SEC Filing | Pulse Biosciences Inc.

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plse-20200930x10q

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


¨	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)

(510) 906-4600

(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

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

‎

Table of Contents

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.

‎

Table of Contents

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.

‎

Table of Contents

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.
‎

Table of Contents

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	$