Aqua Bio Technology ASA ("ABT" or the "Company") has today, 27 June 2019, completed an extraordinary general meeting. The signed minutes from the extraordinary general meeting is enclosed hereto.
The only item on the agenda, election of a new auditor, was passed in accordance with the board's proposal. The Company is pleased to inform that RSM Norge AS is elected as the Company's new auditor.
Reference is made to previous stock exchange announcements regarding the disagreement between the Company and its former auditor, EY, regarding the value of the inventory in Kilda Biolink AS (the Company's subsidiary), intellectual property rights relating to patents owned by the Aqua Bio Technology Group and the shares in Kilda Biolink AS and a claim against the same Company. EY requested that the value of the above assets be set to zero in the Company's accounts. Due to the disagreement, EY withdrew from the position as the Company's auditor with effect from the Annual General Meeting held on 5 June 2019.
The Company has conducted a thorough review of the accounts and the above-mentioned issues. The accounts and issues are also reviewed with the new auditor.
The Company's assessment is still that there is no basis for the write-down of the aforementioned inventories and patents because the Company is of the opinion that Restorsea's turnover, and consequently ABT's royalties and revenues from the sale of products to Restorsea, will increase as described in the Company's stock exchange announcements from 13 February and 5 June. The Company has further reason to believe that Restorsea will renew its exclusivity agreement in 2022 through a total renewal payment of USD 2.5 million to the Company. Although this has not been decisive for the assessment of the value of the inventories and intellectual property rights, the Company assumes that if exclusivity is renewed by payment of USD 2.5 million in 2022, it is also likely that Restorsea will again renew the exclusivity in 2027 with an additional payment of USD 2.5 million. The Company also works with other processes which, together with Restorsea's first exclusivity extension, are expected to contribute to increased cash flows, which alone exceeds the book value of inventories and intangible assets in the Group.
With regards to the book value of the shares and the claim towards Kilda Biolink AS, the Company has concluded that the accounting principle in ABT's Company accounts should be changed. The Company accounts are kept in accordance with NGAAP, where the cost method of the shares in Kilda Biolink AS has been applied to date. This value is higher than what is reflected in the balance sheet of the Aqua Bio Technology Group. As Kilda Biolink AS's accounts consist almost exclusively of the values in the consolidated accounts, the Company considers it natural to change the accounting principle to the equity method for these shares. The equity method corresponds to the same principles used in the consolidation, and a greater correspondence is achieved between the balance sheet of Aqua Bio Technology ASA and the Aqua Bio Technology Group. The change will be accounted for with effect from 1 January 2018, which means that the comparative figures are changed and the difference between the balance sheet value today and the new value according to the equity method, will be directly accounted for and related to the equity of the Company. The above will be addressed in the Company's report for the 1st half year of 2019.
For further information, please contact Edvard Cock, chairman, telephone +47 415 04 004 or eco@clp.no.
Aqua Bio Technology (ABT) is developing and commercializing sustainable biotechnology for use in skin care products. ABT's cosmetics ingredients are highly effective and they provide the cosmetics industry with natural alternatives to traditional ingredients. ABT is also marketing and distributing natural skin care products developed by partners towards consumers and professional users. Aqua Bio Technology is listed on the Axess market of the Oslo Stock Exchange.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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