Premier Biotech Inc (OTCMKTS:BIEI) Crashes After Filing Its Quarterly Report

This Tuesday the stock of Premier Biotech Inc (OTCMKTS:BIEI) soared up the chart by close to 42%. As a result it closed at $0.022, one the highest closing prices for the company. Whatever positive momentum had formed though was quickly offset by the quarterly report that was filed that day.

It showed that as of September 30 BIEI had:

• $73 thousand cash
• $87 thousand total current assets
• $516 thousand total liabilities
• ZERO revenues
• $189 thousand net loss

BIEI‘s CEO may have stated that the company has “a clear roadmap for potentially curing cancer” but a balance sheet such as this is hard to be ignored. Especially if you remember that in our previous articles we warned you about the numerous convertible notes that could become shares at rather sizable discounts to the market price – from 32% to 40% depending on the terms of the note.

While during the quarter covered by the report the issued shares were kept to a minimum with a little over 26 million outstanding shares as of September 30 that was no longer the case with the start of October. From the very first day of the month up to November 17, the period covered by the subsequent events section of the quarterly, $95 thousand worth of convertible notes were turned into approximately 39.5 million fresh shares. This makes the average price of each share just $0.0024.

At the end of September BIEI had outstanding convertible notes totaling $133 thousand so the dilution could be running for a while longer. The company will also need to find new sources of capital in order to fund it operations and there are no guarantees that this time the terms of the financing deals will be any better.

If you are determined to play the stock of the company it is paramount to take into account the effect the millions of underpriced shares could have on the performance of the ticker if they get unleashed on the open market.