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GeneLink Lawsuit Dismissed

NEW YORK (GenomeWeb News) — A Pennsylvania court has dismissed a lawsuit by former GeneLink CEO John DePhillipo against the company, its marketing subsidiary GeneWize Life Sciences, and some of the company's executives, GeneLink said today.

The Philadelphia Court of Common Pleas dismissed the lawsuit — for damages that the plaintiff valued at around $20 million — on the grounds that DePhillipo's claims "were not viable," the company said.

DePhillipo sued the company, which has patented and patent-pending technologies for nutritional, cosmetic, and health-related genetic assessment technologies, based on the allegation that GeneLink misrepresented the financial state of the company in a previous settlement between the parties, DePhillipo's lawyers, Pelagatti & Pelagatti, said in a statement last August.

DePhillipo had settled an earlier New Jersey lawsuit with the company in April 2008, surrendering 4 million of his shares at 6 cents a share for arrear payments. The latest suit alleged that the company had misrepresented its financial statement by releasing its annual report late. After the company's report was released and disclosed the formation of its GeneWize marketing arm, DePhillipo's lawyers claimed, the firm's shares increased in value to as high as $.50 a share in the weeks after the report was released.

In the Philadelphia lawsuit, DePhillipo sought the return of 3,953,000 shares based on a value of $5.00 per share.

DePhillipo left the firm in January 2007 on the grounds that it was involved in a lawsuit that was not funded by the company, because a financing undertaken by the company was "unfair" to shareholders and amounted to the board selling the company without shareholder approval, and because its financial disclosures were not adequate, he said in a resignation letter filed with the US Securities and Exchange Commission.

In that filing, the company's board of directors said that each of DePhillipo's allegations were "completely unfounded."

In Wednesday afternoon trade, shares of GeneLink were unchanged at $.14 on the OTC Bulletin Board.

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