P10 Industries Inc. (PX)

[EM]

Just to be clear ....

Let's start from the recent 10-K

"Langley agreed to partially assume the lease obligations for the Braker Facility Lease pursuant to a sublease, but the landlord refused to approve the sublease of the Braker Facility Lease to Langley, and the sublease was not executed. However, Langley agreed to close on the sale without the sublease of that facility. As a result, P10 is still obligated to make payments under the lease for our headquarters, although Langley is currently making payments to us in the same amount".

and ....

"We are currently in negotiations with Langley, the landlord and other potential tenants in an effort to reduce our obligations under the lease. We are also in discussions with a potential investor that has indicated that it is contemplating an investment in shares of our common stock. However, the investor has indicated that it would be a condition to the closing of its investment that we make a filing under Chapter 11 of the United States Bankruptcy Code pursuant to a prepackaged plan. The prepackaged plan would provide for the issuance of the shares of our common stock to the potential investor in a manner which would not make the rights under our stockholders rights plan exercisable. In addition, the prepackaged plan would also provide for the settlement our lease obligation. We do not have a definitive agreement with the potential investor, and we cannot assure you that the transactions described above will be consummated".

After prepackaged plan ....

ARTICLE IX - SETTLEMENT, RELEASE, INJUNCTION AND RELATED PROVISIONS

B. Settlement of Claims with Legacy Purchaser. As provided in the Langley RSA, pursuant to Bankruptcy Code § 1123 and Bankruptcy Rule 9019 and in consideration for the agreement by Legacy Purchaser to (i) accept an assignment of the Braker Facility Lease, and (ii) release the Debtor and Reorganized Debtor from all Claims relating to (a) the November 2016 Sale Transaction, (b) the November 2016 APA, (c) the Braker Facility Lease, and (d) the Stonehollow Lease Assignment, on the Effective Date the Reorganized Debtor shall make a Distribution to Legacy Purchaser in the amount of $1 million less the Debtor’s security deposit relating to the Braker Facility Lease.

Who is the "legacy purchaser"? Langley.

What does that mean? that P10 shall assume and assign the Braker Facility Lease to Langley.

So It basically means that Langley is part of the settlement and they accepted to assume the remaining lease liabilities. So whatever the Landlord says doesn't matter, it's up to the Judge. Landlord will not have any damage from this plan because Langley will assume all the remaining lease payments.

That's why they choosed (and new investor requested) a prepackaged plan strategy.