[Fine print]
Walt --
Excellent response. You've prompted me to go back and read several earlier documents. First, though, to some of your comments:
I don't know the significance of the wording you highlighted --- "Further, acceptance of the Company's products by these customers may require Company to relinquish rights to its technology or products." --- but will try to find out (if you don't beat me to it).
<<<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?>>>
SEC form 10-K, July 27, 1996,page 7, "Competition":
"The Company has provided a license to Motorola Corporation to develop a standard compliant single chip solution for the ADSL market. Subject to payment of royalty on net sales, Motorola has the non-exclusive right to sell this chip. the Company also has the right to buy the Motorola chip at the most favored customer price. The Company expects Motorola's customers to become competitors with system level DMT products. . . ."
The Texas Instruments partnership was announced in October so wouldn't have been included. While browsing through the different documents, I discovered some changes between the two SC-13D filings by Soros. The first, filed in October 1996, lists the owners as:
SROS: NASD
GROUP MEMBERS: CHATTERJEE ADVISORS L.L.C.
GROUP MEMBERS: CHATTERJEE FUND MANAGEMENT, L.P.
GROUP MEMBERS: CHATTERJEE MANAGEMENT COMPANY
GROUP MEMBERS: CHATTERJEE PURNENDU
GROUP MEMBERS: GEORGE SOROS
GROUP MEMBERS: QIH MANAGEMENT INVESTOR, L.P.
GROUP MEMBERS: QIH MANAGEMENT, INC.
GROUP MEMBERS: QUANTUM INDUSTRIAL PARTNERS LDC
GROUP MEMBERS: S-C PHOENIX HOLDINGS, L.L.C.
GROUP MEMBERS: WINSTON PARTNERS II L.L.C.
GROUP MEMBERS: WINSTON PARTNERS II LDC
GROUP MEMBERS: WINSTON PARTNERS, L.P.
The second, filed in January 1997, lists them as:
SROS: NASD
GROUP MEMBERS: CHATTERJEE ADVISORS LLC
GROUP MEMBERS: CHATTERJEE FUND MANAGEMENT, L.P.
GROUP MEMBERS: CHATTERJEE MANAGEMENT COMPANY
GROUP MEMBERS: DR. PURNENDU CHATTERJEE
GROUP MEMBERS: QIH MANAGEMENT INVESTOR L.P.
GROUP MEMBERS: QIH MANAGEMENT, INC.
GROUP MEMBERS: QUANTUM INDUSTRIAL PARTNERS LDC
GROUP MEMBERS: S-C PHOENIX HOLDINGS, L.L.C.
GROUP MEMBERS: SOROS FUND MANAGEMENT LLC
GROUP MEMBERS: SOROS GEORGE
GROUP MEMBERS: STANLEY F. DRUCKENMILLER
GROUP MEMBERS: WINSTON PARTNERS II LDC
GROUP MEMBERS: WINSTON PARTNERS II LLC
GROUP MEMBERS: WINSTON PARTNERS, L.P.
You'll note the two additions are Soros Fund Management LLC, and Stanley F. Druckenmiller. Back in January several of us concluded Soros had been shorting and covering as we had no other explanation for the November sales filed in the 13D. A few months ago RC told me he'd found out the Soros group had moved shares between funds that later had to be filed with the SEC as sales. I'm guessing these two entities are the beneficiaries of the switched shares. It wasn't an issue when RC gave me the information and I completely forgot it until reading through these documents today. Since the Soros folks didn't dump their shares earlier --- nor short them --- I don't really expect them to begin now.
Back in January when we thought they were playing with the stock, it really was a nightmare --- so much so I still think dreadful thoughts every time I hear the word Soros. And to be really honest, I suppose the possibility of them shorting or dumping shares will always be there until they do sell out.
BTW, I agree with your caution to read all the fine print in these documents. As a matter of fact, I went back and re-read Aware's prospectus (searching for common wording) and found a few clauses that give one pause. The first, that their attorneys told them they were not infringing on Amati's and Telebit's patents "based on the Company's oral description of its technology." (What did they do, read it to them over the phone?) And the other, on page 33 under "ADSL Evaluations and Trials," where they talk about the GTE trials. "Telcos typically put new products through a rigorous approval process before deploying them on a broad basis. . . . For example, GTE started a technical trial of the Company's products earlier this year in its laboratories and in a field trial in the Dallas area. GTE's technical trial, which is ongoing, includes small to midsize businesses, residential customers and GTE employees. . . " They leave out the fact their modems were sent back to the labs and weren't used past the first phase of the field trial, which may be acceptable in press releases but in a prospectus??? Just my take. If Amati ever makes these kinds of statements or omissions I want to know about it. Do you realize how culpable this would make them?
Well, it's true, they did omit the risk of the Andreas Fault. Perhaps we should suggest they add a boilerplate comment excluding "acts of God." :)
Cheers!
Pat
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