TIDMMTFB
RNS Number : 5772P
Motif Bio PLC
09 June 2015
9 June 2015
Motif Bio plc
Motif BioSciences, Inc.
Audited non-statutory financial statements for the
year ended 31 December 2014
Motif Bio plc (LSE: MTFB), the clinical stage biopharmaceutical
company specialising in developing novel antibiotics, reports to
the market today the non-statutory financial statements of its
wholly-owned subsidiary, Motif BioSciences, Inc. for the year ended
31 December 2014 - a period prior to the completion of the
Company's merger, acquisition, and admission to AIM.
Since the end of the period covered by these financial
statements, Motif Bio plc has completed the Group re-organisation,
a necessity of becoming the holding company of the Group. Motif has
also converted and restructured its liabilities, acquired the
iclaprim assets, and raised new funds of approximately US $4.3
million, before issue costs of approximately US $1.0 million,
through a placing and subscription of new shares and seen its
shares admitted to trading on AIM.
These financial statements have been published to enable Motif
Bio plc to comply with its financial reporting obligations under
the AIM Rules and are presented and prepared in a form consistent
with the financial information, and on the basis of the accounting
policies of Motif BioSciences, Inc. set out in Part IV of the AIM
admission document published by Motif Bio plc on 27 March 2015.
POST BALANCE SHEET HIGHLIGHTS:
-- A transformational period including completion of the Group's
re-organisation, acquisition of iclaprim's assets, US $4.3 million
raised in new funds and successful listing on AIM.
-- On 15 April 2015, the U.S. Food and Drug Administration (FDA)
agreed to the proposed Phase III clinical development programme for
iclaprim.
-- On 1 June 2015, Motif BioSciences, Inc. signed Letters of
Intent and interim agreements with a leading global Clinical
Research Organisation - one of the world's top five providers of
Phase I-IV clinical trial management services and to date, has
contributed to the development of all of the top 50 prescription
medicines on the market.
-- Motif Bio plc selected to present at the 2015 BIO Equity
Conference and at the 2015 BIO International Convention, two
leading global partnering and investor events for the Biotechnology
sector.
-- One of the few opportunities for AIM investors to gain
exposure to a late stage clinical asset that already has a wealth
of safety and efficacy data from previously completed Phase III
trials.
Richard Morgan, Chairman of Motif Bio plc, commented:
"Motif Bio plc has made excellent progress in a short period of
time towards the goal of completing the clinical development of
iclaprim and bringing this novel antibiotic to market. It is
unusual to have a late stage clinical asset that already has a
wealth of safety and efficacy data from previously completed Phase
III trials, and that now has agreement from the FDA to initiate a
new Phase III programme. The scientists at Motif Bio plc have been
able to identify a number of ways to improve this new Phase III
programme, based on careful analysis of the existing data, the
evolving knowledge of infectious diseases, and the improved
regulatory environment.
"With new incentives from governments, including the GAIN Act in
the US, broad recognition by politicians and regulators of the need
to help speed the development of novel antibiotics, and the unique
properties of iclaprim, Motif Bio plc is well placed to make an
important contribution in response to the challenges of
anti-microbial resistance and the need for novel antibiotics."
Enquiries:
Motif Bio plc info@motifbio.com
Graham Lumsden (Chief Executive
Officer)
Robert Bertoldi (Chief Financial
Officer)
www.motifbio.com
+49 (0) 89
MC Services (TRADE PR) 210 2280
Raimund Gabriel +44 (0) 207
Shaun Brown 148 5998
+44 (0) 20
Cairn Financial Advisers (NOMAD) 7148 7900
Tony Rawlinson
Carolyn Sansom
+44 (0) 20
Northland Capital Partners (BROKER) 7382 1100
Gerry Beaney/David Hignell
John Howes/Mark Treharne (Broking)
Plumtree Capital Limited (FINANCIAL +44 (0) 207
ADVISOR) 183 2493
Stephen Austin
Yellow Jersey PR Limited (FINANCIAL
PR) +44 (0) 7768
Dominic Barretto/Fiona Walker 537 739
Notes to Editors:
Motif is a clinical stage biopharmaceutical company, which
specialises in developing novel antibiotics designed to be
effective against serious and life-threatening infections caused by
multi-drug resistant bacteria. The Company has a lead antibiotic
candidate, iclaprim, in clinical development and MTF-001, a
preclinical stage programme to design a best-in-class dihydrofolate
reductase inhibitor (DHFRi).
Iclaprim is being developed for the treatment of the most common
and serious bacterial infections such as acute bacterial skin and
skin structure infections (ABSSSI) and hospital acquired bacterial
pneumonia (HABP), including those caused by resistant strains such
as MRSA (methicillin-resistant Staphylococcus aureus) and MDRSP
(multi-drug resistant Streptococcus pneumoniae) that have become
prevalent in patients in both the community and hospital
settings.
Chairman's Statement
These financial statements are for Motif BioSciences, Inc.
("Motif" or the "Company"), and cover the year ended 31 December
2014, prior to the completion of the merger procedure with Motif
Bio plc which, as a consequence, Motif BioSciences Inc. became a
wholly owned subsidiary undertaking of Motif Bio plc, which was
admitted to trading on the AIM market of the London Stock Exchange
("AIM") on 2 April 2015.
These financial statements have been published to enable Motif
Bio plc to comply with its financial reporting obligations under
the AIM Rules and are presented and prepared in a form consistent
with the financial information, and on the basis of the accounting
policies of, Motif BioSciences Inc. set out in Part IV of the AIM
admission document published by Motif Bio plc on 27 March 2015.
Motif is not required to hold an AGM for the year ended 31 December
2014.
Since the end of the period covered by these financial
statements, Motif Bio plc has completed the Group re-organisation,
a necessity of becoming the holding company of the Group, converted
and restructured its liabilities, acquired the iclaprim assets, and
raised new funds of approximately US$4.3 million, before issue
costs of approximately US$1.0 million, through a placing and
subscription of new shares and seen its shares admitted to trading
on AIM.
Background and Activities since IPO
Motif Bio plc is a clinical stage biopharmaceutical company,
which specialises in developing novel antibiotics designed to be
effective against serious and life-threatening infections caused by
multi-drug resistant bacteria.
Motif Bio plc has a lead antibiotic candidate, iclaprim, in
clinical development and MTF-001, a preclinical stage programme, to
design a best-in-class dihydrofolate reductase inihibitor (DHFRi).
Discussions and negotiations with academic institutions and
pharmaceutical companies are under way to build a portfolio of
antibiotic candidates through licensing. The Group's main area of
operation is in the US. Subject to funding being available, the
Directors anticipate that iclaprim could be ready for
commercialisation within approximately 36 months.
Motif Bio plc has built a team of scientists and experts with
extensive drug development experience. Additional funding will be
needed to carry out the two Phase III clinical trials on iclaprim
and to progress the other drug development programmes.
On 15 April 2015, 13 days following the Company's commencement
of trading on AIM, the Company announced that the U.S. Food and
Drug Administration (FDA) had agreed to the proposed Phase III
clinical development programme for iclaprim.
The Phase III programme is designed to obtain marketing approval
for an intravenous formulation of iclaprim in the treatment of
acute bacterial skin and skin structure infections (ABSSSI) and
hospital acquired bacterial pneumonia (HABP) caused by Gram
positive pathogens, including resistant strains such as MRSA
(methicillin-resistant Staphylococcus aureus) and MDRSP (multi-drug
resistant Streptococcus pneumoniae). The FDA confirmed that two
ABSSSI trials or one ABSSSI trial plus one HABP trial meeting their
pre-specified primary endpoints are required for approval of
iclaprim. Motif is working to determine the costs and timeline of
these options. Assuming that funds can be raised or a partnership
can be entered into, the first Phase III trial for ABSSSI is
expected to commence in the second half of 2015.
On 1 June 2015, Motif Bio plc announced that its wholly-owned
subsidiary, Motif BioSciences Inc., had signed Letters of Intent
(LOIs) and interim agreements with a leading global Clinical
Research Organisation (CRO). Under the terms of the interim
agreements, the CRO will undertake preparations for two Phase III,
randomised, double-blind, multicenter clinical trials to evaluate
the efficacy and safety of intravenous iclaprim versus vancomycin
in the treatment of acute bacterial skin and skin structure
infections ("ABSSSIs") suspected or confirmed to be due to
Gram-positive pathogens. The selected CRO is one of the world's top
five providers of Phase I-IV clinical trial management services and
to date, has contributed to the development of all of the top 50
prescription medicines on the market. The CRO has unique insights
into infectious disease clinical trials with over 17,000 patients
in more than 150 studies.
Motif Bio plc was selected to present at the 2015 BIO Equity
Conference and at the 2015 BIO International Convention, two
leading global partnering and investor events for the Biotechnology
sector.
Addressing a Global Crisis
Resistance to antibiotics is a major global health threat.
So-called "superbugs" are developing resistance to currently
available antibiotics faster than new, effective antibiotics are
being developed. In June 2013, Dr Margaret Chan, Director-General
of the World Health Organisation stated that, "a post-antibiotic
era means, in effect, an end to modern medicine as we know it.
Things as common as strep throat or a child's scratched knee could
once again kill. Some sophisticated interventions, like hip
replacements, organ transplants, cancer chemotherapy, and care of
preterm infants, would become far more difficult or even too
dangerous to undertake."
Iclaprim is being designed to be administered in hospitals as an
intravenous infusion. The directors believe the most urgent need
for novel antibiotics effective against multi-drug resistant
bacteria is in the hospital setting where patients often succumb to
serious, life-threatening infections that require immediate
treatment with the best available antibiotic. In the case of HABP,
mortality rates for infected patients are currently between 20 per
cent. and 50 per cent. Extended hospital stays pose a burden to
healthcare systems and can increase hospital costs by an average of
approximately GBP26,000 per patient. In the directors' experience,
commercialisation of hospital products can be done with fewer
resources than commercialisation in the community because there are
fewer hospital healthcare professionals to communicate with,
compared to launching and educating the larger number of primary
care and general practitioners in most countries.
Outlook
Motif Bio plc has made excellent progress in a short period of
time towards the goal of completing the clinical development of
iclaprim and bringing this novel antibiotic to market. It is
unusual to have a late stage clinical asset that already has a
wealth of safety and efficacy data from previously completed Phase
III trials, and that now has agreement from the FDA to initiate a
new Phase III programme. The scientists at Motif Bio plc have been
able to identify a number of ways to improve this new Phase III
programme, based on a careful analysis of the existing data, the
evolving knowledge of infectious diseases and the improved
regulatory environment.
Iclaprim works in a different way to most other antibiotics and
has a very low propensity for resistance development. This is
important because as bacteria continue to develop resistance,
several different classes of antibiotic, with different mechanisms
will be needed to help fight against the looming public health
crisis. Assuming that the clinical programme can be completed
successfully, iclaprim may become an essential addition to the
range of effective, life-saving antibiotics used by hospital
doctors.
With new incentives from governments, including the GAIN Act in
the US, broad recognition by politicians and regulators of the need
to help speed the development of novel antibiotics, and the unique
properties of iclaprim, Motif Bio plc is well placed to make an
important contribution in response to the challenges of
anti-microbial resistance and the need for novel antibiotics.
Richard C.E. Morgan
Chairman
8 June 2015
Directors' report
Status of the audited non-statutory financial information
The directors of Motif BioSciences, Inc present audited
non-statutory financial information for the Company for the year
ended 31 December 2014 (the "financial information"). The financial
information covers the period prior to the completion of the
Company's merger procedure with Nuprim, Inc and consequent
acquisition of the exclusive rights to Nuprim's iclaprim assets,
the completion of the Company's merger procedure with Motif Bio plc
as a consequence of which the company became a wholly owned
subsidiary undertaking of Motif Bio plc and the admission of the
share capital of Motif Bio plc to trading on AIM, all of which
effectively completed on 2 April 2015.
The financial information has been presented and prepared in a
form consistent with the financial information of Motif
BioSciences, Inc, and on the basis of the accounting policies of
Motif BioSciences, Inc, set out in Part IV of the AIM admission
document published by Motif Bio plc on 27 March 2015, and in a form
consistent with that which will be adopted in the next published
financial statements of Motif Bio plc having regard to accounting
standards and policies and legislation applicable to such annual
financial statements.
The financial information has been published by the company to
enable Motif Bio plc to comply with its financial reporting
obligations under the AIM Rules and does not constitute statutory
financial statements for either Motif BioSciences, Inc or Motif Bio
plc. The financial information has been audited but does not
constitute statutory financial statements of Motif BioSciences, Inc
under company law applicable in either the UK or the USA.
Directors
The following served as directors of Motif BioSciences, Inc
during the period:
Richard C.E. Morgan
Jonathan Gold
Zaki Hosny
Dr. Mary Lake Polan
Dr. John W. Stakes
Bruce A. Williams
Gerard Moufflet - resigned October 30, 2014
Dr. Graham Lumsden - appointed October 15, 2014
Charlotta Ginman-Jones - appointed December 30, 2014
Statement of directors' responsibilities in relation to the
non-statutory financial information
The directors are responsible for preparing the annual report
and the non-statutory financial statements. The directors are
required to prepare non-statutory financial statements for the
Company in accordance with International Financial Reporting
Standards as adopted by the European Union.
International Accounting Standard 1 requires that non-statutory
financial statements present fairly for each financial year the
Company's financial position, financial performance, and cash
flows. This requires the faithful representation of the effects of
transactions, other events and conditions in accordance with the
definitions and recognition criteria for assets, liabilities,
income and expenses set out in the International Accounting
Standards Board's "Framework for the Preparation and Presentation
of Financial Statements". In virtually all circumstances, a fair
representation will be achieved by compliance with all IFRS.
Directors are also required to:
-- select suitable accounting policies and then apply them consistently;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information, and
-- provide additional disclosures when compliance with the
specific requirements in IFRS is insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the Company's financial position and financial
performance.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
In the opinion of the directors, the non-statutory financial
statements are drawn up so as to give a true and fair view of the
state of affairs of the Company as at 31 December 2014, and of the
results, the changes in equity and cash flows of the Company for
the period then ended and at the date of this statement, there are
reasonable grounds to believe that the Company will be able to pay
its debts as and when they fall due.
Dividends
The directors do not recommend payment of a dividend in respect
of the year ended 31 December 2014.
Going Concern
The directors are required to report that the business is a
going concern, with supporting assumptions or qualifications as
necessary.
After making enquiries, the directors consider that the Company
has adequate resources and committed borrowing facilities to
continue in operational existence for the foreseeable future.
Consequently, they have adopted the going concern basis in
preparing the non-statutory financial statements.
Statement of disclosure to non-statutory auditor
The directors have confirmed that:
-- so far as each director is aware, there is no relevant audit
information of which the Company's non-statutory auditor is
unaware; and
-- each director has taken all the necessary steps he ought to
have taken as a director in order to make himself aware of any
relevant audit information and to establish that the Company's
non-statutory auditor is aware of that information.
By order of the Board
Richard C.E. Morgan
Chairman
8 June 2015
Independent auditors' report on the non-statutory financial
information on Motif BioSciences, Inc
We have audited the non-statutory financial statements ("the
non-statutory financial statements") of Motif BioSciences, Inc. for
the year ended 31 December 2014, which comprise the Statements of
Comprehensive Income, the Statements of Financial Position, the
Statements of Cash Flow, the Statements of Changes in Equity and
the related notes.
The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union. This report is
made solely to the Company's members, as a body. Our audit work has
been undertaken so that we might state to the Company's members
those matters we are required to state to them in an auditor's
report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than
the Company and the Company's members as a body, for our audit
work, for this report, or for the opinions we have formed.
Respective Responsibilities of directors and auditor
As explained more fully in the Statement of Directors'
Responsibilities, the directors are responsible for the preparation
of the non-statutory financial statements and for being satisfied
that they give a true and fair view. Our responsibility is to audit
the non-statutory financial statements in accordance with
applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing
Practices Board's Ethical Standards for Auditors.
Scope of the audit of the non-statutory financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the non-statutory financial statements sufficient to
give reasonable assurance that the financial statements are free
from material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the directors; and the
overall presentation of the non-statutory financial statements.
In addition, we read all the financial and non-financial
information, which comprise the Chairman's Statement and the
Directors' Report, to identify material inconsistencies with the
audited non-statutory financial statements. If we become aware of
any apparent material misstatements or inconsistencies we consider
the implications for our report.
Opinion on non-statutory financial statements
In our opinion the non-statutory financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 December 2014 and of its results for the period
then ended; and
-- have been properly prepared in accordance with IFRSs as adopted by the European Union.
Crowe Clark Whitehill LLP
Chartered Accountants
London
8 June 2015
Statements of comprehensive income of Motif BioSciences, Inc
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
Note US$ US$
--------------------------------------- ----- ------------ --------------
Revenue - -
Cost of revenue - -
------------ --------------
Gross margin - -
General and administrative (1,096,116) (670,122)
Operating loss 2 (1,096,116) (670,122)
Interest income 78 -
Interest expense, net 5 (449,036) (444,328)
Other income 360,060 -
Loss before income taxes (1,185,014) (1,114,450)
Income tax 6 (876) (1,046)
------------ --------------
Net loss for the period (1,185,890) (1,115,496)
Net comprehensive loss for the period (1,185,890) (1,115,496)
Loss per share (cents)
Basic and diluted* 7 (0.13) (0.13)
--------------------------------------- ----- ------------ --------------
* In accordance with IAS33 "Earnings per share", where the
entity has reported a loss for the period, the shares are not
diluted
Statements of financial position of Motif BioSciences, Inc
31 Dec 31 Dec
2014 2013
Note US$ US$
---------------------------------------- ----- ------------- -------------
ASSETS
Current assets
Notes receivable 12,000 -
Prepaid expenses and other receivables 8 210,661 -
Cash 3,281 44
------------- -------------
225,942 44
------------- -------------
Total assets 225,942 44
---------------------------------------- ----- ------------- -------------
LIABILITIES
Current liabilities
Trade and other payables 9 4,162,946 3,505,253
Other interest-bearing loans and
borrowings 10 6,981,454 6,771,090
11,144,400 10,276,343
------------- -------------
Total liabilities 11,144,400 10,276,343
Net liabilities (10,918,458) (10,276,299)
------------- -------------
STOCKHOLDERS' DEFICIT
Common Stock 12 1,110 844
Share premium 3,964,455 3,692,207
Retained deficit (14,884,023) (13,969,350)
Total stockholders' deficit (10,918,458) (10,276,299)
Statements of changes in equity of Motif BioSciences, Inc
Common Share Retained
stock Premium deficit Total
US$ US$ US$ US$
----------------------------- --------- ---------- ------------- -------------
As at 1 January 2013 859 3,725,942 (13,133,131) (9,406,330)
Loss for the period - - (1,115,496) (1,115,496)
Total comprehensive loss
for the period - - (1,115,496) (1,115,496)
Forfeiture of common stock (15) (33,735) - (33,750)
Stock based payments - - 279,277 279,277
As at 31 December 2013 844 3,692,207 (13,969,350) (10,276,299)
--------- ---------- ------------- -------------
Loss for the period - - (1,185,890) (1,185,890)
--------- ---------- ------------- -------------
Total comprehensive loss
for the period - - (1,185,890) (1,185,890)
Issuance of common stock 211 210,373 - 210,584
Share options exercised 55 61,875 (28,930) 33,000
Stock based payments - - 300,147 300,147
At 31 December 2014 1,110 3,964,455 (14,884,023) (10,918,458)
--------- ---------- ------------- -------------
Common stock represents the aggregate par value of the Company's
issued common stock.
Share premium represents the excess issue price over and above
the par values of the Company's common stock.
Retained deficit represent the aggregate retained deficit of
Motif.
Cash flow statements of Motif BioSciences, Inc
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
Note US$ US$
----------------------------------------------- ------ ------------ ----------
Operating activities:
Operating loss for the period (1,096,116) (670,122)
Adjustments to reconcile net loss
to net cash used in operating activities:
Stock-based payments 300,147 279,277
Interest expense (449,036) (444,328)
Interest income 78 -
Other income 360,060 -
Changes in operating assets and liabilities:
Prepaid expenses, notes receivable
and accounts receivable (222,661) 33,101
Accounts payable and other accrued
liabilities 657,693 685,414
------------ ----------
Net cash used in operating activities (449,835) (116,658)
Net cash used in investing activities - -
Taxation paid (876) (1,046)
Financing activities:
Proceeds from issuance of promissory
notes 210,364 151,406
Proceeds from issue of share capital 210,584 -
Proceeds from exercise of options 33,000 -
Forfeiture of common stock - (33,750)
Net cash provided by financing activities 453,948 117,656
------------ ----------
Net change in cash 3,237 (48)
Cash, beginning of period 44 92
------------ ----------
Cash, end of period 3,281 44
------------------------------------------------------- ------------ ----------
Notes to the non-statutory financial statements of Motif
BioSciences, Inc
1. Summary of significant accounting policies
General information
Motif BioSciences, Inc. is a company incorporated and domiciled
in the USA engaged in applying proprietary technology and expertise
in medicinal chemistry, biology, and genomics to discover and
develop best-in-class small molecule drugs and novel genetic
targets that can be partnered out to the pharmaceutical industry
for further development.
Basis of preparation
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in this
financial information.
a. Basis of preparation
The financial statements have been prepared in accordance with
the requirements of the AIM Rules for Companies and in accordance
with this basis of preparation. This basis of preparation describes
how the financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union (IFRSs as adopted by the EU). The financial
statements have been prepared under the historical cost convention.
A summary of the more important company accounting policies is set
out below.
The preparation of financial statements in conformity with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial information and the reported amounts of revenue and
expenses during the period. Although these estimates are based on
management's best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates.
b. Standards, amendments and interpretations to published standards not yet effective
Certain changes to IFRS will be applicable for the Company's
financial information in future periods. To the extent that these
have not been adopted early in the preparation of the financial
information, they will not affect the Company's reported profit or
equity but they may affect disclosures.
The directors have considered those standards and
interpretations, which have not yet been applied in the financial
information but are relevant to the Company's operations, that are
in issue but not yet effective and do not consider that any will
have a material impact on the future results of Motif.
Numerous other minor amendments to standards have been made as a
result of the IASB's annual improvement project.
c. Segment reporting
The chief operating decision-maker is considered to be the Board
of Directors of Motif BioSciences, Inc. The chief operating
decision-maker allocates resources and assesses performance of the
business and other activities at the operating segment level.
The chief operating decision maker has determined that Motif has
one operating segment, the development and commercialisation of
pharmaceutical formulations. All activities take place in the
USA.
d. Internally generated intangible assets - research and development costs
Costs on research activities are recognised as an expense in the
period in which they are incurred. An internally generated
intangible asset arising from the development of pharmaceutical
formulations is recognised only if all of the following conditions
are met:
- It is probable that the asset will create future economic
benefits;
- The development costs can be measured reliably;
- Technical feasibility of completing the intangible asset can
be demonstrated;
- There is the intention to complete the asset and use or sell
it;
- There is the ability to use or sell the asset; and
- Adequate technical, financial and other resources to complete
the development and to use or sell the asset are available.
At this time Motif does not meet all conditions and development
costs are recorded as expense in the period in which the cost is
incurred.
e. Measurement convention
The financial information has been prepared on the historical
cost basis. Non-current assets are stated at the lower of previous
carrying amount and fair value less costs to sell.
f. Classification of financial instruments issued by the Company
Under IAS32, financial instruments issued by the Company are
treated as equity only to the extent that they meet the following
two conditions:
(a) they include no contractual obligations upon the Company to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavorable to the Company; and
(b) where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments or is a derivative that will be settled by the
Company exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the Company's own shares, the
amounts presented in these financial statements for called up share
capital and share premium account exclude amounts in relation to
those shares.
g. Cash and cash equivalents
Cash and cash equivalents comprise cash balances. Bank
overdrafts that are repayable on demand, and form an integral part
of the Company's cash management, are included as a component of
cash and cash equivalents for the purpose only of the cash flow
statement.
h. Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
i. Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment losses. Where
parts of an item of property, plant and equipment have different
useful lives, they are accounted for as separate items of property,
plant and equipment.
Depreciation is charged to the income statement on a
straight-line basis over the estimated useful lives of the assets.
The estimated useful lives range from 3 to 5 years.
j. Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair
value less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised
cost with any difference between cost and redemption value being
recognised in the income statement over the period of the
borrowings on an effective interest basis.
k. Share-based payment transactions
The grant date fair value of options granted to employees,
directors, and consultants is recognised as expense, with a
corresponding increase in equity, over the period in which the
option holders become unconditionally entitled to the options. The
fair value of the options granted is measured using an option
valuation model, taking into account the terms and conditions upon
which the options were granted. The amount recognised as an expense
is adjusted to reflect the actual number of share options that vest
except where forfeiture is due only to share prices not achieving
the threshold for vesting.
l. Financial income and expenses
Financial income comprises interest receivable on funds
invested. Financial expenses comprise interest payable.
Interest income and interest payable are recognised in the
income statement as they accrue, using the effective interest
method.
m. Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income
for the period, using tax rates enacted or substantively enacted at
the balance sheet date and any adjustment to tax payable in respect
of previous years.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination; and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilized.
n. Earnings per share
The Company presents basic and diluted earnings per share (EPS)
data for its shares. Basic EPS is calculated by dividing the profit
or loss attributable to shares of the Company by the weighted
average number of shares outstanding during the period. Diluted EPS
is determined by adjusting the profit or loss attributable to
shareholders and the weighted average number of shares outstanding
for the effects of all dilutive potential shares, which comprise
share options and warrants granted to employees and non-employees.
Where the Company makes a loss, diluted EPS equates to basic
EPS.
o. Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
income statement over the period of the borrowings using the
effective interest method.
Debt issuance costs on loan facilities are recognised as
transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case,
the fee is deferred until the draw-down occurs. To the extent there
is no evidence that it is probable that some or all of the facility
will be drawn down, the fee is capitalised as a pre-payment for
liquidity services and amortised over the period of the facility to
which it relates.
p. Use of assumptions and estimates
In preparing the financial information, the directors have to
make judgments on how to apply the Company's accounting policies
and make estimates about the future. The critical judgments that
have been made in arriving at the amounts recognised in the
financial information and the key sources of estimation uncertainty
that have a significant risk of causing a material adjustment to
the carrying value of assets and liabilities in the next financial
year, are discussed below:
Capitalisation of intangible assets
The directors have to make judgments when deciding to capitalise
an internally generated intangible fixed asset arising from the
development of antibiotic drugs. This is done when all the
conditions for capitalising research and development are met. At
this time, the Company does not meet all conditions and development
costs are recorded as expense in the period in which the cost is
incurred. All other intangible assets are capitalised at cost when
they are acquired which can be measured reliably.
Stock based payments
The directors have to make judgments when deciding on the
variables to apply in arriving at an appropriate valuation of stock
based compensation and similar awards including appropriate factors
for volatility, risk free interest rate and applicable future
performance conditions and exercise patterns.
2. Operating loss
12 months 12 months
ended ended
The following items have been included 31 Dec 31 Dec
in arriving at 2014 2013
operating loss US$ US$
----------------------------------------------- ---------- ----------
Employee costs (Note 3) 302,468 133,605
Depreciation of property, plant and equipment - -
Motif BioSciences, Inc is not subject to local statutory audit
and no fees were therefore been paid to the Company's independent
auditors for that purpose in the period ended 31 December 2014.
3. Employee numbers and costs
The average number of persons employed by Motif (including
executive directors but excluding non-executive directors) and key
management personnel during the period, analysed by category, was
as follows:
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
Directors and key management personnel 1 1
Non-executive directors 6 6
7 7
---------------------------------------- ---------- ----------
The aggregate payroll costs of those persons were as
follows:
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
US$ US$
----------------------- ---------- ----------
Short term benefits:
Wages and salaries 210,000 110,000
Social security costs - 2,295
Stock based payments 92,468 21,310
----------------------- ---------- ----------
302,468 133,605
----------------------- ---------- ----------
4. Directors' remuneration
The directors' did not receive any salaries prior to 31 December
2014. Directors of the Company have, however, been awarded rights
to subscribe for stock in the Company as set out below:
Exercise Expiry
Name Number of options price date
US
$
----------------- ---------------------------- ------------------------------ ---------- -----------
At 1 January At 31 December
2013 2013
Richard C.E. Between
Morgan 110,500 110,500 0.50 2020-2021
Between
Zaki Hosny 98,600 98,600 0.50 2019-2021
30 January
Zaki Hosny - 150,000 0.10 2023
Between
Jonathan Gold 210,600 210,600 0.06-0.50 2014-2021
Between
Gerard Moufflet 200,800 200,800 0.06-0.50 2014-2020
Dr. Mary Lake Between
Polan 200,900 200,900 0.06-0.50 2014-2021
Between
Dr. John Stakes 190,700 190,700 0.06-0.50 2014-2021
Between
Bruce Williams 237,500 237,500 0.50 2020-2021
At 1 January At 31 December
2014 2014
Richard C.E. Between
Morgan 110,500 810,500 0.10-0.50 2020-2024
Between
Zaki Hosny 248,600 598,600 0.10-0.50 2019-2024
Between
Jonathan Gold 210,600 460,600 0.10-0.50 2020-2024
1 January
Gerard Moufflet 200,800 100,800 0.50 2020
Dr. Mary Lake Between
Polan 200,900 450,900 0.10-0.50 2020-2024
Between
Dr. John Stakes 190,700 440,700 0.10-0.50 2020-2024
Between
Bruce Williams 237,500 587,500 0.10-0.50 2020-2024
Dr. Graham Between
Lumsden - 4,800,000 0.10 2023-2024
Charlotta 4 December
Ginman-Jones - 350,000 0.10 2024
----------------- ---------------------------- ------------------------------ ---------- -----------
5. Interest expense
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
US$ US$
------------------------------------------- ---------- ----------
Interest expense on financial liabilities
at amortised cost 449,036 444,328
---------- ----------
6. Income tax expense
Recognised in the income statement:
12 months 12 months
ended ended
31 Dec 31 Dec
Current tax expense 2014 2013
US$ US$
------------------------------- ---------- ----------
Current year/period 876 817
Adjustments for prior periods - 229
-------------------------------
876 1,046
------------------------------- ---------- ----------
Reconciliation of effective tax rate
US$ US$
-------------------------------------- ------------ ------------
Loss for the period (1,185,014) (1,114,450)
------------ ------------
United States corporation tax at 34% 402,905 378,913
Effects of:
Unrecognised deferred tax asset (402,905) (378,913)
Other adjustments 876 1,046
-------------------------------------- ------------ ------------
876 1,046
-------------------------------------- ------------ ------------
7. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of common stock in issue during the period. In
accordance with IAS 33, where the Company has reported a loss for
the period, the shares are not diluted. The number of potentially
dilutive instruments, share options and convertible promissory
notes, are detailed in notes 11 and 12 respectively.
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
US$ US$
------------------------------------------ ------------ ------------
Loss after taxation (1,185,890) (1,115,496)
Basic weighted average shares in issue 8,947,705 8,455,258
Basic and diluted loss per share (cents) (0.13) (0.13)
------------------------------------------- ------------ ------------
8. Prepaid expenses and other receivables
12 months 12 months
ended ended
31 Dec 31 Dec
Amounts due within one year 2014 2013
US$ US$
---------------------------------- ---------- ----------
Other receivables and prepayments 210,661 -
210,661 -
---------------------------------- ---------- ----------
Included in other receivables is an amount of $210,583 in
relation to the acquisition of the iclaprim assets. On 17 October
2014, Motif issued 2,105,832 shares of common stock to the
shareholders of Nuprim, Inc. at the execution of an agreed upon
term sheet. Under the term sheet, Motif would merge Nuprim, Inc.
into Motif and acquire the exclusive rights to Nuprim's iclaprim
assets, the issued shares of common stock in the Company to be held
in escrow until the closing of the reorganisation. The directors
consider the fair value of the shares of common stock in the
Company at the date of issue was $0.10 per share.
The maximum exposure to credit risk at the end of each reporting
period is the fair value of each class of receivables set out
above. The Company held no collateral as security. The Directors
estimate that the carrying value of receivables approximated their
fair value.
9. Trade and other payables
12 months 12 months
ended ended
31 Dec 31 Dec
Amounts due within one year 2014 2013
US$ US$
----------------------------- ---------- ----------
Trade payables 22,243 20,368
Accrued expenses 2,241,645 2,153,679
Accrued interest expenses 1,769,329 1,320,293
Amounts due to affiliates 129,729 10,913
4,162,946 3,505,253
----------------------------- ---------- ----------
Included in trade and other payables were amounts due to
affiliates in respect of accrued interest on loan notes (see note
10) and other liabilities as follows:
Amounts due to Amphion Innovations
plc 1,513,080 1,122,378
Amounts due to Amphion Innovations
US Inc 177,463 133,128
1,690,543 1,255,506
------------------------------------ ---------- ----------
10. Other interest bearing loans and borrowings
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
US$ US$
------------------------------ ---------- ----------
Amounts due within one year
Convertible promissory notes 200,000 200,000
Notes payable to affiliates 6,781,454 6,571,090
6,981,454 6,771,090
------------------------------ ---------- ----------
The convertible promissory notes were issued in July 2008 and
matured in July 2011 but remain unpaid. The notes accrued interest
at 5% per annum until maturity and accrue interest at 7% after
maturity. In the event the Company receives aggregate gross
proceeds that equal or exceed US $4,000,000 from the financing that
includes the offering of the notes including conversion of the
Company's existing debt, the principal amount of these notes and
the accrued but unpaid interest shall automatically be converted
into shares of the Company's Series D preferred stock, at a per
share price equal to the lower of US $4.00 and the lowest sales
price of the Company's preferred stock in relevant prior offerings.
At any time prior to the occurrence of a mandatory conversion, the
note holder may convert the principal and accrued but unpaid
interest into shares of the Company's Series D preferred stock at a
per share price equal to the lower of US $4.00 and the lowest sales
price of the Company's preferred stock in relevant prior
offerings.
The notes payable to affiliates are demand notes from a
shareholder of the Company - Amphion Innovations plc and its
subsidiary undertaking, Amphion Innovations US Inc. The notes
accrue interest at 5% per annum. If the principal or accrued
interest remains outstanding at such time as the Company concludes
an equity financing that equals or exceeds one million US dollars,
the note holder may convert all or part of the principal balance
plus accrued but unpaid interest into the securities of the Company
issued in the financing at a conversion rate equal to the price per
security at which the securities are issued in the financing.
11. Stock based payments
Motif has issued options and warrants to employees, directors,
consultants, and note holders. The life of the options and warrants
range from 7 to 10 years.
Weighted
Number of average
exercise
share options price
US $
-------------------- ---------------------- -------------------------
Outstanding at 1
January 2013 7,047,106 0.609
Granted during the
period 1,350,000 0.100
Forfeited during
the period - -
Expired during the
period (55,000) 1.330
Outstanding at 31
December 2013 8,342,106 0.522
Granted during the
period 13,250,000 0.100
Forfeited during
the period (651,664) 0.113
Exercised during
the period (550,000) 0.060
Expired during the
period (717,232) 0.875
Outstanding at 31
December 2014 19,673,210 0.251
======================
The fair value of options and warrants has been valued using the
Black Scholes option pricing model. Volatility has been estimated
by reference to historical stock price data. The assumptions for
each option grant were as follows:
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
------------------------------------- ---------- ----------------
Weighted average share price ($) 0.10 0.10
Weighted average exercise price ($) 0.10 0.10
Expected volatility 80-84% 87 - 88%
Expected life 10 years 10 years
2.15 - 2.19 -
Risk free rate 2.64% 2.30%
Expected dividends - -
The range of exercise prices of the options at 31 December 2014
were $0.10-$3.00 (31 December 2013, 2012, 2011 - $0.06 - $3.00).
The weighted average remaining contractual life of the outstanding
options is 8.3 years.
The total expense recognised for the periods arising from
stock-based payments are as follows:
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
US$ US$
----------------------------- ---------- ----------
Stock based payment expense 300,147 279,277
------------------------------- ---------- ----------
On 4 December 2014, the Company adopted a Stock Option Plan
under which options can be granted to employees, consultants, and
directors of Motif. Under the Plan, 12,950,000 options were issued
in 2014.
12. Capital
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
US$ US$
------------------------------------------ ---------- ----------
Authorised capital:
30,000,000 common stock of $0.0001
each 3,000 3,000
1,250,000 Series A convertible preferred
stock of $0.0001 each 125 125
1,500,000 Series B convertible preferred
stock of $0.0001 each 150 150
333,340 Series C convertible preferred
stock of $0.0001 each 33 33
3,000,000 Series D convertible preferred
stock of $0.0001 each 300 300
3,916,660 preferred stock of $0.0001
each 392 392
4,000 4,000
------------------------------------------ ---------- ----------
Allotted, called up and fully
paid: Number US$
In issue at 31 December 2013
Common stock of US $.0001
each 5,610,000 561
Series A convertible preferred
stock of US $.0001 each 1,250,000 125
Series B convertible preferred
stock of US $.0001 each 1,250,000 125
Series C convertible preferred
stock of US $.0001 each 333,340 33
8,443,340 844
In issue at 31 December 2014
Common stock of US $.0001
each 8,265,832 827
Series A convertible preferred
stock of US $.0001 each 1,250,000 125
Series B convertible preferred
stock of US $.0001 each 1,250,000 125
Series C convertible preferred
stock of US $.0001 each 333,340 33
11,099,172 1,110
============== =================
The holders of common stock are entitled to one vote for each
share of common stock held by them. Subject to the rights and
preferences of the holders of any preferred stock, the holders of
the common stock are entitled to receive dividends.
The holders of the preferred stock have the right to vote on an
as-converted basis, with the common stock. Each preferred share is
initially convertible into shares of common stock on a one-for-one
basis, at the option of the holder at any time. Upon the date when
the Company's common stock begins publicly trading, the shares will
be automatically converted into shares of common stock. In the
event of any liquidation, dissolution, or winding up of the
Company, the holders of preferred stock will be entitled to
receive, prior and in preference to any distribution of any of the
assets of the Company to the holders of shares of any other stock,
an amount per share of preferred stock equal to the preferred stock
original issue price plus all declared and unpaid dividends. The
holders of preferred stock are entitled to receive cash dividends
on an as converted basis.
On 17 October 2014, Motif issued 2,105,832 shares of common
stock to the shareholders of Numprim, Inc. at the execution of an
agreed upon term sheet. Under the term sheet, Motif would merge
Nuprim, Inc. into Motif and acquire the exclusive rights to
Numprim's iclaprim assets, the issued shares of common stock in
Motif to be held in escrow until the closing of the reorganisation
(see notes 8, 15, and 16).
In October 2014, 200,000 shares of common stock were issued to
two directors upon the exercise of their options at US $.06 per
share. One of the directors issued a promissory note for US $6,000
in payment. The note accrues interest at 5% per annum and is to be
repaid within 30 days of the completion of a financing in excess of
US $5,000,000 but no later than 31 March, 2015.
In December 2014, 100,000 shares of common stock were issued to
a director upon the exercise of his options at US $.06 per share.
The director issued a promissory note for US $6,000 in payment. The
note accrues interest at 5% per annum and is to be repaid within 30
days of the completion of a financing in excess of US $5,000,000
but no later than 31 March 2015.
In December 2014, options were exercised to purchase 250,000
shares of common stock at US $.06 per share for a total of US
$15,000.
In December 2014, the Company established a Stock Option Plan.
On 4 December 2014, 12,950,000 options were issued to employees and
consultants of the Company. The options were issued with an
exercise price of US $0.10 and will mature ten years from the date
of grant. The options will vest over three years.
13. Financial instruments
Categories of financial instruments
Set out below is a comparison by category of the carrying values
and fair values of all the Company's financial assets and financial
liabilities.
Financial instruments of the Company at each period end are:
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
US$ US$
Financial assets:
Notes receivable 12,000 -
Trade and other receivables 78 -
Cash 3,281 44
Financial liabilities:
Trade and other payables 4,162,946 3,505,253
5% convertible promissory notes 200,000 200,000
Notes payable 6,781,454 6,571,090
Foreign currency exchange risk
The Company does not generally undertake foreign currency
hedging. The majority of the Company's transactions are denominated
in US$ and it uses this as its reporting currency.
Liquidity risk
The directors regularly review the Company's major funding
positions to ensure that it has adequate financial resources in
meeting its financial obligations. The directors take liquidity
risk into consideration when deciding on sources of funds.
Credit risk
The Company had receivables of $78 at 31 December 2014 (2013:
$nil). The maximum exposure to credit risk at the end of each
reporting period is the fair value of each class of receivables set
out above. The Company held no collateral as security. The
Directors estimate that the carrying value of receivables
approximated their fair value.
Market risk
The Company has minimal exposure to the differing types of
market risk. It has no foreign currency denominated monetary assets
or liabilities and does not make sales or purchases from overseas
countries. The Company is not exposed to changes in interest rates
as the cash balances that it holds are de-minimis and its financing
exposures are at fixed rates of interest.
Capital risk management
The directors define capital as the total equity of the Company.
The directors' objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for stockholders and benefits for other
stakeholders and to maintain an optimal structure to reduce the
cost of capital. In order to maintain an optimal capital structure,
the directors may adjust the amount of dividends paid to
stockholders, return capital to stockholders and issue new stock to
reduce debt.
14. Related party transactions
Transactions with Amphion Innovations plc and Amphion
Innovations US Inc
At 31 December 2014 Amphion Innovations plc owned 37.99% of the
issued stock in Motif. In addition, Amphion Innovations plc and its
wholly owned subsidiary undertaking, Amphion Innovations US Inc,
(together the 'Amphion Group') have provided funding for the
activities of Motif through the issue of convertible interest
bearing loan notes. Richard Morgan was a director of both Motif and
Amphion Innovations plc in the period. Transactions between Motif
and the Amphion Group are disclosed below:
12 months 12 months
ended ended
31 Dec 31 Dec
2014 2013
US$ US$
-------------------------------------- ---------- ----------
Amounts due to Amphion Innovations
plc 116,777 -
Amounts due to Amphion Innovations
US Inc 12,952 10,914
Notes payable to Amphion Innovations
plc 5,894,746 5,684,383
Notes payable to Amphion Innovations
US Inc 886,707 886,707
Interest on loan notes accrued and
unpaid in period 435,036 424,416
--------------------------------------- ---------- ----------
Transactions with key management personnel
The directors are responsible for planning, directing, and
controlling the activities of the Company. Transactions between the
Company and its key management personnel and are disclosed in notes
3 and 4 above.
15. Commitment - Nuprim merger procedure
On 31 December 2014 the Company entered into the Nuprim merger
agreement with Nuprim Inc and the former Nuprim shareholders
pursuant to which Nuprim Inc would merge with and into the Company,
which would be the surviving corporation.
Under the terms of the Nuprim merger procedure the Company would
obtain the exclusive worldwide rights to the assets owned by
Nuprim, including the iclaprim assets, and the rights to acquire
certain ancillary materials over a period ending 31 December 2017.
The Company is responsible for costs and expenses related to or
arising from the transfer prices of the iclaprim assets, including
storage and delivery costs of the physical drug supply and
inventory which may be payable after 17 October 2014 and must
assume and accept the terms and obligations arising under the
Acino-LSMG agreement, including payment obligations and is also
responsible for any third-party legal or administrative costs
incurred by Nuprim in connection with the transaction, up to a
maximum of US $25,000 and any obligations arising under a sale and
purchase agreement between F. Hoffmann-La Roche Ltd,
Hoffmann-LaRoche Inc and Arpida Ltd., dated 1 June 2001.
On completion of the Nuprim merger procedure the 1,513,040 (post
reverse stock split) shares of common stock in Motif BioSciences,
Inc. were issued to the former Nuprim shareholders on 17 October
2014 when the term sheet was executed, such shares to be held in
escrow pending closing of the merger. These shares of common stock
in Motif BioSciences, Inc. are to be converted into Ordinary Shares
in the Company on Admission. Further details of this share exchange
can be found at paragraph 13.8 of Part VI of the AIM admission
document published by Motif Bio plc on 27 March 2015. A further
9,805,400 Ordinary Shares are to be issued to the former Nuprim
shareholders at Completion and 9,432,033 Nuprim warrants which,
when exercised, will constitute 9,432,033 Ordinary Shares. In the
event that Motif fails to advance the development of iclaprim by
commencing clinical development by 15 February 2017, the former
Nuprim shareholders have the right to acquire the iclaprim assets
for a purchase price of US $10,000
16. Post balance sheet events
On 12 January 2015, the Company entered into four convertible
promissory notes as part of a pre-Admission fundraising for a total
of GBP470,298 to fund the costs of admission to AIM.
On 20 January 2015, the holders of the 5% convertible promissory
notes converted $278,787 of principal and accrued interest into
1,768,960 shares of the Company.
On 13 March 2015, the Company's Certificate of Incorporation was
amended to increase the authorized number of shares of Common Stock
up to 150,000,000.
On 13 March 2015, there was a reverse stock split of the
Company's issued and outstanding shares of common stock on a 1 for
0.7185 basis. The holders of the issued and outstanding convertible
securities of the Company were converted into Common Stock.
On 27 March 2015, Motif Bio plc utilised the statutory merger
procedure as set out in section 251 and section 252, respectively,
of the Delaware General Corporation Law to effect a merger between
a specially incorporated Merger Subsidiary and Motif BioSciences,
Inc to acquire the entire issued common stock of Motif BioSciences,
Inc. Under these arrangements, all equity interests in Motif
BioSciences, Inc were exchanged for equivalent participation in the
Motif Bio plc upon admission to AIM which took place on 2 April
2015.
On 1 April 2015, Amphion Innovations plc converted US $6 million
of the outstanding debt into 24,538,058 shares of the Company.
On 2 April 2015, the Company and Nuprim, Inc concluded the
purchase and sale of the Nuprim shares by way of a merger
procedure, as set out in section 251 and section 252, respectively,
of the Delaware General Corporation Law, between the Company and
Nuprim Inc, with Motif as the surviving corporation. The merger
completed unconditionally on admission of shares in Motif Bio plc
to trading on AIM, which took place on the same date. As a result
of the merger, the Company acquired the exclusive rights to
Nuprim's iclaprim assets.
Under the terms of the Nuprim merger procedure the former Nuprim
Inc shareholders were issued with a further 9,805,400 ordinary
shares in Motif Bio plc and 9,432,033 non-assignable warrants over
ordinary shares in Motif Bio plc with an expiration date 10 years
from the closing date and an exercise price of 20 pence.
The directors of Motif Bio plc consider the merger between Motif
and Nuprim Inc, with Motif as the surviving corporation, as a
consequence of which the Motif Bio plc group acquired the exclusive
worldwide rights to Nuprim's iclaprim assets, know-how, and certain
ancillary materials, does not meet the definition of an acquisition
of a business as set out in IFRS3 and will therefore be accounted
for as the acquisition of an asset or a group of assets that does
not constitute a business.
IFRS3 requires that in such cases the acquirer shall identify
and recognise the individual identifiable assets acquired
(including those assets that meet the definition of, and
recognition criteria for, intangible assets in IAS 38 Intangible
assets) and to allocate the cost of the individual identifiable
assets and liabilities on the basis of their relative fair values
at the date of purchase, so that no goodwill will arise on the
acquisition.
At the time of authorising these financial statements for
issuance, the directors of Motif Bio plc were still in the process
of finalising the valuation of the assets acquired. Any changes to
the amounts disclosed below, arising from finalisation of these
valuations, will be reflected in the next set of financial
statements of Motif Bio plc.
Details of the purchase consideration and provisional amounts
attributed to net assets acquired are as follows:
US$
------------------------------ ------------
Purchase consideration:
------------------------------ ------------
Ordinary shares in Motif
Bio plc 3,440,805
------------------------------ ------------
Warrants to subscribe
for ordinary shares
in Motif Bio plc 2,899,962
------------------------------ ------------
Total purchase consideration 5,840,767
------------------------------ ------------
Iclaprim assets 6,340,767
------------------------------ ------------
Liabilities assumed (500,000)
------------------------------ ------------
Net assets acquired 5,840,767
------------------------------ ------------
17. Ultimate controlling party
During the period ended 31 December 2014 the directors of Motif
BioSciences, Inc do not consider that the Company had any single
ultimate controlling party. Since 2 April 2015, Motif BioSciences,
Inc has been a wholly owned subsidiary undertaking of Motif Bio
plc.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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