Monday, May 18, 2009

MathStar 8K - Receives and rejects acqusition offer

On May 11, 2009, MathStar, Inc. received a letter containing an unsolicited proposal by PureChoice, Inc. (“PCI”) to enter into a merger transaction with MathStar (the “Merger”). As proposed by PCI, MathStar’s stockholders would receive cash consideration of $1.04 per share in the Merger for all of their MathStar shares.

MathStar’s Board considered and analyzed PCI’s Merger proposal. It concluded that PCI’s proposal was not acceptable because, among other reasons, the $1.04 per share price is less than the liquidation value of MathStar, including the value from any technology sale, and, in the Merger, MathStar’s shareholders would derive no value from MathStar’s net operating loss carryforwards. Thus, the Board rejected PCI’s Merger proposal as not being in the best interests of MathStar’s stockholders. The Board will continue to pursue strategic alternatives.

Note: PureChoice made a previous offer in October 2008.