Just like that Dave Evans out scooping me. Well my story on ANTS has not even come out yet and it is much much better that this. I was first, it just doesnt seem fair.
Ants Software Raises $5 Mln Selling Stock Below Mkt
Santa Barbara, California Dec. 29 (Bloomberg) -- Ants Software.com, a 20-year old software developer with no revenue, sold stock valued at $4.8 million over the past two months even as it warned investors it may go out of business.
Ants did so by selling about 500,000 shares of restricted stock at an average price of $9.60 each, or about half the market price of the company's stock on the day of each sale. Its shares lost half their value in the past week as Ants repeated the 'substantial doubt' expressed by the company's independent auditor about its ability to stay in business.
Ants Chairman Donald Hutton said he can't explain why the shares, which traded below $1 in August, soared more than fifty- fold in four months, trading as high as 55 5/8 last week. Ants fell 12 5/8 to 21 1/8 today, on trading of 746,100 shares, after earlier rising as high as 32 this morning.
The company -- based since January in Hutton's Santa Barbara, California, home -- warned investors earlier this month that there is ``substantial doubt' about its ability to continue as a going concern. Its net worth was $136,130. The value of Ants' 12 million shares closed today at $253.3 million, down from $384 million this morning.
``It's a casino. It has nothing to do with value,' said Hutton, describing the wide price swings of his stock. ``It's the damnedest thing I've ever seen.'
Ants says it has developed a way to speed up data. Twice before, its claims to have forged technological breakthroughs left investors disappointed after initial bursts of optimism.
Ocean View Headquarters
``We will increase the speed for the dissemination of data through existing software 1,000 times faster,' said Hutton, 63, standing under a basketball hoop on the driveway of the company's headquarters, on a bluff overlooking the Pacific Ocean. Hutton, who controls 3.3 million shares of the company, doesn't charge Ants rent for the space its occupies at his home on Santa Tersita Way.
ANTS stands for Asynchronous Non-pre-emptive Tasks.
Hutton said the company raised cash by selling about 500,000 shares for an average of about $9.60 a share over the past two months. The restricted stock was sold at various prices, in each case at about half the market price on the day of the sale, he said.
Hutton's gold 1997 Cadillac displays the license plate ``ANTS 1." His red 1990 Chrysler convertible is ' CHOPP 2.' That reflects the company's change of its name from Chopp Computer to Ants Software.com on Feb. 12.
Origins in Chopp Computer
Hutton blamed Chopp's failure as a supercomputer company on false statements published in an investment newsletter.
In the mid-1980's the company's shares briefly soared on hopes for a supercomputer it said it was developing that would be 10 times faster than machines then available. The computer was never completed, and its share price collapsed. Meanwhile, it sued investors who in 1986 distributed false information about the company.
The company said it won a $30 million libel suit in 1990, but that its legal fees consumed the money it was able to recover.
``During that time, we determined there was no market for supercomputers, so that wasn't the place to be anyhow,' said Hutton. ``Our technology now is totally breakthrough stuff.'
The transformation from a computer hardware maker to a software developer hasn't been smooth.
In 1993, it licensed its CATS, or Communicating Atomic Threads technology to Mosaic Multisoft Corp. of San Diego. After getting the license, Mosaic claimed in press releases that the software could speed up typical applications programs 18-fold.
Mosaic's shares plunged from a high of 24 in 1995 to a recent price of 1.5 cents.
Ants cancelled the license after Mosaic failed to make payments, according to a filing by Ants with the Securities and Exchange Commission earlier this year.
Disbarred Stockbroker
In its latest quarterly filing with the Securities and Exchange Commission, Ants said it's delinquent in its income tax return filings. It added that since the company has never earned taxable income, it makes no provision for income taxes.
Ants' corporate publicist, Elias Argyropoulos, is a former stockbroker. He was censured, fined $200,000 and banned from the brokerage industry in 1995 after the National Association of Securities Dealers found that he engaged in ``manipulation and deceptive practices' as well as unauthorized trading in his customer's accounts.
Argyropoulos declined to comment on the NASD action.
``This has nothing to do with anything,' he said.
Dec/29/1999 16:44
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