Vitality Biopharma Inc (OTCMKTS:VBIO) shares have been on the skids over the past month, but may be finding a little traction in recent trade. Key support was tagged in Wednesday’s action, with a retest of the closing lows from late March around the $1.50/share level on Tuesday. That helped to spur a strong jolt of buying, which was clearly augmented by news that, on July 28, 2017, VBIO closed on a $1 million private placement.
The release notes as follows: “As previously described on the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 27, 2017, on July 26, 2017, the Company entered into a securities purchase agreement in a private placement of an aggregate of 666,667 shares of the Company’s common stock and Warrants to purchase up to an aggregate of 333,334 shares of the Company’s common stock (the “Warrants”), at a price of $1.50 per Share (the “Offering”). Each Warrant is immediately exercisable, expires on the three year anniversary of the date of issuance, and has an exercise price of $2.00 per share.”
Vitality Biopharma Inc (OTCMKTS:VBIO) frames itself as a company that focuses on the development of cannabinoids for the treatment of neurological and inflammatory disorders, such as inflammatory bowel disease and multiple sclerosis in the United States. VBIO is dedicated to unlocking the power of cannabinoids for the treatment of serious neurological and inflammatory disorders.
VBIO’s products in the pipeline include Cannabosides – VITA-100 for gastrointestinal disorders, including inflammatory bowel disease and irritable bowel syndrome; Cannabosides – VITA-210 for muscle spasticity in multiple sclerosis and rare white matter disorders; and Cannabosides for epilepsy, schizophrenia, substance abuse, and Huntington’s disease.
According to company press materials, “Vitality Biopharma is dedicated to unlocking the power of cannabinoids for the treatment of serious neurological and inflammatory disorders.”
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As discussed above, VBIO found some traction this week at key range support with some help from the company’s communications department discussing its recent securing of a cool million in private placement capital.
According to the release, VBIO plans to use the proceeds from this financing for cannabinoid pharmaceutical research and development as well as for general corporate purposes. Company CEO Robert Brooke notes, “We are excited to obtain this additional investment from institutional investors, which is very helpful as we advance our proprietary cannabosides into clinical development.”
It should be noted that this money is through a private placement, which means we aren’t talking about shares or warrants that are registered as securities with the SEC. That should limit the secondary market dilutive consequences, at least over the near term.
Recent action has seen -10% stripped out share values for the company during the trailing week. However, the situation may be worth watching. VBIO has evidenced sudden upward volatility on many prior occasions. What’s more, the listing has registered increased average transaction volume recently, with the past month seeing 87% above its longer run average levels.
This should not be overlooked due to the tight float size in the stock (less than 19M shares). This type of thing is something to watch out for: a mechanically driven price squeeze can result from this type of mix of small float and ramping attention from traders.
Currently trading at a market capitalization of $37.63M, VBIO has a bankroll ($1.2M) of cash on the books, which is balanced by virtually no total current liabilities. VBIO is pulling in trailing 12-month revenues of $163K. However, VBIO is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -41.7%. We will update the story again soon as developments transpire. For continuing coverage on shares of $VBIO stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $VBIO, either long or short, and we have not been compensated for this article.
