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, 2022

☐ 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 18, 2022 was 11,068,187.

TABLE OF CONTENTS

	Page

PART I - FINANCIAL INFORMATION	3

Item 1. Unaudited Financial Statements	3

Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	3

Consolidated Statements of Operations for the Three and Nine months Ended September 30, 2022 and 2021	4

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	5

Consolidated Statements of Changes in Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2022 and 2021	6

Notes to Unaudited Consolidated Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3. Quantitative and Qualitative Disclosure About Market Risk	28

Item 4. Controls and Procedures	28

PART II - OTHER INFORMATION	29

Item 1. Legal Proceedings	29

Item 1A. Risk Factors	29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3. Defaults Upon Senior Securities	30

Item 4. Mine Safety Disclosures	30

Item 5. Other Information	30

Item 6. Exhibits	30

SIGNATURES	31

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30, 2022 (Unaudited)			December 31, 2021 (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	230,880		$	132,311
Accounts receivable		166,314			154,746
Inventories, net of $342,496 reserve at September 30,2022 and December 31, 2021		1,386,527			1,147,554
Prepaid expenses and other current assets		218,476			422,617
Total current assets		2,002,197			1,857,228
Investment in equity securities		51,929			59,976
Property and equipment, net		111,884			115,846
Right of use asset leases		313,564			395,565
Intangible assets, net		360,577			403,846
TOTAL ASSETS	$	2,840,151		$	2,832,461

LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	608,054		$	527,924
Accrued employee compensation		221,938			117,680
Accrued professional fees and other		2,435,910			1,955,672
Accrued interest and dividends payable		9,929,179			7,757,217
Deferred revenue		127,091			37,124
Convertible debt, net of unamortized debt discounts of $434,313 and $1,536,649, respectively		16,708,661			12,839,813
Other debt, net of unamortized discounts of $0 and $0, respectively		1,555,775			1,256,840
Related party, net of unamortized debt discount of $19,149 and $0, respectively		565,501			-
Operating lease liability		141,649			132,996
Total current liabilities		32,293,758			24,625,266
LONG TERM LIABILITIES
Long term debt		150,000			150,000
Operating lease liability – long term		171,915			262,569
Deferred revenue		-			3,587
TOTAL LIABILITIES		32,615,673			25,041,422
COMMITMENTS AND CONTINGENCIES (Notes 4)		-
STOCKHOLDERS’ DEFICIT
Series D, G, H, H2, J, K, AA Convertible Preferred Stock, $.01 par value (Note 6)		1,098			1,099
Common stock, $.01 par value; 100,000,000 shares authorized; 12,220,611 and 9,120,526 shares issued and outstanding on September 30, 2022 and December 31, 2021, respectively		122,207			91,206
Warrants to acquire common stock		31,995,762			31,715,154
Additional paid-in capital		67,041,489			64,261,048
Accumulated deficit		(128,936,078	)		(118,277,468	)
Total stockholders’ deficit		(29,775,522	)		(22,208,961	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,840,151		$	2,832,461

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

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	2022			2021			2022			2021
	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenue:
Products, services, other	$	144,032		$	518,365		$	1,122,169		$	1,687,166
Total revenue		144,032			518,365			1,122,169			1,687,166

Costs and expenses:
Cost of products and services		126,203			258,170			742,707			771,105
Research and development		262,370			282,622			716,685			839,072
Selling and marketing		226,526			66,068			422,422			252,209
General and administrative		892,293			1,154,063			2,591,644			2,788,779
Total operating costs		1,507,392			1,760,923			4,473,458			4,651,165
Operating loss		(1,363,360	)		(1,242,558	)		(3,351,289	)		(2,963,999	)

Other (expense) income:
Interest expense, net		(2,034,021	)		(3,330,101	)		(6,448,771	)		(11,524,306	)
Unrealized (loss) gain on investment in equity securities		(8,675	)		(162,071	)		(8,047	)		(404,451	)
Gain (loss) on extinguishment of liabilities		(1,054,122	)		(277,010	)		(1,809,249	)		(1,500,395	)
Other income (expense)		(2,059	)		60,627			(904	)		119,280
Total other expense		(3,098,877	)		(3,708,555	)		(8,266,971	)		(13,309,872	)
Net loss		(4,462,237	)		(4,951,113	)		(11,618,260	)		(16,273,871	)
Deemed dividends on beneficial conversion feature		-			(815,914	)		-			(873,798	)
Preferred stock dividends		(431,709	)		(432,149	)		(1,295,566	)		(1,239,535	)
Net loss attributable to common shareholders	$	(4,893,946	)	$	(6,199,176	)	$	(12,913,826	)	$	(18,387,204	)

Basic and diluted net loss per share attributable to common shareholders	$	(0.44	)	$	(0.82	)	$	(1.24	)	$	(3.02	)
Weighted average common shares outstanding used in the basic and diluted net loss per share calculation		11,131,742			7,561,728			10,429,817			6,083,017

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

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	2022			2021
	For the Nine Months Ended September 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(11,618,260	)	$	(16,273,871	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on loan forgiveness		(10,000	)		(367,039	)
Non-cash lease expense		82,001			48,158
Common stock and warrants issued for interest and extension fees		2,196,278			6,208,696
Depreciation and amortization		67,985			83,531
Accretion of interest and amortization of debt discount		1,777,863			5,308,424
Loss on extinguishment of accrued liabilities and debt		1,809,249			23,004
Stock-based compensation expense		128,984			219,943
Loss on investment in equity securities		8,047			404,451
Common stock and warrants issued for services		367,370			579,512
Changes in operating assets and liabilities:
Accounts receivable		(11,568	)		(407,404	)
Inventories		(238,973	)		(203,651	)
Prepaid expenses and other assets		204,141			(306,024	)
Accounts payable		80,130			(336,675	)
Accrued employee compensation		104,258			39,801
Operating lease liability		(82,001	)		(48,158	)
Deferred revenue and other accrued expenses		2,083,239			943,400
Net cash used in operating activities		(3,051,257	)		(4,083,902	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property plant and equipment		(20,754	)		(4,503	)
Net cash used in investing activities		(20,754	)		(4,503	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from Series AA Convertible Preferred Stock		-			1,015,000
Proceeds from stock option exercises		17,443			14,773
Net proceeds from convertible debt		3,428,249			5,054,500
Net proceeds from non-convertible debt - third party		1,815,000			1,610,688
Net proceeds from non-convertible debt - related party		762,500			194,600
Payments on convertible debt		(1,086,946	)		(1,608,295	)
Payments on non-convertible debt - related party		(259,600	)		(256,600	)
Payments on non-convertible debt		(1,506,066	)		(1,291,150	)
Net cash provided by financing activities	$	3,170,580		$	4,733,516

NET INCREASE IN CASH AND CASH EQUIVALENTS		98,569			645,111
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		132,311			18,540
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	230,880		$	663,651

SUPPLEMENTAL INFORMATION
Interest paid in cash	$	938,451		$	802,084
NON CASH TRANSACTIONS:
Common stock issued for non-cash warrant exercise		-			363
Early adoption of ASU 2020-06 adoption		473,027			-
Common stock issued with debt		512,593			551,198
Discount from warrants issued with debt		93,576			1,403,546
Common stock issued in lieu of cash for dividend		306,333			114,298
Preferred stock dividends		1,295,566			1,239,535
Conversion of debt and interest into common stock		350,500			2,589,990
Discount due to beneficial conversion feature		-			1,231,528
Deemed dividend - beneficial conversion feature		-			873,798
Conversion of accrued liabilities and debt for Series AA preferred stock		-			500,250
Conversion of preferred stock into common stock		44			-

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

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

For the nine months ended September 30, 2022

	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, 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	)

For the nine months ended September 30, 2021:

	Combined Preferred Stock				Common Stock				Stock		Additional Paid In		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Warrants		Capital		Deficit			Deficit
BALANCE, December 31, 2020		109,272	$	1,093		4,168,324	$	41,683	$	29,192,471	$	50,312,968	$	(96,465,807	)	$	(16,917,592	)
Stock-based compensation		-		-		-		-		-		61,237		-			61,237
Stock option exercise		-		-		21,411		214		-		14,559		-			14,773
Series AA Preferred Stock dividend		-		-		-		-		-		-		(403,215	)		(403,215	)
Issuance of common stock warrants for interest and paid-in-kind		-		-		-		-		600,298		-		-			600,298