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Advanced Oncotherapy (AVO) – Additional financing agreement

Advanced Oncotherapy plc (AIM: AVO), the developer of next generation proton therapy systems for cancer treatment, announces that on Tuesday 25 April it drew down a further £2 million as part of the 12-month convertible and redeemable loan agreement announced on 27 March 2017 with Blackfinch Investment Ltd, through its subsidiary Henslow Trading Limited. This brings the total financing from Blackfinch to £5 million. This additional £2 million facility is issued on the same terms as the initial £3 million loan announced on 27 March 2017.

Terms of the Loan Agreement

  • 1 year loan
  • £5m loan in total now fully drawn down
  • Interest rate of 11%
  • Repayment in cash at maturity, or possibility at discretion of the lender at any time within the next 12 months to convert all or part of the loan into Advanced Oncotherapy shares at a conversion price of 100p per share

Loan security

The £5 million loan is secured on the Company’s lease for 141-143, Harley Street and on certain other equipment of the Company. Should the Company not meet its obligations under the Loan Agreement and after a four month period during which the lease is offered for sale, four shareholders and directors (the “Guarantors”) of the Company, being Dr Nick Plowman, Fairford Capital (a company 100 per cent. owned by Michael Bradfield) and Professor Chris Nutting, in addition to Michael Sinclair who, as announced on 27 March 2017, had already provided an offer to buy back the lease, have agreed with Blackfinch to buy back the lease at a value equivalent to the outstanding amount of the £5m loan plus accrued interests and expenses. The Guarantors have also undertaken to the Company that, should they be required to buy back the lease from Blackfinch, they will offer the then shareholders of the Company the opportunity to participate in the buy back on the same terms as their participation pro rata for their shareholding in the Company.

Related party transactions

The offers by Nick Plowman, Fairford Capital and Chris Nutting to buy back the lease from Blackfinch which is part of the loan agreement with Blackfinch constitute transactions with related parties under the AIM Rules for Companies.  In accordance, therefore, with the AIM Rules, the directors of the Company, with the exclusion of Nick Plowman, Michael Bradfield  and Chris Nutting and Michael Sinclair, who had also made an offer to Blackfinch to buy back the lease as set out in the announcement of 27 March 2017, having consulted with the Company’s nominated adviser, Stockdale Securities Limited, consider that the terms of Nick Plowman, Fairford Capital and Chris Nutting entering into the agreement with Blackfinch are fair and reasonable insofar as the Company’s shareholders are concerned.

For further information, please contact:

Advanced Oncotherapy plc www.avoplc.com
Nicolas Serandour, Chief Executive Officer Tel: +44 20 3617 8728
Michael Sinclair, Executive Chairman
Stockdale Securities (Nomad & Joint Broker) Tel: +44 20 7601 6100
Antonio Bossi / David Coaten
Stifel Nicolaus Europe (Joint Broker) Tel: +44 20 7710 7600
Jonathan Senior / Ben Maddison
Walbrook PR (Financial PR & IR) Tel: +44 20 7933 8780 or avo@walbrookpr.com
Paul McManus Mob: +44 7980 541 893
Anna Dunphy Mob: +44 7876 741 001

About Advanced Oncotherapy plc www.avoplc.com

Advanced Oncotherapy is a provider of particle therapy with protons that harnesses the best in modern technology. Advanced Oncotherapy’s team “ADAM”, based in Geneva, focuses on the development of a proprietary proton accelerator called Linac for Image Guided Hadron Therapy (LIGHT). LIGHT accelerates protons to the energy levels achieved in legacy machines but in a unit that is a quarter of the size and between a quarter and a fifth of the cost. This compact configuration delivers proton beams in a way that facilitates greater precision and electronic control which is not achievable with older technologies.

Advanced Oncotherapy will offer healthcare providers affordable systems that will enable them to treat cancer with an innovative technology as well as better health outcomes and lower treatment related side effects.

Advanced Oncotherapy continually monitors the market for any emerging improvements in delivering proton therapy and actively seeks working relationships with providers of these innovative technologies. Through these relationships, the Company will remain the prime provider of an innovative and cost-effective system for particle therapy with protons.

About Blackfinch www.blackfinch.com

Blackfinch is an established UK provider of tax-efficient investment solutions. Their philosophy is based on transparency and simplicity and their services provide real solutions to real financial planning challenges faced by individuals today

Sabien Technology (SNT) – Pilot Programme showing promise

Sabien Technology (SNT) – Pilot Programme showing promise.

A broker note from Stockdale Securities.

 

SabienStockD1The key elements of the interims in our view are that 30 UK pilots have been agreed for this heating season and that the sales pipeline has increased to £6.4m from the last-reported £5.8m. As anticipated the adj. LBT increased to £1.0m in the first half due to the extra costs incurred in increasing the pilot programme. It is encouraging that the company still anticipates meeting expectations for FY2016. With no changes in our forecast of the move towards profitability in FY2017 we reiterate our 50p DCF-derived TP and Buy.

SabienStockD2

New “free” pilot strategy implemented

Up until last summer Sabien charged c.£20k to run pilots for a potential customers. These involved fitting an M2G device on to at least three of their boilers to demonstrate a 10-25% reduction in gas usage via a report including substantial data analysis. While the proposition should have been compelling it inevitably led to delays as the charge meant that public sector clients typically needed to undergo a tender process first. To take advantage of the substantial level of interest it has built in its boiler optimisation technology and counteract the inertia due to the £20k charge Sabien now includes the cost of the pilot into a roll-out. Importantly, the qualification criteria remain – chiefly a minimum spend of £0.25m, good asset log data and the client’s willingness to devote some of its engineering resource to the pilot programme. To increase the number of pilots it is capable of running, Sabien has increased its headcount by 50% to 24 and has secured 30 UK pilots of its up to 35 pilots in total targeted for FY2016.

Increased sales pipeline

The main reason for introducing the more aggressive piloting strategy was to stimulate a meaningful increase in the sales pipeline. We forecast this to grow from the £6.4m reported in the interim results to £10.8m for the beginning of FY2017. We have used the historical rate of 87% of M2G pilots converting into the sales pipeline and then 69% to an estate-wide roll-out. We have then based our headline forecasts for the sales pipeline and sales on the minimum £0.25m spend. If the historical average of £0.4m spend per client were realised, then profitability would be achieved in FY2017. The company has set itself a five-year target of a sales pipeline of £25m.

DCF valuation captures benefits of the new strategy

In addition to the sales pipeline target of £25m, management also set a five-year revenue target of £8m and EBITDA margin of 25%. With no meaningful profitability forecasts in the next two financial years in our base case forecasts we continue to use a DCF analysis to derive our target price. Our 50p DCF per share assumes a WACC of 12% and a 2% long-term growth rate, both of which are conservative in our view. While we consider FY2016 to be “a year of investment” we are most encouraged by the recent £0.3m order and hope to see news of further orders and building sales pipeline start to drive the share price higher.

Link here to full broker note –Sabien-Tech_Stockdale090216

Advanced Oncotherapy – Change of name of NOMAD & Joint Broker

AVO1Change of name of Nominated Adviser and Joint Broker

 

The Company notifies that its Nominated Adviser and Joint Broker has changed its registered name from Westhouse Securities Limited to Stockdale Securities Limited.

Advanced Oncotherapy Plc

www.avoplc.com

Sanjeev Pandya, CEO

Tel: +44 20 3617 8728

Nicolas Serandour, CFO

Stockdale Securities (Nomad & Joint Broker)

Antonio Bossi / David Coaten

Tel: +44 20 7601 6100

Beaufort Securities (Joint Broker)

Jon Levinson / Elliot Hance

Tel: +44 20 7382 8300

Walbrook PR (Financial PR & IR)

Tel: +44 20 7933 8780 or avo@walbrookpr.com

Paul McManus / Anna Dunphy

Mob: +44 7980 541 893 / Mob: +44 7876 741 001

About Advanced Oncotherapy Plc www.avoplc.com

Advanced Oncotherapy is a provider of particle therapy with protons that harnesses the best in modern technology. As a result, Advanced Oncotherapy will offer healthcare providers affordable systems that will enable them to treat cancer with an innovative technology as well as better health outcomes and lower treatment related side effects.

Advanced Oncotherapy’s team “ADAM” based in Geneva focuses on the development of a proprietary proton accelerator called Linac Image Guided Hadron Technology (LIGHT). LIGHT accelerates protons to the energy levels achieved in legacy machines but in a unit that is a fraction of the size and significantly lower in cost. This compact configuration delivers proton beams in a way that facilitates a greater precision and electronic control which is not achievable with older technologies.

The Company has signed two purchase agreements with Sinophi Healthcare Limited for the LIGHT proton therapy systems to be installed in hospitals in China. There are also four additional framework agreements and further Letters of Intent from other healthcare providers.

The Company has also signed a joint venture agreement with CircleHealth, owned by AIM-listed Circle Holdings plc to operate the Company’s proton beam cancer therapy centre in Harley Street.

Advanced Oncotherapy continually monitors the market for any emerging improvements in delivering proton therapy and actively seeks working relationships with providers of these innovative technologies. Through these relationships, the Company will remain the prime provider of an innovative and cost-effective system for particle therapy with protons.

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