Pressure BioSciences, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Summary of Significant Accounting Policies (Tables)

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

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

In thousands of US dollars ($)	Twelve Months Ended December 31,
Primary geographical markets	2018		2017
North America		1,751		1,461
Europe		287		287
Asia		420		493
		2,458		2,241

	Twelve Months Ended December 31,
Major products/services lines	2018		2017
Hardware		1,454		1,471
Grants		257		174
Consumables		235		260
Contract research services		202		-
Sample preparation accessories		147		153
Technical support/extended service contracts		84		104
Shipping and handling		47		48
Other		32		31
		2,458		2,241

	Twelve Months Ended December 31,
Timing of revenue recognition	2018		2017
Products transferred at a point in time		1,999		1,980
Products and services transferred over time		459		261
		2,458		2,241

Schedule of Contract Balances

Contract balances

In thousands of US dollars ($)	December 31, 2018		December 31, 2017
Receivables, which are included in ‘Accounts Receivable’		475		374
Contract liabilities (deferred revenue)		58		206

Schedule of Future Related to 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 ($)		2019				2020				2021				Total
Extended warranty service			20				20				18				58

Schedule of Inventories

The composition of inventory as of December 31, is as follows:

	2018			2017
Raw materials	$	311,158		$	288,295
Finished goods		727,867			748,967
Inventory reserve		(273,547	)		(179,600	)
Total	$	765,478		$	857,662

Schedule of Customer Concentration Risk Percentage

The following table illustrates the level of concentration of the below two groups within revenue as a percentage of total revenues during the years ended December 31:

	2018			2017
Top Five Customers		34	%		37	%
Federal Agencies		14	%		14	%

The following table illustrates the level of concentration of the below two groups within accounts receivable as a percentage of total accounts receivable balance as of December 31:

	2018			2017
Top Five Customers		54	%		85	%
Federal Agencies		5	%		1	%

Schedule of Computation of Loss Per Share

The following table illustrates our computation of loss per share for the years ended December 31:

	2018			2017
Numerator:
Net loss attributable to common shareholders	$	(23,473,152	)	$	(10,715,561	)

Denominator for basic and diluted loss per share:
Weighted average common shares outstanding		1,530,989			1,114,225

Loss per common share - basic and diluted	$	(15.33	)	$	(9.62	)

Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

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 for the years ended December 31:

	2018		2017
Stock options		366,734		247,692
Convertible debt		413,998		947,203
Common stock warrants		7,764,821		899,542
Convertible preferred stock:
Series D Convertible Preferred		25,000		25,000
Series G Convertible Preferred		26,857		26,857
Series H Convertible Preferred		33,334		33,334
Series H2 Convertible Preferred		70,000		70,000
Series J Convertible Preferred		115,267		115,267
Series K Convertible Preferred		229,334		229,334
Series AA Convertible Preferred		6,499,000		-
		15,544,345		2,594,229

Summary of Assumptions for Grants of Stock Options

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 year ended December 31, 2018:

Assumptions	Non-Employee Board Members			CEO, other Officers and Employees
Expected life		6.0(yrs)			6.0(yrs)
Expected volatility		150.06%-155.38	%		151.53%-155.21	%
Risk-free interest rate		2.62%-3.03	%		2.62%-2.77	%
Forfeiture rate		5.00	%		5.00	%
Expected dividend yield		0.0	%		0.0	%

Schedule of Stock Based Compensation Expense

The following table summarizes the effect of this stock-based compensation expense within each of the line items within our accompanying consolidated statements of operations for the years ended December 31:

	2018		2017
Research and development	$	120,417	$	92,055
Selling and marketing		49,023		54,404
General and administrative		423,037		259,968
Total stock-based compensation expense	$	592,477	$	406,427

Schedule of Reconciliation Related to Liabilities

The following table provides a reconciliation of the warrant derivative liability, convertible debt, conversion option derivative liability, stock warrant, additional paid-in capital and accumulated deficit on the consolidated balance sheet as of December 31, 2016:

	Convertible debt, current portion		Convertible debt, long term portion		Warrant Derivative Liability			Conversion Option Liability			Warrants to acquire common stock		Additional Paid-in Capital		Accumulated deficit
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$	4,005,702	$	529,742	$	1,685,108		$	951,059		$	6,325,102	$	27,544,265	$	(42,264,190	)
Reclassified derivative liabilities and cumulative effect of adoption		769,316		154,152	$	(1,685,108	)		(951,059	)		2,636,236		1,446,011		(2,369,548	)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$	4,775,018	$	683,894	$	-		$	-		$	8,961,338	$	28,990,276	$	(44,633,738	)

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The development of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

			Fair value measurements at December 31, 2018 using:
	December 31, 2018		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Equity Securities		16,643		16,643		-		-
Total Financial Assets	$	16,643	$	16,643	$	-	$	-

			Fair value measurements at December 31, 2017 using:
	December 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Equity Securities		19,825		19,825		-		-
Total Financial Assets	$	19,825	$	19,825	$	-	$	-