On Thursday July 14, 2011, AdvanSource Biomaterials Corporation (PINK:ASNB), a leading manufacturer of advanced polymer materials for an array of medical devices annunciated the completion of $800,000 debt financing transaction on July 7, 2011. The company has entered into a two-year term Commercial Real Estate Promissory Note with Axiom Partners, in the principal amount of $800,000 bearing interest at the rate of 15% per annum.
The component of the Note provides for monthly interest payment, to be initiated on August 31, 2011, and the huge payment of the principal balance of $800,000, plus any accumulated and unpaid interest, to be made on July 8, 2013. Company’s land and building pursuant are kept as mortgage with Axiom, thereby maintaining the security on the Note.
We believe that our financing transaction with Axiom Partners will be favorable for us, as we are looking forward to use the acquired working capital incurred by this transaction in the execution of our future business plan, acknowledged Michael Adams, AdvanSource’s CEO and President. He said that the respective transaction with the unparallel cooperation of Axiom has benefited them to retain the ownership of their land and building.
He also affirmed that the company is planning to execute on certain imperative initiatives during the fourth quarter of the year 2011, which is expected to bring about a considerable reduction of overhead thereby improving the company’s operating margins in the first half of the year 2012. “Our additional licensing arrangement with a large international manufacturer of medical devices is established to further contribute to our cash flow during fiscal 2012.” said Michael.
AdvanSource Biomaterials Corporation, at present has a net book value of approximately $2.4 million. It has entered into this financing transaction with Axiom Partners in order to incur working capital for the execution of its respective business plans at the same time it also aims to keep its shareholders aloof from any effect of dilution resulting from the said transaction.
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