TIDMAVO
RNS Number : 3930A
Advanced Oncotherapy PLC
28 December 2017
ADVANCED ONCOTHERAPY PLC
("Advanced Oncotherapy" or the "Company")
Notice of General Meeting
Advanced Oncotherapy (AIM: AVO), the developer of
next-generation proton therapy systems for cancer treatment,
announces that a circular (the "Circular") convening the Company's
General Meeting to be held at the Royal Institute of British
Architects, 66 Portland Place, London W1B 1AD at 10:00am on
Tuesday, 23 January 2018, in relation to the transactions announced
on 7 December 2017 has been posted to the shareholders of the
Company.
Some of the details of the Conversion and the Placing, including
the number of shares to be issued thereof, have changed marginally.
The full terms of the Conversion and the Placing are set out in the
Chairman's Letter included in the Circular, the full text of which
is set out at the end of this document.
Capitalised terms used in this announcement but not defined have
the same meaning as in the Circular which has been posted to
shareholders.
For further information, please contact:
Advanced Oncotherapy Plc www.avoplc.com
Dr. Michael Sinclair, Tel: +44 20 3617 8728
Executive Chairman
Nicolas Serandour, CEO
Stockdale Securities (Nomad
& Joint Broker)
Antonio Bossi / Ed Thomas Tel: +44 20 7601 6100
Stifel Nicolaus Europe
(Joint Broker)
Jonathan Senior / Ben Tel: +44 20 7710 7600
Maddison
Walbrook PR (Financial Tel: +44 20 7933 8780 or
PR & IR) 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. 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's 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 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.
LETTER FROM THE CHAIRMAN
Advanced Oncotherapy plc
(Incorporated and registered in England and Wales under the
Companies Act 1985 with registered number 5564418)
Directors
Dr Michael Sinclair, Executive Chairman
Michael Bradfield, Non-executive Director
Hans von Celsing, Non-executive Director
Prof. Stephen Myers, Non-executive Director, Executive Chairman
of ADAM
Prof. Chris Nutting, Non-executive Director
Sanjeev Pandya, EVP, Global Business Development
Dr Nicholas Plowman, Non-executive Director
Nicolas Sérandour, Chief Executive Officer
Dr Euan Thomson, Non-executive Director
Dr Enrico Vanni, Non-executive Director
22 December 2017
Dear Shareholder,
Proposed Authority to Allot Shares and Disapply Pre-emption
Rights
Notice of General Meeting
1. Background
The Company announced on 7 December 2017 that it had entered
into an exclusive distribution agreement pursuant to which Yantai
Cipu was appointed as AVO's exclusive distributor to import, market
and distribute proton therapy products manufactured by AVO and its
affiliates, including the Company's LIGHT systems (the "Products"),
on an exclusive basis across China, Macau, Taiwan, Hong-Kong and
South Korea.
Pursuant to the terms of the Distribution Agreement, Yantai Cipu
has agreed to pay to the Company an initial licence fee of
GBP16,500,000 on Admission.
Yantai Cipu has also agreed to invest GBP13,500,000 in the
Company by subscribing for 45 million Ordinary Shares in AVO at a
price of GBP0.30 per share. The Subscription is subject to several
conditions, including Resolution 1 being approved by Shareholders
at the General Meeting and the receipt of Government Approval for
the transfer of the Subscription Monies from China. Further details
of the terms of the Subscription Agreement are set out in section 1
of Part II of this circular.
As the Company announced on 7 December 2017, it has raised a
further GBP3,260,635 by a conditional placing of 10,868,782 new
Ordinary Shares at the Subscription Price, such Placing being
conditional upon the passing of Resolution 1 and completion of the
Subscription. Executive Directors Dr. Michael Sinclair, Prof.
Stephen Myers, Nicolas Sérandour, and Non-Executive Directors Dr.
Enrico Vanni and Dr. Nicholas Plowman have agreed to participate in
the Placing by subscribing, in aggregate, for 4,279,050 Ordinary
Shares at the Subscription Price, representing GBP1,283,715 of the
total amount raised.
Finally, conditional upon completion of the Placing and the
Subscription, the Lenders have agreed to accept 13,697,697 new
Ordinary Shares in full settlement of the Loan. Interest accruing
on the principal amount of the Loan between 1 January 2018 and
Admission will be settled by the Company in cash.
The purpose of this circular is to explain the background to the
Transactions and why the Board believes them to be in the best
interests of the Shareholders as a whole and recommends that you
vote in favour of the Resolutions.
Following completion of the Transactions, the total number of
Ordinary Shares in issue will be 150,501,673 (assuming no
conversion by third parties of existing rights to acquire Ordinary
Shares) and Yantai Cipu will hold 29.90% of the enlarged issued
share capital of the Company.
Pursuant to the terms of the Distribution Agreement, the Company
has also agreed to issue to Yantai Cipu 500,000 Warrants to
subscribe for Ordinary Shares in respect of each binding purchase
agreement for the sale of a LIGHT system in the Territories, up to
a maximum of eleven purchase agreements. The Warrants will be
exercisable for five years after the date of issue at an exercise
price equal to 130% of the one-month average share price prevailing
on the date of final payment for each relevant LIGHT system.
In order to ensure the Company can carry on operations
independently of Yantai Cipu and that transactions entered into
between Yantai Cipu or its associates and the Company will be on
arm's length terms and on a normal commercial basis, the Company
has entered into an agreement which will regulate the relationship
between Yantai Cipu and the Company, if and for so long as Yantai
Cipu exercises Control (the "Relationship Agreement").
Pursuant to the terms of the Relationship Agreement, for so long
as Yantai Cipu is entitled to exercise, or control the exercise of,
more than 20% of the voting rights attaching to the Ordinary Shares
in issue from time to time, Yantai Cipu will be entitled to appoint
to the Board such number of non-executive directors as equals the
same percentage of all Directors as its percentage ownership of
Ordinary Shares, rounded down to the nearest whole number.
Accordingly, if the Subscription becomes unconditional, Yantai Cipu
shall be entitled to appoint two non-executive directors to the
Board from Admission. Subject to completion of the requisite due
diligence procedures for the appointment of directors to the board
of an AIM company and to the approval of the Company's Nominated
Adviser (which is a requirement of any such appointment), it is
expected that Mrs. Zhang RenHua and Mr. Chunlin Han will join the
Board of AVO. A further announcement regarding these appointments
will be made in due course.
Shareholders should be aware that the funds committed by Yantai
Cipu are not currently in the United Kingdom and the receipt of
these funds is subject to approval from the Government of the
People's Republic of China for the transfer of the Subscription
Monies to the United Kingdom. If such approval is not obtained by
the Long Stop Date (subject to extension only as the result of a
Force Majeure Event, as further described in section 1 of Part II
of this circular), then the Transactions will not proceed.
A summary of the key terms of the Subscription Agreement, the
Distribution Agreement and the Relationship Agreement is set out in
Part II of this circular.
2. Rationale and Use of Proceeds
As part of its strategy to deliver an affordable proton therapy
system that addresses the needs of patients, operators and payors,
AVO has long recognised that the People's Republic of China
represents a significant opportunity for the Company with its
potential need for a significant number of proton therapy centres.
Accordingly, the Board determined that finding a cornerstone
investor with relevant local experience would be an important step
for the Company. The Company is therefore delighted to be
partnering with Yantai Cipu as the exclusive distributor of the
LIGHT system in the Territories. The Subscription is consistent
with AVO's strategy of focussing its resources on the technological
development of the first LIGHT system and seeking to establish
partnerships with businesses that have good market access and
relevant expertise in their own geographies. Together, the Company
and Yantai Cipu intend to explore opportunities to manufacture
parts of the LIGHT system in the Territories and the Board believes
the Company will benefit greatly from the knowledge and contacts of
the Han family, who ultimately owns Yantai Cipu.
In due course, the Board is confident that there will be high
demand for the Company's products in the Territories, particularly
as high-performance medical equipment has been listed as one of the
areas to receive support in the People's Republic of China's 13th
Five-Year Plan for Economic and Social Development (2016-20).
In addition to providing local knowledge and contacts, Yantai
Cipu is making a significant equity investment in the Company. In
association with Yantai Cipu's Subscription, other investors have
agreed to subscribe for 10,868,782 million Ordinary Shares at the
Subscription Price to raise a total from the Subscription and the
Placing of GBP16,760,635, before expenses. Conditional upon
completion of the Subscription and the Placing, the Lenders have
agreed to accept repayment of the Loan in return for the issue to
them of the Conversion Shares, thereby reducing the Company's
debt.
It was important to the Board that the dilution of existing
shareholders was limited and for this reason the agreement with
Yantai Cipu was structured in such a way that the Company will
benefit from an additional non-dilutive source of funding in the
form of the GBP16,500,000 Initial Licence Fee.
The participations by Yantai Cipu and other investors (including
certain Directors) in the Subscription and the Placing, and their
resulting holdings in the enlarged share capital of the Company on
Admission, will be as follows:
Number of Number Percentage
Ordinary of Ordinary of enlarged
Shares for Shares share capital
which subscribing held on held after
at the Subscription Admission completion
Investment Price of the Transactions
------------------- ---------------- --------------------- ------------- ----------------------
Yantai Cipu GBP 13,500,000 45,000,000 45,000,000 29.9%
------------------- ---------------- --------------------- ------------- ----------------------
Dr Michael
Sinclair,
Executive
Chairman GBP 500,000 1,666,667 6,594,896 4.4%
------------------- ---------------- --------------------- ------------- ----------------------
Mr Nicolas
Serandour,
CEO GBP 500,000 1,666,667 1,760,467 1.2%
------------------- ---------------- --------------------- ------------- ----------------------
Prof Stephen
Myers, Executive
Chairman
of ADAM GBP 100,000 333,333 783,902 0.5%
------------------- ---------------- --------------------- ------------- ----------------------
Dr. Enrico
Vanni, NED GBP 137,500 458,333 1,682,279 1.1%
------------------- ---------------- --------------------- ------------- ----------------------
Dr. Nicholas
Plowman,
NED GBP 46,215 154,050 3,624,182 2.4%
------------------- ---------------- --------------------- ------------- ----------------------
Other investors GBP 1,976,920 6,589,732 7,215,107 4.8%
------------------- ---------------- --------------------- ------------- ----------------------
Total GBP 16,760,635 55,868,782 66,660,833 44.3%
------------------- ---------------- --------------------- ------------- ----------------------
Following Conversion of the Loan, the Lenders will hold, in
aggregate, 19,129,291 Ordinary Shares, representing 12.7% of the
enlarged share capital of the Company on Admission, and 15,600,000
warrants to subscribe for Ordinary Shares.
A total of 150,501,673 Ordinary Shares will be issued pursuant
to the Transactions. In addition, pursuant to the terms of the
Distribution Agreement, Yantai Cipu will be potentially entitled to
receive Warrants to subscribe for up to 5,500,000 Ordinary Shares
on the terms summarised in section 3 of Part II of this
circular.
The Directors believe that the Transactions provide the funding
foundations necessary to allow the Company to focus on making its
proton therapy technology available to patients around the world.
These funds will allow the Company to progress towards production
and installation of its first LIGHT system in Harley Street,
London, and will also be allocated for general working capital
purposes.
3. General Meeting and Resolutions
The Board is seeking shareholder authority for the issue of
equity securities in relation to the Transactions and additional
authority for general use.
At the end of this document is a notice convening the General
Meeting to be held at the Royal Institute of British Architects, 66
Portland Place, London W1B 1AD on Tuesday, 23 January 2018 at 10.00
a.m. at which the Resolutions will be proposed.
Resolution 1 provides authority to the Board, pursuant to
sections 551 and 570 of the Companies Act 2006, to allot the
Subscription Shares, the Placing Shares, the Conversion Shares and
the Warrants. In the event that Resolution 1 is not passed, the
Transactions will not proceed.
Resolutions 2 and 3 provide additional authority to the Board,
pursuant to sections 551 and 570 of the Companies Act 2006, to
allot Ordinary Shares and grant rights to subscribe for such
shares.
Resolution 2 will permit the issue of Ordinary Shares pro rata
to existing Shareholders and the issue of Ordinary Shares otherwise
than to existing Shareholders for non-cash consideration. The
number of Ordinary Shares that may be issued pursuant to the
authority in Resolution 2(b) will be limited to such number of
Ordinary Shares as has an aggregate nominal value of
GBP7,525,083.50, which equates to approximately 20% of the
Company's enlarged issued share capital on Admission. This
authority will expire at the conclusion of the Annual General
Meeting of the Company to be held in 2018, unless previously
renewed, varied or revoked by the Company in general meeting.
Resolution 3 disapplies pre-emption rights in relation to the
issue of Ordinary Shares under the authority granted by Resolution
2(b) such that such shares can be offered other than pro rata to
existing Shareholders. The number of Ordinary Shares that may be
issued pursuant to this authority will be limited to such number of
Ordinary Shares as has an aggregate nominal value of
GBP5,643.812.50, which equates to approximately 15% of the
Company's enlarged issued share capital on Admission. The authority
granted under Resolution 3 will also expire at the conclusion of
the Annual General Meeting of the Company to be held in 2018,
unless previously renewed, varied or revoked by the Company in
general meeting.
The authorities sought at the General Meeting will replace the
general authorities granted by resolutions 2 and 3 passed at the
general meeting of the Company held on 31 March 2017. They will
not, however, replace the authority granted in resolution 1 passed
at that meeting, which approved the Bracknor facility announced by
the Company on 22 February 2017. As previously announced, however,
the Company does not intend to draw down further funds under the
Bracknor facility. The new authorities are being sought
specifically to allow the Company to complete the Transactions and
to enable the Board to take advantage of future business
opportunities as they arise.
Application for Admission will only be made following the
passing of Resolution 1 at the General Meeting and receipt of
Government Approval for the transfer of the Subscription
Monies.
4. Action to be taken by Shareholders
A Form of Proxy for use by Shareholders in connection with the
General Meeting is enclosed. Shareholders are requested to complete
and return the Form of Proxy in accordance with the instructions
printed on to the Company's Registrars, Link Asset Services, PXS,
34 Beckenham Road, Beckenham, Kent, BR3 4TU as soon as possible,
but in any event no later than 10.00 a.m. on Sunday, 21 January
2018.
CREST members may appoint proxies by using the CREST electronic
proxy appointment service and transmitting a CREST Proxy
Instruction in accordance with the procedures set out in the CREST
Manual so that it is received by Link Asset Services (under CREST
ID: RA10) by no later than 10.00 a.m. on Sunday, 21 January 2018.
The time of receipt will be taken to be the time from which Link
Asset Services is able to retrieve the message by enquiry to CREST
in the manner prescribed by CREST.
Completion and return of a Form of Proxy or transmitting a CREST
Proxy Instruction will not prevent a Shareholder from attending the
General Meeting and voting in person should he or she wish to do
so.
5. Recommendation
Your Directors believe completion of the Transactions and
approval of the Resolutions to be proposed at the General Meeting
are in the best interests of the Company and its Shareholders as a
whole. Accordingly, the Board recommends that you vote in favour of
the Resolutions as the Directors who hold shares in the Company
intend to do in respect of their own beneficial shareholdings
amounting, in aggregate, to 17,523,348 existing Ordinary Shares,
representing approximately 21.70% of the issued share capital of
the Company at the date of this circular.
Yours faithfully
Dr Michael Sinclair
Executive Chairman
This information is provided by RNS
The company news service from the London Stock Exchange
END
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