Quarterly Report (10-q)

Date : 08/15/2019 @ 7:36PM
Source : Edgar (US Regulatory)
Stock : Pressure Biosciences, Inc. (QB) (PBIO)
Quote : 0.8  0.05 (6.67%) @ 7:23PM

Quarterly Report (10-q)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

[X] Q uarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2019

 

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
None   None   None

 

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.

 

[X] 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).

 

[X] 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 [X]

  Smaller reporting company [X]   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 [X] No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of August 7, 2019.

 

Class   Number of Shares  
Common Stock, par value $.01 per share     1,938,046  

 

 

 

     
 

 

TABLE OF CONTENTS

 

  Page
   
PART I - FINANCIAL INFORMATION 3
   
Item 1. Unaudited Financial Statements 3
   
Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018 3
   
Consolidated Statements of Operations for the Three- and Six-Months Ended June 30, 2019 and 2018 4
   
Consolidated Statements of Cash Flows for the Six-Month Periods Ended June 30, 2019 and 2018 5
   
Consolidated Statements of Statements of Equity for the Six Months Ended June 30, 2019 and 2018 6
   
Notes to Unaudited Consolidated Financial Statements 7
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29
   
Item 3. Quantitative and Qualitative Disclosure About Market Risk 35
   
Item 4. Controls and Procedures 35
   
PART II - OTHER INFORMATION 36
   
Item 1. Legal Proceedings 36
   
Item 1A. Risk Factors 36
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 36
   
Item 3. Defaults Upon Senior Securities 36
   
Item 4. Mine Safety Disclosures 36
   
Item 5. Other Information 36
   
Item 6. Exhibits 37
   
SIGNATURES 39

 

2
 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

    June 30, 2019     December 31, 2018  
ASSETS                
CURRENT ASSETS                
Cash and cash equivalents   $ 117,933     $ 103,118  
Accounts receivable, net of $0 reserve at June 30, 2019 and December 31, 2018     410,613       474,830  
Inventories, net of $273,547 reserve at June 30, 2019 and December 31, 2018     744,806       765,478  
Prepaid expenses and other current assets     127,657       170,734  
Total current assets     1,401,009       1,514,160  
Investment in equity securities     16,643       16,643  
Property and equipment, net     94,277       69,272  
Right of use asset leases     108,332       136,385  
Intangible assets, net     620,192       663,462  
TOTAL ASSETS   $ 2,240,453     $ 2,399,922  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                
CURRENT LIABILITIES                
Accounts payable   $ 514,948     $ 658,856  
Accrued employee compensation     438,608       456,932  
Accrued professional fees and other    

1,435,210

      1,112,995  
Other current liabilities     1,909,514       1,233,325  
Deferred revenue     25,702       20,623  
Operating lease liability     67,674       59,799  
Convertible debt, net of unamortized discounts of $360,297 and $156,180, respectively     4,835,066       4,000,805  
Other debt, net of unamortized discounts of $13,833 and $9,118, respectively     1,107,667       852,315  
Other related party debt     15,000       15,000  
Total current liabilities     10,349,389       8,410,650  
LONG TERM LIABILITIES                
Operating lease liability, net of current portion     40,658       76,586  
Deferred revenue     32,506       37,757  
TOTAL LIABILITIES    

10,422,553

      8,524,993  
COMMITMENTS AND CONTINGENCIES (Note 5)                
STOCKHOLDERS’ DEFICIT                
Series D Convertible Preferred Stock, $.01 par value; 850 shares authorized; 300 shares issued and outstanding on June 30, 2019 and December 31, 2018, respectively (Liquidation value of $300,000)     3       3  
Series G Convertible Preferred Stock, $.01 par value; 240,000 shares authorized; 80,570 shares issued and outstanding on June 30, 2019 and December 31, 2018, respectively     806       806  
Series H Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 10,000 shares issued and outstanding on June 30, 2019 and December 31, 2018, respectively     100       100  
Series H2 Convertible Preferred Stock, $.01 par value; 21 shares authorized; 21 shares issued and outstanding on June 30, 2019 and December 31, 2018, respectively     -       -  
Series J Convertible Preferred Stock, $.01 par value; 6,250 shares authorized; 3,458 shares issued and outstanding on June 30, 2019 and December 31, 2018, respectively     35       35  
Series K Convertible Preferred Stock, $.01 par value; 15,000 shares authorized; 6,880 shares issued and outstanding on June 30, 2019 and December 31, 2018, respectively     68       68  
Series AA Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 7,518 and 6,499 shares issued and outstanding on June 30, 2019 and December 31, 2018, respectively     76       65  
Common stock, $.01 par value; 100,000,000 shares authorized; 1,889,616 and 1,684,182 shares issued and outstanding on June 30, 2019 and December 31, 2018 respectively    

18,896

      16,842  
Warrants to acquire common stock     21,446,642       19,807,247  
Additional paid-in capital    

41,676,926

      39,777,301  
Accumulated deficit     (71,325,652 )     (65,727,538 )
Total stockholders’ deficit    

(8,182,100

)     (6,125,071 )
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT   $ 2,240,453     $ 2,399,922  

 

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

 

3
 

 

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   

For the Three Months Ended

June 30,

    For the Six Months Ended
June 30,
 
    2019     2018     2019     2018  
Revenue:                                
Products, services, other   $ 518,663     $ 618,418     $ 1,028,903     $ 1,203,662  
Grant revenue     -       20,355       -       45,885  
Total revenue     518,663       638,773       1,028,903       1,249,547  
                                 
Costs and expenses:                                
Cost of products and services     304,172       270,046       613,884       594,835  
Research and development     291,538       323,832       556,242       648,808  
Selling and marketing     186,609       224,942       374,824       499,410  
General and administrative    

1,136,768

      740,843       2,281,189       1,535,448  
Total operating costs and expenses     1,919,087       1,559,663       3,826,139       3,278,501  
                                 
Operating loss     (1,400,424 )     (920,890 )     (2,797,236 )     (2,028,954 )
                                 
Other expense:                                
Interest expense     (1,074,488 )     (1,159,242 )     (1,587,194 )     (2,282,387 )
Other expense     (185,469 )     (9,582 )     (290,314 )     (14,312 )
(Loss) Gain on extinguishment of debt     (106,461 )     471,612       (147,271 )     475,897  
Incentive shares/warrants     -       (663,130 )     -       (663,130 )
Total other (expense) income     (1,366,418 )     (1,360,342 )     (2,024,779 )     (2,483,932 )
                                 
Net loss     (2,766,842 )     (2,281,232 )     (4,822,015 )     (4,512,886 )
Deemed dividend on down round feature     -       (213,012 )     -       (213,012 )
Deemed dividend on beneficial conversion feature     (889,532 )     (10,532,291 )     (1,949,731 )     (10,532,291 )
Preferred stock dividends     (420,489 )     (95,879 )     (776,099 )     (95,879 )
Net loss attributable to common stockholders   $ (4,076,863 )   $ (13,122,414 )   $ (7,547,845 )   $ (15,354,068 )
Basic and diluted net loss per share attributable to common stockholders   $ (2.22 )   $ (9.20 )   $ (4.24 )   $ (11.01 )
                                 
Weighted average common stock shares outstanding used in the basic and diluted net loss per share calculation     1,837,913       1,426,698      

1,780,881

      1,395,187  

 

The accompanying notes are an integral part of these unaudited consolidated

 

4
 

 

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

    For the Six Months Ended  
    June 30,  
    2019     2018  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (4,822,015 )   $ (4,512,886 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Right of use asset     28,053       -  
Common stock issued for debt extension     -       28,490  
Depreciation and amortization     47,180       45,874  
Accretion of interest and amortization of debt discount     290,040       986,155  
Issuance of incentive shares and common stock warrants     168,000       663,130  
Inventory reserve recovery     -       (39,900 )
Loss(Gain) on extinguishment of debt     147,271     (475,897 )
Stock-based compensation expense     607,574       148,270  
Shares issued with debt     -       7,800  
Impairment loss on investment     -       1,834  
Changes in operating assets and liabilities:                
Accounts receivable     64,217       (319,242 )
Inventories     20,673       (2,501 )
Prepaid expenses and other assets     43,077       19,422  
Accounts payable     152,275     108,698  
Accrued employee compensation    

(18,323

)     58,925  
Operating lease liability     (28,053 )     -  
Deferred revenue and other accrued expenses     (172 )     678,789  
Net cash used in operating activities     (3,300,203 )     (2,603,039 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property plant and equipment     (28,915 )     -  
Net cash used in investing activities     (28,915 )     -  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Net proceeds from revolving note payable     -       460,000  
Net proceeds from warrant exercises     -       -  
Net proceeds from Series AA Convertible Preferred Stock     2,292,300       226,091  
Net proceeds from convertible debt     3,339,050       3,242,950  
Net proceeds from non-convertible debt – third party     1,211,500       952,501  
Net proceeds from non-convertible debt – related party    

125,000

      102,100  
Payments on convertible debt     (2,533,985 )     (1,518,500 )
Payments on non-convertible debt – related party    

(125,000

)     (52,100 )
Payments on non-convertible debt     (964,932 )     (872,545 )
Net cash provided by financing activities     3,343,933       2,540,497  
                 
NET INCREASE (DECREASE) IN CASH     14,815       (62,542 )
CASH AT BEGINNING OF YEAR     103,118       81,033  
CASH AT END OF PERIOD   $ 117,933     $ 18,491  
                 
SUPPLEMENTAL INFORMATION                
Interest paid in cash   $ 1,162,557     $ 525,979  
Income taxes paid     -       -  
NON CASH TRANSACTIONS:                
Common stock issued in lieu of cash for interest     -       90,023  
Common stock issued with debt     167,359       170,745  
Discount from warrants issued with convertible debt     -       162,023  
Discount from one-time interest     -       154,500  

Common stock issued in lieu of cash for dividend

    151,993       -  
Preferred stock dividends     776,099       95,879  
Conversion of debt into preferred stock     -       12,688,634  
Contingent beneficial conversion feature on convertible note     -       253,000  
Deemed dividend-triggered down round feature     -       213,012  
Deemed dividend-beneficial conversion feature     1,949,731       10,532,291  
Derivative liability released upon warrant exercise     -       -  

 

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

 

5
 

 

PRESSURE BIOSCIENCES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

 

    Series D Preferred Stock     Series G Preferred Stock     Series H Preferred Stock     Series H(2)Preferred Stock     Series J Preferred Stock     Series K Preferred Stock     Series AA Preferred Stock     Common Stock     Stock     Additional Paid-In     Accumulated other comprehensive     Accumulated     Total Stockholders’  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Warrants     Capital     loss     Deficit     Deficit  
BALANCE, December 31, 2017     300     $ 3       80,570     $ 806       10,000     $ 100       21     $ -       3,458     $ 35       6,880       68.00       -       -       1,342,858     $ 13,429     $ 9,878,513     $ 30,833,549     $ -     $ (55,349,299 )   $ (14,622,796 )
Stock-based compensation     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       86,020       -       -       86,020  
Issuance of common stock for dividends paid-in-kind     -       -       -       -       -       -       -       -       -       -       -       -       -       -       22,606       226       -       80,529       -       -       80,755  
Common Stock issued for debt extension                                                                                                                     7,000       70       -       28,420                       28,490  
Stock issued with debt     -       -       -       -       -       -       -       -       -       -       -       -       -       -       15,750       158       -       59,106       -       -       59,263  
Warrants issued with debt     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       118,416       -       -       -       118,416  
Net loss     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       (2,231,654 )     (2,231,654 )
BALANCE, March 31, 2018     300     $ 3       80,570     $ 806       10,000     $ 100       21     $ -       3,458     $ 35       6,880     $ 68       -     $ -       1,388,214     $ 13,883     $ 9,996,929     $ 31,087,624     $ -     $ (57,580,953 )   $ (16,481,506 )
Stock-based compensation     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       62,249       -       -       62,249  
Down round feature triggered     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -               10,532,291             -       10,532,291
Down round feature triggered on warrants     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -               -               213,012     213,012  
Incentive Shares/Warrants     -       -       -       -       -       -       -       -       -       -       -       -       -       -       110,833       1,108       312,637       339,149       -       -       652,894  
Series AA Preferred Stock dividend     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       (95,879 )     (95,879 )
Contingent beneficial feature on convertible notes     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       253,000       -       -       253,000  
Conversion of debt and interest for preferred stock     -       -       -       -       -       -       -       -       -       -       -       -       -       51       -       -       6,826,710       5,861,874       -       -       12,688,635  
Issuance of common stock for dividends paid-in-kind     -       -       -       -       -       -       -       -       -       -       -       -       -       -       2,637       26       -       9,242       -       -       9,268  
Deemed dividend-beneficial conversion feature     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       ( 10,532,291 )     -       -       (10,532,291 )
Deemed dividend-beneficial conversion feature on warrants and debentures     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       (213,012 )     (213,012 )
Warrant modification     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       60,120       -       -       -       60,120  
Preferred Stock offering     -       -       -       -       -       -       -       -       -       -       -       -       120       1       -       -       172,932       127,067       -       -       300,000  
Offering costs for issuance of preferred stock     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       37,782       (111,691 )     -       -       (73,909 )
Stock issued with debt     -       -       -       -       -       -       -       -       -       -       -       -       -       -       35,410       354       -       118,927       -       -       119,281  
Warrants issued with debt     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       43,607       -       -       -       43,607  
Net loss     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -               -       (2,281,232 )     (2,281,232 )
BALANCE, June 30, 2018     300     $ 3       80,570     $ 806       10,000     $ 100       21     $ -       3,458     $ 35       6,880     $ 68       120     $ 52       1,537,094     $ 15,371     $ 17,450,717     $ 37,747,441     $ -     $ (59,958,064 )   $ (4,743,472 )

 

    Series D Preferred Stock     Series G Preferred Stock     Series H Preferred Stock     Series H(2)Preferred Stock     Series J Preferred Stock     Series K Preferred Stock     Series AA Preferred Stock     Common Stock     Stock     Additional Paid-In     Accumulated other comprehensive     Accumulated     Total Stockholders’  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount     Warrants     Capital     loss     Deficit     Deficit  
BALANCE, December 31, 2018     300     $ 3       80,570     $ 806       10,000     $ 100       21     $ -       3,458     $ 35       6,880       68.00       6,499       65.00       1,684,184     $ 16,842     $ 19,807,247     $ 39,777,301     $ -     $ (65,727,538 )   $ (6,125,071 )
Stock-based compensation     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       245,392       -       -       245,392  
Series AA Preferred Stock dividend     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -                       -       (355,610 )     (355,610 )
Issuance of shares for services     -       -       -       -       -       -       -       -       -       -       -       -       -       -       50,000       500               167,500       -       -       168,000  
Beneficial conversion feature on Series AA convertible preferred stock     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       1,060,199     -       -       1,060,199
Deemed dividend-beneficial conversion feature     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       (1,060,199 )     -       -       ( 1,060,199
Preferred Stock offering     -       -       -       -       -       -       -       -       -       -       -       -       560       6       -       -       738,528       661,466       -       -       1,400,000  
Offering costs for issuance of preferred stock     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       160,764       (300,764 )     -       -       (140,000 )
Common Stock issued for debt extension                                                                                                                     16,350       163       -       38,824                       38,988  
Stock issued with debt     -       -       -       -       -       -       -       -       -       -       -       -       -       -       17,958       180       -       50,553       -       -       50,733  
Net loss     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       (2,055,173 )     (2,055,173 )
BALANCE, March 31, 2019     300     $ 3       80,570     $ 806       10,000     $ 100       21     $ -       3,458     $ 35       6,880     $ 68       7,059     $ 71       1,768,492     $ 17,685     $ 20,706,539     $ 40,640,273     $ -     $ (68,138,321 )   $ (6,772,741 )
Stock-based compensation     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       362,182       -       -       362,182  
Series AA Convertible Preferred Stock dividend     -       -       -       -       -       -       -       -       -       -       -       -               -                                       -       (420,489 )     (420,489 )
Beneficial conversion feature on Series AA Convertible Preferred Stock     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       889,532       -       -       889,532  
Deemed dividend-beneficial conversion feature     -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       (889,532 )     -       -       (889,532 )
Issuance of common stock for dividends paid-in-kind     -       -       -       -       -       -       -       -       -       -       -       -                       42,456       425               151,568       -       -       151,993  
Preferred Stock offering     -       -       -       -       -       -       -       -       -       -       -       -       459       5                       608,852       538,062       -       -       1,146,919  
Offering costs for issuance of preferred stock     -       -       -       -       -       -       -       -       -       -       -       -               -                       131,251       (245,870 )     -       -       (114,619 )
Stock issued with debt     -       -       -       -       -       -       -       -       -       -       -       -               -       29,641       296               105,293       -       -       105,589  
Common Stock issued for debt extension     -       -       -       -       -       -       -