18th Aug 2014 09:16
LONDON (Alliance News) - AorTech posted Monday a narrowed pretax loss for the year to end-March, as it transitioned from a manufacturing company to an intellectual-property licensor and pursued legal action against its former chief executive.
AorTech posted a pretax loss from continuing operations of USD823,000, narrowed from a loss of USD3.3 million the year before, as it saw revenue rise slightly to USD418,000 from USD313,000, and it posted significantly lower exceptional costs.
In the recent year, the company recorded an exceptional administrative expense of USD83,000 related to a legal dispute with the company's former chief executive and a finance expense of USD59,000, compared to a USD2.04 million exceptional finance expense related to restructuring in the previous year.
The company's administration expenses fell due to the closing of manufacturing facilities. It said its exit from polymer manufacture had provided it with the opportunity to develop a more attractive business model on a lower cost base by exploiting its intellectual property.
AorTech is embroiled in a legal dispute with former Chief Executive Frank Maguire who resigned in November 2013. The company said that after Maguire's resignation several matters arose that had created "serious concerns". It said it found evidence that Maguire had sought to undertake business transactions with existing and potential licensees unknown to the board.
The company said its investigations discovered Maguire had been negotiating with individuals connected to a company called Foldax, where he has subsequently taken a senior position, over a potential heart valve deal. Additionally, it said its investigations found that Maguire had negotiated with another of AorTech's licensees for a transaction that excluded AorTech.
AorTech said that it had not been informed of these meetings and discussions.
As a result, it said it took legal action against Maguire, who after an initial court hearing was instructed to return all of AorTech's property including all data and confidential information. It said it is taking legal advice from its US attorneys over the possibility of of further action against Maguire and Foldax. It said it had received confirmation that its insurance policies will meet the costs of its legal action against Maguire.
AorTech said the last six months had been "very difficult" due to the time spent on the investigation into Maguire, the delays in the validation process for its manufacturing partner Biomerics LLC, and delays in regulatory processes with several of its licensees.
AorTech said its restructuring is now complete and will result in substantial cost savings going forward.
Shares in AorTech are untraded Monday; they last traded at 32.12 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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