“with foresight, the excitement was palpable.” bonds. by the time everyone else realizes GameStop will not have to deplete 88% of their balance sheet cash, excitement will be off the charts. bonds are not notes. $GME

part 6: my thoughts on the January 13, 2023 LBO and its intended (and failed) use to force $BBBYQ into insolvency. I hope you like it. $BBBY (old).

I was reading through old $BBBYQ SEC filings and came across something that really stood out. whatever the intentions of the affiliates and/or Purchaser, the assets had to have been secured at the end of 2022 in some way. think back to the private bond exchanges; there was first a single investor, then an institutional group that followed by retiring their bonds for shares some time between November 14 and December 6, 2022. here is what I had never caught before: [image 1] thanks to accounting requirements there is disclosure in the 10-Q that the exchange was performed under what is called a "troubled debt restructuring". that can only be used under very specific circumstances, say if a company discloses that it may not be able to continue as a going concern. if we dive into the math on the deal we will see that whoever participated in the exchange was friendly to the company. here's why: [image 2] the aggregate principal amount retired through the bond exchange: 69.0 (2024) 15.3 (2034) 70.2 (2044) = 154.5 million dollars worth of bond debt. [image 3] but investors only received: first Form D: 2,762,444 shares which was an offering amount of 10,331,540$; second Form D: 11,667,021 shares which was an offering amount of 40,717,903$; 10,331,540 40,717,903 = 51,049,443$. [image 3] 154.5 million of debt was retired in exchange for 51 million dollars’ worth of shares. the bond holders exchanged at 0.33 on the dollar when they could have just sold them on the open market at the time for a better return plus the individual investor gave the Company another 3.5 million dollars cash for 0.9 million additional shares. the Company obviously benefitted tremendously from this deal, recording a 94.4 million dollar gain (the net difference) on their 10-Q. who would do that? the only way it makes sense is if the former bond, then equity holders received something more than just the shares in return. the only alternative explanation is preferring to lose money over open market sales to help the Company. [image 4] fun little side fact, looking at the TSO from the 10-Q (which was late!) if you look at the share amount received by the institutional group they total 9.9444% ownership, just under 10% with no way to round up to 10% and be labelled an insider. two more fun facts, the Company filed that their 10-Q was going to be late on the same day the bond exchange was finally terminated with no more extensions, and, the "troubled debt restructuring" was only revealed in the 10-Q itself, over a month later. to summarize: no investor retires their senior, secured debt instrument for junior, unsecured equity at a loss compared to open-market price to help the Company's balance sheet, unless they got something in return. this exchange retired 25% of all 2024 bonds, an imminent insolvency risk at the time. so.. what did they get?

what if the ace up the sleeve for $GME is not about the actual acquisition, but what happens after the acquisition? what if it is Delaware Law Title 8, Chapter 1, Subchapter IX. Merger, Consolidation or Conversion. specifically §251(g)? like many I was surprised to see RC doing the media tour and for the first time, hyping how big their plans will be. I mentioned before that a likely explanation could be they are doing a roadshow for an upcoming traditional bond offering. I also couldn’t help but worry when I read some snippets: “it's gonna be really big. Really big. Very, very, very big," Cohen said of the size of the acquisition.” “this is something that really has never been done before within the history of the capital markets.” “it has the "potential to make [GameStop] worth several hundreds of billions of dollars.” ..because no matter what the Board was planning, the market could make this the largest sell-the-news event in history to try and curb their momentum and sentiment around the pivot of GameStop into a holding company. why would big dog do that? why would he not say basically anything for 5 years then suddenly risk shooting himself in the foot by making grandiose claims about their first acquisition? lets not overlook that in the CNBC article he claims this one acquisition could propel the market cap of the company to the extent his entire pay package vests.. it got me thinking about why he would be so confident. then I found §251(g): “Delaware General Corporation Law Section 251(g) allows a corporation to reorganize into a holding company structure without requiring a stockholder vote. This statutory provision facilitates mergers with a wholly-owned subsidiary, ensuring the holding company has the same charter provisions as the original corporation, often used for corporate restructuring or, historically, for adopting anti-takeover measures.” emphasis mine. it is mainly used to create a new, top-level holding company where the original parent corporation used to be. That old parent co becomes a subsidiary and shareholders receive identical shares in the new holding company. “Section 251(g) facilitates a holding company reorganization merger where outstanding shares of the original corporation are automatically converted into equivalent shares of the new holding company upon the merger’s effective time, provided all statutory conditions are met (e.g., identical rights and no tax recognition). This conversion is seamless and does not require surrendering or recalling physical certificates or shares,..” hang on.. I know exactly what I thought of when I read that. do you remember this? this sure provides a convenient explanation. oh, I can already hear the naysayers.. upon the merger's effective time. do you now remember what happened immediately before September 2024? the Board closed their credit facility and less than one month later, a pre-negotiated, pre-settled agreement was filed by the FTC. I wrote at the time that I believed the Company applied to the FTC for a pre-merger certificate, hence why the settlement came out when it did and that the issuance of the certificate occurred after the second, 30-day review period following the filing of RC's settlement of the FTC violation. that is why he tweeted "yolo" exactly 60 days after the application for the certificate, because he got it. OK back on topic. guess what else? if they want to, a company can reissue shares under §251(g) as tokenized shares even if they weren’t tokenized before, as long as the tokenized shares are identical in all the important respects like rights, voting powers, etc. to the original shares. this is explained in §251(g)(2). “Since §251(g) allows for a holding company reorganization where the new parent issues shares that mirror the originals, the holding company can adopt a blockchain-based stock ledger for its issuance process. This doesn’t violate the “identical” requirement because the form of record-keeping (traditional vs. blockchain) is administrative, not substantive—much like switching from certificated to uncertificated shares, which Delaware law expressly supports.” hang on now.. do you remember the S-3 that was filed in May 2024, defining digital assets inside of the sale agreement contract between GME and Jefferies? for their share offering? GameStop’s current corporate structure looks like this: GameStop Corp (parent) holding company → GameStop Inc (subsidiary) that manages retail operations. the shares are issued for ownership of the parent company. important to understand that the legacy business is managed by a subsidiary. what if in the future GameStop wanted to maintain the brand identity for their retail business as the premier destination for how to spend your leisure time, but wanted to have a new name for their investment behemoth diversified holding company.. like Teddy? they could: • acquire a company that they find undervalued or owning an asset they would want; • place it as a subsidiary of GameStop Corp; • perform a Section 251(g) corporate reorganization; • and name it whatever they want. then it becomes Teddy (probably) → GameStop Corp → GameStop Inc. you may be wondering why? ..well, tell me why shares of GME were labelled new class in 2024? kidding aside, this allows GameStop Corp to keep its current roles: strategic oversight, capital allocation, governance.. the investment policy.., and allows a new parent corporation to be formed to hold all of the acquisitions made by a dying, brick and mortar retailer-turned-investment fortress, managed by big dog and friends. and! it does not require a shareholder vote. that could explain Section 4 of the warrant agreement, specifically why they chose to include legal definitions around a “Share Exchange Event” in the event of a reorganization: it would explain the “new class” anomaly observed in September 2024 (or it was a private placement); it would explain why the ATM agreement would require GME and Jefferies to have explained digital assets in a contract only to do with selling of their shares; and lastly, it could explain why RC is so confident in his interviews with the news media. talk about exciting times. n.b.—this is just my personal opinion and fun speculation.

part 6: my thoughts on the January 13, 2023 LBO and its intended (and failed) use to force $BBBYQ into insolvency. I hope you like it. $BBBY (old).

here is the $BBBYQ IRC § 368(a)(1)(G) Type G Reorganization with working video and slides. it will be much better to follow along with visuals. I think we've solved the puzzle (again). remember, can only use the full NOL if the NewCo issues shares as a substantial portion (or all) payment for the acquired asset.

one thing I didn't get to spend much time discussing on the Space call was the $BBBYQ Statement of Financial Affairs and it disclosing RC's co-debtor status. first I want to establish the importance and legitimacy of this disclosure. the Statement of Financial Affairs (SOFA) is a document that must be filed with a Chapter 11 and has to be accurate; it is considered perjury to lie. the point of it is to give a history of financial transactions and activities leading up to a company's bankruptcy filing: "The Statement of Financial Affairs is designed to disclose relevant financial information to the bankruptcy court, the trustee, and your creditors. It helps establish an accurate picture of your financial affairs, including your income, expenses, assets, liabilities, and recent financial transactions. The form assists in assessing your eligibility for bankruptcy relief and aids in determining the best course of action for your case." jdsupra.com/legalnews/unders… I am trying to emphasize this point because you cannot dismiss the significance of seeing RC listed here and it is not a mistake. do you really think his lawyers would allow for that when he had two ongoing litigations involving the company? that is ridiculous. it is also not "because he is being sued", that argument is either repeated because someone was too lazy to look, they don't understand what they are reading or they are intentionally being misleading. it is laughable. I'll explain how we know: here we see RC listed opposite the plaintiff of his class action suit before the lead was changed to Bratya. it is listed. here is why you cannot dismiss finding RC in the sofa: because here we see RC listed again, separate of the class action and 16(b) lawsuits. unless you believe that a municipality where there used to be a $BBBY and Baby store location is involved in the litigations against RC, this is what is referred to as a "slam-dunk find." the previous comment was obviously a joke but in case you really did believe (or someone has claimed) that Tyler, TX and several other municipalities are involved in the lawsuits, further in the sofa we will see the city of Tyler disclose to the court exactly why they are in the creditor list: to no one's surprise, they are a taxing authority. do you remember the Texas Taxes and the Comptroller, for who the Plan reserved the right to pursue a third-party for taxes owed by the OldCo? who would agree to that? only an acquirer. RC is listed in the full financial disclosure presented to the US Court that he is a co-debtor of the Old $BBBY company, opposite of a municipality claiming they are owed for county taxes and water utility bills. do you really think that RC's attorneys would allow a "mistake" of this magnitude to exist, when he is being litigated relating to the same business? do you think the signatory for the Statement of Financial Affairs, would make the "mistake" of falsely attributing company debts to a third party, under penalty of perjury? of course not. that would be laughable. make no mistake, that is exactly what this says. RC is a co-debtor for the OldCo and a co-debtor is a person other than who is filing for bankruptcy, who is also legally responsible for paying the debts. there is no alternative interpretation. and you don't have to believe me, it is written at the top of the sofa itself: liable for debt nearly a year after he sold his shares. RC had a chip on his shoulder seeing how the former board treated him and his ideas for transforming the company. he could not turn away from the destruction of shareholder value resulting from the "October 2020 plan" and he held everyone to account as the Holder of Interests through the third-party release. look at the information filed with the US Court and decide for yourself. the facts are right there in front of you and they do not care how difficult it is for anyone "to get there" with their own opinion to believe them.