Everyone on Biomerica's board wrote a personal check. So did the chief executive. So did the bank they just hired to find them a deal.
On August 27, the diagnostic test maker raised $2.23 million by selling shares at $1.60 each, with no warrants attached and no discount, according to the company's announcement. Buyers included B. Riley Principal Capital, executives from B. Riley Securities, Biomerica's CEO, and every member of the board.
The same announcement said Biomerica has hired B. Riley as its exclusive advisor to evaluate mergers, acquisitions, joint ventures and other combinations. The company said it intends to use proceeds to strengthen its balance sheet and fund operations while the board works through that process.
The new shares represent about 30% of the company's share count once the placement closes, the announcement said. Every new share issued makes the existing ones a smaller slice of the same company. The counterweight is that the people authorizing those shares also bought them.
Shares closed 24.27% higher at $2.10 on August 28, after the announcement, on dollar volume of about $6.9 million.
The placement price was $1.60. The stock closed the following day at $2.10.