Shares of CT Holdings Enterprises Inc. (OTCBB: CTHE) jumped up this morning after news about its merger with Xcorporeal was released. In early trading today, CTHE was up 63 cents (140 percent) to $1.08 per share.
CTHE announced in a press release that they have executed a definitive merger agreement with respect to a reverse triangular merger with Xcorporeal Inc. (Pink Sheets: XCOR), pursuant to which Xcorporeal will emerge as the surviving entity. Xcorporeal is a medical device company that has developed an innovative extra-corporeal platform technology to build devices that may potentially perform functions of various human organs. The four products that it plans to market are a hospital congestive heart failure (CHF) device; a hospital renal replacement device; a portable home hemodialysis device and a wearable artificial kidney.
“We believe facilitating access to the public markets for this exciting medical device company represents a significant opportunity for our shareholders,” said Steven B. Solomon – CEO of CTHE – in a statement.
On November 20 and December 13, 2006, Xcorporeal issued shares of its common stock at a price of $7.00 per share in private placements to approximately one hundred institutional and accredited investors for gross proceeds of approximately $29.4 million.
Under the merger agreement, CTHE will effect a 1-for-8.27 reverse stock split of its common stock immediately prior to the merger. The company will then acquire all of the issued and outstanding capital stock of Xcorporeal, and the holders of Xcorporeal capital stock will receive an equal share of common stock of CTHE which, upon the closing of the merger, will equal approximately 97.6 percent of the total issued and outstanding shares of common stock.
“With a proven and experienced management team, promising clinical results and unique technology, the company is well positioned to become a leader in the large market represented by patients suffering from Congestive Heart Failure and advanced kidney disease,” concluded Solomon in a statement.
CTHE formerly operated as a business development firm providing capital and management expertise to start up ventures. In 2002, CT Holdings spun off its Citadel Security Software business to shareholders and Citadel was acquired by McAfee Inc. in 2006. Also during 2006, the company transferred all of its rights, title and interest in its two remaining investees in settlement of obligations. Since 2006, CTHE has been engaged in seeking business opportunities to maximize value for its shareholders, including acquisitions of new operating businesses and technologies as well as potential merger opportunities.
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