Tuesday, April 24, 2007
BakBone Software (BKBO) deal with Sun
BakBone Software (combined links) issued an 8-K today along with the attached contract for warrants on BakBone stock.
Sun gets warrants for 4.4 million shares with a strike price of $1.78.
Vesting:
20% vests when Sun reports to BKBO that the "Base Technology" is available.
26.7% vests after Sun gets $5 million in revenues for BKBO through the deal and one year has passed.
26.7% vests after Sun gets $10 million in revenues for BKBO through the deal and two years have passed.
26.7% vests after Sun gets $15 million in revenues for BKBO through the deal and three years have passed.
Warrants expire after 10 years.
In a change of control, 25% of the warrants vest immediately. Also there's a conversion right whereby Sun gets an amount of BKBO shares equal to the current intrinsic value of the warrants (i.e. how much they're in the money).
If BKBO breaches the contract and it's not resolved, then all the warrants vest immediately.
BKBO's gross margins are very high, so based on this alone, the deal would be worth perhaps $12 million.
A reclassification of the stock (not including a change in par value of the stock), a split, or a merger will require rewriting the warrants to be substantially equivalent, if I understand correctly. Also, the strike price is reduced by any dividends paid out (not likely). Warrants are non-voting but receive the usual info distributions of common stock.
There are now 88.5 million fully diluted shares of BakBone Software (64.5 million shares, 5.6 million options, 18 million convertible preferred shares, 300K restricted stock units, 13K shares held by employee benefit trust, 80K warrants).
If the 4.4 million warrants are added to the 88.5 million fully diluted shares we get around 90 million fully diluted shares of BKBO (am I good, or what?)
UPDATE same day: The sole remaining child laborer wants to correct the record that they are not lazy, just busy with other work. Not only that, but the backlog of companies they've generated has grown quite a bit. So I'm the bottleneck. I stand corrected.
Sun gets warrants for 4.4 million shares with a strike price of $1.78.
Vesting:
20% vests when Sun reports to BKBO that the "Base Technology" is available.
26.7% vests after Sun gets $5 million in revenues for BKBO through the deal and one year has passed.
26.7% vests after Sun gets $10 million in revenues for BKBO through the deal and two years have passed.
26.7% vests after Sun gets $15 million in revenues for BKBO through the deal and three years have passed.
Warrants expire after 10 years.
In a change of control, 25% of the warrants vest immediately. Also there's a conversion right whereby Sun gets an amount of BKBO shares equal to the current intrinsic value of the warrants (i.e. how much they're in the money).
If BKBO breaches the contract and it's not resolved, then all the warrants vest immediately.
BKBO's gross margins are very high, so based on this alone, the deal would be worth perhaps $12 million.
A reclassification of the stock (not including a change in par value of the stock), a split, or a merger will require rewriting the warrants to be substantially equivalent, if I understand correctly. Also, the strike price is reduced by any dividends paid out (not likely). Warrants are non-voting but receive the usual info distributions of common stock.
There are now 88.5 million fully diluted shares of BakBone Software (64.5 million shares, 5.6 million options, 18 million convertible preferred shares, 300K restricted stock units, 13K shares held by employee benefit trust, 80K warrants).
If the 4.4 million warrants are added to the 88.5 million fully diluted shares we get around 90 million fully diluted shares of BKBO (am I good, or what?)
UPDATE same day: The sole remaining child laborer wants to correct the record that they are not lazy, just busy with other work. Not only that, but the backlog of companies they've generated has grown quite a bit. So I'm the bottleneck. I stand corrected.
// posted by Bruce @ 6:33 PM 
