CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). In some cases, forward-looking statements are
identified by terms such as "may," "will," "should," "could," "would,"
"expects," "plans," "anticipates," "believes," "estimates," "projects,"
"predicts," "potential" and similar expressions intended to identify
forward-looking statements. Such statements include, without limitation,
? our need for, and our ability to raise, additional equity or debt
financing on acceptable terms, if at all;
? our need to take additional cost reduction measures, cease operations or
sell our operating assets, if we are unable to obtain sufficient
? our belief that we will have sufficient liquidity to finance normal
operations for the foreseeable future;
? the options we may pursue in light of our financial condition;
? the potential applications for Ultra Shear Technology (UST);
? the potential applications of the BaroFold high-pressure protein refolding
and disaggregation technology
? the amount of cash necessary to operate our business;
? the anticipated uses of grant revenue and the potential for increased
grant revenue in future periods;
? our plans and expectations with respect to our continued operations;
? the expected increase in the number of pressure cycling technology ("PCT")
and constant pressure ("CP") based units that we believe will be installed
and the expected increase in revenues from the sale of consumable
products, extended service contracts, and biopharma contract services;
? our belief that PCT has achieved initial market acceptance in the mass
spectrometry and other markets;
? the expected development and success of new instrument and consumables
? the potential applications for our instrument and consumables product
? the expected expenses of, and benefits and results from, our research and
? the expected benefits and results from our collaboration programs,
strategic alliances and joint ventures;
? our expectation of obtaining additional research grants from the
government in the future;
? our expectations of the results of our development activities funded by
government research grants;
? the potential size of the market for biological sample preparation,
biopharma contract services and ultra shear technology;
? general economic conditions;
? the anticipated future financial performance and business operations of
? our reasons for focusing our resources in the market for genomic,
proteomic, lipidomic and small molecule sample preparation;
? the importance of mass spectrometry as a laboratory tool;
? the advantages of PCT over other current technologies as a method of
biological sample preparation and protein characterization in biomarker
discovery, forensics, and histology, as well as for other applications;
? the capabilities and benefits of our PCT Sample Preparation System,
consumables and other products;
? our belief that laboratory scientists will achieve results comparable with
those reported to date by certain research scientists who have published
or presented publicly on PCT and our other products and services;
? our ability to retain our core group of scientific, administrative and
sales personnel; and
? our ability to expand our customer base in sample preparation and for
other applications of PCT and our other products and services.
These forward-looking statements are only predictions and involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements, expressed or implied, by such forward-looking statements. Also,
these forward-looking statements represent our estimates and assumptions only as
of the date of this Quarterly Report on Form 10-Q. Except as otherwise required
by law, we expressly disclaim any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statement contained in this
Quarterly Report on Form 10-Q to reflect any change in our expectations or any
change in events, conditions or circumstances on which any of our
forward-looking statements are based. Factors that could cause or contribute to
differences in our future financial and other results include those discussed in
the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2019 and in this Report. We qualify all of our
forward-looking statements by these cautionary statements.
We are a leader in the development and sale of innovative, broadly enabling,
pressure-based platform solutions for the worldwide life sciences industry. Our
solutions are based on the unique properties of both constant (i.e., static) and
alternating (i.e., pressure cycling technology, or "PCT") hydrostatic pressure.
PCT is a patented enabling technology platform that uses alternating cycles of
hydrostatic pressure between ambient and ultra-high levels to safely and
reproducibly control bio-molecular interactions (e.g., cell lysis, biomolecule
extraction). Our primary focus has been in the development of PCT-based products
for biomarker and target discovery, drug design and development, biotherapeutics
characterization and quality control, soil & plant biology, forensics, and
counter-bioterror applications. Additionally, major new market opportunities
have emerged in the use of our pressure-based technologies in the following
areas: (1) the use of our recently acquired, patented technology from BaroFold,
Inc. (the "BaroFold" technology platform) to allow entry into the bio-pharma
contract services sector, and (2) the use of our recently-patented, scalable,
high-efficiency, pressure-based Ultra Shear Technology ("UST") platform to (i)
create stable nanoemulsions of otherwise immiscible fluids (e.g., oils and
water) and to (ii) prepare higher quality, homogenized, extended shelf-life or
room temperature stable low-acid liquid foods that cannot be acceptably
preserved using existing non-thermal technologies.
On April 29, 2020, we signed a binding letter of intent to merge with Cannaworx,
Inc. (USA), and their portfolio of products and intellectual property (the
"Cannaworx LOI" and "Cannaworx merger"). Cannaworx founders Bobby Ghalili, DMD
and Adrienne Denese, MD, PhD bring extensive medical expertise and product
innovation into the newly combined public company. Post-merger, Cannaworx
products will utilize our proprietary UST platform.
Subsequently, we announced two letters of intent by Cannaworx which we will
assume in the Cannaworx merger. On April 30, 2020 we announced a signed
Cannaworx agreement to acquire SkinScience Labs, Inc or "SSL" (the SSL LOI). SSL
is the parent company of Dr. Denese's skin care and anti-aging product lines.
Subsequently, on May 7, 2020 we announced a signed Cannaworx agreement to
acquire Five Leaf Labs or "FFL" (the FLL LOI). FLL is based in Louisiana and
will expand the Cannaworx sales and distribution network to over 50 sales
representatives in 21 states.
The Cannaworx LOI and SSL LOI are subject to certain closing conditions,
including completion of all due diligence and acquisition financing. The FLL LOI
is subject to the completion of all due diligence.
On May 7, 2020 we also announced that, if the mergers are completed, Jim
Morrison would be appointed as the new CEO of the rebranded public company and
that following the completion of the Cannaworx merger we would change our name
to "Availa Bio".
Developments and Accomplishments:
We reported the following accomplishments during the first quarter, April and
On May 14, 2020, Pressure BioSciences announced the launch of FDA-registered
hand sanitizer as first product developed through pending merger partners.
On May 7, 2020, former L'Oreal President Jim Morrison, one of the top brand
strategists in the personal care space worldwide, was announced as the person
who would become CEO of Availa Bio upon merger completion.
On May 5, 2020, PBI announced plans to change name to Availa Bio following
completion of the Cannaworx and SkinScience Labs merger.
On April 30, 2020, PBI announced plans to acquire SkinScience Labs and their
profitable and award-winning Dr. Denese Skin Care and Anti-Aging Lines.
On April 29, 2020, PBI announced plans to acquire Cannaworx, Inc. and their
portfolio of innovative consumer products.
On April 16, 2020, PBI and RedShiftBio demonstrate potential of combining
proprietary technologies to enable new tool for development and production of
On March 12, 2020, PBI announced that it is nearing a complete sellout on its
pre-launch offering of game-changing UST Platform for processing CBD Oil into
On February 27, 2020, PBI launched new era in preparation of water-soluble
nanoemulsions for CBD and other valuable oils with opening of UST Demonstration
On January 30, 2020, PBI announced acceleration of UST Platform rollout for
water-soluble CBD with planned release of additional BaroShear product - a
benchtop, R&D scale, BaroShear 'Mini" instrument.
On January 24, 2020, PBI announced significant new order and near sellout on
revolutionary nanoemulsification system for water-soluble CBD oil. Company said
that additional orders are expected shortly.
On January 17, 2020, PBI reported the Company's UST Platform was featured in a
leading North American Cannabis Magazine and that the article highlighted the
potential of the UST Platform to play a significant role in multiple
billion-dollar markets, such as CBD, nutraceuticals, cosmetics,
biopharmaceuticals, and food/beverage.
On January 9, 2020, PBI reported that the number of published scientific papers
in 2019 citing the advantages of the Company's PCT Platform remained strong,
with over 20 journal articles for the second straight year.
Results of Operations
Quarter ended March 31, 2020 ("Q1 2019") as compared with March 31, 2019 ("Q1
Products, Services, and Other Revenue
We recognized total revenue of $253,873 for Q1 2020 compared to $510,240 for Q1
2019, a decrease of $256,367 or 50%. This decrease was primarily attributable to
a $228,199 decrease in Scientific Services revenue which was primarily
attributable to the negative impact that the COVID-19 pandemic had on our
operations and on the operations of our customers.
Cost of Products and Services
The cost of products and services was $175,146 for the three months ended March
31, 2020 compared to $309,712 for the comparable period in 2019. Gross profit
margin on products and services decreased to 31% for Q1 2020 compared to 39% for
the prior year period. The current period margin was affected by the reduction
in higher-margin Scientific Services revenue.
Research and Development
Research and development expenditures were $265,690 during the three months
ended March 31, 2020 as compared to $264,704 in the same period in 2019, an
increase of $986 or 0.4%.
Selling and Marketing
Selling and marketing expenses were $189,116 for the three months ended March
31, 2020 from $188,215 for the comparable period in 2019, an increase of $901.
General and Administrative
General and administrative costs totaled $1,019,010 for Q1 2020 compared to
$1,144,421 for the comparable period in 2019.This decrease was principally
related to lower investor relations and stock based compensation expenses.
Operating loss was $1,395,089 for the three months ended March 31, 2020 compared
to $1,396,812 for the comparable period in 2019. This decrease was principally
attributable to lower operating costs and expenses, which offset the $256,367
decrease in revenues.
Interest Expense, net
Interest expense was $1,571,800 for the three months ended March 31, 2020
compared to interest expense of $512,706 for the three months ended March 31,
2019. The increase in interest expense is directly attributable to the increase
in convertible and other debt.
(Loss) on extinguishment of liabilities
In connection with payments of interest in common stock and debt extensions, we
recognized losses of $1,136,367 in the quarter ended March 31, 2020 and losses
of $40,810 in the quarter ended March 31, 2019. This increase was related to
extension fees incurred and warrants issued for the recent amendments to
Standstill and Forbearance Agreements and merchant loan extension.
During the quarter ended March 31, 2020 we recorded net loss attributable to
common shareholders $4,278,471 or ($1.62) per share, as compared with $3,470,982
or ($2.01) per share during the quarter ended March 31, 2019. The decrease in
the loss per share was attributable a 54% increase in weighted shares
Liquidity and Financial Condition
We have experienced negative cash flows from operations with respect to our
pressure cycling technology business since our inception. As of March 31, 2020,
we did not have adequate working capital resources to satisfy our current
liabilities and as a result, we have substantial doubt regarding our ability to
continue as a going concern. We have been successful in raising cash through
debt and equity offerings in the past and as described in Notes 4 and 5 of the
accompanying consolidated financial statements, we received $2.3 million in net
proceeds from loans in the first three months of 2020. We have efforts in place
to continue to raise cash through debt and equity offerings.
We will need substantial additional capital to fund our operations in future
periods. If we are unable to obtain financing on acceptable terms, or at all, we
will likely be required to cease our operations, pursue a plan to sell our
operating assets, or otherwise modify our business strategy, which could
materially harm our future business prospects.
Net cash used in operations for the three months ended March 31, 2020 was
$1,364,639 as compared to $1,617,924 for the three months ended March 31, 2019.
Net cash used in investing activities for the three months ended March 31, 2020
was $0 as compared to $12,615 for the three months ended March 31, 2019.
Net cash provided by financing activities for the three months ended March 31,
2020 was $1,366,833 as compared to $1,797,135 for the same period in the prior
year. The cash flow from financing activities of the three months ended March
31, 2019 included $1,260,000 of proceeds from the sale of preferred stock which
did not recur in 2020. This decrease was offset by a increase in net convertible
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