The Fortress Trading flag indicates that 70% of the tokens have been sold, and they are demanding th

Bastion Trading is challenging SkyAI’s tender offer terms, demanding disclosure of details regarding the large-scale sale of Solana holdings.

SkyAI (Nasdaq: SKYA), as the financial backbone of the Solana ecosystem, has faced challenges from Bastion Trading, whose shareholders hold a 9.99% stake in the company. Bastion Trading is demanding not only an increase in the offer price but also that SkyAI provide detailed information on its sale of approximately 70% of Solana (SOL) holdings within less than one month.

In a letter dated October 14th, this aggressive investor demanded that SkyAI raise the offer price to at least $3.50 per share or equivalent warrants, appoint additional independent directors to the board, and provide clear instructions regarding the timing, price, and process of selling SOL. This letter was sent three days after SkyAI announced its tender offer on October 11th. Prior to that, SkyAI had rejected an offer from a company called Forward Industries. Bastion Trading believes that the current terms of the deal are unfair, and since the board has lost shareholder support, it should not continue to lead this transaction.

Why does Bastion think $3.00 is too low?

Bastion Trading estimates SkyAI’s net asset value per share to be around $3.30, and they hope to raise the offer price to at least $3.50. According to the letter, this valuation assumes that the price of SOL is $110. The calculation is based on the market value of Solana holdings plus cash, minus liabilities, divided by the fully diluted share capital.

In addition, the investor also requested the removal of two conditions: first, the “$100 SOL price trigger condition” – this clause allowed the company to abandon the tender offer during periods of short-term price fluctuations; second, there must be a minimum participation threshold of 50% for each type of securities. Additionally, Bastion Trading expressed opposition to the strategic advisory stock options held by Sol Markets. Sol Markets is a entity controlled by James Zhang, brother of Alice Zhang, who is both a director and chief investment officer at SkyAI. Bastion believes that these stock options should not be treated on an equal footing as the shares held by external investors.

The core of the dispute lies in the sale of 70% of SOL holdings

. A more contentious issue is related to information disclosure. According to SkyAI’s tender offer announcement, the company sold approximately 1 million SOL, which accounted for about half of its cash reserves. However, the 8-K form filed on October 13 indicated that the remaining SOL amount was only around 600,000 units. Bastion pointed out that this means that within less than a month, approximately 70% of the company’s cash assets were sold. This occurred after SkyAI reiterated its strategy for investing in Solana digital assets on September 14, when the company held more than 2 million SOL.

Bastion argued that shareholders were never informed of the specific dates of the sales, the prices at which transactions were completed, or the approval process behind the disposition decisions. This sequence of events raises questions regarding compliance with securities laws and NASDAQ disclosure regulations. So far, SkyAI has not responded publicly to this letter.

The uncertainty behind the data

This negotiation isn’t one-sided at all. The net asset value of $3.30 cited by Bastion relies on the assumption that the SOL price is $110. On October 14th, the trading price of SOL was close to $104.79, which means the implied value would decrease accordingly. Of course, an accurate recalculation would require access to SkyAI’s complete balance sheet. Since the final tender offer documents hadn’t been submitted at the time the letter was issued, the final price, funding arrangements, and transaction terms remain undisclosed.

Bastion also referred to the results of the annual shareholders’ meeting: all five current directors received more “no-confidence” votes than “support” votes, with the ratio sometimes approaching three to one. The question remains whether this result will prompt SkyAI to revise its offer or reorganize its board of directors.

Looking ahead, Bastion stated that they would not accept the offer under the current terms and said they were “ready to take all available legal measures.” Key developments include SkyAI’s official response, whether an independent committee will be established, and the submission of the tender offer documents containing the final terms. SkyAI’s disputes regarding SOL’s financial situation reflect a broader trend among public companies to include their balance sheets in their holdings in cryptocurrencies. This includes Forward Industries’ own $25 million Solana balance sheet.