TL;DR:
- SkyAI launched a $201 million tender offer after liquidating its entire Solana treasury, accumulating $223.8 million in cash as of October 16, 2026.
- Bastion Trading reported that 3,955,293 strategic advisory warrants could channel up to $11.9 million to entities tied to the brother of director Yuwen Zhang.
- The repurchase offer establishes a unit price of $3.00 per share and warrant, with the deadline set for October 29, 2026.
This Wednesday, October 21, Bastion Trading demanded formal explanations from the board of directors of SkyAI following the controversial $201 million SkyAI share repurchase, funded through the total sale of its corporate reserves.
The investment firm directly challenged executive chairman Paul K. Danner III and directors Soren Bo Christiansen, Timothy J. Ruemler, and Jason L. Monroe. The demand requires each board member to justify their vote in favor of the transaction.
SEC regulatory filings indicate that the acquisition process encompasses both common shares and three distinct series of warrants. Among these instruments are 3,955,293 warrants classified as strategic advisory warrants.
In its report, Bastion Trading pointed out that these instruments were issued without capital outlay to firms connected to the brother of Yuwen (Alice) Zhang, current director and chief investment officer of SkyAI. According to the calculations disclosed by the fund, the beneficiary entity could receive approximately $11.9 million in cash if it tenders those positions within the offer.
Prior Schedule 13D filings link these contracts to the companies Sol Edge Limited and Sol Markets. Historical corporate filings from SkyAI—when it operated under the name Sharps Technology—confirm the execution of prior agreements with James Zhang serving as a strategic advisor.
Bastion Trading argued that members of the board should resign if they cannot demonstrate that they exercised independent fiduciary oversight. According to the fund’s stance, if the directors believe they retain shareholder support, they should convene a special meeting to submit their seats to a vote.
Governance records reflect prior tensions at the Nasdaq-listed company. During the annual meeting held on September 18, all five directors received between 66.6% and 75.0% withheld votes compared to favorable ballots. The directors retained their seats due to a plurality voting system in the absence of competing slates.
Liquidation of Solana reserves and valuation discrepancies
To finance the transaction, SkyAI chose to entirely divest its exposure to Solana. Official company reports show that as of October 16, it held $223.8 million in cash after selling all SOL tokens on its balance sheet.
Additionally, the company removed the prior clause that conditioned operations on the market price of the cryptocurrency remaining above the $100 threshold.
This divestment contrasts with the position expressed by the company weeks earlier. On September 14, management had reaffirmed its commitment to the digital asset treasury strategy when it still held more than two million units of SOL, a figure that positioned it as the fifth-largest public balance sheet holder of the asset.
Industry data indicates that a 70% contraction in the value of the Solana holdings prompted Bastion Trading’s initial public concerns on October 14. Media coverage further suggests that the repurchase could serve as a defensive maneuver against an unsolicited stock-for-stock acquisition proposal submitted by Forward Industries.
Bastion Trading reiterated that the offered price of $3.00 per security is inadequate. The firm estimates that the net asset value per share is around $3.30 and maintains that any equitable offer should be set at least at $3.50.
The fund demanded that holders of pre-funded warrants be granted the ability to tender 100% of their holdings instead of the 95% cap. In turn, it requested the publication of an independent valuation report verifying the fair distribution of capital across the different asset classes.
The formal tender offer commenced on October 16. Unless an official extension is announced, the shareholder submission deadline expires at 11:59 p.m. (New York Time) on October 29, 2026.
