Pharma-Bio Serv, Inc 10-Q for FY2022 Q2

Pharma-Bio Serv, Inc. (PBSV)

10-Q 2022-06-14 For: 2022-04-30

Added on April 06, 2026

About this 10-Q

Pharma-Bio Serv, Inc filed this 10-Q on June 14, 2022, covering the quarter ended April 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended April 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.97M; down 1.5% from $5.04M a year earlier
Net income: $240.03K; down 0.1% from net income of $240.27K a year earlier

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		Page
PART I FINANCIAL INFORMATION

Item 1 –	Financial Statements		3

	Condensed Consolidated Balance Sheets as of April 30, 2022 and October 31, 2021 (unaudited)		3

	Condensed Consolidated Statements of Operations for the three-month and six-month periods ended April 30, 2022 and 2021 (unaudited)		4

	Condensed Consolidated Statements of Comprehensive Income for the three-month and six-month periods ended April 30, 2022 and 2021 (unaudited)		5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month and six-month periods ended April 30, 2022 and 2021 (unaudited)		6

	Condensed Consolidated Statements of Cash Flows for the three-month and six-month periods ended April 30, 2022 and 2021 (unaudited)		8

	Notes to Condensed Consolidated Financial Statements (unaudited)		9

Item 2 -	Management's Discussion and Analysis of Financial Condition and Results of Operations		15

Item 4 –	Controls and Procedures		18

PART II OTHER INFORMATION

Item 1 –	Legal Proceedings		19

Item 1 A –	Risk Factors		19

Item 2 –	Unregistered Sales of Equity Securities and Use of Proceeds		19

Item 6 –	Exhibits		19

SIGNATURES			20

ASSETS	April 30, 2022*			October 31, 2021**
Current assets
Cash and cash equivalents	$	13,163,997		$	17,468,345
Accounts receivable		5,478,212			4,613,142
Prepaids and other assets		507,759			740,869
Total current assets		19,149,968			22,822,356

Property and equipment, net		85,222			105,522
Operating lease right-of-use		572,825			639,969
Other assets		353,181			353,354
Total assets	$	20,161,196		$	23,921,201
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current operating lease liabilities	$	135,306		$	130,060
Accounts payable and accrued expenses		1,512,395			2,071,264
Current portion of US Tax Reform Transition Tax and income taxes payable		543,603			449,896
Total current liabilities		2,191,304			2,651,220

US Tax Reform Transition Tax payable		1,639,048			1,850,536
Long-term operating lease liabilities		418,204			487,364
Other liabilities		17,950			17,950
Total liabilities		4,266,506			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 22,956,886 and 23,003,615 shares outstanding at April 30, 2022 and October 31, 2021, respectively		2,346			2,343
Additional paid-in capital		1,508,994			1,480,193
Retained earnings		14,806,057			17,707,384
Accumulated other comprehensive income		67,823			144,455
		16,385,220			19,334,375
Treasury stock, at cost; 500,629 and 429,726 common shares held at April 30, 2022 and October 31, 2021, respectively		(490,530	)		(420,244	)
Total stockholders' equity		15,894,690			18,914,131
Total liabilities and stockholders' equity	$	20,161,196		$	23,921,201

	Three months ended April 30,				Six months ended April 30,
	2022		2021		2022		2021
REVENUES	$	4,967,318	$	5,041,666	$	9,986,422	$	9,529,975

COST OF SERVICES		3,751,412		3,750,794		7,525,933		6,923,993

GROSS PROFIT		1,215,906		1,290,872		2,460,489		2,605,982

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		935,276		1,026,093		1,824,011		2,022,082

INCOME FROM OPERATIONS		280,630		264,779		636,478		583,900

OTHER INCOME, NET		4,404		21,090		5,019		23,492

INCOME BEFORE INCOME TAX		285,034		285,869		641,497		607,392

INCOME TAX EXPENSE		45,007		45,598		96,226		99,089

NET INCOME	$	240,027	$	240,271	$	545,271	$	508,303

BASIC AND DILUTED EARNINGS PER COMMON SHARE	$	0.010	$	0.010	$	0.024	$	0.022

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC		22,961,401		23,029,215		22,986,597		23,019,765

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED		22,987,042		23,209,118		23,026,937		23,181,347

	Three months ended April 30,					Six months ended April 30,
	2022			2021		2022			2021
NET INCOME	$	240,027		$	240,271	$	545,271		$	508,303

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

Foreign currency translation gain (loss), net of tax		(51,139	)		4,739		(76,632	)		28,491

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		(51,139	)		4,739		(76,632	)		28,491

COMPREHENSIVE INCOME, NET OF TAX	$	188,888		$	245,010	$	468,639		$	536,794

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
(THREE MONTHS ENDED APRIL 30, 2021)	Shares		Amount		Shares		Amount		Capital		Earnings		Income (Loss)		Stock			Total
BALANCE AT JANUARY 31, 2021		23,433,341	$	2,343		-	$	-	$	1,435,384	$	20,064,656	$	184,406	$	(394,278	)	$	21,292,511

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

NET INCOME		-		-		-		-		-		240,271		-		-			240,271

OTHER COMPREHENSIVE INCOME, NET OF TAX		-		-		-		-		-		-		4,739		-			4,739

BALANCE AT APRIL 30, 2021		23,433,341	$	2,343		-	$	-	$	1,446,814	$	20,304,927	$	189,145	$	(394,278	)	$	21,548,951

	Three months ended April 30,				Six months ended April 30,
	2022		2021		2022		2021
Net income available to common equity holders - used to compute basic and diluted earnings per share	$	240,027	$	240,271	$	545,271	$	508,303

Weighted average number of common shares - used to compute basic earnings per share		22,961,401		23,029,215		22,986,597		23,019,765
Effect of options to purchase common stock		25,641		179,903		40,340		161,582
Weighted average number of shares - used to compute diluted earnings per share		22,987,042		23,209,118		23,026,937		23,181,347

	Three months ended April 30,								Six months ended April 30,
Revenues by Region:	2022				2021				2022				2021
Puerto Rico	$	3,074	61.9	%	$	3,745	74.3	%	$	6,438	64.5	%	$	7,112	74.6	%
United States		1,226	24.7	%		477	9.4	%		2,412	24.2	%		924	9.7	%
Europe		667	13.4	%		675	13.4	%		1,132	11.3	%		1,205	12.7	%
Other¹		-	0.0	%		145	2.9	%		4	0.0	%		289	3.0	%
	$	4,967	100.0	%	$	5,042	100.0	%	$	9,986	100.0	%	$	9,530	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)
February 1, 2022 through February 28, 2022		12,700	$	0.93		12,700		1,565,943
March 1, 2022 through March 31, 2022		1,500		0.89		1,500		1,564,443
April 1, 2022 through April 30, 2022		2,100		0.92		2,100		1,562,343
Total		16,300	$	0.93		16,300

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: June 14, 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 April 30,						Six months ended April 30,
	2022			2021			2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	240,027		$	240,271		$	545,271		$	508,303
Adjustments to reconcile net income to net cash used in operating activities:
Gain on disposition of property and equipment		-			(7,404	)		-			(7,404	)
Stock-based compensation		14,401			11,430			28,801			22,860
Depreciation and amortization		12,140			18,831			25,345			40,255
Increase in accounts receivable		(463,989	)		(797,930	)		(910,297	)		(621,066	)
Decrease in other assets		122,030			113,385			268,563			249,851
Decrease in liabilities		(370,894	)		(764,001	)		(731,170	)		(790,031	)
NET CASH USED IN OPERATING ACTIVITIES		(446,285	)		(1,185,418	)		(773,487	)		(597,232	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(4,361	)		(2,048	)		(5,045	)		(4,616	)
Proceeds from sale of property and equipment		-			57,571			-			57,571
Collection from promissory note receivable		-			-			-			1,250,000
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(4,361	)		55,523			(5,045	)		1,302,955

CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock		(15,127	)		-			(70,286	)		-
Payments on obligations under finance lease		-			(64,228	)		-			(67,079	)
Cash dividends paid to shareholders		(1,724,204	)		(1,727,364	)		(3,446,595	)		(1,727,364	)
NET CASH USED IN FINANCING ACTIVITIES		(1,739,331	)		(1,791,592	)		(3,516,881	)		(1,794,443	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		2,421			(365	)		(8,935	)		17,283
NET DECREASE IN CASH AND CASH EQUIVALENTS		(2,187,556	)		(2,921,852	)		(4,304,348	)		(1,071,437	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		15,351,553			18,988,339			17,468,345			17,137,924
CASH AND CASH EQUIVALENTS – END OF PERIOD	$	13,163,997		$	16,066,487		$	13,163,997		$	16,066,487

SUPPLEMENTAL DISCLOURES OF CASH FLOWS INFORMATION:
Cash paid during the period for:
Income taxes	$	211,813		$	507,207		$	211,813		$	507,207
Interest	$	-		$	552		$	-		$	1,404

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	$	-		$	433		$	21,538		$	4,046
Conversion of cashless exercise of options to shares of common stock and shares issued under restricted stock unit agreements	$	-		$	-		$	3		$	2
Disposed property and equipment with accumulated depreciation of $35,833 for the three and six months ended April 30, 2021	$	-		$	86,000		$	-		$	86,000

	Three months ended April 30,						Six months ended April 30,
	2022			2021			2022			2021
REVENUES:
Puerto Rico consulting	$	3,073,939		$	3,744,725		$	6,437,815		$	7,112,076
United States consulting		1,225,978			476,809			2,412,685			924,220
Europe consulting		666,839			674,826			1,131,807			1,205,322
Other segment		562			145,306			4,115			288,357
Total consolidated revenues	$	4,967,318		$	5,041,666		$	9,986,422		$	9,529,975

INCOME (LOSS) BEFORE TAXES:
Puerto Rico consulting	$	23,140		$	44,546		$	159,715		$	148,958
United States consulting		121,076			(23,268	)		201,150			(13,885	)
Europe consulting		162,608			222,541			315,684			380,044
Other segment		(21,790	)		42,050			(35,052	)		92,275
Total consolidated income before taxes	$	285,034		$	285,869		$	641,497		$	607,392

	Three months ended April 30,								Six months ended April 30,
	2022				2021				2022				2021
Revenues	$	4,967	100.0	%	$	5,042	100.0	%	$	9,986	100.0	%	$	9,530	100.0	%
Cost of services		3,751	75.5	%		3,751	74.4	%		7,526	75.4	%		6,924	72.7	%
Gross profit		1,216	24.5	%		1,291	25.6	%		2,460	24.6	%		2,606	27.3	%
Selling, general and administrative expenses		935	18.8	%		1,026	20.3	%		1,824	18.3	%		2,022	21.2	%
Other income, net		4	0.0	%		21	0.4	%		5	0.1	%		23	0.2	%
Income before income taxes		285	5.7	%		286	5.7	%		641	6.4	%		607	6.3	%
Income tax expense		45	0.9	%		46	0.9	%		96	1.0	%		99	1.0	%
Net income		240	4.8	%		240	4.8	%		545	5.4	%		508	5.3	%

1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.