This is what I have been able to get with DD:
The Regenetech deal as stated in the S-1 was an acquisition of Regenetech by HOTI. It failed because shareholders objected because the Texas law on M&A was not followed. After months of trying to find a way to get it done, it was decided to do a stock swap where shareholders of Regenetech would swap their shares for HOTI shares, with HOTI thereby getting voting control of Regenetech.. One (maybe more) shareholder of Regenetech objected because M&A law not followed in that M&A law requires financial disclosures, audits, etc. Objection was well taken under the law. Even though large percent of shareholders were in favor, it only takes one to block it if not done according to law. By the way, this becomes important with the merger/sale/acquisition of the requirement for shareholders meetings and financial disclosure in the HOTI/SK3/Eneftech deals.
Regenetech was relying on operating capital from HOTI. Since the stock swap was not accomplished, HOTI did not provide so the deal died.
I’m sure there is another side of the story so if anyone can get it from HOTI, please post. My info is limited to what people can disclose and I believe everyone has the phone numbers of Regenetech present and past members to get their side.
Why the HOTI people are still on the Regenetech Board is a mystery.
From publicly available information, it appears that this is a deal that should have been done. If one looks at Xenotis Pty Ltd, OTS and Regenetech, the combination would have been extremely strong. If one were to take the Xenotis Pty Ltd cell scaffolding work and combine it with Regenetech’s cell and tissue growth, Rudd’s Hayfleck work, and OTS’s transport systems, it would be very significant. What this means is you could take a body part, use stem cells with scaffolding to rebuild it and have plenty of time to get it to a person for implantation before it dies. If it were an allogeneic transplant (persons cells to himself), there would be no rejection. This would be like owning the keys to Fort Knox.
There were probably a lot of egos involved here, and that is usually where men get off course. However, it is very bad for business.
If there were a combination, Holder and crew should have been on top. OTS has very strong management as does Xenotis Pty Ltd, but Xenotis Pty Ltd is geographically too far away to run the show. HOTI has so-so management as demonstrated by not calling annual meetings of shareholders and producing financials. Regenetech has weak to very weak management so they really would not have anyone to supply to a combined entity. Still, it appears that this could have been a good deal.
I want to take a minute to discuss why there may have been little or no DD of HOTI by the companies they acquired. We know from the S-1 that these companies were essentially all in need of cash. HOTI has been saying it has a lot of available money. Let us say I own ABC Company and I need $300,000 in operating funds. My cash flow and balance sheet makes it virtually impossible to obtain the funds in this market. Even though my company may be worth $5 million if I get the operating funds, if I do not get it, it may mean Chapter 11. HOTI says they will acquire and provide the operating funds. Since they are going to be vertically integrated, they will not interfere with our operations. Further, they are giving us HOTI stock for our stock and HOTI is going public with an IPO at over $10 per share. If that happens, we are all millionaires. We do not have to do a lot of DD. The only thing we need to protect ourselves is make sure the acquisition has a strong unwind provision that provides if HOTI does not fund the operating funds or go public within a certain time, the acquisition is totally unwound. Now, assume HOTI funds the operating funds but goes no further. We are off and running and have saved our company and got it back. So, as long as we get the operating funds, why do we need DD on HOTI. See the picture?
If anyone can get more on the Regenetech deal, please post.
AI
