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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

Form 10-Q

___________________________________

(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

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: 001-34899

___________________________________

Pulse Biosciences, Inc.

(Exact name of registrant as specified in its charter)

Delaware

46-5696597

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

3957 Point Eden Way

Hayward, CA

94545

(Address of principal executive offices)

(Zip Code)

(510906-4600

(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

Common Stock, par value $0.001 per share

PLSE

The Nasdaq Stock Market

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 x    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 x   No ¨ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth 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. 

Large accelerated filer   

¨

Accelerated filer

¨

Non-accelerated filer   

x

Smaller reporting company   

x

Emerging growth company

x

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. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes ¨   No x

The number of shares outstanding of the registrant’s common stock as of October 31, 2021: 29,631,283

TABLE OF CONTENTS

PAGE
 No.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited):

3

Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020

3

Condensed Consolidated Statements of Operations and Comprehensive Loss
for the Three- and Nine-Month Periods Ended September 30, 2021 and 20
20

4
 

Condensed Consolidated Statements of Cash Flows
for the Nine-Month Periods Ended September 30, 2021 and 20
20

5
 

Condensed Consolidated Statements of Stockholders’ Equity

for the Three- and Nine-Month Periods Ended September 30, 2021 and 2020

6

Notes to Condensed Consolidated Financial Statements  

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations  

22

Item 3. Quantitative and Qualitative Disclosures About Market Risk  

31

Item 4. Controls and Procedures  

31

PART II. OTHER INFORMATION

Item 1. Legal Proceedings  

32

Item 1A. Risk Factors  

32

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds  

59

Item 3. Default Upon Senior Securities  

59

Item 4. Mine Safety Disclosures  

59

Item 5. Other Information  

59

Item 6. Exhibits  

59

Signatures

60

“Pulse Biosciences,” the Pulse logos and other trademarks or service marks that we use in connection with the operation of our business appearing in this quarterly report on Form 10-Q (this “Quarterly Report”), including CellFX, CellFX CloudConnect, CellFX Marketplace, Nano-pulse Stimulation, and NPS, are the property of Pulse Biosciences, Inc. Solely for your convenience, some of our trademarks and trade names referred to in this Quarterly Report are listed without the ® and TM symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks and trade names. Also, this Quarterly Report may contain additional trade names, trademarks or service marks of others, which are the property of their respective owners. We do not intend our use or display of any other company’s trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any of these other companies.

Unless expressly indicated or the context requires otherwise, the terms “Pulse,” “company,” “we,” “us,” and “our,” in this document refer to Pulse Biosciences, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries.


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PULSE BIOSCIENCES, INC.

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

(Unaudited)

September 30,

December 31,

2021

2020

ASSETS

Current assets:

Cash and cash equivalents

$

41,991

$

12,463

Investments

8,012

Accounts receivable

72

Inventory

4,281

Prepaid expenses and other current assets

2,866

1,864

Total current assets

49,210

22,339

Property and equipment, net

2,446

2,478

Intangible assets, net

3,382

3,882

Goodwill

2,791

2,791

Right-of-use assets

8,954

9,438

Other assets

365

365

Total assets

$

67,148

$

41,293

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

2,706

$

1,717

Accrued expenses

4,971

5,326

Deferred revenue

7

Lease liability, current

749

542

Note payable, current

1,086

Total current liabilities

9,519

7,585

Lease liability, less current

10,242

10,814

Total liabilities

19,761

18,399

Commitments and contingencies (Note 8)

 

 

Stockholders’ equity:

Preferred stock, $0.001 par value;
authorized – 50,000 shares; no shares issued and outstanding

Common stock, $0.001 par value:
authorized – 500,000 shares; issued and outstanding – 29,631 shares and 25,550 shares at September 30, 2021 and December 31, 2020, respectively  

29

25

Additional paid-in capital

268,142

195,410

Accumulated other comprehensive loss

(1)

Accumulated deficit

(220,784)

(172,540)

Total stockholders’ equity

47,387

22,894

Total liabilities and stockholders’ equity

$

67,148

$

41,293

See accompanying notes to the condensed consolidated financial statements.

 

PULSE BIOSCIENCES, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share amounts)

(Unaudited)

Three-Month Periods Ended

Nine-Month Periods Ended

September 30,

September 30,

2021

2020

2021

2020

Revenues:

Product revenues

$

574

$

$

574

$

Total revenues

574

574

Cost and expenses:

Cost of revenues

727

727

Research and development

6,460

6,968

22,982

19,019

Sales and marketing

3,404

1,746

10,697

4,926

General and administrative

4,256

4,191

13,772

12,264

Total cost and expenses

14,847

12,905

48,178

36,209

Loss from operations

(14,273)

(12,905)

(47,604)

(36,209)

Other income (expense):

Interest income (expense), net

(9)

9

(640)

108

Total other income (expense)

(9)

9

(640)

108

Net loss

(14,282)

(12,896)

(48,244)

(36,101)

Other comprehensive gain (loss):

Unrealized gain (loss) on available-for-sale securities

1

1

(3)

Comprehensive loss

$

(14,282)

$

(12,895)

$

(48,243)

$

(36,104)

Net loss per share:

Basic and diluted net loss per share

$

(0.48)

$

(0.51)

$

(1.76)

$

(1.60)

Weighted average shares used to compute net loss per common share basic and diluted

29,612

25,223

27,400

22,540

See accompanying notes to the condensed consolidated financial statements.

 

PULSE BIOSCIENCES, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Nine-Month Periods Ended

September 30,

2021

2020

Cash flows from operating activities:

Net loss

$

(48,244)

$

(36,101)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation

349

310

Amortization of intangible assets

500

499

Stock-based compensation

10,990

7,686

Net premium amortization and discount on available-for-sale securities

13

(6)

Loss on disposal of fixed assets

119

Gain on U.S. Treasury securities

(8)

Changes in operating assets and liabilities:

Accounts receivable

(72)

Inventory

(4,281)

Prepaid expenses and other current assets

(2,087)

431

Other receivables

32

Right-of-use assets

484

352

Other long-term assets

129

Accounts payable

975

(595)

Accrued expenses

(355)

1,352

Deferred revenue

7

Lease liabilities

(365)

(104)

Accrued interest on note payable

651

Other assets

(174)

Net cash used in operating activities

(41,403)

(26,110)

Cash flows from investing activities:

Purchases of property and equipment

(303)

(162)

Purchases of investments

(25,516)

Maturities of investments

8,000

4,510

Sale of investments

17,000

Net cash provided by (used in) investing activities

7,697

(4,168)

Cash flows from financing activities:

Proceeds from issuance of common stock under employee stock purchase plan

810

490

Proceeds from exercises of warrants

4,217

112

Proceeds from exercises of stock options

678

349

Proceeds from issuance of common stock

56,697

29,498

Proceeds from insurance loan agreement

1,939

Payments made on insurance loan agreement

(875)

Tax payments related to shares withheld for vested restricted stock units

(232)

Net cash provided by financing activities

63,234

30,449

Net increase in cash and cash equivalents

29,528

171

Cash and cash equivalents at beginning of period

12,463

6,899

Cash and cash equivalents at end of period

$

41,991

$

7,070

Supplemental disclosure of noncash investing and financing activities:

Equipment purchases included in accounts payable and accrued expenses

$

14

$

263

Change in unrealized gains on available-for-sale securities

1

(3)

Accrued interest settled via issuance of common stock from private placement equity offering from private placement equity offering

629

Issuance costs for rights offering in accounts payable

64

See accompanying notes to the condensed consolidated financial statements. 

PULSE BIOSCIENCES, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

  

Additional

Accumulated Other

Total

Common Stock

Paid-in

Comprehensive

Accumulated

Stockholders’

Shares

Amount

  

Capital

Income (Loss)

Deficit

Equity

Balance, June 30, 2021

29,606 

$

29 

$

266,223 

$

$

(206,502)

$

59,750 

Issuance of shares under employee stock purchase plan

25 

389 

389 

Stock-based compensation expense

1,577

1,577

Debt extinguishment and private investment, additional issuance costs

(47)

(47)

Net loss

(14,282)

(14,282)

Balance, September 30, 2021

29,631 

$

29 

$

268,142

$

$

(220,784)

$

47,387

  

Additional

Accumulated Other

Total

Common Stock

Paid-in

Comprehensive

Accumulated

Stockholders’

Shares

Amount

  

Capital

Income (Loss)

Deficit

Equity

Balance, December 31, 2020

25,550 

$

25 

$

195,410 

$

(1)

$

(172,540)

$

22,894 

Issuance of common stock as part of debt extinguishment and private investment, net of issuance cost of $100

3,049

3

49,891

49,894

Issuance of shares upon exercise of warrants

585

1

3,333

3,334

Issuance of common stock as part of ATM offering

289

7,432

7,432

Issuance of common stock upon exercise of stock options

45

508

508

Issuance of shares under employee stock purchase plan

91

810

810

Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes

22

(232)

(232)

Stock-based compensation expense

10,990

10,990

Unrealized gain on available-for-sale securities

1

1

Net loss

(48,244)

(48,244)

Balance, September 30, 2021

29,631

$

29

$

268,142

$

$

(220,784)

$

47,387


  

Additional

Accumulated Other

Total

Common Stock

Paid-in

Comprehensive

Accumulated

Stockholders’

Shares

Amount

  

Capital

Income (Loss)

Deficit

Equity

Balance, June 30, 2020

25,149 

$

25 

$

188,197 

$

$

(145,894)

$

42,328 

Issuance of shares upon exercise of stock options

85 

340 

340 

Issuance of shares under employee stock purchase plan

40 

235 

235 

Issuance of shares upon exercise of warrants

16 

112 

112 

Stock-based compensation expense

2,648 

2,648 

Rights offering, additional issuance costs

(64)

(64)

Unrealized gain on available-for-sale securities

1 

1 

Net loss

(12,896)

(12,896)

Balance, September 30, 2020

25,290 

$

25 

$

191,468 

$

1 

$

(158,790)

$

32,704 

  

Additional

Accumulated Other

Total

Common Stock

Paid-in

Comprehensive

Accumulated

Stockholders’

Shares

Amount

  

Capital

Income (Loss)

Deficit

Equity

Balance, December 31, 2019

20,825 

$

21 

$

153,401 

$

4 

$

(122,689)

$

30,737 

Issuance of shares upon exercise of stock options

86 

349 

349 

Issuance of shares under employee stock purchase plan

83 

490 

490 

Issuance of common stock and warrants in connection with rights offering, net of issuance cost of $565

4,280 

4 

29,430 

29,434 

Issuance of shares upon exercise of warrants

16 

112 

112 

Stock-based compensation expense

7,686 

7,686 

Unrealized gain on available-for-sale securities