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EKF Diagnostics Holdings plc (AIM: EKF), the AIM listed point-of-care business, announces that further to the announcement on 6 November 2019, and reflecting the continued value creation for shareholders in the current financial year, EKF's Remuneration Committee ("RemCo") has determined that it is appropriate that the Executive Directors receive an equal performance-related payment of approximately £227,300 each (the “Bonus”).

The Company currently operates a cash-settled, share based incentive (the "Incentive") for the Company's CEO and Finance Director (the "Executive Directors"), which is designed to pay out in the event that the Company is acquired by a third party (an "Exit"). The Bonus recognises the further delivery of performance in the business by Executive Management, in the absence of any other performance-related pay mechanism, and substitutes value creation for an Exit as the relevant trigger for payment on this portion of the Incentive.  The Bonus has been calculated using a 2 pence increase over the baseline share price which was reset in November 2019 to 27 pence.  Based on the closing mid-market price on 4 August 2020, EKF’s share price has improved by nearly 50% since the start of the current financial year and by circa 56% since 5 November 2019.

Following payment of the Bonus, RemCo considers that the remaining unpaid amounts under the Incentive continue to provide strong motivation to the Executive Directors, who will receive a further potential variable reward in the event of an Exit, equal to 5% of the excess value obtained over the new baseline price of 29 pence per share. 

Any future amounts payable to the Executive Directors under the Incentive in the event of an Exit take into account previously paid amounts through the resetting of the baseline price.  Accordingly, the aggregate amount payable to the Executive Directors under the Incentive is unchanged by the payment of the Bonus and the total value available to Shareholders on an Exit will therefore be unaffected by the prior, partial utilisation of the Incentive to provide performance-related pay.

Further disclosure will be made in the Company's next Annual Report as to the independent assessment of the carrying value of the Inventive arrangement following the above payment.

As at 31 July 2020, the Company had cash net of borrowings approximately £16.0m.  The Company's Renalytix AI plc securities (2,677,981 shares) had a fair value of £15.4m, based on the closing mid-market price on the same date.  The Company therefore remains very well capitalised to execute its plans and continues to generate strong operating and net cashflows.

The Bonus is considered to represent a related party transaction under the AIM Rules for Companies. The Non-executive Directors, having consulted with N+1 Singer as the Company's nominated adviser, consider the terms of the Bonus to be fair and reasonable in so far as shareholders are concerned.

The persons responsible for arranging the release of this Announcement on behalf of the Company are Julian Baines, CEO, and Richard Evans, FD and COO respectively.

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