July 9, 2012
Pressure BioSciences (PBIO): Favorable Financing and Board Changes Signal Commercialization, Progress
Pressure BioSciences, Inc. (OTCQB: PBIO) is a developer of proprietary lab instrumentation and associated consumables based on its game changing Pressure Cycling Technology (PCT), which it provides to companies like Thermo Fisher Scientific (NYSE: TMO), Amgen Inc. (NASDAQ: AMGN) and other medical and biotechnology companies around the world.
We have been following them for some time with interest. We watched as the long-time NASDAQ-listed company managed to develop groundbreaking technology on a shoestring budget. We saw them gamely try to avoid delisting as the market beat them down, apparently for having flat revenue numbers while the company was still developing their ground-breaking product line. We saw the market punish the company for down listing to the OTCQB in April, driving their stock price from around $.70 to around $.30 today. Also in April, we saw them complete some very favorable above-market bridge financing, and release other good news, which hinted at better times to come. In fact we wrote about it at the time.
Since then we have seen some good announcements by the company about their commercialization efforts while the stock reached its 52-week low a few days ago at $.20. So what to make of the company’s press release from last week? On the surface, this press release might be seen as sending some potentially confusing messages. Digging a little deeper, however, it can be seen as the strongest sign yet of the rebirth of the company.
New Members of Board of Directors
This release has two major bits of news that need to be examined together to figure out what is really going on with Pressure BioSciences. First, there have been wholesale changes to the Board of Directors. The five members who have resigned did so on friendly terms, as they all participated in the current deal, and it allowed the company to reduce board size from eight to five. A closer look at the two members appointed in their place gives us an idea of where the company is headed.
Mr. Vito Mangiardi has very deep experience with Life Science companies of all shapes and sizes. He has run businesses (CEO of Diagnostic Laboratories, Inc., Clingenix, Inc. and Bilcare, Inc.) and comes from the science/product side of the equation (Research Chemist for Bio-Rad Laboratories, COO of University of California Lawrence Berkeley National Laboratory Joint Genome Institute). A man of his background, with contacts developed over a lifetime in the industry, is an excellent addition to the Pressure BioSciences board as the company turns from research and development to aggressive commercialization. They will need to raise some money to build an effective sales and marketing organization and also get some early customer wins. Mr. Mangiardi might be able to help on both fronts.
Mr. Kevin Pollack is well connected in the finance world through his years of experience with investment banks small and large. Paragon Capital, where Pollack is currently a Managing Director, has a track record of outperforming the market. Mr. Pollack himself has even been something of a subject matter expert, doing some interviews over the last couple of years with Bloomberg and others. His focus on corporate finance, capital markets and mergers and acquisitions could bear fruit for the company as it looks to fund the next stage of growth.
The second piece of news ties in nicely with the new board configuration and makes the whole picture much more clear. PBI brought in $600,000 of a $1.2 million private placement at above market pricing. Shares have been trading for the last several weeks in the $.20 to $.30 cent range, but this financing is sold at $.50/share. This makes the second straight round of financing at prices far exceeding the current market. Perhaps even more interesting than the price point is that members of the Board of Directors, both old and new, as well as all officers of the company, are participating in the placement.
So we have a huge shakeup of the Board of Directors. This can often be a sign of turmoil and division, but in this case it does not appear to be. The outgoing board members believe in the company enough to put their own money in at a premium price. The incoming board members are doing the same. From the outside, it looks like an endorsement of the next phase of development – commercialization of cutting-edge products that have been years in the making. It looks like the people on the old board recognize that the needs of the company have changed and the make-up of the board needs to keep up. The new members bring an infusion of energy and connections with them and are putting up their own money as well.
It appears that when people are let in to the ‘inner circle’ of Pressure BioSciences they come away with a very positive outlook on the future growth of the company. Zacks Small Cap Research and AMI Research have similarly positive takes on the stock. It might be wise for potential investors to take note, especially at this crucial stage of development. If sales numbers come anywhere close to matching the level of scientific validation for the company’s products, the current valuation of the company will look like something of a joke.
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