AVO.L Regulatory News (AVO)

17 April 2014

Advanced Oncotherapy plc

("AVO" or the "Company")

Placing and Subscription to raise £6 million

Advanced Oncotherapy (AIM: AVO), the developer of innovative medical technology for cancer treatment, is delighted to announce an approximately £6 million equity fundraising before expenses, through a placing and subscription of 222,222,222 new ordinary shares of 1 penny each (the "New Shares") at 2.7 pence per New Share. The New Shares have been placed with institutional investors (the "Placing") and subscribed for by existing shareholders, directors and management of the Company and other investors including the Indian hospital group, Kanoria, (the "Subscription") (the Placing and Subscription together the "Fundraising"). Mr Colussi, who through Brahma AG is a shareholder of the Company and was an investor in ADAM SA ("ADAM"), has participated in the Subscription through the conversion of an existing £800,000 loan into New Shares. It is expected that the New Shares will be admitted to AIM on or around 23 April 2014 (the "Admission").

The Fundraising is conditional upon, inter alia, Admission becoming effective and the Placing Agreement made between the Company and Westhouse Securities becoming unconditional and not being terminated in accordance with its terms.

Highlights

· Fundraising to raise £6 million in cash, by Westhouse and Peterhouse, as joint brokers to the Company

· Funds to be used to develop the LIGHT system for cancer treatments

· Accelerate AVO's plan to become a global provider of cost effective proton therapy systems by reducing both the capital and operational costs in a clinical setting

· Capturing a share of the growing market for proton-based radiotherapy solutions

Use of Proceeds

As part of its plans, the Company intends to use the net proceeds of the Fundraising to continue the development of its LIGHT accelerator which the board expects will be developed by the end of 2015.

Funds raised will assist the Company in its aim to convert existing letters of intent (which would be worth in aggregate £170 million if all were turned into orders) into contracts. Subject to completing the installation of a LIGHT system in one of the sites for which the Company is currently in discussions, it expects to commence treating patients during 2016.

Michael Sinclair, CEO of Advanced Oncotherapy, said:

"We are delighted to have received the support of investors for the next phase of development through this fundraising. We would like to acknowledge the existing shareholders, directors and management who have contributed 35% of the total raise and wish to extend our gratitude for their continued support. We believe that the development of the LIGHT machine over the next 18 months will generate significant value for shareholders."

Contacts:

Background to and reasons for the Fundraising

AVO is a developer and provider of technology for advanced radiotherapy solutions that are focused on the treatment of both common and rare cancers. Following its acquisition of ADAM, development of its proprietary technology is focused on the delivery of its first Linac for Image Guided Hadron Therapy (LIGHT) machine in 2016.

The company has two divisions: ADAM (Application of Detectors and Accelerators to Medicine) and Oncotherapy Resources Limited which provides a fully managed radiotherapy service to the NHS and private sector for the treatment of early stage breast cancer, colorectal cancer and veterinary cancers.

ADAM is a spin off from CERN (the European Centre for Nuclear Research) and a wholly owned subsidiary of AVO. It was founded to develop and to build accelerators for use in advanced medical equipment and conventional radiotherapy for clinical applications. ADAM's research and development activities focus the design of compact linear accelerators. One of ADAM's principal successes has been designing the linear accelerator for use in the treatment of cancer.

The board expects the LIGHT machine to be smaller, more compact and easier to transport with modular units that can be arranged to fit in existing buildings and require less shielding than conventional cyclotron or synchrotron machines. LIGHT systems are expected to be significantly more affordable with lower operating costs per patient in comparison to existing technologies. The system is expected to cost approximately one fifth of current comparable three room systems. Less shielding is required due to the reduced level of stray radiation production, which decreases construction and development time.

In addition, the LIGHT machine is expected to produce a proton beam which will be easier to control and can be precisely directed to "paint" various points inside a tumour even within moving organs (e.g. the lungs).

Proton therapy has greater precision over conventional x-ray radiation because the particle's properties, the Bragg Peak, often cause less damage to healthy tissue and surrounding organs. It has fewer side effects than conventional x-ray radiotherapy. This method of therapy can also be used in conjunction with other cancer treatments like as chemotherapy and surgery and potentially lead to shorter treatment times for patients.

Use of proceeds

The Company is currently in the process of developing the next generation of proton-based cancer treatment that offers significant advantages over traditional radiotherapy. The funds raised from the Placing and Subscription will mainly be used for working capital and manufacturing costs enabling production of a complete LIGHT accelerator.

The Company is currently in discussions with a number of hospitals and healthcare organisations to install LIGHT systems at various locations in the UK and the US and other countries. In addition, AVO has made various applications for grant funding in the US and Europe which will help support its working capital needs until it is able to generate a positive cash flow.

Directors' Shareholdings

Certain of the Directors and their connected persons will be participating in the Fundraising. The details of the Directors' participation and the holdings in ordinary shares of the Directors and their connected persons following Admission are set out in the table below:

Fundraising Statistics

Total Voting Rights

Following Admission, the Company's enlarged issued share capital will comprise 865,148,572 ordinary shares, with voting rights. The Company does not hold any ordinary shares in treasury. Therefore the total number of ordinary shares in the Company with voting rights will be 865,148,572. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Related Party Transaction

Through Brahma AG, Mr Colussi is a substantial shareholder of the Company, the conversion of the existing loan from Mr Colussi into equity is therefore classified as a transaction with a related party for the purposes of the AIM Rules. In accordance, therefore, with the AIM Rules, the directors of the Company, having consulted with the Company's nominated adviser, Westhouse Securities Limited, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.