Will Premier Biomedical Inc (OTCMKTS:BIEI) Hold Its Gains?
For the past four sessions the stock of Premier Biomedical Inc (OTCMKTS:BIEI) has been going nowhere but up. The uptrend gets even more impressive due to the fact that both the traded volumes and the daily gains have been growing with each sessions. After closing Thursday’s session nearly 20% in the green BIEI‘s stock arrived at $0.034 per share. Can the company stabilize at these prices, though?
Well, taking into account the fact that there is no immediately obvious reason for the positive chart performance BIEI might find keeping their recent gains to be rather difficult. While it is true that at the end of May the company announced that it had finally managed to consolidate its debt under one lender, which according to the company should minimize the toxic impact on the stock, the positive effect of this achievement was completely nullified by the 8-K filing submitted by BIEI on June 3. According to it the company has entered into a stock purchase agreement for $2 million with the price of the shares being sold by the company featuring a 20% discount. In addition, BIEI also sold a $105 thousand convertible note that can be turned into common shares at a 40% discount.
The conversions may slow down but millions upon millions of underpriced shares have already been issued resulting in a severe dilution of the common stock – just take a look at the subsequent events section of the latest quarterly report. It reveals that in April close to 25 million shares came into existence as a conversion of debt. With BIEI having 1 BILLION authorized shares and around 120 million outstanding shares as of May 9 there is plenty of room for even more conversions.
BIEI‘s financial state doesn’t inspire much confidence, either. The company finished the quarter ended March 31, 2016, with:
• $39 thousand cash
• $55 thousand total current assets
• $360 thousand total current liabilities
• ZERO revenues
• $415 thousand net loss
The recent financial agreements will provide sufficient capital for BIEI to keep their operations going but as we said earlier in order to get the money the company will have to continue selling shares.
BIEI is a risky choice that must be approached with caution. Do extensive due diligence and adjust your trades accordingly.
In early trading today the stock is crashing hard, currently trading almost 12% in the red at $0.0295.
