Earlier in March, Pressure BioSciences, Inc. PBIO (“PBI”) announced that its largest shareholder has converted $10 million of secured debt into unsecured preferred stock. The move is an important signal of confidence in PBI’s growth potential and support for the company’s plans for expansion this year.
The company has made steady and impressive progress in the commercialization of its proprietary Ultra Shear™ technology, a pressure-based based platform that can create shelf-stable nanoemulsions for use across dozens of industries including pharmaceuticals, food and beverage, cosmetics, skincare, supplements, nutraceuticals and agrochemicals. Here’s a closer look at what the debt-to-equity conversion means for PBI’s financial health and some of the recent milestones that have contributed to that growing investor confidence.
Debt To Equity Conversion Signals Increasing Investor Confidence In PBI’s Strategic Position
The news is a major boost to PBI’s balance sheet as the $10 million represents over half of the total debt owed to that investor and more than 30% of the company’s total outstanding debt through February of this year. The exchange of convertible promissory notes, accrued and unpaid interest, and accrued and unpaid dividends into shares of common stock puts PBI in a stronger position to raise capital and continue expanding production capacity.
Above all, the conversion is a key signal of growing investor confidence as the deal was consummated at a value of $2.50 per share, which is about 38% higher than the stock’s current open market price. Shares of PBI have been rallying since January, achieving more than 41% growth year-to-date as of March 6.
PBI President and CEO Richard T. Schumacher anticipates other investors will soon convert debt into equity as well, and said, “We are in discussions with other large shareholders who have expressed similar interest in supporting the Company through continuing improvements in our balance sheet, by exchanging additional millions of dollars of debt into equity, following the confidence and leadership demonstrated by the Company’s long-standing, largest investor.”
With the company’s largest shareholder exchanging debt for equity and other major shareholders expected to do the same in the coming weeks, it’s a good indicator that investors expect this stock to maintain that momentum.
PBI Continues Expansion Via Collaboration Agreements Across Multiple Industries
That bullish sentiment is largely driven by a series of recent milestones PBI has achieved over the past few months as the company works to transition into profitability and uplist to NASDAQ/NYSE. Among those achievements is the December announcement of a partnership with Dr. Adrienne Denese, the founder and president of Dr. Denese SkinScience.
Through the partnership, the renowned skincare expert, who has sold more than $500 million of her skincare products on QVC, will initially collaborate with PBI to develop topical nanoemulsions of a retinol serum and a Vitamin C serum, both of which are potent active ingredients in some of the leading anti-aging products on the market.
PBI’s Ultra Shear technology will be used to break down these oil-based compounds into a potent nanoemulsion with the goal of making them more readily absorbed into the skin. Currently in clinical trials, commercial sales are expected to begin by the second quarter of this year.
In January, PBI announced another key partnership with One World Products, Inc. OWPO. Headed by NBA legend, Isiah Thomas, One World Products is Colombia’s largest Black-controlled, fully licensed cannabis producer.
The two companies are collaborating on a line of next-generation sports drinks infused with cannabidiol (CBD) oil. In addition to its calming effects, research has shown that CBD oil may be able to reduce inflammation, relieve pain and speed up muscle recovery – all of which make it an ideal ingredient for a post-workout recovery drink. But the oil-based compound is poorly absorbed in the digestive system, meaning that as little as 6% of the CBD oil in current infused products actually makes it into the bloodstream.
PBI’s nanoemulsion technology has the potential to dramatically improve absorption rates by breaking the oil molecules down into droplets so small that they are effectively water-soluble. So the partnership will see One World Product’s premium CBD oil processed into a nanoemulsion to make a potent CBD-infused sports drink for both athletes and health-conscious consumers.
That same month, PBI released the initial results from consumer focus group testing of a THC nanoemulsion oral spray that was made using the company’s groundbreaking Ultra Shear technology. Like CBD, THC is an oil-based compound with poor absorption rates which makes precise dosing of edibles and other cannabis products difficult.
Where edibles can take up to an hour for consumers to begin feeling the effects, the focus group reported the first effects from the oral spray in under 10 minutes. That immediate effect can prevent consumers from accidentally taking stronger-than-necessary doses under the mistaken assumption that the edible isn’t working.
In addition to being faster-acting, the easy-to-use oral spray is also intended as a safer alternative to vaping or smoking – the current consumption method of choice for those looking for a more immediate effect than edibles.
With marketing set to begin this quarter in California, the novel THC oral spray could start generating substantial revenue for PBI soon.
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