Richard T. Schumacher - President and CEO

Delray Wannemacher - Private investor Daniel Long - Private investor Alan Stone - WallStreet Research Geoffrey Scott - Scott Asset Management

Greetings and welcome to the Pressure BioSciences Third Quarter 2015 Financial Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Richard Schumacher. Thank you. You may begin. Richard T. Schumacher: Thanks and welcome everybody to Pressure Bio's third quarter 2015 financial review and business update. I'm going to be your host today. Unfortunately, my comrade and colleague, Dick Thomley, is no longer with us. He resigned, as I think you all know, a few weeks back as our Chief Financial Officer. Dick came three years ago when we were in need of a high-level financial person. He came for three months and stayed for three years. So I can't ask for much more than that. Highly talented, highly motivated, very focused individual, wonderful to have him over those three years. He kept saying, at some point he needed to go back into retirement. We were able to convince him to put that off for three years but we couldn't do it any longer. So good luck to Dick, if you're listening, which I think you are, and thank you for all your hard work over the years. So in the meantime, I will be coming back into the position of Principal Financial Officer, but that hopefully will be there for a very short period of time as we begin to search for a new financial officer here at Pressure BioSciences. I'd like to read the cautionary statement before we begin today's conference call. The following remarks may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include among others those detailed from time to time in the Company's filings with the Securities and Exchange Commission. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which such statement or statements are based. So the agenda today is that I'm going to give a brief overview of the third quarter. Certainly I believe most people on this call have seen the numbers through the published 10-Q and the press release. I want to go over them briefly. And then follow with the general business update. And after that, we'd be pleased to take a few questions. So for the financial overview in the third quarter, this was as we mentioned in our press releases, as Jeff Peterson, our Chairman mentioned, this is the most successful financial quarter in our history. Extremely happy with this quarter. We believe it's a pivot point, an inflection point in PBI's financial progress. We've talked over the past year, year and a half, that we need to get our financial ship in order and we believe we are very much doing that now, and very proud of the team here at PBI for their focus, their hard drive, their loyalty that has enabled us to have such a terrific third quarter of 2015. In the quarter, we reported total revenue of $580,334, compared to $372,545 for the third quarter of 2014. This was an increase of 55.8%, and we also increased at the same time almost 30% our products and services revenue which was $481,452 in the third quarter versus $372,545 in the same quarter of 2014, last year's third quarter. And again, I said this is an increase of nearly 30% on products and services and overall revenue increase of 55.8%. Our grant revenue was $98,882. There was no grant revenue. So obviously grants played a role in our increased revenue, but it wasn't only because of the grants. As I just said, we increased our products and services revenue nearly 30% in the same quarter while we performed all of the obligations under the grant with adding very little overhead, and that's why our operating loss for Q3 was at $690,728 compared to $797,633 for the same period in 2014. So we decreased our operating loss by 13.4% while we concurrently increased our total revenue by 55.8% and increased products and services by 30%. We achieved this by working harder, working smarter, working longer. We achieved this in spite of adding important new expenditures that we had in marketing, sales and R&D during the third quarter. So I'm very proud of the overall fact that we could keep our margins about the same, reduce our operating loss and significantly increase both our products and services revenue and our total revenue, and at the same time add go to more shows and add additional needed help in R&D and marketing and sales. Now for the year-to-date period, for the nine months through September 30, we reported total revenue of $1,433,757 versus $1,084,156. This was an increase of 32.2%. So our total revenue increased 32% over the same nine-month period last year. But please note that our total revenue this year through nine months has exceeded our entire revenue for all four quarters in 2014. So we're very proud of that too. Our products and services revenue was $1.1 million, $1,174,391, and this compared to $1,084,156 for the same nine months in 2014. So our products and services revenue, which had been down for the first half of the year, has now increased 8.3% over the three quarters of last year. Our grant revenue was $259,181, and again, there was no grant revenue in the same period 2014. Grants, as I said, often are very important to this Company. They are able to cover the expenditures we have in areas in which we want to develop products or develop applications. So it's very important for us to get these grants in, but when they come in, we often have to take some of the existing people and take them off of the work they're doing to help build products, help build applications that the Company is paying for them and put them on the grants. And so to be able to develop new products and applications, to increase sales, while having nearly $260,000 in grant revenue, I think it is admirable and a great deal of thanks to Alex Lazarev and his team who have been working on the grants, got the grants and have been working on them ever since. The operating loss for the nine-month period in 2015 through September 30 was $2,629,436, compared to a smaller operating loss of $2,426,756 for the same nine month period in 2014. So our operating loss increased by 8.4% over the nine months, although it decreased substantially over the last quarter, and what we're happy about is that the increase in operating loss that we had was mitigated to a great extent through two quarters by the strong third quarter that we had and decreasing our operating loss by nearly 14%. Loss per common share, both basic and diluted, was for the quarter $0.03 versus $0.07 last year 2014. And for the nine-month period it was $0.17 versus $0.35 for the same period in 2014. So I'd like to briefly discuss and comment on several operational and strategic events in the third quarter and in the six weeks since the end of the quarter. Much of this is reported, if not all of it reported, on our 10-Q that was filed last Thursday as well as most of it in the press release that was also released last Thursday. And we believe these operational and strategic events are very important to the Company and important to our stability and our growth going forward. And then after I go through these, we're going to have time for Q&A. So as I said, we're very, very pleased with the financial results of the third quarter of 2015, but we're also equally pleased with the operational progress that we've made during this period of time. And during this time, during this quarter as well as the last six weeks, we've had a number of accomplishments that we've reported. First and certainly foremost, since we sent it out today, we announced earlier today that we had closed on the third tranche of our $5 million financing our PIPE. We have now closed on three tranches and on over $4 million of our $5 million PIPE by having raised $3.3 million earlier this quarter, both in September and in July. So in the third quarter, we had three tranche closings for a total of over $4 million of our $5 million PIPE. I'm very happy with that, very happy with the work that everyone has been doing on this, as it's no secret that the deal which is publicly known is at $0.28, it's a fixed convertible at $0.28 with half a warrant, our stock has been pretty much below $0.28 the entire time that this has been out, and yet we've been able to successfully close on over $4 million. We have investors, I believe there's somewhere between 20 and 30 investors now that have come in and they're betting on this long-term. They are betting because they're paying – getting stock at $0.28 when the stock is out in the market at $0.20 to $0.27, for most of the time that this PIPE has been open since July. And in talking with them, with the investors, we feel that they are confident as we are that we've hit that pivot point, we've hit that inflection point and we really feel like the fourth quarter next year is going to be extremely exciting for our Company. On October 16, we announced a collaboration. This was three or so years in the making. We've been working with Dr. McCord and his team in Florida International University. So we announced a collaboration to co-develop what we want to have as an improved rape kit test method and it's going to be based on our patented pressure cycling technology or PCT platform. There is reported out in the literature, an estimated number of rape kit backlog that can be between 200,000 and 400,000 kits sitting on shelves, often containing the semen of the perpetrator and yet for numerous reasons that kit has not been run. And part of it is that the test is expensive, part of it is that the test is very cumbersome and not person-friendly and takes several days to run, and part of it is that you can't run a lot of samples at one time. We believe that the data that have been generated by Dr. McCord and his team, they crossed over an inflection point in our opinion in the past few months. They've been working on this problem for as I said about three or four years. But we believe they made a couple of major discoveries that they think, and we believe that they are right, will be able to develop a better improved rape kit test method, one that can do more samples with great quality, faster and we think less expensively than what is out in the market. But most important, do more with what we have, so that perhaps we can start to reduce this backlog. We think it will take 18 months, it might take 24 months, but somewhere in that time period we think we'll be able to develop this test and have it ready for use. We are supporting Dr. McCord and his team. We are supporting them by supplying them with reagents, supplying them with our Pressure BioSciences reagents for PCT, but also we are buying test kits for them over the next 18 months to allow them to compare what they're doing with PCT versus the normal method out there. We're very excited about this because it is a great way to utilize this very powerful technology of ours to make a difference in this world, and I hope that all investors in this Company are investing for two reasons, one is, hopefully to make money and we certainly are on board with that, and two is to do something that's beneficial, do many things that are beneficial with this very powerful technology. And this is one of the ones that is very near to me, it's one that we've been working on for about four years and one that has now come up and taken front-and-center a very important project for us in this collaboration with Florida International University. So it's a formal collaboration, where in the past three to four years it's been a very informal working relationship. On September 1, we announced that there was a recent publication in a peer-reviewed journal that indicated that our PCT platform might play a significant role in personalized, what's now known as personalized or precision medicine, including in cancer tissue biopsies. It's so important for a company like us, trying to break a paradigm that's existed for decades, trying to get scientists in the laboratory to using a method that they've never many times heard of, trying to get them to switch from something that they did and their mentor did and maybe their mentor's mentor did, having them switch to our technology, is very difficult. So one way to do that, perhaps the best way to do that is to get the key opinion leaders in the world to use the product and to publish and present on the product. So on September 1, when we announced that there was a recent publication that said, we had a play in personalized precision medicine particularly in cancer tissue biopsies, we were very excited about that. We also, in terms of collaborations, we also announced back in August 26, the start of a two-year collaboration with one of the most important, if not the most important protein institute in all of India, it's the Institute of Bioinformatics. It is run by a very world-renowned scientist Dr. Akhilesh Pandey of Johns Hopkins School of Medicine and it's an incredible institute in Bangalore, India making a lot of discoveries, a lot of progress in a number of fields, and they are now using PCT and they've signed on for a two-year collaboration with us in a number of fields. And there are, as I understand it, well over 100 scientists in the institute and these are scientists that will be using, many of them will be using pressure cycling technology in their work. Whether it'd be cancer or heart disease or infectious disease, they will be using PCT to see if PCT can help, and we believe in some cases it certainly can. We announced on August 17 our second quarter financial results. At that time on this conference call, we were very proud of the second quarter and the year-to-date numbers, and we've taken it to the next step by taking the guidance we gave of getting to $500,000 in sales and revenue for the first time ever and getting it to actually $580,000, blowing right through the guidance of $500,000, and so very, very, very happy with that. So a few more things that happened. We talked about publications. There were three others, July 15, July 13 and July 7. We had press releases announcing that scientists, many times nationally renowned or world-renowned scientists, were using PCT and indicating that PCT could be a key part of the work that they were doing. In one case, COPD associated lung cancer, and in other, in discovering new biomarkers for the early diagnosis and prediction of complications in diabetes, and the third one was back in rape kit testing and other forensic samples. So there were three other publications this quarter that came out in peer-reviewed journals from leading scientists, key opinion leaders, that are talking about our product line and how it can help get to an answer better, faster, less expensively with higher quality, or all of the above, any or all of the above. This is very important to us. We're a company of nine people, we're a company that has very limited budget up till now in sales and marketing, and people have asked, many people have asked, how did you do it, how did you go from two $400,000 quarters back to back in the first year to a $580,000 and even giving guidance for a strong fourth quarter. It's not because we've expanded our sales team yet, which is what we plan to do, it's because we have brought on new important customers that are using and publishing and presenting on our technology and others in the field are seeing it and calling us and saying, I'd like to see the system, I'd like to own the system, please give me a quotation for the system that so-and-so and so-and-so have been using. So, very excited about that. What I'd like to do now is finish this and turn it over to everybody on the phone and open it up for questions.

[Operator Instructions] Our first question is from [Delray Wannemacher] [ph], who is a private investor. Please state your question.

Rick, I have – through looking at the reports, it looked like you had about $2.6 million worth of debt. I wanted to see if you could comment on – I didn't found anywhere where it shows exactly what is left on that, and for my estimation from what you've raised, I would estimate somewhere in the $600,000 range of that debt left as part of your strategy. And the second part of that question is, has any of the debt converted at this point? Richard T. Schumacher: Let me take it backwards. We've had no debt convert, and I say that with a little asterisk on that. We've had two groups that we've taken convertible debt from that did convert but they converted when we got together and worked at a deal that worked for both, that converted in the $0.25 to $0.35 range, and it wasn't that much converted but it worked for us because it allowed us to keep some cash that we needed for growing our operations, building inventory, getting the sales that everyone has seen we've gotten. So, other than some very small conversions that were under our circumstances, our guidelines, no, no debt has converted. We paid off a lot of debt, Delray. I'm going to guess, in over three years we probably paid back $4 million. But, yes, I think you're basically right, the numbers are in the Q. If you look at the table in the Q, one can see pretty much what's happened, and I'm very happy to say that we have taken $2.6 million or more of this convertible debt variable rate and reduced it to a number now that's, let's just say, it's under $0.5 million. So our goal has always been, starting in July when we closed our first tranche to get rid of this debt, we believe we will get rid of it and we believe it will be gone fairly quickly from this point on. And what's interesting is that we've made it very clear that raising this money, which I think is interesting that we are raising money when the stock is well below the price of the purchase and we're using the vast majority of the money being raised so far, the vast majority is being used to clean up our balance sheet. So it's not going into operations, it's not going into R&D, it's going to take debt off of the balance sheet and clean this up, because as we've said publicly, we are looking at the possibility of an uplist for sometime next year when the time is right and that time will be right when we think the value of the Company is appropriate and the market is appropriate. And I should add that everybody on the phone who, like you Delray and others who are investors, we are asking everyone's support to revote. We voted last year for a stock split that we will need to do an uplist and we've put it on the ballot again this year. But as I said in the press release, as I'm saying now and publicly, our goal is to do that at the right time, when the value is right, when it's in the best interest of our shareholders, we'd like to get back to a national regulated exchange because we think that's in the best interest of all of our shareholders. So by reducing our debt, by getting rid of that debt, which our goal is absolutely to get rid of it before the end of the year, perhaps it could be next week, it could be next month, but our goal is to get rid of it, so there is zero variable rate debt on our balance sheet on 12/31, we think that is going to go a long way to helping us to get back on a national exchange. But also to your point, since the variable rate debt is almost gone and since we're using the vast majority of the funds from the raise to pay it off, what's exciting to me is that in just – in not too long a period from now in my opinion, the money that will be coming in from the end of the raise will be able to go directly into operations, and we've made it very clear, it's going to go into sales and marketing. We've already started to buff-up our capabilities in sales and marketing, but we're going to expand it much greater once the last bit of debt is paid off, which we think will be very soon, then we can start putting the money that's being raised in the PIPE into a very good bucket and that bucket is sales and marketing. So far we've talked about hiring as many as four to six sales and marketing personnel and we'd like to start hiring those people as soon as in the next few weeks.

Our next question is from [Daniel Long] [ph], who is a private investor. Please state your question.

Rick, along that point there, I know you had talked about doing a large co-marketing deal with a large mass spec company. I wanted to kind of see if that will go hand in hand or where you are in the progress of that? Richard T. Schumacher: Dan, that's a nice question, good question. What I can say is that we gave guidance about this time last year or at the beginning of the year, sometime around that, we believe that before 2015 ended, we would be able to have or announce a co-marketing deal with a large company that sells and manufactures and sells mass spectrometers. Mass specs are, as we talked about previously, they are generally regarded as the number one instrument used for protein analysis in a lab and mass spectrometer can run anywhere from $400,000 or $500,000 to $1.5 million. And we have a number of customers, maybe 25 of our 150 customers, are using their PCT instrument in front of their mass spec. Well, we think there's more than 7,000 labs in the U.S. that have at least one, if not multiple, mass specs. We believe that we should have an opportunity to put our PCT instrument in front of those mass specs because we break up the sample and make it available for the mass spec we think better than what's out in the market. So we've been talking to the mass spec companies and several have been using our product. Multiple scientists have published in the last year or two, particularly this year, on what they see as the advantages for using us in front of a mass spectrometer. And so we've been pushing hard because we think it's a win-win. If we could find a mass spec manufacturer-seller who could use our product, we think the customer wins and we win and the mass spec company wins because they get this what I call unfair advantage because they get our system in front of their system, and I think that often makes one plus one equal three. So, where we are in it? I gave a talk last week at a wonderful meeting called SeeThruEquity, and at the SeeThruEquity Financial Conference I reiterated the guidance that I gave earlier this year in August and gave in June and gave back in January, which is we believe that before the year ends, we will be able to secure a co-marketing deal with one of the six major multinational mass spec companies. And so all I can say Dan is, the year is not over and our guidance remains there.

Is that also – you've had two really good quarters, you talked about the fourth quarter being even stronger, is that part of the plan there? Richard T. Schumacher: Not really. Like with most things in life, it takes a little time to get things going. Yes, we've had two really good quarters, we had an exceptionally good quarter in the third quarter, and I did give guidance tonight that the fourth quarter we think will be strong. In fact, I'll even go further and I'll say that I believe that the fourth quarter may in fact, could in fact be our best quarter ever other than the one we just ended. The one we just ended was exceptional but we've never broken $450,000 ever in any quarter before. We did $580,000. We've had good quarters before in the last two or three years, and unfortunately we followed them with pretty flat quarters. And I want everyone to know, I want the investor base to know, that that is not going to happen this time. We do not expect to follow this tremendous third quarter with a flat quarter. We expect to follow this quarter with a very good quarter. In fact, it could be – it should be, we believe, at least in the $400,000 range and it could in fact be higher than any quarter we've had until other than the third quarter we just finished. So the fourth quarter, it will not include anything from a co-marketing deal. That will take three, four, five months to get going once it's announced. So that's what we have to look forward to. We have a strong year and the co-marketing is not part of it. And I'd even take it further, Dan, and say that we had a strong year and sales of our new products that we released at the end of last year, when we released we put them out into the market for evaluation. It's taken longer than we expected, as most things do, for the evaluation. We've got great feedback. The three quarters to date have really not been impacted by those two new instruments. We have five instruments but only three are making up the major sales that we had. So as we look forward to the fourth quarter and next year, I think we can look forward to two additional instruments, both of which list in around the $40,000 range and higher, being able to be part of the sales program, sales and marketing personnel coming onboard and the dozens of feet that will be available through a co-marketing deal that we believe will be signed and announced before the year is over.

Our next question is from Alan Stone with WallStreet Research. Please state your question.

Rick, first of all congratulations on the exceptional quarter, last couple of quarters and finally achieving sort of the breakthroughs that you've been working really hard to do over the last four or five years are starting to really bear some fruit. And as hard as you've been working, the stock market doesn't seem to be recognizing your great accomplishments and achievements, and was kind of wondering why that might be, particularly in light of some of the research that's been put out there which has had some pretty good potential target prices for those shares, just doesn't seem to be getting any recognition in the marketplace. So I thought potentially you might have some thoughts on that that you might wish to comment on. Richard T. Schumacher: I wish I knew the answer, but I don't, Alan. Thanks for joining us today and you do a wonderful job with what you do. I don't understand. I can't comment on research reports other than saying, yes, they are publicly available, and yes, they have very strong target prices and they are much beyond where we are today. I believe that we have to look at – we have to be as optimistic as possible. When I talk, I generally say that this is I believe an opportunity for investors. I agree with you, this Company has done some major things in the past several years, particularly this year, and the guidance for the fourth quarter and next year is even stronger than what we've done this year. We have announced co-marketing – not co-marketing, collaboration deals with some of the top research institutes in the world. We have some of the top scientists publishing and talking about the advantages of our technology. We've had three terrific quarters in a row. We are looking forward to a wonderful fourth quarter and next year. We're looking forward to announcing a co-marketing deal in the near future. We are reducing the debt from $2.6 million to where we believe it will be zero on the variable rate debt in the very, very near future, in the coming weeks. And we've talked about at the right time next year taking this Company back to an exchange where more stockbrokers would be able to look at it and suggest it to their clients. So if you put that all together, and I think I saw a chart by someone who published something last week on us and it showed – a chart where it showed the increasing revenue of the Company while the stock price decreased inversely proportional to our increasing revenue. We're marching closer to profitability. We're marching closer to what I believe can be very, very good revenue numbers. I don't have any answer, Alan. All I know is our guys are absolutely determined to do better in the fourth quarter than the third and the second, to do better next year in 2016 than 2015, and at some point we believe the market will recognize what we've done, and until then we just ask people to look at it as a potential opportunity that they may want to add on to what they have or become a stockholder. I don't have any answers, but what we do here is we control the Company in terms of its growth and we're very excited about that, but it's a good point, Alan, and I don't have any answer. I wish I did. Maybe you do.

I think it's a tough time for biotech and micro-cap in general, so that could – post August, the market was pretty rough, and even though it's had some rally recently, maybe with your results that came out today, you'll start to see some recognition there. Richard T. Schumacher: Thank you.

Our next question is from Geoffrey Scott with Scott Asset Management. Please state your question.

Question on the grant revenue. How much of that grant is remaining? Richard T. Schumacher: It's a $1 million grant and we billed less than $400,000, Geoff.

So you have $600,000 cap left on it? Richard T. Schumacher: Roughly $600,000 is left, maybe between $500,000 and $600,000 is left. So, certainly more is left than we used.

Okay. And over what timeframe will you be doing that work? Richard T. Schumacher: That will be for up until next November, unless we extend it, which it does allow groups to extend it when at the end if there's money left. We're working on a very exciting thing where we're working on developing a new system and a protocol and applications to extract DNA from samples. The majority of our customers, we have 150 customers, 250 systems or more out there now and the majority are using our systems for proteins. Some are using it for DNA, but it's not built right now for DNA. And so what's exciting is that they are getting good results with DNA now where the system that's built for proteins and getting better we think by the month for proteins, then that leaves a great opportunity for us to build a new instrument that's meant for getting DNA out, and that's in my opinion the hottest area in science. Proteins are one of the most difficult areas in science and research to work because there's approximately 1 million proteins in the body and maybe 35,000 genes in the body and proteins are very easily modified, changed, disrupted while DNA is not. But it's a big field, as you know Geoff, it's a big field. So we'll work on it. We will continue to look for additional grant money, but we're very excited about the work to date. I can't go into any of the details but we're excited, and I can tell you that we are optimistic that at the end of this grant process, that we believe we're going to have a method of extracting DNA in a way that is better than what is out in the market now by using PULSE as a pressure or constant pressure or a combination.

Can you talk about what the technological problems are in achieving that DNA? Richard T. Schumacher: Not really. What I can say is that the current – okay, I can say a little bit without going too far, Geoff, and what I can say is that the methods that are out there now, you need to control the process better than we control the process now. You need to be able to, when you get DNA, think of DNA as this very long string of molecules, and some of the systems that read DNA, just a few, think of the DNA as a length of beads and there's 1,000 beads, and some of the systems will only read 10 or 100 or 200, and some might need a length of beads there, 1,000 or 10,000 beads long. So you need to control the process because if your DNA system needs a number of what we call nucleotides or the beads, if you need to have 400 or 500 and you break up your DNA and you're down to where everything is 100, a length of 100 of these so-called beads, it's too small and it can't be used. So often times, the DNA that you break out of a cell could be too long or could be too short and you want to be able to better control the quality and the size of the DNA as it comes out of the cell. We believe that we can do that with pressure. We believe that we can build an instrument that can control the breaking of the cell and the release of the DNA and a length of DNA that is more controllable, more applicable to the instrument that's going to read the DNA. That would be a breakthrough, a major breakthrough of course because that really can't be done as exquisitely as it needs to be today. So that's what we're working on. And again, it's being done at the same time as we are doing all the other things that we talked about in terms of proteins and the work we're doing there. So the grant does call for additional people. We have hired two people part-time to help us on the grant, two incredibly good, one software engineer and one electrical engineer. But we've also had to take some of our folks off of the other protein projects and put them on the grant which adversely affects the protein project. So we're looking forward to paying off all of our debt, all of our variable rate debt and finishing our PIPE so that some of the funds can come in and help support the increase in sales, which will support our growth.

Okay, thank you. On the product and services revenue for the third quarter, can you break that down into the consumables and the machines? Richard T. Schumacher: The consumables in the third quarter, I don't have it in front of me, but the consumables were down while our instruments were up. And rather than try to explain why that is, there are some quarters where some of our customers – we have one full-time salesperson as you know, Geoff, as I think everybody on the phone call knows. So we've got to focus on certain areas. We had a number of key events happen in the June timetable where a number of scientists were pushing our systems, and we had the opportunity to push the sale of systems which are $30,000, $40,000 rather than the sale of consumables which are a few hundred dollars per box of tubes. So with a limited sales force of one, we chose to push the installed base and we were very successful. We installed more instruments in the third quarter than we ever expected to. And so I will tell you that the consumables were down. I'd be happy to give you that number. The consumable number was down and that's the first time it's been down for quite some time as you know. We've been growing consumables quite a lot, but consumables took a backseat in the third quarter because we focused on the instruments which have the same margin, gross margin, but have a much higher sales price.

How many machines were installed in the third quarter? Richard T. Schumacher: You're asking me questions that if Dick were here, he'd have them on the tip of his tongue. Again, I can get you that number. More machines were installed in the third quarter. I'm going to give you a number of about 15, where normally in a quarter we might not hit double digits. So there were clearly more instruments installed in the third quarter than we had installed in quite some time in any quarter. There were quarters three years ago, when we first came out four years ago, where we – I remember one quarter we installed 20 or 21, and most quarters around 12 to 14. The price of the instrument has gone up appreciably over the last four years. What used to sell for $17,000 is now selling for about $27,000 to $29,000. But the number of instruments for the third quarter was clearly the highest number of total instruments we've sold in a quarter in I'd say three years.

Okay. Last question. When would you think about giving us the first cut of 2016 revenue? Would it be if and when you're able to announce the co-marketing agreement or would it be in the conference call which announces the fourth quarter revenues? Richard T. Schumacher: I think my lawyers are on call and I think they're trying to kick me, but they are in a different room, so it's not…

I'm trying to kick you and I'm hundreds of miles away. Richard T. Schumacher: I'm not going to give you a number now, Geoff, sorry.

The question was, when will you give us the first cut? I know you're not going to today. Richard T. Schumacher: I think that if I'm to give guidance, and again, my lawyers don't like it, but we've given guidance I think three times over two years and we've either hit or greatly exceeded the guidance. So I think it's safer. I've already given you guidance for the fourth quarter, saying we're not going to fall on our face. We're going to have $400,000 plus, maybe even the second best quarter ever. Next year is going to be a little tricky because let's assume that we do announce a co-marketing deal, the question is, how long will it take to get, who is it with, how many salespeople do they have, how many distributors do they have, and how long will it take to get them trained. I think the safe bet is, if we were to announce a co-marketing deal as we said we will over the next four weeks or five weeks, then I would not expect to see a huge ramp in sales in the first quarter of next year, but I would expect to see an impact in the second, third and fourth, an increasing impact next year, as you would expect. So I think your prophecy of maybe at the end, maybe in March when we have this call again and we talk about the fourth quarter and year-end numbers, that might be a good time that I could become – I don't want to give a number and not hit it or exceed it, I don't, but we want to give you some idea of how good next year could be. And so I think let's look at the March timeframe when we are looking at filing our 10-K and having a conference call in the first few days of April.

Okay. Thanks for your help. Appreciate it.

Our next question is from Alan Stone with WallStreet Research. Please state your question.

Rick, just as a follow-up to some of the questions, if you are potentially able to hit that $5 million PIPE number that you are looking for in the next, hopefully before the holidays or shortly thereafter, is there any chance that that number could be exceeded or could be expanded so that you could have a little more working capital in the Company to achieve some of the growth that you're looking to achieve? Richard T. Schumacher: That's a great question, Alan, great question. If you go back to the 8-K filed in July, I think July 28, if you go back to that 8-K which has all the deal documents attached to it, it's there so it's publicly known that it is a $5 million PIPE and we expect to reach that soon. But it also allows for an overshoe or greenshoe of about $1.8 million. So the answer to your question is, absolutely yes, there is already a mechanism built in that would allow us to exceed $5 million. And I think that we certainly would consider exceeding $5 million number. It's all built in, it's there, and if the strength in the market comes as we hope and think it will, for us we want to take advantage of this great opportunity. I mean we're very excited about this pivot point that we've reached. We do believe that we've hit that inflection point. We do believe that if properly funded and if we've cleaned up our balance sheet as we are doing and have almost finished doing, and if we're able to find a partner as we believe we will, we think we've got quite a future ahead of us and we're not talking two or three years from now, we're talking next year and beyond. So it's there, it's available to us. We'll make that decision once we hit or pass the $5 million mark, but it's a great point. We do have that ability all built in, ready to go if we want to take advantage of it.

That's great. Thank you. Congratulations again.

Mr. Schumacher, there are no further questions at this time. Would you like to make any closing remarks? Richard T. Schumacher: Very short. I do. I want to thank everybody for taking time out of their busy day to come learn more about Pressure Bio and some of you to help celebrate this wonderful quarter. But we know that we can't fall on our face. We know that the quarter is over, and that after this conference call, it's going to be, what are you doing in the fourth quarter, what are you doing for planning for next year? So thanks for the time, thanks for listening, thanks for asking some very good questions. And to those of you who are in the market and our shareholders of ours, thanks for your ongoing support and just know that we understand that we can't look back, we've got to look forward and we are. We're looking forward with a lot of anticipation, a lot of optimism. We're looking forward to a company that if you think about earlier in 2015, you're looking at a company that had very little money in the bank, had $2.6 million or more of variable rate debt, maybe closer to $2.7 million, did not have a marketing partner out there, and now you're looking at a company that has its goals set and has already achieved some of them, where it's going to clean up its balance sheet, it's going to hire a small sales force, it's going to do a co-marketing deal with a company in its low-hanging fruit space, it's going to look at an uplist to a national exchange where far more broker-dealers will be able to work with the Company, at the right time we're going to look at that. So we're excited, we're very excited. We think that we have worked extremely hard, as hard as probably most companies out there, to not just survive, because we've done more than survive, we've excelled, we've exceeded a lot of people's expectations, but we've got a long ways to go. So we're excited about what's coming up. I'm excited about the conference call that's going to be up in March. So since we won't be seeing a lot of you in the interim, happy holidays to everybody, safe joyous holidays, and I look forward to our conference call in March or early April talking about how the year ended. Thank you all.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.