Pressure BioSciences, Inc. (PBIO) CEO Richard Schumacher on Q1 2019 Results - Earnings Call Transcript

About: Pressure BioSciences, Inc. (PBIO)
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Earning Call Audio

Pressure BioSciences, Inc. (OTC:PBIO) Q1 2019 Earnings Conference Call May 16, 2019 4:30 PM ET

Company Participants

Richard Schumacher - President & Chief Executive Officer

Conference Call Participants

Geoffrey Scott - Scott Asset Management.


Good day, ladies and gentlemen, and welcome to the Pressure BioSciences First Quarter 2019 Financial Results and Business Update Call. All lines have been placed in a listen-only mode. And the floor will be opened for your questions and comments following the presentation. [Operator Instructions]

At this time, it's my pleasure to turn the floor over to Mr. Richard Schumacher. Sir, the floor is yours.

Richard Schumacher

Thanks, Tom. Appreciate it. Before I start, first of all, let me welcome everybody to our first quarter financial review and business update.

But before I start, I need to read this 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 any forward-looking statements to reflect any change in our expectations or any change in events, conditions, or circumstances on which such statements are based.

So, as I begin, I wanted to mention that, on our call just about a month ago, we had Dr. Young. I had -- he had expected and I had expected him to be on his call, but he's working on a couple of deals and a couple of programs for us, and he could not change an obligation that he had. So he's traveling to meet that obligation, which is very important to the company. So, I'm sorry, we're not going to have Brad with us. But he was on the last call, and I certainly expect him to be on the next call.

Brad, as everyone knows is our new Chief Commercial Officer and working on just a new commercial strategies, as well as business development and working with our sales and marketing team.

So what I'm going to do is, briefly go over the first quarter financials and then talk briefly about what -- on the business and operational side, some of the updates that occurred during the first quarter and in the month since. And then, we're going to open-up the lines for Q&A.

So we filed last night and released today, a press release and in this separate press release we talked about the financial results of the first quarter and compared it to the first quarter 2018. So our total revenue for the first quarter of 2019 was $510,000, which compares to the $611,000 that we have for the same period in 2018. This was a 16% decreased.

The revenue, however, when you break it down, revenue from our new biopharma, which is our BaroFold Platform, the platform we bought in December of 2017 that we were so high about, and our Ultra Shear, which is a technology that we've been developing for three years, and have two patents issued in China and our patents filed really in many, many places around the -- around the world that we're also very high about.

Both of these technologies generated income -- generated revenue during the first quarter. So we had a revenue total of $238,000 in these two. In the first quarter of last year, we had no revenue. So, we went from no revenue to $238,000 and we really haven't done that much advertising and promotion yet, particularly in the area of our biopharma, so that's exciting to me to think that the business we're getting is coming from word of mouth as we learn to perform these services, as we as we learn to develop new procedures that can enhance these services that we offer.

We have a number of companies coming to us and we have one in particular, we've been working with for three quarters, we have two others that are -- legal documents are being passed back and forth. Some of these companies are $1 billion and some of these companies are multi-billion dollar companies, so we're very excited about the companies that are coming to us.

And this is coming from again word of mouth. They've heard about the technology. They found out we purchased it in late 2017. So to generate 238,000 and we generated no revenue in the first quarter last year, it was exciting for us and satisfying for us, but also satisfying is that the 238,000 in the first quarter actually exceeded all three quarters of last year where we did generate revenue of 202,000.

So in the number, although we are disappointed that our instruments and consumables, which we mentioned sales decreased in Q1, and I believe this is only the second time in the last 14 or so quarters where we've actually had a decrease in either our product sales or in our products and services combined sales. We were disappointed with that decrease, but we were very satisfied that our other programs, which a year ago were not generating revenue, did generate a substantial amount of revenue in the first quarter.

So overall, if you add up all of the products and services, revenue was 510,000 in the first quarter of 2019, compared to 585,000 for the same quarter in 2018, which is a 13% decrease. We pointed out in the call last month, and also in the call at the end of last year in November that the grant that we had had for a number of years for four years had ended and that there is no grant revenue. We are looking at submitting additional grants. We think grants are great way to fund the company as an addition onto equity and on to sales grants.

As long as they're written in an area, in which you plan to develop products or services, we can let the government pay for a lot of this work. So it's a great way to do it. You also end up owning the intellectual property in that case. So there were no grant revenues in the first quarter of this year. There was 25,000 in the first quarter of last year. So that's the difference in terms of the total revenue, but there was still a 13% decrease. However, there was a very significant increase in revenue from our two services.

Operating loss was -- it was up 26%. We talked about this in the press release. It was driven primarily by non-cash stock compensation, which related to stock option repricing that we did and talked about last year, but also some costs relating to the hire of Dr. Young, our first Chief Commercial Officer who came in, in November, but was on staff for the entire first quarter, and also increased utilization of contracted investor and public relations services.

That's the bulk of the increase, but also there are other things that were minor that added up, but those are the three major aspects that affected it. And we believe that, we can get this back to where it was before. We have things going on here that would increase sales and with cutting some of the cost particularly in the investor or public relations area, we'll reduce some costs, and of course, we won’t have this very large charge that we had for -- in the first quarter for the repricing. So we will still have a charge, it will still go on. But it is decreasing and by the end of the year, it will be substantially less.

The loss per share, both basic and diluted was $2.01, compared to $1.64 a year ago. So what I'd like to talk about is our revenue and our products revenue in particular. And then I'll follow-up with a little bit more on the services revenue.

As I said, I believe that in about 12 of the last 14 quarters, our products and our services revenue increased over the same quarter previous year. So we are disappointed. We pointed out four things that we believe reflected on this decrease. The first is the retirement of Dr. Lawrence. Dr. Lawrence has been with the company from the get go. He joined me in 2006 along with Dr. Tang and Dr. Lazarev.

All three join me in 2006, when I came back from running Pentecost Pharmaceuticals for two years and decided to get into Pressure Cycling and Pressure BioSciences full time. So these three gentlemen have been with me the entire time and have done a yeoman's job both Dr. Tang and Dr. Lazarev are still with us. Dr. Lawrence took retirement at the end of the year. He was our Head of Sales and Marketing for a number of years, did a terrific job. So that alone, there's some changes that occurred with his retiring at the end of December of 2018.

We also lost two salespeople in the fall. And, of course, our sales are a three to six month sales cycle for the most part. So when you lose them in the fall, it's going to affect some of the following quarter, which it did. We lost two salespeople, one, was to a much larger company that basically offered this person a very, very large increase in salary and in commission. And we lost a second person, because as I've mentioned on previous calls, he decided to leave to go back and to work with his brother who is developing a genomics company.

The third thing was -- it’s very important. Brad Young is a -- has great expertise in commercialization and business development, which is why we're very lucky and fortunate and happy to get him on board. And he started to work at the end of the year, but more in the beginning of this year with our North American sales director, Roxana McCloskey and also with Dr. Lawrence before he left and even getting some discussion with Dr. Lawrence.

Our new strategy that's focusing our resources on -- not on the individual academic users, which we've been doing. They're terrific users, but they usually buy one instrument once in a very, very long time. You might get two users. They're very important to us. The key opinion leaders and the academic users that are buying one instrument at a time.

But we've learned over the last two or three years that there are biopharma companies that can use our instrumentation and our consumables in a way that for characterization and quality control of some of the drugs that they're developing and several companies have bought multiple instruments, one company in particular has nine instruments where three years ago or two years ago they only had one.

So the change in strategy is to begin to focus on these more lucrative and efficient long-term growth relationships with the biopharmaceutical companies and we think it's going well. We believe it's going well. There'll be some growing pains. I think we felt some of the pains in the first quarter, along with the other things that happen. But in the long run, it's going to help the company because one sale could be 10 instruments rather than one instrument.

And the fourth area is clearly the strategic focus that we wanted to put on in our two new growth areas, the contract services related to our BaroFold protein refolding and disaggregation. These are the patents; eight issued and more coming we believe in the area -- in that area that we purchased from BaroFold company year and a half ago, and also our Ultra Sheer Technology, UST platform.

So, we wanted to focus and we started to focus and I believe we certainly are gratified with the returns to-date. So with that focus in mind, we were able to generate a very large amount of revenue, which was zero in the same quarter previous year.

So, unfortunately, this convergence of these factors all kind of happened in Q1. We're able to make up a lot of that loss in sales of the instruments through generating sales and the two new growth areas, but not all and that is disappointing. But we're certainly working on it and we're working to rectify it. We are interviewing, looking for interview new sales reps. We are looking at the program, the new strategic program is selling to the biopharma companies and enhancing that, although, we think it's pretty enhanced right now. It's doing quite well and I think it will start to show itself before the end of this year.

What I liked about it is if we'd had a bad quarter and we really haven't had a bad, knock on wood, but if we'd had a bad quarter and we were only a one trick pony, only selling our pressure cycling technology -- technology line or platform, it would be it would be much more difficult to get out of that hole.

Now, we have three lines, three different groups, three different very distinct platforms that can generate revenue, that are very well intertwined and yet are quite different.

So, I'm very excited on that. And my goal and a goal of everybody here at Pressure Bio is to get all -- all of these working in sync. Imagine this company when all three platforms, all generating revenue are all generating revenue at a very good clip. So, that's what's exciting for us in the future.

So, I think the other thing I'd like to talk about is that our goal is to continue to do what we're doing. We've learned from the first quarter. We're fixing some of these issues. We're working very hard to bring on some salespeople. And we're focusing a lot of efforts in areas that we now know can probably bring and generate revenue in our two new area.

So, with this focus in mind, we're going to continue doing this in the second quarter. Everything is telling us that we made the right decision to change our strategy and go after the biopharmaceutical companies. We're still getting orders from academics, but down the road, this year we believe, we will get orders from biopharma companies that are not for one or two, but maybe for three, five, maybe even more instruments at one time, maybe even double-digit. So, we'll continue that strategy.

The other thing I want to mention briefly and then open it up for questions is to talk about some of the successes of the first quarter. They were listed in the press release that went out, so I won't spend a lot of time. Most of these had their own press release during the quarter, so if you want to learn more, please go to our website. You can look at the press releases, if you have any questions, you can always feel free to call me, call Brad, we’d be happy to take your phone calls.

So several of these -- we're dealing with this new Ultra Shear technology platform. We believe that our method answers a glowing need, a glaring need in the CBD field. CBD as we've talked about before it comes out of the plant in an oil, oil and water don't mix very well. Our bodies are mostly water. When people -- when human beings or animals digest CBD enhanced fluids, beverages, edibles, the absorption rate is known to be very poor.

And we believe that we can answer that and we answered it, what we see as a different way than many in the industry. Many ways of answering that are by adding chemicals and changing the configuration, changing the CBD itself and hoping not to change its effect or using methods that do good job of getting it to become more water soluble. But these methods don't scale, in our opinion it don't scale very well at all.

The answer here is finding something that doesn't change it, doesn't change CBD, allows it to have its natural effects in the body, increases the absorption, increases the stability, increases the solubility of it, so that the bioavailability hopefully will go from where many people expect now that it's at best 10% or less, to where it can be at 90% or greater. And do all this, without having to add changing the structure or adding chemicals, a lot of chemicals.

We believe we can do this with what we call physics, with pressure. We are pressure experts. We are one of the top companies in the world in dealing with high pressure and we've learned to how to deal with pressure. It's an amazing force of nature and by learning how to deal with pressure, we built a technology that with two patents that are already issued in China, we believe will be issued elsewhere in the world, and we believe there'll be more patents to come in our Ultra Shear that this is a method that can allow through physics, not through chemistry. The oil and the CBD in the oil to become much more observable, and therefore, everyone expects much more bio available for the person or the animal that takes it.

And we've done some work. We released a video, actually two videos during the quarter and also we released some data. We're scientists. We're a little different than many cannabis companies, because we're not a cannabis company. We're different because we're a scientifically driven company. We are a technology platform company. And one of our technology platforms, Ultra Shear can answer questions in the food industry, in the cosmetics industry, in the pharmaceutical, in the nutriceuticals and in the cannabis industry.

So with that industry being as hot as it is with our ability to answer those issues, we decided to put a lot of focus in this area and we are putting focus in this area. And we've generated data and these data show that using this Ultra Shear technology method that we've developed that we've been able to prove that the CBD that is being put into the system prior to the processing, the level of CBD is equal to the level of CBD it comes out the other end. That's extremely important. We're not losing the CBD. We're not changing the CBD.

And the other thing that's very important is we add a second lab, both of these were independent labs that generated data. A second lab took a look at the particles that remained at the end of the processing and told us that the particles were very small. They were what they call nanometer small about 67 -- very tightly around 67 nanometer, and anything under 200 or so is considered what people call a nanoemulsion and that's what everyone's trying to get to, a very small particle so it gets much easier to absorbed, much more stable. And we'll have -- should have much better bioavailability.

So we're down in a range where we're clearly in the nanoemulsion range and we're not losing any from what's going in, to what's coming out. So those are data that we've generated. We're working on other studies right now. Hopefully, in the coming weeks and months, we'll be announcing other studies that, I believe, have a chance to enhance what we already have. But two or three of the releases during the first quarter dealt with what I just said.

We also announced that, in New York City, which is a wonderful place for us, but we haven't done a good job of selling an instrument. Dr. Christine Vogel's Lab at NYU became a center of excellence for us. She has an instrument. She's opening it up.

We're able to bring people into her lab to show how it works, which has always been difficult because, we'd have to drive down with an instrument or find someone that have and they let us in. Now, we have a center of excellence. And anybody, really in the Northeast, can get to New York. They can come in and see the instrument, see how it works. And she'll be there to help walk them through.

We also announced collaboration with the Steinbeis Centre. This is a very, very eloquent center that's doing some amazing work and they've incorporated our pressure cycling technology and our instrument, the Barocycler in their work.

And we're working with them to develop a revolutionary method that can optimize disease fighting antibody, something that isn't -- something that’s been talked about a lot in the literature, but no one's really done to the level that we believe and they believe we can do, so very excited about the collaboration that we have with the Steinbeis Centre in Germany.

We also have a collaboration with a nutraceutical company. It's tough to knowing all about cannabis and particularly CBD when you're not a cannabis company. So we have a terrific small company that's right in the midst of it.

I think they announced, a couple months ago, they did $3 million to $4 million in sales last year. They came to us when they found out about our ability to make nanoemulsions and we've been working with them ever since. We're excited about that collaboration.

We also announced that there were a record number of papers, over 25 that were published during 2018. This is one way to help increase our sales, is getting peer reviewed journal publications from a key opinion leaders and from non key opinion leaders who talk about our technology and how well it helped them.

So -- and then, we started to focus on our biopharma, the contract services. And you've seen some of the results so far. We think it's the beginning, the proverbial tip of the iceberg. We bought this technology very inexpensively. Our shareholders got a very good deal on this.

We had a conference call in December. I believe it's still on the -- on our website, with the owners of the previous company BaroFold. We talked about things like the $25 million that they put into their IP that we now own and some of the other great things about the BaroFold technology.

So this gets us into an estimated $250 billion global market. So we're very excited about that -- what we're doing there and very excited that with minimal advertising, with minimal optimization, we were able to generate some significant revenue over the last four quarters, three quarters last year and the first quarter this year, and we think it's just the beginning.

So I now want to open it up. So Tom, if you're there, I'm sure our guests have some questions. And I'd like to open it up for some Q&A.

Question-and-Answer Session


And ladies and gentlemen, the floor is now open for your questions. [Operator Instructions]

Richard Schumacher

So Tom. No, question yet. I'm sure there will be some. So, can you hear me well?


Yes, I can hear you.

Richard Schumacher

Okay. Good. So I was sent an e-mail today by someone who normally I believe comes on this call, but couldn't come on the call. And they had three questions. They asked if I would be kind enough to answer them, which I will do, since others are thinking about any questions that they have.

So I'm going to -- she is a stockholder and I've seen her name before. So, I'd like to ask the questions that she asked, so I'll be her proxy. She asked three questions. She said who's taking the CEO position after Dr. Schumacher's retirement? Who is the CFO? And who is taking Dr. Lawrence's place?

So, I probably do it in reverse. So, I'm going to start with Dr. Lawrence, Nate Lawrence. Nate had been with us for as I said a dozen years, did a terrific job. Started as our Head of R&D, stepped down voluntarily, when we're able to hire Dr. Lazarus not much later because he realized that that Sasha as he's known was a tremendous -- could be a tremendous asset and he always wanted to kind of press the flesh as they say. So, he stepped into a role of Marketing and then Marketing and Sales and then retired at the end of last year, just four months ago -- four and a half months ago.

So, when Nate retired, of course, he'd had a little bit of a -- of overlap with Dr. Yang with Brad Young. So, Brad took over Sales and Marketing together with Business Development and Commercialization. And he's working in all three areas.

And Nate also did some other things that he is actually still doing. He still comes in a few hours a week and takes care of the website and does some things at least for the foreseeable future for us, so that those things are being done on a per diem basis -- per hour basis. And some of the things that Nate was doing I've thrown it into my job and some we've given to Jim Behnke. Jim has been with us also for twelve years and was recently promoted to after Nate left to Director of Operations and some of what Nate was doing has gone to Jim.

So, we were lucky enough to add another full time officer and Brad Young. So, we lost a terrific guy in Nate, we added a terrific guy in Brad. So, the FTE stayed the same and we spread what Nate was doing among four or five people who had expertise in those areas. So, in terms of Nate, that's what we're doing now.

I see and I think it's very important, my vision is that things could change dramatically between now and September in a lot of areas. We are focusing on some very exciting areas. We have a lot of good things going on. Brad as been beaten the pounding the pavement and there's a number of things that he's working on that we hope will come to fruition sooner than later hopefully. And everybody's working on different projects. So with the change that we announced, the transition we announced in September, I'm looking at the next four months as a period of time that I think the potential is that, so much more will get done in the next four months, positively for our shareholders than usually in any four month period. Not because I'm going to work any harder, because I've got four months before I step down. Not because of anything, any other reason, but because we have been working very hard on a number of projects and I believe some of them have a chance to come to fruition.

So with Nate stepping down, with Brad taking his place, obviously, when Brad, if Brad stands as CEO in four months, which is the plan then he will need a Director or a VP of Sales and Marketing. So we're talking to people, I'm talking to people I know in the industry. I believe that between now and September that we have a good chance to find the right person and bring in a very solid officer, VP of Sales and Marketing.

And in the meantime, two or three of us are sharing, Roxanna, who's our Director of North America, Sales and Marketing, Brad and myself meet and talk and share a lot of things, and I believe that between now and September we'll probably fill a position of either Director -- Worldwide Director or Vice President of Sales and Marketing.

In the meantime, it's in good hands, because it's in hands that know what they're doing and I'm relying on Roxanna. I'm relying on Brad and others to fill the bill in the next four months.

The next question going backwards is who is the CFO? So currently, I'm the CFO. I signed the documents. I'm deeply involved. I've been CEO of publicly traded companies since 1996. I've been CEO of companies since the 1980s. Four of the companies I've been on have all been on NASDAQ. I've been with they’ve all been on NASDAQ. I am a hands-on person. I am deeply involved and have always been deeply involved in the finance -- in the financings and financials of any company that I've been a part of.

So when Joe decided, and again, he had a tremendous offer and as he felt it was the right thing for him and his family to take a another job. I stepped in short-term. I don't expect it to be long-term. But I stepped in short-term and luckily having been as involved as I've been over the last few months and years, I was able to take on with help from some outside people, one of which was our another ex-CFO, a guy named Richard, Dick who helped us out a great deal, and Joe before he left helped us out a great deal.

So things were not as efficient as when Joe was here. But I think they're just the same high quality that Joe was known for and same with our sales and marketing. I believe strongly with the indications that I've seen and read that there could be some really nice changes that happen to this company over the coming between now and September.

Now let's call it Labor Day and the CFO we need is going to be the CFO that fits the bill for the company in September and after, not the company as it is now in my opinion. So we are talking to people. I've been introduced to people who were CFOs of very large companies, billion dollar, multi-million dollar and billion dollar pharma companies and life science companies have also been introduced to some guys that we’re on start ups, or early stage companies. So I continue to talk to people, I believe that, that will probably -- whoever we end up getting, will come from the people we’re talking to now. I think, we are fine for the next few weeks to months.

I'm surrounded by some very smart people that – smart people in finance. And as I said, I've done the job before. I was the acting CFO for two years, about three years ago. And I have every bit of confidence I can do this job for the next several weeks to several months.

So -- but the long-term, I'm not the answer. The long-term is -- and the long-term is really not that long. We're really talking between now and September. So I hope that answers the questions on who is the CFO. For the time being it's me.

But I'm looking for my replacement as CFO, and I think that the next -- let's say, four weeks to four months is going to tell us what type of person we need, and we'll have done our homework by the time it's -- time to offer a position to somebody.

The third question is, who's taking the CEO position after I retire? I didn't actually put retire. I don't know what that word means. As my wife would say and my daughter and my son, but I said I'm stepping down. My intention is to step down.

I came back from a two-week vacation in July; first two-week vacation in 25 years. One week is not enough. You barely start to relax and then you're going back, two weeks, which maybe I should have done this before.

I began to think a lot and realize that I'll be 69 years old this August. I still have a lot to give, but I'd rather bring in -- I think, it's time to bring in some new blood, some new ideas, some new ways of doing things. But I don't want to disappear.

So my goal is -- and I've discussed this with Brad. I've discussed this with the Board. My goal, my expectation is that I'll step down as CEO. I'll remain in a capacity as a consultant for as long as I'm needed, which I assume would be a minimum of a year. And I have a lot of knowledge that I've gained over the years.

And I'd certainly want to be able to help everybody the best I can, once I stepped down. But it was my decision and I still think it's the right decision. The determination of how long you give. We started the transition process last July, when I came back, with the Board. It was something which I feel very strongly about. Our Board feels very strongly about.

You don't want to wake-up one day and see a headline that the CEO of a company, that you're a stakeholder in, has left and a new CEO has been hired. So we wanted to have a transition. We thought this was the right amount of time, for the transition gives stakeholders enough time to see what's going on, make some decisions.

I hope everybody stays with us because this is – this is a company that, I don't think, has had the chance yet to really show its worth. And I'm hoping that over the next four months, some of that worth will be shown. And then, with leadership after that, that it will really show itself.

So the choice of the Board is Brad. Brad has not been offered the job. Brad is now talking to the Board. My expectation is that -- of that, as we said in the press release, that takes time. So the Board and Dr. Young are talking and during this time I remain as CEO. He remains CCO, Chief Commercial Officer, and we keep doing the jobs that we're doing. But I've made it clear that it's -- I believe it's time for some new blood at the top. And I believe Brad is absolutely -- he was my pick. He was Jeff Peterson, our phenomenal Chairman's pick. He is a phenomenal person. So, we're doing everything we can to just get everything done, so that when September comes, it can be Brad's job. But until then, we all have our own positions and as I said, we have a lot of work to do to make this transition work.

So, I hope, I've answered the questions that came on the email, some of which maybe somebody was going to ask. So, Tom, let's see if there's any other questions.


We do have a couple of questions that have come through, sir. [Operator Instructions] We'll take our first question from Geoffrey Scott with Scott Asset Management.

Geoffrey Scott

Good afternoon Rick. How are you?

Richard Schumacher

Hey Geoff, good to hear from you.

Geoffrey Scott

Good. You said one of the big bio pharmas had purchased nine machines. What was their run rate for use of consumables during the quarter?

Richard Schumacher

I don't have that in front of me. And it's not because I'm not a good in terms of CFO, I don't think Joe would have it either. I can get that for you Geoff, but I can tell you one thing, it's growing of those nine that they've purchased over the last two years. Most of them were last year and most of them have been installed and are starting to be used. This is a very large multi -- owned by very large multinational company and everything is done very methodically, so I can assure you that we've been there. We've trained and their use has started and it is increasing. I'd be happy to write a note here. I'd be happy to get that for you.

Geoffrey Scott

Maybe for the next call, it would be a useful metric for us to kind of track their progress.

Richard Schumacher

I'll do that. I'll do that.

Geoffrey Scott

The metrics have changed because we're not going from numbers of machines to a lot of service income. So, would you go out on a limb and estimate the total 2019 calendar revenue for us?

Richard Schumacher

No, I can't do that. I would be shot by a lot of people. I'd be -- I'd have -- September we've been moved up. I can tell you that we have had five consecutive years of increased revenue, not startling revenue you know 2.2 million to 2.5 million, 1.7 million to 2 million, things like that. We're not happy with that. We'd like to see revenue increases much greater than that. I do want to correct one thing you said about the model is going from products and services. I want to go back to that in a minute Geoff.

So, what I can tell you is we fully expect that this year will exceed last year, even though the first quarter fell 100,000 short. We still fully exceed that this year. And part of the reason is we haven't gone from a product company to a service company. We've gone from a product company to a company its added services. We had a bad quarter in our products. I do not expect to have a bad quarter in the second quarter in our products.

Looking at what we have, I expect that products will go back to where it was, which was increasing year-after-year, quarter after previous years quarter, sometimes very significantly. And I expected to go back there and I expect that services will continue to be sold.

So I'm excited because we're not replacing products with services, we're augmenting our product sales with services and you can do the math. If we can add -- if we can go back to where we were in products and continue on a level of services that's where we are now or slightly higher maybe, we're going to be doing much better.

Geoffrey Scott

Okay. Thank you.

Richard Schumacher

So please think of us as both now, Geoff.

Geoffrey Scott

Okay. We'll do it.

Richard Schumacher

You invested into a products company. We're now a products and services company.

Geoffrey Scott

I wish you the best of luck, Rick.

Richard Schumacher

I appreciate it Geoff. I know you do. Thank you.


And we'll go next to Joel Griswold [ph], Private Investor.

Unidentified Analyst

Thank you, Dr. Schumacher. I appreciate your leadership and everything you've done for the company. It seems to me that our biggest competitive advantage right now is that we basically have technology that allows for clean solubility versus competitors who have to basically as you pointed out add chemicals or in some cases bits of metal to achieve solubility.

I'm just wondering what we're doing as a company to get that out in the news and in the press, so that the public becomes aware of the value of this technology. I think that's really could be the difference maker and probably will increase the demand amongst the biopharmas, and maybe some the beverage companies and CBD companies that are out there?

Richard Schumacher

Joel, it's an excellent question. One of the things we did is Dr. Young went to New York on Tuesday, a long, long day trip for him. And he met with a number of management, particularly CEOs of cannabis companies. He went to a number of talks, being a technical guy. He can go into these talks and understand very quickly what they're talking about and what their issues are. And he met -- he gathered a lot of business cards and contacts as much as one person can do in that period of time.

And also, we did as I said, we -- I didn't get into specifics. I don't want to get in too many specifics, so we certainly increased the spending in investor relations in the first quarter. We had three -- we had two videos. We got videos on TV shows. We got videos on the net. We got video sent out all around the world. So -- and I have probably talked in the last -- just this month, I probably talked to 10 folks in cannabis, particularly CBD who've called in. I said how do you find out about us? And different than Barefold, Barefold [ph]. They find out about us, because somebody somewhere saw what Barefold Corporation used to do and told somebody you might want to find out where this company is now.

In this case, they saw our video. They saw a press release. They saw maybe an interview. They saw Brad Young being interviewed. They saw a headline somewhere. So we spent some extra money to get it out. And to your point, it has started to pay off, because this month alone, I probably get -- I'm probably averaging a call a day from people who never heard of this before, never thought of us as a company that could help them out. And a lot of these calls are CEOs or board members of a CBD company. So it's exciting.

We need to get the word out. We've got to get the word out. As my old boss from Harvard days said, contacts make contracts. You got to get the contacts and they make the contracts. So we've got to get the word out and we're going to continue to do whatever we can within reason to get the word out on what we have.

And I can assure you that, our goal is to set up strategic partnerships with companies that need our technology in the area of CBD. It is an absolute goal. We've mentioned it in previous conference calls. We've mentioned it in press releases. We're looking for strategic partners in these areas. And how are we going to find them? We're going to find them by us finding them and then finding us.

And so, it is -- I can assure you that of those 10 people have called me this month, of which two called today, I couldn't call them -- yesterday and today. I couldn't call them back because of everything going on with the queue. But they'll be -- they’re first on my list tomorrow, or maybe even tonight, if they're from the West Coast.

So that's what we're doing. We've got to let people know that Pressure BioSciences. We have a very good name in the biotech, biopharma, life sciences field. No one's ever heard of us in the cannabis field. We have to change that. So we have to get the word out and we're going to do it in a number of ways, as I just mentioned.

Unidentified Analyst

Thank you.


[Operator Instructions] Mr. Schumacher, there are no further questions at this time. I'd like to turn the call back over to you for any additional or closing remarks.

Richard Schumacher

Sure. I'll just take about a minute to close. I want to first thank everybody, because I know it's always busy at 4:30 or it's time to go home after a long day. So thanks for joining us. I really appreciate. We really appreciate it.

I apologize again for Dr. Young not being able to join, but if you knew, what he's working on, you would say, why is he on the call, so he's doing -- we hired him to develop strategic partnerships, to talk to companies, to work on deals. And that's exactly what he's doing. And so -- but I'm pretty certain he'll be on the call -- the next call that we have, which I believe will be in the middle of August, actually it's usually on either my birthday or my son's birthday.

So in conclusion, there's a lot of things going on right now. There's a lot of good things. As you guys know, I've been CEO or President of four publicly-traded companies and I'm fond of saying and I'll say it again, I think this company has technology that's as good as any of the previous three and the previous three had a combined market cap of a $1 billion. The difference with this one is that this one is broad-based. It's platform.

It can be -- the cannabis is just what we started in Ultra Shear in the food. We're still looking at the food, clearly, working in the food industry and the beverage industry. But we were pulled into the cannabis, because there's a lot of need there. People have the need have cash and we have, we believe, the ability to choose to fix their problem and satisfy their need.

So I think, maybe the next four months might be the most exciting four months of my career, which would be a nice thing to happen before I step down. The other thing I want to make sure of, because I've had multiple phone calls and emails, I am stepping down, I am not retiring, I'm planning on staying here. This is the love besides my family, this is a love of my life. It's been nurtured and nurtured, and I think it's ready to really take the next move. I think it can do it under Dr. Young. But right now, the important thing is I'm not going to go anywhere. I am going to step back. I'm going to let somebody else run the company. But I'm going to be there to offer my advice and my experience for I hope at least a year, if not longer on the sidelines. And that's where I should be at this point in my life. So thanks again for joining. I look forward to everybody joining us in the middle of August. Thanks.


Thank you. Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time. And have a great day.