Bastion Tells SKYA Holders to Reject SkyAI's $3.00 Buyback

Bastion Trading says it owns about 9.99% of SkyAI (Nasdaq: SKYA) together with its affiliates. It has told the company it will not tender its shares into the planned $3.00 cash offer. In an open letter on 14 October, it asked other stockholders to stay out as well until SkyAI says what happened to its Solana.

If you hold SKYA, that is the decision in front of you. SkyAI wants to buy back up to 95% of each class of its stock and warrants at $3.00 in cash, for a maximum of about $201 million. It says neither the board nor management makes any recommendation on whether you tender. Bastion says the shares are worth about $3.30 and will not sell for less than $3.50.

The cash for the buyback is coming, in part, from the asset the company is built on. SkyAI's 11 October press release says it expects to fund purchases using cash on hand. It also expects to use proceeds from sales of SOL held in its treasury.

SkyAI Sold Half Its SOL, Then Reported 600,000 Left

The disclosed balances moved faster than the explanations. On 14 September SkyAI said it continued to hold more than 2 million SOL as its primary treasury reserve asset, nearly all of it staked. On 11 October, announcing the offer, it said it had recently sold approximately 1 million SOL, about half its holdings, and held approximately 1 million as of that date. Its 13 October Form 8-K then put the remaining balance at approximately 600,000 SOL. It also said the company had about 80% of the cash required for the offer.

That last figure sits roughly 400,000 SOL below the 1 million reported two days earlier. SkyAI has not given a dated breakdown of the sales behind either number, or the prices it realised on the earlier tranches. Going from more than 2 million SOL to about 600,000 means at least 1.4 million SOL left the treasury. That is roughly 70% of it, which matches the percentage Bastion cites.

At about $104 per SOL on 14 October, the 600,000 that remained would be worth roughly $62 million.

What Bastion Wants Before the Offer Opens

Bastion's letter asks for every recent sale to be disclosed: dates, quantities, average prices, and gross and net proceeds. It also wants to know how the board approved the sales, and how much of the remaining SOL is liquid rather than locked. It wants new independent directors identified by stockholders, and an independent committee with its own lawyers to run the offer.

On price, Bastion wants at least $3.50 per share or eligible warrant. Its own estimate of net asset value is about $3.30 per share, which assumes SOL at $110. It also wants two conditions removed: the 50% minimum tender, and the requirement that SOL stay above $100. Bastion calls the SOL condition a source of unnecessary uncertainty. It says the condition gives SkyAI too much room to abandon the offer on short-term price moves.

Bastion's argument is that a board which received more votes withheld than in favour should not set the terms. At the September shareholder meeting all five SkyAI directors drew more votes against them than for them, in some cases nearly three to one. They kept their seats because shareholders had no direct option to vote for their removal.

Bastion Also Questions the Advisor Warrants

Bastion says the strategic advisor warrants were granted without cash payment to Sol Markets. It says that entity is controlled by James Zhang, the brother of SkyAI director and chief investment officer Alice Zhang. It adds that Sol Ege Limited received a $10 million upfront payment under a 20-year consulting agreement. It says James Zhang controls that entity too, citing SkyAI's 10-K.

SkyAI answered that line on 14 September. It said the consultant and strategic advisor agreements were reviewed by the board with independent advisors and signed on 25 August 2025. The advisor warrants cover 6,321,367 shares, it said. The strategic advisor has not sold any shares or warrants, it said, and holds no hedges. Bastion's allegations have not been tested by any regulator or court.

The Offer Lapses if SOL Closes Below $100

SkyAI's 8-K ties the offer to two conditions. SOL's closing price has to stay above $100 for the whole offer period, and at least 50% of each class must be validly tendered. The company says it may waive those conditions. The buffer is thin. SOL's daily close slid from about $122 on 4 October to about $107 on 13 October. The token was trading around $104 on 14 October.

Bastion's Schedule 13D, filed on 3 September, shows it bought into SkyAI's August 2025 private placement at $6.50 per share and $6.4999 per pre-funded warrant. That is more than double the $3.00 now on the table. That is one reason it can afford to sit out.

SkyAI also rejected a takeover approach from Forward Industries. Its press release says the board unanimously determined that Forward's latest proposal undervalues SkyAI and is not in its shareholders' best interests. It says the proposal, at 0.306 FWDI shares per SkyAI share, carried no certainty of timing or value.

No Schedule TO Yet

SkyAI's SEC filing list showed a pre-launch tender offer communication, a Form SC TO-C, on 13 October. There was no Schedule TO, the filing that formally opens an offer. The company expects to commence the offer on or about 15 October and keep it open for 10 business days unless extended. It says the final terms will be in the Schedule TO it planned to file after the market close on 15 October. Until that document lands, what stockholders are actually being offered is not fixed.

By mid-afternoon UTC on 14 October, no filing or press release from SkyAI answering Bastion's letter had appeared. Bastion says it is prepared to pursue all available legal remedies if SkyAI does not act.