SkyAI Settles Bastion Standoff With $3.00 Tender, Expands Warrant Coverage to 95% of Cap Table

SkyAI Inc. (NASDAQ: SKYA) entered a tender support and settlement agreement with Bastion Trading Limited on October 15, extending its $3.00 per share cash tender offer to cover all pre-funded warrants and stapled warrants—a material expansion from the original common-only structure. The company now targets up to 95% of its outstanding equity and derivative instruments. Bastion, previously the largest blockholder, agreed to tender all shares and warrants it controls. The settlement closes a three-week standoff that began when Bastion filed a 13D amendment signaling dissent over SkyAI's AI infrastructure pivot.

The revised terms mean SkyAI is attempting to consolidate control across three instrument classes: common stock, pre-funded warrants issued in a February 2026 PIPE, and strategic advisor warrants distributed last quarter. Each warrant now receives the same $3.00 cash equivalent as common shares, eliminating the prior valuation ambiguity that kept warrant holders on the sidelines. Bastion's capitulation removes the largest obstacle to hitting the 95% threshold. The company filed tender materials after market close, launching a formal offer period under SEC Rule 13e-4. Bastion receives no premium or side consideration beyond the standard tender price, per the settlement disclosure.

The timing matters because SkyAI burned $11.2 million in cash during Q2 2026, per its August 10-Q, leaving roughly $8 million in working capital before the tender. A successful buyback at 95% absorption implies SkyAI is either raising debt, has a majority buyer lined up, or is executing a take-private financed by a single family office or strategic. The warrant sweep suggests the buyer wants a clean cap table with no derivative overhang. Pre-funded warrants—originally issued at $2.85 with nominal exercise prices—effectively function as common equity but carry different voting mechanics. Folding them into the tender removes a governance wrinkle that could complicate a going-private vote.

Bastion's reversal is notable because the fund accumulated its position between $1.80 and $2.40 per share in March and April 2026, per 13F filings. The settlement locks in a 25% to 67% gross return depending on entry, though Bastion likely hedged the position with short-dated puts after filing its dissent amendment. The fund's agreement to tender "all shares and warrants" suggests it extracted non-public assurances on timing or deal certainty, or simply concluded that fighting a 95% offer with majority support was uneconomical. SkyAI's largest remaining outside holders are Vanguard (4.1% as of June 30) and Dimensional (2.8%), neither of which has filed opposition.

Operators should monitor the tender expiration date, likely 20 business days from October 15 under standard offer rules, and watch for a subsequent merger agreement if the tender succeeds. A 95% tender typically triggers a short-form merger under Delaware law, allowing the acquirer to squeeze out remaining holders at the same $3.00 price without a shareholder vote. SkyAI's SEC filings over the next ten days will reveal whether a named buyer emerges or if the company is conducting the tender as a prelude to a management-led recapitalization. The stapled warrant detail is the tell: those instruments were issued to six named strategic advisors in Q1 2026, and their inclusion suggests those advisors either want out or are part of the buyer group.

The settlement closes the Bastion chapter. What remains is whether SkyAI files a definitive merger proxy by month-end or whether this tender completes without a named acquirer—a structure that would imply management or a dark family office is taking the company private through the tender mechanism alone.