NEW YORK (GenomeWeb News) – Pacific Biometrics today said that it has entered into a loan agreement providing the firm with $4 million.
The loan comes from Terry Giles, a member of the firm's board of directors, who stepped down from that position Aug. 31, in order to avoid a conflict of interest. The four-year loan has a fixed interest rate of 12 percent per year and provides for eight monthly interest-only payments, followed by 40 monthly payments comprised of interest plus amortization of the principal, Pacific Biometrics said.
As required by the loan, on Aug. 31, the firm repurchased 2,391,906 shares of common stock from certain stockholders at a price of $0.70 per share. Those shares will be retired to the company's treasury.
"We are very pleased that Terry Giles, who has served on our Board of Directors since September 2003, has agreed to provide financing for the Company to fund our working capital and growth needs, in particular our development efforts involving the biomarker services business," Ron Helm, CEO of Pacific Biometrics, said in a statement. "We believe the terms of the loan are more favorable than we could have obtained from other sources, and the financing allowed us to avoid the dilution to stockholders that would have resulted from an equity-based financing at the current price of our stock."