Heatworx, Inc. (OTCPK:HUWX), technically a pinksheet (even though it lists itself as "OTCQB") that holds itself to be a asphalt preservation and repair company, is little more than a shell given its "stop" sign warning on OTC Markets, no website, lack of filings and absense of news.
It's not that the company is trying to hide anything based upon the fact that in September 2015 Heatworx management announced it was putting the company and all its assets up for sale in order to pay down or settle liabilities, which explains the lack of other fundamental transparency and activity.
Shares of the Pasadena-based company are up a whopping 292% in Monday trading, following news that dovetails with the public shell thesis, as a reverse merger into a biotech looks to be in the making.
Heatworx this morning disclosed a non-binding letter of intent with Promet Therapeutics, LLC, a clinical stage drug developer working on therapies to meet areas of unmet medical need. Little more on Promet was disclosed and no website is available explaining the company's pipeline.
However, an interesting component of the potential merger is David Young, whose LinkedIn page shows he is the CEO at Promet. Young is also the President and CEO of CorLyst, LLC - both companies are headquartered in Hanover, Maryland. CorLyst is an umbrella company providing its expertise to upstarts, including an unnamed "publicly traded biotechnology company."
Young and part of his team come from senior roles at Questor Pharmaceuticals - Young served as Chief Scientific Officer at Questor - and helped turn the company around from near bankruptcy to its sale to Mallinckrodt (NYSE:MNK) in 2014 for about $5.6 billion.
If the LOI can transition to a definitive agreement and the merger is completed (and a reverse split effected as laid out in the initial agreement), shareholders of Heatworx will own about 10% of the new company, which will be renamed Promet Pharmaceuticals, Inc.
A non-binding LOI is pressed in the OTC world all too frequently and nearly as often doesn't come to fruition or have little meaningful impact if it does. Given the lineage of the Promet management, though, it could be interesting to learn more about the details of Promet and what it has coming down its pipeline.
Trading in HUWX is extremely limited today. The surge in share value has come on only about 24,500 in volume, suggesting market participants are remaining cautious about the deal.
