UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): September 29, 2006
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Chembio
Diagnostics, Inc.
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(Exact
name of registrant as specified in its charter)
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Nevada
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333-85787
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88-0425691
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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3661
Horseblock Road, Medford, NY 11763
(Address
of principal executive offices)
(Zip
Code)
Registrant's
telephone number, including area code (631)
924-1135
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N/A
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(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
]
Written communications pursuant to Rule 425 under the Securities Act
(17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
(17 CFR 240.13e-4(c))
ITEM
1.01. Entry into a Material Definitive Agreement
On
September 29, 2006, the Registrant entered into the material agreements
described below.
HIV
Barrel License, Marketing and Distribution Agreement
This
agreement is a three way agreement among Chembio Diagnostic Systems,
Inc.
(“Chembio”), Inverness Medical Innovations, Inc. (“Inverness”) and StatSure
Diagnostic Systems, Inc. (“StatSure”). This agreement covers Chembio’s
FDA-approved SURE CHECK(R) HIV 1/2 (“SURE CHECK”), a lateral flow rapid HIV test
employing a proprietary barrel system that is a convenient, safe, accurate
and
integrated single-use rapid HIV antibody detection screening test.
Some terms of
the agreement are:
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o
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Inverness
will market the SURE CHECK product under Inverness brands
globally
[subject only to certain existing international agreements
Chembio and
StatSure may keep in place for up to one year].
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o
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Inverness
will exclusively market SURE CHECK under the agreement as
well as any new
HIV products in the “barrel field” that are developed, and may not compete
with any products in this field worldwide as defined.
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o
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Chembio
and StatSure have each granted Inverness exclusive rights
to their
intellectual property in the HIV barrel
field
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o
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Inverness
has a first right to negotiate any agreements to market and
distribute any new Chembio HIV antibody detection tests,
including
products that may incorporate Chembio’s patent-pending Dual Path Platform
(DPP(TM))
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HIV
Cassette License, Marketing and Distribution Agreement
This
agreement is between Chembio and Inverness. This agreement covers Chembio’s
FDA-approved STAT-PAK(TM) HIV 1/2 (“STAT-PAK”), a lateral flow rapid HIV test
employing a cassette system that is a convenient, safe, accurate and
a
single-use rapid HIV antibody detection screening test. Some terms
of the
agreement are:
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o
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Inverness
will market this product in the US market only; Chembio has
a
non-exclusive license under the Inverness lateral flow patents
to continue
to market the product under Chembio’s brand in the rest of the
world
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o
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Inverness
may bring a competitive HIV cassette product to the US market,
but in that
event Chembio would expand its lateral flow license for this
product to
the US and have other options under the
agreement.
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Non-Exclusive
License, Marketing and Distribution Agreement
This
agreement is between Chembio and Inverness. This agreement covers Chembio’s
FDA-approved STAT-PAK(TM) HIV 1/2 (“STAT-PAK”), a lateral flow rapid HIV test
employing a cassette system that is a convenient, safe, accurate and
a
single-use rapid HIV antibody detection screening test. Some terms
of the
agreement are:
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o
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Chembio
has received a non-exclusive license under the Inverness
lateral flow
patents for its HIV 1/2 Dipstick for marketing outside the
United States
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o
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Chembio
has also received a worldwide non-exclusive license to manufacture
and
market a number of other Chembio-branded products including
all Chembio’s
rapid tests for human and veterinary and tuberculosis, Chagas
disease, and
tests for other defined emerging and neglected
diseases.
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o
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Inverness
has the right to market each of these products (except the
HIV 1/2 STAT
PAK Dipstick) under an Inverness brand pursuant to an agreed-upon
pricing
and margin sharing formula similar to the other
agreements.
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General
to the three Agreements above
The
agreements with Inverness contain margin sharing formulae that are
designed to
provide Inverness, Chembio and StatSure with reasonable profit margins
after
deduction for certain unit costs of the products. Based on their Joint
HIV
Barrel Product Commercialization Agreement, outlined below, StatSure
and Chembio
will share 50-50 in the net sales to Inverness of SURE CHECK after
these
deductions. Chembio will receive all of the net selling price to Inverness
in
the Cassette Agreement.
Chembio
has the exclusive right and duty to manufacture the products marketed
by
Inverness under all the agreements, and it has the right to subcontract
manufacturing, but not sublicense or subcontract its rights or
obligations.
Joint
HIV Barrel Product Commercialization Agreement and Settlement Agreement
with
StatSure
Chembio
and StatSure have entered into a Settlement Agreement pursuant to which
all
matters in their litigation regarding StatSure’ barrel patent and other matters
have been settled. As stated in the second preceding paragraph above,
the Joint
JIV Barrel Product Commercialization Agreement provides that the parties
will
equally share in the profits relating to SURE CHECK after reimbursement
to
Chembio of its manufacturing and related costs, as defined, and that
they will
act jointly in the HIV barrel field. The settlement combines each company’s HIV
barrel intellectual property, including an exclusive manufacturing
license from
StatSure to Chembio of its barrel patent for all HIV applications,
thereby
ensuring Chembio’s exclusive right to manufacture, as well as Inverness’ right
to market though the marketing license StatSure grants Inverness under
the 3-way
Agreement.
ITEM
7.01. REGULATION FD DISCLOSURES
(a)
On
October 5, 2006 the Registrant issued the press release titled “Inverness
Medical Innovations, Chembio Diagnostics, Inc. and StatSure Diagnostic
Systems,
Inc. Announce Agreements to Market Rapid HIV and Other Tests” included herein as
Exhibit 99.1.
(b)
On
October 5, 2006 the Registrant issued the press release titled “StatSure and
Chembio Agree to End Litigation and Enter Agreement to Commercialize
HIV Barrel
Technology” included herein as Exhibit 99.2.
ITEM
8.01 OTHER EVENTS
Also
on
September 29, 2006, Inverness Medical Innovations, Inc. participated
in a
private placement of securities of Chembio. See Press Release filed as
Exhibit 99.1 and Item 3.02 to a separate form 8-K filed with the
U.S. Securities
and Exchange Commission on October 5, 2006 by Chembio.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d)
Exhibits
10.1 HIV
Barrel License, Marketing and Distribution Agreement, dated as of September
29,
2006, by and among the Registrant, Inverness and StatSure.
10.2 HIV
Cassette License, Marketing and Distribution Agreement, dated as of
September
29, 2006, between the Registrant and Inverness.
10.3 Non-Exclusive
License, Marketing and Distribution Agreement, dated as of September
29, 2006,
between the Registrant and Inverness.
10.4 Joint
HIV
Barrel Product Commercialization Agreement, dated as of September 29,
2006,
between the Registrant and StatSure.
10.5
Settlement
Agreement, dated September 29, 2006, between the Registrant and
StatSure.
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99.1
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Press
Release titled “Inverness Medical Innovations, Chembio Diagnostics, Inc.
and StatSure Diagnostic Systems, Inc. Announce Agreements
to Market Rapid
HIV and Other Tests” issued October 5,
2006
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99.2
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Press
Release titled “StatSure and Chembio Agree to End Litigation and Enter
Agreement to Commercialize HIV Barrel Technology” issued October 5,
2006
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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
thereunto
duly authorized.
Date:
October 5, 2006 CHEMBIO
DIAGNOSTICS, INC.
By: /s/
Lawrence A. Siebert
Lawrence
A. Siebert
Chief
Executive Officer