Pharma-Bio Serv, Inc 10-Q for FY2022 Q1

Pharma-Bio Serv, Inc. (PBSV)

10-Q 2022-03-17 For: 2022-01-31

Added on April 06, 2026

About this 10-Q

Pharma-Bio Serv, Inc filed this 10-Q on March 17, 2022, covering the quarter ended January 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended January 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $5.02M; up 11.8% from $4.49M a year earlier
Net income: $305.24K; up 13.9% from net income of $268.03K a year earlier

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		Emerging growth company	☐

	Page
PART I FINANCIAL INFORMATION

Item 1 – Financial Statements		3

Condensed Consolidated Balance Sheets as of January 31, 2022 and October 31, 2021 (unaudited)		3

Condensed Consolidated Statements of Income for the three-month periods ended January 31, 2022 and 2021 (unaudited)		4

Condensed Consolidated Statements of Comprehensive Income for the three-month periods ended January 31, 2022 and 2021 (unaudited)		5

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended January 31, 2022 and 2021 (unaudited)		6

Condensed Consolidated Statements of Cash Flows for the three-month periods ended January 31, 2022 and 2021 (unaudited)		7

Notes to Condensed Consolidated Financial Statements (unaudited)		8

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		14

Item 4 – Controls and Procedures		17

PART II OTHER INFORMATION

Item 1 – Legal Proceedings		18

Item 1A – Risk Factors		18

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		18

Item 5 – Other Information		19

Item 6 – Exhibits		19

SIGNATURES		20

	January 31, 2022*			October 31, 2021**
ASSETS
Current assets
Cash and cash equivalents	$	15,351,553		$	17,468,345
Accounts receivable		5,046,481			4,613,142
Prepaids and other assets		623,540			740,869
Total current assets		21,021,574			22,822,356

Property and equipment		93,001			105,522
Operating lease right-of-use		606,421			639,969
Other assets		353,294			353,354
Total assets	$	22,074,290		$	23,921,201

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current operating lease liabilities	$	132,700		$	130,060
Accounts payable and accrued expenses		1,689,623			2,071,264
Current portion of US Tax Reform Transition Tax and income taxes payable		499,471			449,896
Total current liabilities		2,321,794			2,651,220

US Tax Reform Transition Tax payable		1,850,536			1,850,536
Long term operating lease liabilities		453,278			487,364
Other liabilities		17,950			17,950
Total liabilities		4,643,558			5,007,070

Stockholders’ equity
Preferred Stock, $0.0001 par value; authorized 10,000,000 shares; none outstanding		-			-
Common Stock, $0.0001 par value; authorized 50,000,000 shares; 23,457,515 and 23,433,341 shares issued, and 22,973,186 and 23,003,615 shares outstanding at January 31, 2022 and October 31, 2021, respectively		2,346			2,343
Additional paid-in capital		1,494,593			1,480,193
Retained earnings		16,290,234			17,707,384
Accumulated other comprehensive income		118,962			144,455
		17,906,135			19,334,375
Treasury stock, at cost; 484,329 and 429,726 common shares held at January 31, 2022 and October 31, 2021, respectively		(475,403	)		(420,244	)
Total stockholders’ equity		17,430,732			18,914,131
Total liabilities and stockholders’ equity	$	22,074,290		$	23,921,201

	Three months ended January 31,
	2022		2021
REVENUES	$	5,019,104	$	4,488,309

COST OF SERVICES		3,774,521		3,173,199

GROSS PROFIT		1,244,583		1,315,110

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		888,735		995,989

INCOME FROM OPERATIONS		355,848		319,121

OTHER INCOME, NET		615		2,402

INCOME BEFORE INCOME TAX		356,463		321,523

INCOME TAX EXPENSE		51,219		53,491

NET INCOME	$	305,244	$	268,032

BASIC AND DILUTED EARNINGS PER COMMON SHARE	$	0.013	$	0.012

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC		22,979,004		23,010,623

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED		23,033,944		23,172,348

	Three months ended January 31,
	2022			2021
NET INCOME	$	305,244		$	268,032

OTHER COMPREHENSIVE INCOME (LOSS):

Foreign currency translation gain (loss), net of tax		(25,493	)		23,752

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		(25,493	)		23,752

COMPREHENSIVE INCOME	$	279,751		$	291,784

Title of each class		Trading Symbol(s)		Name of each exchange on which registered

														Accumulated
									Additional					Other
FISCAL YEAR 2021	Common Stock				Preferred Stock				Paid-in		Retained			Comprehensive		Treasury
	Shares		Amount		Shares		Amount		Capital		Earnings			Income (Loss)		Stock			Total
BALANCE AT NOVEMBER 1, 2020		23,405,753	$	2,341		-	$	-	$	1,423,954	$	21,523,990		$	160,654	$	(394,278	)	$	22,716,661

STOCK-BASED COMPENSATION		-		-		-		-		11,430		-			-		-			11,430

ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS		27,588		2		-		-		-		(2	)		-		-			-

NET INCOME		-		-		-		-		-		268,032			-		-			268,032

OTHER COMPREHENSIVE, NET OF TAX		-		-		-		-		-		-			23,752		-			23,752

CASH DIVIDEND ($0.075 PER COMMON SHARE AT RECORD DATE)		-		-		-		-		-		(1,727,364	)		-		-			(1,727,364	)

BALANCE AT JANUARY 31, 2021		23,433,341	$	2,343		-	$	-	$	1,435,384	$	20,064,656		$	184,406	$	(394,278	)	$	21,292,511

	Three months ended January 31,
	2022		2021
Net income available to common equity holders - used to compute basic and diluted earnings per share	$	305,244	$	268,032

Weighted average number of common shares - used to compute basic earnings per share		22,979,004		23,010,623
Effect of options to purchase common stock		54,940		161,725
Weighted average number of shares - used to compute diluted earnings per share		23,033,944		23,172,348

	Three months ended January 31,
Revenues by Region:	2022				2021
Puerto Rico	$	3,364	67.0	%	$	3,367	75.0	%
United States		1,187	23.6	%		447	10.0	%
Europe		465	9.3	%		531	11.8	%
Other		3	0.1	%		143	3.2	%
	$	5,019	100.0	%	$	4,488	100.0	%

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
November 1, 2021 through November 30, 2021		18,503	$	1.05		18,503		1,614,743
December 1, 2021 through December 31, 2021		28,500		0.99		28,500		1,586,243
January 1, 2022 through January 31, 2022		7,600		0.98		7,600		1,578,643
Total		54,603	$	1.01		54,603

31.1		Certification of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of chief financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of the chief executive officer and chief financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase
104		Cover page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

	PHARMA-BIO SERV, INC.

	/s/ Victor Sanchez
	Victor Sanchez
	Chief Executive Officer and President Europe Operations
	(Principal Executive Officer)

	/s/ Pedro J. Lasanta
	Pedro J. Lasanta
	Chief Financial Officer, Vice President Finance and Administration, and Secretary
	(Principal Financial Officer and Principal Accounting Officer)

Dated: March 17, 2022

1.	I have reviewed this quarterly report on Form 10-Q of Pharma-Bio Serv, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

*	Unaudited.
**	Condensed from audited financial statements.

	Three months ended January 31,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	305,244		$	268,032
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation		14,400			11,430
Depreciation and amortization		13,205			21,424
Decrease (increase) in accounts receivable		(446,308	)		176,864
Decrease in other assets		146,533			136,466
Decrease in liabilities		(360,276	)		(26,030	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(327,202	)		588,186

CASH FLOWS FROM INVESTING:
Acquisition of property and equipment		(684	)		(2,568	)
Collection from promissory note receivable		-			1,250,000
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(684	)		1,247,432

CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock		(55,159	)		-
Payments on obligations under finance lease		-			(2,851	)
Cash dividends paid to shareholders		(1,722,391	)		-
NET CASH USED IN FINANCING ACTIVITIES		(1,777,550	)		(2,851	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		(11,356	)		17,648
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(2,116,792	)		1,850,415
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		17,468,345			17,137,924
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	15,351,553		$	18,988,339

SUPPLEMENTAL DISCLOURES OF CASH FLOWS INFORMATION:
Cash paid during the period for:
Income taxes	$	-		$	-
Interest	$	-		$	852
SUPPLEMENTARY SCHEDULES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Income tax withheld by clients to be used as a credit in the Company’s income tax return	$	21,538		$	3,613
Cash dividend declared but paid in the subsequent quarter	$	-		$	1,727,364
Conversion of cashless exercise of options to common stock	$	3		$	2

	Three months ended January 31,
	2022				2021
Revenues	$	5,019	100.0	%	$	4,488	100.0	%
Cost of services		3,775	75.2	%		3,173	70.7	%
Gross profit		1,244	24.8	%		1,315	29.3	%
Selling, general and administrative expenses		889	17.7	%		996	22.2	%
Other income, net		1	0.0	%		2	0.1	%
Income before income taxes		356	7.1	%		321	7.2	%
Income tax expense		51	1.0	%		53	1.2	%
Net income		305	6.1	%		268	6.0	%

Date: March 17, 2022

		/s/ Victor Sanchez
		Victor Sanchez
		Chief Executive Officer
		(principal executive officer)