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Kinovo - letter to AIM Regulation, suspension & enquiry into Canaccord needed now

By Tom Winnifrith, the Sheriff of AIM | Tuesday 10 May 2022


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.


After my weekend revelations, following on from Friday’s bombshell admission of rank dishonesty, I had expected Kinovo (KINO) shares to be suspended by now. For those weekend reports suggest that, very soon, the company will be reliant on its banks for survival. I have written to the Oxymorons at AIM Regulation about what is a major scandal of non-disclosure.

Re Kinovo: suspension and enquiry into the company and Nomad Canaccord needed now

To: AIM Regulation

Sirs.

Make no mistake: Kinovo, a company listed in your Parish, is a major scandal, and, on three counts, I urge immediate action.

On January 12 2022, Kinovo announced the sale of its construction arm, DCB, for up to £5 million, with £4 million almost certain to land in 2022. For a business that made prior-year profits of only £260,000, this looked like a cracking deal. Nowhere in that RNS did Kinovo mention it had to guarantee the working capital needs of DCB. Last week, we discovered there was such a guarantee, and that Kinovo was already on the hook for £3.7 million.

  1.  Why was there no mention of this guarantee? Why didn't Canaccord, as Nomad, demand to see the Sale agreement and insist that the guarantee be included in the RNS.

  2. I understand, and revealed at the weekend, HERE, that the guarantee would see Kinovo having to find an additional £2.3 million.  As it has just £400,000, that will see it reliant on the support of its bank, which currently offers a term loan of £2.5 million, expiring in just four months, and an overdraft of the same quantum. Surely, the shares should be suspended until the potential liability is bottomed out, communicated to the market, and the bank has committed to providing the necessary support. That should happen now, not in a “suspended pending clarification” statement in a few months.

  3. At the weekend, I showed that the buyer of DCB was a new company, set up by a man whose career to date is as a security guard, and who runs 3 other companies, none of which have any asset backing. So, how was MCG Global Limited going to buy a company making a £260,000 profit, and pay £4 million within a year? Did Canaccord do any research before signing off on a nonsensical RNS?

I suggest the suitability of those at Canaccord be investigated at once, that shares in Kinovo be suspended for the reasons detailed above, and that there be an investigation into whether its executive team is fit to run a public lavatory, let alone a public company.

I remain,

As ever,

Your obedient servant,

 

 

Tom Winnifrith
The Real Sheriff of AIM
www.ShareProphets.com

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