Replies to post #243005 on Innovation Pharmaceuticals Inc (IPIX)

[DaubersUP]

My only hope. Is that something drastically changed the landscape between June 29th and early Sept 10K

That is all I can be hopeful for that MGMT decided these Milestone payments will not be needed for a very good reason and therefore do not see the benefit in diluting shareholders another 15 million shares.

Good news: BTD is CURRENTLY under review.

TERM SHEET is in final DD stage for OM and IBD

MGMT are still extremely confident and excited about Prurisol and Kevetrin. We just need money to push those drugs fwd.

I’m still confident in a deal mostly because the indication for OM is a lucrative untapped market. If this current BP does not bite, there are several others waiting behind. If I were Leo, I’d start talking to the others and give the current Term BP a deadline.

[williamssc]

"With partnering discussions ongoing, as well as active efforts underway to secure additional sources of capital, the prospects of our loyal shareholders are of paramount concern and front-of-mind as we strive to execute on these opportunities".

For business to move forward next update needs to at least say source of capital has been secured.

[loanranger]

"They feel they will not hit any milestones."

For sure that's what they said, but I should have included the context in case the REASON they said it is significant. :
"Fiscal 2018 compared to Fiscal 2017 - Other expense, net increased during fiscal 2018 primarily related to the increase in other expense of $2,218,000. The commitment fee allocated to the future milestone funding of $2.2 million was fully expensed under Other Expenses, because it is unlikely that the Company will achieve any of the three milestones by September 30, 2018. (see Note 13 to the accompanying financial statements)."

I posted about the commitment fee issue previously. We don't know exactly when the light bulb went off that the milestones wouldn't likely be met, but by acknowledging that none of the milestones was likely to be met it became the obligation of the Company to write off the full amount of the commitment fee as soon as they became aware of it otherwise it (or the piece of it pertaining to whatever milestone WAS expected to be met) would have been carried forward as an asset and written off upon the achievement of the relevant milestone(s). That's the proper accounting treatment when an asset isn't expected to have any future value and one can't find fault with it from an accounting standpoint. Just because the fee was agreed to and paid on June 28th and it boggles the mind to think that it was already determined to be worthless as of June 30th, that doesn't mean that it wasn't accounted for properly.
My problem was with how the the $2.2 million VALUE assigned to the fee was calculated, which was absent from the filing except in the vaguest of terms and I had hoped that someone could explain it. No one could, or at least no one did.

I suspect that the method of calculating the fee was flawed. Even if that wasn't the case, if the Company had carried that $2.2 million forward as an asset its size alone would have been a red flag...or at least a "WTF?"... to any objective reader of the 6/30 balance sheet. I believe that that was the true motivation for the decision.