VAUDREUIL-DORION, QC, July 31 /CNW Telbec/ - Immunotec Inc. (TSX-V:IMM - News) announced today the closing of the Korean operations of its subsidiary, Immunotec (Korea) Inc., located in Seoul, South Korea which took effect on the close of business on July 29, 2009.
This closure is a direct result of litigation with a former sub-distributor which obtained from the Seoul Central District Court the issuance of an "Executory Preliminary Injunction" on July 13, 2009 against Immunotec Korea Inc. to cease selling Immunocal products in Korea as the Court concluded the Company was infringing on the former sub-distributor exclusive distribution rights for these products.
Negotiations with the former sub-distributor which were initiated by the Company to obtain the withdrawal of the Injunction failed resulting in the decision to close the business since the appeals process to remove the Injunction against the Company by the District Court could take many months.
Immunotec Korea began its operations in the second quarter ended April 30, 2009 recording net sales of $1,071,081. Net sales for the third quarter ending July 31, 2009 taking into account a provision for returned products will approximate $1,000,000. A provision for the costs associated with the discontinuance of the operations will be recorded in the third quarter of approximately $1.5 million.
We have instructed our Korean Legal Counsel to file an appeal of the "Executory Preliminary Injunction" as well as to file a claim for damages against the former sub-distributor for misrepresentations of facts on which the Injunction was based.
Immunotec is located in a 37,000 square foot facility located in Vaudreuil-Dorion, Quebec, Canada and also has a manufacturing facility located in Blainville, Quebec, Canada and a distribution centre located in Swanton, Vermont, USA. Immunotec is engaged primarily in the development and marketing of natural health products, dietary supplements, food, vitamins and personal care products, and natural health products, some of which are manufactured on its behalf by third parties. Immunotec's products are distributed and sold in Canada, the United States, the Republic of Ireland and the United Kingdom through a network marketing system and exported in other countries under exclusive distributorship agreements.
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For further information
Richard Patte, CA, Chief Financial Officer, (450) 510-4445