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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: October 31, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to ________________
Commission file number: 0000796655
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ANTS SOFTWARE.COM
(Exact name of registrant as specified in its charter)
Nevada 13-3054685
(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
801 Mahler Rd, Suite G, Burlingame, CA 94010
(Address of principal executive offices) (Zip Code)
(650) 692-0240
(Registrant's Telephone Number, including area code)
----------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate the number of shares outstanding of each of the issuer's classes
of Common stock, as of the latest practicable date:
12,797,706 shares of common stock as of October 31, 2000
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<PAGE>
TABLE OF CONTENTS
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PART I. Financial Information
Item 1. Financial Statements ............................................... 3
Item 2. Management's Plan of Operation ..................................... 10
PART II. Other Information
Item 2. Changes in Securities .............................................. 11
Item 4. Submission of Matters to a Vote of Security Holders ................ 12
Item 5. Other Matters....................................................... 12
Risk Factors................................................................ 12
Signatures ................................................................. 14
1
<PAGE>
ANTs software.com
(A NEVADA CORPORATION)
PART 1. FINANCIAL INFORMATION
The accompanying unaudited financial statements are presented in accordance with
the requirements for Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly,
they do not include all the disclosures normally required by generally accepted
accounting principles. Reference should be made to the ANTs software.com (the
"Company") Form 10-KSB for the year ended April 30, 2000, for additional
disclosures including a summary of the Company's accounting policies, which have
not significantly changed.
The information furnished reflects all adjustments (all of which were of a
normal recurring nature) which, in the opinion of management, are necessary to
fairly present the financial position, results of operations, and cash flows on
a consistent basis. Operating results for the six months ended October 31, 2000,
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2000.
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
ANTs software.com
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
October 31,
2000
------------
<S> <C>
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $ 1,587,735
Interest receivable 4,860
Prepaid expenses 161,114
------------
Total current assets 1,753,709
------------
PROPERTY AND EQUIPMENT:
Computers and software 558,021
Office furniture and fixtures 26,372
Less accumulated depreciation (44,190)
------------
Property and equipment, net 540,203
------------
OTHER ASSETS 3,700
------------
Total assets $ 2,297,612
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 302,715
Accrued expenses 73,136
Notes payable 89,260
------------
Total current liabilities 465,111
------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value; 20,000,000
authorized; 12,808,142 shares issued and 12,797,706 shares outstanding 12,798
Common stock subscribed, 358,332 shares 2,015,224
Treasury stock, 10,436 shares, at cost (121,078)
Notes receivable from officers for stock purchases (180,000)
Additional paid-in capital 12,985,376
Accumulated deficit (12,879,819)
------------
Total stockholders' equity 1,832,501
------------
Total liabilities and stockholders' equity $ 2,297,612
============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
ANTs software.com
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Six months ended For the Three months ended
October 31, October 31,
2000 1999 2000 1999
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
REVENUES $ -- $ -- $ -- $ --
OPERATING EXPENSES:
General and administrative expenses 2,310,514 242,110 1,113,890 132,229
Research and development expenses 855,923 -- 662,786 --
Abandonment loss on corporate office 636,480 -- 636,480 --
------------ ------------ ------------ ------------
Loss from operations (3,802,917) (242,110) (2,413,156) (132,229)
------------ ------------ ------------ ------------
OTHER INCOME:
Interest income 68,830 -- 17,910 --
Interest expense (8,805) -- (3,437) --
------------ ------------ ------------ ------------
Other income, net 60,025 -- 14,473 --
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (3,742,892) (242,110) (2,398,683) (132,229)
INCOME TAXES 800 -- -- --
------------ ------------ ------------ ------------
NET LOSS $ (3,743,692) $ (242,110) $ (2,398,683) $ (132,229)
============ ============ ============ ============
BASIC LOSS PER COMMON SHARE $ (0.29) $ (0.02) $ (0.19) $ (0.01)
============ ============ ============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 12,731,700 11,657,165 12,903,922 11,657,165
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
ANTs software.com
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six months ended
October 31,
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(3,743,692) $ (242,110)
Adjustments to reconcile net income (loss)
to net cash used by operating activities:
Depreciation 38,644 --
Forgiveness of note and interest due from officer 58,687 --
Cashless warrant exercise 13,502 --
Abandonment loss of leasehold improvements and lease deposits 483,914 --
Changes in operating assets and liabilities:
Interest receivable (4,860) --
Prepaid expenses 147,901 --
Accounts payable 283,097 --
Accrued expenses (384,939) (10,000)
Notes payable (172,490) --
----------- -----------
Net cash used in operating activities (3,280,232) (252,110)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net (743,486) --
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from private placement 1,732,500 949,900
Proceeds from exercise of warrants 235,687 --
Loans to officers for stock purchase -- (337,500)
----------- -----------
Net cash provided by financing activities 1,968,187 612,400
----------- -----------
NET (DECREASE) INCREASE IN CASH (2,055,531) 360,290
CASH, BEGINNING OF PERIOD 3,643,266 16,050
----------- -----------
CASH, END OF PERIOD $ 1,587,735 $ 376,340
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 8,805 $ --
Income taxes $ 800 $ --
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
See accompanying notes to financial statements.
5
<PAGE>
ANTs software.com
NOTES TO FINANCIAL STATEMENTS
In the quarter ended October 31, 2000, the Company forgave $45,000 of principal
and $13,687 of accrued interest of a note due from the Company's President. The
Company recorded the transaction as Officer Compensation.
In the quarter ended October 31, 2000, a former employee executed a "cashless"
exercise of a warrant for 1,940 shares of the Company's common stock by
returning warrant to purchase 3,472 shares of common stock to the Company.
In the quarter ended October 31, 2000, the Company accepted 10,436 shares of the
Company's common stock from a former Company officer as payment in full of
$112,500 note due from the officer.
In the quarter ended October 31, 2000, the Company abandoned $483,914 of
leasehold improvements and lease deposits in connection with the termination of
the Company's lease of their future corporate offices.
6
<PAGE>
ANTs software.com
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business - ANTs software.com (the "Company"), a Nevada
corporation, was incorporated on September 24, 1996. The Company is the
successor to CHoPP Computer Corp., a Delaware corporation. In February
1999, the Company changed its name from CHoPP Computer Corporation to ANTs
software.com.
Going Concern - The Company has incurred significant losses since
inception and expects to continue to incur such losses until its software
successfully achieves commercial viability. The accompanying financial
statements were prepared assuming the Company will continue to operate on
a going-concern basis and do not include any adjustments to the recorded
amounts of assets or to the recorded amounts or classification of
liabilities which would be required if the Company were unable to realize
its assets and satisfy its liabilities and obligations in the normal
course of business.
Cash and Cash Equivalents - The Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.
Property and Equipment - Property and equipment are stated at cost with
depreciation provided over the estimated useful life of 5 years using the
straight-line method.
Research and Development - Company-sponsored research and development
costs related to both present and future products are expensed currently
as a separate line item in the accompanying statements of operations.
Pervasiveness of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Income Taxes - The Company accounts for its income taxes under the
provisions of Statement of Financial Accounting Standards ("SFAS") 109
("SFAS 109"). The method of accounting for income taxes under SFAS 109 is
the asset and liability method. This method requires the recognition of
deferred tax assets and liabilities for the expected future tax
consequences of temporary differences is accounting for tax and financial
reporting bases of other assets and liabilities. The provision for income
taxes in the accompanying financial statements represents the California
corporate minimum franchise tax.
Fair Value of Financial Instruments - Pursuant to SFAS statements 107,
"Disclosures About Fair Value of Financial Instruments," the Company is
required to estimate the fair value of all financial instruments included
on its balance sheet at October 31, 2000. The Company considers the
carrying value of such amounts in the financial statements to approximate
their current fair values.
Basic Income (Loss) Per Share - The Company adopted the provisions of SFAS
statements 128, "Earnings Per Share" ("EPS") that established standards
for the computation, presentation and disclosure of earnings per share,
replacing the presentation of Primary EPS with a presentation of Basic
EPS. It also requires dual presentation of Basic EPS and Diluted EPS on
the face of the statement of operations for entities with complex capital
structures. Basic EPS is based on the weighted average number of common
7
<PAGE>
ANTs software.com
NOTES TO FINANCIAL STATEMENTS
shares outstanding during the period, which totalled 12,847,706 and
11,657,165 for 2000 and 1999, respectively. The Company did not present
Diluted EPS, since the result was anti-dilutive in 2000 and immaterial in
1999.
Operating Segment Information - The Company operates in one industry
segment, computer software. Substantially all of the Company's assets and
employees are located at the Company's headquarters in Burlingame,
California.
2. INCOME TAXES
The Company has net operating loss carryforwards totaling approximately
$5.8 million for Federal income tax purposes available to offset future
taxable income through 2020.
Deferred tax assets consist substantially of the net operating loss
carryforward. The Company has made a 100% valuation allowance against the
deferred tax assets. The valuation allowance increased approximately $2.4
million in the six months ended October 31, 2000 representing the tax
effect of the Company's net taxable loss for that quarter. In assessing
the realizability of deferred tax assets, management considers whether it
is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of sufficient future taxable
income prior to the expiration of the net operating loss carry forward.
Management considered the scheduled reversal of deferred tax liabilities,
projected future taxable income and tax planning strategies in making this
assessment.
The Company has not filed Federal income tax returns since 1994 and has
not filed state income tax returns since inception. It is in the process
of gathering the information and filing prior year tax returns to become
current.
3. WARRANTS AND EMPLOYEE STOCK OPTIONS
As of October 31, 2000, the Company had outstanding warrants for 3,419,890
common shares. These securities give the holder the right to purchase
shares of the Company's common stock in accordance with the terms of the
instrument. Warrants to purchase 2,451,927 shares are exercisable at
October 31, 2000. There are no employee stock options outstanding or
exercisable at this date.
Outstanding warrants include warrants immediately exercisable into 23,334
restricted shares of common stock. All other warrants and stock options
were registered on a Form S-8 filed on September 27, 2000.
<TABLE>
<CAPTION>
Employee
Warrants Stock Options Total
-------- ------------- -----
<S> <C> <C> <C>
Outstanding at July 31, 2000 3,194,000 -- 3,194,000
Granted 385,334 -- 385,334
Exercised or retired ( 159,444 ) -- ( 159,444 )
--------- --------- ---------
Outstanding at October 31, 2000 3,419,890 -- 3,419,890
========= ========= =========
</TABLE>
8
<PAGE>
ANTs software.com
NOTES TO FINANCIAL STATEMENTS
4. OPERATING LEASES
On October 24, 2000, the Company signed an agreement to terminate an
operating lease with De Ritz, LLC for the new headquarters in 1528 El
Camino Real. The Company decided that the current temporary offices would
be sufficient according to the Company's immediate plan. The Company is
also looking to secure more office space in the current location to house
new hires. In connection with this termination, the Company abandoned
leasehold improvements and security deposits totaling $483,914 and three
months lease payments totaling $152,566.
5. LEGAL MATTERS
There have been no new developments or new lawsuits filed against the
Company since the Company's last 10-QSB filing.
9
<PAGE>
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
The forward-looking statements herein are based on current expectations
that involve a number of risks and uncertainties. Such forward-looking
statements are based on assumptions that the Company will have adequate
financial resources to fund the development and operation of its business, and
there will be no material adverse change in the Company's operations or
business. The foregoing assumptions are based on judgments with respect to,
among other things, information available to the Company, future economic,
competitive and market conditions and future business decisions. All are
difficult or impossible to predict accurately and many of which are beyond the
Company's control. Accordingly, although the Company believes that the
assumptions underlying the forward-looking statements are reasonable, any such
assumption could prove to be inaccurate and therefore there can be no assurance
that the results contemplated in the forward-looking statements will be
realized. There are a number of risks presented by the Company's business and
operations which could cause the Company's financial performance to vary
markedly from prior results or results contemplated by the forward-looking
statements. Such risks include failure of the ANTs technology, failure to
develop commercially viable products or services from the ANTs technology,
delays in or lack of market acceptance, failures to recruit adequate personnel,
and problems with protection of intellectual property, among others. Management
decisions, including budgeting, are subjective in many respects and periodic
revisions must be made to reflect actual conditions and business developments,
the impact of which may cause the Company to alter its capital investment and
other expenditures, which may also adversely affect the Company's results of
operations. In light of significant uncertainties inherent in forward-looking
information included in this quarterly Report on Form 10QSB, the inclusion of
such information should not be regarded as a representation by the Company that
the Company's objectives or plans will be achieved.
Overview
We are engaged in the development of a proprietary, software technology
that is intended to significantly improve the speed at which computers can
process commutative transactions. Our operations currently consist of start-up
activities, including research and development of its asynchronous
non-pre-emptive tasking software technology ("ANTs technology"), personnel
recruiting and capital raising. We intend to use the ANTs technology as the
basis for providing outsourcing services to enhance performance of ERP and other
software applications used by large enterprises and in e-commerce. We are in the
process of developing this technology and have not realized any revenues to
date.
Plan of Operation
Our operations over the next three to six months will primarily consist of
continued research and development of our proprietary software technologies.
Research and development will be focused initially upon developing a prototype
system utilizing and demonstrating the capabilities of our technology. We
anticipate this prototype system to be completed during the first half of
calendar 2001. Thereafter, research and development will be directed towards
developing initial customer applications utilizing our technology. General
commercial applications utilizing our technology are expected to be available in
the second half of calendar 2001. We also expect to begin recognizing revenues
from the sales of our products at that time.
The majority of our operating expenses and costs over the next three to
six months are expected to be for and in connection with existing and additional
personnel. We currently have fifteen fulltime employees, and three consultants
and are actively recruiting additional personnel. We view the recruitment of
additional qualified technical personnel as essential to the further development
and commercialization of our proprietary technologies. Should we be successful
in our recruitment efforts, we expect that our personnel and other operating
costs will increase significantly over current levels.
We believe that additional sources of financing can be secured to enable
us to complete the development and commercialization of our proprietary
technologies, although there is no assurance of our ability to do so.
10
<PAGE>
General and Administrative
General and administrative expenses increased from $242,110 during the six
months ended October 31, 1999 to $2,310,514 for the six months ended October 31,
2000. The Company incurred salary expenses of approximately $761,600. These
expenses are related to approximately 10 administrative and corporate management
employees. The Company expects that its general and administrative expenses will
continue to increase as additional staff are recruited. The Company intends to
continue to focus significant resources on recruiting additional personnel for
engineering, technical development, marketing and administrative roles. There
can be no assurances that the Company will be able to recruit the appropriate
personnel necessary for the development of its products.
Professional service expenses increased from near $0 during the six months
ended October 31, 1999 to $764,459 for the six months ended October 31, 2000.
These were principally legal expenses associated with general corporate matters,
review of the Company's legal records, patents and trademarks, and current
litigation. Professional service expenses were also incurred for retention of
certified public accountants, web site development and recruiting. The Company
expects to continue to incur significant professional fees with providers of
outside legal, accounting, technical and financial services as the Company
continues to execute its operation plans.
Research and Development
We incurred research and development expenses of approximately $662,786
during the second quarter. These expenses are related to the research, testing
and product development of the Company's proprietary software.
Notes Receivable from Officers for Stock Purchases
Notes receivable from officers for stock purchases decreased during the
six months ended October 31, 2000 from $337,500 to $180,000. We forgave
one-fifth, $45,000, of the notes receivable from the Company's President
pursuant to the terms of the agreement. In addition, the prior Managing Director
settled his outstanding notes of $112,500 by selling back 10,436 shares of ANTs'
stock at the fair market value as of September 29, 2000.
Capital and Liquidity Resources
We anticipate significantly increasing expenditures over the coming months
as the Company continues to develop its technology. We do not expect to realize
any revenues through calendar year 2000. Our cash balance as of October 31, 2000
was approximately $1.6 million, which would be adequate to fund our activities
through the end of the calendar year at its current rate of spending. There can
be no assurance that our continued product development and infrastructure
development will not require a much higher rate of spending. We are currently
seeking investment from additional investors to support continued operations,
although there can be no assurance that we will be able to obtain such
investment.
PART II. OTHER INFORMATION
ITEM 2. Changes in Securities
In September 2000, we completed the sale, through a private offering, of
233,332 shares of Common Stock at a price of $8.25 per share. The net proceeds
of the offering were $1,732,500, which was comprised of gross proceeds of
$1,925,000 less offering expenses of $192,500. Under the terms of the sale, we
issued Warrants to purchase 23,334 shares of common stock to the investors and
the Placement Agents who assisted in securing investors to purchase this Common
Stock. The terms of the sale also require us to file a registration statement
with the Securities and Exchange Commission for the Common Stock issued and
underlying the Warrants issued either if certain funding requirements are met or
on a best efforts basis.
11
<PAGE>
ITEM 4. Submission of Matters to a Vote of Security Holders
The annual Shareholder Meeting of the Company was held on September 12,
2000. Proxies for the meeting were solicited pursuant to Regulation 14A under
the Exchange Act. On the proposal to elect 6 Directors of the Company in three
classes, 12,756,197 shares of the Company's voting securities voted on the
matter, of which 10,600,426 shares were voted for Mr. Frederick D. Pettit as a
Class 3 Director, 10,583,559 shares were voted for Ms. Alison B. Hicks as a
Class 3 Director, 10,598,956 shares were voted for Dr. Clive G. Whittenbury as a
Class 2 Director, 10,600,321 shares were voted for Mr. Dean Witter III as a
Class 2 Director, 10,600,254 shares were voted for Dr. John. Williams as a Class
1 Director and 10,599,961 shares were voted for Mr. Richard J. Lee as a Class 1
Director. On the proposal to adopt the ANTs software.com 2000 Stock Option Plan,
23,881 shares of the Company's voting securities were abstaining, 7,194,940
shares voted for the proposal and 92,193 shares voted against the proposal. On
the proposal to re-incorporate the Company in Delaware, 16,262 shares of the
Company's voting securities were abstaining, 7,186,705 shares voted for the
proposal and 108,047 shares voted against the proposal. On the proposal to
change the fiscal year end of the Company to December 31, 12,535 shares of the
Company's voting securities were abstaining, 10,590,417 shares voted for the
proposal and 8,835 shares voted against the proposal. On the proposal to ratify
the selection of Farber & Hass, LLP, as independent public accountants for the
Company for the fiscal year ending December 31, 2000, 20,714 shares of the
Company's voting securities were abstaining, 10,568,273 shares voted for the
proposal and 22,800 shares voted against the proposal.
ITEM 5. Other Matters
Resignation and Appointment of Officers and Directors
Dr. John H. Williams resigned as a director of the Company as of September
13, 2000. Mr. Thomas Holt was appointed as a director of the Company by
unanimous written consent of the Board of Directors on November 13, 2000. Mr.
Dean Witter III resigned as a director of the Company as of December 12, 2000.
Mr. Miles Mochizuki resigned as acting Chief Financial Officer and
Secretary as of October 31, 2000. Mr. William J. Peichel was appointed as the
new Chief Financial Officer and Secretary by unanimous written consent of the
Board of Directors on October 31, 2000.
Mr. Frederick D. Pettit resigned as President, Chief Executive Officer and
as a director of the Company as of December 12, 2000. Dr. John H. Williams was
appointed interim Chief Executive Officer of the Company by the Board of
Directors of the Company at the Board meeting held on December 12, 2000. Dr.
Clive G. Whittenbury was appointed interim Chairman by the Board of Directors of
the Company at the Board meeting held on December 12, 2000.
Re-incorporation in Delaware
In order to change the state of incorporation of the Company to Delaware,
the Company is filing an Agreement and Plan of Merger with the Secretary of
States of Nevada and Delaware.
Change in Fiscal Year
The Company is changing its fiscal year end from April 30 to December 31.
The next quarter will therefore end on December 31, 2000. The report covering
the transition period from the end of the last fiscal year to December 31, 2000
will be filed on Form 10-K or Form 10-KSB.
RISK FACTORS
In addition to other information in this 10-QSB, the following risk
factors should be carefully considered in evaluating our business because such
factors currently may have a significant impact on our business, operating
results and financial condition. As a result of the risk factors set forth below
and elsewhere in this 10-QSB, and the risks discussed in our other Securities
and Exchange Commission filings, actual results could differ materially from
those projected in any forward-looking statements.
12
<PAGE>
A failure to obtain additional financing could prevent us from executing
our business plan. We anticipate that current cash resources will be sufficient
to fund our operations through January 2001. We believe that additional sources
of financing can be secured to enable us to complete the development and
commercialization of our proprietary technologies, although there is no
assurance of our ability to do so. A failure to obtain additional funding could
prevent us from making expenditures that are needed to allow us to hire
additional personnel and continue development of the technology. If we raise
additional funds by selling equity securities, the relative equity ownership of
our existing investors could be diluted or the new investors could obtain terms
more favorable than previous investors. If we raise additional funds through
debt financing, we could incur significant borrowing costs.
Market acceptance of our products and services is not guaranteed. We are
at an early stage of development and our earnings will depend upon broad market
acceptance and utilization of our intended products and services. There can be
no assurance that our product and technology development efforts will result in
new products and services, or that they will be successfully introduced.
History of operating losses and may never become profitable. We have not
recognized any operating revenues to date. We expect to begin recognizing
revenues from the sale of products and services in the second half of calendar
2001. There is no assurance that our plans will be realized, that we will be
able to generate revenues in 2001 or that we will achieve profitability in the
future.
Limited market for our common stock. Our common stock is not listed on any
exchange and trades in the over-the-counter (the "OTC") market. As such, the
market for our common stock is limited and is not regulated by the authorities
of any exchange. Further, the price of our common stock and its volume in the
OTC market may be subject to wide variations. There are no recognized investment
analysts who follow our common stock and it does not have material institutional
ownership. In December 1999, we applied to list our Common Stock on the Nasdaq
National Market. In April 2000, a denial letter was issued to us by the Nasdaq.
In August 2000, we filed to list our common stock on the American Stock
Exchange. This application is pending a resolution of the matters cited in the
Nasdaq's denial letter. It is our intent to continue to pursue the listing of
our common stock on the Nasdaq National Market and the American Stock Exchange,
but there is no assurance that we will be successful in our efforts.
SEC investigation. In January 2000, the Securities and Exchange Commission
(the "SEC") issued an order that a private investigation be made to determine
whether any persons or entities had made false or misleading statements
regarding the value of our stock in postings made on Internet investor bulletin
boards. We have cooperated fully with the SEC and believe that none of our
officers, directors or advisory board members have committed any wrongdoing in
this matter. The SEC inquiry was one of the matters cited in the Nasdaq denial
letter noted above.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANTs software.com
Date: December 14, 2000 By: /s/ JOHN H. WILLIAMS
------------------------------------
John H. Williams, Ph.D.
Chief Executive Officer
Date: December 14, 2000 By: /s/ William J. Peichel
------------------------------------
William J. Peichel
Chief Financial Officer
14
