The 7 Cents valuation was based upon warrant dilution as leverage to force a deal (IMO). As I recently stated, 18 Cents was a non-diluted (OS) evaluation that is only justified without warrants used in formula. The risk was on the terms of buyout and whether he was going to go private and forced to use the warrants as leverage for lower price....or perhaps force an agreement (a carrot or stick deal). The risk was a "stick" of 7 cent warrants in play. That was a huge risk, and one that technically is still in play for the remaining OS (IMO).
I was correct on a buyout coming, while you completely denied it and called it BS. And, I did suggest he might keep the company public by only buying-out the partners (which until late August didn't seem likely given the old problems). Looks like today's filing by Shea has more coming and possible full acquisition at an unknown number. I would remain cautious against the warrants in any remaining buyout deal to go private as dilutive in a public offer.
I believe the partner buyout number might operate around both buyout and debt resolution by the partners, i.e. it depends upon reconciliation and cash distribution on the Insider Deal. If debt payoff weren't involved, it might be a lot lower number, e.g. I pay you $X with $Y of that money going against debt you owe in buying-out your portion of the business. Chaudhuri is paying 20. 3 Cents against the partners portion, or just under $21 Million for the partners percentage ownership (a little less than half). That is correct against $23 Million x 2 (exactly against prior discussed valuation and 2x prediction), which reflects the 7 cent valuation at full dilution and debt resolution factor. Therefore, the deal does appear to sustain a $23 Million valuation, IF it includes payout going to debt on the collateralized loan of $48+ Million. If it doesn't payoff the debt, then it remains as a loan against the real estate and reduces lease payments....or some other similar arrangement (IMO).
I'm very happy to see the higher number, but we really need more details on the number and the deal structure to justify true valuation.
