Pressure Biosciences Inc (OTCMKTS:PBIO) stock has been turning around and breaking out from a long base. The share price rose 6.35% on above average volume of 152,000 shares trading hands. Could PBIO be in the early stages of a turnaround? Typically, the stock leads the company and the share price is telling us something is going on.
PBIO has been clearing up its balance sheet over the last few months and had several successful PIPE financing subscriptions. PIPE stands for Private Investment in Public Equity. The company originally expected to open $5M in PIPE. This is allowing PBIO to remove all of the variable rate debt from its balance sheet which it had promised shareholders to do. Due to the successful PIPE campaign and over subscription, the company decided to increase the PIPE capacity to $6.25M. PBIO recently announced that it had closed the first tranche of the over subscription and received $550k. Once again, PBIO has decided to increase the maximum capacity to $7.5M which allows there to be an additional $1.94M raised. The terms of the PIPE are secured convertible debt with a fixed conversion at $0.28 and warrants exercisable into restricted common stock at an exercise price of $0.40.
So what has all of the PIPE Financing proceeds been used for? According to the CEO of the company, Mr. Richard T. Schumacher, the vast majority of the proceeds went to reducing the convertible debt. PBIO announced that SCIEX, a wholly owned subsidiary of $61B company Danaher, has an exclusive agreement with PBIO. The two companies will jointly promote PBIO’s sample prep systems along with SCIEXs spectrometry equipment. The proceeds of the over-subscriptions will go to supporting the co-marketing of the new partnership.
This new deal is extremely exciting for shareholders, investors, and any new investors. Why is this deal significant? SCIEX is a leader in the study of proteins industry. The expected industry value will likely climb to over $7 Billion in 2020. SCIEX was acquired by Danaher for roughly $1.1B. SCIEX is now one of six large spectrometry companies in the world. The combination of PBIO’s PCT Platform with SCIEX’s SWATH mass spectrometry is now being referred to by some of the leading protein experts in the world as “PCT-SWATH.”
This is huge for both SCIEX and even bigger for PBIO. The market potential and revenue acceleration is significant if it takes off. Given SCIEX size, backing from Danaher, and scale, it has all of the ingredients for an extremely successful partnership. There is a huge potential for a possible acquisition in this industry. The sample preparation industry (which PBIO specializes in) could quite possibly reach $5.6 Billion by 2018. Several large cap companies like Danaher all have an interest in this industry and with PBIO $7 million market cap could make it an easy buy-out target and low hanging fruit for large companies looking for a huge return on investment.
PBIO has recently also announced its intentions and plans to uplist to a larger exchange soon. This could be as early as the first half of 2016 which would expand its investor base and its liquidity. The move would open the doors for a wider investment base and access to capital at better terms. It recently announced a surge in revenues.
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PBIO is currently trading at a $9.87 million market valuation. This is an exciting company that is making the right moves by cleaning up its balance sheet, signing up exclusive partnership agreements with a billion dollar company, and set up for acceleration to revenues. This is not your typical penny stock company and we can expect big things from PBIO.
We will be updating on PBIO when more details emerge so make sure you are subscribed to Microcapspot so you know what’s going on with PBIO.
Disclosure: we hold no position in PBIO either long or short and we have not been compensated for this article.