Onco near financial collapseA London-based company that attracted millions of dollars from investors with its dream to revisit natural gas fields under Southwestern Ontario is in dire straits, its lender demanding repayment of loans worth $1.25 million. Chip Martin |
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 [ 2009-11-06 ] |
But in a letter to investors to be posted today on its website, Onco president Peter Bilodeau says the company's lender has demanded loan repayment.
Directors and managers of the cash-starved firm are meeting to review Onco's options and a decision will be made in days.
"We've been continually hand-to-mouth," Bilodeau told The Free Press. "There are creditors all over the place, there is ongoing litigation . . . we continue to live every day with our back to the wall."
Bilodeau said it's unclear what steps the company can take.
"At this stage of the game, I don't really know what can be done. Decisions will be made on the corporate front in the not-too-distant future," he said.
Bilodeau and a new set of directors took over embattled Onco a bit more than a year ago from Londoner Robert Vanier, its former president and chief shareholder.
The company had been bounced from the former CNQ junior stock exchange for failing to file financial reports for the year ending 2007 and for subsequent quarters. That came after its share price plunged to 15 cents from $5.
Onco went public two years ago, touting assets of more than $23 million.
A financial report completed under Bilodeau's watch recently found $22 million of that amount sold in a "private placement" in August 2006 had never been put into the company by Vanier.
Bilodeau said he was hoping to cancel the shares that were sold to raise that $22 million.
Vanier has been unavailable for comment.
The high-flying Vanier sold some of the shares in the United States, where two court judgments have been filed against him for unrelated matters.
The Quebec native has been ordered to pay $2.8 million in damages to a Los Angeles entertainment company with whom he had arranged to lease office space.
Vanier has also been ordered to pay $441,000 to the MGM Grand casino in Las Vegas for unpaid gambling debts.
Bilodeau said Onco had pinned hopes on a gas well, Onco 32, to begin producing revenue, but without substantial further investment no return is expected.
He said the banker demanding repayment on the loans, when Onco has no money, has created a cash crunch that threatens the firm.
"They key is we have to have a business," he said. "It's hard to be in business without any cash flow or any cash in the bank. That's what we've been operating with for 12 months."
Bilodeau, who operates a payday cash advance firm and relocated Onco to Windsor, said he has put nearly $500,000 of his own money into Onco.
"I was hoping there might be some last-minute money to do a few things, but there isn't," he said. "I'm beyond the point where I am putting any more in. There doesn't seem to be anyone else willing to step up to the table."
A 90-day extension of Onco's suspension of its listing on the CNSX exchange, the successor to CNQ, expired Monday. Bilodeau said he'll be in touch with the exchange in coming days, but that isn't as pressing a priority as trying to keep Onco alive.
Chip Martin is a Free Press reporter. chip.martin@sunmedia.ca
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