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Excellent PR!. Not yet money in the bank, but excellent!
"We are excited to drive cadmium-free quantum dots as a phosphor replacement in OLED displays, in concordance with Apple's recent announcement regarding their integration of quantum dot and OLED technologies into QD-LED for future iPhone displays.
glta
M and A Journal
Useful article giving consideration to net operating loss carryovers and their value in M&A process. I think Amedica's NOL's are likely to be highly valued in our situation, but assessing the quality of the NOL's is important part of the dd in BO/merger process and may have caused delay. Factors include bookkeeping and IRS issues related to how loss was structured by amda in years past.
I think it was CL who was bringing this to light earlier--that tax considerations and full utilization of amda's loss carryovers could be influencing the basic layout of this deal--decision to merge, buy assets, stock swap etc.
For me this article is a primer in a topic I have little experience with.
Picking up a few more shares in this lull.
glta
All good points Boston. Also any major news is going to have to meet shareholder vote at some point. If valuation is too low, the shareholder sentiment could lean toward holding out for competing possible suitors.. If merger plan plays out, a sweet valuation that instantly wins the hearts and minds of shareholders would get quick results and reduce the likelyhood of anyone else getting chance to formulate a bid. (I think im echoing something you or Cl made earlier in this regard)
Still, i would love to hear the actual arguments put on the table for valuation of a biomaterial that might truly own the future of the industry.
glta
Also Sonny played one of his key remaining cards last week. He's more deeply and directly aligned with maximizing shareholder value... Prior to this I was a little nervous about too much coziness in a possible merger process. After all any potential acquirer would want amda as cheaply as possible--but Sonny stands to gain substantially from every nickel of amda share valuation at this point. (valuation that must be terrifically difficult to nail down). I do still wonder if a value has been determined or not. It's a toss up to me whether major news of a merger slams this window of opportunity shut in the coming days or if it drags out a bit longer. Either way, I agree, stealthways, that this doesn't feel too likely to "slip" away by some shadowing process..Significant value appears ready to be unlocked!
Best to you,
Got it, reading too fast.
glty
Atlanta, what is the significance of the business day count?
Sweeps, thanks for the close-up look and careful read of these loan conditions.
glta
SGT
Sonny now has 660k warrants to purchase shares whenever he wants over the next five years or so at .42. Its important to note the wording that Boston posted earlier related to those warrants that appear to fully protect their value in the case of a take over, merger, sale etc. by converting them to shares or equity held by the buyer.
Sonny is a lawyer, among other things. I sure he has covered himself from a legal perspective and doesn't need me worrying about conflict of interest on his behalf. Nothing I see prevents a buy out (or more likely it appears, horizontal merger) from taking place whenever the preliminary steps are all completed and the chosen day to announce arrives..
glta
Thanks Atlanta1,
According to the form 4, they were issued on 7/28-- til 2022, so I was a little surprised to hear they were converted already. Doesn't matter as far as incentive for stock appreciation, and Boston pointed out the relevant wording in case of merger, BO, etc where value is fully preserved. Important step.
glta
Thanks CL. That's great news. Things keep lining up. I missed this. How do we know he exercized these warrants?
glta
Yes, now what about the rest of the team?
Im catching up after some offline days, CL101 why do you suggest step #2 "modify the sonny's loan term (remove the warrants)"
I'm seeing those warrants as important incentives! What am i missing from your thinking here?
Thanks,
Oops, not proxy... 8-K found posted on amedica website.
glta
I agree with your read of this Sweeps.
glta
Very pleased to hear about the Sonny Bal loan and especially warrants. I was vexed by the lack of substantial reward for CEO that linked directly to maximum shareholder value. This does it!
Can someone share link to this latest proxy? sorry if i missed that..
Windows of opportunity do eventually slam shut...
Best of luck to all,
okay missed that.. and CL is looking for the 14A-amended where presumably corrected numbers will appear .. along with possible incentive bonuses.
Boston, What can I say.. I'm back for more and trying to see with "fresh eyes"
A very different moment for Amedica. I hope Sonny is compensated like a king for his work if he indeed brings a fair valuation of this technology back to shareholders. Baby boomers need their high performance, bacteria-resistant implants!!
glta
Back to other proxy question: any further thoughts on the insider share discrepancy that Santa pointed at between the draft 14A and the final 14A? The last form 4 was in 2016--nothing recent. 1.0% inside ownership total drops to .1% between draft and final...i'm confused by this too.
glta
Boston,
I would if I had something substantial to offer. My views are fragmented. Not my field of expertise. Plus I was burned a few years ago by amda. I'm compelled by the unrecognized value of this technology but still feeling the past...
You recently sketched a scenario where our 14m market cap company, with a backdrop of years of intense value loss, could be lining up all the pieces to blast into a merger with ZBH valued at 5% of of ZBH market cap of 24Billion...
Compelling and fascinating. A reasonable case is being made.. but wow Does the world really work this way? is this door really wide open and flapping in the wind daring a small investor to step through? I'll be the first to say I'm nervous. Are sharks circling? You bet.
My sincere best wishes to everyone with "skin in the game.."
Boston, my worrisome nature is not a reflection of the quality of your dd here, or of your generosity in sharing it here. CL also articulated earlier a commitment to digging facts and sharing them. Any honest effort to improve the understanding and access to information of the private investor has my respect. Interpretation of the facts entails many angles and questions..
Best to you,
Agreed! I find your evidence compelling and appreciate the heavy lifting you, Cl and some others have done here. I think you've brought a lot of expertise to the table. Invested, yes. Cautious too? yes. Certain about the outcome, no. No offense intended. I'll be first to congratulate you and CL if this plays out as anticipated here.
Glta
Hey CL101, i don't intend to sound alarmist. I'm invested in something happening soon here and like your scenario alot. If it plays out sooner rather than later then the point i'm making is of course meaningless. Do I live in a world with 100% certainty--no.. so I keep beating the bushes for things that might bite me later. Anyway, I clarified the point i was making, wont drag it on. IR didnt respond fwiw.
glta
Boston,
yes. We're on the same page with the math. Shareholders drop, in this example, from 48m to 3.2 million shares post-r-split and management now has available to them 246.8m for future possible issue, fundraising etc. This is a 15x proportional increase in dilutive potential to the 3.2 mil that currently own 100% of the corp. (in this example)
If the rs is also applied to the authorized shares, the proportion between issued and non issued, authorized shares remains the same.
What nags me here is the question "why increase the dilutive potential at this point in time?
glta
Boston745,
a 1:15 reverse split (for example) is equivalent to a 15x increase in authorized shares, as stated in proxy. The corporation can choose to apply rs to authorized shares along with common shares. Amda is specifically not doing this. Its like voting an X increase in authorized shares. Is there a reason for doing this? or is it just their boilerplate? I don't mean to imply anything specific, just turning stones at a moment with a lot at stake..
I went through this issue with another company where shareholders asked corp to apply rs to authorized shares as well as issued..and I recall they did.
glta
Good question Santa.
Also is anyone concerned about this:
"Our authorized capital stock currently consists of 250,000,000 shares of Common Stock, par value $0.01, and 130,000,000 shares of preferred stock, par value $0.01. Although the Reverse Stock Split will not affect the rights of stockholders or any stockholder’s proportionate ownership interest in the Company (except as a result of rounding in lieu of fractional shares), the number of authorized shares of our Common Stock and preferred stock will not be reduced. If the Reverse Stock Split is implemented, the number of authorized shares of Common Stock would remain at 250,000,000 shares, thereby effectively increasing the number of shares of Common Stock available for future issuance, which will enable us to raise additional capital in the future through the issuance and sale of equity securities from time to time as our Board of Directors may deem advisable. In addition, the total number of authorized shares of preferred stock would remain at 130,000,000 shares. The conversion ratio of our issued and outstanding shares of preferred stock will adjust proportionately with the ratio of the Reverse Stock Split." (from 14A final)
If Cl's plan comes to fruition this shouldn't matter, but I do wonder if the proportional explosion in the number of authorized, issue-able shares could play a future, major, dilutive role.
glta
Very helpful Boston745. Thank you.
I was not aware of the "reverse merger" concept.. that helps explain why the selected ratio of a reverse split would be directly linked to valuation between the two parties, and not just a selected ratio/pricing according to general Nasdaq listing requirements and the usual forward looking speculation on shareprice.
Also very helpful to read your notes on "horizontal merger" and "competitor collaboration". Compelling thoughts and scenario.
Is a "horizontal merger" a strategic means to keep an outright bidding war from unfolding? Particularly with the stakes for Silicon Nitride being so high for this industry.
glta
Cl101,
Im missing something. What is the incentive for either side in a BO to aim at a 1:1 share equalization? why is 1:1 a better outcome than 2:1, 4:1 etc.?
For example, if the RS aims at Nasdaq stability and SEC satisfaction (even with possible BO looming), then
if a stock based buyout occurs, the stock ratio would simply be whatever it happens to be on the date of record... stock prices, adjusted by BO price. X shares of amda converts to Y number of buyer shares..
I understand you are collapsing the two above steps into essentially one formulation--on a very rapid time line (hope you are correct) but still wondering why 1:1 emphasis?
Best
nice!
K, thanks, I'm not particularly skilled in tracking this kind of info...
Understood and agreed CL101, Boston, Btw, how did you get from 36m to 55M, I thought earlier warrants were converted to common sharecount?
Thanks Boston745, I was looking for the Max. authorized no. (250m) not the issued sharecount.
Do you happen to know if the prior (Jan 3016) RS was applied to the Authorized count at the time?
My understanding is that RS's do not necessarily apply to total authorized sharecount unless this is explicitly stated by the corporation. In otherwords a reverse split can become, in effect, a huge increase in authorized shares, if issued shares are split and total authorized shares are not... if the proposed RS does indeed occur (BO we're looking for delayed further) Id like to know if amda is proposing to apply RS to Authorized sharecount as well as outstanding sharecount.
FWIW, Best,
Can someone help me locate/confirm the authorized sharecount? No response from amda IR regarding confirmation of this.
glta
Boston745, clearly there are multiple materials in competition, and probably always will be, but if performance, and superior resistance to infection line up in one bio-material, there is no second from my perspective as a potential consumer (hopefully far down the road if at all). Aging boomers will have a very high interest in this kind of issue. A health consciousness and high performance footware mentality applied to aging body parts. All imho.
Best to you,
Nice post stealthways.
"in medical grade material there is no future for being #2" is a simple, powerful point.
Excellent posts AshvsEvil!
This aligns with my somewhat less informed thinking. Thank you. Also regarding RS, there is always plenty of fear around the mention of RS, but the split itself is mathematically neutral, as we all know. It's a matter of understanding whether, at this point in time, the company is growing revs and moving forward strategically (amda) or in a state of decline and heading into dilution purgatory (lots of other companies).
great conversation. Key events in coming weeks.
glta
Good to know Boston745! I was feeling the "drama" of that particular moment and wondering what every else knew that I didn't....
Hondo, I have similar worries, and also appreciate the confidence from CL and others that some process of fair valuation will prevail. I hope Sonny has some major share grants in place and profits like a king from his work here. Clearly war has been waged over this company and IP, and most shareholders are long dead and buried..
The quietness from the company is unsettling. Last conference call we all heard it..not one single question after the presentation, just a minute of silence. Hopefully this silence speaks volumes about the background issues that CL101 and Boston have dragged into the light of day. I don't have much experience with this process. I too was an AVNR investor and that seems in retrospect like a friendly game of shuffleboard compared to this. But I am increasingly confident that there are many eyes on this important next gen biomaterial, and that it is unlikely to quietly slip away in a dirty deal.
Best of luck to all.
Hi omid, I too was in amda earlier, but driven out. CL, Boston and a few others have done a remarkable job creating visibility at such a critical point in this company and SiN technology. Quite a saga playing out. I hope your earlier investments pay you back handsomely.
glta
Other eyes on Zimmer, not just Jana. Ariel too. This CNBC vid clip ends with some interesting comments on Zimmer but directly relates to amda context and value.
Interesting comment regarding long term buy-in to ortho sector.
CNBC Healthcare stock clip Bobrinskoy-Ariel
glta
Boston745, incredible. Amda is a company in control of IP that could become an essential gateway for all osteo-implants, period.
Higher demand for antibacterial, osteoconductive material could bring everyone to Amedica's doorstep. Add the value of Amedica's product line with the the value of an entire multi-billion $ industry converting to Si3N4 via AMDA licensing agreements, and you have a glimpse of AMDA future value. Right? How can this be sitting at 13 mil market cap? Have you ever seen this disparity in valuation before?
GLTA