So what's up with Panda now? They issued a news release last Friday (14 May) headlined "The Panda Project, Inc. Enters into Definitive Agreement to Sell Assets to Silicon Bandwidth, Inc" in which it seemed to me that they are selling essentially everything, as well as fixing the conversion price of the outstanding convertibles at $0.261 per share of common.
Today they filed an 8-K detailing the transaction. It seems to me that there will now be at least 42,488,243 shares of PNDA outstanding (the convertible holders will get 21,333,333 shares).
Some initial thoughts on this. (I've just had a quick peek over everything so far, I may very well have missed important stuff)
Panda will receive a 10% stake in the new company, Silicon Bandwidth, which will be "initially be capitalized with $6,000,000." Assuming that this makes Panda worth essentially $600K, then would not each common share have an intrinsic value of essentially $600K/42.5M = 1.4 cents each?
I must admit that I am somewhat baffled as to why Panda would go to the effort of entering into a difficult and complicated agreement such as this (instead of just going bust). Who benefits, and how? What does Silicon Bandwidth get in exchange for (apparently) bailing them out?
- Daniel |
