Letter To The Shareholders
A Periodic Update - September 2010
I wanted to take this opportunity to provide a brief update related to a couple of specific areas. I plan to release a more comprehensive update letter by the end of the month.
I wanted to remind everyone of our upcoming shareholder meeting. Based on some of the questions that I have been getting, I think there may be some confusion over the proposal to expand our authorized common shares. We are not issuing 40 million new shares. In fact we are not planning to issue any new shares. The financing that we did this spring, in the form of convertible notes, basically used up all of our available shares. Once the shares are converted, we will be approaching the 120 million share limit in our articles of incorporation. We are simply proposing that our articles of incorporation be changed to allow the shares to be issued if needed, in the future. We, as management, believe that this is prudent and in the best interest of the company and all shareholders to approve this increase in authorized shares.
Some of you may have received calls asking to vote your proxy and may be wondering about it. This year we hired a proxy solicitation firm. Historically, less than 35% of our outstanding shares have been voted by shareholders at our annual meetings. It takes 50% to have a quorum. In the past, brokerage firms could vote on routine proposals, like election of Directors, on behalf of their clients who did not vote. That has changed and brokers can no longer vote for Directors on behalf of their clients who do not vote. If we do not have 50% of the shares voting, there will not be a quorum and therefore, it will not be a valid meeting. Since it costs $50,000 to $70,000 for a meeting, we need 50% of the shares to vote to avoid wasting that money.
We invite anyone who is interested to come to the meeting, which we will hold whether there is a quorum or not. The meeting itself is largely administrative, but we will present some information on our current activities. The real point of interest should be the open house at our facility, where you can see first-hand the exciting projects that we are working on. Even if you plan to attend the meeting, I would encourage you to vote your shares in advance using the proxy material that you received from your broker, or on-line using the instructions that you received from your broker. This will shorten the administrative portion of the meeting and allow more time for the information that you really want to hear. For those of you that are unable to attend, we will put our presentation slides on our website following the meeting.
Just to remind everyone, our meeting will be held at Maggiano’s Little Italy, 10910 Domain II Drive, Suite 100, Austin, TX 78756 on Tuesday, October 5, 2010 10:00 a.m., Central Daylight Time. For those of you that may be coming from out of town, we have reserved a block of rooms at The Westin Austin at the Domain, 11301 Domain Drive, Austin, TX 78758. Rooms are $145 per night and are reserved under the name “ANI Annual Meeting”. To book one of these rooms, call the Westin at (512) 832 – 4197 before September 27, 2010.
A second, somewhat related topic is an upcoming registration statement that we will be filing. We will be filing an S-1 with the SEC to register the shares related to the financing that we did this spring. These are not new shares that we will be selling. The S-1 is a legal document that requires a prescribed format and people often confuse the registration of existing shares with shares that will be sold in the future.
Finally, as I mentioned in the opening paragraph, I plan to do a more comprehensive letter before the end of September. As opposed to an overall update, like with previous letters, I thought that I might do the next one in question and answer format to address questions that you may have. Please send any questions for the letter to me at dbaker@appliednanotech.net. I can’t guarantee that I will be able to answer every question submitted, but certainly can will try to address all appropriate questions.
Sincerely,
Doug Baker
Chief Executive Officer
Safe Harbor Statement
This letter contains forward-looking statements that involve risks and uncertainties concerning our business, products, and financial results. Actual results may differ materially from the results predicted. More information about potential risk factors that could affect our business, products, and financial results are included in our annual report on Form 10-K for the fiscal year ended December 31, 2009, and in reports subsequently filed by us with the Securities and Exchange Commission ("SEC"). All documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval System (EDGAR) at www.sec.gov or from our website at . We hereby disclaim any obligation to publicly update the information provided above, including forward-looking statements, to reflect subsequent events or circumstances.