Lev wanting to take it private at $0.97

Shows how managment buying lots on market can still end badly for the common shareholder!

Shares have tanked after reporting results, so it looks like Lev is literally the only interested buyer. He can take everything as far as I'm concerned!

...and Lev continues to gobble up the supply in the market. Shares remain subdued, but surely he's buying for a good reason at these levels? Given his track record, you'd be brave to second guess him.

We have three notices this month alone -

~ $362k on 05/05

~ $138k on 09/05 and 10/05

~ $593k on 10/05

All purchased on market.

Lev continues to increase his stake in the company, both via the recent DRP and via smaller on-market trades.

It feels like he's the only one supplying the bid under the shares with the price action continuing to be feeble.

ANO released an update guiding for revenue remaining on track to achieve $13.5 million for FY, on improved gross margins and reduced payroll costs.

ANO outlined a series of headwinds on presentation slide 3, and outlines an increase in inventories, with the aim of reducing supply chain lead times, and customer inventory requirements.

NASDAQ listing remains on the agenda, aiming for early 2023 listing.

Competitors are raising prices, and have longer lead times, making ANO's product more attractive.

DISC - HELD.

Lev's been buying reasonable amounts, as per the disclosures yesterday and today. It hasn't moved the price, so ordinary punters can get in at the same price too. Owns something like half the company already, so it is a decent signal.

Lev (the chair) is still buying shares on market. He's bought six times during November and invested about $900k. In the past two years he has bought almost $21M of shares.

To put this into perspective he has bought 10% of the company on market in the past 2 years. He now owns 50% of the company.

October 28, 2021, ANO sent a 41.5 Tonne shipment to the US.

By my records, this is the largest shipment ever. largest shipment I have on my record prior to this one was 17 Tonnes in December 2019.

On its own, not a big deal, but worthwhile monitoring if further shipments follow......

Here Issued 20/8

From the Chair

The $265,000 profit before tax is as expected given a 63.69% decline in revenue primarily due to the following reasons:

• COVID-19 travel restrictions and lockdowns globally reducing demand for sunscreen products.
• Our key distributors reduced their stock levels in North America and Europe due to ANO establishing warehouse facilities in Netherlands and USA.

In past 6 months have

• increased capacity and product range including a vegan range
• An AUS client has developed a combined sunscreen / mosquito repellent product

Based on forecasts from distributors and firm orders placed to date, we anticipate that sales for this half to be similar to that of FY20 sales - which was $11M with profit after tax of $3.4M

1/7/21 - ANO has combined sales orders and future sales forecasts at present from July to December2021 totalling approximately $10 million. This compares to our pre COVID-19December 2019 half-year salesof $11.3million

9/8/21 - July sales exceeded $1.1 million the highest sales month since March 2020

From the CEO

We have invested significantly into increasing finished inventory across all products and have over 300T of product ready and available in our warehouses in Netherlands and USA and in excess of 700T of product in our Australian warehouses.

Our facility now has an annual capacity of 5,000T of XP Powder. Allowing for up to 50% of this capacity to be used as an input into our dispersion products, the remaining 50% provides the Company with capacity to grow at a rate of 6 times the XP Powder sales levels achieved in FY2019

quotes published in a Tegus Transcript by Estee Lauder Director of R&D Material/Product Physical Science:

“We use Zinclear/Advance Nantech because of the quality and value add to the product technology they offer and future offerings.”

“They are the largest of the ZnO USA material manufacturers on the market. The Japanese manufacturers that compete in this technology market landscape come in as second. The market share and penetration will increase for Advance Nanotech in this space.”

As you should now be aware, UV chemical filters have been linked to skin cancers and environmental damage, which is why safe zinc-based sunscreens with no chemical filters will become more prevalent over time in the sunscreen market. There is a growing list of countries to ban UV chemical filters with Thailand the latest to join this list.

My View

I'm buying more for the following reasons

• Actual sales have started to materialise
• Lev has invested $20m of his own money over the past 2 years - at the current share price
• The share price is close to the minimum reached in the COVID crash last year.

In case anyone was wondering why Advance Nanotek experienced a share price rally today, I came across a tweet from a Chris Silvestro, flagging the following notification:

"Please be advised that on or about September 27, 2021, the US FDA intends to issue a proposed administrative order under Section 505G(b)(2) of the Federal Food, Drug, and Cosmetic Act to amend the OTC monograph for suncreen drug products."

An OTC monograph is a “rule book” for each therapeutic category establishing conditions, such as active ingredients, uses (indications), doses, labeling, and testing, under which an OTC drug is generally recognized as safe and effective (GRASE) and can be marketed without a New Drug Application and FDA pre-market approval. 

There is a possibility that Zinc Oxide and Titanium Oxode will be the only two approved GRASE UV filters..........This will increase ANOs TAM significantly. 

More will be known in a week or so.

DISC - I HOLD.

Hi all,

Over the past week, Beiersdorf (Nivea, Coppertone), Johnson & Johnson , and Edgewell (Banana Boat) have reported their Q2/H1 results.   They point to a recovery in demand for ANO's Zinclear product.  Key takeaways:

Beiersdorf: 

• Coppertone: strong double digit growth in the world’s largest sun care market (USA).

Johnson & Johnson:

• 16.2% growth in Skin health / beauty segment (they didn't break out sun care) - Growth also partially offset by divestitures. 

Edgewell:

• The increase in organic net sales was primarily driven by Sun Care growth of nearly 50%, reflecting a sharp recovery in consumption as compared to the heavily COVID-19 impacted prior year period in the U.S. market.

DISC - HELD

This may not be that significant, as I do not know what volume of product Ethical Zinc sell, but I do know it uses ANO Zinclear product.   

ANO expects profit to be 2.5x higher in FY20 compared to the previous year, coming in at around $8.4 million. This is on the back of a 46% lift in turnover.

It also looks as though sunscreen manufacture has recommenced in the US and ANO says it expects an extension to the aluminium oxide supply agreement.

The market has reacted favourably, sending shares over 20% higher.

ASX announcement here

02-Apr-2020:  3:33pm:  ANO: Retraction of Announcements

and at 4:42pm:  ASX: ANO Reinstatement to Official Quotation

So, ANO and AIR will both be trading again tomorrow.  Looks like Lev blinked first.  The ASX had very little to lose.  Lev had much more.  I'm selling my ANO tomorrow.

01-Apr-2018:  9:37am:  ANO: Suspension Update

The war continues...  

I have updated my valuation for ANO, slashing my TP, and explaining why I'm going to sell as soon as they begin trading again (assuming they begin trading again)...

27-Mar-2020:  From the ASX (at 5:03pm, after the market closed):  Continued Suspension from Official Quotation

In this update from the ASX (link above), they explain why they consider that a continuation of ANO's suspension from trading is appropriate.  They include the query letter that they sent to ANO regarding their draft announcement regarding their new patent for various oral care products that may use various combinations (compositions) of "at least one zinc compound or at least one zinc salt and hinokitiol or a salt thereof".  The ASX also include ANO's response (reply) to that query letter, and it's not hard to understand why the ASX regarded the ANO reply as lacking in detail and not adequately addressing all of the questions that the ASX had asked.

Just one example: 

Question 12:  

"Please advise whether ANO has received any legal advice regarding the statement in the Draft Announcement that: “The initial sales are contemplated on the Amazon EU platform as no regulatory approvals are needed.” If it has, please provide a copy of the advice (not for release to the market). If it has not, please explain its basis for making this statement." 

ANO's answer:

"No."

Hmmm.  Perhaps they didn't read the whole question?

The ASX felt that they needed to release this announcement (link above) in response to ANO releasing their ANO Business Update announcement the previous day (2:20pm on 26-Mar-2020) in which they do make assertions about the ASX that the ASX clearly felt they needed to address.

Apart from the spelling and punctuation errors in the last line of ANO's response to the ASX - "The balance of information sort by the ASX is in the opinion of the Board is not material." - ...the wording is dismissive and provocative.  I think they'll find that they won't get out of this trading suspension until they provide satisfactory answers to the ASX and let the ASX decided what is and is not material.  

Another fine mess they've got themselves into.  Such promising tech, and such a badly run company - from a communications and regulatory compliance point of view.

18-Mar-2020:  If anybody else has posted a straw about this, I haven't seen it.  Both ANO & AIR are currently suspended from trading, following a call on Monday for a trading halt, pending further details of a patent they have just filed for a novel (new) product or product range.

On Monday they talked about "a highly progressed opportunity regarding the development of Oral Care Products (New Products) which could prevent the coronavirus cells multiplying" , but by yesterday they had corrected that to:

“The patent is looking at a range of oral care products that could inhibit the replication of the novel coronavirus inside the cells of the oral cavity / mouth” 

So - slow down/inhibit - instead of stop/kill.  Still, that is certainly the sort of thing that DOES require a trading halt or suspension until they are in a position to provide further details (especially in THIS environment), so they've done the right thing for sure.  

Apparently, AstiVista (AIR) brought this to ANO's attention, and they are approaching it as a joint venture or partnership, with the details of how that works being just one of the things they needed to iron out.  Lev, Geoff and Rade are all directors of both boards (ANO & AIR) with one additional director (Laurie Lefcourt) on the ANO board, so the companies are pretty much on the same page you would imagine.  Lev is the Chair of both companies.  

Similar announcements have been released by both AIR & ANO, but the full details of this opportunity will be released either after market today or some time tomorrow (I imagine) and they should both recommence trading after that release.

Looking forward to reading more about this!