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Curious to see if the "independent investigation" is new research:
"Amedica’s presentation is titled “Effect of Surface Topography on the Bacteriostatic and Osseointegration Behavior of Silicon Nitride” and summarizes an independent investigation supporting the unique antibacterial properties of silicon nitride."
https://ih.advfn.com/p.php?pid=nmona&article=76812780
glta
Amda likely has some solid Q4 performance that is being downplayed. Inventory is being worked through, but--as you've read into the numbers--only lasting into 2Q-18 before some new business model needs to unfold. Interesting times we live in!
glta
Boston745, Enjoyed a close look at your Q4 rev research:
https://amedicablog.wordpress.com/2018/02/22/q4-2017-revenue/
Thanks
glta
Omid,
a close (albeit amateur) read of the S-I spells out the way that subscription rights and then over-subscription rights will be distributed pro rata. Thus a fair distribution of all unsubscribed leftovers divided pro rata among those willing to over subscribe. No stand-by agreement, and non-transferability of rights, IMO assure that there will be some left over units, particularly from small investors (those few not dead and buried) unable to pony up extra cash on short notice to buy their allotment.
Also OMID, a curious effect of the S-1 announcement is that many bottom feeding longs may have now stopped picking up shares--preserving resources for the subscription offering...but what if the offering, doesn't happen? interesting way to shut down continued slow accumulation by long investors...
Just have to wait and see what the S-1A says when it appears, or other news items drop..
glta
Thanks OMID, again I'm in basic agreement with you. Depending on the set price attached to warrants and total number of warrants per unit, this could be an opportunity for some shareholders, including insiders who have been laying low, to pounce on over-subscription opportunity and increase percentage ownership. I also agree that its good to see the relatively modest $ size of the offering, and basic opportunity extended to all shareholders to act on their subscription rights and preserve % ownership.
"For the time-being, without all the information available: it is difficult to deduce the true nature of this offering." Agreed.
glta
I'm half-expecting the S-1A to be filed this week. Anyone with a perspective on the timing for this?
glta
OMID,
I agree with much of your post. Additionally, I'm VERY interested to see the # of warrants, dates, and set price to be assigned to our subscription offer per unit. Depending on how wildly our disconnected share price fluctuates prior to establishing the price and number of warrants assigned to each subscription unit we wont know how much dilution we face if we don't buy in to our pro rata allotment, and how aggressively the oversubscribers may gobble up new shares... I'm assuming among the class of current shareholders, perhaps including amda insiders, there will be some looking to aggressively over-subscribe.. imho. Curious about your take on this.
glta
good read from issuers perspective-- FAQ regarding rights offering:
http://media.mofo.com/files/uploads/Documents/FAQRightsOfferings.pdf
glta
Some random info on subscription rights. (no clue why these guys say its usually a good idea to buy in--do your homework!)
https://strategiccfo.com/subscription-rights-preemptive-rights/
also: LGL a company that completed a subscription offer late 2017 just for reference--same size offering but significantly different situation.
http://irdirect.net/filings/viewer/index/61004/000119312517263753/
glta
stock rights offering info:
https://thismatter.com/money/stocks/rights-offering.htm
glta
Boston745, CL101, fwiw I'm reposting my earlier reply to CL below. I read the S-1 as setting the conversion price (set price) "immediately preceding" the offering. Not 40 days after the offer expires.
glta
-------------------------------
Hi CL101, Thanks as always for your analysis.
I'm reading this portion of the text you referenced differently:
"The Conversion Price for the Series B Preferred Stock is equal to, for the first 40 trading days following the expiration of the Rights Offering, $ per share of Common Stock which price shall be determined by negotiations between the Company and the Dealer-Manager based upon the price of the Company’s Common Stock immediately preceding the offering, referred to as the Set Price,..."
Thus the set price appears to be based on common stock price preceding the offering not 40 days after the offer expires. ? Am i reading your interpretation correctly?
glta
regarding the earlier question about the distribution of subscription rights: (excerpted from S-1, QUESTIONS AND ANSWERS RELATING TO THE RIGHTS OFFERING section)
"May the Subscription Rights that I exercise be reduced for any reason?
Yes. While we are distributing to holders of our common stock one Subscription Right for every share of common stock owned on the Record Date, we are only seeking to raise $10.0 million dollars in gross proceeds in this Rights Offering. As a result, based on 3,073,414 shares of common stock outstanding as of January 31, 2018, we would grant Subscription Rights to acquire 3,073,414 Units but will only accept subscriptions for 10,000 Units. Accordingly, sufficient Units may not be available to honor your subscription in full. If exercises of Basic Subscription Rights exceed the number of Units available in the Rights Offering, we will allocate the available Units pro-rata among the record holders exercising the Basic Subscription Rights in proportion to the number of shares of our common stock each of those record holders owned on the Record Date, relative to the number of shares owned on the Record Date by all record holders exercising the Basic Subscription Right. If this pro-rata allocation results in any record holders receiving a greater number of Units than the record holder subscribed for pursuant to the exercise of the Basic Subscription Rights, then such record holder will be allocated only that number of Units for which the record holder subscribed, and the remaining Units will be allocated among all other record holders exercising their Basic Subscription Rights on the same pro rata basis described above. The proration process will be repeated until all Units have been allocated. Please also see the discussion under “The Rights Offering—The Subscription Rights—Over-Subscription Privilege” and “The Rights Offering—Limitation on the Purchase of Units” for a description potential proration as to the Over-Subscription Privilege and certain stock ownership limitations.
If for any reason the amount of Units allocated to you is less than you have subscribed for, then the excess funds held by the Subscription Agent on your behalf will be returned to you, without interest, as soon as practicable after the Rights Offering has expired and all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected, and we will have no further obligations to you."
glta
Boston, all,
The question of how the 10000 units would be distributed, proportional to ownership is spelled out in detail in the S-1. Sorry no time to dig for it now but its there.
glta
Hi CL101, Thanks as always for your analysis.
I'm reading this portion of the text you referenced differently:
"The Conversion Price for the Series B Preferred Stock is equal to, (i) for the first 40 trading days following the expiration of the Rights Offering, $ per share of Common Stock which price shall be determined by negotiations between the Company and the Dealer-Manager based upon the price of the Company’s Common Stock immediately preceding the offering, referred to as the Set Price,..."
Thus the set price appears to be based on common stock price preceding the offering not 40 days after the offer expires. ? Am i reading your interpretation correctly?
glta
17% AMDA short interest reduction from 1/12/2018 to 1/31/2018
https://www.nasdaq.com/symbol/amda/short-interest
glta
Zimmer Biomet (NYSE:ZBH) Q4 2017 Earnings Conference Call January 30, 2018 8:00 AM ET, Bryan Hanson CEO excerpt:
"In terms of our innovation capabilities, Zimmer Biomet is uniquely positioned to leverage platform technologies across our entire portfolio, including advanced proprietary materials and surgical robotics applications."
glta
https://seekingalpha.com/article/4141232-zimmer-biomets-zbh-ceo-bryan-hanson-q4-2017-results-earnings-call-transcript?part=single
Agree, Farmer6, OMID,
Nice time to add. A little stormy, but that is no surprise..
glta
Yes, obviously there is a lot of pressure on future and near-future performance.
glta
It was more revealing than I expected, especially regarding the timeline upon which yet-to-be-announced events will occur.
glta
Very nice analysis of the recent Zimmer conference call. Thanks Boston
Great post AshvsEvilDead, especially appreciate your thoughts on geo presence.
glta
Hats off to you Boston! You put up with a lot of abuse for simply sharing your ideas and research.
Cl101, too.
Best,
glta
Michael,
Thanks for the reply, I'm not too concerned at this point (agree with boston's following post), even if some of the warrant prices get dialed down. Frankly, I don't think amda needs a lot of money at this point, and presumably they have a pretty accurate idea of their 2018 financial needs. I had to laugh seeing $10,000 split adjusted warrants...cant wait for those warrants to get exercised as share price goes into orbit and our market cap exceeds 50 billion... (humor)
glta
Michael3290,
Thanks for sharing your thoughts on the recent filing.
What do you make of the curious $10,206 per common share referenced below from p. 14? I guess its a reflection splits and the massive loss of share price in recent years--but I have no idea how a warrant valued like this even functions if a reduction of some point doesn't occur:
Boston, it looks like some of the warrants can adjust from high excercise price from the past to something in the current share price spectrum. The main thing that I quickly read (as amateur not to be relied upon!) is the confirmation of adjustment related to reverse splits and apparent cap of common share #'s that have been anticipated.. no sign of of preferreds, or anything other than common share category, and up to 12m cash possible to cover ongoing expenses .
4.5-5m aprox total shares issued after warrants.
glta
outnabout, I agree.
glta
Apologies Boston for putting words in your mouth. I just don't share these concerns or read into the coincidental amount.
Best,
glta
I don't buy it Boston,
By backdoor I guess you mean direct from Zimmer R+D (as reported publically) to S Bal's private corporation ?? so he can loan it back to the publicly held company where he is CEO and CFO, while amda is being scrubbed for clean bookkeeping by multiple firms??, so S. Bal can then run the company into BK then sell the remains all back to Zimmer?? etc, etc,. So much sounds wrong with this.. Im not with you here.
IMO, all parties have so much to gain at this point, just by being fair, lawful, effective business people. This scenario looks okay to me: S Bal's loan gets repaid and he makes a bucketload on his warrants??
glta
Thanks CL101 for another monster, informative post!
glta
Boston,
I have more questions than answers in relation to this, you could be right, but as we patiently wait, maybe there is some additional expertise lurking on this forum able to shed additional light on these valuation categories and processes??
Best,
glta
Boston, thanks for laying out these thoughts on valuation.
Technology was a big category in LDR acquisition, I wonder how that figures in here, particularly since amda technology is based on a material that potentially has a very long future..opposed to technology that can rapidly become obsolete. also I agree with points you've made regarding the significance of antibacterial qualities in silicon nitride...reducing dependence on antibiotics is an extremely important medical issue.
Best,
glta
Also Boston,
I hope you take a crack at formulating amda value in BO situation, as CL101 asked. I really appreciate the ways both you and CL can formulate ideas and attack difficult problems.
I agree with CL, by the way, and am not particularly worried about your earlier concerns.
glta,
Boston745,
It may not be super helpful for me to post an article here that shows how complicated these IP valuation issues are, but I like the point below that multiple methods are in principle applicable equally. These are no doubt extremely complicated processes and difficult to arrive at educated estimates. I appreciate those who take a crack at providing numbers here, and am interested in what goes into these valuation processes even if Im not confident enough to make educated guess myself. I think its useful just to have a sense of whether AMDA would be worth more or less than LDR (for example), regarding specific categories of Technology, IP, Goodwill, customers, etc., and some of the basic thinking behind that, as we await future developments.
http://www.wipo.int/sme/en/documents/ip_valuation_fulltext.html
Intangible Asset & Intellectual Property Valuation: A Multidisciplinary Perspective
Hi CL101
Below is a partial glimpse of the values assigned to LDR when Zimmer acquired them. Excerpted from Zimmer 2016 annual report p48-49:
Always interested to hear your estimates. Obviously amda will touch many more markets beyond spine and synergies are very interesting. You suggest IPRandD already at 200m (as opposed to 2m for LDR below). Do you (or others) have thoughts regarding an estimate for technology for example? Operational synergies that drop into Goodwill, are potentially very large as you've previously stated.
Best
glta
-----------------------------------------
LDR #'s (partial)
IPR&D 2m
Technology 452m
Customer relationships 118m
Trademarks, Tradenames 71m
other assets 76m
Goodwill (operational synergy) 482m
Boston, what evidence are you referring to here?
Outnabout, I may have crossed up my reading of the indirect ownership. Thanks.
glta
Nasdaq.com showing a trade made at 15:13:20 ET $3.6281 200shares.
A three hour pause in trading?
glta
We've entered a little time warp.. PR coming?
Nasdaq.com shows last amda trade at 12:07 ET....
Schwab shows last trade at 12:10 ET...
Zero volume since 12:10 ET