Pressure BioSciences Inc. (NSDQ:PBIO) is once again comfortably in the green, having secured commitments from investors participating in a recent offering of preferred stock to purchase nearly 100,000 additional shares for $12.50 each.
Coupled with proceeds from similar purchases of preferred stock since November 2009, the South Easton, Mass.-based company has taken in just less than $1.5 million in new money and now likely has sufficient cash to fully fund development of its pressure cycling technology until another $2.3 million capital injection is slated to arrive in mid-2011.
The preferred stock purchases announced April 28 trace back to PBIO’s private placement of Series A preferred stock in February 2009. As part of that deal — which produced initial proceeds of $1.8 million — the investors received warrants to purchase either 10 shares of common stock for $1.25 apiece or to buy one additional preferred share for $12.50 by the April 27 deadline.
The preferred shares can be converted into 10 shares of Pressure Bio’s common stock but also pay those shareholders a 5 percent yearly dividend. According to the company, all of the approximately two dozen eligible investors from the February 2009 private placement elected to exercise all of their available warrants. The group still holds additional warrants to buy 10 more shares of common stock for each preferred share they bought in the original deal, setting up another potential $2.3 million payday for the company in July 2011.
In prepared remarks, board chairman R. Wayne Fritzsche said the 100 percent participation rate in the recent exercise of warrants was “a clear statement” that investors recognize the company’s achievements and remain confident in its future.
Overall, Pressure BioSciences sold nearly 157,000 units of Series A preferred stock and warrants for $11.50 per unit, including about 27,000 units purchased by executives and directors of the company. At the time, Pressure Bio common stock was trading around 90 cents a share and the company was down to $1.6 million in available working capital.
The stock closed April 28 at $1.68 a share. Based on an average $12 paid for each preferred share, the Series A investors currently are ahead 48 cents per share — a 40 percent gain — assuming those shares eventually are converted into common stock.