This excerpt taken from the BLUD 10-Q filed Oct 5, 2006.
10. SUBSEQUENT EVENTS
On September 7, 2006, Edward L. Gallup, the Chief Executive Officer, Chairman of the Board of Directors and founder of the Company announced his retirement from the positions of Chief Executive Officer, Chairman of the Board and director of the Company. Mr. Gallup retired from his position as the Chief Executive Officer and Dr. Gioacchino (Nino) DeChirico was elected as his successor in that position, effective immediately. Mr. Gallup will be employed by the Company through January 31, 2007, and he will hold his positions as the Chairman of the Board and a director of the Company up to the conclusion of the Companys next annual meeting to be held on November 15, 2006.
Under the terms of Mr. Gallups employment agreement, 42,188 unvested stock options granted through April 30, 2006, will vest on January 31, 2007 and become exercisable in full for the remainder of the terms of those options. Options to purchase 26,568 shares and 8,860 restricted shares granted after April 30, 2006 under the Companys new 2005 Long-Term Incentive Plan will also vest immediately. The compensation expense amounting to approximately $485,000 pertaining to all the unvested options and restricted shares as of September 7, 2006 will be expensed evenly for the remaining period of Mr. Gallups service which will terminate on January 31, 2007.
This excerpt taken from the BLUD 10-K filed Oct 19, 2005.
18. SUBSEQUENT EVENTS
In July 2005, the Company signed a technology licensing agreement with Kiwi Ingenuity Limited (Kiwi) to use Kiwis KODE technology platform to create a quality control system for blood group typing. Kiwi Ingenuity Limited, in association with the Auckland University of Technology Biotechnology Research Institute, has developed a range of KODE technology platforms which allow for the attachment of molecules on to the outside of cells, thereby resulting in a quality control system for blood grouping. The Company expects to be able to offer its customers heightened assurance as to the accuracy of test results by incorporating Kiwis technology into the Companys products. The Company expects to spend approximately $15,000 in research and development costs regarding this agreement in fiscal 2006.
On April 22, 2005, the Company announced that it had signed a letter of intent to engage in discussions with Kainos Laboratories, Inc. (Kainos), the distributor of Immucor products in Japan, about the possibility of structuring Kainos blood banking business as a joint venture between Immucor and Kainos. A definitive agreement to form the joint venture was signed, and announced by the Company, on June 20, 2005. On June 30, 2005, Kainos accordingly spun-off its blood-banking business, consisting primarily of certain assets and no debt, as a separate legal entity. On July 5, 2005, final documents were signed fully consummating the joint venture arrangement, with Immucor and Kainos owning 51% and 49%, respectively, of Immucor-Kainos, K.K. the newly-formed joint venture company that is now Immucors distributor in Japan. For its initial 51% interest, Immucor paid Kainos 459.0 million Japanese Yen which equated to $4.2 million. The joint venture has 800 shares of common stock authorized, of which 200 shares were issued upon establishment; Immucor purchased 102 of these shares from Kainos on July 5, 2005. The Company is currently evaluating whether this joint venture will meet the definition of a variable interest entity as defined in the Financial Accounting Standards Board Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin (ARB) No. 51 (FIN No. 46). However, the Company has determined that it will be the primary beneficiary; therefore regardless of whether the joint venture is deemed to be a variable interest entity, the transaction is expected to be accounted for as a purchase of a majority-owned business, the results of operations of which will be included in the Companys consolidated financial statements as of the date of acquisition. Pro forma results of operations for the year ended May 31, 2005 would not have been materially different as a result of this acquisition and therefore are not presented. The Company is awaiting additional information concerning certain asset valuations, primarily the value of the new distribution agreement (see further discussion below), for purposes of finalizing the allocation of the purchase price.
58 IMMUCOR, INC. ANNUAL REPORT 2005
In accordance with the terms of the Stock Purchase Agreement associated with the above acquistion, Immucor will purchase the remaining 49% interest from Kainos for 441.0 million Japanese Yen. The Company expects to purchase this remaining interest after a three-year transition period ending on June 30, 2008, but upon mutual agreement with Kainos, may purchase the interest prior to the end of the transition period. In accordance with the terms of a Services Agreement, Kainos has agreed to supply certain services to the joint venture during the transition period.
The acquisition price, which will total 900.0 million Japanese Yen upon Immucors purchase of Kainos 49% interest, includes a premium based on managements belief that this business will achieve higher future profitability levels with the installment of Immucor personnel in key managerial positions overseeing the operations of the joint venture.
In accordance with the terms of the Joint Venture Agreement, Immucor has agreed to fund the joint ventures purchase of Kainos blood-banking inventory, the majority of which consists of Immucor products sold to Kainos in the ordinary course of business. This inventory repurchase is expected to occur by the end of the second quarter of fiscal 2006.
Additionally, a new distribution agreement was signed on July 5, 2005 between Immucor, Kainos and the joint venture. The new agreement stipulates that Kainos will act as an intermediary between Immucor and the joint venture in that Kainos will have exclusive rights to supply the joint venture with Immucor product during the term of the agreement. In accordance with this agreement, the joint venture guarantees that Kainos will receive a minimum net profit (as defined in the agreement) of 300 million Japanese Yen by the end of the three-year transition period ending June 30, 2008 on sales of Immucor product to the joint venture. The agreement expires on May 30, 2009, but may be terminated sooner (1) upon mutual agreement of the parties, (2) at the end of the transition period, or (3) upon Kainos realization of the minimum guaranteed net profit.