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ANTS SOFTWARE INC.
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April 23, 2003
Dear ANTs Shareholders:
It's been a while since my last shareholder letter so I would like to update you
on the significant progress we've made since then and discuss one of the issues
up for vote at this year's shareholder meeting.
Many of you know that on March 24th, Gary Ebersole accepted the position of
President and Chief Operating Officer. Gary is a strong addition to our team
with extensive experience bringing database products to market. Gary oversees
sales, marketing, and product development and I believe that with his
experience, he will rapidly accelerate these efforts.
With Gary's hiring and the recent addition of Steve Messino as VP of Sales, we
have reached an important milestone. The company is now laser-focused on sales
and marketing. Shortly you'll see changes in how we present ANTs to potential
customers (most notably on our web site).
Two recent successes that will undoubtedly help in the sales and marketing
effort are the signing of our first license agreement and the announcement that
another potential customer is evaluating the ANTs Data Server (ADS).
In early March, Wireless Services Corporation (HTTP://WWW.WIRELESSCORP.COM)
which had been evaluating ADS for about six months, signed a license agreement
(our first). WSC can now incorporate ADS in its product which is used by
wireless carriers to offer (among other things) cell phone text messaging. WSC
is a rapidly growing private company and we look forward to a strong
relationship with them.
Most recently, Orion Telecommunications, a well-established provider of prepaid
calling cards agreed to evaluate ADS. We also recently completed porting ADS to
the 64-bit Sun/Solaris platform. Now, with ADS deployable on both Windows and
Solaris, the potential market for our product is larger. I encourage you to
visit our web site to view the press releases announcing these events.
In the near future we intend to announce the availability of the next version of
the ANTs Data Server. This version will include a number of features that will
appeal to a wider range of customers, further expanding our market potential.
The entire organization is in high gear and focused on one goal for 2003:
customers, customers, customers!
Annual Meeting/Proxy Proposals
This year's shareholder meeting will be held May 6th at 2pm at the Crowne Plaza,
San Francisco International Airport, 1177 Airport Blvd., Burlingame, California
94010, (650) 342-9200. I encourage you to attend and look forward to meeting
those who can.
In this year's proxy, we have four proposals up for your approval:
1) John Gaulding and I are up for election to the board of directors
2) We'd like to amend our Amended and Restated Certificate of
Incorporation to authorize 50,000,000 shares of undesignated Preferred
Stock, with a par value of $0.0001 per share;
3) We'd like to amend our 2000 Stock Option Plan to increase the shares
reserved under the plan by an additional 1,500,000 shares of Common
Stock;
4) We'd like you to ratify the selection of Burr, Pilger & Mayer, LLP, as
independent accountants for the Company for the year ending December
31, 2003
A number of shareholders have inquired about proposal #2. Let me take this
opportunity to explain our rationale.
As stated in the proxy statement, one of the reasons is to give management and
the board of directors the ability to quickly take advantage of business
opportunities. Such opportunities could include: merger, acquisition or a large
institutional financing deal. For example: assume that we're presented with an
opportunity to raise significant funds from an institutional investor. Most
institutional investors require preferred stock when they do this type of deal.
If we do not have preferred stock authorized, we would need to convene a special
and expensive shareholder vote, a process that could take up to 120 days. During
that delay it is possible the deal could grow cold. We would rather avoid both
the delay and the expense by getting your approval for the authorization of
preferred shares now, as part of the normal proxy process.
I believe that if you were to approve the authorization of preferred shares, you
would be providing the management team and the board of directors with an
important tool we could use to quickly capitalize on strategic business and
financing opportunities. Please note that we do not have any current plans,
proposals or arrangements written or otherwise at this time to engage in any
business or investment opportunity involving the issuance of preferred stock.
Please note that a majority of all outstanding shares must vote for this
proposal in order for the proposal to pass, unlike the other proposals which
require only a majority of voted shares. So I urge you to vote on this and all
other proposals.
As part of your decision process, I encourage you to review the definitive proxy
statement, which contains the full text of each proposal. You can view the proxy
statement here:
http://www.sec.gov/archives/edgar/data/796655/000120677403000254/d12316.txt
I look forward to an exciting 2003!
Sincerely,
Frank Ruotolo
Chief Executive Officer
This letter is not an offer to sell, nor solicitation of offers to buy,
securities. This letter contains certain forward-looking statements as that
phrase is defined in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to a number of risks and uncertainties
that could cause actual results to differ materially from those projected. Such
risks include but are not limited to the following: there can be no assurance
that ANTs software inc. (the "Company") will produce the expected results or
that it will result in a commercially viable product; that the Company will
secure the necessary current and additional financing, intellectual property and
staff to support current and future operations. Further risks are detailed in
the Company's filings with the Securities and Exchange Commission, including the
Company's most recent form 10-KSB for the fiscal year ended December 31, 2002.
The Company undertakes no obligation to revise or publicly release the results
of any revision to the forward-looking statements.