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I’m sure this is all seat of the pants stuff with multiple things happening simultaneously, so I’m prepared to give them a pass on this kind of stuff for once. First of all, of course, is getting the bridging finance sorted! Without that we’re stuffed.
I’m hoping one or more of the radiotherapy companies ends up being the / a major investor, because a) for what they can bring to the party and b) because the shares will be stickier than if sold to the wider market. And a full buy-out may give us a better return.
So a consolidation to sort out the convertibles and then a sub division share split to reduce the nominal value to raise equity !@#%@ I think or maybe I don't.
MasterPlan,
I suspect that you are right, but why talk about issuing shares before you talk about a share consolidation, especially when the one has to precede the other? And why have they still not said what the new nominal share price will be? They have had plenty of time to think about this. The whole RNS is disjointed and confusing, because it has been presented in the wrong order, and is full of wishful thinking rather than factual information.
And here is a prime example of their muddled thinking, and poor phrasing.
"In addition to obtaining the shareholder approvals noted above, in order to implement the Prospective Recapitalisation Plan, it will be necessary to first implement a capital reorganisation of the Company. At the date of this announcement there are 542,573,869 existing Ordinary Shares of 25 pence each in the capital of the Company in issue. The middle market share price of each Ordinary Share as at close on the date prior to suspension of trading in the Company's shares on 30 June 2023 was 1.925 pence, giving the Company a market capitalisation of £10.4 million. The Directors consider that the number of existing Ordinary Shares is not only unwieldly in volume for a company of Advanced Oncotherapy's market capitalisation, but when combined with the prevailing share price, is not conducive to an orderly market. Accordingly, the Directors believe that a consolidation of share capital will result in a more appropriate number of shares in issue for a company of Advanced Oncotherapy's size in the UK market."
So the Directors think that the number of existing Ordinary Shares is unwieldy now!
Do you think that someone should tell them that there is likely to be ten times more shares in issue after the share consolidation, and then anything up to another ten times that number after the fundraising is completed.?
It’s referring to 20% discount the new issue price which was always in the agreement but I don’t think the issue price has been decided yet.
"As per the Company's announcement of 1 March 2023, various lenders who hold £6.4 million of secured convertible loan notes will have the option to convert their secured convertible loan notes into Ordinary Shares at a price that is equivalent to a 20% discount to the Issue Price."
So lenders are being offered the chance to convert their loan notes into shares at a price of 20p per share (ten times more than the closing sp before suspension).
Shares in lieu of fees
"In addition, subject to obtaining the necessary shareholder approvals and reaching agreement with the various counterparties summarised below, the Company intends to satisfy amounts owed to various parties as follows through the issue of new Ordinary Shares at the Issue Price:
· the Company is hopeful that £0.5-£2.0 million of payables to certain suppliers will be settled in new Ordinary Shares at the Issue Price (the "Supplier Fee Shares"). Negotiations with selected suppliers are ongoing;"
And suppliers are being asked to settle their outstanding bills with the issue of new 25p shares. (At current sp of 2p, they would be getting 8p in the pound to settle the bills).
The Company is hopeful, they say. I bet they are!
I agree that it would be great if the news were better and not include so many uncertainties but it is a lot better than losing everything.
If the terms of the recapitalisation plan turn out particularly poor for existing shareholders then an offer for the company now might be a much better option, in which case the Board would be duty bound to recommend it. (Clearly they have no duty to prospective shareholders who would be thwarted if the recapitalisation didn’t go ahead) That seems to me the best situation for us existing shareholders - then the terms of the proposed recapitalisation would be adjusted (logically, at least) according to the value placed on the company by the offerer, and the Board can decide which avenue looks best.
Whilst the Prospective Recapitalisation Plan has been the Company's primary focus, the Company remains in discussions under the Formal Sale Process with strategic players in the radiotherapy sector.
Better something than nothing.....and if this is the case than it's positive news but that's just about that,I wouldn't describe it as excellent news.....
Yet,to bring the LIGHT machine into the medical world will be certainly brilliant news as a potentially revolutionary treatment for cancer, lots of hard work has spent on that system so to finally to get it work will be massive to many sufferers. This is for sure.
As for us share holders lets just hope that we may get a little rewards for our loyalty one day, but I doubt it will be much or soon enough.
GLA.
At the time loss 1100 if i held be 20000 so that was a result
It is excellent news. Quite apart from the fact that AVO should retain control of LIGHT so should be able to bring its plan of democratising proton beam therapy to fruition, it also means that our shares should retain some value, as opposed to facing the risk being valueless. We might even see the value of our shares increase over time, especially if AVO becomes the proton beam therapy's version of, say, Microsoft.
It all depends at what price they raise the new equity. I’d be astonished if it’s at the (pre-suspension) 2p or so as the Board will argue the resulting mcap would overly disadvantage existing shareholders.
Is it excellent news though ? Dilution would horrendous, did they state a price for D4E or will it be at 1p, it just means the market cap balloons and any future little rises in the share price means a huge jump in valuations.
Current Market Cap’ £10.4m.
A number of caveats on the new £110m financing but hopefully it will successfully bring LIGHT to market.
Pleased to see the Plan, need to read it properly. Good to see there is already a commitment to some equity investment, if I read it right.
A small glimmer of hope that one day the hard work that has gone into creating an improved treatment for cancer.
Got a picture of a juggler with ten balls stood on one leg trying to ride a surfboard in a force ten gale.
For some unknown reason they didnt reverse the consolidation that took place a few years back to raise funds as some suggested, pride who knows.
The RNS demonstrates that no one wants AVO to fail.
If they pull that off, hats off to them. There are a lot of moving parts in there. BUT heartening to see the major debt holder already on board to convert debt to equity.
"It's alive" - RNS
I can't imagine a situation in which major shareholders would allow AVO to fail for want of a few million.
Harley Street building, fully converted to accomodate LIGHT, must be a big draw to any proton therapy operator wishing to adopt this disruptive technology. Mrs. RenHua Zhang of Liquid Harmony ltd gives her correspondence address as 143 Harley Street at companies house?
It’s no secret the company was seeking a partner so if one has been found to fund the business then happy days.
Share dilution will happen.
The technology AVO have is priceless, existing shareholder and a new one will save us. Can’t really say no more but I’m happy with what I was told as I had bought a few of these shares, hopefully what was spoken will come to fruition.
Wantthatone if this happens we will be good for the future.
Sharesforlife - lots of recommendations for your post, no doubt because we desperately all hope you’re right! But do tell us more……