SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 5(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 4, 1996
SALIVA DIAGNOSTIC SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-21284 91-1549305
(Commission File No.) (IRS Employer I.D. No.)
11719 NE 95th Street, Suite G
Vancouver, WA 98682
(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code (206) 696-4800
Exhibit Index is on Page 3
Page 1 of 5
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Item 5.Other Events.
Litigation. The Company had granted a license to Home Access
Health Corporation ("Home Access") in March 1995 to use certain
proprietary technology relating to Omni-SAL solely in testing kit
form in certain markets (the "License Agreement"). An amendment to
the License Agreement (the "Amendment") and a Sublicense Agreement
(the "Sublicense") were entered into between Home Access and the
Company in December 1995. In the Sublicense the Company in effect
licensed back its rights to Omni-SAL and agreed to transfer to Home
Access the 510(k) premarket notification relating to Saliva Sampler
and the IDE granted to the Company related to Omni-SAL. A dispute
has arisen between the Company and Home Access over the scope and
validity of the License Agreement, the Amendment and the Sublicense
(collectively the "Agreements"). The Company's position is that
only Omni-SAL devices sold in kits are covered by the Agreements.
Home Access' position is that pursuant to the Agreements the
Company licensed to Home Access all rights to the Omni-SAL for
remote laboratory testing (excluding rapid testing). Due to the
dispute and Home Access' failure to actively pursue use of the
technology licensed pursuant to the Agreements, the Company
commenced a suit in Clark County Superior Court in January 1996 for
declaratory judgment, seeking termination of the Agreements and/or
a court interpretation of the scope of the Agreements.
Home Access has asserted counterclaims in its answer to the
complaint dated June 4, 1996. Home Access alleges it is the
Company's failure to transfer the IDE and 510(k) and the Company's
notice of termination of the Agreements that impeded Home Access'
efforts to market and utilize the Technology licensed pursuant to
the Agreements. Home Access has counterclaimed for breach of
contract, tortious interference with its business relationships and
unfair competition. Home Access alleges it has incurred damages
estimated in excess of $1,000,000, plus its attorneys' fees and
costs.
In the event the Company does not prevail in the litigation,
in addition to payment of monetary damages, the Company may be
precluded from selling Omni-SAL for use in remote laboratory
applications (excluding rapid testing) except for uses the Company
has obtained in the Sublicense (to the extent the Sublicense is
valid). Furthermore, the Company may not be able to utilize the
510(k) for Saliva Sampler and may be precluded from conducting
clinical trials relating to the usage of Omni-SAL. No such trials
are presently scheduled.
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The Company believes that the Agreements never covered
anything but licensing Omni-SAL to Home Access for applications in
kit form and that Home Acess' erroneous interpretation of the
Agreements would make the consideration transferred for the
Agreements wholly inadequate. The Company further believes that
Home Access has cancelled the Sublicense. The litigation is at an
early stage and the Company intends to vigorously defend itself in
this litigation. In the event, however, that Home Access prevails
in this litigation, such event could have a material adverse effect
on the Company.
Item 7. Financial Statements and Exhibits.
(c)(1) Press Release issued by the Company and dated June
7, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
SALIVA DIAGNOSTIC SYSTEMS, INC.
By: s/Ronald L. Lealos
Ronald L. Lealos,
President
June 14, 1996
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<PAGE>
EXHIBIT c(1)
Saliva Diagnostic Systems, Inc.
11719 NE 95th Street
Vancouver, WA 98682
Contact: Ronald L. Lealos, President
(360) 696-4800 For Immediate Release
Home Access Counterclaims Against SDS
Vancouver, WA, June 7, 1996 - Saliva Diagnostic Systems, Inc.
(NASDAQ:SALV) announced on January 9, 1996 that it had filed suit
in Clark County Superior Court, asking the court to determine
rights negotiated in contracts signed last year by SDS and Home
Access Health Corporation ("Home Access"), an Illinois company
specializing in medical products for the home.
On June 5, 1996 Home Access filed its answer and
counterclaims. The counterclaims allege that SDS has breached
these contracts, interfered with Home Access' business
relationships and engaged in unfair competition. Home Access seeks
monetary damages in excess of $1,000,000.
SDS believes the counterclaims are without merit and will
vigorously defend.
SDS is a developer, manufacturer and marketer of rapid, non-
laboratory tests and specimen collection devices for infectious
diseases such as the Human Immunodeficiency Virus (HIV). Tests in
production include Ser.Strip HIV-1/2 and Hema.Strip HIV-1/2.
Saliva.Strip HIV-1/2, which uses saliva as a diagnostic medium, is
in final stages of development. It is also intended to provide
results in minutes outside clinical settings. The Company also
sells Omni-SAL, a saliva collection device used for HIV testing
overseas, and other diagnostic devices.
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saliva\8k.696
