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Well Jay,
You always ask the tough questions. The SKB agreement with Antex is 40+ pages long and full of legal mumbo jumbo. I shudder every time I think about rereading it.
Anyway
>>>Mike: I'm inclined to agree. Lets consider everything in the deal as it has transpired in 1997 (as far as we know).<<<
Points 1,2& 3 as shown in your post have already passed starting May 1996 ($3 mil payment + $2.4 mil trial & expense) and thru Feb 28, 1997. Year Two Began March 1, 1997 and runs thru Feb 28, 1998. Antex will receive a total ~$2.8 million from SKB during this timeframe some of which is due during the current quarter. SKB has agreed to fund Year Three which is March 1,1998 thru Feb 28, 1999. My current guesstimate is ~$3.25-$3.75 million. The increase of course is a result of further trial progression for Antex's three current vaccine candidates plus the likely addition of another candidate into trials.
A KEY POINT WHICH NO ONE HAS PREVIOUSLY COMMENTED >>> The agreement runs until September 2003. How many knew this ????
Point 4 is self explanatory.
Point 5 .... well this gets interesting. SKB chose not to exercise it's first option to increase their JV stake. As a result, this affects future exercises by SKB in that each builds somewhat on the previous option/warrant. As I understand the agreement, SKB has just shaved about 1.2 million shares off of the 4,793,685 available for conversion of the JV ownership.
Point 6 is very difficult to understand. I am not sure that I understand totally how it works. My brain was twisted into a pretzel trying to make heads or tails of the legal wording of this part. My interpretation is that SKB is somewhat assured of non dilution of their ownership in Antex and the JV and at the same time is protection for SKB in the event another entity intends to acquire a significant % of Antex common and also allows them some greed should the stock take off. The agreement continually refers to the exercise of index warrants before SKB can exercise this option .... I believe this is either Blair or insider options from the stock option plan. This option is separate for the conversion warrant.
As far as the listing regarding the shares ..... well there are currently 22.4 million shares outstanding (where did you get the 9.6 mil # ?). The 27+ million options and warrants have been discussed previously with Doc and he has stated that there is likely to be a total of 35 million common shares outstanding in the future. Meaning exercise of 13 million of these. I do believe this is one of the reasons why Antex shares aren't trading in the $3 range. Blair's 7 million are very likely simply because I don't think Antex can cancel them and Blair ... well we all know Blair. The others are likely to be from exercises of employee options. As of tomorrow, the 27.6 million figure will be reduced by ~2.1 million down to 25.5 million (Yippie !!!!). The 25 million number is further reduced since SKB didn't exercise their first option in the JV. Shave off another 1.2 million shares. Down to 24.3 million. Most everyone that does their due dilly on Antex loves the company but hates the warrant/option listing. EVERYBODY sees this as a negative. What people don't realize is that most of those won;t be exercised and if SKB goes through with everything, you can bet your bippy that Antex will be cranking in the profits.
My valuation model of Antex used a figure of 35 million fully diluted shares and still came up with a valuation price of $2.51 per share ($3.94 now with 22.4 mil out). Incidentally, 35 million is the common equivalent Antex reports in its filings for per share data.
As to who owns the expiring warrants ... they are publically traded so my guess is John Q Public.
Pasteur and SBIR grant .... yup .. due by year end. I'm a little peeved that there has been no information yet on the H Influenzae vaccine that Pasteur has in Phase 1 trials. IMO, the results are overdue. Jay, that's a good question to call Antex on tomorrow. I'd do it but am swamped at work.
Geez..... sorry for the long post. Hope I didn;t put anyone to sleep :-)
Mike |
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