To OTC Journal Members:
 

Amnis Systems (OTC BB: AMNM): Turn Around Time Approaching

I've gotten tons of emails from OTC Journal members, all wondering whether Amnis should be chalked up in the loser column and ejected from the portfolio, or held on to for a swing to the upside. Uniformly, I have responded by saying a turn around strategy was in place, and investors would probably see some evidence unfold in January.

Today, just after the market closed, Amnis put out a press release which begins to give investors some clues as to where the company is headed.

Amnis disclosed it had retained the services of an investment banking firm to complete a $5 million financing. In addition, the press release disclosed it was negotiating with its holders of $3.5 million in convertible debt to fix their conversion price.

Despite the excellent fundamental progress the company has made in the last six months, the stock price has not faired well. Amnis has doubled its sales each quarter since the June time frame, but the stock is trading at just under $.03, down from a July high of $.15. 

The stock traded poorly for one simple reason: excess supply. Excess supply from convertible debt holders who have no floor price on their conversion feature. Therefore, no matter how low the stock price goes, someone can still sell and make money.

I am expecting the whole turn around picture to be a multi step process. Both of the elements disclosed in today's press release need to be completed, and we need to know the set conversion price. If it is above the current market, this will be extremely bullish for the stock and will precipitate a Trading Alert from the OTC Journal. 

An additional $5 million financing should give the company all the working capital it needs to keep moving forward in 2004 and would be an endorsement of the company's upside potential. 

No doubt today's press release was designed to keep the inquiring minds who want to know informed as to where the company is headed. I am cautiously optimistic that the company can execute. New CEO Steve Peltier needs an opportunity to take this dog out and see if it will hunt. Peltier has done it before, taking his last assignment for zero to $100 million in sales in seven years.

Demand for video streaming technology is growing was again with the surge in the tech sector, and Amnis should participate.

While we wait for further developments, you might want to drop back and punt a few more shares into the portfolio if you're wearing your gambler's hat today and have a high cost basis. The more conservative approach would be to wait for the company disclose the final arrangement. However, "conservative" in the same sentence with a $.03 stock is probably an oxymoron.

Here is the complete text of today's news release for your review:
 

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