Premier Biomedical Inc (OTCMKTS:BIEI) Takes A Step Back
Last Thursday Premier Biomedical Inc (OTCMKTS:BIEI) closed at $0.0027 per share. Just three sessions later however the company managed to reach a close at $0.0234, price that is over 766% higher. The daily volumes also experienced a drastic increase and this Tuesday investors shifted over 58 million of BIEI‘s shares in a single day while the current monthly average for the stock stands at 6.3 million shares.
After such a massive appreciation a pullback was to be expected and indeed yesterday BIEI suffered a correction. The company lost over 10% of its value sitting at $0.021 at the time of the closing bell. The drop wasn’t that scary and for now the ticker is holding on to its gains.
The main reason for the sudden change in investors’ sentiment towards the stock was the latest PR published by BIEI. In it the company announced that they had they have obtained exclusive rights to the recently allowed U.S. patent application, “Sequential Extracorporeal Treatment of Bodily Fluids”. While this is definitely an important step for the company it alone may not be enough to keep the hype going for long. Especially when investors start to notice the rather serious red flags that surround BIEI.
The financial report for the quarter ended September 30 was supposed to be filed by the end of next week but instead a notification of late filing was submitted. It gives BIEI a 5-day extension to complete the quarterly so we will see if the company manages to do so in the next couple of days. Meanwhile let’s take a look at the previous report for the quarter ended June 30. Back then BIEI were in a rather depressing state with:
• $26 492 cash
• $43 493 total assets
• $420 thousand total liabilities
• ZERO revenues
• $936 thousand net loss
When dealing with pennystocks that are trying to develop new drugs or treatments the lack of revenues is something to be expected. The limited cash reserves and the sizable losses, on the other hand, are quite alarming.
In order to acquire the necessary funds to keep its operations going BIEI has sold two convertible notes (here and here) at the start of September. While the shares issued under these notes will be restricted investors should still note that the conversions prices feature heavy discounts to the market price. At the end of June BIEI already had $133 thousand in outstanding convertible notes. In addition Mr. Mitchell Felder, one of the company’s directors has been receiving millions of shares through the exercise of warrant at $0.00001 per share.
If the positive momentum remains strong BIEI may be able to recover from yesterday’s drop and move even higher up the chart. If the hype starts to weaken though or if the new quarterly report shows little improvement the ticker could be in for a rather rude awaking. That is why you should take the necessary time to do your own due diligence and to adjust your trades accordingly.
