REDONDO BEACH, CA--(Marketwired - Nov 4, 2016) - SECFilings.com, a leading financial news and information portal offering free real time public company filing alerts, announces the publication of an article on the impact a recent financing has on Pressure Biosciences Inc. (OTCQB: PBIO). The company announced yesterday the closing of a $2 million line of credit, on quite favorable terms, that should fund Pressure Bio comfortably for the next 6 months or so.
A few things stand out in reviewing the deal. First, the interest rate is between 10% and 18%, depending on the timing of the repayment of any credit issued. In the world of small and micro-cap public financing, that equates to a very favorable deal and could be read as a vote of confidence by the noteholder.
Second, Pressure Bio granted the noteholder warrants with an exercise price of $0.40/share as part of the initial cash advances. The stock closed at a price of just under $0.29 cents on November 3 (the date of the announcement and accompanying 8-K filing). So the $0.40 warrants represent an approximately 38% premium to the market price of the stock. This should be read as another vote of confidence by the investor, as above-market financings are no small accomplishment.
Third, the investor initially advanced $250,000 (the agreed-upon size of each advance) on October 28. Under the terms of the agreement, the investor is under no obligation to provide any more than a $250,000 advance in any given 15 day period. Regardless, the noteholder chose to advance another $250,000 just 5 days later, on November 2. This is yet another vote of confidence.
The new financing arrangement allows the company some breathing room as it works toward profitability. It also allows management time to focus on achieving the company's stated goals, something the company has shown it can do over the past several quarters. Imagine the results when the CEO actually spends more time at his PBIO desk rather than on the road.
Though it doesn't look like an up-listing is in the cards for this calendar year, it remains a stated goal of the company and would provide greater visibility and liquidity for the stock as institutional investors generally are limited in their involvement with OTC stocks. On top of that, retail brokers have a difficult time getting compliance approval to allow them to introduce their individual investors to OTC stocks.
In the meantime, a financing involving warrants with an exercise price at a 38% premium to the market should be very attractive over the short term as Pressure Bio continues to increase customers, revenues and margins.
Click here to read the full article: http://analysis.secfilings.com/articles/122-pressure-biosciences-pbio-secures-funding-allowing-for-accelerated-corporate-development
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