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Not sure why you are defending the board Vanilla.
Repeating my post of last week:
"I do not agree that it looks like a slight oversight from the BoD in setting up this arrangement. They knew exactly what they were doing when they issued these warrants. Some of AVO's directors also subscribed for these warrants. It is the shareholders that who failed to understand this complex deal. Hardly surprising when many of the RNS's are so opaque."
If they had lowered the nominal share value back to 1p as a previous lender (Bracknor) had asked, this would not have happened. They would also be able to issue new shares to ordinary shareholders at their stated price.
Instead a French company subscribes for 200,000 shares and is issued 1, 858,736 new shares. Is this an example of the non dilutive funding that the company talked about a while back?
"The conversion fee of £91,266 would be very expensive alongside the the £100,000 repayment if settled in cash."
Sorry that does not make much sense.
What I meant was that AVO would still have had to pay £91,266 as well as issuing 400,000 25p shares to settle this loan. If they are struggling to repay the £100,000 loan note in cash, they are unlikely to be able to afford the £91,266 compensation payment either.
I'm pretty sure that the option to pay the difference in cash or shares is down to AVO, not the converting noteholder. The conversion fee of £91,266 would be very expensive alongside the the £100,000 repayment if settled in cash.
Can't help you on why the Froggies chose to convert these warrants into shares, but the company is very short of cash, so repaying debt would be difficult. AVO may be actively encouraging noteholders to convert.
I do not agree that it looks like a slight oversight from the BoD in setting up this arrangement. They knew exactly what they were doing when they issued these warrants. Some of AVO's directors also subscribed for these warrants. It is the shareholders that who failed to understand this complex deal. Hardly surprising when many of the RNS's are so opaque.
Vanilla is right.
The French company may be paying an exorbitant 25p to convert these warrants into shares, but there is a very generous amount of compensation shares issued as well.
" Total value of the convertible notes being converted: £100,000"
" Number of new Ordinary Shares issued from the conversion: 400,000"
So far so good, 400,000 new shares issued at 25p for a total of £100,000, now for the not quite so clear bit.
"As set out in the Company's announcement on 1 March 2023, if the conversion price is below the nominal value of the Ordinary Shares, the Company shall pay the noteholder a conversion fee calculated to compensate for the difference, which may be settled through the issue of new Ordinary Shares or cash. As such, a conversion fee of £91,266 (the "Conversion Fee") is to be paid. The Conversion Fee will be settled through the issuance of 1,877,904 new Ordinary Shares."
So the French company is paying £100,000, and receiving 400,000 + 1,877,904 new shares.
Hence £100,000 buys 2,277,904 new shares. This equates to 4.39p per share.
"Following this issuance of warrants the Company has a total of 199,061,873 warrants in issue."
"AVO also confirms that as at the close of business on 30 May 2023 its issued share capital consisted of 537,481,209 ordinary shares of 25 pence each."
If all these warrants are converted the company will raise almost £50 million and shareholders will be diluted by 37%, if my calculations are correct.
"Would it possible if leave in aj bell nominee accounts for now later ask for paper certificate in couple of years time if situation doesn’t change ."
Rishab,
The answer is a definite NO.
If the shares remain in AJBell's name, they will be lost in a dark hole, unless POLY is somehow readmitted to the FTSE. You may well receive any dividends, but you will never be able to trade the shares.
I have been through exactly this scenario with AJB, over Aclara paper share certificates, which were given as a dividend by Hochschild. And these are listed in Canada, a market that AJB trades on. However, once any shares are converted to paper certificates AJB will not trade them at all. A transfer to another broker is the only option they will offer you.
Take the offer of converting the certificates into your own name, an offer that was not made to holders of Aclara shares.
Try this Huudi,
customerservices@iwebsharedealing.co.uk
i have not used this address for a while, but may still work.
"That specifically says "cannot be traded electronically" I wonder then, if they can in fact (in the future) be traded over the counter (OTC) ?"
Jotom750,
I can categorically say that that statement from AJ Bell is misleading bulls**t.
I have gone through this with Aclara shares (given as a HOC dividend).
For "cannot be traded electronically", read CANNOT BE TRADED AT ALL.
My paper Aclara shares are listed on the Canadian market which AJB trade on, but they will not trade in paper shares. Neither will they send me the paper shares. The only option they offer is to transfer them to a broker who trades Canadian paper shares.
This is complicated by the fact that the shares certificates are listed as belonging to AJ Bell and not me, which is true for all shares held in a Nominee account, so don't bother asking them for your share certificates because they are not your's, they are AJ Bells.
AJB did not offer me the option to have these shares listed in my name as Ninna has posted below.
" You may request to convert your holding to certificated form to be held directly in your own name - This request must be submitted by the 30th of June 2023. "
If you decide to hold, get the certificates in YOUR name.
The loan repayment has not been deferred for 3 months, it has been deferred for an additional 3 months. The loan was already 24 months past its original repayment date when this announcement was made.
RNS 15th May 2023
The Company also announces that the repayment date of its £10m loan facility with Credit Suisse AG (the "Loan") has been extended to 4 September 2023. The Loan is secured against an aggregated amount of £10.5 million. Nerano Pharma Ltd, acting as Third Party Pledgor, placed £10 million in a pledged account, with the remainder placed in a pledged account by the Company. Full details of the Loan are set out in the Company's announcement published on 10 May 2019.
RNS 10th May 2019
The Loan has been fully drawn down immediately. The interest rate payable on the Loan is 2 per cent. above LIBOR per annum and the Loan is repayable in full in cash at the end of the 24-month period. The Loan is otherwise subject to Credit Suisse's standard terms and conditions.
The Loan is secured against an aggregated amount of £10.5 million, Nerano Pharma Ltd[1] ("Nerano Pharma") acting as Third Party Pledgor having placed £10 million in a pledged account, with the remaining £0.5 million placed in a pledged account by the Company.
" is possible that any data showing that inflation is not under control, will create greater downward pressure on POG."
Don't follow your logic there!
Rising inflation drives up the prices of just about everything, as we can all see from our shopping bills. Why should gold be an exception to this rule?
I don't think the company has any intention of raising funds by issuing shares on AIM. The directors lack the humility to lower the nominal share price. Their product is far too impressive to be listed as penny shares.
The latest RNS makes it very clear that they would prefer to operate on the US NASDAC market, alongside Apple and other highly successful tech companies. They have put up the For Sale signs and are hoping to attract an American partner, but no interest has been reported yet.
As Gerhart says any interested parties may be biding their time, preferring to get the technology on the cheap by buying from the Administrators.
"They would look a bunch of muppets if they reversed something they did less than seven years ago, the consolidation won't be reversed. "
AParky,
Thanks, I had completely forgotten that AVO's nominal shares price was initially 1p. Then back in July 2016 they did a 1 for 25 share consolidation. Everybody's share holding was reduced accordingly and the shares now had a nominal value of 25p.
During the Bracknor financing deal AVO had to repay £190,000 of one tranche of £400,000, to reflect the conversion price being below the nominal value of the shares. Bracknor later proposed a motion to reduce the nominal value back to 1p, but were talked out of it by AVO. So way back in 2017 the directors knew that their share consolidation was costing the company, and restricting their ability to issue new shares, but chose to do nothing about it.
As you say they might look like a bunch of muppets if they reversed their 2016 decision, and I suspect it is too late now to take that course of action anyway. However, how small minded will they look if their pride, hubris and stubbornness results in insolvency, with the remnants of the company being bought off the receiver, and shareholders taking a severe haircut?
iWantThatOne,
Reducing the nominal share price does not dilute anyone. If the nominal share price was reduced to 2.5p everyone would automatically own 10 times more shares. Dilution occurs when large investors or funds are offered shares and small shareholders are excluded. A placing to institutional investors can be made available to small shareholders as well, if the company chooses. That way investors have the choice to minimize any dilution, by buying new shares at a reduced price. However, as these idiots refused to lower the nominal price, they cannot issue and sell new shares to anyone. They have cut off the supply of funds from their supporters as well as any potential new investors.
You say that "the Board is explicit that they’re looking for partners, not buyers."
When you have run out of money you are in no position to dictate to anyone.
"I think the Board has always had shareholders' interests at heart - hence the focus on debt, and the refusal so far to reduce the nominal price to allow equity raises at sub-25p."
iWantThatOne, you could not be more wrong with that statement!
Bracknor proposed reducing the nominal value of the shares back in 2017, but were talked out of it by the board, who no doubt regarded this as a loss of face.
"Advanced Oncotherapy (AIM: AVO), the developer of next-generation proton therapy systems for cancer treatment, announces that following discussions with the Company, Bracknor Investment Group ("Bracknor") has waived the requirement to call a General Meeting proposing a reduction in the nominal value of ordinary shares of 25p each, as had been stipulated in the Circular for the General Meeting on 31 March 2017."
Nobody likes share dilution, but it is preferably to disintegration. Financially it makes no difference if a shareholder holds 100 shares with a nominal value of 25p or 500 shares with a nominal value of 5p. However, reducing the nominal share price is viewed as a sign that a company is not doing well. Hence imo, the stubborn refusal by the board to take this course of action. As I said in an earlier post, this has prevented them raising money by issuing new shares to small and large shareholders alike. With the banks and other financiers clearly unwilling to lend, the company has had little option but to put the for sale sign up
The Bracknor loan as I recall it, involved AVO issuing loan notes that Bracknor would later convert into new shares. If the share price fell below the nominal share price, then AVO had to make up any difference. The last issues resulted AVO receiving far less than planned.
I found the cutting below while looking through my old notes.
"Additional fees of c.£190,000 are to be paid to reflect the conversion price being below nominal value of the Ordinary Shares. These fees may be paid in cash or deducted from the net funds owing to the Company in the draw down of the next tranche from Bracknor."
With the sp at c 2,5p, AVO could not even consider this type of funding.
"The funds raised will further strengthen the Company's balance sheet and contribute to the funding for progressing the assembly, documentation, verification and validation activities."
I am sorry Meldrew, but that statement tells us nothing!
It is blindingly obvious that any money raised will strengthen the balance sheet.
As iWTO says this money will not stretch very far.
"Might bounce now if they are finished, or are they selling it all and 15M more still to go? 3% is last notifiable event, I believe. Guess we'll see soon."
As they are already down to 2.82% share ownership, I don't think that we will be told if they sell the rest. They might have done so already, for all we know. The RNS's sale was on 28-Mar-2023. There has been 3 trading days since then.
"Kenj, if that be the case, why are the major shareholders not selling their shares?"
Basil,
If I have said anything that is not correct, then please point it out to me.
As for why aren't the major shareholders selling, you would need to ask them that. However, the big boys do not always get it right. They can buy a dud, hold for too long, or sell too early, just like the rest of us.
My posts were not to offer investment advice. They were simply to point out the real options the company has to raise cash, and refute the suggestion that the company could issue new shares to bridge their cash short fall.