Microbiology diagnostic equipment manufacturer LBT Innovations has fully written down the value of its major business centred on its APAS technology.
The company has recognised a non-cash impairment of $13.4 million which is the full carrying value of the company’s intangible assets related to APAS, as well as a non cash write off of around $5.5 million in deferred tax assets.
The company’s APAS Independence laboratory instrument (pictured) is an AI-based imaging, interpretation, sorting and reporting machine that automatically examines culture plates for the presence of bacterial colonies.
LBT Innovations told investors: “The decision to write down was based on the company not receiving the sales it expected for the 12 month period ending 30 June, 2023.
“Despite a strengthening pipeline of opportunities. the company was unable to provide a ‘reasonable and supportable’ forecast for the timing of sales and sales growth, as required by the accounting standard AASB 136 impairment of assets.”
LBT Managing Director and CEO Brent Barnes said: “We remain confident on the opportunity for our APAS technology but given current market valuations, we believe taking a conservative position is an appropriate course of action.
“Importantly this is an accounting focused, non cash transaction which cleans up our balance sheet.”
The APAS technology cost $25.9 million to develop with about half amortised in the first eight years of sales of the equipment.
Barnes said: “We continue to work with our (distribution) partner Thermo Fisher to improve sales execution and have been encouraged to see these initiatives translate to the sales funnel where we have several advanced opportunities in the pipeline.
“In the pharmaceutical market we continue to be buoyed by positive feedback from potential customers who are proactively looking for solutions such as our APAS Independence and the progress being made with Astra Zeneca.”
LBT and AstraZeneca are developing the APAS AI software platform for microbial testing in the pharmaceutical sector.
The write down will be reflected in the company’s financial results for the year ended 30 June, 2023.
LBT Innovations and AstraZeneca to develop AI systems
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Picture: LBT Innovations