CryoLife reaches full settlement in Medafor lawsuit

CryoLife, Inc. (NYSE: CRY), a leading medical device company focused on cardiac and vascular surgery, announced today that it has reached full settlement of the outstanding CryoLife, Inc. v. Medafor, Inc. lawsuit that was pending in the Northern District Court of Georgia.

Under terms of the settlement, Medafor has agreed to pay CryoLife $3.5 million in cash. Fifty percent of the payment is to be paid on or before July 9, 2012 and the remainder on or before September 6, 2012. In addition, as part of the settlement, CryoLife will no longer be required to pay Medafor $1.17 million for previous purchases of inventory, for which Medafor had requested payment.  Both parties have agreed to dismiss with prejudice all claims and counter claims associated with the lawsuit. CryoLife will continue to own approximately 2.39 million shares of Medafor common stock, which CryoLife estimates at approximately 9.2% of Medafor's total outstanding shares. CryoLife believes that it remains Medafor's largest shareholder. Although the terms of the settlement are binding, the parties are in the process of formalizing a settlement agreement.

Steven G. Anderson, Chairman of the Board, President and Chief Executive Officer of CryoLife, said, "We are pleased to enter a settlement agreement with Medafor that effectively ends the current litigation between the two companies. The settlement also significantly reduces the ongoing legal expenses associated with the lawsuit, freeing additional capital to invest in our strategic growth initiatives."

The Company is currently evaluating the full financial impact of the settlements with Medafor and CardioFocus and reduced legal expenses relative to prior expectations, as well as the impact of the recently completed acquisition of Hemosphere on the remainder of 2012. The Company intends to update its 2012 financial guidance during its second quarter financial conference call, which is expected to occur in late July 2012.