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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, 2020

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

x

Non-accelerated filer   

¨

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 November 2, 2020: 25,341,540


TABLE OF CONTENTS

PAGE
 No.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited):

3

Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019

3

Condensed Consolidated Statements of Operations and Comprehensive Loss
for the Three- and Nine-Month Periods Ended September 30, 2020 and 2019

4
 

Condensed Consolidated Statements of Cash Flows
for the Nine-Month Periods Ended September 30, 2020 and 2019

5
 

Condensed Consolidated Statements of Stockholders’ Equity

for the Three- and Nine-Month Periods Ended September 30, 2020 and 2019

6

Notes to Condensed Consolidated Financial Statements  

8

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

18

Item 3. Quantitative and Qualitative Disclosures About Market Risk  

25

Item 4. Controls and Procedures  

26

PART II. OTHER INFORMATION

Item 1. Legal Proceedings  

27

Item 1A. Risk Factors  

27

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

60

Item 3. Default Upon Senior Securities  

60

Item 4. Mine Safety Disclosures  

60

Item 5. Other Information  

60

Item 6. Exhibits  

61

Signatures

62


2


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,

2020

2019

ASSETS

Current assets:

Cash and cash equivalents

$

7,070

$

6,899

Investments

22,516

18,499

Prepaid expenses and other current assets

748

1,005

Total current assets

30,334

26,403

Property and equipment, net

2,562

2,566

Intangible assets, net

4,048

4,547

Goodwill

2,791

2,791

Right-of-use assets

9,595

5,114

Other assets

365

494

Total assets

$

49,695

$

41,915

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

1,432

$

1,963

Accrued expenses

4,111

2,496

Lease liability, current

457

Total current liabilities

6,000

4,459

Lease liability, less current

10,991

6,719

Total liabilities

16,991

11,178

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 – 25,290 shares and 20,825 shares at September 30, 2020 and December 31, 2019, respectively  

25

21

Additional paid-in capital

191,468

153,401

Accumulated other comprehensive income

1

4

Accumulated deficit

(158,790)

(122,689)

Total stockholders’ equity

32,704

30,737

Total liabilities and stockholders’ equity

$

49,695

$

41,915

See accompanying notes to the condensed consolidated financial statements.

 

3


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,

2020

2019

2020

2019

Revenue

$

$

$

$

Operating expenses:

General and administrative

5,771

5,606

16,691

15,153

Research and development

6,968

6,192

19,019

18,371

Amortization of intangible assets

166

166

499

500

Total operating expenses

12,905

11,964

36,209

34,024

Other income:

Interest income

9

218

108

841

Total other income

9

218

108

841

Net loss

(12,896)

(11,746)

(36,101)

(33,183)

Other comprehensive loss:

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

1

(14)

(3)

9

Comprehensive loss

$

(12,895)

$

(11,760)

$

(36,104)

$

(33,174)

Net loss per share:

Basic and diluted net loss per share

$

(0.51)

$

(0.57)

$

(1.60)

$

(1.60)

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

25,223

20,774

22,540

20,728

See accompanying notes to the condensed consolidated financial statements.

 

4


PULSE BIOSCIENCES, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Nine-Month Periods Ended

September 30,

2020

2019

Cash flows from operating activities:

Net loss

$

(36,101)

$

(33,183)

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

Depreciation

310

390

Amortization of intangible assets

499

500

Stock-based compensation

7,686

7,739

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

(6)

(458)

Loss on disposal of fixed assets

119

Gain on U.S. Treasury securities

(8)

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

431

(658)

Right-of-use assets

352

Other long-term assets

129

Accounts payable

(595)

544

Accrued expenses

1,352

633

Lease liabilities

(104)

Other assets

(174)

(2,734)

Other current and long-term liabilities

2,238

Net cash used in operating activities

(26,110)

(24,989)

Cash flows from investing activities:

Purchases of property and equipment

(162)

(645)

Purchases of investments

(25,516)

(72,981)

Maturities of investments

4,510

57,000

Sales of investments

17,000

Net cash used in investing activities

(4,168)

(16,626)

Cash flows from financing activities:

Proceeds from issuance of common stock under employee stock purchase plan

490

423

Proceeds from exercises of warrants

112

Proceeds from exercises of stock options

349

272

Proceeds from issuance of common stock, net of issuance cost of $565

29,498

Tax payments related to shares withheld for vested restricted stock units

(613)

Net cash provided by financing activities

30,449

82

Net increase (decrease) in cash

171

(41,533)

Cash and cash equivalents at beginning of period

6,899

51,103

Cash and cash equivalents at end of period

$

7,070

$

9,570

Supplemental disclosure of noncash investing and financing activities:

Change in unrealized gains on available-for-sale securities

$

(3)

$

9

Unpaid property and equipment included in accounts payable and accrued expenses

263

219

Issuance costs for rights offering in accounts payable

64

See accompanying notes to the condensed consolidated financial statements. 

5


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, 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

(3)

(3)

Net loss

(36,101)

(36,101)

Balance, September 30, 2020

25,290 

$

25 

$

191,468

$