Ants Software Sells Stock as It Issues Closure Warning
Santa Barbara-based Ants Software.com, a 20-year-old software developer with no revenue, sold stock valued at $4.8 million over the last two months even as it warned investors it may go out of business.
Ants did so by selling about 500,000 shares of restricted stock at an average price of $9.60 each, or about half the market price of the company’s stock on the day of each sale. Its shares lost half their value in the last week as Ants repeated the “substantial doubt” expressed by the company’s independent auditor about its ability to stay in business.
Ants Chairman Donald Hutton said he can’t explain why the shares, which traded below $1 in August, soared more than fiftyfold in four months, trading as high as $55.63 last week. Ants fell $12.63 to close at $21.13 on Wednesday, on trading of 746,100 shares, after rising as high as $32 Wednesday morning.
The company--based since January in Hutton’s Santa Barbara home--warned investors earlier this month that there is “substantial doubt” about its ability to continue as a going concern. Its net worth was $136,130. The value of Ants’ 12 million shares closed Wednesday at $253.3 million, down from $384 million in the morning.
“It’s a casino. It has nothing to do with value,” said Hutton, describing the wide price swings of his stock.
Ants says it has developed a way to speed up data. Twice before its claims to have forged technological breakthroughs left investors disappointed after bursts of optimism.
“We will increase the speed for the dissemination of data through existing software 1,000 times faster,” said Hutton, 63, who controls 3.3 million shares of the company.
Ants stands for Asynchronous Nonpreemptive Tasks. The company changed its name from Chopp Computer to Ants Software.com on Feb. 12 after failing to find success as a supercomputer company.
Ants’ corporate publicist, Elias Argyropoulos, is a former stockbroker. He was censured, fined $200,000 and banned from the brokerage industry in 1995 after the National Assn. of Securities Dealers found that he engaged in “manipulation and deceptive practices” as well as unauthorized trading in his customer’s accounts.
