RE:A Buyout, Or Something Else? I should add a couple of points to the "spinoff"
post I made on October 31. This post is all over the place and I apologize for that, but I don't have time to edit it down, or to offer all the research that the subject calls for. The post is also a "stream of thought" piece where scenarios are considered and may not be completely reconciled with previous scenarios and thoughts in the piece.
First, if Bioasis does an oncology (or some other) spinoff by issuing new shares in the spinoff to current shareholders then the shareholders will get the money from the transaction. That would mean that Bioasis would not have money from that source to help qualify for NASDAQ.
If Bioasis creates a wholly-owned subsidiary, similar the three it already has (Bioasis Advanced Technologies Inc., Bioasis Biosciences Corporation and Bioasis Royalty Fund, LLC.), then the proceeds of the sale of the new subsidiary would go to Bioasis and not to the shareholders, unless Bioasis paid a dividend to the shareholders or paid the shareholders by some other means.
Selling a shareholder-owned spinoff may not help Bioasis reach NASDAQ, but it would put money into shareholder pockets. But because Bioasis says it's looking to create liquidity for shareholders then some money (or equity) has to come to the shareholders.
Of course, selling Bioasis would create liquidity but would it create a NASDAQ entity for Bioasis shareholders? Not unless the shareholders had some interest in a NASDAQ entity that's buying Bioasis. How about a SPAC in the face?
Ladenburg Thalmann is in the SPAC business.
Investopedia defines a SPAC as follows, "A special purpose acquisition company (SPAC) is a company without commercial operations and is formed strictly to raise capital through an initial public offering (IPO) or the purpose of acquiring or merging with an existing company." There are
risks with SPACs, however. They seem to struggle after their acquisitions are completed.
Ladenburg Thalmann is involved in several SPACs, (
several of which are listed on the SPAC Research website. Ladenburg Thalmann is the "sole book-runner" for several of these SPACs, which means that they are highly involved in the creation and use of SPACs. So, a SPAC may turn out to be the vehicle of choice for Bioasis and Ladenburg Thalmann. A SPAC with USD $30 to $50 million in trust could fit the bill, but the acquisition, as I understand it, has to be made with the SPAC's funds, which could mean that Bioasis shareholders get cash and would have no equity interest in the SPAC, unless Bioasis was rolled back and shareholders got a combination of SPAC NASDAQ stock and cash.
So, with a SPAC, or by some other means like a reverse take over (RTO), maybe shareholders would see some liquidity and would have the benefit of trading on NASDAQ. I can see no reason for Bioasis to discuss NASDAQ unless it means that after an M&A transaction, current Bioasis shareholders would have a stake in the NASDAQ company.
There is also the Bioasis phrase in its MD&A, "...the goal has been to identify accretive M&A opportunities and to pursue said opportunities to unlock value and liquidity for shareholders."
What are "accretive M&A opportunities?" Accretive is generally defined as gradual or incremental growth. Investopedia considers accretive to mean
increasing value to the buyer of an entity, more than to the seller.
The context in which Bioasis is using "accretive" seems to reference ongoing and increasing benefit to Bioasis shareholders, something that could happen with a buyout + CVR agreement, but that wouldn't include a NASDAQ company unless the shareholders end up with a CVR agreement from the SPAC that could be buying Bioasis. But in such a scenario Bioasis shareholders would not benefit from the NASDAQ entity that bought out Bioasis, unless the Bioasis shareholders were paid with SPAC shares, which may be more liquid than Bioasis shares.
Predicting it all is impossible, but I would suggest that Bioasis has made its plans in detail. The question remains whether Bioasis will disclose anything much before the AGM, or will it force shareholders to grant sweeping powers to management and BoD to do whatever they want with Bioasis.
Big questions...
jd