The offering is for $5M and not $600K. If persons were to review the S3 filed back in May for $3M, the 600K is obviously a typo.
On the S3 in May, 8,020,919 shares were indicated as outstanding. In the new S3, 8,480,659 shares were indicated as outstanding where the Company indicated that $2.9 of the $3M S3 has been accessed to date. Assuming all new shares were S3 related, then an average selling price of $6.31 (2900000/459750).
If persons were to recall the SEC filing as to amended credit terms like early loan repayment, then I strongly suspect that $1.6M of the proceeds will be used to retire the Term Loan Facility. If so, this will leave PZZI with a $2M revolving credit facility that has a ZERO balance and an amended Advancing Term Loan of $6M that had a $0.9M balance per the 10K. Going forward, PZZI will have these credit arrangements and the remaining balance of the $5M share offering to finance the opening of additional Pie Five stores like the Houston market. Financial speaking, PZZI looks to be employing a balanced approach of short term debt, long term debt and equity to finance the growth of the Company.
Hot diggity. I guess it helps to read. That is why I need all the luck I can get. This makes more sense than 600K. It is much better. This tells me they're ready to move big time. 3M to test the waters and 5M to go all in.
"So you think its $5m on top of the $3 million for $8m total ?...That might keep a lid on the stock more than $600k would....If its a typo, it should be corrected."
Yup. $5 on top of $3. Can the competition do this? NO! This gives PZZI a DISTINCT competitive advantage. And YES. New shares coming to the market is apt to keep a lid on the stock price. But who is buying? The list of INSTITUTIONAL investors grow quarter to quarter and so does their holdings. Think about that. PZZI is able to utilize equity this way because there are ready and willing buyers. Meanwhile, PZZI is able to open Company store after Company store. As for being a "typo", I think that is obvious and most likely already corrected with the SEC.
To close, what do you think will happen to the stock price when PZZI has all these Company owned and Franchised stores up and running and there are no more new shares coming to market? Better yet, look at how the stock price has behaved with all those new shares coming to market! The days of so called "cheap" shares are over where the current stock price is the new bargain.