Pharma-Bio Serv, Inc 10-Q for FY2024 Q1

Pharma-Bio Serv, Inc. (PBSV)

10-Q 2024-03-18 For: 2024-01-31

Added on April 06, 2026

About this 10-Q

Pharma-Bio Serv, Inc filed this 10-Q on March 18, 2024, covering the quarter ended January 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended January 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.38M; down 43.8% from $4.24M a year earlier
Net loss: $270.72K; compared with net income of $426.43K 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, 2024 and October 31, 2023 (unaudited)		3

	Condensed Consolidated Statements of Operations for the three-month periods ended January 31, 2024 and 2023 (unaudited)		4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three-month periods ended January 31, 2024 and 2023 (unaudited)		5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended January 31, 2024 and 2023 (unaudited)		6

	Condensed Consolidated Statements of Cash Flows for the three-month periods ended January 31, 2024 and 2023 (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

Item 6 –	Exhibits		19

SIGNATURES			20

ASSETS	January 31, 2024*			October 31, 2023**
Current assets
Cash and cash equivalents	$	6,413,550		$	10,446,054
Marketable securities		9,475,958			4,531,164
Accounts receivable		2,407,580			3,940,845
Prepaids and other assets		477,925			483,034
Total current assets		18,775,013			19,401,097

Property and equipment		26,383			32,849
Operating lease right-of-use		318,159			356,450
Other assets		111,691			111,665
Total assets	$	19,231,246		$	19,902,061

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Current operating lease liabilities	$	155,570		$	152,474
Accounts payable and accrued expenses		1,062,560			1,467,425
Dividend payable to shareholders		1,722,236			-
Current portion of US Tax Reform Transition Tax and income taxes payable		738,003			533,782
Total current liabilities		3,678,369			2,153,681

US Tax Reform Transition Tax payable		1,242,507			1,427,560
Long term operating lease liabilities		153,993			194,035
Total liabilities		5,074,869			3,775,276

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; 23,519,672 and 23,512,880 shares issued, and 22,963,143 and 22,963,451 shares outstanding at January 31, 2024 and October 31, 2023, respectively		2,352			2,351
Additional paid-in capital		1,611,722			1,596,922
Retained earnings		12,860,870			14,853,826
Accumulated other comprehensive income		225,206			210,266
		14,700,150			16,663,365
Treasury stock, at cost; 556,529 and 549,429 common shares held at January 31, 2024 and October 31, 2023, respectively		(543,773	)		(536,580	)
Total stockholders' equity		14,156,377			16,126,785
Total liabilities and stockholders' equity	$	19,231,246		$	19,902,061

	Three months ended January 31,
	2024			2023
REVENUES	$	2,380,187		$	4,238,356

COST OF SERVICES		1,844,578			2,998,200

GROSS PROFIT		535,609			1,240,156

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		973,909			911,524

INCOME (LOSS) FROM OPERATIONS		(438,300	)		328,632

OTHER INCOME, NET		180,529			246,545

INCOME (LOSS) BEFORE INCOME TAX		(257,771	)		575,177

INCOME TAX EXPENSE		12,948			148,745

NET INCOME (LOSS)	$	(270,719	)	$	426,432

BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE	$	(0.012	)	$	0.019

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC		22,962,460			22,945,120

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED		22,986,370			22,957,755

	Three months ended January 31,
	2024			2023
NET INCOME (LOSS)	$	(270,719	)	$	426,432

OTHER COMPREHENSIVE INCOME (LOSS):

Foreign currency translation:
Net unrealized gain		32,957			126,152
Intercompany balances foreign exchange settlement, included in net income (loss)		(18,017	)		(134,617	)

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		14,940			(8,465	)

COMPREHENSIVE INCOME (LOSS)	$	(255,779	)	$	417,967

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

														Accumulated
									Additional					Other
FISCAL YEAR 2024	Common Stock				Preferred Stock				Paid-in		Retained			Comprehensive		Treasury
THREE MONTHS ENDED JANUARY 31, 2024	Shares		Amount		Shares		Amount		Capital		Earnings			Income (Loss)		Stock			Total
BALANCE AT NOVEMBER 1, 2023		23,512,880	$	2,351		-	$	-	$	1,596,922	$	14,853,826		$	210,266	$	(536,580	)	$	16,126,785

STOCK-BASED COMPENSATION		-		-		-		-		14,800		-			-		-			14,800

ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS		6,792		1		-		-		-		(1	)		-		-			-

PURCHASE OF TREASURY STOCK (7,100 SHARES)		-		-		-		-		-		-			-		(7,193	)		(7,193	)

NET LOSS		-		-		-		-		-		(270,719	)		-		-			(270,719	)

OTHER COMPREHENSIVE INCOME, NET OF TAX		-		-		-		-		-		-			14,940		-			14,940

CASH DIVIDEND ($0.075 PER COMMON SHARE AT RECORD DATE)		-		-		-		-		-		(1,722,236	)		-		-			(1,722,236	)

BALANCE AT JANUARY 31, 2024		23,519,672	$	2,352		-	$	-	$	1,611,722	$	12,860,870		$	225,206	$	(543,773	)	$	14,156,377

	Level 1:	Quoted prices in active markets for identical assets and liabilities.

	Level 2:	Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

	Level 3:	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

	Three months ended January 31,
	2024			2023
Net income (loss) available to common equity holders - used to compute basic and diluted earnings per share	$	(270,719	)	$	426,432

Weighted average number of common shares - used to compute basic earnings (loss) per share		22,962,460			22,945,120
Effect of options to purchase common stock		23,910			12,635
Weighted average number of shares - used to compute diluted earnings (loss) per share		22,986,370			22,957,755

	Three months ended January 31,
Revenues by Region:	2024				2023
Puerto Rico	$	1,390	58.4	%	$	2,174	51.3	%
United States		883	37.1	%		1,094	25.8	%
Europe		65	2.7	%		970	22.9	%
Other		42	1.8	%		-	0.0	%
	$	2,380	100.0	%	$	4,238	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, 2023 through November 30, 2023		600	$	0.92		600		1,512,943
December 1, 2023 through December 31, 2023		3,200	$	1.00		3,200		1,509,743
January 1, 2024 through January 31, 2024		3,300	$	1.04		3,300		1,506,443
Total		7,100	$	1.01		7,100

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 18, 2024

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

*	Unaudited.
**	Condensed from audited financial statements.

	Three months ended January 31,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(270,719	)	$	426,432
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation		14,800			14,801
Depreciation and amortization		7,286			16,127
Amortization of operating lease right-of-use		38,291			35,431
Reinvested interests		(182,215	)		(51,596	)
Decrease in accounts receivable		1,561,136			736,718
Increase in other assets		(11,528	)		(101,154	)
Decrease in liabilities		(431,106	)		(200,893	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		725,945			875,866

CASH FLOWS FROM INVESTING:
Acquisition of property and equipment		(820	)		(8,067	)
Marketable securities investment, net		(4,762,579	)		(8,195,897	)
NET CASH USED IN INVESTING ACTIVITIES		(4,763,399	)		(8,203,964	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock		(7,193	)		-
CASH USED IN FINANCING ACTIVITIES		(7,193	)		-

EFFECT OF EXCHANGE RATE CHANGES ON CASH		12,143			90,619
NET DECREASE IN CASH AND CASH EQUIVALENTS		(4,032,504	)		(7,237,479	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		10,446,054			14,462,729
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	6,413,550		$	7,225,250

SUPPLEMENTAL DISCLOURES OF CASH FLOWS INFORMATION:
Cash paid during the period for:
Income taxes	$	-		$	-
Interest	$	-		$	-
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	$	20,497		$	9,149
Cash dividend declared but not paid	$	1,722,236		$	-
Conversion of cashless exercise of options to common stock	$	1		$	-

	Three months ended January 31,
	2024					2023
Revenues	$	2,380		100.0	%	$	4,238	100.0	%
Cost of services		1,845		77.5	%		2,998	70.7	%
Gross profit		535		22.5	%		1,240	29.3	%
Selling, general and administrative expenses		974		40.9	%		911	21.5	%
Other income, net		181		7.6	%		246	5.8	%
Income (loss) before income taxes		(258	)	-10.8	%		575	13.6	%
Income tax expense		13		0.5	%		149	3.5	%
Net income (loss)		(271	)	-11.3	%		426	10.1	%

	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.

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.