Advanced Oncotherapy Share Discussion Threads

[daijavu] 27/1/2017 18:45

Karolina.

His article will only matter to those who have not researched AVO thoroughly for themselves. Anyone who is likely to be influenced by tipsters like TW should not really be investing in shares, anyway.

AVO is a risk, just like any other AIM share. You should only own AIM shares if you are prepared to lose every penny you put in. If you are uncomfortable with the risk, don't hold AVO shares. It is that simple. In any case, you should always do your own research. It is rule number one.

[daijavu] 27/1/2017 14:08

Beaufort Securities posted this article on Wednesday:

"The developer of next-generation proton therapy systems for cancer treatment yesterday informed shareholders that on 23rd January, Sinophi Healthcare Limited had told the Group that it wished to terminate the purchase orders announced on 25 March 2015 and 21 October 2015. Advanced Oncotherapy noted its firm position that Sinophi has no legal basis on which to make such a termination and that it will take appropriate action to protect its position.

Our view: It always comes as a surprise when the market reacts violently to some news item whose impact was considered already to be priced-in. Yesterday’s announcement told shareholders nothing new. Back in November, AVO detailed the fact that Sinophi was no longer to proceed with the installation of LIGHT technology in the China-Japan Union Hospital of Jilin University in Changchun and First People's Hospital of Huai'An. Back then, AVO also confirmed that the orders for the two machines remained in place as per its agreement with Sinophi and that they were assessing other sites in the same cities as well as pursuing other framework agreements in China. Realistically, however, given the bespoke nature of the two original contracts, it was clear that no ‘replacement buyers’ would be found and formal termination was only ever going to be a matter of time. AVO’s management always insisted, however, that the contractual details simply do not permit the originator to ‘walk away’ and that there never was any binding legal agreement with respect to delivery schedules. More to the point, the contracts were composed under English law and both companies have registered offices in the UK. Nevertheless, it would never be in either of the company’s interests to see their argument fought out in the courts, particularly for Sinophi which undertakes very large operations in China where partners would be highly sensitive to any suggestion that it had not looked after its client interests correctly. As such, assuming AVO’s legal counsel has correctly advised it, the dispute will more likely be argued behind closed doors and result in reparations being made to partially compensate AVO for its loss of profit opportunity amounting to, perhaps, a few million US$. Given the pressures on AVO’s balance sheet, any such payment would be welcome although, of course, it would still represent an unfortunate outcome from what initially had appeared to be a quite remarkable business opportunity. In this same respect, Monday’s announcement regarding the possibility of the Group securing non-dilutive financing from a ‘strategic partner’ (which Beaufort believes to be the French giant, Thales Group), also provides some hope for those fearful that AVO will otherwise be forced to undertake further discounted equity placements. Investment in AVO carries risk, but Beaufort retains its Speculative Buy recommendation in the belief that its technology has the potential to revolutionise the world of proton beam therapy."

It seems that Beaufort believes that Thales is the likely provider of funds and there could be some cash coming from Sinophi in an out of court settlement.

Interesting stuff.

[vatnabrekk] 27/1/2017 13:18

Here's a link to the presentation pdf file on AVO's web site:
www.avoplc.com/Portals/0/Documents/Investors/2017%2001%2024%20Presentation%20AVO.pdf

[daijavu] 27/1/2017 08:59

Any news from the presentation?

[gerhart] 27/1/2017 08:56

Twirl, they did say again only this week that funding would be non-dilutive anbd the scope in present talks had expanded. That sounded positive to me.

If things in general were bad behind the scenes, would they still have gone ahead with last night's presentation for example - when they could have been "found out"? Wonder did TW go along?!

[daijavu] 27/1/2017 08:44

The schedule for the development of LIGHT that AVO published in November 2014 indicated that integration and testing of the system would be completed in Q1/2 2017. So hopefully we are getting close.

[twirl] 27/1/2017 08:44

I agree the substantive issue is successful completion of testing - which IMHO has been delayed. That delay costs money and the need to raise more funding from a non dilutive mechanism is my concern.

The delay in obtaining funding indicates AVO are encountering difficulties.

I have lost out before as a shareholder in a company where lenders wiped out equity.

[gerhart] 27/1/2017 08:22

JakNife Re the milestone payments. This is from the RNS update on 30th Nov.

"....As part of these agreements Advanced Oncotherapy was due certain milestone payments, with the first payment received last year and recognised as customer order deposits received in the Report & Accounts for the year ended 31 December 2015 (see Note 21 to the Accounts)."

[daijavu] 26/1/2017 20:59

smtrading You are spot on.

Most of the discussion that is going on now is just irrelevant noise. The reality is that when LIGHT does take off it has the potential to take over the global market for both proton and photon therapy. The potential is huge. I have visited the web sites of AVO's competitors and I have yet to come across anything they offer that can match LIGHT.

LIGHT was invented by CERN who also developed much of the cyclotron technology used by AVO's competitors and then went on to develop LIGHT as the next generation of proton therapy machines to supersede the cyclotrons and synchrotrons sold by AVO's competitors. All that most of AVO's competiors seem to have done is to tweak and improve CERN's original technology. Few seem to have invented anything of their own and none seem to have produced anything that can compete with LIGHT.

Just my opinion, of course. DYOR

[smtrading] 26/1/2017 20:02

I think everyone is missing trick here cause this is one of a kind machine that could be sold 300 times over so not really bothered about them canceling order and I think market over reacted, what we need to look out for is more purchase orders that are in the pipeline, and the got result from prototype testing which we will hear the timetable for after the 100 days thing which finishes 4 Feb so update the following week, once the test result show working machine then bingo, I think within the year

[daijavu] 26/1/2017 19:31

As much as I would like to be there, I can't. I live too far away.

[sweet karolina] 26/1/2017 19:19

"The Company reiterates that despite the recent news that two Chinese customers are not now proceeding with LIGHT installations, the sale and purchase agreements between Sinophi Healthcare Limited and Advanced Oncotherapy for two machines remain in place. As part of these agreements Advanced Oncotherapy was due certain milestone payments, with the first payment received last year and recognised as customer order deposits received in the Report & Accounts for the year ended 31 December 2015 (see Note 21 to the Accounts). The purchase agreements also state that Sinophi will install the LIGHT system in the specific planned facility sites in Changchun or Huai'An or, if not, in alternative locations in China."

Without seeing the full T & Cs of the contract it is not possible to opine whether or not AVO have a winnable case, but it has been made clear that the contract is with Sinophi UK, which is just a shell company, so it would cost them more to win than they could ever hope to get back.

[daijavu] 26/1/2017 18:21

JakNife. I know no more about what the contract says than you do. All I can go on is what AVO says and my personal knowledge of contracts and contract law. I know, even if you don't, that a carefully worded contract can make what you believe is impossible, eminently possible.

AVO says:

"Advanced Oncotherapy is firmly of the view that Sinophi has no legal basis on which to make this termination and will take appropriate action to protect its position."

I am happy to assume that they would not make such a statement unless they had cause to believe it is true.

As far as the milestone payment is concerned, I regret I don't remember exactly where the item is and I don't have the time to look back. If you want to know, you will have to read through the report yourself.

[daijavu] 26/1/2017 16:51

JakNife,

AVO's right to take action depends on the wording of the contract. Unless you know what the contract says you cannot know what rights AVO have, or have not, got.

AVO have not recorded the milestone payment as revenue because it was not revenue but it is recorded in the annual report under a different, more appropriate, heading. The issue has previously been addressed and answered on these boards.

[daijavu] 26/1/2017 09:52

As far as I am aware, the AVO BoD contains people with many years of successful international business experience. The Chairman for one.

[daijavu] 26/1/2017 09:41

JakNife.

Who are the second limited liability company?

And how have you got insider information about the terms of the contract?

[sea and sky] 26/1/2017 09:08

You have to say either these new exec directors are stark raving mad or they see far more potential than most of us here. I know they are only execs but even so you wouldn't really associate yourself with a no hoper would you?

I hang on (mostly with fingernails over the abyss).

[gerhart] 26/1/2017 08:47

If the the knowledge and expertise in the scientific field of our BOD is matched by business expertise, then I agree with Hans von Celsing: "The foundation is there for a great commercial success story"

The question is do we have enough pertinient experienced hard-nosed business expertise on the BOD also? Cos you need both in a company like this.

[tournesol] 26/1/2017 08:15

Sweet Karolina

"….The reason why large companies incorporate subsidiaries is to isolate risks so if something goes wrong in one area it does not bring down the whole company….."

Utter nonsense

consider BP whose US subsidiary had a disaster in the Gulf of Mexico - it almost broke the parent company

consider BT whose Italian subsidiary has just had a disaster in its accounting and which has lost 20% of its market cap as a result

consider AZN (or was it GSK?) which had a disaster as a result of its Chinese subsidiary getting caught bribing officials

In the business world parent companies are held accountable for the sins of their children.

[daijavu] 25/1/2017 19:36

Maybe so. But whatever the reason, the fact is that they are all seasoned investors who all have significant sums of money invested in AVO and stand to lose the lot if AVO fails.

I have read in several books on investing in shares that one cardinal rule is to look after your cash. That no matter how much you stand to lose by selling your shares, you should sell if the alternative is to lose more or the lot by holding on. I would expect experienced investors to understand that.

I have also had experiences of seeing the share price of companies go through the floor after CEOs, CFOs and clusters of directors sold. None of those things have happened with AVO. Instead we have seen major shareholders buying. I know one of them was Swedish but...

I think that if anyone is unhappy they should either sell their shares or short, as JakNife suggests. It's the obvious thing to do.