Ambri dumps IP value and reels in $15m

Sydney bio-nano company Ambri has raised AUD$15.5 million through a placement of ordinary shares to a mix of existing and new institutional investors, and simultaneously announced it will write off $20.7 million worth of IP value from its accounts.

The moves followed a two-day trading suspension earlier this week, after which existing investors Dow Corning Corporation and Thorney Investment Group committed $2.3 million and $2.9 million respectively.

"The proceeds of the placement will allow Ambri to focus on pursuing its milestone of achieving commercially viable technology targeted for May 2004," said managing director and CEO Dave Cornelius.

To date, Ambri has not fared well in the milestone ratings, a fact admitted by CFO Jeff Carter. "The company previously missed milestones, but our new management and business plan headed up by Dave Cornelius will allow us to take a very disciplined approach to making our capital go further," he said.

"Also, the company used to have a cash burn of something like $1.5 million a month. We have already substantially reduced that and it is now down to about $1 million," he added.

Carter noted that the raising was in some ways a result of Ambri's recently outlined new direction and business plan. He said the placement would further strengthen the company's register, and allow company milestones to be hit with more predictability than previously.

The company's new board -- boosted by the recent appointment of Roman Zwolenski and Prof Silviu Itescu -- was now able to demonstrate a very good track record of getting milestones and products out on time, claimed Carter, who said the new team would be better at understanding the importance of project requirements and addressing them.

"The money we have raised shows a vote of confidence form the market for what we are doing," he said.

The write down of $20.7 million worth of intellectual property (the amount the company paid in August 2001 for the IP) was instituted in recognition of the difficulty of determining an accurate value for the IP, especially given the previously erratic milestones progress.

"But we have some sophisticated shareholders and half a dozen key shareholders who are happy to continue with us. We have a good strong register, and are working towards our target of a viable technology in 2004, with full market release in 2005," affirmed Carter.