The exceptional administrative expenses of $83,000 relate to legal fees incurred in the dispute with the Group's former Chief Executive, Mr Maguire, of which further details are set out below.
We announced in June that AorTech is in dispute with Mr Frank Maguire, the Company's previous CEO who resigned in November 2013.
ollowing Mr Maguire's
resignation several matters arose which created serious concerns for your Board.
We have found evidence showing that during his
employment with AorTech Mr Maguire sought to undertake business transactions, unbeknown to the Board, with existing and potential licensees.
resignation from AorTech
, Mr Maguire
took up a senior appointment with a company called Foldax which is involved in the development of a TAVI heart valve.
In addition our investigations revealed that, during his period of employment with AorTech, Mr Maguire had been negotiating with another of AorTech's licensees for a transaction between himself and the licensee to the exclusion of AorTech.AorTech's Board had not been informed of these meetings and discussions.
As a result of these investigations, AorTech
has taken legal action against Mr Maguire
for amongst other matters breach of his
contract, breach of his
fiduciary duties, misappropriation of trade secrets and the retaining of confidential documents, files and assets which are the property of AorTech International
At an initial court hearing on 1 August 2014, the Court indicated it would deny motions in which Mr Maguire
asked the Court to dismiss AorTech's claims identified above.
It is the Board's present intention to vigorously pursue Mr Maguire
through the appropriate legal processes in order to protect AorTech's know-how and trade secrets and, in doing so, protect the Company and its shareholders' interests.
may include seeking, as appropriate, damages from Mr Maguire
At the initial court hearing on 1 August Mr Maguire
was instructed to return all of AorTech's
property including all data and confidential information relating to AorTech's know-how and trade secrets.
However such work has been necessary in view of the serious allegations which arose from Mr Maguire's
is taking advice from our US attorneys on the possibility of taking further action against Mr Maguire
and indeed against Foldax, particularly where it relates to our IP, know-how and trade secrets.
has over many years maintained appropriate insurance cover to protect our IP, know-how and trade secrets.
I am pleased to confirm that AorTech
has recently received confirmation that insurance coverage, in accordance with the policy terms, will be available to meet the ongoing costs of its action against Mr Maguire
The last twelve months, in particular the last six months has been a very difficult period for your Board in view of the inordinate length of time that has been spent on the investigation of the actions of Mr Maguire, our previous CEO.