Copies of a 2016 Information Memorandum sent to potential investors in the Avocet Group's 'disruptive technology' concepts have been passed to Not Just Sheep & Rugby, disputing claims by company chairman Martin Frost that the document "was never completed and not used".
The 29-page memorandum, packed with information about Avocet Infinite PLC and its subsidiaries, was attached to emails written by Mr Frost in December 2016 and January 2017 and sent to individuals who had expressed an interest in the Avocet brand.
The 'strictly confidential' Avocet Infinite Information Memorandum (IM) dated October 2016 was one of four attachments accompanying the emails. The others dated from November 2016 and included a so-called Snapshot of Prominent Facts.
Yet in an email to Kit Jarvis, a partner in the law firm FieldFisher, earlier this week Mr Frost wrote: "The 2016 IM was never completed and not used - and indeed I understand that Aileen Orr dropped in the 2018 IM figures into the 2016 IM".
As reported previously, Mr Jarvis forwarded an email to Mr Frost which had been sent on behalf of this blog to Avocet's advisers whose names appear on a later 2018 version of the IM.
We had asked Fieldfisher as legal advisers, the Avocet company auditors Ryecroft Glenton and Asset Match, share platform providers and Avocet Infinite financial advisers, according to the IM, whether they had signed off the 2018 document before it was issued.
Mr Frost then published copies of our message to his 'advisers' in a shareholder letter sent to 650 investors on August 3rd. The text of his email to Mr Jarvis was also reproduced.
In another letter to shareholders on February 2nd this year Mr Frost revealed that FieldFisher had petitioned the courts to have Avocet Infinite (now called Omega Infinite) wound up.
He wrote: "Omega Infinite Plc is to go into some form of insolvency. A winding up petition initiated by lawyers Fieldfisher for some £400,000 is to be heard on February 12th in London; likely now to support this petition are lawyers Womble Bond Dickinson for another some £600,000 along with various other creditors for £300,000. The total trade creditor indebtedness of Omega Infinite Plc is likely to reach some £2.5 million, and on top of which there are private Avocet controlled loans in excess of £10 million."
A far cry from the information being provided to would-be investors in the 2016 IM. It forecast these revenue totals: 2019 £52.016 million; 2020 £122.951 million; 2021 £202.796 million. Bold predictions from a business which was not trading at the time.
The IM also stated: "The current opportunity to invest is in a new funding round totalling up to £5 million, taking the total capitalisation of the group up to £15.9 million. It is intended that this will be the last opportunity to purchase shares at £1 each, with a significant future revaluation towards the end of 2016 given the technical and commercial progress of all three divisions.
"The £4-5 million fund raise is expected to be assigned as
follows: Fuels - Pre-production of fuel additive Process development at
Copperhead facility Developing final engine test with modern engines (exhaust
gas recycle) - £750,000 to £1 million; Agriculture – hydroponics Finalise grain solution for initial sale;
Ozone seed pre- treatment; Further develop grain yield; Improvements in design
of tray mould system. Agriculture – Cattle - Stock of Cattle finishing £500,000 to
£700,000; Green energy R&D - Investments into AD plants £1-£1.3 million.
Central costs/contingency Includes 150%
provision for current legacy litigation issue - £1 million."
In his email to potential stakeholders Mr Frost wrote: “May
I first suggest you peruse the Avocet Synopsis followed by the Draft Jump Start
2015 Report which will provide a flavour of Avocet’s innovative ethos. The
November Snapshot of prominent facts along with the Avocet Information
Memorandum should thereafter enhance financial understanding.”
And they were also told: "Avocet Infinite Plc has commenced an application to secure EIS HMRC tax relief for subscribers – furthermore via a share platform such as Asset Match such will grant in the short term an exchange marketability for Avocet Infinite Plc shares. Note: it is Avocet Infinite Plc’s intention to obtain a full stock market quote for either the whole or part of its business during the next two to three years."
In fact Avocet Infinite shares were never traded on the Asset Match platform. And shares in a replacement' virtually debt free' parent company called Avocet Natural Capital PLC are yet to make it onto that platform.
'A Snapshot of Prominent Facts as at 14th November 2016' also outlined ambitious elements of the Avocet package.
It claimed: "Currently the Avocet Infinite Plc group is largely non-trading with research and development as its main activity. Coller IP have indicated that Avocet Infinite Plc’s intellectual property is currently worth more than £100 million.
"Jumpstart [a consultancy specialising in research and development tax relief] expects to secure in early 2017 up to £2 million of a tax credit refund for Avocet Infinite Plc for the years 2015 and 2016. HMRC have indicated their tentative approval (subject to sight of the finished product) of Avocet Infinite Plc’s £15 million ISA Cattle Bond and £10 million ISA Renewable Energy Bond. Such bonds will fund the cattle herd and anaerobic digestion / green methanol plants. In 2017 the Avocet Infinite Plc group expects to produce a revenue profit of more than one million thereafter rising to over twenty-eight million in 2019."
A recipient of the 2016 IM and the other documentation from Avocet told us: "As far as I'm concerned the figures presented by the company were totally unbelievable from what they were calling a start-up business primarily involved in R&D.
"There was no evidence to back up these exaggerated claims of future revenue and profit, and not one of the forecasts made in 2016 has been fulfilled. The same can be said for the 2018 memorandum which contained even more fanciful projections. Did Avocet's so-called advisers concur with its contents?"
So far Not Just Sheep & Rugby has not received a response to our enquiry of August 3rd from FieldFisher, Asset Match or Ryecroft Glenton.
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