HERE ARE THE DETAILS OF THE ANYI SB-2 SEC FILING
First off, congrats to all BANY longs from the contrarian (especially Brad, Mike, and AnnieO).
I found the filing late last night and have completed the following analysis based on about 1 hour of reviewing the document (yes, I was up LATE). BTW, the filing was posted on Edgar at 4:30 p.m. yesterday afternoon, so I was probably not the only one to read it. Please don't tell me I'm the only one who checks Edgar every night before I go to bed:)
Here's the link to read the filing from the Edgar SEC site:
edgar-online.com
You need to pay ~$40 to subscribe to the premium service to actually view the filing (or you can wait for it to be free in a couple days). If you subscribe with credit card, you'll be able to access it right away.
FIRST IMPRESSIONS
ANYI will be one HOT stock. The filing was prepared very professionally, no hidden time bombs that I could detect. I am not familiar with how BB stocks typically start trading their new common shares, but it appears AYIC will add 200,000 shares (to the existing 3,000,000 total) in the form of some kind of warrant. It was hard to understand all the options and warrants, but overall it seems on the up and up. Since I don't understand how all of this is going to work, I'll try to throw out key facts, and if you have a better understanding you can explain for the rest of us.
DISCUSSION OF SHARES
Current total was 3,074,400, they filed to add 200,000 shares through a $1/share warrant ($600,000 is the only money that actually goes to the company?), the dilution is fairly small. The number of fully diluted shares was given as 3,976,000.
Some of the specifics:
200,000 set aside for employee stock ownership program (7 employees)
205,000 option for CEO Schick (6.6% of total)
110,000 option for Delise (co-founder - 3.7% of total)
60,000 option to Bernard Sandoval
10,000 option to Sitra
10,000 option to Yost (BANY CEO)
800,027 owned by BANY (26% before, 24.4% after dilution)
They are allowed up to 50M Class A restricted shares, and 25M Class B, but at present have no plans regarding these.
On Jan. 20, 1999 BOD gave themselves 5,000 shares each for $1/share, and on Jan. 25 they sold 34,000 shares for $2 based on BOD decision.
It appears the company will get its capitol by selling $1 warrants, which can be exercised at the hit price of $3 if the stock trades above $4 for more than 10 days. I know little about warrants, but this looks like a typical warrant issuance to raise capital that is used by BB stocks in place of doing an IPO. Does anyone know if this is the standard way this is done? I believe MLRE sold warrants for $0.50, with a $3 strike price ($3.50 total) before it went to $27.
The registration statement says they'll make $600,000 from the offering when 200,000 warrants are exercised at $3 strike price each. So, looks like company itself only wanted/needed to raise $600K from this offering.
BUSINESS DISCUSSIONS
These discussions are very standard, and very solid. ANYI makes no bones about proclaiming their intent to be an agressive e-commerce company.
From the SB-2:
The Company's objective is to become the leading global Internet-only
retailer of computer hardware, software and peripheral products to the consumer
and business marketplaces. The Company intends to capitalize on and extend its
market position as one of the first Internet-only retailers of computer
hardware, software and peripheral products through the following key strategies: ....
Lots of good details. Goes on to discuss the following:
Strategic Alliances -- The Company pursues strategic relationships to expand the
Company's online presence, increase its access to online customers, expand brand
recognition, and enhance the underlying technology of its Internet storefronts.
In pursuing these relationships, the Company seeks exclusive or semi-exclusive
positioning for the sales of computer related products on key screens of major
Internet sites. To date, the Company has established successful strategic
alliances with C|Net Shopper.com and Digital River, Inc. (NASDAQ: DRIV).
- Mentions that they pay CNET/Shopping.com $500 per month for 2,000 hits, then $0.25 per hit after that.
- Mentions how DRIV lets them sell software using electronic software distribution (ESD).
- Also says that they are in negotiations with several other content providers for alliances.
FINANCIALS
They list two sets of financials, one for the year ending June '98, and one for the 6 months ending Dec '98.
This is the really exciting part since revenues increase dramatically over time.
Year ending June 1998:
$647,988 net sales, gross profit of $44,660 (6.8% profit margin)
6 months ending Dec 1998:
$1.65 million net sales (vs. $5,990 for same time period in '97)
gross profit = $75,691 (4.6% margin)
net loss = $137,857 or -$0.46/share (EPS) vs.
net loss = -$1.89/share in '97 for same time period.
This is as good as (or better) some of the recent high flying internet IPOs trading on Nasdaq. Very nice growth.
Short Term Debt = $145,205
ANYI has supplier credit lines with Ingram Micro, Tech Data (which is where Schick and Delise worked before coming to ANYI), Miresel, and Pinacon
THE BANY DEAL
BANY was $0.20 when it exchanged 500,000 BANY shares for 1,000,000 ANYI shares. 200,000 of the BANY shares are not restricted (I believe), and actually represent an asset for ANYI. The other 300,000 shares can be exercised at different increasing prices of BANY.
This is a cool deal, since as ANYI goes up, BANY goes up, and therefore ANYI's assets of BANY stock become worth more, so ANYI goes up more, so BANY also .... (you get the picture)
TRADING
No trading date is set. It appears that now that the filing has been posted by the SEC, Sitra can go back to NASD and ask to start trading. NASD can either let 'em, or make 'em wait up to 60 days to receive some confirmation from the SEC.
So it could be as long as 60 days if nothing goes wrong, but now that I've read the filing, I see no reason why NASD wouldn't let 'em trade right away (next week?). It's up to NASD, but ANYI has fully audited everything in this filing, and looks like it is prepared to set a good example for future new BB stocks to follow.
In fact, compared to some recent Nasdaq internet IPOs that had less than $500K annual revenues, I'm not quite sure why ANYI wouldn't want to wait and try to trade on Nasdaq. I know Scott has mentioned the possibility of ANYI moving from the BB to Nasdaq in the near future, is it somehow easier if you trade on BB first?
SUMMARY
That's my analysis, I may be able to e-mail the filing to those that can't afford the $40 to open an Edgar account, but no promises (send me a PM).
IMO, we should fire up that ANYI thread now, since trading could happen as early as next week as far as I know. Use the ANYI symbol, if it changes I'm sure we could change the title later.
From my personal experience with at least a dozen backdoor IPO plays, this thing should move in stages. At each stage we may gain 10-20-30-100%, no telling exactly how much. We'll get a boost today, again Monday after the weekend warriors check BANY out, again when we get a PR that NASD is letting us trade, and another boost everytime we get some meaningful press. Even after we run up 20-50%, the ride won't be over. The biggest most important advice I can give is that in almost every IPO backdoor I've followed, the price may get way over what anyone expects it to get, but on the day of the IPO/trading, it will all come crashing down to the actual valuation. You may not like the actual valuation, since it is usually a discount of what everyone thinks the stock SHOULD be trading at.
For evidence, check out TSQD and DRIV, DBCC and MKTW, MALL and UBID, TMCS, WCAP and COOL, the list goes on. But also check out the tiered level of increase these stocks experience. UIHIA (UPCOY IPO next week)is a good recent example. Also see how NAVR (net radio), PWCC (flash internet), DLIA (iVillage?), KLOC (800ussearch), BNYN (switchboard.com), PTEL (priceline), CGTVY (Prodigy), TNO (MMPT), and XTON (internet lottery) all react. The have all had more than just one big gain, and they all have pullbacks. IMO, the best time to get out of a backdoor is the day BEFORE the IPO. If you wait until the IPO - you could get screwed, if you get out early - you may regret it if it gains a bunch the day before.
BANY will be tricky because it is a BB stock that owns 26% of a new BB stock. The fact that BANY gave out shares/warrants/options for ANYI is a better leap of faith than any other backdoor has taken to my knowledge.
BB stock Shopping.com's (IBUY) buyout by Compaq (CPQ) for $220M (~$18/share) bodes well for ANYI. The recent (Dec. '98) new BB issue of MLRE which sold options at $0.50 and went to $27 also won't hurt. You should really look hard at MLRE's chart, this is exactly what I think ANYI is capable of doing, maybe better.
IMO, even with the markets still turbulent, now is the best time for ANYI to start trading. Today will be the biggest IPO day of 1999, over $2 billion in 6 IPOs (Delphi, Del Monte, MMPT, Pacific Internet, ...). If we can go next week, we could do very well. If we are further delayed, the momentum could die, and the new issue market may wane.
Well, I hope everyone enjoyed my overnight report. And in case you are wondering, yes, I did wait to post this until after the market opened so I could try to grab some BANY first (and so that others who have followed BANY close would have a shot as well). I can't imagine that I'm the only one who found this, so I didn't expect to be the first post, and I don't expect to get more at less than $3/4 (it's 9:40 and so far no orders are going through, maybe the MMs are still scratching their heads wondering what to do will all the orders?). We'll see.
Good luck to all today!
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