Stock filing warns Alabama toll road developer is undercapitalized; CEO pleaded guilty to sex crime

An artist's rendering of the proposed Alabama tollway train station

MOBILE, Alabama
Proposed toll road developer Ameri-Metro sent out a broadcast email Wednesday morning indirectly implying it had $37 billion "available" to develop its project, citing a 2010 stock filing. That stock filing, though, shows only that the company would like to sell that amount in bonds.
The filing with federal securities regulators also says that Ameri-Metro was so thinly capitalized as of July 31, 2010, that its auditor warned that it was in danger of going out of business. At that time, Ameri-Metro’s liabilities of $1.58 million outweighed its assets of $1.49 million.
The filing indicates that the company’s main asset was 50 acres of land, and that any shares sold were likely to trade over the counter, not on a major exchange. The filing said shares could price below $5, which would mean it would be a "penny stock," subject to more restrictive federal rules.
Also Wednesday, Ameri-Metro Chief Executive Officer Shah Mathias, a Pennsylvania real estate developer and financier, said he had pleaded guilty to a sex crime in Pennsylvania. Pennsylvania state records show he is registered as a sex offender because of unlawful contact or communication with a minor.

An artist's rendering of the proposed Alabama tollway international airport.

Mathias said he had pleaded guilty to the crime, which Pennsylvania law says must be at least a third-degree felony, despite alibi evidence that showed he was out of the country. He would not discuss the subject further.
Published reports show Mathias was acquitted in 2008 of a second sex charge in Carlisle, Pa. Mathias said Wednesday that case involved an attempt to extort money from him after he cut off funding to a business associate.
Ameri-Metro, of York, Pa., said Tuesday that it wanted to build a combination toll road and railroad from Orange Beach to a point on the Tennessee state line northeast of Florence, generally paralleling the path of U.S. 43 through western Alabama. It would finance the project with $7 billion in bonds issued by a nonprofit entity, Alabama Toll Facilities Inc.
The proposal was greeted with surprise and some skepticism by state and local officials.

An artist's rendering of the proposed Alabama tollway inland port facility.

Included in the plan is a giant warehousing and trans-shipment complex, as well as an airport with four 18,000-foot runways. Each would be a third longer than the 12,600-foot runway at Huntsville International Airport, currently the longest in Alabama.
A statement emailed Wednesday morning by company spokeswoman Amanda Flontek to a list characterized as editors, reporters and legislators pointed to the stock filing, which shows that two Ameri-Metro subsidiaries have proposed as much as $30 billion more in bonds for high-speed rail construction.
The same statement said the company had sent its initial press release Tuesday to more than 400,000 Alabamians.
Flontek’s statement said that the surprised reaction from state and local officials to Ameri-Metro’s proposal was being "addressed."
Mathias has met with some Alabama state officials.
Allison Scott, a spokeswoman for Lt. Gov. Kay Ivey, confirmed Mathias’ account that he had lunch with Ivey sometime in 2008, when Ivey was leading the Black Belt Action Commission. Scott was unable to answer whether Ivey endorses Mathias’ plan.
Mathias said he met with Joe McInnes, transportation director throughout the Riley administration, during the same trip, but McInnes said he does not recall that meeting.
"Sounds like pie in the sky to me," McInnes said of the project, saying a previous west Alabama toll road proposal failed in part because developers didn’t work with the Alabama Department of Transportation and other state officials.
Flontek and Mathias refused to discuss the stock filing, saying they were bound by federal rules that bar companies from talking about proposals to sell stock. Such a quiet period runs from when the statement is filed until the Securities and Exchange Commission declares a registration "effective," the SEC says.
The stock filing indicates that Ameri-Metro would like to sell up to 500,000 shares at $20 apiece. The company would use the up to $10 million to build a corporate headquarters, for sales and marketing and as working capital, it said. Mathias would retain at least 93 percent ownership through his 10 million-plus shares. Ameri-Metro said it had tried to sell shares privately before the middle of 2010, but hadn’t succeeded.