POW! Entertainment Inc. (fka POWN)

[firehorse]

Anyone looking to understand why POW! is being sold for what may seem to be a low valuation, should read this from the proxy.

Background of the Merger
Our board of directors and management have periodically reviewed and assessed our long-term strategy and objectives and developments in the markets in which we operate. We have on various occasions considered ways in which to maximize stockholder value, including potential opportunities for business combinations, joint ventures, acquisitions and other strategic alternatives. As a result of its continued assessment of maximizing stockholder value, our board of directors is generally aware of potential opportunities for strategic transactions and acquisitions involving companies in the markets in which we operate.

We have experienced significant cash flow and funding challenges since the completion in 2014 of Silver Creek’s funding obligations under our agreements with Silver Creek, and these problems have accelerated during the last few months. We have not been able to obtain long term funding sources or enter into an overall co-production venture for development of projects. Consequently, we have not been able to generate a positive cash flow. Our ability to continue as a going concern without a sale is doubtful. The above assessment is reflected in our financial statements for the past few years. As of June 30, 2017 there was minimal cash on hand and operations were being funded primarily by loans from outside sources and Stan Lee personally.

and if there is a buyer willing to pay more

Our Board of Directors’ Right to Terminate the Merger Agreement to Accept a Superior Proposal. The board of directors also has the right to terminate the Merger Agreement in order to accept a Superior Proposal if (i) we have complied with requirements set forth in the previous paragraph and (ii) prior to such termination, we pay Parent a termination or ‘‘breakup’’ fee of $800,000, which the board of directors believed was reasonable and would not deter competing bids and would not likely be required to be paid unless the board of directors entered into a definitive agreement for the consummation of a Superior Proposal