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Omega Diagnostics has paid out €350,000 in a civil case to resolve a historic case over the insolvency of its German business.
Omega lodged formal proceedings in the German civil court on 1 September 2018 and a permanent administrator was appointed.
The administrator was responsible for checking transactions between each company in the last 12 months before it started to see if any creditor had been disadvantaged.
It found cash transactions between Omega and its GmbH group through a loan account which operated as a current account. In September 2017, the German business made a repayment to Omega for €500,000 – with Omega making payments totalling €400,000 up to March 2018.
The administrator wrote an out of court letter to Omega’s German lawyer outlining why it believed it had a claim on Omega for repayment of €500,000 in February 2019.
The Alva-based company responded, outlining why the exposure was limited to €100,000.
However, the court found that the German company had spent the €400,000 so it was not seen as reparation to the creditors, as the company used it before the insolvency application.
In its latest annual report, Omega stated: “The court initially stated that repayment of €500,000 needed to be made but noted that the insolvency administrator as plaintiff had certain legal risks, especially in the enforcement of the claim and proposed a settlement to the parties.
“The final outcome of the settlement discussions between the parties is that Omega Diagnostics Group has agreed to settle with the plaintiff with a payment €350,000 to be made on or before 31 July 2021.”
The company also revealed its decision to stop all future expenditure on the allergy development programme in the prior year led to an impairment charge of £8.75m.
Meanwhile, the cost to redevelop and automate manufacturing equipment required for the Alva facility to meet anticipated demand for Covid-19 lateral flow test opportunities was £1.84m.
At the company’s Littleport facility, £130,000 was incurred on manufacturing and laboratory equipment.
Omega invested £1.46m into all of its development activities and £460,000 into its health and nutrition business on food sensitivity products and services.
Earlier in the month, the company reported that revenue in the first half of 2021 had decreased by 29% to £3.16m from £4.46m during 2020.
But, the second half showed signs of recovery, with the year-end revenue finishing 11% lower than the previous year at £8.7m compared to £9.8m in 2020.
Chief executive Colin King said: “We expect our food sensitivity product range to return to growth and we are confident in the opportunities that Food Detective has in China.
“In terms of Covid-19, we expect a successful conclusion to discussions with DHSC that will see us utilising the capacity for both our own equipment and the government-loaned equipment, which will be further utilised with expected demand for our VISITECT lateral flow antigen test, especially once we gain approvals for the self-test version and the Emergency Use Authorisation from the US FDA.
“We are, therefore, confident as we look forward that we are well positioned to deliver growth to the business.”
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