10-Q 1 form10-q.htm
false --12-31 Q3 0000830656 http://fasb.org/us-gaap/2023#ProductAndServiceOtherMember http://fasb.org/us-gaap/2023#ProductAndServiceOtherMember http://fasb.org/us-gaap/2023#ProductAndServiceOtherMember http://fasb.org/us-gaap/2023#ProductAndServiceOtherMember 0000830656 2023-01-01 2023-09-30 0000830656 2023-11-10 0000830656 2023-09-30 0000830656 2022-12-31 0000830656 us-gaap:ConvertibleDebtMember 2023-09-30 0000830656 us-gaap:ConvertibleDebtMember 2022-12-31 0000830656 us-gaap:RelatedPartyMember 2023-09-30 0000830656 us-gaap:RelatedPartyMember 2022-12-31 0000830656 PBIO:SeriesDConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesDConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesGConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesGConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesHConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesHConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesH2ConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesH2ConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesJConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesJConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesKConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesKConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesAAConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesAAConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesBBConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesBBConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesCCConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesCCConvertiblePreferredStockMember 2022-12-31 0000830656 2023-07-01 2023-09-30 0000830656 2022-07-01 2022-09-30 0000830656 2022-01-01 2022-09-30 0000830656 2021-12-31 0000830656 2022-09-30 0000830656 us-gaap:PreferredStockMember 2022-12-31 0000830656 us-gaap:CommonStockMember 2022-12-31 0000830656 us-gaap:WarrantMember 2022-12-31 0000830656 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0000830656 us-gaap:RetainedEarningsMember 2022-12-31 0000830656 us-gaap:PreferredStockMember 2023-03-31 0000830656 us-gaap:CommonStockMember 2023-03-31 0000830656 us-gaap:WarrantMember 2023-03-31 0000830656 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0000830656 us-gaap:RetainedEarningsMember 2023-03-31 0000830656 2023-03-31 0000830656 us-gaap:PreferredStockMember 2023-06-30 0000830656 us-gaap:CommonStockMember 2023-06-30 0000830656 us-gaap:WarrantMember 2023-06-30 0000830656 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0000830656 us-gaap:RetainedEarningsMember 2023-06-30 0000830656 2023-06-30 0000830656 us-gaap:PreferredStockMember 2021-12-31 0000830656 us-gaap:CommonStockMember 2021-12-31 0000830656 us-gaap:WarrantMember 2021-12-31 0000830656 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0000830656 us-gaap:RetainedEarningsMember 2021-12-31 0000830656 us-gaap:PreferredStockMember 2022-03-31 0000830656 us-gaap:CommonStockMember 2022-03-31 0000830656 us-gaap:WarrantMember 2022-03-31 0000830656 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0000830656 us-gaap:RetainedEarningsMember 2022-03-31 0000830656 2022-03-31 0000830656 us-gaap:PreferredStockMember 2022-06-30 0000830656 us-gaap:CommonStockMember 2022-06-30 0000830656 us-gaap:WarrantMember 2022-06-30 0000830656 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0000830656 us-gaap:RetainedEarningsMember 2022-06-30 0000830656 2022-06-30 0000830656 us-gaap:PreferredStockMember 2023-01-01 2023-03-31 0000830656 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0000830656 us-gaap:WarrantMember 2023-01-01 2023-03-31 0000830656 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0000830656 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0000830656 2023-01-01 2023-03-31 0000830656 us-gaap:PreferredStockMember 2023-04-01 2023-06-30 0000830656 us-gaap:CommonStockMember 2023-04-01 2023-06-30 0000830656 us-gaap:WarrantMember 2023-04-01 2023-06-30 0000830656 us-gaap:AdditionalPaidInCapitalMember 2023-04-01 2023-06-30 0000830656 us-gaap:RetainedEarningsMember 2023-04-01 2023-06-30 0000830656 2023-04-01 2023-06-30 0000830656 us-gaap:PreferredStockMember 2023-07-01 2023-09-30 0000830656 us-gaap:CommonStockMember 2023-07-01 2023-09-30 0000830656 us-gaap:WarrantMember 2023-07-01 2023-09-30 0000830656 us-gaap:AdditionalPaidInCapitalMember 2023-07-01 2023-09-30 0000830656 us-gaap:RetainedEarningsMember 2023-07-01 2023-09-30 0000830656 us-gaap:PreferredStockMember 2022-01-01 2022-03-31 0000830656 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0000830656 us-gaap:WarrantMember 2022-01-01 2022-03-31 0000830656 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0000830656 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0000830656 2022-01-01 2022-03-31 0000830656 us-gaap:PreferredStockMember 2022-04-01 2022-06-30 0000830656 us-gaap:CommonStockMember 2022-04-01 2022-06-30 0000830656 us-gaap:WarrantMember 2022-04-01 2022-06-30 0000830656 us-gaap:AdditionalPaidInCapitalMember 2022-04-01 2022-06-30 0000830656 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0000830656 2022-04-01 2022-06-30 0000830656 us-gaap:PreferredStockMember 2022-07-01 2022-09-30 0000830656 us-gaap:CommonStockMember 2022-07-01 2022-09-30 0000830656 us-gaap:WarrantMember 2022-07-01 2022-09-30 0000830656 us-gaap:AdditionalPaidInCapitalMember 2022-07-01 2022-09-30 0000830656 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0000830656 us-gaap:PreferredStockMember 2023-09-30 0000830656 us-gaap:CommonStockMember 2023-09-30 0000830656 us-gaap:WarrantMember 2023-09-30 0000830656 us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0000830656 us-gaap:RetainedEarningsMember 2023-09-30 0000830656 us-gaap:PreferredStockMember 2022-09-30 0000830656 us-gaap:CommonStockMember 2022-09-30 0000830656 us-gaap:WarrantMember 2022-09-30 0000830656 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0000830656 us-gaap:RetainedEarningsMember 2022-09-30 0000830656 2020-08-30 0000830656 PBIO:NexityGlobalSAMember 2023-01-01 2023-09-30 0000830656 PBIO:NexityGlobalSAMember 2023-09-30 0000830656 srt:MinimumMember 2023-09-30 0000830656 srt:MaximumMember 2023-09-30 0000830656 srt:NorthAmericaMember 2023-07-01 2023-09-30 0000830656 srt:NorthAmericaMember 2022-07-01 2022-09-30 0000830656 srt:NorthAmericaMember 2023-01-01 2023-09-30 0000830656 srt:NorthAmericaMember 2022-01-01 2022-09-30 0000830656 srt:EuropeMember 2023-07-01 2023-09-30 0000830656 srt:EuropeMember 2022-07-01 2022-09-30 0000830656 srt:EuropeMember 2023-01-01 2023-09-30 0000830656 srt:EuropeMember 2022-01-01 2022-09-30 0000830656 srt:AsiaMember 2023-07-01 2023-09-30 0000830656 srt:AsiaMember 2022-07-01 2022-09-30 0000830656 srt:AsiaMember 2023-01-01 2023-09-30 0000830656 srt:AsiaMember 2022-01-01 2022-09-30 0000830656 PBIO:HardwareMember 2023-07-01 2023-09-30 0000830656 PBIO:HardwareMember 2022-07-01 2022-09-30 0000830656 PBIO:HardwareMember 2023-01-01 2023-09-30 0000830656 PBIO:HardwareMember 2022-01-01 2022-09-30 0000830656 PBIO:ConsumablesMember 2023-07-01 2023-09-30 0000830656 PBIO:ConsumablesMember 2022-07-01 2022-09-30 0000830656 PBIO:ConsumablesMember 2023-01-01 2023-09-30 0000830656 PBIO:ConsumablesMember 2022-01-01 2022-09-30 0000830656 PBIO:ContractResearchServicesMember 2023-07-01 2023-09-30 0000830656 PBIO:ContractResearchServicesMember 2022-07-01 2022-09-30 0000830656 PBIO:ContractResearchServicesMember 2023-01-01 2023-09-30 0000830656 PBIO:ContractResearchServicesMember 2022-01-01 2022-09-30 0000830656 PBIO:SamplePreparationAccessoriesMember 2023-07-01 2023-09-30 0000830656 PBIO:SamplePreparationAccessoriesMember 2022-07-01 2022-09-30 0000830656 PBIO:SamplePreparationAccessoriesMember 2023-01-01 2023-09-30 0000830656 PBIO:SamplePreparationAccessoriesMember 2022-01-01 2022-09-30 0000830656 PBIO:TechnicalSupportExtendedServiceContractsMember 2023-07-01 2023-09-30 0000830656 PBIO:TechnicalSupportExtendedServiceContractsMember 2022-07-01 2022-09-30 0000830656 PBIO:TechnicalSupportExtendedServiceContractsMember 2023-01-01 2023-09-30 0000830656 PBIO:TechnicalSupportExtendedServiceContractsMember 2022-01-01 2022-09-30 0000830656 PBIO:AgrochemProductsMember 2023-07-01 2023-09-30 0000830656 PBIO:AgrochemProductsMember 2022-07-01 2022-09-30 0000830656 PBIO:AgrochemProductsMember 2023-01-01 2023-09-30 0000830656 PBIO:AgrochemProductsMember 2022-01-01 2022-09-30 0000830656 us-gaap:ShippingAndHandlingMember 2023-07-01 2023-09-30 0000830656 us-gaap:ShippingAndHandlingMember 2022-07-01 2022-09-30 0000830656 us-gaap:ShippingAndHandlingMember 2023-01-01 2023-09-30 0000830656 us-gaap:ShippingAndHandlingMember 2022-01-01 2022-09-30 0000830656 PBIO:OtherMember 2023-07-01 2023-09-30 0000830656 PBIO:OtherMember 2022-07-01 2022-09-30 0000830656 PBIO:OtherMember 2023-01-01 2023-09-30 0000830656 PBIO:OtherMember 2022-01-01 2022-09-30 0000830656 PBIO:TransferredAtAPointInTimeMember 2023-07-01 2023-09-30 0000830656 PBIO:TransferredAtAPointInTimeMember 2022-07-01 2022-09-30 0000830656 PBIO:TransferredAtAPointInTimeMember 2023-01-01 2023-09-30 0000830656 PBIO:TransferredAtAPointInTimeMember 2022-01-01 2022-09-30 0000830656 PBIO:TransferredOverAtTimeMember 2023-07-01 2023-09-30 0000830656 PBIO:TransferredOverAtTimeMember 2022-07-01 2022-09-30 0000830656 PBIO:TransferredOverAtTimeMember 2023-01-01 2023-09-30 0000830656 PBIO:TransferredOverAtTimeMember 2022-01-01 2022-09-30 0000830656 PBIO:TwoThousandAndTwentyThreeMember 2023-09-30 0000830656 PBIO:TwoThousandAndTwentyFourMember 2023-09-30 0000830656 PBIO:TopFiveCustomersMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-07-01 2023-09-30 0000830656 PBIO:TopFiveCustomersMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2022-07-01 2022-09-30 0000830656 PBIO:TopFiveCustomersMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-09-30 0000830656 PBIO:TopFiveCustomersMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2022-01-01 2022-09-30 0000830656 PBIO:FederalAgenciesMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-07-01 2023-09-30 0000830656 PBIO:FederalAgenciesMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2022-07-01 2022-09-30 0000830656 PBIO:FederalAgenciesMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-09-30 0000830656 PBIO:FederalAgenciesMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2022-01-01 2022-09-30 0000830656 PBIO:TopFiveCustomersMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-09-30 0000830656 PBIO:TopFiveCustomersMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2022-01-01 2022-12-31 0000830656 PBIO:FederalAgenciesMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-09-30 0000830656 PBIO:FederalAgenciesMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2022-01-01 2022-12-31 0000830656 PBIO:EmployeeStockOptionsMember 2023-01-01 2023-09-30 0000830656 PBIO:EmployeeStockOptionsMember 2022-01-01 2022-09-30 0000830656 us-gaap:ConvertibleDebtSecuritiesMember 2023-01-01 2023-09-30 0000830656 us-gaap:ConvertibleDebtSecuritiesMember 2022-01-01 2022-09-30 0000830656 PBIO:CommonStockWarrantsMember 2023-01-01 2023-09-30 0000830656 PBIO:CommonStockWarrantsMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesDConvertiblePreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesDConvertiblePreferredStockMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesGConvertiblePreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesGConvertiblePreferredStockMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesHConvertiblePreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesHConvertiblePreferredStockMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesHTwoConvertiblePreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesHTwoConvertiblePreferredStockMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesJConvertiblePreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesJConvertiblePreferredStockMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesKConvertiblePreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesKConvertiblePreferredStockMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesAAConvertiblePreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesAAConvertiblePreferredStockMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesBBConvertiblePreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesBBConvertiblePreferredStockMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesCCConvertiblePreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesCCConvertiblePreferredStockMember 2022-01-01 2022-09-30 0000830656 PBIO:EmployeesOfficersMember 2023-01-01 2023-09-30 0000830656 PBIO:EmployeesOfficersMember srt:MinimumMember 2023-01-01 2023-09-30 0000830656 PBIO:EmployeesOfficersMember srt:MaximumMember 2023-01-01 2023-09-30 0000830656 us-gaap:CostOfSalesMember 2023-07-01 2023-09-30 0000830656 us-gaap:CostOfSalesMember 2022-07-01 2022-09-30 0000830656 us-gaap:CostOfSalesMember 2023-01-01 2023-09-30 0000830656 us-gaap:CostOfSalesMember 2022-01-01 2022-09-30 0000830656 us-gaap:ResearchAndDevelopmentExpenseMember 2023-07-01 2023-09-30 0000830656 us-gaap:ResearchAndDevelopmentExpenseMember 2022-07-01 2022-09-30 0000830656 us-gaap:ResearchAndDevelopmentExpenseMember 2023-01-01 2023-09-30 0000830656 us-gaap:ResearchAndDevelopmentExpenseMember 2022-01-01 2022-09-30 0000830656 us-gaap:SellingAndMarketingExpenseMember 2023-07-01 2023-09-30 0000830656 us-gaap:SellingAndMarketingExpenseMember 2022-07-01 2022-09-30 0000830656 us-gaap:SellingAndMarketingExpenseMember 2023-01-01 2023-09-30 0000830656 us-gaap:SellingAndMarketingExpenseMember 2022-01-01 2022-09-30 0000830656 us-gaap:GeneralAndAdministrativeExpenseMember 2023-07-01 2023-09-30 0000830656 us-gaap:GeneralAndAdministrativeExpenseMember 2022-07-01 2022-09-30 0000830656 us-gaap:GeneralAndAdministrativeExpenseMember 2023-01-01 2023-09-30 0000830656 us-gaap:GeneralAndAdministrativeExpenseMember 2022-01-01 2022-09-30 0000830656 us-gaap:EquitySecuritiesMember 2023-09-30 0000830656 us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0000830656 us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel2Member 2023-09-30 0000830656 us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0000830656 us-gaap:FairValueInputsLevel1Member 2023-09-30 0000830656 us-gaap:FairValueInputsLevel2Member 2023-09-30 0000830656 us-gaap:FairValueInputsLevel3Member 2023-09-30 0000830656 us-gaap:EquitySecuritiesMember 2022-12-31 0000830656 us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0000830656 us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel2Member 2022-12-31 0000830656 us-gaap:EquitySecuritiesMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0000830656 us-gaap:FairValueInputsLevel1Member 2022-12-31 0000830656 us-gaap:FairValueInputsLevel2Member 2022-12-31 0000830656 us-gaap:FairValueInputsLevel3Member 2022-12-31 0000830656 PBIO:CorporateOfficeMember 2023-01-01 2023-09-30 0000830656 PBIO:MedfordLeaseMember 2023-01-01 2023-09-30 0000830656 PBIO:MedfordLeaseMember 2023-09-30 0000830656 PBIO:SparksLeaseMember 2021-08-08 2021-08-09 0000830656 PBIO:SparksLeaseMember 2023-09-30 0000830656 PBIO:BattelleMemorialInstituteMember 2014-01-01 2014-12-31 0000830656 PBIO:BattelleMemorialInstituteMember 2015-01-01 2015-12-31 0000830656 PBIO:BattelleMemorialInstituteMember 2016-01-01 2016-12-31 0000830656 PBIO:BattelleMemorialInstituteMember 2017-01-01 2017-12-31 0000830656 PBIO:BattelleMemorialInstituteMember 2018-01-01 2018-12-31 0000830656 PBIO:TargetDiscoveryIncMember 2012-04-01 2012-04-30 0000830656 PBIO:TargetDiscoveryIncMember 2022-01-01 2022-09-30 0000830656 PBIO:TargetDiscoveryIncMember 2023-01-01 2023-09-30 0000830656 us-gaap:ConvertibleDebtMember 2023-01-01 2023-09-30 0000830656 srt:MinimumMember us-gaap:ConvertibleDebtMember 2023-01-01 2023-09-30 0000830656 srt:MaximumMember us-gaap:ConvertibleDebtMember 2023-01-01 2023-09-30 0000830656 srt:MinimumMember us-gaap:ConvertibleDebtMember 2023-09-30 0000830656 srt:MaximumMember us-gaap:ConvertibleDebtMember 2023-09-30 0000830656 us-gaap:ConvertibleCommonStockMember us-gaap:ConvertibleDebtMember 2023-09-30 0000830656 us-gaap:ConvertibleDebtMember 2023-09-30 0000830656 PBIO:PBIAgrochemIncMember 2023-09-30 0000830656 PBIO:ThreeLendersMember 2023-01-01 2023-09-30 0000830656 PBIO:ThreeLendersMember PBIO:ForbearanceAgreementsMember 2023-01-01 2023-09-30 0000830656 PBIO:FourLendersMember PBIO:ForbearanceAgreementsMember 2023-09-30 0000830656 PBIO:NewLoanMember 2023-09-30 0000830656 PBIO:NewLoanMember 2023-01-01 2023-09-30 0000830656 PBIO:TenLoansMember 2023-01-01 2023-09-30 0000830656 us-gaap:CommonStockMember PBIO:TenLoansMember 2023-01-01 2023-09-30 0000830656 us-gaap:PreferredStockMember PBIO:TenLoansMember 2023-01-01 2023-09-30 0000830656 PBIO:ShortTermNonConvertibleLoanMember 2023-01-01 2023-09-30 0000830656 PBIO:ShortTermNonConvertibleLoanMember srt:MinimumMember 2023-09-30 0000830656 PBIO:ShortTermNonConvertibleLoanMember srt:MaximumMember 2023-09-30 0000830656 us-gaap:ConvertibleDebtMember 2023-01-01 2023-09-30 0000830656 PBIO:ShortTermNonConvertibleLoanMember 2023-09-30 0000830656 PBIO:ShortTermNonConvertibleLoanMember 2022-12-31 0000830656 us-gaap:InvestorMember 2023-01-01 2023-09-30 0000830656 us-gaap:InvestorMember 2023-09-30 0000830656 us-gaap:InvestorMember 2022-01-01 2022-12-31 0000830656 us-gaap:InvestorMember 2022-12-31 0000830656 PBIO:OthersMember srt:MinimumMember 2023-01-01 2023-09-30 0000830656 PBIO:OthersMember srt:MaximumMember 2023-01-01 2023-09-30 0000830656 PBIO:OthersMember srt:MinimumMember 2023-09-30 0000830656 PBIO:OthersMember srt:MaximumMember 2023-09-30 0000830656 PBIO:OthersMember 2023-09-30 0000830656 PBIO:OthersMember srt:MinimumMember 2022-01-01 2022-12-31 0000830656 PBIO:OthersMember srt:MaximumMember 2022-01-01 2022-12-31 0000830656 PBIO:OthersMember srt:MinimumMember 2022-12-31 0000830656 PBIO:OthersMember srt:MaximumMember 2022-12-31 0000830656 PBIO:OthersMember 2022-12-31 0000830656 us-gaap:ConvertibleDebtMember PBIO:FiveDayAverageVWAPMember 2023-09-30 0000830656 us-gaap:ConvertibleDebtMember PBIO:SeriesAAPreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:ConvertibleDebtOneMember 2023-01-01 2023-09-30 0000830656 PBIO:ConvertibleDebtTwoMember 2023-01-01 2023-09-30 0000830656 PBIO:ConvertibleDebtThreeMember 2023-01-01 2023-09-30 0000830656 PBIO:ConvertibleDebtFourMember 2023-01-01 2023-09-30 0000830656 srt:ChiefExecutiveOfficerMember 2023-09-30 0000830656 PBIO:NonConvertibleLoansMember 2023-09-30 0000830656 PBIO:NonConvertibleLoansMember 2022-12-31 0000830656 PBIO:MerchantDebtMember 2023-09-30 0000830656 PBIO:MerchantDebtMember 2022-12-31 0000830656 PBIO:SBAMember 2023-09-30 0000830656 PBIO:SBAMember 2022-12-31 0000830656 PBIO:PayrollProtectionProgramMember 2020-12-31 0000830656 PBIO:PaycheckProtectionProgrammeMember 2021-12-31 0000830656 PBIO:MerchantAgreementMember srt:MinimumMember 2023-09-30 0000830656 PBIO:MerchantAgreementMember srt:MaximumMember 2023-09-30 0000830656 PBIO:MerchantAgreementMember 2023-01-01 2023-09-30 0000830656 PBIO:MerchantAgreementMember 2022-01-01 2022-12-31 0000830656 PBIO:OfficersAndDirectorsMember 2023-09-30 0000830656 PBIO:OfficersAndDirectorsMember 2023-01-01 2023-09-30 0000830656 PBIO:OfficersAndDirectorsMember 2022-12-31 0000830656 PBIO:OfficersAndDirectorsMember 2022-01-01 2022-12-31 0000830656 PBIO:OtherRelatedPartiesMember 2023-09-30 0000830656 PBIO:OtherRelatedPartiesMember 2023-01-01 2023-09-30 0000830656 PBIO:OtherRelatedPartiesMember 2022-12-31 0000830656 PBIO:OtherRelatedPartiesMember 2022-01-01 2022-12-31 0000830656 us-gaap:RelatedPartyMember 2023-01-01 2023-09-30 0000830656 us-gaap:RelatedPartyMember 2022-01-01 2022-12-31 0000830656 us-gaap:RelatedPartyMember 2023-09-30 0000830656 us-gaap:RelatedPartyMember 2022-12-31 0000830656 us-gaap:RelatedPartyMember srt:MinimumMember 2023-09-30 0000830656 us-gaap:RelatedPartyMember srt:MaximumMember 2023-09-30 0000830656 us-gaap:PreferredStockMember 2023-09-30 0000830656 PBIO:SeriesBBConvertiblePreferredStockMember 2023-05-01 0000830656 PBIO:SeriesCCConvertiblePreferredStockMember 2023-05-01 0000830656 PBIO:SeriesBBPreferredStockMember 2023-09-30 0000830656 PBIO:SeriesBBPreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesCCPreferredStockMember 2023-09-30 0000830656 PBIO:SeriesCCPreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesBBRestrictedPreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesCCRestrictedPreferredStockMember 2023-01-01 2023-09-30 0000830656 PBIO:SeriesBBPreferredStockMember us-gaap:PreferredStockMember 2023-01-01 2023-09-30 0000830656 us-gaap:CommonStockMember 2023-01-01 2023-09-30 0000830656 PBIO:TwoThousandAndTwentyOneEquityIncentivePlanMember 2021-12-30 0000830656 PBIO:TwoThousandAndTwentyOneEquityIncentivePlanMember 2023-09-30 0000830656 PBIO:UnvestedStockBasedAwardsMember 2023-09-30 0000830656 PBIO:UnvestedStockBasedAwardsMember 2023-01-01 2023-09-30 0000830656 PBIO:StockOptionsMember 2023-09-30 0000830656 PBIO:StockOptionsMember 2023-01-01 2023-09-30 0000830656 PBIO:ExercisableOptionsMember 2023-01-01 2023-09-30 0000830656 us-gaap:WarrantMember 2023-04-13 0000830656 us-gaap:WarrantMember 2023-04-11 2023-04-13 0000830656 us-gaap:WarrantMember 2023-01-01 2023-09-30 0000830656 us-gaap:CommonStockMember 2022-01-01 2022-09-30 0000830656 PBIO:AccreditedInvestorAndConsultantsMember 2023-01-01 2023-09-30 0000830656 us-gaap:PaymentInKindPIKNoteMember PBIO:CommonStockAndWarrantMember 2023-01-01 2023-09-30 0000830656 PBIO:IssuedForServicesRenderedMember PBIO:CommonStockAndWarrantMember 2023-01-01 2023-09-30 0000830656 PBIO:IssuedForServicesRenderedMember 2023-01-01 2023-09-30 0000830656 PBIO:ConversionOfDebtMember 2023-01-01 2023-09-30 0000830656 PBIO:DebtSettlementMember 2023-01-01 2023-09-30 0000830656 PBIO:LenderMember 2023-09-30 0000830656 PBIO:DividendsPaidInKindMember 2023-01-01 2023-09-30 0000830656 PBIO:ConversionOfDebtMember PBIO:CommonStockAndWarrantMember 2023-01-01 2023-09-30 0000830656 PBIO:DebtExtensionMember 2023-01-01 2023-09-30 0000830656 PBIO:NewCommonStockIssuancesMember 2023-01-01 2023-09-30 0000830656 PBIO:ConversionOfPreferredToCommonStockMember 2023-01-01 2023-09-30 0000830656 us-gaap:RestrictedStockMember 2022-01-01 2022-09-30 0000830656 PBIO:ConversionOfDebtMember 2022-01-01 2022-09-30 0000830656 us-gaap:PaymentInKindPIKNoteMember 2022-01-01 2022-09-30 0000830656 PBIO:IssuedForServicesRenderedMember 2022-01-01 2022-09-30 0000830656 us-gaap:CommonStockMember PBIO:IssuedForServicesRenderedMember 2023-01-01 2023-09-30 0000830656 us-gaap:PaymentInKindPIKNoteMember us-gaap:CommonStockMember 2023-01-01 2023-09-30 0000830656 us-gaap:PaymentInKindPIKNoteMember us-gaap:CommonStockMember 2022-01-01 2022-09-30 0000830656 us-gaap:CommonStockMember PBIO:NewConversionDebtMember 2022-01-01 2022-09-30 0000830656 us-gaap:CommonStockMember PBIO:DebtExtensionMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesAAPreferredStockMember PBIO:DebtExtensionMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesAAPreferredStockMember 2022-01-01 2022-09-30 0000830656 us-gaap:WarrantMember 2022-01-01 2022-09-30 0000830656 PBIO:SeriesAJuniorParticipatingPreferredStockMember 2023-09-30 0000830656 PBIO:SeriesAJuniorParticipatingPreferredStockMember 2022-12-31 0000830656 PBIO:SeriesAConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesAConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesBConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesBConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesCConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesCConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:SeriesEConvertiblePreferredStockMember 2023-09-30 0000830656 PBIO:SeriesEConvertiblePreferredStockMember 2022-12-31 0000830656 PBIO:StockOptionsMember 2022-12-31 0000830656 us-gaap:SubsequentEventMember 2023-11-05 0000830656 us-gaap:SubsequentEventMember srt:MinimumMember 2023-11-05 0000830656 us-gaap:SubsequentEventMember srt:MaximumMember 2023-11-05 0000830656 us-gaap:SubsequentEventMember us-gaap:CommonStockMember 2023-10-01 2023-11-05 0000830656 PBIO:SeriesBBConvertiblePreferredStockMember us-gaap:SubsequentEventMember 2023-10-01 2023-11-05 0000830656 srt:BoardOfDirectorsChairmanMember us-gaap:SubsequentEventMember PBIO:TwoThousandTwentyOneEquityPlanMember 2023-10-18 2023-10-18 0000830656 srt:BoardOfDirectorsChairmanMember us-gaap:SubsequentEventMember PBIO:TwoThousandTwentyOneEquityPlanMember 2023-10-18 0000830656 srt:BoardOfDirectorsChairmanMember us-gaap:SubsequentEventMember 2023-10-18 2023-10-18 0000830656 srt:BoardOfDirectorsChairmanMember us-gaap:SubsequentEventMember 2023-10-18 0000830656 PBIO:MrSchumacherMember us-gaap:SubsequentEventMember 2023-10-18 2023-10-18 0000830656 PBIO:DrsTingMember us-gaap:SubsequentEventMember 2023-10-18 2023-10-18 0000830656 PBIO:LazarevMember us-gaap:SubsequentEventMember 2023-10-18 2023-10-18 0000830656 srt:ExecutiveOfficerMember us-gaap:SubsequentEventMember 2023-10-18 0000830656 srt:ExecutiveOfficerMember us-gaap:SubsequentEventMember srt:MinimumMember 2023-10-18 0000830656 srt:ExecutiveOfficerMember us-gaap:SubsequentEventMember srt:MaximumMember 2023-10-18 iso4217:USD xbrli:shares iso4217:USD xbrli:shares PBIO:Integer xbrli:pure

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2023

 

or

 

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from _____________ to _____________

 

Commission File Number 001-38185

 

PRESSURE BIOSCIENCES, INC.

(Exact name of registrant as specified in its charter)

 

Massachusetts   04-2652826
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)

 

14 Norfolk Avenue

South Easton, Massachusetts

  02375
(Address of principal executive offices)   (Zip Code)

 

(508) 230-1828

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
N/A   N/A   N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Yes ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

  Large accelerated filer Accelerated filer
  Non-accelerated Filer Smaller Reporting Company
  Emerging Growth Company    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).

 

☐ Yes ☒ No

 

The number of shares outstanding of the Issuer’s common stock as of November 10, 2023 was 21,726,433.

 

 

 

 

 

 

TABLE OF CONTENTS

 

  Page
   
PART I - FINANCIAL INFORMATION 3
   
Item 1. Unaudited Financial Statements 3
   
Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 3
   
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022 4
   
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 5
   
Consolidated Statements of Changes in Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2023 and 2022 7
   
Notes to Unaudited Consolidated Financial Statements 9
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 26
   
Item 3. Quantitative and Qualitative Disclosure About Market Risk 30
   
Item 4. Controls and Procedures 30
   
PART II - OTHER INFORMATION 31
   
Item 1. Legal Proceedings 31
   
Item 1A. Risk Factors 31
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 31
   
Item 3. Defaults Upon Senior Securities 32
   
Item 4. Mine Safety Disclosures 32
   
Item 5. Other Information 32
   
Item 6. Exhibits 32
   
SIGNATURES 33

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report2
 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

   September 30, 2023   December 31, 2022 
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents  $5,263   $3,865 
Accounts receivable   329,263    295,374 
Inventories, net of $905,759 and $982,973 reserve, respectively   467,155    686,383 
Prepaid expenses and other current assets   219,283    257,527 
Total current assets   1,020,964    1,243,149 
Investment in equity securities   77,918    63,638 
Property and equipment, net   91,409    103,351 
Right of use asset operating leases   159,424    282,095 
Intangible assets, net   252,404    317,308 
TOTAL ASSETS  $1,602,119   $2,009,541 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
CURRENT LIABILITIES          
Accounts payable  $1,062,565   $637,238 
Accrued employee compensation   376,760    167,247 
Accrued professional fees and other   2,722,666    2,497,762 
Accrued interest and dividends payable   4,576,350    10,803,983 
Deferred revenue   253,152    58,242 
Convertible debt, net of unamortized debt discounts of $744,393 and $455,517, respectively   18,222,120    17,823,669 
Other debt, net of unamortized discounts of $0 and $0, respectively   2,030,510    1,638,969 
Related party, net of unamortized debt discount of $514 and $7,915, respectively   647,986    634,885 
Right of use operating lease liability   66,259    142,171 
Total current liabilities   29,958,368    34,404,166 
LONG TERM LIABILITIES          
Long term debt   162,522    150,000 
Right of use operating lease liability long term   71,287    139,924 
Deferred revenue   10,645    1,822 
TOTAL LONG TERM LIABILITIES   244,454    291,746 
TOTAL LIABILITIES   30,202,822    34,695,912 
COMMITMENTS AND CONTINGENCIES (Note 4)   -    - 
STOCKHOLDERS’ DEFICIT          
Series D, G, H, H2, J, K, AA, BB, CC Convertible Preferred Stock, $.01 par value (Note 6)   100    1,098 
Common stock, $.01 par value; 100,000,000 shares authorized; 23,399,945 and 13,682,910 shares issued and outstanding on September 30, 2023 and December 31, 2022, respectively   234,000    136,829 
Warrants to acquire common stock   35,684,321    31,995,762 
Additional paid-in capital   93,973,646    69,006,145 
Accumulated deficit   (158,492,770)   (133,826,205)
TOTAL STOCKHOLDERS’ DEFICIT   (28,600,703)   (32,686,371)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $1,602,119   $2,009,541 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report3
 

 

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   2023   2022   2023   2022 
   For the Three Months Ended
September 30,
   For the Nine Months Ended
September 30,
 
   2023   2022   2023   2022 
Revenue:                    
Products, services, other  $413,009   $144,032   $1,665,412   $1,122,169 
Total revenue   413,009    144,032    1,665,412    1,122,169 
Costs and expenses:                    
Cost of products and services   229,457    126,203    844,684    742,707 
Research and development   288,345    262,370    1,004,437    716,685 
Selling and marketing   157,773    226,526    537,802    422,422 
General and administrative   1,030,243    892,293    5,290,564    2,591,644 
Total operating costs   1,705,818    1,507,392    7,677,487    4,473,458 
Operating loss   (1,292,809)   (1,363,360)   (6,012,075)   (3,351,289)
                     
Other (expense) income:                    
Interest expense, net   (4,338,759)   (2,034,021)   (14,112,098)   (6,448,771)
Unrealized gain (loss) on investment in equity securities   (5,965)   (8,675)   14,280    (8,047)
Gain (loss) on extinguishment of liabilities   -    (1,054,122)   687,591    (1,809,249)
Other income (expense)   7,588    (2,059)   11,820    (904)
Total other expense   (4,337,136)   (3,098,877)   (13,398,407)   (8,266,971)
Net loss   (5,629,945)   (4,462,237)   (19,410,482)   (11,618,260)
Deemed dividends on extension of warrants   -    -    (3,626,950)   - 
Preferred stock dividends   (632,054)   (431,709)   (1,629,133)   (1,295,566)
Net loss attributable to common shareholders  $(6,261,999)  $(4,893,946)  $(24,666,565)  $(12,913,826)
Basic and diluted net loss per share attributable to common shareholders  $(0.29)  $(0.44)  $(1.21)  $(1.24)
Weighted average common shares outstanding used in the basic and diluted net loss per share calculation   21,716,950    11,131,742    20,337,229    10,429,817 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report4
 

 

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   2023   2022 
   For the Nine Months Ended 
   September 30, 
   2023   2022 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(19,410,482)  $(11,618,260)
Adjustments to reconcile net loss to net cash used in operating activities:          
(Gain) on extinguishment of debt   (687,591)   (10,000)
Non-cash lease expense   122,671    82,001 
Common stock and warrants issued for interest   3,715,204    2,196,278 
Depreciation and amortization   84,341    67,985 
Accretion of interest and amortization of debt discount   3,213,622    1,777,863 
Loss on extinguishment of accrued liabilities and debt   -    1,809,249 
Common stock and warrants issued for debt extension   1,671,573    - 
Preferred stock issued for debt extension   2,683,600    - 
Stock-based compensation expense   1,706,420    128,984 
(Gain)/Loss on investment in equity securities   (14,280)   8,047 
Common stock and warrants issued for services   1,978,645    367,370 
Preferred stock issued for services   617,200    - 
Changes in operating assets and liabilities:          
Accounts receivable   (33,889)   (11,568)
Inventories   219,228    (238,973)
Prepaid expenses and other assets   38,244    204,141 
Accounts payable   425,327    80,130 
Accrued employee compensation   209,513    104,258 
Operating lease liability   (144,549)   (82,001)
Deferred revenue and other accrued expenses   1,551,380    2,083,239 
Net cash used in operating activities   (2,053,823)   (3,051,257)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property plant and equipment   (7,495)   (20,754)
Net cash used in investing activities   (7,495)   (20,754)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Sale of common stock for cash   150,000    - 
Proceeds from stock option exercises   81,111    17,443 
Net proceeds from convertible debt   4,336,665    3,428,249 
Net proceeds from non-convertible debt - third party   2,043,681    1,815,000 
Net proceeds from debt - related party   159,186    762,500 
Payments on convertible debt   (2,462,269)   (1,086,946)
Payments on debt - related party   (159,000)   (259,600)
Payments on non-convertible debt   (2,086,658)   (1,506,066)
Net cash provided by financing activities   2,062,716    3,170,580 
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   1,398    98,569 
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR   3,865    132,311 
CASH AND CASH EQUIVALENTS AT END OF PERIOD  $5,263   $230,880 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report5
 

 

   2023   2022 
   For the Nine Months Ended 
   September 30, 
   2023   2022 
CASH FLOWS SUPPLEMENTAL INFORMATION          
Interest paid in cash  $1,219,038   $938,451 
NON CASH TRANSACTIONS:          
Early adoption of ASU 2020-06   -    473,027 
Common stock issued with debt   1,293,270    512,593 
Discount from warrants issued with debt   -    93,576 
Common stock issued in lieu of cash for dividend   162,528    306,333 
Preferred stock issued with debt   539,487    - 
Preferred stock dividends   1,629,133    1,295,566 
Conversion of preferred stock for common stock   14,869    44 
Conversion of debt, interest, preferred stock dividend for preferred stock   10,017,212    - 
Conversion of debt and interest into common stock   509,033    350,500 
Conversion of common stock for preferred stock   6,240    - 
Extension of warrants for Series AA preferred stock   3,626,950    - 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report6
 

 

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND SEPTEMBER 30, 2022

(UNAUDITED)

 

   Shares   Amount   Shares   Amount   Warrants   Capital   Deficit   Deficit 
   Combined Preferred Stock   Common Stock   Stock   Additional Paid In   Accumulated   Total Stockholders’ 
   Shares   Amount   Shares   Amount   Warrants   Capital   Deficit   Deficit 
BALANCE, December 31, 2022   109,874   $1,098    13,682,910   $136,829   $31,995,762   $69,006,145   $(133,826,205)  $(32,686,371)
Stock option exercise   -    -    117,552    1,176    -    79,935    -    81,111 
Stock-based compensation   -    -    -    -    -    1,430,244    -    1,430,244 
Series AA Preferred Stock dividend   -    -    -    -    -    -    (431,807)   (431,807)
Issuance of common stock for services   -    -    990,500    9,905    -    1,409,430    -    1,419,335 
Issuance of common stock warrants for services   -    -    -    -    61,609    -    -    61,609 
Conversion of debt and interest for common stock   -    -    203,613    2,036    -    506,997    -    509,033 
Issuance of common stock for dividends paid-in-kind   -    -    73,694    737    -    101,698    -    102,435 
Issuance of common stock for interest paid-in-kind   -    -    1,111,081    11,111    -    1,694,123    -    1,705,234 
Common stock issued for debt extension   -    -    568,200    5,682    -    1,024,257    -    1,029,939 
Stock issued with debt   -    -    783,150    7,832    -    1,079,919    -    1,087,751 
Conversion of preferred stock for common stock   (101,154)   (1,012)   493,540    4,935    -    (3,923)   -    - 
Sale of Common Stock   -    -    40,000    400    -    99,600    -    100,000 
Net loss   -    -    -    -    -    -    (6,857,834)   (6,857,834)
Balance, March 31, 2023   8,720   $86    18,064,240   $180,643   $32,057,371   $76,428,425   $(141,115,846)  $(32,449,321)
Series AA/CC Preferred Stock dividend   -    -    -    -    -    -    (565,272)   (565,272)
Stock-based compensation   -    -    -    -    -    135,554    -    135,554 
Issuance of common stock for services   -    -    147,500    1,475    -    170,925    -    172,400 
Extension of warrants for Series AA Preferred stock   -    -    -    -    3,626,950    -    (3,626,950)   - 
Common stock issued for debt extension   -    -    528,600    5,286    -    486,348    -    491,634 
Conversion of preferred stock for common stock   (44)   -    44,400    444    -    (444)   -    - 
Conversion of debt, accrued interest and accrued dividend for preferred stock   401    4    -    -    -    10,017,208    -    10,017,212 
Conversion of common stock to preferred stock   62    1    (624,000)   (6,240)   -    6,239    -    - 
Issuance of common stock for dividends paid-in-kind   -    -    69,073    690    -    59,403    -    60,093 
Issuance of common stock for interest paid-in-kind   -    -    1,034,000    10,340    -    1,286,106    -    1,296,446 
Stock issued with debt   -    -    302,092    3,021    -    153,653    -    156,674 
Sale of Common Stock   -    -    20,000    200    -    49,800    -    50,000 
Issuance of preferred stock for services   57    1    -    -    -    505,699    -    505,700 
Issuance of Preferred stock for debt extension   185    2    -    -    -    1,396,998    -    1,397,000 
Preferred stock issued with debt   58    1    -    -    -    539,486    -    539,487 
Net loss   -    -    -    -    -    -    (6,922,703)   (6,922,703)
BALANCE, June 30, 2023   9,439   $95    19,585,905   $195,859   $35,684,321   $91,235,400   $(152,230,771)  $(25,115,096)
Stock-based compensation   -    -    -    -    -    140,622    -    140,622 
Series AA/CC Preferred Stock dividend   -    -    -    -    -    -    (632,054)   (632,054)
Issuance of common stock for services   -    -    492,500    4,926    -    320,375    -    325,301 
Common stock issued for debt extension   -    -    250,000    2,500    -    147,500    -    150,000 
Conversion of preferred stock for common stock   (95)   (1)   949,000    9,490    -    (9,489)   -    - 
Issuance of common stock for interest paid-in-kind   -    -    1,949,040    19,490    -    694,034    -    713,524 
Stock issued with debt   -    -    173,500    1,735    -    47,110    -    48,845 
Issuance of preferred stock for services   35    -    -    -    -    111,500    -    111,500 
Issuance of Preferred stock for debt extension   556    6    -    -    -    1,286,594    -    1,286,600 
Net loss   -    -    -    -    -    -    (5,629,945)   (5,629,945)
BALANCE, September 30, 2023   9,935   $100    23,399,945   $234,000   $35,684,321   $93,973,646   $(158,492,770)  $(28,600,703)

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report7
 

 

   Combined Preferred Stock   Common Stock   Stock    Additional Paid In    Accumulated    Total Stockholders’ 
   Shares   Amount   Shares   Amount   Warrants   Capital   Deficit   Deficit 
BALANCE, December 31, 2021   109,878   $1,099    9,120,526   $91,206   $31,715,154   $64,261,048   $(118,277,468)  $(22,208,961)
Early adoption of ASU 2020-06   -    -    -    -    -    (2,728,243)   2,255,216    (473,027)
Stock-based compensation   -    -    -    -    -    64,483    -    64,483 
Series AA Preferred Stock dividend   -    -    -    -    -    -    (432,149)   (432,149)
Issuance of common stock for services   -    -    37,000    370    -    77,330    -    77,700 
Issuance of common stock warrants for services   -    -    -    -    39,761    -    -    39,761 
Warrants issued for debt extension   -    -    -    -    132,537    -    -    132,537 
Common stock issued for debt extension   -    -    214,500    2,145    -    470,755    -    472,900 
Conversion of debt and interest for common stock   -    -    140,200    1,402    -    349,098    -    350,500 
Issuance of common stock for dividends paid-in-kind   -    -    31,810    318    -    63,938    -    64,256 
Issuance of common stock for interest paid-in-kind   -    -    558,100    5,581    -    1,167,877    -    1,173,458 
Stock issued with debt   -    -    92,000    920    -    141,560    -    142,480 
Warrants issued with debt   -    -    -    -    87,436    -    -    87,436 
Net loss   -    -    -    -    -    -    (4,239,685)   (4,239,685)
BALANCE, March 31, 2022   109,878   $1,099    10,194,136   $101,942   $31,974,888   $63,867,846   $(120,694,086)  $(24,748,311)
Stock-based compensation   -    -    -    -    -    32,074    -    32,074 
Stock option exercise   -    -    25,279    253    -    17,190    -    17,443 
Series AA Preferred Stock dividend   -    -    -    -    -    -    (431,708)   (431,708)
Issuance of common stock for services   -    -    40,000    400    -    67,400    -    67,800 
Common stock issued for debt extension   -    -    106,400    1,064    -    190,239    -    191,303 
Conversion of preferred stock for common stock   (4)   (1)   4,400    44    -    (43)   -    - 
Issuance of common stock for dividends paid-in-kind   -    -    86,464    865    -    150,156    -    151,021 
Issuance of common stock for interest paid-in-kind   -    -    224,500    2,245    -    386,270    -    388,515 
Stock issued with debt   -    -    22,000    220    -    35,628    -    35,848 
Net loss   -    -    -    -    -    -    (2,916,338)   (2,916,338)
BALANCE, June 30, 2022   109,874   $1,098    10,703,179   $107,033   $31,974,888   $64,746,760   $(124,042,132)  $(27,212,353)
Stock-based compensation   -    -    -    -    -    32,427    -    32,427 
Issuance of common stock for interest paid-in-kind   -    -    389,500    3,895    -    630,410    -    634,305 
Issuance of common stock for dividends paid-in-kind   -    -    52,032    520    -    90,536    -    91,056 
Issuance of common stock for services   -    -    113,500    1,135    -    166,240         167,375 
Series AA Preferred Stock dividend   -    -    -    -    -    -    (431,709)   (431,709)
Common stock issued for debt extension   -    -    707,900    7,079    -    1,043,396    -    1,050,475 
Warrants issued for services   -    -    -    -    14,734    -    -    14,734 
Stock issued with debt   -    -    254,500    2,545    -    331,720    -    334,265 
Stock warrants issued   -    -    -    -    6,140    -    -    6,140 
Net loss   -    -    -    -    -    -    (4,462,237)   (4,462,237)
BALANCE, September 30, 2022   109,874   $1,098    12,220,611   $122,207   $31,995,762   $67,041,489   $(128,936,078)  $(29,775,522)

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report8
 

 

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(UNAUDITED)

 

1) Business Overview, Liquidity and Management Plans

 

Pressure BioSciences, Inc. (OTCQB: PBIO) (the “Company”) is a leader in the development & sale of innovative, enabling, high pressure technology-based instruments, consumables, and services for the life sciences and other industries worldwide. Our products/services are based on three patented, high-pressure platforms: (i) Ultra Shear Technology™ (“UltraShear™” or “UST™”), (ii) BaroFold Technology™ (“BaroFold™”), and (iii) Pressure Cycling Technology™ (“PCT™”)

 

The Company was founded on the belief that its PCT platform had the potential to significantly increase the quality of sample preparation in both research and clinical settings. This premise has been well proven and PBI has been successful in installing its PCT platform in the laboratories of key opinion leaders worldwide. Although developed subsequently, the Company now assesses that the commercial potential for its UST platform across diverse multi-billion-dollar markets far exceeds the potential of the PCT platform. Consequently, in January 2022, PBI made the critical strategy decision to immediately shift its primary business focus from PCT to its innovative UST Platform.

 

The UST Platform (8 issued patents) is based on the use of intense shear forces from ultra-high-pressure discharge (greater than 20,000 psi) through a dynamically controlled nano-gap valve under precisely controlled temperatures. UST has been shown to turn hydrophobic (water-repelling) oil-based supplements (e.g., CBD, curcumin, astaxanthin), therapeutics (e.g., prednisone), and other active ingredients (e.g., retinol) into long-term stable, effectively water-soluble, highly bioavailable, oil-in-water nanoemulsion formulations. The Company first introduced the UST Platform in May 2022 through participation in several cannabis/health & wellness meetings combined with a free-sample program. Executed agreements were subsequently announced with six CBD companies and one cosmeceutical/skincare company for full commercialization in Q3 202 3. The Company began shipping Nano CBD topical spray on October 2, 2023.

 

The BaroFold Platform (14 issued patents) can be used to significantly improve the quality and production costs of protein biotherapeutics. It employs high pressure manipulations for the disaggregation, unfolding and controlled refolding of proteins to their desired native structures at yields and efficiencies not achievable using existing technologies. The BaroFold Platform has been shown to remove protein aggregates in biotherapeutic drug manufacturing, thereby improving product efficacy, safety, and cost for both new-drug entities and biosimilar (follow-on biologic) products. It is scalable and practical for standard manufacturing processes.

 

The PCT Platform (17 issued patents) uses alternating cycles of hydrostatic pressure between ambient and ultra-high pressures to control bio-molecular interactions safely and reproducibly in sample preparation (e.g., the critical steps performed by tens of thousands of scientists worldwide prior to analytical measurements, such as cell lysis and biomolecule extraction from tissue samples). Our focus for PCT is on making, GMP-compliant, next generation PCT-based Barocycler EXTREME system available globally to biopharmaceutical drug manufacturers for use in the design, development, characterization, and quality control of biotherapeutic drugs. We currently have over 350 PCT Systems placed in approximately 250 academic, government, pharmaceutical, and biotech research laboratories worldwide. There are currently over 200 independent publications highlighting the advantages of using the PCT Platform in scientific research & clinical laboratories.

 

2) Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. However, we have experienced losses from operations and negative cash flows from operationing business since our inception. As of September 30, 2023, we do not have adequate working capital resources to satisfy our current liabilities and as a result, there is substantial doubt regarding our ability to continue as a going concern. We have been successful in raising debt and equity capital in the past as described in Notes 5 and 6. In addition, we raised debt and equity capital after September 30, 2023, as described in Note 7. We have financing efforts in place to continue to raise cash through debt and equity offerings. Although we have successfully completed financings and reduced expenses in the past, we cannot assure you that our plans to address these matters in the future will be successful. These financial statements do not include any adjustments that might result from this uncertainty.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report9
 

 

3) Summary of Significant Accounting Policies

 

Basis of Presentation

 

The unaudited interim financial statements of Pressure BioSciences, Inc. and its consolidated subsidiaries (collectively, the “Company”) included herein have been prepared by the Company in accordance with the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission. Under these rules and regulations, some information and footnote disclosures normally included in financial statements prepared under accounting principles generally accepted in the United States of America have been shortened or omitted. Management believes that all adjustments necessary for a fair statement of the financial position and the results of operations for the periods shown have been made. All adjustments are normal and recurring. These financial statements should be read together with the Company’s audited financial statements included in its Form 10-K for the fiscal year ended December 31, 2022. Operating results for the nine months ended September 30, 2023 are not necessarily indicative of the final results that may be expected for the year ending December 31, 2023.

 

Use of Estimates

 

The Company’s consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates, judgements and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Global concerns about the COVID-19 pandemic have adversely affected, and we expect will continue to adversely affect, our business, financial condition and results of operations including the estimates and assumptions made by management. Significant estimates and assumptions include valuations of share-based awards, investments in equity securities and intangible asset impairment. Actual results could differ from the estimates, and such differences may be material to the Company’s consolidated financial statements.

 

Recent Accounting Pronouncements

 

In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes the beneficial conversion separation model for convertible debt. As a result, after adopting the guidance, entities will no longer account for beneficial conversion features in equity. The guidance is effective for public business entities, other than small reporting company’s financial statements starting January 1, 2022, with early adoption permitted. The Company is a small reporting company and early adopted the new guidance on January 1, 2022 using the modified retrospective approach and recorded a cumulative effect of adoption equal to a $2,728,243 decrease in additional paid in capital and a $2,255,216 decrease in accumulated deficit. There is no material impact to the Company’s statements of operations or cash flows as the result of the adoption of ASU 2020-06.

 

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires measurement and recognition of expected credit losses for financial assets held. We adopted this new accounting guidance effective January 1, 2023. The adoption did not have a material impact on our consolidated financial statements and disclosures and did not significantly impact the Company’s accounting policies or estimation methods related to the allowance for doubtful accounts. The Company does not have any reserve for doubtful accounts due to its customers being distributors, universities, research organizations and government agencies. In the past several years, all its customers have paid in full without any need for a write-down.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Pressure BioSciences, Inc., and its wholly owned subsidiaries PBI BioSeq, Inc. and PBI Agrochem, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report10
 

 

Revenue Recognition

 

We recognize revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers, and ASC 340-40, Other Assets and Deferred Costs—Contracts with Customers. Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. We enter sales contracts that may consist of multiple distinct performance obligations where certain performance obligations of the sales contract are not delivered in one reporting period. We measure and allocate revenue according to ASC 606-10.

 

We identify a performance obligation as distinct if both the following criteria are true: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determining the standalone selling price (“SSP”) and allocation of consideration from a contract to the individual performance obligations, and the appropriate timing of revenue recognition, is the result of significant qualitative and quantitative judgments. Management considers a variety of factors such as historical sales, usage rates, costs, and expected margin, which may vary over time depending upon the unique facts and circumstances related to each performance obligation in making these estimates. While changes in the allocation of the SSP between performance obligations will not affect the amount of total revenue recognized for a particular contract, any material changes could impact the timing of revenue recognition, which would have a material effect on our financial position and result of operations. This is because the contract consideration is allocated to each performance obligation, delivered or undelivered, at the inception of the contract based on the SSP of each distinct performance obligation.

 

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

 

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenues as consistent with treatment in prior periods.

 

Our current Barocycler® instruments require a basic level of instrumentation expertise to set-up for initial operation. To support a favorable first experience for our customers, upon customer request, and for an additional fee, we will send a highly trained technical representative to the customer site to install Barocyclers® that we sell, lease, or rent through our domestic sales force. The installation process includes uncrating and setting up the instrument, followed by introductory user training. Our sales arrangements do not provide our customers with a right of return. Any shipping costs billed to customers are recognized as revenue.

 

Most of our instrument and consumable contracts contain pricing that is based on the market price for the product at the time of delivery. Our obligations to deliver product volumes are typically satisfied and revenue is recognized when control of the product transfers to our customers. Concurrent with the transfer of control, we typically receive the right to payment for the shipped product and the customer takes on the significant risks and rewards of ownership of the product. Payment terms require customers to pay shortly after delivery and do not contain significant financing components.

 

Revenue from scientific services customers is recognized upon completion of each stage of service as defined in service agreements.

 

We apply ASC 845, “Accounting for Non-Monetary Transactions”, to account for products and services sold through non-cash transactions based on the fair values of the products and services involved, where such values can be determined. Non-cash exchanges would require revenue to be recognized at recorded cost or carrying value of the assets or services sold if any of the following conditions apply:

 

  a) The fair value of the asset or service involved is not determinable.
     
  b) The transaction is an exchange of a product or property held for sale in the ordinary course of business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties to the exchange.
     
  c) The transaction lacks commercial substance.

 

We recognize revenue for non-cash transactions at recorded cost or carrying value of the assets or services sold.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report11
 

 

We account for lease agreements of our instruments in accordance with ASC 842, Leases. We record revenue over the life of the lease term, and we record depreciation expense on a straight-line basis over the thirty-six-month estimated useful life of the Barocycler® instrument. The depreciation expense associated with assets under lease agreement is included in the “Cost of PCT products and services” line item in our accompanying consolidated statements of operations. Many of our lease and rental agreements allow the lessee to purchase the instrument at any point during the term of the agreement with partial or full credit for payments previously made. We pay all maintenance costs associated with the instrument during the term of the leases.

 

Deferred revenue represents amounts received from service contracts for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. Revenue from service contracts is recorded ratably over the length of the contract.

 

Disaggregation of revenue

 

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.

 

In thousands of US dollars ($)  Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
Primary geographical markets  2023   2022   2023   2022 
North America  $251   $138   $1,067   $709 
Europe   76    13    130    61 
Asia   86    (7)   468    352 
   $413   $144   $1,665   $1,122 

 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
Major products/services lines  2023   2022   2023   2022 
Hardware  $273   $1   $994   $532 
Consumables   50    49    173    165 
Contract research services   -1    -    35    125 
Sample preparation accessories   31    41    113    93 
Technical support/extended service contracts   34    41    123    94 
                     
Agrochem Products   15    10    181    93 
Shipping and handling   11    2    38    20 
Other   -    -    8    - 
   $413   $144   $1,665   $1,122 

 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
Timing of revenue recognition  2023   2022   2023   2022 
Products transferred at a point in time  $379   $103   $1,506   $903 
Services transferred over time   34    41    159    219 
   $413   $144   $1,665   $1,122 

 

Contract balances

 

In thousands of US dollars ($) 

September 30,

2023

  

December 31,

2022

 
Receivables, which are included in ‘Accounts Receivable’  $329   $295 
Contract liabilities (deferred revenue)   59    60 

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report12
 

 

Transaction price allocated to the remaining performance obligations

 

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

 

In thousands of US dollars ($)  2023   2024   Total 
Extended warranty service  $48   $11   $59 

 

All consideration from contracts with customers is included in the amounts presented above.

 

Contract Costs

 

The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses. The costs to obtain a contract are recorded immediately in the period when the revenue is recognized either upon shipment or installation. The costs to obtain a service contract are considered immaterial when spread over the life of the contract so the Company records the costs immediately upon billing.

 

Concentrations

 

Credit Risk

 

Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, and trade receivables. We have cash investment policies which, among other things, limit investments to investment-grade securities. We perform ongoing credit evaluations of our customers, and the risk with respect to trade receivables is further mitigated by the fact that many of our customers are government institutions, large pharmaceutical and biotechnology companies, and academic laboratories.

 

The following table illustrates the level of concentration as a percentage of total revenues during the three and nine months ended September 30, 2023 and 2022.

 

   Three Months Ended
September 30,
   Nine months Ended
September 30,
 
   2023   2022   2023   2022 
Top five customers   80%   42%   49%   31%
Federal agencies   18%   4%   5%   1%

 

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of September 30, 2023 and December 31, 2022. The Top Five Customers category may include federal agency receivable balances if applicable.

 

   September 30,
2023
   December 31,
2022
 
Top five customers   80%   93%
Federal agencies   22%   0%

 

Product Supply

 

In recent years we utilized a contract assembler for our Barocycler® 2320EXT. They provided us with precision manufacturing services that included management support services to meet our specific application and operational requirements. Among the services provided to us were:

 

  CNC Machining
  Contract Assembly & Kitting
  Component and Subassembly Design
  Inventory Management
  ISO certification

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report13
 

 

Beginning in July 2021, we brought the assembly of our Barocycler 2320EXT instruments in-house. This became necessary when our independent contract assembler (CBM Industries) informed us that they were about to need 100% of their assembly space for one of their customers (one of the largest life science instrument manufacturers in the U.S.). We worked with our notified body to gain approval to use both the CE and CSA marks on the instrument, which we received during Q3 2021. Until further notice, we expect to continue to assemble our Barocycler 2320EXT instrument at our South Easton, MA location.

 

We currently manufacture and assemble the Barocycler®, HUB440, HUB880, the SHREDDER SG3, and most of our consumables at our South Easton, MA facility. We will regularly reassess the tradeoffs between in-house assembly versus the benefits of outsourced relationships for of the entire Barocycler® product line, and future instruments.

 

Investment in Equity Securities

 

As of September 30, 2023, we held 100,250 shares of common stock of Nexity Global SA, (a Polish publicly traded company).

 

We account for this investment in accordance with ASC 320 “Investments — Debt and Equity Securities.” ASC 320 requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income.

 

As of September 30, 2023, our consolidated balance sheet reflected the fair value, determined on a recurring basis based on Level 1 inputs of our investment in Nexity, to be $77,918. We recorded $14,280 as an unrealized gain during the nine months ended September 30, 2023 for changes in market value.

 

Computation of Loss per Share

 

Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding plus additional common shares that would have been outstanding if dilutive potential common shares had been issued. For purposes of this calculation, convertible preferred stock, common stock dividends, and warrants and options to acquire common stock, are all considered common stock equivalents in periods in which they have a dilutive effect and are excluded from this calculation in periods in which these are anti-dilutive to our net loss.

 

The following table illustrates our computation of loss per share for the three and nine months ended September 30, 2023 and 2022:

 

   2023   2022   2023   2022 
   For the Three Months Ended September 30,   For the Nine months Ended September 30, 
   2023   2022   2023   2022 
Numerator:                    
Net loss attributable to common shareholders  $(6,261,999)  $(4,893,946)  $(24,666,565)  $(12,913,826)
Denominator for basic and diluted loss per share:                    
Weighted average common stock shares outstanding   21,716,950    11,131,742    20,337,229    10,429,817 
Loss per common share - basic and diluted  $(0.29)  $(0.44)  $(1.21)  $(1.24)

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report14
 

 

The following table presents securities that could potentially dilute basic loss per share in the future. For all periods presented, the potentially dilutive securities were not included in the computation of diluted loss per share because these securities would have been anti-dilutive to our net loss. The Series D Convertible Preferred Stock, Series G Convertible Preferred Stock, Series H and H2 Convertible Preferred Stock, Series J Convertible Preferred Stock, Series K Convertible Preferred Stock, Series AA Convertible Preferred Stock, Series BB Convertible Stock and Series CC Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

 

   As of September 30, 
   2023   2022 
Stock options   3,420,754    1,307,822 
Convertible debt   7,417,906    6,471,034 
Common stock warrants   15,732,940    16,293,768 
Convertible preferred stock:          
Series D Convertible Preferred Stock   6,250    25,000 
Series G Convertible Preferred Stock   -    26,857 
Series H Convertible Preferred Stock   -    33,334 
Series H2 Convertible Preferred Stock   -    70,000 
Series J Convertible Preferred Stock   -    115,267 
Series K Convertible Preferred Stock   -    229,334 
Series AA Convertible Preferred Stock   8,601,000    8,645,000 
Series BB Convertible Preferred Stock   8,580,000    - 
Series CC Convertible Preferred Stock   4,010,000    - 
    47,768,850    33,217,416 

 

Accounting for Stock-Based Compensation Expense

 

We maintain equity compensation plans under which incentive stock options and non-qualified stock options are granted to employees, independent members of our Board of Directors and outside consultants. We recognize stock-based compensation expense over the requisite service period using the Black-Scholes formula to estimate the fair value of the stock options on the date of grant.

 

Determining Fair Value of Stock Option Grants

 

The following table summarizes the assumptions we utilized for grants of stock options to the three sub-groups of our stock option recipients during the nine months ended September 30, 2023:

 

Assumptions  CEO, other Officers and Employees 
Expected life   6.0 (yrs) 
Expected volatility   130.5%
Risk-free interest rate   3.90%
Forfeiture rate   0 to 5.00%
Expected dividend yield   0.0%

 

Valuation and Amortization Method - The fair value of each option award is estimated on the date of the grant using the Black-Scholes pricing model based on certain assumptions. The estimated fair value of employee stock options is amortized to expense using the straight-line method over the vesting period.

 

Expected Term - The Company uses the simplified calculation of expected life, as the Company does not currently have sufficient historical exercise data on which to base an estimate of the expected term. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted.

 

Expected Volatility - Expected volatility is based on the Company’s historical stock volatility data over the expected term of the award.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report15
 

 

Risk-Free Interest Rate - The Company bases the risk-free interest rate used in the Black-Scholes valuation method on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

 

Forfeitures - The Company records stock-based compensation expense only for those awards that are expected to vest. The Company estimated a forfeiture rate of 0% to 5% for awards granted based on historical experience and future expectations of options vesting. The Company used this historical rate as our assumption in calculating future stock-based compensation expense.

 

All of the outstanding non-qualified options had an exercise price that was at or above the Company’s common stock share price at time of issuance.

 

The Company recognized stock-based compensation expense of $140,622 and $32,427 for the three months ended September 30, 2023 and 2022, respectively. The company recognized stock-based compensation expense of $1,706,420 and $128,984 for the nine months ended September 30, 2023 and 2022, respectfully. The following table summarizes the effect of this stock-based compensation expense within each of the line items of our costs and expenses within our Consolidated Statements of Operations:

 

   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30, 
   2023   2022   2023   2022 
Cost of sales  $11,183   $2,184   $75,724   $8,694 
Research and development   35,676    9,499    241,585    37,803 
Selling and marketing   17,150    4,583    102,675    18,166 
General and administrative   76,613    16,161    1,286,436    64,321 
Total stock-based compensation expense  $140,622   $32,427   $1,706,420   $128,984 

 

Due to their short maturities, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and debt approximate their fair value. The carrying amount of long-term debt approximates fair value due to interest rates that approximate prevailing market rates.

 

Fair Value Measurements

 

The Company follows the guidance of FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) as it related to all financial assets and financial liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.

 

The Company generally defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company uses a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values. These tiers include Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring the Company to develop its own assumptions. A slight change in an unobservable input like volatility could have a significant impact on fair value measurement.

 

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that its financial assets are classified within Level 1 in the fair value hierarchy. The development of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

 

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2023:

 

      

Fair value measurements at

September 30, 2023 using:

 
   September 30, 2023  

Quoted

prices in

active

markets

(Level 1)

  

Significant

other

observable

inputs

(Level 2)

  

Significant

unobservable

inputs

(Level 3)

 
Equity Securities  $77,918   $77,918           -            - 
Total Financial Assets  $77,918   $77,918   $-   $- 

 

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2022:

 

      

Fair value measurements at

December 31, 2022 using:

 
  

December 31,

2022

  

Quoted

prices in

active

markets

(Level 1)

  

Significant

other

observable

inputs

(Level 2)

  

Significant

unobservable

inputs

(Level 3)

 
Equity Securities   63,638    63,638           -             - 
Total Financial Assets  $63,638   $63,638   $-   $- 

 

4) Commitments and Contingencies

 

Operating Leases

 

The Company accounts for its leases under ASC 842. The Company has elected to apply the short-term lease exception to leases of one year or less. Our corporate office is currently located at 14 Norfolk Avenue, South Easton, Massachusetts 02375. We are currently paying $7,650 per month, on a lease extension, signed on December 5, 2022, that expires December 31, 2023, for our corporate office. We expanded our space to include offices, warehouse and a loading dock on the first floor starting May 1, 2017 with a monthly rent increase already reflected in the current payments.

 

We extended our lease for our space in Medford, MA (the “Medford Lease”) from December 30, 2020 to December 30, 2023. The lease required monthly payments of $7,282 subject to annual cost of living increases. The lease shall be automatically extended for additional three years unless either party terminates at least nine months prior to the expiration of the current lease term.

 

The Company accounted for the lease extension of our Medford Lease as a lease modification under ASC 842. At the effective date of modification, the Company recorded an adjustment to the right-of-use asset and lease liability in the amount of $221,432 based on the net present value of lease payments discounted using an estimated borrowing rate of 12%.

 

On August 9, 2021, we entered into an operating lease agreement for our warehouse space in Sparks, NV (the “Sparks Lease”) for the period from September 1, 2021 through September 30, 2026. The lease contains escalating payments during the lease period. The lease can be extended for an additional three years if the Company provides notice at least six months prior to the expiration of the current lease term.

 

The Company accounted for the Sparks Lease as an operating lease under ASC 842. Upon the commencement of the lease, the Company recorded a right-of-use asset and lease liability in the amount of $239,327 based on the net present value of lease payments discounted using an estimated borrowing rate of 12%.

 

Following is a schedule by years of future minimum rental payments required under operating leases with initial or remaining non-cancelable lease terms in excess of one year as of September 30, 2023:

 

Year  Total 
October 1 – December 31, 2023  $15,887 
2024   64,393 
2025   66,969 
2026   51,778 
Total future undiscounted lease payments   199,027 
Less imputed interest   (61,481)
Present value of lease liabilities  $137,546 

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report16
 

 

The operating cash flows from the operating leases were $122,671 for the nine months ended September 30, 2023 and $82,001 for the nine months ended September 30, 2022. The weighted-average remaining lease term (years) of the above leases is 2.59 year as of September 30, 2023.

 

Below is a table for the right of use asset and the corresponding lease liability in the consolidated balance sheets:

 

Operating Leases  September 30, 2023   December 31, 2022 
Right of use asset  $159,424   $282,095 
Right of use liability, current  $66,259   $142,171 
Right of use liability, long term  $71,287   $139,924 
Total lease liability  $137,546   $282,095 

 

The weighted-average discount rate is 12%.

 

The Company had no financing leases during the nine months ended September 30, 2023 and 2022.

 

The components of lease cost for operating leases for the nine months ended September 30, 2023 and 2022 are as follows:

 

   September 30, 2023   September 30, 2022 
Operating lease cost  $153,290   $152,193 
Short-term lease cost   110,205    123,514 
Total lease cost  $263,495   $275,707 

 

Battelle Memorial Institute

 

In December 2008, we entered into an exclusive patent license agreement with the Battelle Memorial Institute (“Battelle”). The licensed technology is the subject of a patent application filed by Battelle in 2008 and relates to a method and a system for improving the analysis of protein samples, including through an automated system utilizing pressure and a pre-selected agent to obtain a digested sample in a significantly shorter period of time than current methods, while maintaining the integrity of the sample throughout the preparatory process. In addition to royalty payments on net sales on “licensed products,” we are obligated to make minimum royalty payments for each year that we retain the rights outlined in the patent license agreement and we are required to have our first commercial sale of the licensed products within one year following the issuance of the patent covered by the licensed technology. After re-negotiating the terms of the contract in 2013, the minimum annual royalty was $1,200 in 2014 and $2,000 in 2015; the minimum royalties were $3,000 in 2016, $4,000 in 2017 and $5,000 in 2018 and each calendar year thereafter during the term of the agreement.

 

Target Discovery Inc.

 

In March 2010, we signed a strategic product licensing, manufacturing, co-marketing, and collaborative research and development agreement with Target Discovery Inc. (“TDI”), a related party. Under the terms of the agreement, we have been licensed by TDI to manufacture and sell an innovative line of chemicals used in the preparation of tissues for scientific analysis (“TDI reagents”). The TDI reagents were designed for use in combination with our pressure cycling technology. The companies believe that the combination of PCT and the TDI reagents can fill an existing need in life science research for an automated method for rapid extraction and recovery of intact, functional proteins associated with cell membranes in tissue samples. We did not incur any royalty obligation under this agreement in 2023 or 2022.

 

In April 2012, we signed a non-exclusive license agreement with TDI to grant the non-exclusive use of our pressure cycling technology. We executed an amendment to this agreement on October 1, 2016 wherein we agreed to pay a monthly fee of $1,400 for the use of a lab bench, shared space, and other utilities, and $2,000 per day for technical support services as needed. The agreement requires TDI to pay the Company a minimum royalty fee of $60,000 in 2022 and $60,000 in 2023. For the nine months ended September 30, 2023 and September 30, 2022, the Company reported $55,400 and $65,100, respectively in TDI fees.

 

Pressure BioSciences, Inc.September 30, 2023 10Q Report17
 

 

Severance and Change of Control Agreements

 

Each of Mr. Schumacher, and Drs. Ting, and Lazarev, executive officers of the Company, are entitled to receive a severance payment if terminated by the Company without cause. The severance benefits would include a payment in an amount equal to one year of such executive officer’s annualized base salary compensation plus accrued paid time off. Additionally, the officer will be entitled to receive medical and dental insurance coverage for one year following the date of termination.

 

Each of these executive officers, other than Mr. Schumacher, is entitled to receive a change of control payment in an amount equal to one year of such executive officer’s annualized base salary compensation, accrued paid time off, and medical and dental coverage, in the event of their termination upon a change of control of the Company. In the case of Mr. Schumacher, this payment would be equal to two years of annualized base salary compensation, accrued paid time off, and two years of medical and dental coverage. The severance payment is meant to induce the aforementioned executives to remain in the employ of the Company, in general, and particularly in the occurrence of a change in control, as a disincentive to the control change.

 

5) Debt

 

Convertible Debt

 

On various dates during the nine months ended September 30, 2023, the Company issued convertible notes for net proceeds of approximate total of $4.3 million which contained varied terms and conditions as follows: a) 1-12 month maturity date; b) interest rates of 0-120%; c) convertible to the Company’s common stock at issuance at a fixed rate of $2.50 or at variable conversion rates upon the Company’s up-listing to NASDAQ or NYSE or an event of default. These notes were issued with shares of common stock that were fair valued at issuance date. The aggregate relative fair value of the shares of common stock and preferred stock issued with the notes of $1,832,757  was recorded as a debt discount to be amortized over the term of the notes. We also evaluated the convertible notes for derivative liability treatment and determined that the notes did not qualify for derivative accounting treatment on September 30, 2023.

 

For the nine months ended September 30, 2023, deferred financing costs and OID issued with the debt are $648,470  and the Company repaid $2,462,269.

 

The summary of specific terms of the convertible notes and outstanding balances as of September 30, 2023, and December 31, 2022, are listed in the tables below. The convertible notes are from numerous parties and with original issue dates from July 2019 to September 2023 and maturity dates from July 2020 to September 2024. There are approximately $12.3 million of notes that are past due as of September 30, 2023.

 

   September 30, 2023   December 31, 2022 
Holders  Interest
Rate
   Conversion
Price
   Principal   Interest
Rate
   Conversion
Price
   Principal 
Main Investor   10%  $2.50 (1)   $8,586,750    10%  $2.50 (1)  $9,393,150 
Others   0 to 24%  $2.50 (2) or $7.50    10,379,763    0 to 24%  $2.50 (2) or $7.50
   8,886,036 
Totals             -               18,279,186 
Discount