[Comments On Amati's S-3]
First, many, many thanks to Rafael for posting the link to Amati's recently-filed S-3. This Registration Statement, dated June 12, is the latest official word on just where Amati currently stands; everyone who is interested in Amati should download it, print it, and file it for future reference. If you missed it, the URL is:
edgar-online.com
Some comments, first re the material in the statement, then re the filing itself.
1. Risk Factors. Take them with a grain of salt; lawyers make companies put a lot of stuff in this section that normal people would consider unnecessary. (I'm surprised, for instance, that they didn't include something like "Given the Company's proximity to the San Andreas Fault, there can be no assurance that the Fault will not open up unexpectedly and swallow up one or more of the Company's key employees".
2. But I am surprised that nothing was said about licensing, Motorola, or Texas Instruments in that whole document. (At least a search on each of those words turns up nothing.) Given the myriad of risk factors cited in the filing, many of which were either obvious or rather obscure, why were none mentioned re licensing agreements?
3. And if these is anything to worry about in the filing, it might be the next-to-last sentence in the Dependence On Large Customers And Systems Integrators section: "Further, acceptance of the Company's products by these customers may require Company to relinquish rights to its technology or products." (Emphasis Added.) That sentence wasn't put in there just to take up space.
Now on to the Soros deal.
1. This filing allows them to sell the 1M shares of stock they got for their $15M plus an additional 600,000 shares they'll get if they exercise their warrants. (The 424,088 shares in this filing plus 1,142,710 shares and 62,203 shares being carried forward from Prior S-3s equals 1,629,001 shares.)
2. Soros' average price for their 1M shares is $15/share.
3. The $12.69 price in the filing is meaningless; it is "estimated solely for the purpose of computing... the registration fee".
4. If Soros sells any of their 1M shares at current market prices, they will take a loss. Unless they are using salim as a consultant, and believe AMTX is going to 8 next week, that 1M shares is therefore unlikely to come onto the market immediately.
5. Re "Short selling": Perhaps I don't understand the wonders of modern financing a la Soros, but why would they use their million shares, which cost them $15/share, to cover a previously-established short position when they can do so in the open market at less than $15/share/?
6. Soros' Warrants are exercisable for 600,000 AMTX shares, half at $17.45 and half at $25.00. Neither Warrant is thus likely to be exercised soon (nor is Amati likely to get the $5,235,000 and $7,500,000 that they would receive upon exercise soon.)
Some thoughts, for what they're worth; I trust others will expand on them (especially with regard to the "short selling" part of the deal) as need be. When doing so, though, I would urge everyone to keep in mind that nothing is ever included in a filing statement for no reason, and a Registration Statement is thus just as close to The Truth as one can get in the investment business. If anyone disagrees with anything in the Registration Statement, in other words, an "I know more about that than they do" response is not enough to win the argument.
-- Walt Deemer |
