By Tom Winnifrith, The Sheriff of AIM | Tuesday 10 January 2017
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
AIM (very) bad boy Advanced Oncotherapy (AVO) did its best to ramp its shares following the shock loss of its entire order book back in November. Or was it October? Glitzy promo videos and spoofing share purchases by NEDs phased out to have maximum effect on fooling the gullible managed to get the shares back to c90p. But now folks are looking behind the smokescreen of bullshit and the shares are tumbling again, to 73.5p. Since this company has committed securities fraud my target remains 0p. The questions are mounting fast.
Before we go to the questions we should note that with the shares where they are, the decision of former NED, the Blair crony, Lord Evans to sell all his shares just weeks before September 30th results and the placing was an inspired trading call. Okay it broke all the AIM rules and might even have been insider dealing ( did he know there was a placing coming?) which is why the company "resigned him" after I exposed him. But has any further investigation taken place or are members of the House of Lords exempt from the rules for little people?
The first issue not addressed is the Securities fraud. In possession of leaked emails I showed HERE that Advanced knew the Sinophi deal was in deep trouble BEFORE it launched an open offer but did not tell investors until November 24, well after it closed. We still have had no explanation from Advanced on why that was not fraud.
Moreover the version of events given publicly by Sinophi directly contradicts that given by Advanced (Sinophi said contract were terminated in early November, Advanced said orders would still go ahead and that this was a late November development). When I exposed that Advanced said on November 30:
The Company notes the recent statement from Sinophi in relation to proton therapy projects in China. The Company believes that this differs from its own understanding of Sinophi's position outlined in a recent meeting with Advanced Oncotherapy management ahead of the announcement on 24 November. The Company is therefore seeking to meet with Sinophi to discuss its position as per the existing binding sale and purchase agreements.
How about an update fellas?
Then there is the funding issue which I have flagged up before, on December 10, writing:.
Earlier this year Advanced managed to get Metric Capital Partners to agree to lend it £24 million to build its Harley Street centre on condition that it raised £25 million in new equity. As September arrived while NED Lord Evans was busy dumping all his shares, it was clear that Advanced could not raise that much. And thus Metric agreed to waive that condition as long as Advanced raised £10 million ( as it did) and, to quote house broker Beaufort after a chat with the company:
"the implementation of an additional financing plan supported by banks and strategic partners which will not be dilutive to equity investors. Further details of this financing plan are expected to be announced by the end of the year."
Well the end of the year is getting closer and revelations that the 2 Chinese customers who had ordered $120 million of kit have walked will not have made financiers that keen. And that will be a problem when you are trying to get banks to lend you cash.
The year end has now passed. Advanced told its brokers one thing which - as is their job - they conveyed to the market via a research note. That information is now shown to be untrue. Advanced needs to update all investors via RNS on this matter as a matter of urgency. And while it is about it maybe it might clarify the other Sinophi matters as well?
Keep selling. Target price 0p.
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