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Advanced Oncotherapy - the truth finally dragged out of the shysters

By Tom Winnifrith | Monday 6 February 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.

Advanced Oncotherapy (AVO) has finally fessed up to the truth of its bust up with Sinophi and is paying the Chinese $250,000 to settle - even last week house broker Beaufort was, with an Advanced steer, suggesting the Chinese would be paying Oncotherapy several million quid. Lets remind ourselves of a timetable of lies, deception and non disclosure.

On October 12 , twelve days after a £10 million placing was completed, Sinophi started sending emails saying the two end user hospitals were very likely to walk as Advanced was not delivering kit on the timelines it had promised. On October 14 Advanced started an open offer not mentioning that its entire $150 million order book was in jeopardy.

In early November Sinophi formally notified Advanced that the deal had been terminated. On November 24 Advanced said that the two hospitals had cancelled orders but the deal with Sinophi was okay and they kit would go to other hospitals.

On November 29 I ran a story saying that Sinophi was saying the deal was "terminated" and had said so in early October. On November 30 Advanced said this was all unclear and that it would hold urgent talks and clarify.

It did sweet FA.

On 23 January 2017 I ran a piece asking where the talks with Sinophi were heading. A day later Advanced said the deal had been ended but Sinophi had no legal right to do so and it was taking legal action. Sinophi responded by saying it had a contractual right to cancel.

House broker Beaufort was steered by Advanced and said the two companies would settle with the Chinese likely to pay a, material, sum to Advanced to ease is big balance sheet worries.

Now we are told that not only will Advanced not get a cent but it must pay back a $250,000 deposit it got for kit that was not delivered as per the contract. Advanced says that as part of the deal it reclaims the distribution rights for its kit that is not even at prototype stage in Asia. Well bully for it.

Advanced will have negative net assets within three weeks and now it has to write another cheque. Even its own house broker must now concede that the balance sheet is fucked and it needs either a massive discounted placing or it is tits up time. The way that the truth or partial truth has to be dragged out of Advanced is sordid. Its shares are simply not investment grade and it is within weeks of being insolvent. What is not to like?

Sell. target 0p.

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