Immunotec Inc. Interim Consolidated Financial Statements (Unaudited)

Immunotec Inc. Interim Consolidated Financial Statements (Unaudited) As at January 31, 2016 and October 31, 2015 and for the three-month periods ended...
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Immunotec Inc. Interim Consolidated Financial Statements (Unaudited) As at January 31, 2016 and October 31, 2015 and for the three-month periods ended January 31, 2016 and 2015

Immunotec Inc. MANAGEMENT’S COMMENTS ON UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS AT JANUARY 31, 2016 AND OCTOBER 31, 2015 AND FOR THE THREE-MONTH PERIODS ENDED JANUARY 31, 2016 AND 2015.

NOTICE OF NO AUDITOR REVIEW OF UNAUDITED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed interim consolidated financial statements of Immunotec Inc. [the “Company”] have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor, PricewaterhouseCoopers LLP, has not performed a review of these financial statements in accordance with standards established by Chartered Professional Accountants of Canada [CPA Canada] for a review of interim financial statements by an entity’s auditor.

March 29, 2016.

Immunotec Inc. Interim Consolidated Statements of Financial Position (Unaudited)

(Canadian dollars)

Note

January 31, 2016 $

October 31, 2015 $

7,941,828 940,897 510,663 6,800,177 920,527 17,114,092

9,663,503 535,557 693,892 5,907,425 684,436 17,484,813

630,270 6,181,897 849,215 833,559 256,176 3,237,231 11,988,348

588,375 6,187,573 852,042 833,559 765,465 3,405,655 12,632,669

29,102,440

30,117,482

3,892,932 5,974,643 414,778 623,835 566,447 24,205 602,256 12,099,096

3,741,054 6,653,852 219,763 1,140,798 973,525 28,037 534,661 13,291,690

ASSETS Current assets Cash Trade and other receivables Income taxes receivable Inventories Prepaid expenses Non-current assets Restricted cash Property, plant and equipment Intangible assets Goodwill Recoverable amounts from taxation authorities Deferred income tax assets

3 4

5

LIABILITIES Current liabilities Payables Accrued liabilities Provisions Deferred revenue and customer deposits Income taxes payable Current portion of finance lease obligation Current portion of long-term debt

6 7

Non-current liabilities Long-term debt

2,204,575

2,377,926

14,303,671

15,669,616

3,515,091 13,173,803 (26,035) (1,864,090) 14,798,769

3,515,091 13,138,750 (3,849) (2,202,126) 14,447,866

29,102,440

30,117,482

EQUITY Share capital Contributed surplus Accumulated other comprehensive loss Deficit

Contingencies

8

16

The accompanying notes are an integral part of these interim consolidated financial statements.

Approved by the Board of Directors

Director Charles L. Orr

Director Rod Budd, CPA, CA

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Immunotec Inc. Interim Consolidated Statements of Changes in Equity For the three-month periods ended January 31,

(Unaudited)

$

Contributed surplus $

Accumulated other comprehensive (loss) income $

68,935,555

3,416,511

13,077,291

32,343

Net profit

-

-

-

-

Foreign currency translation adjustments

-

-

-

(403,079)

-

-

-

-

(403,079)

851,864

448,785

-

-

2,806

-

2,806

Balance at January 31, 2015

68,935,555

3,416,511

13,080,097

(370,736)

(5,392,478)

10,733,394

Balance at November 1, 2015

69,287,627

3,515,091

13,138,750

(3,849)

(2,202,126)

14,447,866

Net profit

-

-

-

Foreign currency translation adjustments

-

-

-

(22,186)

-

-

-

-

(22,186)

338,036

315,850

-

-

35,053

-

35,053

69,287,627

3,515,091

13,173,803

(C anadian dollars except for the number of shares) Note

Balance at November 1, 2014

Total comprehensive income Share-based compensation

8

Total comprehensive income Share-based compensation Balance at January 31, 2016

8

Share capital Number

-

-

(26,035)

Deficit $ (6,244,342) 851,864

338,036

(1,864,090)

Total $ 10,281,803 851,864 (403,079)

338,036 (22,186)

14,798,769

The accompanying notes are an integral part of these interim consolidated financial statements.

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Immunotec Inc. Interim Consolidated Statements of Income For the three-month periods ended January 31,

(Unaudited)

(Canadian dollars exc ept for the number of shares)

Note

Revenues Network sales Other revenue Cost of sales Margin before expenses Expenses Field inc entives Selling, general and administrative Depreciation and amortization Other expenses Operating income Net finance expenses (income)

9,12

2016 $

2015 $

21,129,591 1,813,966 22,943,557 5,850,608 17,092,949

16,305,136 1,613,317 17,918,453 4,152,012 13,766,441

11,563,491 4,345,920 179,829 446,053 557,656

8,901,043 3,743,360 154,032 2,806 965,200

12 10 11

13

4,610

(342,420)

Profit before income taxes

553,046

1,307,620

Income taxes Current Deferred Net profit

30,674 184,336 338,036

11,704 444,052 851,864

Total basic and diluted net profit per common share

8

0.005

0.012

Weighted average number of common shares outstanding during the period Basic Diluted

8 8

69,287,627 69,289,931

68,935,555 68,939,108

The acc ompanying notes are an integral part of these interim consolidated financial statements.

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Immunotec Inc. Interim Consolidated Statements of Comprehensive Income For the three-month periods ended January 31,

(Unaudited) _____________________________________________________________________________________________

(Canadian dollars)

Net profit

2016 $

2015 $

338,036

851,864

(22,186)

(403,079)

315,850

448,785

Other comprehensive loss, net of income taxes Item that may be reclassified subsequently to profit or loss: Foreign currency translation adjustments Total comprehensive income

The accompanying notes are an integral part of these interim consolidated financial statements.

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Immunotec Inc. Interim Consolidated Statements of Cash Flows For the three-month periods ended January 31, (Unaudited)

2016 $

2015 $

338,036

851,864

136,439 43,390 (154,236) 54,530 184,336 35,053 (54,530)

112,199 41,833 (603,344) 36,528 444,052 2,806 (36,528)

Cash from operating activities prior to working capital variation Net change in non-cash working c apital 15

583,018 (2,088,102)

849,410 (2,781,887)

Net cash used in operating activities

(1,505,084)

(1,932,477)

Investing activities Additions to property, plant and equipment Additions to intangible assets

(126,237) (40,735)

(297,113) (23,432)

Net cash used in investing activities

(166,972)

(320,545)

Financing activities Reimbursement of long-term debt Reimbursement of finance lease obligation

(105,756) (3,832)

(84,299) (3,632)

Net cash used in financing activities

(109,588)

(87,931)

Net decrease in cash during the period

(1,781,644)

(2,340,953)

Cash — Beginning of the period

10,251,878

6,787,207

101,864

237,529

Cash — End of the period

8,572,098

4,683,783

Cash Restricted cash

7,941,828 630,270 8,572,098

4,111,788 571,995 4,683,783

(Canadian dollars)

Note

Operating activities Net profit Adjustments for: Depreciation Amortization Unrealized foreign exc hange Interest expense Deferred inc ome taxes Share-based compensation Interest paid

Effect of foreign exchange rate fluctuations on c ash

13 8

The ac companying notes are an integral part of these interim consolidated financial statements.

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Immunotec Inc. Notes to Interim Consolidated Financial Statements For the three-month periods ended January 31, 2016 and 2015 (Unaudited) (Stated in Canadian dollars, except for share data)

1. Nature of activities and reporting entity Immunotec Inc. (the “Company” or “Immunotec”) is incorporated under the Canada Business Corporations Act. The address of the Company’s registered office is 300 Joseph-Carrier, VaudreuilDorion, Quebec, J7V 5V5. Headquartered near Montreal, Canada, Immunotec develops, manufactures, markets and sells research-driven nutritional products through direct-to-consumer sales channels mainly in Canada, the United States and Mexico. The Company subcontracts certain distribution logistics and manufacturing activities in the United States, Europe and Mexico to support its activities. Its common shares are listed on the TSX Venture Exchange under the symbol “IMM”. 2. Basis of preparation a)

Accounting framework These unaudited condensed interim consolidated financial statements (“interim financial statements”) for the three-month periods ended January 31, 2016 and 2015 have been prepared in accordance with IAS 34, Interim financial reporting. Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board ("IASB"), have been omitted or condensed. These interim financial statements should therefore be read in conjunction with the annual consolidated financial statements for the year ended October 31, 2015, which have been prepared in accordance with IFRSs and which can be found, along with other information at www.sedar.com. These interim financial statements were approved for issue on March 29, 2016 by the Company’s Board of Directors.

b)

Accounting policies The accounting policies used in these interim financial statements are consistent with those applied by the Company in its October 31, 2015 audited consolidated financial statements, except for the following: IFRS 9, Financial instrument In July 2014, the IASB issued IFRS 9 final version – Financial Instruments: Recognition and measurement. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. Requirements relating to hedge accounting representing a new hedge accounting model have also been added to IFRS 9. The new standard is effective for annual periods beginning on or after January 1, 2018. Early adoption is permitted. The Company is currently evaluating this standard and its impact on the consolidated financial statements.

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Immunotec Inc. Notes to Interim Consolidated Financial Statements For the three-month periods ended January 31, 2016 and 2015 (Unaudited) (Stated in Canadian dollars, except for share data)

IAS 1, Presentation of financial statements In December 2014, the IASB issued amendments to clarify guidance in IAS 1 on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies. The amendments are effective for annual periods beginning on or after January 1, 2016 and early adoption is permitted. The company is currently evaluating this standard and its impact on the consolidated financial statements. IFRS 15, Revenue recognition In May 2014, the IASB issued IFRS 15 – Revenue from contracts with customers. IFRS 15 replaces all previous revenue recognition standards, including IAS18 – Revenue, and related interpretations such as IFRIC 13 – Customer Loyalty Programs. The standard sets out the requirements for recognizing revenue. Specifically, the new standard introduces a comprehensive framework with the general principle being that an entity recognizes revenue to depict the transfer of promised goods and services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduces more prescriptive guidance than was included in previous standards and may result in changes in classification and disclosure in addition to changes in the timing of recognition for certain types of revenues. The new standard is effective for annual periods beginning on or after January 1, 2018. Early adoption is permitted. The Company is currently evaluating this standard and its impact on the consolidated financial statements. IFRS 16, Leases In January 2016, the IASB issued IFRS 16, Leases, which supersedes IAS 17, Leases, and the related interpretations on leases: IFRIC 4, Determining whether an arrangement contains a lease, SIC 15, Operating Leases – Incentives and SIC 27, Evaluating the substance of transactions in the legal form of a lease. The new standard is effective for annual periods beginning on or after January 1, 2019, with earlier application permitted for companies that also apply IFRS 15, Revenue from Contracts with Customers. The Company is currently evaluating this standard and its impact on the consolidated financial statements. c)

Use of estimates and judgments The preparation of interim financial statements in conformity with IFRS requires the use of judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses. In preparing these interim financial statements, the significant judgments made in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited consolidated financial statements for the year ended October 31, 2015.

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Immunotec Inc. Notes to Interim Consolidated Financial Statements For the three-month periods ended January 31, 2016 and 2015 (Unaudited) (Stated in Canadian dollars, except for share data)

3. Trade and other receivables

Trade Recoverable commodity taxes Research and development tax credits Other receivables

January 31, 2016 $

October 31, 2015 $

382,637 446,560 57,743 53,957

415,214 85,700 17,578 17,065

940,897

535,557

4. Inventories

Raw materials Finished goods Less: inventory write-downs

January 31, 2016 $

October 31, 2015 $

1,762,788 5,102,389 6,865,177 65,000

1,735,004 4,237,421 5,972,425 65,000

6,800,177

5,907,425

During the three-month period ended January 31, 2016, inventories in the amount of $4,491,427 (2015 — $3,069,583) were recognized as cost of goods sold. 5. Recoverable amounts from taxation authorities

Recoverable commodity taxes Non-refundable research and development tax credits

January 31, 2016 $

October 31, 2015 $

256,176 -

364,930 400,535

256,176

765,465

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Immunotec Inc. Notes to Interim Consolidated Financial Statements For the three-month periods ended January 31, 2016 and 2015 (Unaudited) (Stated in Canadian dollars, except for share data)

6. Accrued liabilities

Accruals for field incentives Accrued employee compensation Accrued trade payables Accrued professional fees Accrued commodity taxes Other accruals

January 31, 2016 $

October 31, 2015 $

3,324,317 1,218,797 261,874 304,269 670,916 194,470

4,001,906 1,302,328 535,729 481,260 184,479 148,150

5,974,643

6,653,852

7. Provisions Charges associated with

Balance as at Oc tober 31, 2014 Additional provision rec ognized Utilization of provision Revaluation of the provision Effec t of movements in exchange rates

Loyalty

Product

corporate Commodity

Programs

returns

changes

taxes

Total

$

$

$

$

$ 1,131,089

16,761

52,355

-

1,061,973

939,574

75,863

-

-

(813,627)

(59,900)

-

-

-

-

5,935

3,749

-

141,761

78,002

-

-

219,763

Additional provision rec ognized

304,207

-

200,000

-

504,207

(311,014)

-

-

-

(311,014)

(1,460)

3,282

-

-

1,822

81,284

200,000

-

414,778

Balance as at January 31, 2016

133,494

(35,569)

1,015,437 (1,899,931)

Balance as at Oc tober 31, 2015 Utilization of provision Effec t of movements in exchange rates

(947)

5,935

(1,026,404)

(32,767)

During the period ended January 31, 2016, the Company proceeded with certain changes to its marketing and sales management, which resulted in a severance provision. Accordingly the costs associated with this change were provisioned and recorded as Charges associated with corporate changes, described under note 16. 8.

Capital and other components of equity a) Stock options The activity in the outstanding balance of stock options and related weighted-average exercise prices is as follows:

9

Immunotec Inc. Notes to Interim Consolidated Financial Statements For the three-month periods ended January 31, 2016 and 2015 (Unaudited) (Stated in Canadian dollars, except for share data)

For the three-month period ended January 31, 2016

Number of options

Weighted average exercise price

For the year ended October 31, 2015

Number of options

$ Issued and outstanding Beginning of period

2,370,000

Granted Expired Forfeited

(10,000)

Weighted average exercise price $

0.30

1,470,000

0.31

0.30

1,125,000 (149,998) (75,002)

0.30 0.36 0.31

Issued and outstanding End of period

2,360,000

0.30

2,370,000

0.30

Exercisable - End of period

1,038,330

0.30

1,038,330

0.30

For the three-month periods ended January 31, 2016, the Company recorded share-based compensation expenses of $35,053 (2015 ̶—$2,806) with corresponding credits recorded to contributed surplus. The weighted average remaining contractual life for the stock options outstanding as at January 31, 2016 is 3.2 years (October 2015 ̶—3.5 years). The range of exercise prices for stock options outstanding as at January 31, 2016 was $0.24 to $0.35 (October 2015 ̶— $0.24 to $0.35). b) Earnings per share The calculation of basic and diluted earnings per share for the three-month period ended January 31, 2016 was based on the net profit attributable to common shareholders of the Company of $338,036 (2015 — $851,864). The calculation of the weighted average number of common shares outstanding in determining diluted earnings per share for the three-month period ended January 31, is as follow:

W eighted average number of outstanding common shares (basic) Effect of options to purchase common shares W eighted average number of outstanding common shares (diluted)

2016

2015

69,287,627

68,935,555

2,304

3,553

69,289,931

68,939,108

For the three-month period ended January 31, 2016, 2,335,000 options to purchase common shares (2015—2,345,000) that may potentially dilute earnings per share in the future were not considered in the computation, since the exercise price of these options was higher than the average market price for the period.

10

Immunotec Inc. Notes to Interim Consolidated Financial Statements For the three-month periods ended January 31, 2016 and 2015 (Unaudited) (Stated in Canadian dollars, except for share data)

9. Cost of sales Note

Cost of goods sold Other variable costs

4

2016 $

2015 $

4,491,427 1,359,181

3,069,583 1,082,429

5,850,608

4,152,012

2016 $

2015 $

2,320,284 1,604,073 421,563

2,238,732 1,272,479 232,149

4,345,920

3,743,360

2016 $

2015 $

35,053 411,000

2,806 -

446,053

2,806

10. Selling, general and administrative

Administrative Marketing and selling Quality and development costs

11. Other expenses

Share-based compensation Charges associated with corporate changes

During the period ended January 31, 2016, the Company proceeded with certain changes to its marketing and sales management as described under note 7 and also expensed, incremental costs for professional fees associated with the finalization of the conclusive agreement procedures in Mexico, described under note 16. As a result, a charge of $411,000 has been recorded as Charges associated with corporate changes.

11

Immunotec Inc. Notes to Interim Consolidated Financial Statements For the three-month periods ended January 31, 2016 and 2015 (Unaudited) (Stated in Canadian dollars, except for share data)

12. Supplemental information on the statements of income Distribution of selected expenses by function

Expenses on the statement of income Depreciation and amortization Other expenses: Share-based compensation Charges associated w ith corporate changes

For the three-month period ended January 31, 2016 Quality and AdminisMarketing development trative and selling costs Total $ $ $ $

Cost of sales $

Field incentives $

5,850,608 22,025

11,563,491 -

2,320,284 147,024

1,604,073 6,160

421,563 4,620

21,760,019 179,829

-

-

35,053

-

-

35,053

5,872,633

11,563,491

411,000 2,913,361

1,610,233

426,183

411,000 22,385,901

For the three-month period ended January 31, 2015

Expenses on the statement of income Depreciation and amortization Other expenses: Share-based compensation

Cost of sales $

Field incentives $

Administrative $

Marketing and selling $

Quality and development costs $

Total $

4,152,012 20,843

8,901,043 -

2,238,732 124,133

1,272,479 5,175

232,149 3,881

16,796,415 154,032

4,172,855

8,901,043

2,806 2,365,671

1,277,654

236,030

2,806 16,953,253

For the three-month period ended January 31, 2016 quality and development costs include research and development costs of $316,687 (2015 — $195,540), which are net of $18,000 (2015 — $18,000) of refundable research and development tax credits. 13. Net finance expenses (income) 2016 $ Interest expense Net foreign exchange gain Net finance expenses (income)

54,530 (49,920) 4,610

2015 $ 36,528 (378,948) (342,420)

14. Geographical information The Group’s operations involve only one reportable business segment: it manufactures and sells nutritional products and sells them under a network marketing business model. The net sales by geographic destination are detailed as follows:

12

Immunotec Inc. Notes to Interim Consolidated Financial Statements For the three-month periods ended January 31, 2016 and 2015 (Unaudited) (Stated in Canadian dollars, except for share data)

Mexico United States Canada Other countries

2016 $

2015 $

11,280,482 7,970,285 3,039,917 652,873

9,082,846 5,185,601 2,971,019 678,987

22,943,557

17,918,453

The Company’s property, plant and equipment, intangible assets and goodwill are substantially all located in Canada. 15. Consolidated statements of cash flows Net change in non-cash working capital 2016 $

2015 $

Trade and other receivables

(315,669)

Income taxes receivable Inventories Prepaid expenses Payables Accrued liabilities Provisions Deferred revenue and customer deposits Income taxes payable Recoverable amounts from taxation authorities

193,762 (801,922) (234,742) 139,712 (736,416) 193,193 (519,348) (407,207) 400,535

327,323 (566,822) (34,962) (596,658) (1,637,934) 42,606 (340,019) 24,579 -

(2,088,102)

(2,781,887)

Supplemental cash flow information Income tax paid (received) during the period

115,501

(12,898)

16. Contingencies In the normal course of business, the Company and its subsidiaries are subject of tax audits by government authorities in their respective countries. In certain of these audits, taxation authorities could propose different tax or commodity tax treatments which could result in additional amounts due, as well as related interest or penalties. The Company believes that the current tax treatments are correct and it has a reasonable defense for any allegations that additional amounts are owed. When appropriate, the Company contests notices of assessment and administrative or judicial decisions in this respect. At the moment, the Company is subject to the following taxation processes: i.

In December 2012 and January 2013, the Mexican Tax Administration Service (“MTAS”) issued resolutions which denied the Company’s Mexican subsidiary’s refund requests for a number of favourable value added tax “VAT” balances in aggregate, totaling approximately $505,000. The denials were based on the MTAS’s evaluation that the Immunocal and Immunocal Platinum products were not destined for nutritional purposes and that a VAT tax rate of 16% should have been applied on the sale of such products. The Company filed an annulment lawsuit (first stage lawsuit) in lower tax court against these resolutions. The annulment was denied and the

13

Immunotec Inc. Notes to Interim Consolidated Financial Statements For the three-month periods ended January 31, 2016 and 2015 (Unaudited) (Stated in Canadian dollars, except for share data)

Company proceeded to the next level of appeal in the Collegiate Tribunals. In September 2014, the Fifteenth Collegiate Tribunal in Administrative Matters of the First Circuit denied the Company’s request for this refund. Immunotec has challenged this decision and filed an appeal with the Mexican Supreme Court (third stage of appeal) but the reimbursement was denied during this fiscal year. As a result, the Company recorded during the year ended October 31, 2014 a provision for commodity tax provision of approximately $5,497,512 which was partially offset by the related recoverable amounts from taxation authorities covering prior months which are related to the above-mentioned appeal to the Supreme Court. ii.

During the fourth quarter of fiscal 2014 the MTAS requested information related to 134 of the Company’s Mexican subsidiary’s imports covering 100% of entries associated with IMMUNOCAL and IMMUNOCAL PLATINUM products into Mexico between June 2011 and July 2013. After some further discussions with the MTAS Auditors, Immunotec decided to file, on June 1st, 2015, a request for a conclusive agreement before the Mexican Tax Ombudsman (PRODECON as per its acronym in Spanish), proposing a settlement of the audit, under the following terms: (i)Immunotec would be compelled to pay the VAT over all of the imports under questioning by the MTA, plus inflation adjustments and surcharges; (ii) Since this is the first time Immunotec enters into a conclusive agreement, it should have the right to amnesty over 100% of the aforementioned penalties, pursuant to Article 69-G of the Mexican Federal Tax Code. The MTA was officially notified of the request for conclusive agreement and officially accepted the proposal for conclusive agreement. Immunotec, effectively, paid an amount of $2,740,895 (34,328,052 MXP). The conclusion for these event resulted in affecting the audited consolidated financial statements as at October 31, 2015, as follow: (i) the reversal of a portion of the 2014 provision for $1,034,026 (12,703,021 MXP and Inflation surcharge and interest for a total of $982,845 (12,074,260 MXP) resulting in net gain of $51,181 (628,761 MXP) see note 11; (ii) and a recoverable amount from foreign taxation of $1,758,050 (22,253,792 MXP). While administrative matters related to the conclusive agreement remain to be completed, management believes it has fulfilled its obligations under the conclusive agreement. The Company and its legal advisors believe that the outcome of the matter should not change once those administrative matters are finalized. If the Company is incorrect in its understanding of the outcome, the potential adjustments required could have a material impact on the financial situation of the Company, in particular of the Mexican subsidiary. In view of the clear and persistent attempts by the MTA to tax VAT on the sale of nutritional supplements and after some negotiations with certain sectors of the industry, on March 26, 2015, a Presidential Decree was published in the Official Gazette, which grants amnesty of VAT triggered over the sale of nutritional supplements for all periods preceding January 2015, insofar as taxpayers comply mainly with two requirements: (i) that taxpayers charge VAT over the sale of nutritional supplements as of January of 2015; and (ii) that taxpayers file an official form detailing the amount of nutritional supplements sold during those years preceding 2015. Immunotec did file the official form requested and started charging VAT in October 2014. The Company is therefore in compliance with this taxation position. As a result of this presidential decree, the Company believes that no retroactive liabilities could be incurred.

17. Comparative figures Certain comparative figures in the notes to interim consolidated financial statements have been reclassified to conform to the presentation adopted for the current period. An amount of $180,571 has been reclassified from “Marketing and selling” to “Administrative”. The Company believes this adjustment will better reflect the activities in which Immunotec is involved.

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