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GAINESVILLE, FL - Cyclo Therapeutics, Inc. (NASDAQ:CYTH), a biopharmaceutical company with a market capitalization of $20.71 million and impressive gross profit margins of 91%, announced today the approval of a merger agreement by its stockholders. According to InvestingPro analysis, the company is currently trading near its Fair Value, while maintaining a challenging financial health score. The agreement involves a two-step acquisition process by Rafael Holdings, Inc., which will result in Cyclo Therapeutics becoming a wholly owned subsidiary of Rafael.
At a special meeting held on Monday, stockholders voted on two key proposals. The first was the adoption of the merger agreement initially dated August 21, 2024, and subsequently amended on December 18, 2024, and February 4, 2025. The second was the approval of adjournment from time to time of the special meeting, if necessary, to solicit additional proxies.
The merger proposal received overwhelming support with 18,548,536 votes for, 396,733 against, and 7,860 abstentions. The proposal for adjournment also passed with 18,500,314 votes for, 381,580 against, and 71,228 abstentions. The need for adjournment was rendered moot by the approval of the merger. InvestingPro data reveals the company has been quickly burning through cash, with a concerning current ratio of 0.17, highlighting the strategic importance of this merger.
A total of 57.6% of the outstanding shares were present in person or represented by proxy at the meeting, surpassing the quorum requirement. The company has confirmed that the merger is expected to close on March 25, 2025, subject to the satisfaction or waiver of the remaining customary closing conditions outlined in the merger agreement.
This strategic move comes after a series of amendments to the original agreement, reflecting the parties’ commitment to finalizing the merger. Cyclo Therapeutics specializes in biological products, and the merger with Rafael Holdings is poised to create a combined entity with enhanced capabilities in the biopharmaceutical industry. The company’s stock has shown resilience with an 18.64% year-to-date return, and InvestingPro analysts expect net income growth this year. Subscribers can access 8 additional ProTips and comprehensive financial metrics to better evaluate this merger’s potential impact.
The information in this article is based on a press release statement from Cyclo Therapeutics, Inc. and is intended to provide shareholders and the investing public with key facts regarding the recent special meeting outcomes and the forthcoming merger.
In other recent news, Cyclo Therapeutics, Inc. announced positive results from a sub-study of its Phase 3 TransportNPC™ trial, which evaluates the treatment Trappsol® Cyclo™ for Niemann-Pick Disease Type C1. The study showed that a significant percentage of young participants experienced stabilization or improvement over 24 to 48 weeks. Concurrently, Cyclo Therapeutics has secured $2.5 million in funding through a convertible promissory note from Rafael Holdings, bringing the total convertible debt to $18 million since June 2024. This funding is intended for general corporate purposes as the company navigates a merger process with Rafael Holdings. The merger agreement has been extended to March 31, 2025, allowing more time for regulatory approval. Additionally, Cyclo Therapeutics faces a potential Nasdaq delisting due to a lapse in conducting its annual shareholder meeting, with a compliance plan required by February 24, 2025. The company has also issued a $3 million convertible note to Rafael Holdings, which can be converted into common stock under certain conditions. These developments highlight Cyclo Therapeutics’ ongoing financial strategies and regulatory challenges.
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