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Ferg

Q. "When this was suspended it was due to a possible sale through CITIC, going back to 2019, so I wondered why this didn't ever manifest and the stock was re-listed? He is saying if it didn't sell then why would it now and I don't know how to counter this :/"
A. The current FSP is the result of the CITIC informal approach from a potential buyer. The BoD have said there are several interested parties, not one. My opinion is that a FSP is transparent and allows competition - ie increasing ultimate takeover price. It wasn't that the company 'didn't sell', I believe they had more interest and wanted the competition. Also, the FSP allows for due diligence and allows for other details to emerge (license approvals etc.) which may further increase sale price.

Q. "He keeps referring to their past performance which admittedly doesn't make good reading, but if they're sat on so much potential wealth in the ground, why have they struggled to make profit for a few years? I know they are now debt free which is obviously great news."
A. The history was typical of an exploration company. The easiest form of finance was from equity issue and therefore dilution as a result of financing... The sp therefore suffers. Also, it takes time for a small explorer to build a cash flow positive business. Production has helped them make some revenues / profit and being debt free now is a great achievement. Very good for M&A. The timing is right.
Others have said it before, the demand for palladium has only recently started to rise significantly. As has the price for palladium. Again, the timing is right.

My rebuttal to your friend would be: "Look at the amount of shares the BoD hold. Do you think it is in their interest to achieve the highest possible offer price?"

Hi Teletubbies
In my experience of several large takeovers, the share is not suspended pending an offer.
Generally, as per Rule 2.7 of the Takeover Code, the offer is RNS'ed with the full details of the offer price, offeror, Board recommendation and next steps.
The MM's will just move the Bid / Ask to just under the offer price immediately after news. There will be no chance to get scrambling to buy shares.

There can easily be a counter-offer - and this almost certainly will come within the 28 days post first offer (the period an Offeror has to complete paperwork etc.).

On the Canadian stock exchange as an example, they do suspend trading in a stock after releasing material news. Not on London Stock Exchanges.
There are circumstances when a stock may be suspended, i.e. if material news is leaked (see EUA earlier this year). But as part of a FSP everything is transparent and open so suspension is highly unlikely.

Pompey - just to confirm, in a FSP it is not business days. So the 28 days ended in July.

I posted this last night, but it is even more relevant now with this morning's RNS...

Okay, so the reason SONA dropped today was because they released news today of delays in approval timescales due to:
- revised FDA approval requirements for non-lab covid tests that came into effect 29 July 2020 (enhanced safety and quality requirements). Interestingly, the FDA has recently adopted ISO13485 to replace 21 CFR part 820 which is the Quality System requirement for medical devices approval. Avacta are currently getting accreditation as per today’s RNS.
- not obtaining ethics board sign off - it looks like issues with enrolment criteria (this could be personal data capture mistakes; paying to take part in study; poor sample size / variability...). As we are using CONDOR Process, ethics should already be signed off.
- issues with human usability - and the impact on test accuracy (nasopharyngeal swabbing is not easy). Our spit test should be far more user friendly.
- environmental / containment factors - which could be mitigating the risk of contamination. Neutralising Affimers May help with this?
The SONA news states a revised two week timeline for approval. I’m not convinced this will be hit. Ethics is a huge hurdle.

My opinion - Avacta could now be ahead of SONA... watch this space!

Okay, so the reason SONA dropped today was because they released news today of delays in approval timescales due to:
- revised FDA approval requirements for non-lab covid tests that came into effect 29 July 2020 (enhanced safety and quality requirements). Interestingly, the FDA has recently adopted ISO13485 to replace 21 CFR part 820 which is the Quality System requirement for medical devices approval. Avacta are currently getting accreditation as per today’s RNS.
- not obtaining ethics board sign off - it looks like issues with enrolment criteria (this could be personal data capture mistakes; paying to take part in study; poor sample size / variability...). As we are using CONDOR Process, ethics should already be signed off.
- issues with human usability - and the impact on test accuracy (nasopharyngeal swabbing is not easy). Our spit test should be far more user friendly.
- environmental / containment factors - which could be mitigating the risk of contamination. Neutralising Affimers May help with this?
The SONA news states a revised two week timeline for approval. I’m not convinced this will be hit. Ethics is a huge hurdle.

My opinion - Avacta could now be ahead of SONA... watch this space!

I've been having long and interesting conversations with many different people regarding where the vast $trillions are going from the FED (and other central banks). Everyone agrees that the real economy is not seeing the benefit of this stimulus as the money is going straight to the investment banks (primary dealers) and not filtering down.
Why is this relevant to EUA you ask...
Well, we believe the majority of the stimulus money is being used to fund IPOs, feeding the stock market via hedge funds / IIs, speculative derivatives, and M&A. And mostly big banks dealing with big corporations.
Wall Street is returning to the pre-GFC levels of greed and 'who can get the biggest deal / bonus'.

When you add it all together you get an interesting scenario:
- High inflation from all the MMT policies around the globe creates continuing rising asset prices (Pd, Au, Pt)
- Near unlimited money supply from central banks ensures liquidity
- Big loans available to big corporations at very low rates (ZIRP / NIRP)
- Investment banks bragging rights 'the pursuit of the biggest deals / bonuses', and UBS are at the top!

In my opinion, EUA are, right now, in the best possible position for a huge acquisition.

The Hastings sp is at 252p because the offer is for 250p per share PLUS there is a one-off dividend of 4.5p per share (Interim Dividend) that will be paid in October.
So the total offer is actually worth 254.5p per share...

There has been NO delays - you are impatient.
If you thought the Avacta test would be on the market by end of July then you're expectations were completely wrong - not based on FACTS - AS never stated this - I for one, have always believed we would have a test on the market by September (c.1 month after SONA). Myles McN has voiced similar opinion.

The Kamani family has invested a large sum of money in AVCT and also in Medusa-19 off their own back - they clearly have a strong business case and want to make profit. I commend that. It's only positive for Avacta.
We are all aware that there are other tests and that it is a huge market - it doesn't matter if others beat us to be first, we will get the market share our test deserves. Big or small.

Insider trading happens - there's nothing you can do about it - get over it.
The placing was opportunistic, yes, and frustrating, but it has definitely put Avacta in a stronger position long-term.

And for you to say your posts are evidence based and factual is just ignorant and misleading - you deserve all the lambasting you get alwayswinning.

Good morning Ian_
Please can you put me down for 21/09/2020 (21 Sep 2020).
Thanks.

Sadiq - my thoughts.
- The GDR test performance (sensitivity 100%, specificity 98.2%) is good but worse than the big pharma players, Roche, Siemens, Abbott. So governments and other buyers are more likely to go with the big players. This may explain why they have not sold in EU.
- The test still requires EUA/FDA and individual country approvals for their target markets (India, Africa) which has been delayed.
- Unless their test is cheaper, I just can't see GDR competing in this space.
- Couple that with increasing global supply of antibody tests, GDR's slice of market is diminishing.
- GDR's POC test won't be available until 2021, so this is unlikely to create significant revenues.
- They have only confirmed £1m of pre-orders - compare this to NCYT - it is very small.
- Government narrative is moving towards antigen testing.

I have no doubt GDR will bring in revenue from its covid tests, but I think they are too late to profit as a pioneer company.
The FDA/EUA approval, India approval and individual African countries' approvals will spike the sp, but only revenues will sustain the rises.
I just don't think GDR has a unique selling point, or penetrating ability, to warrant its 800% rise.

What we know:
- EUA has huge known reserves of increasingly valuable / desired minerals, though absolute value unknown
- EUA has potential access to additional reserves (Flanks)
- The mining is very low cost
- The area is known for mining and has some infrastructure in place
- There are parties that have shown interested in acquiring EUA or some of its assets
- EUA has begun a Formal Sales Process (FSP) on 1st July to ensure transparency in sale process
- The FSP is being managed through UBS bank, who are experts in M&A, on a no sale no fee basis
- CITIC are also involved
- Going by history, FSP for similar companies range from c.50-90 days (we are at 30 days)

Risks
- There is a risk the licence for the Flanks may not be granted
- There is a risk of no offers - priced out due to commodity prices too high / Russia's geopolitics
- The sp is high and many II's, LTH's and the BoD's could decide to sell shares - could spark lack of confidence
- Informal offers are not required to be made public so if EUA don't get their price, the sp will likely fall significantly

Opportunities
- CITIC brings connection with China - China needs minerals and has lots of money
- UBS brings global interest and as they are on a no win no fee basis, they will want to make a sale happen
- EUA's minerals are in demand now and will be more in demand in the future - tech, EVs, green tech...
- Any formal offers must be made public and the sp will subsequently re-rate
- The BoD may release details of informal discussions

Also, worth noting that when a formal offer is made it CANNOT be rescinded.

GFD - I disagree. The FSP process has been designed and setup to drive transparency in a sales process.
If an entity decides to make a formal offer, under Rule 2.7, they must inform the Takeover Panel who then enter it into the Disclosure Table.
The Disclosure Table is open for anyone to see at any time.

If this 70p offer is true, it is likely an informal approach that does not require any formal announcement.

Hi GFD
Rule 2.7 of the takeover code means any offeror must submit their formal offer and provide all documentation within 28 days. This goes to the Takeover Panel and is reported as per the takeover panel process. EUA are not required to RNS until shareholders need to be informed for voting.

He also notes that most acquisitions he’s been involved with, the Target has announced (RNS) to the market upon confirmation of Formal offer (Rule 2.7).

A good recent example is Amigo (AMGO) where the Board released news of an intention to offer, not a formal offer. The subsequent events may also provide lessons on why not to announce ‘intentions’...

I just spoke to a friend of mine who is a senior Director in M&A in the City (not for UBS).
I wanted to allay my concerns regarding the removal of rules 2.4a, 2.4b, and 2.6a.

He said that this is not uncommon and the impact includes:
- Negative - tends to cause increased uncertainty for the Target (EUA) primarily due to effect on 'business as usual'. So in EUA's case, there will not be a significant impact compared to, say, a firm with lots of staff and need to continue operations.
- Negative - if no parties are interested, EUA are not obliged to inform the market, so after the 28 days the share price could drop significantly / steadily until news.
- Positive - as there is no 28 day put up or shut up (PUSU) period, we could get perpetual speculation and a bidding war. Ergo, it could invite more bidders and eventually get a better price. But timeframe could be anything from 28 days to months.
- Positive - all offers have to be disclosed (via RNS) and cannot be rescinded.
- Positive - a better offer could be submitted at any time and must be disclosed (via RNS).

His opinion on EUA was the timeframe has likely been extended due to the complexity of the resources and valuation, and also covid impact. His view is that UBS will likely try to adhere to a 28 day process, BUT will accommodate more time where absolutely necessary (i.e. if it takes longer it means there are very interested parties). Ultimately, he expects the process to not take more than 3 months for final bid to be accepted. If no news within three months, it is likely that there is no offer.
Good practice would be to update the market after 28 days regardless of interest. This would be next week!

I know some of you don't see a correlation or similarity with AVCT and SONA, but I do.
They have created a covid rapid POC antigen test which is in final validation / approval stages - to be announced end of July.

My opinion is that our sp trajectory will follow that of SONA quite closely - in fact it already has.
When SONA was at our stage, their sp was c.$1.30. They had increased by 1000% from $0.125 taking 3 months.
Today they have reached c.$12.50, and that is without FDA approval - this took 2 months.

SONA achieved the second 1000% rise by announcing pre-orders and Letters of Intent plus very good clinical specificity / sensitivity for their tests.

I am very confident, as long as our sensitivity / specificity is 95%+, we will follow this path - and we are already 1 month in to that second stage!

BBN - The time line for Sona is interesting and very comparable. They moved to optimisation stage 13 April.
It seems the time line then went:
- Lab trials --> successful (announcement 12 May)
- Clinical trials commenced throughout May
- Engaged with MRIGlobal to validate tests ready for FDA approval (22 May)
- Positive validation results (announced 3 July)
- In-field human trials throughout July --> If successful, FDA approval (awaiting results...)

So, if we compare to Avacta, I'd say we are awaiting the news that Sona got on 12 May. It took them one month to optimise which for Avacta would mean news on or around 24 July.
I'd imagine that Sona's next news will be 'conclusion of human trials and FDA approval' which they have said will be end of July. This will likely also include orders / revenue forecasts...

My question is, can we shorten the subsequent activities i.e. clinical trials / 'in-field' human trials?
Or do we have to wait for each step to complete?

Pigster - the Sona test does do data capture and distribution. They partnered with Bond Digital Health in Cardiff, UK.
Text from Sona 'RNS' in February 18:

"Sona Nanotech Inc. (CSE: SONA) has announced a partnership with UK-based medical technology company Bond Digital Health (Bond) to add data capture and analysis to its coronavirus (Covid-19) rapid screening test currently in development.
This data partnership will allow test result data to be collected through either a reader system or mobile app before being securely stored in the cloud. The data can be accessed and analysed on an analytics dashboard, providing feedback on:
-The total number of tests administered
-Positive and negative results
-Geolocation of where tests are administered
-Demographic information of patients (when input)

It looks like the sensitivity of the NCYT saliva test is 69.2%?
Is that not too low to be approved?

C'mon Spanner...
We should focus on the end goal and not worry about intraday swings.
The global markets are generally down, so you would expect a little volatility today.