HLTT(.45)...complex/interesting situation developing here.....
There are a lot of very complex elements going on with HLTT right now (they have a need for financing, revenue from their Amniobind product is expected to begin, other risks/catalysts you might expect from a biotech/medical company, etc). I have no idea how everything is going to play out (could be extremely good or extremely bad), but it is certainly an interesting situation.
One aspect of HLTT that is particularly interesting at the moment is its 5.5% ownership position in privately-held Varian Biopharma. Originally Varian was planning to go public via HLTT, but I think Varian/HLTT had difficulty attracting financing. Both parties mutually agreed to abandon the plan. So Varian then entered into a potential acquisition deal with SPK (a Nasdaq SPAC). As with most SPAC deals it is taking a considerable amount of time to get the deal closed.
Recently SPK mentioned in its filings that as part of closing the deal a simultaneous private placement was being worked on. I found that a bit interesting (and somewhat unusual) because the SPAC already had a fairly decent amount of cash (around $50M). SPK recently had its vote to extend the time for the SPAC to complete its acquisition and the 8-K disclosed a couple of items that caught my attention: 1) One day before the vote an institutional investor agreed to pay the first month's extension. I am not entirely sure but it is possible this investor may not have had any previous relationship with this SPAC. 2) More than 61% of the SPAC's shares were tendered for redemption. There are now only a little more than 2.5M shares outstanding in this SPAC.
That recent disclosure of work being done on a private placement and the institutional investor paying the first extension almost suggests to me that SPK probably was aware there would be a high number of redemptions but SPK/Varian might still be interested in trying to get a deal completed. If that is the case it will be interesting to see what kind of adjustments might be made to the original terms of the deal and what (if any) positive/negative impact it might have on HLTT. Under the original deal, HLTT was going to own a little more than 2.2% of the post-merger company.
Perhaps worth noting: Ever since HLTT issued 25-cent stock options to a debt holder on September 6 (the stock was trading around 20 cents at the time), and SPK had its extension vote on September 9, HLTT has quietly doubled in price. HLTT's ownership position in Varian Biopharma probably is not all that significant if you look at it from just a purely/overall fundamental perspective. But it probably does have some market awareness and psychological significance when you consider that one of the OTC investment themes that has garnered some increased interest recently has been with OTC stocks that have some connections to Nasdaq stocks. The HLTT/Varian/SPK connection is one that very few investors are probably aware of at the moment.
