TIDMAMP
RNS Number : 2262C
Amphion Innovations PLC
28 September 2018
AMPHION INNOVATIONS PLC
("Amphion" or the "Company")
Half Year Report
Interim results for the six months to 30 June 2018
London and New York, 28 September 2018 - Amphion Innovations plc
(AIM: AMP), the developer of medical, life science, and technology
businesses, announces its audited results for the six months to 30
June 2018.
Financial Results
-- Net Asset Value ("NAV") decreased when compared to the previous year end, being
US -$8.68 million (31 December 2017: US -$2.81 million) due
almost entirely to the movement in value of the share price of
Motif Bio plc, a partner company
-- Revenue decreased to US $60,000 (H1 2017: US $153,000)
-- Administrative expenses decreased to US $1.37 million (H1 2017: US $1.75 million)
-- Loss before taxation was US -$5.92 million (H1 2017: US $1.68
million) after fair value loss on the holding of Motif Bio plc
Highlights
Amphion
-- In March, the holders of the Convertible Promissory Notes
2008 - 2017 voted to extend repayment of the Notes to 31 December
2018
-- In May, Amphion sold 8,896,034 shares of Motif Bio for total
proceeds of US $3.65 million bringing Amphion's holding of Motif
Bio to 9.53% of the total issued share capital
-- In June, Mr. Philip Tansey joined the Board as a Non-Executive Director
Motif Bio
-- Motif Bio raised an additional GBP10.0 million (US $13.5 million) in May 2018
-- In June, Motif Bio submitted its New Drug Application ("NDA")
for its lead product iclaprim and in August the FDA notified the
company that its filing was sufficiently complete to perform a
substantive review
Polarean
-- Successful IPO of Partner Company, Polarean Imaging plc
("Polarean") in March 2018, raising GBP3 million at 15 pence per
share
Post Period Events
-- In September, Mr. Stephen Austin joined the Board as a Non-Executive Director
-- In September, Amphion reached an agreement in principle,
subject to entering into binding agreement, to extend the repayment
of the loan Facility until 30 September 2019 and to potentially
increase the size of the Facility by approximately US $1.4 million
(approximately US $1.1 million after fees and expenses)
-- In August, Amphion sold 3,000,000 shares of Motif Bio for net
proceeds of US $1.29 million to make a repayment of the Loan
Facility previously announced on 5 June 2014, reducing the loan
balance from US $3.69 million at 30 June 2018 to US $2.82 million
and bringing Amphion's holding of Motif Bio to 8.51% of the total
issued share capital
-- In August, Motif Bio received a Notice of Allowance from the
US Patent and Trademark Office ("USPTO") for its Patent Application
Nos 15/586,021 and 15/586,815. The two method of use patents will
expire in November 2037
-- In August, Polarean announced that the first patient has been
enrolled in its Phase III FDA clinical trial which aims to
demonstrate non-inferiority of its drug-device technology
combination, using hyperpolarised 129-Xenon (129Xe) gas MRI,
against an approved comparator
-- In July, Polarean announced the successful placing of
ordinary shares, raising GBP0.8 million (US $1.064 million)
*Exchange rate at 30 June 2018 - US $1.3197 per GBP
Richard Morgan, CEO of Amphion Innovations plc, commented:
"Amphion's immediate prospects are tied directly to the progress of
its Partner Companies. We work tirelessly both on and off the Board
to support and guide each company towards its own independent
success. During the first half of 2018, we devoted considerable
time and effort to support the IPO of Polarean Imaging. We
supported this with an additional investment of US $600,000
bringing the Company's total investment in Polarean over the last
two years to almost US $1 million. The IPO was successfully
completed in March 2018 against a generally negative market
backdrop for healthcare IPO's in London. Soon after the close of
the IPO fundraise roadshow, the broad equity market was hit by a
sudden setback with the Dow having the largest point drop in
history on 5 February 2018. This had a very negative impact on the
risk appetite of investors in small cap healthcare companies.
Polarean was in fact the only healthcare IPO to be completed on the
AIM market in the six months to June 2018. Although the valuation
of Polarean at listing was significantly below original
expectations, we managed to complete the listing and raised
sufficient funds to allow the company to make steady progress on
our plans. Following a very successful investor symposium in late
June we were pleased to encounter additional demand for Polarean
shares and were able to complete a supplementary placing of 5
million ordinary shares at a slightly higher price of 16 pence per
share for a total of GBP0.8 million.
With regards to Motif Bio, despite a slight delay in filing the
NDA for the antibiotic iclaprim used to treat bacterial skin
infections, Motif continued to make steady progress in preparation
of the NDA and completed the filing and application in June 2018.
Motif subsequently received acceptance of the filing on 14 August
within the statutory 60 day timeframe. The NDA has been granted
Priority Review and the FDA has set a target decision date under
the Prescription Drug User Fee Act (PDUFA) for 13 February 2019.
The granting of two method of use patents will add additional
exclusivity for iclaprim in targeting bacterial infections. We
believe the significant progress that has been made by Motif has
yet to be reflected in its share price. We therefore continue to
take steps to maintain our holdings in Motif Bio in so far as
possible. To date, these steps have included revising the secured
loan agreement, Convertible Promissory Notes and the Macaleer
Notes, as well as working with our creditors to extend repayment
dates. These steps do come at a cost to the Company, but we believe
are in the best interest of our shareholders in the long term. We
have received a great deal of support and cooperation from these
stakeholders and hope to be able to continue to work with these
groups to further restructure our debt as required in order to
allow us to reap the rewards of our long term investment in and
strong support of our Partner Companies.
In addition to continued support for both Motif Bio and
Polarean, subject to the availability of working capital, we are
planning to put additional resources behind the further development
of FireStar. Our goal is to have FireStar in a position for an IPO
in 2019 and look forward to being able to update the market with
additional progress."
This announcement contains insider information for the purposes
of Article 7 of Regulatory (EU) No596/2014.
For further information please contact:
Amphion Innovations Tel: +1 (212) 210 6224
Charlie Morgan
Panmure Gordon Limited (Nominated Adviser Tel: +44 (0)20 7886
and Corporate Broker) 2500
Freddy Crossley / Emma Earl (Corporate Finance)
Charlie Leigh-Pemberton (Corporate
Broking)
Northland Capital Partners Limited (Joint Tel: +44 (0)20 3861
Corporate Broker) 6625
David Hignell (Corporate Finance)
Vadim Alexandre (Corporate
Broking)
Walbrook PR Tel: +44 (0)20 7933 8780 or amphion@walbrookpr.com
Anna Dunphy / Paul McManus
About Amphion Innovations plc - www.amphionplc.com
Amphion Innovations is a developer of medical, life science and
technology businesses. We use our extensive experience in company
building to invest and build shareholder value in high growth
companies in the US and UK. Amphion has significant shareholding in
seven partner companies developing proven technologies targeting
substantial commercial marketplaces. The Amphion model has been
refined to optimise the commercialisation of patents and other
intellectual property within the partner companies.
Chief Executive Officer's Statement
Partner Company Summaries
Motif Bio
Motif Bio has continued to make good progress and we are pleased
to note that this culminated in Motif Bio making a NDA FDA
submission for iclaprim on 14 June 2018. The success of Motif Bio's
clinical programme has been matched by a major increase in the
capital funding needs of the company and we have been very active
in assisting Motif in every possible way to get access to the
capital required to keep the programmes on track. The need to
return to the capital markets in 2017 and again in 2018, following
the successful listing on NASDAQ in late 2016, has placed a lot of
pressure on the valuation of Motif Bio, which in turn has imposed
pressures on Amphion. We continue to believe the intrinsic value of
this antibiotic are not fully understood by the market or reflected
in the Motif Bio share price. Given the nature of our business
model, we needed access to additional capital to further the
development of Polarean and the undervaluation of the Motif Bio
shares created circumstances where we needed to restructure our
secured loans and sell some of our holding in Motif Bio in the
market. However, our intentions toward Motif Bio should not be
misconstrued. We were important in supporting the business as it
exists today and our faith in the value of the assets we acquired
in 2014 has been validated by the additional clinical trials
completed since then and the recent NDA. For many years, through
good times and bad, the value of a novel, safe, and effective
antibiotic has typically been substantially higher than the market
capitalisation of Motif Bio and we believe that value will be
recognised in due course as the company makes progress with its NDA
and, assuming approval is granted, the commercial launch of the
drug. We own
25,254,611 ordinary shares of Motif Bio, 24,475,591 of which are
pledged as security in respect of our loan facility.
Polarean Imaging
Polarean is a medical drug-device combination company operating
in the high resolution medical imaging market. The company has been
selling pre-clinical systems to leading institutional research
facilities for the last two years and is now, following the IPO,
embarked on the pivotal clinical trials designed to get marketing
approval from the FDA for sales of clinical systems to hospitals
and clinics.
The Polarean IPO was the only life-science listing on AIM in the
first six months of 2018. Polarean raised a total of US $7.1
million through the two pre-IPO financings and the GBP3 million (US
$4.2 million) raised in the IPO. As well as this, Polarean raised
an additional GBP0.8 million (US $1 million) in early July,
following the successful investor symposium held in late June. The
video of the symposium can be seen on the Polarean website
www.polarean-ir.com/content/investors/videos.asp. Amphion supported
the IPO financing by making an additional investment of US
$600,000. Prior to its IPO, we held 29% of Polarean. Following the
IPO and supplementary placing in July, Amphion now has a 21.7%
holding in Polarean. In aggregate, the funding activities provided
sufficient capital to prepare Polarean for a public listing while
allowing the programmes to make sustained progress. On 23 August
2018, Polarean announced that the first patient had been scanned as
the clinical trials got under way. The trials are estimated to take
about eight months to readout. Polarean's original intellectual
property and clinical achievements have been joined by new
inventions that move the state of the art technology forward
significantly, beyond ventilation into the realm of opportunities
made possible by the quantitative measure of gas exchange. Work is
already under way in some of the preclinical research sites where
Polarean's polarizers are being used by prestigious researchers for
use in neurological and other applications. The clinical trials
required by the FDA, if successful, should lead to a broad
marketing label for use of Polarean's systems in pulmonary
medicine. We are very excited by the promise of this technology to
address a huge unmet medical need and we believe the value of our
investment should, in due course, be substantially higher than it
is today. We currently own 17,034,853 ordinary shares of
Polarean.
FireStar Software
We continue to actively assist FireStar in the further
development of its new business plan. The technology platform on
which the product offering is being built is robust and protected
by six issued patents. The product is being designed to give the
sponsors of outsourced clinical trials an efficient and economical
window in real time into the key performance indicators that all
sponsors need to see at the earliest possible moment. The costs of
drug development are very large and significant opportunity exists
to save both money and time in trials by getting better data in
front of the key decision makers at the sponsor at the earliest
possible moment. Clinical data in trials is gathered in countless
different formats and FireStar's proprietary technology can play an
important role in synthesising and translating those data flows
into comprehensible and actionable signals, in real time. The need
is large and the value to the sponsor is very high. We have at
least another six months to a year of further development of the
system before it can begin to be beta tested by the customers, but
early interaction with industry players encourages us to believe
this programme should be successful. Currently, Amphion's holding
in FireStar is in the form of loans (advances and amounts owed for
advisory fees) and equity that reflect the continued financial
support we have given to the company over many years. Ahead of any
IPO, Amphion's ownership is typically in the 30% - 50% range and we
are confident that our FireStar holding will reflect that by the
time we complete the expected equity financing rounds.
DataTern's efforts, announced in our full year 2017 results, to
progress its claims in the Massachusetts courts came to an end in
November 2017, when the law firm that had been leading the
programme, with contingency funding, decided not to proceed. The
efforts made to find an alternative firm to take up the programme
were unsuccessful and the interactions with various litigation
financing sources also failed to produce the necessary funding.
This result is very disappointing, given the considerable body of
evidence that these patents, originally developed within FireStar
and subsequently licensed to DataTern, have considerable merit.
These programmes are now on hold and will only move forward if
suitable funding sources and litigation partners can be
identified.
Axcess has had some success in pursuing its claims of
infringement against certain parties but the settlements achieved
to date have not been large or numerous enough to allow the
programme to be expanded. We remain confident in the strength of
the patent portfolio and continue to explore the opportunity to
help the company move forward with its claims against infringing
parties.
WellGen
Through its joint venture with a US-based sports drink company,
WellGen began marketing Workout Tea, a novel functional beverage
based on a patented anti-inflammatory ingredient. The market for
such products has been expanding rapidly in recent years and
WellGen believes there is a place for a tea-based sports drink
whose anti-inflammatory properties have been clinically proven.
WellGen has determined that its interest in the marketing of
Workout Tea will be through a profit participation in the
activities of its joint venture partner. The profit participation
agreement is currently being negotiated.
Financial review
Revenue in the six months to 30 June 2018 decreased to US
$60,000 from US $153,000 in 2017 while administrative expenses
decreased by US $383,351 from US $1,752,817 in 2017 to US
$1,369,466 in 2018. The Net Asset Value ("NAV") as at 30 June 2018
significantly decreased when compared to the end of 2017, being US
-$8,683,260 (31 December 2017: US -$2,807,418). This was almost
entirely due to the decrease in the value of our holding in Motif
Bio. At 31 December 2017, Motif Bio's share price per share was 41
pence and by 30 June 2018 it had dropped to 33.825 pence per share.
We continue to hope that the market will realise the value that we
see in Motif Bio and now Polarean as the outlook for Amphion
increasingly depends on the success of our Partner Companies.
In prior years, the Group has been able to meet its working
capital and investment obligations through fund raising including
the issue of shares, convertible promissory notes ("CPNs") and
promissory notes, from revenue generated through the provision of
advisory services to its Partner Companies, from the revenue
generated from the licensing of intellectual property, and through
a secured loan facility. As a result of a lack of cash being
generated from these activities during 2018, the Group has had to
reduce its financial support to its Partner Companies and extend
the payment dates for its trade payables and its convertible and
non-convertible promissory notes. As the Company has been able to
reach accommodations with these debt holders in the past we are
confident that, if required, we will be able to reach agreement to
extend the maturity of the debt. The Group has also reduced its
operating costs where possible, including salary and fee reductions
for employees and directors, and has obtained financial support
from various related parties, through the issue of promissory
notes, short-term loans, and through a secured loan facility. The
Group will need to continue to implement these measures and seek
further financing as required. The Group's primary method of
financing during 2018 has been through a second loan facility (the
"Facility"), using its holdings in Motif Bio as security. Since 31
December 2017, Amphion has sold a total of 11.9 million ordinary
shares of Motif Bio. The net proceeds from the sales were used as
partial repayment of the loan Facility as well as ongoing business
operations and development of Amphion's other Partner Companies.
Pursuant to the current terms of the Facility, the remaining loan
balance is to be repaid in three monthly installments from 15
October to 15 December 2018. The Company has, however, entered into
an agreement in principle, subject to entering into a definitive
binding agreement, to defer further repayment of the Facility until
30 September 2019 and to potentially increase the size of the
Facility by approximately US $1.4 million (approximately US $1.1
million after fees and expenses). Extension of the maturity in the
Facility and the provision of additional funds will allow the
Company to maintain its current ownership in Motif Bio for a longer
period of time. The Company will make a further announcement in the
event that it enters into definitive binding agreements to amend
the Facility.
The timing and ability of the Group to realise its investments
in Partner Companies is subject to inherent uncertainty due to
numerous factors including, but not limited to: the liquidity of
the investment; market conditions being favourable for realisation
whether through a listing or otherwise; potential for restrictions
being imposed that may limit full realisation of investments sold;
such as lock-in periods; and other factors that are outside the
control of the Group. The Group will realise investments where the
terms of any potential arrangement are favourable to the Group and
is confident of its ability to fund near term cash requirements
through this process if required.
In May 2017, Richard Morgan and Robert Bertoldi, Directors of
the Company, entered into a deed of postponement where they agreed
to postpone amounts owed to them, which total approximately US $4.5
million, until all other liabilities of the Company are repaid.
At period end, the Company also has approximately US $2.5
million in liabilities that are on the books of its wholly owned
subsidiary DataTern Inc. This total includes many old balances
which are no longer collectable. The majority of these liabilities
are non-recourse to Amphion.
Outlook
Despite the setback to the Motif Bio share price, as well as the
static hold of the Polarean share price, we continue to believe
that both are drastically undervalued. Comparable drug development
companies with a drug that has completed a Phase III trial and
submitted an NDA to the FDA have, typically, been substantially
higher than the current market capitalisation of Motif Bio. We
continue to actively support the development of both companies and
view the future of both companies with optimism and excitement. We
are now beginning to focus our efforts to develop FireStar and its
product platform with the goal of an IPO for the company in
2019.
We have recently had occasion to begin to look beyond the
horizon defined by the projects already underway, as described
above. We remain very actively supportive of each of them but
recognise the need to identify extensions to our business model
that can provide the next wave of opportunity for our shareholders.
We see that most likely being in the space between the private
financing activities that support emerging life science and
med-tech companies and the public markets where they can access a
deeper pool of capital.
We look forward to reporting further on this topic in coming
months. Meanwhile our efforts remain focused on doing everything we
can to support Motif Bio and Polarean on the public markets and to
help FireStar progress to the point where it can graduate to the
next level both commercially and financially.
Richard Morgan
Chief Executive Officer
Amphion
Innovations plc
Condensed consolidated statement of comprehensive
income
For the six
months ended 30
June
2018
Unaudited Unaudited
Notes Six months Six months Audited
ended ended Year ended
30 June 31 December
30 June 2018 2017 2017
Continuing
operations US $ US $ US $
Revenue 4 60,000 153,000 286,367
Administrative
expenses (1,369,466) (1,752,817) (3,150,011)
Operating loss (1,309,466) (1,599,817) (2,863,644)
Fair value
(losses)/gains
on investments 8 (5,494,003) 4,277,373 9,956,222
Realised
gains/(losses)
on sale
of investments 1,478,471 (485,170) (3,173,012)
Interest income 328 155,868 314,394
Other gains and
losses 217,139 33,201 (308,093)
Finance costs (817,217) (696,601) (1,425,359)
(Loss)/profit
before tax (5,924,748) 1,684,854 2,500,508
Tax on
profit/(loss) 6 96 - (719)
(Loss)/profit for
the period (5,924,652) 1,684,854 2,499,789
------------------------- ----------------------- --------------------------------
Other
comprehensive
income
Other
comprehensive
income/(loss)
for the period - - -
------------------------- ----------------------- --------------------------------
Total comprehensive
(loss)/income
for the period (5,924,652) 1,684,854 2,499,789
========================= ======================= ================================
The Directors consider that all results derive from
continuing activities.
(Loss)/earnings
per share 7
Basic US $ (0.03) US $ 0.01 US $ 0.01
========================= ======================= ================================
Diluted US $ (0.03) US $ 0.01 US $ 0.01
========================= ======================= ================================
The notes are an integral part of these financial
statements.
Amphion Innovations plc
Condensed consolidated statement of financial
position
As at 30 June 2018
Unaudited Unaudited Audited
30 June 30 June 31 December
Notes 2018 2017 2017
---------------------- ----------------- --------------------------------
US $ US $ US $
Non-current assets
Intangible assets - 42,390 -
Security deposit 16,000 20,000 16,000
Investments 8 19,065,659 25,314,069 26,092,767
19,081,659 25,376,459 26,108,767
---------------------- ----------------- --------------------------------
Current assets
Prepaid expenses and other
receivables 1,147,167 1,178,621 1,157,146
Cash and cash equivalents 141,384 705,601 1,035,201
1,288,551 1,884,222 2,192,347
---------------------- ----------------- --------------------------------
Total assets 20,370,210 27,260,681 28,301,114
====================== ================= ================================
Current liabilities
Trade and other payables 10,714,011 9,872,969 10,478,036
Notes payable 10 10,305,673 13,440,632 12,522,232
Convertible promissory
notes 10 8,033,786 7,765,923 8,108,264
29,053,470 31,079,524 31,108,532
---------------------- ----------------- --------------------------------
Total liabilities 29,053,470 31,079,524 31,108,532
====================== ================= ================================
Net liabilities (8,683,260) (3,818,843) (2,807,418)
====================== ================= ================================
Equity
Share capital 11 3,626,128 3,593,032 3,615,284
Share premium account 39,062,508 38,897,769 39,053,530
Retained earnings (51,371,896) (46,309,644) (45,476,232)
Total equity (8,683,260) (3,818,843) (2,807,418)
====================== ================= ================================
The notes are an integral part of these financial
statements.
Amphion
Innovations
plc
Condensed consolidated statement of
changes
in equity
For the six
months ended
30 June 2018
Unaudited
Share
Share premium Retained
Notes capital account earnings Total
----------------- ------------------- -------------------- ------------------
US $ US $ US $ US $
Balance at 1
January 2017 3,465,082 38,677,056 (48,028,519) (5,886,381)
Profit for the
period - - 1,684,854 1,684,854
Total
comprehensive
income
for the
period - - 1,684,854 1,684,854
----------------- ------------------- -------------------- ------------------
Issue of share
capital 127,950 220,713 - 348,663
Recognition of
share-based
payments 12 - - 34,021 34,021
Balance at 30
June 2017 3,593,032 38,897,769 (46,309,644) (3,818,843)
================= =================== ==================== ==================
Balance at 1
January 2018 3,615,284 39,053,530 (45,476,232) (2,807,418)
Loss for the
period - - (5,924,652) (5,924,652)
Total
comprehensive
loss for
the period - - (5,924,652) (5,924,652)
----------------- ------------------- -------------------- ------------------
Issue of share
capital 10,844 8,978 - 19,822
Recognition of
share-based
payments 12 - - 28,988 28,988
Balance at 30
June 2018 3,626,128 39,062,508 (51,371,896) (8,683,260)
================= =================== ==================== ==================
Amphion Innovations plc
Condensed consolidated
cash flow statement
For the six months
ended 30 June 2018
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 31 December
30 June 2018 2017 2017
--------------------------- ------------------------ ---------------------------------
US $ US $ US $
Operating activities
(Loss)/profit (5,924,652) 1,684,854 2,499,789
Adjustments for:
Amortisation of
intangible assets - 77,542 119,932
Recognition of
share-based payments 48,810 34,021 52,498
Change in fair value
of investments 5,494,003 (4,277,373) (9,956,222)
(Gain)/loss on sale
of investments (1,478,471) 485,170 3,173,012
Issue notes to settle
interest expense 205,617 184,983 383,436
Issue ordinary shares
to settle finance
fee - 348,664 348,664
Transaction costs 307,044 - -
(Gain)/loss from
change in foreign
exchange rate on
convertible
promissory
notes (204,131) 389,956 712,322
Other income - (4,338) (4,338)
Decrease in security
deposit - - 4,000
(Increase)/decrease
in prepaid &
other receivables 9,979 (28,003) (6,527)
Increase/(decrease)
in trade & other
payables 235,975 (275,384) 329,683
Net cash used in
operating activities (1,305,826) (1,379,908) (2,343,751)
--------------------------- ------------------------ ---------------------------------
Investing activities
Purchases of
investments (642,137) (461,278) (543,361)
Proceeds from
disposition of
investment 3,653,712 1,783,736 4,078,128
Net cash provided by
investing activities 3,011,575 1,322,458 3,534,767
--------------------------- ------------------------ ---------------------------------
Financing activities
Proceeds on issue of
promissory notes - 2,050,000 3,007,964
Repayments of
promissory notes (2,599,566) (1,600,775) (3,477,605)
Net cash (used in)/from
financing
activities (2,599,566) 449,225 (469,641)
--------------------------- ------------------------ ---------------------------------
Net (decrease)/increase
in cash and
cash equivalents (893,817) 391,775 721,375
Cash and cash
equivalents at the
beginning
of the period 1,035,201 313,826 313,826
Cash and cash
equivalents at the end
of the period 141,384 705,601 1,035,201
=========================== ======================== =================================
Interest received 328 12 98
=========================== ======================== =================================
Interest paid 264,216 230,705 374,379
=========================== ======================== =================================
Notes to the condensed consolidated interim financial
statements
1. General information
The condensed consolidated interim financial statements for the
six months ended 30 June 2018 are unaudited and do not constitute
statutory accounts within the meaning of the Isle of Man Companies
Act 2006. The statutory accounts of Amphion Innovations plc for the
year ended 31 December 2017 have been filed with the Registrar of
Companies and contain an unqualified audit report which includes an
emphasis of matter relating to significant uncertainty in respect
of going concern and valuation of Partner Company investments.
Copies are available on the Company's website at
www.amphionplc.com/reports.php.
2. Accounting policies
These condensed consolidated interim financial statements have
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted by the EU (IFRS).
The accounting policies applied by the Group are consistent with
those followed in the preparation of the Group's annual financial
statements for the year ended 31 December 2017. None of the new
standards that have become effective in the period are expected to
have a material effect on the Group's financial statements.
Going concern
After making inquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. In prior years,
the Group has been able to meet its working capital and investment
obligations through fund raising including the issue of shares,
convertible promissory notes ("CPNs") and promissory notes, from
revenue generated through the provision of advisory services to its
Partner Companies, from the revenue generated from the licensing of
intellectual property, and through a secured loan facility. As a
result of a lack of cash being generated from these activities
during 2018, the Group has had to reduce its financial support to
its Partner Companies, sell shares in its listed Partner Companies,
and extend the payment dates for its trade payables and its
convertible and non-convertible promissory notes. As the Company
has been able to reach accommodations with these debt holders in
the past, we believe that, if required, we will be able to reach
agreement to extend the maturity of the debt. In addition, the
Company is currently working with the Facility lender and looking
at alternative lenders in an attempt to extend the maturity date of
the Facility and obtain additional leverage. For these reasons,
they continue to adopt the going concern basis in preparing the
condensed consolidated interim financial statements.
3. Use of judgements and estimates
The preparation of the Group's interim financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, and contingencies at
the date of the Group's interim financial statements, and revenue
and expenses during the reporting period. Actual results could
differ from those estimated. Significant estimates in the Group's
financial statements include the amounts recorded for the fair
value of the financial instruments and other receivables. By their
nature, these estimates and assumptions are subject to an inherent
measurement of uncertainty and the effect on the Group's financial
statements of changes in estimates in future periods could be
significant.
Investments that are fair valued through profit or loss, as
detailed in note 8, are all considered to be "Partner Companies".
Those "Partner Companies" categorised as Level 3 are defined as
investment in "Private Companies".
3. Use of judgements and estimates, (continued)
Fair value of financial instruments
The Directors use their judgement in selecting an appropriate
valuation technique for financial instruments not quoted in an
active market ("Private Investments"). The estimation of fair value
of these Private Investments includes a number of assumptions which
are not supported by observable market inputs. The carrying amount
of the Private Investments is US $2.6 million.
Fair value of other receivables
Other receivables are stated at their amortised cost which
approximates their fair value and are reduced by appropriate
allowances for estimated irrecoverable amounts and do not carry any
interest.
4. Revenue
An analysis of the Group's revenue is as follows:
Six months ended Six months ended Year ended
30 June 2018 30 June 2017 31 December 2017
US $ US $ US $
Continuing
operations
Advisory fees 60,000 153,000 286,367
License fees - - -
60,000 153,000 286,367
=============================== ================================ =============================
As part of the agreement for DataTern, Inc. to purchase certain
of the intangible assets in December 2007, a portion of future
revenues from these patents will be retained by FireStar Software,
Inc. No amounts have become payable to FireStar Software, Inc. to
date.
5. Segment information
For management purposes, the Group is currently organised into
three business segments - advisory services, investing activities,
and intellectual property. These business segments are the basis on
which the Group reports its primary segment information.
Information regarding these segments is presented below.
Advisory Investing Intellectual
services activities property Eliminations Consolidated
Six months Six months Six months Six months Six months
ended ended ended ended ended
30 June 30 June 30 June 30 June 30 June
2018 2018 2018 2018 2018
US $ US $ US $ US $ US $
REVENUE
External advisory
fees 60,000 - - - 60,000
External license
fees - - - - -
---------------------- ---------------------- ----------------------- ---------------------- ----------------------
Total revenue 60,000 - - - 60,000
---------------------- ---------------------- ----------------------- ---------------------- ----------------------
Administrative
expenses (417,109) (857,395) (94,962) - (1,369,466)
---------------------- ---------------------- -----------------------
Segment result (357,109) (857,395) (94,962) - (1,309,466)
Fair value losses on
investments - (5,532,910) - 38,907 (5,494,003)
Realized gain
on sale
of
investments - 1,478,471 - - 1,478,471
Interest income - 328 - - 328
Other gains and
losses - 217,139 - - 217,139
Finance costs - (795,568) (21,649) - (817,217)
Profit/(loss)
before tax (357,109) (5,489,935) (116,611) 38,907 (5,924,748)
Income taxes 96 - - - 96
---------------------- ---------------------- -----------------------
Profit/(loss)
after tax (357,013) (5,489,935) (116,611) 38,907 (5,924,652)
Advisory Investing Intellectual
services activities property Eliminations Consolidated
Six months Six months Six months Six months Six months
ended ended ended ended ended
30 June 30 June 30 June 30 June 30 June
2018 2018 2018 2018 2018
US $ US $ US $ US $ US $
OTHER
INFORMATION
Segment assets 2,348,107 29,545,063 30,909 (11,553,869) 20,370,210
Segment
liabilities 9,266,200 22,826,489 7,938,769 (10,977,988) 29,053,470
Amortisation - - - - -
Recognition of
share-based
payments - 48,810 - - 48,810
5. Segment information, (continued)
For management purposes for 30 June 2017, the Group was
organised into three business segments - advisory services,
investing activities, and intellectual property.
Advisory Investing Intellectual
services activities property Eliminations Consolidated
Six months Six months Six months Six months Six months
ended ended ended ended ended
30 June 30 June 30 June 30 June 30 June
2017 2017 2017 2017 2017
US $ US $ US $ US $ US $
REVENUE
External advisory
fees 153,000 - - - 153,000
External license
fees - - - - -
---------------------- ----------------------
Total revenue 153,000 - - - 153,000
---------------------- ---------------------- ---------------------- ---------------------- ----------------------
Administrative
expenses (331,499) (1,077,680) (343,638) - (1,752,817)
---------------------- ---------------------- ----------------------
Segment result (178,499) (1,077,680) (343,638) - (1,599,817)
Fair value gains on
investments - 4,308,957 - (31,584) 4,277,373
Realized loss
on sale
of
investments - (485,170) - - (485,170)
Interest income - 155,868 - - 155,868
Other gains and
losses - (407,664) 440,865 - 33,201
Finance costs - (660,961) (35,640) - (696,601)
Profit/(loss)
before tax (178,499) 1,833,350 61,587 (31,584) 1,684,854
Income taxes - - - - -
---------------------- ---------------------- ----------------------
Profit/(loss)
after tax (178,499) 1,833,350 61,587 (31,584) 1,684,854
Advisory Investing Intellectual
services activities property Eliminations Consolidated
Six months Six months Six months Six months Six months
ended ended ended ended ended
30 June 30 June 30 June 30 June 30 June
2017 2017 2017 2017 2017
US $ US $ US $ US $ US $
OTHER
INFORMATION
Segment assets 2,150,523 35,418,672 74,316 (10,382,830) 27,260,681
Segment
liabilities 8,500,757 24,878,056 7,526,804 (9,826,093) 31,079,524
Amortisation - - 77,542 - 77,542
Recognition of
share-based
payments - 34,021 - - 34,021
5. Segment information, (continued)
Geographical segments
The Group's operations are located in the United States and the
United Kingdom.
The following table provides an analysis of the Group's advisory
fees by geographical location of the investment.
Advisory fees by
geographical location
------------------------------------
Six months ended Six months ended
30 June 2018 30 June 2017
US $ US $
United States - -
United Kingdom 60,000 153,000
60,000 153,000
================= =================
The following table provides an analysis of the Group's license
fees by geographical location.
License fees by
geographical location
------------------------------------------------------
Six months
ended Six months ended
30 June 2018 30 June 2017
US $ US $
United States - -
Europe - -
- -
========================== ==========================
The following is an analysis of the carrying amount of segment
assets, and additions to fixtures, fittings, and equipment,
analysed by the geographical area in which the assets are
located:
Additions to fixtures, fittings,
Carrying amount and
equipment and intangible
of segment assets assets
---------------------------- -----------------------------------
Six months Six months Six months Six months
ended ended ended ended
30 June 2018 30 June 2017 30 June 2018 30 June 2017
US $ US $ US $ US $
United States 3,913,443 10,252,395 - -
United Kingdom 16,456,767 17,008,286 - -
20,370,210 27,260,681 - -
============= ============= ================= ================
6. Income tax expense
Six months ended Six months ended Year ended
30 June 2018 30 June 2017 31 December 2017
---------------- ---------------- ----------------
US $ US $ US $
Isle of Man income tax - - -
Tax on US subsidiaries (96) - 719
Current tax/(refund) (96) - 719
================ ================ ================
From 6 April 2006, a standard rate of corporate income tax of 0%
applies to Isle of Man companies, with exceptions taxable at the
10% rate, namely licensed banks in respect of deposit-taking
business, companies that profit from land and property in the Isle
of Man and companies that elect to pay tax at the 10% rate. No
provision for Isle of Man taxation is therefore required. The
Company is treated as a Partnership for U.S. federal and state
income tax purposes and, accordingly, its income or loss is taxable
directly to its partners.
The Company has three subsidiaries, two in the USA and one in
the Kingdom of Bahrain. The US subsidiaries, Amphion Innovations US
Inc. and DataTern, Inc., are Corporations and therefore taxed
directly. The US subsidiaries suffer US federal tax, state tax, and
New York City tax on their taxable net income.
The Group charge for the period can be reconciled to the profit
per the consolidated income statement as follows:
US $
Loss before tax (5,924,748)
=========================
Tax at the Isle of Man income tax rate of 0% -
Effect of different tax rates of subsidiaries
operating in other jurisdictions (96)
Current tax/(refund) (96)
=========================
7. Earnings per share
The calculation of the basic and diluted earnings per share
attributable to the ordinary equity holders of the parent is based
on the following data:
Six months Six months
Earnings ended ended Year ended
31 December
30 June 2018 30 June 2017 2017
--------------------------------- ------------------------ -----------------------------
US $ US $ US $
Profit/(loss) for the
purposes of basic
and diluted earnings
per share (5,924,652) 1,684,854 2,499,789
================================= ======================== =============================
Number of shares
Six months Six months
ended ended Year ended
31 December
30 June 2018 30 June 2017 2017
--------------------------------- ------------------------ -----------------------------
Weighted average
number of ordinary
shares
for
the purposes of
basic earnings per
share 209,904,770 199,500,179 203,648,083
Effect of dilutive
potential ordinary
shares:
Options - 1,511,227 1,002
Convertible
promissory notes 202,919,502 74,701,069 74,915,585
Weighted average
number of ordinary
shares
for
the purposes of
diluted earnings
per
share 412,824,272 275,712,475 278,564,670
================================= ======================== =============================
Share options that could potentially dilute basic earnings per
share have been excluded from the computation of diluted earnings
per share in 2018 because they would be antidilutive.
8. Investments
At fair value through profit or loss
Group
------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
---------------------- ------------------------ ---------------------- ----------------------
US $ US $ US $ US $
At 1 January 2018 20,615,470 - 5,477,297 26,092,767
Investments during
the year 573,376 - 68,761 642,137
Transfers between
levels 2,876,579 (2,876,579) -
Disposals (3,653,712) - - (3,653,712)
Fair value losses (3,946,772) - (68,761) (4,015,533)
At 30 June 2018 16,464,941 - 2,600,718 19,065,659
====================== ======================== ====================== ======================
At 1 January 2017 14,918,606 - 7,925,718 22,844,324
Investments during
the year - - 461,278 461,278
Disposals (1,783,736) - - (1,783,736)
Fair value
gains/(losses) 3,873,417 - (81,214) 3,792,203
At 30 June 2017 17,008,287 - 8,305,782 25,314,069
====================== ======================== ====================== ======================
The Group is required to classify fair value measurements using
a fair value hierarchy that reflects the significance of the inputs
used in making the measurements. In the case of the Group,
investments classified as Level 1 have been valued based on a
quoted price in an active market. Investments classified as Level 2
have been valued using inputs other than quoted prices included
within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from
prices). Fair values of unquoted investments classified as Level 3
in the fair value hierarchy have been determined in part or in full
by valuation techniques that are not supported by observable market
prices or rates. Investment valuations for Level 3 investments have
been arrived at using a variety of valuation techniques and
assumptions. For instances where the fair values are based upon the
most recent market transaction but which occurred more than twelve
months previously, the investments are classified as Level 3 in the
fair value hierarchy.
The net decrease in fair value for the six months ended 30 June
2018 of US $4,015,533 includes a net decrease of US $5,425,242 from
the change in value of the public companies and is based on quoted
prices in active markets, a realized gain of US $1,478,471 from the
sale of Motif Bio plc and a net decrease of US $68,761 in Level 3
investments that has been estimated using valuation techniques in
accordance with the International Private Equity and Venture
Capital Valuation Guidelines.
During 2018, securities with a carrying value of US $2,876,579
at 31 December 2017 were transferred from Level 3 to Level 1
because the securities were listed on the AIM of the London Stock
Exchange in 2018 and they are currently actively traded in that
market. The securities now have a published price quotation in an
active market.
8. Investments, (continued)
The 2018 disposals include the sale of 8,896,034 Motif Bio plc
ordinary shares for US $3,653,712 that was used to pay monthly
payments to the institutional lender.
Fair value determination
The Directors have valued the investments in accordance with the
guidance laid down in the International Private Equity and Venture
Capital Valuation Guidelines. The inputs used to derive the
investment valuations are based on estimates and judgements made by
management which are subject to inherent uncertainty. As such the
carrying value in the financial statements at 30 June 2018 may
differ materially from the amount that could be realised in an
orderly transaction between willing market participants on the
reporting date.
In making their assessment of fair value at 30 June 2018,
management has considered the total exposure to each entity
including equity, warrants, options, promissory notes, and
receivables.
Further information in relation to the directly held private
investment portfolio that are at Level 3 at 30 June 2018 is set out
below:
Fair Unobservable
value Methodology inputs
US $
Private investments 2,600,718 Multiple methods used in combination Discount (0%-100%),
including: Discount to last market price of fund
price, discount to last financing round, raising.
price of future financing round, third
party valuation, and valuation of planned
transaction.
-------------------- ------------------------------------------- --------------------
Given the range of techniques and inputs used in the valuation
process and the fact that in most cases more than one approach is
used, a sensitivity analysis is not considered to be a practical or
meaningful disclosure. It should be noted however that increases or
decreases in any of the inputs listed above in isolation may result
in higher or lower fair value measurements.
9. Other financial assets and liabilities
The carrying amounts of the Group's financial assets and
financial liabilities at the statement of financial position date
are as follows.
30 June 2018 31 December 2017
Carrying Fair Carrying Fair
amount value amount value
US $ US $ US $ US $
Financial assets
Fair value through profit or
loss
Investments - designated
as such upon initial recognition 19,065,659 19,065,659 26,092,767 26,092,767
Current assets
Loans and receivables
Security deposit 16,000 16,000 16,000 16,000
Prepaid expenses and other receivables 1,147,167 1,147,167 1,157,146 1,157,146
Cash and cash equivalents 141,384 141,384 1,035,201 1,035,201
Financial liabilities
Amortised cost
Trade and other payables 10,714,011 10,714,011 10,478,036 10,478,036
Notes payable 10,305,673 10,305,673 12,522,232 12,522,232
Convertible promissory notes 8,033,786 8,033,786 8,108,264 8,108,264
The carrying value of cash and cash equivalents, the security
deposit, prepaid expenses and other receivables, and trade and
other payables, in the Directors' opinion, approximate to their
fair value at 30 June 2018 and 31 December 2017.
10. Promissory notes
Convertible promissory notes
On 26 February 2018, the holders of the Convertible Promissory
Notes agreed to amend the terms of the notes. The notes, previously
due on 31 December 2017, are to be redeemed on 31 December 2018
(subject to certain early partial redemption options) unless
previously converted. The notes will be convertible into fully paid
ordinary shares of the Company at a conversion price of 5 pence per
share and 3 pence per share after 31 March 2018. The interest on
the notes is to accrue beginning 1 January 2018 and will be payable
quarterly. The notes will pay interest of 5% (10% after 31 March
2018) if the Company elects to satisfy the interest in either cash
or additional notes or 7% (12% after 31 March 2018) if the Company
elects to satisfy the interest in ordinary shares of the Company at
the volume weighted average price of the shares in the five trading
days prior to their issue. For every GBP1 of note held, the Company
will issue two warrants to subscribe for shares. The exercise price
will be 7 pence per share (5 pence after 31 March 2018) with an
expiration date of 31 December 2019. The Company commits to give
the note holder the option to redeem the remaining portion of the
notes held, subject to the Company having restructured its secured
loan facility. The Company has been able to reach accommodations
with these debt holders in the past, and we believe that, if
required, we will be able to reach agreement to extend the maturity
of the debt.
10. Promissory notes, (continued)
During 2018, US $205,617 (GBP149,261) additional convertible
promissory notes were issued in payment of the accrued interest
payable on the notes for the quarters ended 31 December 2017 and 31
March 2018. The Company redeemed a total of GBP54,923 of
convertible promissory notes for the 30 June 2017 redemption date.
The amounts were paid in January 2018. At 30 June 2018, the
convertible promissory notes totaled US $8,033,786 (GBP6,087,585)
and the warrants issued totaled 12,175,172.
The net proceeds received from the issue of the convertible
promissory notes are classified as a financial liability due to the
fact that the notes are denominated in a currency other than the
Company's functional currency and that on any future conversion a
fixed number of shares would be delivered in exchange for a
variable amount of cash.
Promissory notes
In June 2014, the Company was granted a loan facility
("Facility") by an institutional lender (the "Lender"). In May
2018, the Company sold 8,496,467 shares of Motif Bio plc. The
proceeds were used to pre-pay three months' of loan repayments to
the Lender of the Facility. The remaining loan balance will be
repaid in 4 monthly installments from 15 September to 15 December
2018. The balance of the loan at 30 June 2018 is US $3,336,806 and
continues to be secured by the pledge of 27,475,591 ordinary shares
of Motif Bio plc. Amphion has transferred the legal title to, but
retains the beneficial interest in, the pledged shares. As part of
the Facility, the Directors agreed to a Deed of Postponement that
regulates the Directors' rights in respect to the repayment of any
debt due to them from the Company. The Directors agreed to defer
payment of their debt by the Company until the Facility is repaid
in full.
In July 2017, the Company reached an agreement with the estate
of R. James Macaleer, the former Chairman of the Company, to extend
the maturity of the notes payable totaling US $6,308,600 to the end
of 2017 in return for the grant of 3 million warrants (1 million
with an exercise price of 8p, 1 million with an exercise price of
9p, and 1 million with an exercise price of 10p). In April 2018,
the notes were extended to 31 December 2018. In no case will any
payment be made on the new notes until the amounts outstanding
under the Company's existing Facility are fully repaid. The final
payment until the Facility is currently scheduled for 15 December
2018.
Reconciliation of movements of liabilities to cash flows arising
from financing activities:
Convertible
promissory
Notes payables notes Total
----------------------------- ----------------------------------- ----------------------
Balance at 1 January 2018 12,522,232 8,108,264 20,630.496
Changes from financing
cash flows
Repayment of promissory
notes (2,523,603) (75,963) (2,599,566)
Total changes from
financing cash
flows (2,523,603) (75,963) (2,599,566)
----------------------------- ----------------------------------- ----------------------
Non-cash changes
The effect of changes in
foreign
exchange rates - (204,131) (204,131)
Convertible promissory
notes issued
to settle interest
expense - 205,616 205,616
Transaction costs 307,044 - 307,044
Total changes from
non-cash changes 307,044 1,485 308,529
----------------------------- ----------------------------------- ----------------------
Balance at 30 June 2018 10,305,673 8,033,786 18,339,459
============================= =================================== ======================
11. Share capital
Number GBP US $
------------- ---------------- --------------
Balance as at 31 December
2017 209,175,888 2,091,759 3,615,284
Issued and fully paid:
Ordinary shares of 1p
each 799,562 7,996 10,844
Balance as at 30 June
2018 209,975,450 2,099,755 3,626,128
============= ================ ==============
During the six months ended 30 June 2018, the following changes
occurred to the share capital of the Company:
On 17 January, the Company issued 799,562 ordinary 1p shares at
a premium of .828 per share (US $8,979) to Directors in payment of
2010 and 2016 fees.
12. Share based payments
On 31 October 2016, the Group established the 2016 Long Term
Incentive Plan ("LTIP") to replace the 2006 Unapproved Share Option
Plan that expired in June 2016. During 2018, 938,000 options were
issued under the Plan.
2018
Weighted
average
Number of exercise
share options price (in GBP)
Outstanding at beginning of period 11,966,472 0.04
Granted during the period 938,000 0.02
Forfeited during the period (568,875) 0.02
Expired during the period - -
Outstanding at the end of the period 12,335,597 0.05
======================
Exercisable at the end of the period 12,102,264 0.05
The fair value of options granted has been calculated using the
Black Scholes model which has given rise to fair values per share
of US$0.02. This is based on risk-free rates of 2.91% and
volatility of 94.43%.
The Group recognised total costs of US $28,987 relating to
equity-settled share-based payment transactions in 2018 which were
expensed in the statement of comprehensive income during the
period.
13. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on
consolidation and are not disclosed in this note. Details of
transactions between the Group and other related partners are
disclosed below.
On 1 April 2015, Motif Bio plc entered into an advisory and
consultancy agreement with Amphion Innovations US Inc. Richard
Morgan and Robert Bertoldi, Directors of the Company, are also
Chairman and Director of Motif Bio plc. The consideration for the
services is US $120,000 per annum. The agreement was amended in
December 2016
13. Related party transactions, (continued)
so that either party may terminate the agreement at any time,
for any reason, upon giving the other party 90 days advance written
notice. Amphion Innovations US Inc.'s fee for the period ended 30
June 2018 was US $60,000.
On 1 April 2015, Motif Bio plc entered into a consultancy
agreement with Amphion Innovations plc for Robert Bertoldi, a
Director of Amphion Innovations plc, to provide services to Motif
Bio plc. In July 2017, the agreement was amended to increase the
consideration to US $125,000. The agreement was also amended in
December 2016 so that either party may terminate the agreement at
any time, for any reason, upon giving the other party ninety days
advance written notice.
A subsidiary of the Company has entered into an agreement with
Axcess International, Inc. ("Axcess") to provide advisory services.
Richard Morgan and Robert Bertoldi, Directors of the Company, are
also Chairman and Director of Axcess, respectively. Amphion
Innovations US Inc. will receive a monthly fee of US $10,000
pursuant to this agreement. The agreement renews on an annual basis
until terminated by one of the parties. The monthly fee is
suspended for any month in which Axcess' cash balance falls below
US $500,000. Amphion Innovations US Inc. received no fee during the
period ended 30 June 2018.
A subsidiary of the Company has entered into an agreement with
WellGen, Inc. ("WellGen") to provide advisory and consulting
services. Richard Morgan and Robert Bertoldi, Directors of the
Company, are also Chairman and Director of WellGen, respectively.
The fee under this agreement is US $60,000 per quarter. The
agreement renews annually until terminated by either party. The
subsidiary's fee for the period ended 30 June 2018 was suspended.
At 30 June 2018, US $1,320,000 of the advisory fees remain payable.
This balance has been reduced by a provision for doubtful debts in
the amount of US $1,320,000.
A subsidiary of the Company has entered into an agreement with
PrivateMarkets, Inc. ("PrivateMarkets") to provide advisory
services. Richard Morgan, a Director of the Company, is also the
Chairman of PrivateMarkets. The fee under this agreement is US
$30,000 per quarter until the successful sale of at least US
$3,000,000 and thereafter, US $45,000 per quarter. This agreement
will renew annually unless terminated by either party. The
subsidiary's fee for the period ended 30 June 2018 was suspended.
At 30 June 2018, US $770,000 remains payable by PrivateMarkets. The
payable has been reduced by a provision for doubtful debts in the
amount of US $770,000.
Amphion Innovations US Inc. has entered into an agreement with
DataTern, Inc. ("DataTern") (a wholly owned subsidiary of the
Company) to provide advisory and consulting services. Richard
Morgan and Robert Bertoldi, Directors of the Company, are also
Directors of DataTern. The quarterly fee under this agreement is US
$60,000 and renews annually unless terminated by either party. The
subsidiary's fee for the period ended 30 June 2018 was
suspended.
During 2013, Richard Morgan, a Director of the Company, advanced
US $190,000 to a subsidiary of the Company under promissory notes.
The promissory notes accrue interest at 5% per annum and are
payable in three years. In 2010, Richard Morgan advanced US
$352,866 to the Company. In July 2014, the balance of this advance
was converted into a demand note that accrues interest at 5% per
annum. At 30 June 2018, US $81,301 remains outstanding. The net
amount payable by the Group at 30 June 2018 to Richard Morgan is US
$2,369,192. The amount payable includes a voluntary salary
reduction of US $1,999,687, US $341,779 of which will be payable at
the discretion of the Board at a later date.
At 30 June 2018, US $108,333 was due to Gerard Moufflet, a
retired Director of the Company, for Director's fees and US $8,337
for expenses.
At 30 June 2018, US $1,151,235 was due to Robert Bertoldi, a
Director of the Company, for voluntary salary reductions of which
US $188,769 is payable by the discretion of the Board at a later
date.
13. Related party transactions, (continued)
In May 2017, Richard Morgan and Robert Bertoldi, Directors of
the Company, agreed to a Deed of Postponement where they have
agreed to postpone the repayment of the amounts owed to them, which
total US $4.3 million, until all other debts of the company are
repaid.
14. Subsequent Events
On 16 August 2018, the Company sold 3,000,000 shares of Motif
Bio plc for net proceeds of US $1,286,391. The net proceeds were
used as partial repayment of the loan Facility, as well as ongoing
business operations and development of Amphion's other Partner
Companies. The remaining loan balance will be repaid in three
monthly installments from 15 October to 15 December 2018. The
Company has, however, entered into an agreement in principle,
subject to entering into a definitive binding agreement, to defer
further repayment of the Facility until 30 September 2019 and to
potentially increase the size of the Facility by approximately US
$1.4 million (approximately US $1.1 million after fees and
expenses).
On 1 September 2018, the Company appointed Stephen Austin as a
non-executive director.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EDLFLVKFLBBF
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