Greetings, and welcome to Pressure BioSciences Third Quarter 2020 Investors Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Rick Schumacher, CEO of Pressure BioSciences. Please go ahead, sir.

Thank you, Laura, and welcome everybody to our third quarter conference call. Before we being, I'd like to read a cautionary statement. 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 forward-looking statements to reflect any change in our expectations or any change in events, conditions, or circumstances on which such statement is based. Again, thanks everybody again for joining us. I am pleased to once again welcome the co-host today in Jeff Peterson. Jeff, as I'm sure, many of you know, is the Chairman of the Board of Pressure BioSciences and has been for a number of years. He brings a lot of experience and knowledge and thought to the Company. As I said several times before, we are blessed to have Jeff be on Board as our Chairman. Jeff is here, at my request to add additional insight into where we're going in this crazy year of 2020, to help me answer some of the questions that sure we're going to have during the Q&A session, and also to offer some thoughts of his own on our recent progress and on our future plans and expectations. Jeff, thanks for joining us.

Hello, all. It's a pleasure to join you today.

For today's meeting, we're going to start with a brief discussion of the Q3 financials, then Jeff and I will go over some of the accomplishments of the quarter, and then we're going to a general business update. Afterwards, we'll be pleased to take a few questions. So, let's start, if we will, with the financials. And as we had in the Q that was released last night and also in our press release that we released earlier today. For the third quarter of 2020, products and services revenues were $534,000 for the third quarter of 2020, compared to $501,000, for the same quarter of 2019, which is a 7% increase. This increase was primarily driven by increased sales in our instruments, which totaled $312,700 for Q3 compared to 185,800 for Q3 2019. So, our instruments showed a 68% increase in sales. I think, we'll comment on that in just a few seconds. Revenue from consumable products was $49,000 for the third quarter of this year, compared to $112,000 for the same quarter last year, which was a 56% decrease. And our contracted scientific services for both our BaroFold protein refolding and disaggregation applications, and our Ultra Shear Technology services provide revenue of $84,200 in Q3, compared to $149,000 in Q3 of 2019, a decrease of 44%. We believe these decreases in the consumable product sales and scientific services were primarily attributed to the negative impact of COVID pandemic had on the operations of many of our customers. Quite frankly, starting in March and going up until early August, we had difficulty reaching many of our customers. As you know, our major customer base, our research labs, first and foremost, and academic institutions throughout the world; secondly, in pharmaceutical and other biotech companies; third, in government labs, many of these labs were shut down from March until June, July, August, completely shut down. So, we had a number of our customers that weren't even going into the lab. As they said to us, they spent a lot of time writing papers and getting caught up on things like that, but they weren't doing a lot of lab work. There were some essential sites, thank goodness, some developing vaccines and other products that are essential to fight this pandemic that were working. But for the most part, the vast majority of our customers were shut down. They're not all back, some are back. And as we looked at the third quarter numbers, we came to the conclusion that since many of them are not in the lab working, they're going to use less of our services and few of our consumables. But the good news here is that they did find money to start buying the instruments. And we started to install these instruments, so that everybody's getting ready for -- hopefully, for the comeback. And as I said, we've seen -- little-by-little, we've seen more and more people come back into the lab over the past two or three months, which is terrific. So, we've seen an increase now in consumable, starting in the last month or so. And we've certainly had much better, easier times getting hold of our customers. So, we think that's what really propelled the large increase in instruments, our customers wanting to get ready for when everybody's back in the lab and back at full steam. Our operating loss for the third quarter in 2020 was $819,000 compared to $1,069,000 for the same period in 2019, which is a typical operating loss for us. So, this decrease in operating loss was a decrease of 23%. We think it was primarily due to lower investor relations services, lower stock-based compensation expenses, lower personnel costs, and also, of course, lower marketing costs, since we haven't gone to any meetings since about February. And so, we've got lower transportation costs and things like that. So, this is shown in the 23% decrease in our operating loss for the quarter. Loss per common share, basic and diluted, was $1.02 for Q3 compared to $2.20 for the same period in 2019. So, what I'd like to do now is talk a little bit about some of the highlights that we put in the press release that went out today that are certainly in the Q that was submitted last night and go through some of these and maybe ask Jeff to comment on several of these. Jeff is a different kind of Chairman than I'm used to hearing about and working with and that he has such expertise. He's an engineer by training, with a master's degree from MIT and undergraduate and understands our technology inside out, that's how I found him or he found me, at a meeting where he had such an interest in what we were doing. And so, he's a great sounding board to bounce things off of when we are in meetings and we run up against something and say, well, let's ask Jeff, let's see what Jeff thinks about this. So, under the operational and technical highlights in the press release, the first -- I broke them into three categories, the first was the launch of our UST or Ultra Shear Technology based system, which we've said, we're looking towards the launch in the middle of 2021. We have three, if everyone recalls, there are three basic platforms that we have that all use pressure cycling technology or PCT platform. And this is used by about 200 customers throughout the world with about 350 instruments, where we basically turn pressure on and off PCT, pressure cycling technology. And these customers are often -- the simplest thing that they might do is put in samples, for instance, viruses, bacteria cells to break them open, but rather than breaking them up in a way, I was taught, a hundred years ago to break it open, which is beat the living heck out of the cell. What we do is, we actually use Mother Nature. We squeeze the cells. We put them in a pressure chamber and we turn the pressure on and off. It's like squeezing a sponge. And it's much more controllable. Since cells break it and different viruses, bacteria break it all different pressures, we can dial in the pressure chamber exactly and get the same pressure here as Jeff's getting in San Francisco and our friends in Germany and Japan and China are getting. And everyone's breaking that same type of cell the same way, which adds a level of reproducibility that is not seen by current methods of breaking cells. There are many other things that our instruments can do, but this is the one thing that's a pretty much used universally by many of our -- most of our customers, and it's a very easy to understand, put cells in, squeeze them and squeeze them just them enough to break them, don't over break them, don't under break them. The second technology we have and we have a number -- we have 15 or 16 patents in that area. The second area, the second platform is what we call BaroFold. Barrow pressure fold for folding proteins are made up of what we call peptides. They fold over each other. And the function of that protein depends exactly on the structure of the protein. And if that folding of the peptides is not exactly the way Mother Nature said. It may not have and probably will not have the function it supposed to have, could actually hurt the patient, if you're giving it as a drug or a vaccine. It could hurt the patient. So, when these proteins are made in the lab, sometimes they come out what we call miss-folded. They're not exactly the way they're supposed to be. What was determined years ago is, if you put these proteins under pressure and then take the pressure off, some of these proteins using very specific pressures and temperatures can be refolded exactly back to way the Mother Nature meant them to be. So, this holds enormous potential in the area of drug development. Because if a company has got a drug, a protein-based drug, they're trying to get to market, and remember that a few years ago, no drugs were protein-based, and now 25% of all drugs are protein-based. And I've read, in the future, more than 50% of all drugs will be protein-based. You make the proteins in the lab, and if it comes out and it's not folded exactly right, then we offer a service to see whether or not that protein could be folded, refolded correctly using our 8 patents and more coming, in the area of BaroFold. We've had five customers come in so far. We haven't had to advertise. It's all word of mouth. And some of these are multi-billion dollar companies, some of these are startup companies. They all have one thing in common. They want to see whether coming in and using our pressure folding techniques and refolding techniques can allow them to save money when they're making their drug or make it better, or save something that perhaps is miss-folded and can't be used in the way it is, but could be used if we were able to put it back to normal. So, we've had two groups that came in this year and they were put on hold in the beginning of the year, but they came in a few months ago. We're working with them both. Very excited about some of the results we're getting and excited about the previous three that we're still in touch with. So, that's our second platform, which is to BaroFold platform. The third, the one that probably has most investors and certainly us very excited, because the time to market or the revenue generation one can see, could be quite quick in this application. This is called Ultra Shear Technology, where we're not folding, refolding proteins or not breaking open cells, what we're doing is we're putting liquids through a system that we've developed and just received our first patent for last week, very excited about that. That patent covers the whole process of Ultra Shear Technology. And the simplest way to put it is that we're able to make oil and water mix. We're able to take liquids that do not mix normally, such as oil and water, they're immiscible. They don't mix. We're able to make them mix. And we do that in the area of oil and water by -- I won't say simply, by breaking the oil droplet down into millions of tiny little nano sized droplets. And because of that, the material, the vitamins, the compounds, for instance, a vitamin or a CBD molecules that are in the oil are now spread out in millions of tiny little oil droplets and they're able -- the body's able to absorb and get to the molecules inside the oil much faster and make it much more bioavailable. So, generally speaking, the bioavailability, the solubility of oil after our system, goes up from probably less than 10% to greater than 90%. So, we've had a lot of people in the cannabis, particularly the CBD area come to us and are very interested in this process. But, we've also had people in the food and the beverage and the nutraceutical and the pharmaceutical and the cosmetics field, in the industrial lubricant field, we've talked with people across the board. This is -- we're very excited about it. This is a technology that expands into many, many different areas. And so, I'm happy to say that Ultra Shear Technology, the first instrument, we call the BaroShear K45, we've been working on the technology, developing it. We had a press release several months ago saying we set ourselves, we settled in on all of the specifications of the first, we call alpha unit. And we're starting to buy the parts to build the first alpha unit. And now, we've got the patent to protect us and to give us the right to use this technology and to license this technology we like, and we are on schedule to have this done first out in the middle of 2021. And as many of you know, we've already received preorders for 12 instruments, and we actually have three or four more that were groups that we're talking to that are also interested. So, that's one of the major things that we've been doing this year, this crazy year of 2020 is we stayed open, and we've continued to work as hard as we can on getting Ultra Shear ready and out. Jeff, would you like to comment any on Ultra Shear Technology?

I'd be glad to, and perhaps a little more overarching commentary as well. As Rick alluded to, my educational background was as a chemical engineer. And when I first ran across Pressure Bio, gosh, we must be pushing back almost 15 years now. But, when I first ran across them, I was immediately intrigued by their marketing materials about pressure cycling, from a chemi point of view that has a lot of meaning to me that -- and pressure is one of those things that for so many folks, it's just kind of hard to relate to the importance of it. When we think about sample prep, as Rick alluded to, is done with very aggressive physical techniques, blending, beating or aggressive acids, bases, surfactants or cooking things, those are all things we can kind of get our head around the aggressiveness of the techniques that are being used to try and achieve something and why they often fail because they can be too aggressive and too uncontrolled. And pressure is this gentle giant, the thermodynamics, which is something our engineers learn about, a lot of folks don't relate to, it kind of explains what's going on. And pressure is this gentle giant of nature that when properly employed, as we do and Pressure BioSciences technology can achieve miraculous things in gently breaking things apart, just disassociating chemical reaction between each other, and that's why the researchers are so excited that they see more variety of the analytes they're looking for and more quantity of those analytes and get there with a faster process and a more reproducible process that they can have standard operating procedures, they can rely on to do it the same way every time. I mean, those are the things that we’re driving the pressure cycling technology business in sample prep. And it's a very diverse field that it can serve an R&D, but also extends out into manufacturing and quality control applications, where we've seen some really big pharma and biopharma players who buy into it and then start to buy many multiples of the instrument for those kinds of applications. When we move beyond that into buying the BaroFold business for controlled protein unfolding and refolding, this is again another gentle giant performance in the use of pressure to take these complex proteins that rely upon being in a certain exact folding configuration to have the right effects and the ability to gently unfold them when they have been missfolded or they've changed over storage and aggregated with each other, it can gently undo and then redo in a controlled fashion to the desired configuration. And it's just fascinating for the power and the subtlety of what this technology can do. But, when you consider the scale of the biopharmaceuticals market, the large molecule protein therapeutics market and how far and fast that's growing and becoming the dominant format for therapeutics as we go forward, a technology like this that has that gentle giant ability to provide reliable process control, to get it made right the first time, and to remediate things that haven't held up in storage or didn't come out quite right by other process, that's an enormous opportunity that frankly dwarfs the pressure cycling technology in our view. And then, we got to Ultra Shear and nanoemulsions. And when you consider how oil and water -- we often think of oil and water, we're thinking of salad dressing or thinking of oil in our car or something, but so many of the molecules that we are consuming as -- in food and beverage and nutraceuticals and pharmaceuticals and other arenas or industrial applications, paints and lubricant and so on, these are oily type molecules. Oily means, they don't like water, they don't want to mix with water or for anything biological, water-based systems, and it's a huge challenge to how do you optimize getting these oily type molecules into and absorbed by our systems and not just pass through. And so many things that go into us today are in these oil droplets that - and bulk material gets through our body not absorbed by our body. The ability to get down to droplets so tiny that there's really no room left inside the droplets or molecules to hide. The droplet is so small, all the molecules in it are now pressed to the surface of the droplet, and there's no place left to hide. That's what we're doing with these extreme nanoemulsions created by Ultra Shear. And that’s what makes for the incredibly high bioavailability bioabsorption that is achieved. The process also tears down any microbial content as it goes through that nanoemulsion process. So, it also gives us a virtual sterility in long-term, room temperature, shelf stable, storage capabilities. So, it's a very powerful, exciting technology that reaches into huge markets in food and bev, but into many extremely valuable markets that are lower volume, but high value in pharmaceuticals and nutraceuticals, cosmetics, fragrance, all kinds of things like this. So, I think back 15 years to first seeing this technology and realizing, wow, these guys have a unique position in IP and engineering, command of high pressure processing. This is going to go a lot of exciting places beyond what we were just looking at that day. And here we are in 2020 seeing the Company now poised in protein refolding, and nanoemulsions and pressure cycling. There was a marvelous presentation given the other day that I had the chance to watch and listen to on how this technology was combined with Laser Microdissection, where they're taking samples of tissue and cutting out the specific bits of tumor to go on and analyze that by a mass spec. But, the researcher spoke eloquently to the fact that the pivotal piece of this is the sample prep being done by pressure cycling, because that's what allows you to get the most out of those samples and do it reproducibly. I listen and see all this positioning, and then look at, what's been accomplished now and repositioning the company and reducing debt. Rick will talk some more about that here in a moment. It just could not be a more exciting time in terms of the Company's readiness to fly. So, I lasted little long and eloquent there. But, I hope that was helpful.

Thanks, Jeff. So, to summarize the highlights, the first one we talked about was Ultra Shear. And we are on a timetable to get this out by the middle of next year. We have 12 pre-orders that are in, we're reconfirming those now, but we also have additional people that have -- we've talked to in the past couple of months, particularly last month who have shown a good interest in our Ultra Shear Technology. So, we're very excited about getting the first dozen instruments out. Because once it's out and once people can actually touch it and see it work and see the product, we think it's going to really magnify our ability to sell that instrument, once you get those first 12 out. We've also -- we have the two new contracts in our BaroFold services business and we've continued to build that business. And in the intellectual property, we announced last week our first patent in the U.S. for Ultra Shear Technology. We do have two patents already issued several years ago in China. But, we think that other patents are coming along, and we think this patent in the U.S., we are optimistic it will be issued in other parts of the world. We've certainly filed in Europe and Asia and other areas. And in the collaborations that we talked about, Jeff just touched on it with Dr. Conrads, who was the speaker, it was a Leica Microsystems, which is a Danaher company, a couple of hundred million parent. But Leica is the microscope company that started 104 years ago -- 103, 104 years ago. And we signed a deal and announced it earlier this year, a couple months ago with Leica. We had a big plan for a big unveiling at a cancer meeting in the summer. Obviously, it didn't happen as all of the conferences that we go to any conference I'm aware of has been cancelled so far this year. But there was what like a called a Science Week. And they asked a number of very well known researchers, like Dr. Conrads to speak. And he spoke about what he's doing in the area of cancer, particularly women's health and women's cancers. And he gave us a lot of credit for the instruments that he has of ours that do pressure cycling technology, the EXT it's called. And we're very happy with what he said and very happy that it is in his lab playing a very important part. And because of that we were able to be introduced to Leica last year. And we signed a collaboration with them a couple of months ago. And so, when you're looking forward to what's going to happen, not only are we looking forward to the end of this year, and particularly all of next year with Ultra Shear Technology playing apart, not only do we expect additional patents to be issued, during this time in the U.S. and throughout Europe and the rest of the world, not only do we expect to continue to expand and bring in more customers in the BaroFold area, but I would -- we're looking forward to working with Leica and there many and their very large sales force throughout the world, as the work plan that Dr. Conrads has put together is a work plan that has a multi -- an instrument, a microscope upfront that has a laser that costs a few hundred thousand dollars, a mass spectrometer on the other end that costs a few hundred thousand dollars, and in between is our instrument. So, our pressure cycling instrument is in between those two. And he has said, we're the glue that holds this whole work plan together. So, very excited that during the Leica Science Week last week, that he was able to talk and acknowledged the importance of our system in there. So, Jeff mentioned also, in addition to the financial results that talk about sales and profits and losses and things. Another big thing in the financial arena for us over the past few months, and pretty much this entire year has been in trying to clean up our balance sheet to get rid of some very heavy-duty, onerous, toxic debt that we took on last year and the year before, and to try to replace it with equity and -- or better debt, and we've been very successful. So, as we indicated in the Q and more in the press release, it's a bit complicated in the Q. I understand 80 pages with a lot of information in it. But, what we did is, we entered the year in January 1st, of 2020 with about $5.4 million of very onerous, very expensive debt that had a variable rate, could turn into a variable rate where it could really hurt the Company. We knew we had to get rid of this. It did -- it played a role in getting us to where we got. It helped us buy the BaroFold company that we've been talking about. It helped us design the early part of Ultra Shear Technology. It helped us develop the new Barocycler instrument that's being used in PCT, all of that was done. But now, at this point, we know that it was impeding our ability to raise money at good rates. So, we needed to get rid of this debt. And we asked all of the lenders, 17 lenders at the time in December of 2019 to stand still and to work with us, and they all did, pretty much all did, several didn't, so we paid them off pretty quickly. But all the rest of them said, we will work with you, we want you to survive and grow, and we want to be paid. So, 17 lenders in December, down to 5 lenders on September 30th. $5.4 million of onerous loans with potential variable rates in December, down to $1.7 million in principal of the same type of loans. So, a drastic reduction in those. In addition, in order to grow, we took out what I'll call merchant cash advances, money against our receivables coming in, and at the beginning of the year, we had $1.1 million. This really ties up cash flow because they take money out every day to pay it back. So, that $1.1 million on September 30th was zero. So, for the 9 months of this year, and particularly for the last 3 months of the third quarter, we were able to reduce the principal of our owners debt from $5.4 million to $1.7 million and reduce the merchant cash advances from $1.1 million to zero. And we've also made good -- for some of our friends and family that we told we would work our best to try to get them paid down to, and we've taken about $1 million, $2 million, $3 million down to about $800,000 in our friends and family. So, wonderful progress has been made. We now have more debt than we had in December, but most of this debt is -- or all of this debt that we've taken, none of it is variable, all of it is convertible into stock at $2.50 a share. If it's convertible at all, it converts at $2.50 a share, and most of this money was raised when the stock was under $2.50. The holders of these notes have shown us through the last few years, how good they are, how strong they are, how good of an investor they are, because the owners of these notes have in the past, converted their notes in the past into equity. And so, we're looking at much better debt and that at the point, when we want to be able to convert this into equity. We feel we've got the investors that we can go to and that they most likely will do that. So, it's much better debt, and it's basically we're looking at it as more equity than debt. So, at this point, Jeff, I don't know if you want to add anything to that. Otherwise, we'll open it up for questions.

Well, I'll just say, I thought that was an excellent explanation. And I'm sure for many of the experienced investors listening in, they would share my observation and comment that that is a singular achievement that Rick has led the Company and our investors through. Frankly, many a company has been -- has died on the stump, so to speak, over toxic debt and Pressure Bio has been able to use it significantly on a prior occasion and pay it off and did it again. It's never a welcome thing when you use it. But, when you have to strategically consider that to get to the critical objectives as we did, and then succeed again in paying it down and well on the way to completing the conversion of all of that. And I just want to give a bit of recognition and thanks to Rick for what was accomplished there. I know that from a Board point of view, we are proud of that work and accomplishment and very grateful for it. So, well done, Rick.

Now, you all can see why I invited Jeff on the phone call today. Thanks, Jeff. Laura, I think we're ready for questions, if there are any.

Okay. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes to the line of Gary Zwetchkenbaum with Plum Tree Consulting. You may proceed with your question.

Thank you. Rick and Jeff, I want to congratulate you on a great third quarter. I think, you mentioned, it was the best quarter in over two years. I think in reducing toxic debt over 70% since the beginning of the year is fantastic. As a long-term investor of over five years, I and many of my investors would greatly appreciate an update. About three months ago, you announced a proposed merger with Cannaworx and SkinScience Labs. And with Jim Morrison, who is the ex-CEO of L'Oreal, being involved and forming a new company. And if I'm not mistaken, these companies collectively had done over $60 million in sales in certain years. And that was very exciting, their vetting and understanding of the technology. I would greatly appreciate it if you could update us on developments. I know you had Jim on a recent conference call, maybe two or three months ago. But, if you and Jeff would talk about it, I greatly appreciate it.

Sure. I would just clarify that Jim was previously President of L'Oreal U.S. I don't think CEO is a correct term. I just wanted to clarify.

I’m sorry. President. My apologies.

No worries. We also were very excited about the synergies between all of these companies. As you probably know, there was an 8-K filed for the extension of the letter of intent. It is a pretty quiet period here. We have to be careful about what we're saying about everything. I think, I'm going to defer to Rick to let him at any other color. But, it’s largely we're having to let the process move through in steps.

Well, I think you've -- you didn't say much, but you said everything we could, Jeff. We are looking at this as in a quiet period where we did announce the extension to 12/31. We're very impressed with Jim and Dr. Denese and Dr. Ghalili and all the other folks on the other side that we're working with. We've got our mindset on trying to get the deal done, and we're just excited that -- for the whole thing and we think it is a great fit. And really, Gary, that's all we can say, unfortunately. We need to -- you might have heard my lawyer's talking to me in my ears, saying, don't talk about anything that isn’t public. So, I'm going to have to leave it at that. But I can just tell you that we are working as hard as we can, and we're very as excited now as we were in April, when we first announced it.

I and many investors -- I remember the announcement. I remember the video. You guys did a 20 or 30-minute video with Jim and yourself, and it was very well done. It gave a lot of great information. So, we are looking forward to hearing more as time goes on.

Okay.

Thanks Gary.

You're welcome.

Our next question comes from the line of Rory Jensen [ph] with PBI. You may proceed with your question.

Hey. Rick and Jeff, so, I spoke with you before. And my only question is, well, I would have asked about the merger too, but it'd be fair to guess that I know what the answer would be. We can't talk about it. But, we can talk about the consumables. And my question will be, the consumables fell off hugely, obviously earlier in the year. And I think it was 150%, 160% drop or something of that nature. And going forward, after we sell these 12 units, even though you said there was 15 units, I'm assuming 3 of these units are for the merger. But, what about the consumables going forward? Can I look at double-digit increase? Because the consumables were a bright shiny star for you guys for many years. And what exactly are you doing to have consumables continue that trend after these units are sold and what exactly are the consumables? And are we looking at consumables as a major revenue provider?

So, we should clarify that. The consumables that you've been seeing -- and you're right, they've been increasing almost quarter-after-quarter, but certainly year-after-year for the last five or six years, and very happy with the way they were increasing. And there was a drop off this year. But, to us, it's a momentary drop off. I mentioned earlier on the call that we've had difficulty getting a hold of, I would say, 80% or 90% of our customers between March and July, August. They just weren't working. Most hospitals, most labs, and most research labs were shut down. And so, if they're shut down, they're not doing work, they're not using consumables. So, that's going to change. This too will pass. We believe that consumables will come back. There are a lot more instruments that we sold than ever before in the past quarter. Those instruments are going to need consumables. Right now, they're being -- we're going to be installing them, or they're already installed. And once they start getting used, they're going to need consumables. Now, when you talk about the 12 instruments, and there are 15 that we're building. We're building three for other purposes. We'll leave it at that. But, we're building 12 for sale. We have pre-orders for these. These will also have consumables. This is totally in addition to the consumables that you now are seeing for our Barocycler sales. And so, these are consumables for Ultra Shear Technology. And so, they will be very similar, razor, razor blade, and that the instrument will be a very good, profitable. We believe that we're going to be able to have a very good margin on this instrument right up front. And then, there will be consumables that some people will need every day, every week, every month. So, it is a razor, razor blade. It does have consumables. And so, we would expect to see consumables start to flow by the second half of next year, if we're successful in getting everything installed by the end of the second quarter.

Yes. I might just add onto that. In the pressure cycling technology, here we're talking about testing of individual samples. So, you have -- that’s a real razor, razor blade kind of analogy, and that you have individual tubes and caps and other consumables, sample by sample that are being consumed. And for a tremendous amount of R&D work, it can be a lower smattering of what's being done here and there in these R&D programs. Some R&D programs start to approach industrial scale and can go through large quantities of consumables, as we see with our partners in Australia and China, doing some massive scale proteomic projects. And as we see with industrial scale, biopharmaceutical customers that start to make the transition in using this equipment, from R&D rules to manufacturing quality control rules, where again, you start to get to quantities on an ongoing basis. Those are all part of the transitions and growth of consumables that will flow in pressure cycling technology. Whereas in Ultra Shear, this is more of a continuous or semi-continuous flow process kind of scenario. And there, we're dealing with some very sophisticated, high value consumables and valve component designs around the nano-cap valve that creates nanoemulsions and specialized bladders that are consumable that help make this run as a continuous process. So, a different kind of consumable, but definitely a significant ongoing value stream associated with that in UST.

Okay. That's what I'm looking for. So excellent, I would just like to clarify that my magic pencil, I guess we all have a magic pencil, the UST side is going to have a much higher demand of consumables, whether it be cutting agents, cleaning fluids, bladders, valves, and et cetera, et cetera?

I was just going to say that from a quantity point of view, nothing like you see in PCT. The actual quantities of consumables were vastly higher in PCT, but at a lower value point. The kind of specialized materials and design, super hard materials and things that are involved in the valve designs, make for a higher value, but many fewer of those that are consumed. So, bladders will be consumed on a regular basis, as batches of -- different batches of things are run through the system and the bladders are changed out. So, a different scenario. The quantity of items will be lower in UST, but there will be some pretty high value associated with some of this.

Okay. Thank you for the clarification. And good job on the debt reduction. Is that about all we're going to see on the dilution side then for the shareholders?

Well, we have a little bit more debt to go. As I mentioned earlier, we want to get rid of -- we'd like to -- my personal goal is, before the end of the year is to get rid of the remaining, particularly the debt that could become variable rate debt, before the end of the year. I think our five lenders would applaud that too. They've been working with us. We appreciate them very much, the remaining five. So, we will do our best to get rid of that debt, and start next year, which we think is going to be -- it's such an exciting year for us, with all of these things coming together. Whether it was 12 or 15 years ago, Jeff, that we met, who would have dreamed that in 2021, all of these things are coming together, so that three different platforms are all coming out with some pretty exciting things for next year. So, we want to start the year as clean as we can. And of course, it's all part of what we need to do for the next two months.

Our next questions comes from the line of Tom Coldervet [ph]. You may proceed with your question.

Looking to the future, just on PBIO, so we're not stepping on any toes. What kind of sales force do you see? Because I would not call your technology a disruptive technology. It's a pioneering technology. And with so much emphasis being placed on environmental, social and corporate governance, in terms of investing from Wall Street, are you going to go from like a product manager approach to dealing with international corporations Sanofi, Bayer, people making pharmaceutical outside the U.S. I don't know if there's any pharmaceutical companies actually manufacturing in the U.S. anymore.

Tom, nice to meet you. I've heard your name of course, and nice to meet you. Our customer list that we mentioned before for those who've been on the calls before is, a very enviable one. There are very few pharmaceutical companies that are anywhere in Europe, U.S., Asia of any of that we haven't talked to. And many of them are already our customers, and that's terrific. Now, when you're in a big pharmaceutical company, you’re going to be talking to one group and there's another group there that doesn't even know you exist. They're so big. So, that's one of the challenges we have. But, we already have, we've got a lot of experience in working with biopharmaceutical, therapeutic, biotherapeutic companies. We work with startup companies and we work with some of the largest companies in the world. In fact, probably, of the 10 largest biopharmaceutical companies in the world, 9 of them are our customers in one product or another, so. But, we also work with the groups that are making the end product. So, there are, if you look at the orders that we have, the pre-orders we have for the first 12 systems, these orders are all coming from smaller companies, because many have told us they want to get a leading edge. They want to get ahead of the competition. And so, that they looked at what we were doing, and they said, we need this. One of the clear things is when we chose CBD because it's the low-hanging fruit, it's expected to be a 20 to $40 billion market by 2027, 2026 by different studies. And that's the smallest market that we're looking at right now, smallest, not largest, smallest market, with our Ultra Shear Technology. So, Ultra Sheer kind of touches on all the things you said. You talked about social impact. You talked about good investing. I give you an example. There is a fruit juice or juice at Starbucks called Evolution, and most Starbucks carry it. It's one of their leading juices, as I understand. And if you look at the labels on the side, you won't find a single chemical. It is chemical-free. What is one thing that so many people want, they want to reduce or eliminate chemicals from the food and beverages that we have. And so, evolution has gotten rid of a 100% of the chemicals. How can you do that? How can you have a juice that's obviously full of bacteria or will be -- will have bacteria, certainly once it's open and how can you have no chemical preservatives? You do it through pressure. And so, pressure has been used in the food and beverage industry since the year 2000. It was initially pioneered with our Head of Engineering, Dr. Edmund Ting. Dr. Ting has won many, many awards over the last 20 years for his work in using high pressure to make food safer. So, you go to Starbucks and you buy this juice and you're having a juice that's chemical-free. That's one of the things that we can do with our Ultra Shear Technology. We can replace some of the things like chemicals by using pressure. As Jeff said earlier, it's such a massive and incredible technology, force of nature. It's an amazing thing. So, we will have products that will, we think have much longer shelf lives. We think we'll have products out there that can use our technology that will be able to reduce or eliminate the use of chemicals and preservatives in their products, whether they be food or cosmetics or whatever they may be. It cuts across all of these barriers. It's an amazing technology that we're going to be debuting commercially by the -- we think by the middle of next year. And its sales will be to big corporations, and its sales will be to the little guy that wants to get that extra step ahead of the competition by having something that gives a better product to the consumer.

So, will you be at the electronic show in Las Vegas at the start of the year? Do you ever go to that?

I don't. We don't. I'm surprised that that show is still on, but we will not be at that show. But, there are a number of -- it's a great problem you have, when you have an instrument that feeds into multiple applications, all of which are just enormous markets, multibillion dollar markets. We're looking at -- we're talking, not just looking, we're talking to people in groups, in food in beverage, in cosmetics and in lubricants, in pharmaceuticals, in nutraceuticals. So, and the initial was in CBD, because that's the low hanging fruit. It's very simple to show the advantages in something like CBD. If you have CBD and it's in an oil and it's not nanoemulsified. If it's not in a nanoemulsion, there's a very good chance that you're going to have very little of that CBD absorbed out by the body before you excrete it from your body. If it's in a nanoemulsion form, there's a much better chance that there'll be higher, much higher bioavailability of the compound that gets -- and your body's going to be able to get a hold of it. We believe our instrument can take it from that less than 10% to the greater than 90%. And we believe we do it in a way that can scale better than anything we've seen on the market. It should be less expensive than anything we've seen on the market. And its quality should equal if not exceed anything we've seen in the market. So, we're very excited about what we've seen so far, which is why you can see why we've stayed open and put everything we can into the progress of getting Ultra Shear Technology to the point where we can start building the first unit, which is what we're now doing.

Ladies and gentlemen, we have reached the end of today's question-answer-session. I would like to turn this call back over to Mr. Rick Schumacher for closing remarks.

Thank you, Laura. And Jeff, thanks for joining me. I appreciate it. And thanks, everybody on the call. Again, we're -- we did ended, as I said earlier, and one of our questioners mentioned, I think Gary did that this was the best quarter that we've had in a revenue sense since fourth quarter of 2018. And I can tell you that we're very, very excited about everything that's going on here. We have many parallel paths. Obviously, we're working on the merger. We're working on getting Ultra Shear Technology finishing out, we're working on developing BaroFold, so that we can do more than two companies at one time. And of course, our pressure cycling technology just got a great boost from Dr. Conrads and the Leica Science Week with presentation he made, where he highlighted the work he's doing in women's cancers particularly, using our system. So, there's a lot of excitement here at PBI, which is great, because there's a lot of commotion outside in this world. But I can assure you that your Company is working, working hard. We've stayed open through the whole time where we've been very careful on what we do, because as a small Company, we can't afford to lose anybody. Not that we would even if it was a big company. But we're very careful. And we want to end this year strong. And I've already said some of the goals we want to end with, like getting rid of the last part of this debt that could become variable is a major, major project of ours that we hope to complete before 12/31. Jeff, any final words? And we'll let everybody go.

Can you hear me Rick?

I can.

Oh, good. I was speaking a couple of times earlier. I got dropped off the call for a couple of minutes. And when I came back in that didn't seem that I could be heard. So, I was just texting you to pass on my thanks in regards to our investors. I think, you've summarized that well. As we said in the press release and in our comments, we're just very excited about how nicely positioned and poised the Company is for achieving its agenda and destiny. The progress made on the debt front and the readiness to complete the final strokes on that and have a very exciting future realized. So, thanks again to everybody. It was a pleasure to join you today.

Everybody, stay safe, please. Stay safe and we'll talk to you in March.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a great rest of your evening.

You too, Laura.

Thanks. Bye, bye.