I'm voting NO Why I'm voting to reject the proposition:
1) AM shareholders are not getting much measurable value for the immediate cash infusion to HLS balance sheet and their fast track listing on a stock exchange.
- HLS will receive $25M from AM balance sheet
- Post arrangement, the Automodular value based on circular pro forma market cap of the new entity will be $24.64M (New entity value (p.24): $314,113M X 7.92% (Future Automodular ownership of the new entity - 2,151,900 / 27,429,897)
- Net ~0
2) AM shareholders didn't invest in the company to see their initial AM investment now tied to a volatile Bio company and see their capital at risk. AM was a deep value stock with tons of cash to support it's value. HLS could have good growth potential but that's not the point.
3) The amount reserved in the Preferred structure (after the GM litigation payment) could be accesible in 2 years only.
4) Current HLS shareholders could increase the new entity share float by almost 4.9M shares if they exercise all their options after the lock-Up agreement (180 days after the effective date). The number of outstanding shares could increase from 27.430M to 32.329M. Consequently, current AM shareholder would see their ownership shrink from 7.92% to 6.66%. Their exercise price is $9.5-$10
5) I always found that AM management made good decisions to optimize shareholder value over the 6-7 years that I've owned the stock. But this time, they are not able to demonstrate much added value to AM shareholders. Also, I have a hard understanding why they didn't wait until the trial date before sending the circular. The timing looks really bad.
Please, just close down the company and redistribute the net cash. That's what most shareholders were expecting.
If I'm missing something, please don't hesitate. For all the reasons above, for me the decision is simple: Reject the proposition.
This is my opinion
Good luck