Wow that's more than enough to cover the next few years and take them past live for Harley Street. I suppose it depends on how much they have to give away in equity, their market Cap is about 30m at today's SP. That would be a massive dilution, if it's all in equity.
It doesn't really have much new information in it from what is already in the public domain. It does give it a positive spin, which is good, but I don't see much that would make the SP double in a few days? There must be more news out there.
Given that the funding has changed and the dilution from the Bracknor arrangement isn't as pronounced then that's stopped the rot.
I would imagine that the project is on track with the milestones so there's bound to be no downward movement and pressure on with that in mind then any buying would move the SP up, the volumes have been pretty small, so it could be just that, any bad news/rumours would always leak out and the SP would drop.
The potential here is pretty big, if everything goes to plan, but still a big IF.
No sign of that General Meeting you mentioned.
The sp has been below 25p since the 19th May, so way over the 10 days set.
From what I can see they are not in any hurry to lower the nominal sp, and are content to simply pay a penalty charge to Bracknor for issuing shares below 25p. The last £400,000 of loan notes converted to new shares cost AVO £190,000 in charges.
"Additional fees of c.£190,000 are to be paid to reflect the conversion price being below nominal value of the Ordinary Shares. These fees may be paid in cash or deducted from the net funds owing to the Company in the draw down of the next tranche from Bracknor."
The management are spending quicker than Bracknor can convert. See what the AGM brings on 19th July, but if it doesn't change it nominal value very soon the receivers will be knocking on the door! Its scr*wed either way. Has handed over the lease on Harley St and other assets, so a conventional loan out of the question. The unconventional loan in operation, will release further mega dilution.
UCLH operational in 2020.
Newport operational 'within a year'.
I guess these are both using proven cyclotron or synchrotron technology.
AVO timescales depending on progress with LIGHT accelerator.
Worryingly, nuclear engineering timescales are usually measured in decades!
People seem to be ignoring some fundamental points. UCLH are building a new proton beam therapy treatment centre less than a couple of miles away from Harley Street. Proton beam therapy, although it is useful for treating cancer in children and in some parts of the body in adults, it is not as useful overall as conventional radiotherapy as it isn't powerful enough. Therefore once the UCLH facility is open you have to question how much unsatisfied demand there will be to keep Harley Street busy. This is assuming that AVO can develop a validated machine to install in Harley Street. From what I've read they can generate a proton beam with their technology and not much beyond that.
Meanwhile the company is burning cash and issuing shares to Bracknor to keep afloat. The next set of results should prove interesting.
The long and the short of it is that the SP has been hammered because of the funding arrangement. I suppose they couldn't get, although they did try to get some better deals out there. The issue is that it is unproved commercially so they have had to give a lot away. Like a lot of things everybody wants one, but nobody wants to be the first, with not just the end product but the installing, configuring, running and maintenance. There is a massive upside, is if it is as good as it is, then medium term there's massive uplift in SP. I'd imagine they'd be bought out if is by the conventional scanner manufacturers, as they will have learnt from all the mistakes that AVO have/will make and it'll just be part of a bigger manufacturing process.
I bought in as a punt as there is potential to be a market leader and the benefits of that is massive.
It just needs to work and not fall behind schedule too much, as that'll mean more costs, more dilution or potentially a sell to another company for buttons, as I'm sure there will be plenty of companies out there watching and waiting.
Genuine, potentially obvious, question from a minor shareholder - who went in over a year ago based on scientific and engineering evaluation of their plans. It's a solid idea and great technical facilities to deliver it.
Since buying in - suffered share consolidation, massive drop, China pulling out of contracts, with an overall position at -80pc.
Not trading, so not reactive, but rather investing in the idea itself - so what is going on with the share price? Is it really driven primarily by the punitive funding arrangement, terrible cash flow management? When will we see an upside, given that the actual development is on track?
I see that Bracknor have just converted a batch of loan notes, presumably when the sp was at 25p, but also gained another £37,000 in fees because the price had been lower in the 15 preceding days.
Good business for Bracknor, a £37,000 return on loan of £200,000 (that's an interest rate of 18.5% earned in under 3 months), plus 800,000 new shares, and a further bonus of 24,000 shares.
AVO will soon be bankrupt at this rate.
"Total nominal value of the CLN converted: £200,000
Lowest VWAP in 15 days preceding conversion notice: £0.2135
Conversion price: £0.25
Number of shares issued from the conversion: 800,000
Shares issued for the satisfaction of the conversion fees: 24,000
Additional fees of c.£37,000 are to be paid to reflect the conversion price being below nominal value of the Ordinary Shares. These fees may be paid in cash or deducted from the net funds owing to the Company in the draw down of the next tranche from Bracknor."
Par value of Ordinary Shares
Under the terms of the Subscription Agreement, if the closing price of the Ordinary Shares is lower than 110% of their par value for a period of more than 10 consecutive Trading Days the Company must convene a general meeting of Shareholders within 45 days to propose a reduction of the par value of the Ordinary Shares by not less than half.
The market knows that there is a very material overhang from the avalanche of shares that are due to be issued under the Bracknor death spiral convertible of which another £100,000 worth have just been announced as issued at 27.89p:
I think the RNS of 22nd Feb needs clarification. I think the term tranches is misleading and it has been used just to make it easier to understand. As stated before each note as a nominal value of £10,000, so in the case of the 1st tranche 130 notes were issued. If it goes AVO's way at the GM (existing investors have no choice but to go along with it unless they want to come up with the dosh) it will get 1,300 notes issues (forget the 50% pay back side, just a sweetner) . It has converted 10 notes so far ie £100,000.
It states in the circular
Conversion: The Notes must be converted into Ordinary Shares within twelve months of issue at a ConversionPrice equal to the lowest Closing VWAP during the fifteen (15) Trading Days immediatelypreceding the Conversion Date. Upon receipt of a conversion notice from Bracknor, theCompany can elect to redeem up to half (50%) of the Notes which are the subject of the notice byway of a cash payment, instead of converting them into Ordinary Shares.
It doesn't state anything about tranches just notes, so yes the notes must be converted into shares in 12 mths. Bracknor is controlling the outcome and it will want to sell shares before converting the notes, if it didn't it would soon be up to 29.9%, which (a) it isn't allowed to and (b) it would have to make a bid for the company, which it definitely doesn't want to do.
Which to get back to "Drawdown of a trache of notes cannot be requested by either party without the written consent of the other unless (1) all previously issued notes have been converted in Ord shares" meaning AVO will not be allowed to draw down the next batch of loan notes until Bracknor's say so and that will only occur once it has sold the majority of the converted loans.
Personally, shareholders are going to see mega dilution after the GM and if it doesn't insolvency. Why anyone is buying is beyond me
"Drawdown of a trache of notes cannot be requested by either party without the written consent of the other unless (1) all previously issued notes have been converted in Ord shares"
What I think this says is that AVO have the right to insist that Bracknor convert all previous loan notes before another £1.3m tranche is issued. However, this only applies if one party has not given their written consent to the next drawdown. The mandated conversion is within one year of issue.
The document also says this:
"Upon receipt of a conversion notice from Bracknor, the Company can elect to redeem up to half (50%) of the Notes which are the subject of the notice by way of a cash payment, instead of converting them into Ordinary Shares."
This is really likely to happen, isn't it?
A company that is so short of money that they borrow from corporate loan shark, is going to repay 50% in cash, rather than issue more shares. The only way this could happen is if they can borrow money to repay Bracknor, as they are two to three years away from being able to sell a LIGHT machine.
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