UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, ~~2022~~2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ______________

Commission File No. 000-50956

PHARMA-BIO SERV, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

20-0653570

(State or Other Jurisdiction of

Incorporation or Organization)

(IRS Employer

Identification No.)

Pharma-Bio Serv

# 6 Road 696

Dorado, Puerto Rico

00646

(Address of ~~PRincipal~~Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code 787-278-2709

N/A

~~(Former name, former address and former fiscal year, if changed since last report)~~

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated ~~Filer~~filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of September ~~9, 2022~~8, 2023 was ~~22,944,286.~~22,963,451.

PHARMA-BIO SERV, INC.

FORM 10-Q

FOR THE QUARTER ENDED JULY 31, ~~2022~~2023

TABLE OF CONTENTS

		Page
PART I FINANCIAL INFORMATION

Item 1 –	Financial Statements		3

	Condensed Consolidated Balance Sheets as of July 31, ~~2022~~2023 and October 31, ~~2021~~2022 (unaudited)		3

	Condensed Consolidated Statements of Operations for the three-month and nine-month periods ended July 31, ~~2022~~2023 and ~~2021~~2022 (unaudited)		4

	Condensed Consolidated Statements of Comprehensive Income for the three-month and nine-month periods ended July 31, ~~2022~~2023 and ~~2021~~2022 (unaudited)		5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month and nine-month periods ended July 31, ~~2022~~2023 and ~~2021~~2022 (unaudited)		6

	Condensed Consolidated Statements of Cash Flows for the three-month and nine-month periods ended July 31, ~~2022~~2023 and ~~2021~~2022 (unaudited)		8

	Notes to Condensed Consolidated Financial Statements (unaudited)		9

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

Item 4 –	Controls and Procedures		18

PART II OTHER INFORMATION

Item 1 –	Legal Proceedings		19

Item ~~1 A~~1-A –	Risk Factors		19

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

Item 6 –	Exhibits	19	20

SIGNATURES		20	21

2-2-

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

~~Item 1.~~ ~~FINANCIAL STATEMENTS~~

PHARMA-BIO SERV, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

ASSETS	July 31, 2022*			October 31, 2021**			July 31, 2023*			October 31, 2022**
Current assets
Cash and cash equivalents	$	14,238,829		$	17,468,345		$	2,869,584		$	14,462,729
Marketable securities								11,714,596			-
Accounts receivable		4,802,756			4,613,142			4,631,107			4,982,500
Prepaids and other assets		543,024			740,869			515,327			498,374
Total current assets		19,584,609			22,822,356			19,730,614			19,943,603

Property and equipment, net		74,347			105,522			41,821			73,684
Operating lease right-of-use		538,957			639,969			394,003			502,685
Other assets		130,932			353,354			130,161			130,874
Total assets	$	20,328,845		$	23,921,201		$	20,296,599		$	20,650,846

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current operating lease liabilities	$	138,053		$	130,060		$	149,441		$	140,855
Accounts payable and accrued expenses		1,738,734			2,071,264			1,679,846			1,629,600
Current portion of US Tax Reform Transition Tax and income taxes payable		281,702			449,896			620,995			337,264
Total current liabilities		2,158,489			2,651,220			2,450,282			2,107,719

US Tax Reform Transition Tax payable		1,639,048			1,850,536			1,427,560			1,639,048
Long-term operating lease liabilities		382,716			487,364			233,276			346,509
Other liabilities		-			17,950
Total liabilities		4,180,253			5,007,070			4,111,118			4,093,276

Stockholders' equity
Preferred Stock, $0.0001 par value; authorized 10,000,000 shares; none outstanding		-			-			-			-
Common Stock, $0.0001 par value; authorized 50,000,000 shares; 23,457,515 and 23,433,341 shares issued, and 22,946,486 and 23,003,615 shares outstanding at July 31, 2022 and October 31, 2021, respectively		2,346			2,343
Common Stock, $0.0001 par value; authorized 50,000,000 shares; 23,512,880 and 23,457,515 shares issued, and 22,964,251 and 22,943,486 shares outstanding at July 31, 2023 and October 31, 2022, respectively								2,351			2,346
Additional paid-in capital		1,523,393			1,480,193			1,596,238			1,551,838
Retained earnings		15,094,091			17,707,384			14,900,974			15,267,470
Accumulated other comprehensive income		28,619			144,455			221,706			238,152
		16,648,449			19,334,375			16,721,269			17,059,806
Treasury stock, at cost; 511,029 and 429,726 common shares held at July 31, 2022 and October 31, 2021, respectively		(499,857	)		(420,244	)
Treasury stock, at cost; 548,629 and 514,029 common shares held at July 31, 2023 and October 31, 2022, respectively								(535,788	)		(502,236	)
Total stockholders' equity		16,148,592			18,914,131			16,185,481			16,557,570
Total liabilities and stockholders' equity	$	20,328,845		$	23,921,201		$	20,296,599		$	20,650,846

*	Unaudited.
**	Condensed from audited financial statements.

See notes to the condensed consolidated financial statements.

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Table of Contents

PHARMA-BIO SERV, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended July 31,					Nine months ended July 31,					Three months ended July 31,					Nine months ended July 31,
	2022			2021		2022			2021		2023		2022			2023		2022
REVENUES	$	4,774,103		$	4,987,909	$	14,760,525		$	14,517,884	$	4,577,167	$	4,774,103		$	13,378,665	$	14,760,525

COST OF SERVICES		3,461,789			3,732,847		10,987,722			10,656,840		3,027,160		3,461,789			9,242,059		10,987,722

GROSS PROFIT		1,312,314			1,255,062		3,772,803			3,861,044		1,550,007		1,312,314			4,136,606		3,772,803

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		942,809			894,572		2,766,820			2,916,654		1,089,541		942,809			2,967,430		2,766,820

INCOME FROM OPERATIONS		369,505			360,490		1,005,983			944,390		460,466		369,505			1,169,176		1,005,983

OTHER INCOME (EXPENSE), NET		(53,683	)		1,952,898		(48,664	)		1,976,390		126,985		(53,683	)		566,146		(48,664	)

INCOME BEFORE INCOME TAX		315,822			2,313,388		957,319			2,920,780		587,451		315,822			1,735,322		957,319

INCOME TAX EXPENSE		27,788			38,270		124,014			137,359		61,209		27,788			377,994		124,014

NET INCOME	$	288,034		$	2,275,118	$	833,305		$	2,783,421	$	526,242	$	288,034		$	1,357,328	$	833,305

BASIC AND DILUTED EARNINGS PER COMMON SHARE	$	0.013		$	0.098	$	0.036		$	0.120	$	0.023	$	0.013		$	0.059	$	0.036

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC		22,952,009			23,029,215		22,996,584			23,022,950		22,965,496		22,952,009			22,962,113		22,996,584

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED		22,970,959			23,174,605		23,031,926			23,178,091		22,984,558		22,970,959			22,991,372		23,031,926

See notes to the condensed consolidated financial statements.

4-4-

Table of Contents

PHARMA-BIO SERV, INC.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three months ended July 31,					Nine months ended July 31,					Three months ended July 31,						Nine months ended July 31,
	2022			2021		2022			2021		2023			2022			2023			2022
NET INCOME	$	288,034		$	2,275,118	$	833,305		$	2,783,421	$	526,242		$	288,034		$	1,357,328		$	833,305

OTHER COMPREHENSIVE INCOME (LOSS), NET OF RECLASSIFICATIONS ADJUSTMENTS AND TAX:
OTHER COMPREHENSIVE LOSS

Foreign currency translation:
Net unrealized gain (loss)		(103,357	)		5,232		(179,989	)		33,723		(42,466	)		(103,357	)		151,785			(179,989	)
Intercompany balances foreign exchange settlement, included in net income		64,153			-		64,153			-		17,857			64,153			(168,231	)		64,153

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		(39,204	)		5,232		(115,836	)		33,723
TOTAL OTHER COMPREHENSIVE LOSS												(24,609	)		(39,204	)		(16,446	)		(115,836	)

COMPREHENSIVE INCOME, NET OF TAX	$	248,830		$	2,280,350	$	717,469		$	2,817,144
COMPREHENSIVE INCOME											$	501,633		$	248,830		$	1,340,882		$	717,469

See notes to the condensed consolidated financial statements.

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Table of Contents

PHARMA-BIO SERV, INC.

Condensed Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

Accumulated

Additional

Other

FISCAL YEAR 2022
(THREE MONTHS ENDED JULY 31, 2022)

Common Stock

Preferred Stock

Paid-in

Retained

Comprehensive

Treasury

Shares

Amount

Shares

Amount

Capital

Earnings

Income (Loss)

Stock

Total

BALANCE AT APRIL 30, 2022

23,457,515

$ 2,346

-

$ -

$ 1,508,994

$ 14,806,057

$ 67,823

$ (490,530 )

$ 15,894,690

STOCK-BASED COMPENSATION

-

-

-

-

14,399

-

-

-

14,399

PURCHASE OF TREASURY STOCK (10,400 SHARES)

-

-

-

-

-

-

-

(9,327 )

(9,327 )

NET INCOME

-

-

-

-

-

288,034

-

-

288,034

OTHER COMPREHENSIVE LOSS, NET OF TAX

-

-

-

-

-

-

(39,204 )

-

(39,204 )

BALANCE AT JULY 31, 2022

23,457,515

$ 2,346

-

$ -

$ 1,523,393

$ 15,094,091

$ 28,619

$ (499,857 )

$ 16,148,592

													Accumulated
									Additional				Other
FISCAL YEAR 2023	Common Stock				Preferred Stock				Paid-in		Retained		Comprehensive			Treasury
(THREE MONTHS ENDED JULY 31, 2023)	Shares		Amount		Shares		Amount		Capital		Earnings		Income (Loss)			Stock			Total
BALANCE APRIL 30, 2023		23,512,880	$	2,351		-	$	-	$	1,581,439	$	14,374,732	$	246,315		$	(530,705	)	$	15,674,132

STOCK-BASED COMPENSATION		-		-		-		-		14,799		-		-			-			14,799

PURCHASE OF TREASURY STOCK (5,100 SHARES)		-		-		-		-		-		-		-			(5,083	)		(5,083	)

NET INCOME		-		-		-		-		-		526,242		-			-			526,242

OTHER COMPREHENSIVE LOSS, NET OF TAX		-		-		-		-		-		-		(24,609	)		-			(24,609	)

BALANCE AT JULY 31, 2023		23,512,880	$	2,351		-	$	-	$	1,596,238	$	14,900,974	$	221,706		$	(535,788	)	$	16,185,481

Accumulated

Additional

Other

FISCAL YEAR 2022
(NINE MONTHS ENDED JULY 31, 2022)

Common Stock

Preferred Stock

Paid-in

Retained

Comprehensive

Treasury

Shares

Amount

Shares

Amount

Capital

Earnings

Income (Loss)

Stock

Total

BALANCE AT NOVEMBER 1, 2021

23,433,341

$ 2,343

-

$ -

$ 1,480,193

$ 17,707,384

$ 144,455

$ (420,244 )

$ 18,914,131

STOCK-BASED COMPENSATION

-

-

-

-

43,200

-

-

-

43,200

ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS

24,174

3

-

-

-

(3 )

-

-

-

PURCHASE OF TREASURY STOCK (70,903 SHARES)

-

-

-

-

-

-

-

(79,613 )

(79,613 )

NET INCOME

-

-

-

-

-

833,305

-

-

833,305

OTHER COMPREHENSIVE LOSS, NET OF TAX

-

-

-

-

-

-

(115,836 )

-

(115,836 )

CASH DIVIDEND ($0.075 PER COMMON SHARE AT RECORD DATE)

-

-

-

-

-

(3,446,595 )

-

-

(3,446,595 )

BALANCE AT JULY 31, 2022

23,457,515

$ 2,346

-

$ -

$ 1,523,393

$ 15,094,091

$ 28,619

$ (499,857 )

$ 16,148,592

														Accumulated
									Additional					Other
FISCAL YEAR 2023	Common Stock				Preferred Stock				Paid-in		Retained			Comprehensive			Treasury
(NINE MONTHS ENDED JULY 31, 2023)	Shares		Amount		Shares		Amount		Capital		Earnings			Income (Loss)			Stock			Total
BALANCE AT NOVEMBER 1, 2022		23,457,515	$	2,346		-	$	-	$	1,551,838	$	15,267,470		$	238,152		$	(502,236	)	$	16,557,570

STOCK-BASED COMPENSATION		-		-		-		-		44,400		-			-			-			44,400

ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS		55,365		5		-		-		-		(5	)		-			-			-

PURCHASE OF TREASURY STOCK (34,600 SHARES)		-		-		-		-		-		-			-			(33,552	)		(33,552	)

NET INCOME		-		-		-		-		-		1,357,328			-			-			1,357,328

OTHER COMPREHENSIVE INCOME, NET OF TAX		-		-		-		-		-		-			(16,446	)		-			(16,446	)

CASH DIVIDEND ($0.075 PER COMMON SHARE AT RECORD DATE)		-		-		-		-		-		(1,723,819	)		-			-			(1,723,819	)

BALANCE AT JULY 31, 2023		23,512,880	$	2,351		-	$	-	$	1,596,238	$	14,900,974		$	221,706		$	(535,788	)	$	16,185,481

See notes to condensed consolidated financial statements.

6-6-

Table of Contents

PHARMA-BIO SERV, INC.

Condensed Consolidated Statements of Changes in Stockholders' Equity (continued)

(Unaudited)

Accumulated

Additional

Other

FISCAL YEAR 2021
(THREE MONTHS ENDED JULY 31, 2021)

Common Stock

Preferred Stock

Paid-in

Retained

Comprehensive

Treasury

Shares

Amount

Shares

Amount

Capital

Earnings

Income (Loss)

Stock

Total

BALANCE AT APRIL 30, 2021

23,433,341

$ 2,343

-

$ -

$ 1,446,814

$ 20,304,927

$ 189,145

$ (394,278 )

$ 21,548,951

STOCK-BASED COMPENSATION

-

-

-

-

11,430

-

-

-

11,430

NET INCOME

-

-

-

-

-

2,275,118

-

-

2,275,118

OTHER COMPREHENSIVE INCOME, NET OF TAX

-

-

-

-

-

-

5,232

-

5,232

BALANCE AT JULY 31, 2021

23,433,341

$ 2,343

-

$ -

$ 1,458,244

$ 22,580,045

$ 194,377

$ (394,278 )

$ 23,840,731

													Accumulated
									Additional				Other
FISCAL YEAR 2022	Common Stock				Preferred Stock				Paid-in		Retained		Comprehensive			Treasury
(THREE MONTHS ENDED JULY 31, 2022)	Shares		Amount		Shares		Amount		Capital		Earnings		Income (Loss)			Stock			Total
BALANCE AT APRIL 30, 2022		23,457,515	$	2,346		-	$	-	$	1,508,994	$	14,806,057	$	67,823		$	(490,530	)	$	15,894,690

STOCK-BASED COMPENSATION		-		-		-		-		14,399		-		-			-			14,399

PURCHASE OF TREASURY STOCK (10,400 SHARES)		-		-		-		-		-		-		-			(9,327	)		(9,327	)

NET INCOME		-		-		-		-		-		288,034		-			-			288,034

OTHER COMPREHENSIVE LOSS, NET OF TAX		-		-		-		-		-		-		(39,204	)		-			(39,204	)

BALANCE AT JULY 31, 2022		23,457,515	$	2,346		-	$	-	$	1,523,393	$	15,094,091	$	28,619		$	(499,857	)	$	16,148,592

Accumulated

Additional

Other

FISCAL YEAR 2021
(NINE MONTHS ENDED JULY 31, 2021)

Common Stock

Preferred Stock

Paid-in

Retained

Comprehensive

Treasury

Shares

Amount

Shares

Amount

Capital

Earnings

Income (Loss)

Stock

Total

BALANCE AT NOVEMBER 1, 2020

23,405,753

$ 2,341

-

$ -

$ 1,423,954

$ 21,523,990

$ 160,654

$ (394,278 )

$ 22,716,661

STOCK-BASED COMPENSATION

-

-

-

-

34,290

-

-

-

34,290

ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS

27,588

2

-

-

-

(2 )

-

-

-

NET INCOME

-

-

-

-

-

2,783,421

-

-

2,783,421

OTHER COMPREHENSIVE INCOME, NET OF TAX

-

-

-

-

-

-

33,723

-

33,723

CASH DIVIDEND ($0.075 PER COMMON SHARE AT RECORD DATE)

-

-

-

-

-

(1,727,364 )

-

-

(1,727,364 )

BALANCE AT JULY 31, 2021

23,433,341

$ 2,343

-

$ -

$ 1,458,244

$ 22,580,045

$ 194,377

$ (394,278 )

$ 23,840,731

														Accumulated
									Additional					Other
FISCAL YEAR 2022	Common Stock				Preferred Stock				Paid-in		Retained			Comprehensive			Treasury
(NINE MONTHS ENDED JULY 31, 2022)	Shares		Amount		Shares		Amount		Capital		Earnings			Income (Loss)			Stock			Total
BALANCE AT NOVEMBER 1, 2021		23,433,341	$	2,343		-	$	-	$	1,480,193	$	17,707,384		$	144,455		$	(420,244	)	$	18,914,131

STOCK-BASED COMPENSATION		-		-		-		-		43,200		-			-			-			43,200

ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS		24,174		3		-		-		-		(3	)		-			-			-

PURCHASE OF TREASURY STOCK (70,903 SHARES)		-		-		-		-		-		-			-			(79,613	)		(79,613	)

NET INCOME		-		-		-		-		-		833,305			-			-			833,305

OTHER COMPREHENSIVE LOSS, NET OF TAX		-		-		-		-		-		-			(115,836	)		-			(115,836	)

CASH DIVIDENDS ($0.075 PER COMMON SHARE AT RECORD DATE)		-		-		-		-		-		(3,446,595	)		-			-			(3,446,595	)

BALANCE AT JULY 31, 2022		23,457,515	$	2,346		-	$	-	$	1,523,393	$	15,094,091		$	28,619		$	(499,857	)	$	16,148,592

See notes to condensed consolidated financial statements.

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Table of Contents

PHARMA-BIO SERV, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three months ended July 31,						Nine months ended July 31,						Three months ended July 31,						Nine months ended July 31,
	2022			2021			2022			2021			2023			2022			2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	288,034		$	2,275,118		$	833,305		$	2,783,421		$	526,242		$	288,034		$	1,357,328		$	833,305
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gain on disposition of property and equipment		-			-			-			(7,404	)
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Stock-based compensation		14,399			11,430			43,200			34,290			14,799			14,399			44,400			43,200
Depreciation and amortization		12,962			18,183			38,307			58,438			11,400			12,962			40,694			38,307
Loans forgiveness		-			(1,956,291	)		-			(1,956,291	)
Reinvested interests														(34,734	)		-			(178,038	)		-
Decrease (increase) in accounts receivable		652,913			284,599			(257,384	)		(336,467	)		380,213			652,913			453,235			(257,384	)
Decrease (increase) in other assets		220,778			(552,175	)		489,341			(302,324	)		(112,009	)		220,778			(129,860	)		489,341
Increase (decrease) in liabilities		(83,233	)		360,860			(814,403	)		(429,171	)		170,854			(83,233	)		(5,235	)		(814,403	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		1,105,853			441,724			332,366			(155,508	)
NET CASH PROVIDED BY OPERATING ACTIVITIES														956,765			1,105,853			1,582,524			332,366

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(2,087	)		(7,110	)		(7,132	)		(11,726	)		-			(2,087	)		(8,831	)		(7,132	)
Proceeds from sale of property and equipment		-			-			-			57,571
Collection from promissory note receivable		-			-			-			1,250,000
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(2,087	)		(7,110	)		(7,132	)		1,295,845
Marketable securities investment, net														(6,176,052	)		-			(11,536,558	)		-
NET CASH PROVIDED BY INVESTING ACTIVITIES														(6,176,052	)		(2,087	)		(11,545,389	)		(7,132	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock		(9,327	)		-			(79,613	)		-			(5,083	)		(9,327	)		(33,552	)		(79,613	)
Payments on obligations under finance lease		-			-			-			(67,079	)
Cash dividends paid to shareholders		-			-			(3,446,595	)		(1,727,364	)		-			-			(1,723,819	)		(3,446,595	)
NET CASH USED IN FINANCING ACTIVITIES		(9,327	)		-			(3,526,208	)		(1,794,443	)		(5,083	)		(9,327	)		(1,757,371	)		(3,526,208	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		(19,607	)		(2,931	)		(28,542	)		14,352			(2,500	)		(19,607	)		127,091			(28,542	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,074,832			431,683			(3,229,516	)		(639,754	)		(5,226,870	)		1,074,832			(11,593,145	)		(3,229,516	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		13,163,997			16,066,487			17,468,345			17,137,924			8,096,454			13,163,997			14,462,729			17,468,345
CASH AND CASH EQUIVALENTS – END OF PERIOD	$	14,238,829		$	16,498,170		$	14,238,829		$	16,498,170		$	2,869,584		$	14,238,829		$	2,869,584		$	14,238,829

SUPPLEMENTAL DISCLOURES OF CASH FLOWS INFORMATION:
Cash paid during the period for:
Income taxes	$	-		$	67,550		$	211,813		$	574,757		$	-		$	-		$	312,155		$	211,813
Interest	$	-		$	-		$	-		$	1,404		$	-		$	-		$	-		$	-

SUPPLEMENTARY SCHEDULES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Income tax withheld by clients to be used as a credit in the Company’s income tax return	$	623		$	-		$	22,161		$	4,046		$	-		$	623		$	15,309		$	22,161
Conversion of cashless exercise of options to shares of common stock and shares issued under restricted stock unit agreements	$	-		$	-		$	3		$	2		$	-		$	-		$	5		$	3
Disposed property and equipment with accumulated depreciation of $35,833 for the three and nine months ended July 31, 2021	$	-		$	-		$	-		$	86,000

See notes to the condensed consolidated financial statements.

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PHARMA-BIO SERV, INC.

Notes To Condensed Consolidated Financial Statements

July 31, ~~2022~~2023

(Unaudited)

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

Pharma-Bio Serv, Inc. (“Pharma-Bio”) is a Delaware corporation organized on January 14, 2004. Pharma-Bio is the parent company of Pharma-Bio Serv PR, Inc. (“Pharma-PR”), Pharma Serv, Inc. (“Pharma-Serv”), and Scienza Labs, Inc. (currently inactive) (“Scienza Labs”), each a Puerto Rico corporation, Pharma-Bio Serv US, Inc. (“Pharma-US”), a Delaware corporation, Pharma-Bio Serv SL (“Pharma-Spain”), a Spanish limited liability company, and Pharma-Bio Serv Brasil Servicos de Consultoria Ltda. (currently insignificant) (“Pharma-Brazil”), a Brazilian limited liability company. Pharma-Bio, Pharma-PR, Pharma-Serv, Scienza Labs, Pharma-US, Pharma-Spain and Pharma-Brazil are collectively referred to as the “Company.” The Company operates in Puerto Rico, the United States, Europe and Brazil under the name of Pharma-Bio Serv and is engaged in providing technical compliance consulting service.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated balance sheet of the Company as of October 31, ~~2021~~2022 is derived from audited consolidated financial statements but does not include all disclosures required by generally accepted accounting principles. The unaudited interim condensed consolidated financial statements, include all adjustments, consisting of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations and cash flows for the interim periods. The results of operations for the nine months ended July 31, ~~2022~~2023 are not necessarily indicative of expected results for the full ~~2022~~2023 fiscal year.

The accompanying financial data as of July 31, ~~2022,~~2023, and for the three-month and nine-month periods ended July 31, ~~2022~~2023 and ~~2021~~2022 has been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally contained in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our audited Consolidated Financial Statements and the notes thereto for the fiscal year ended October 31, ~~2021.~~2022.

Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Segments

The Company operates in three reportable business segments: (i) Puerto Rico technical compliance consulting, (ii) United States technical compliance consulting, and (iii) Europe technical compliance consulting. Accordingly, the accompanying condensed consolidated financial statements are presented to show these three reportable segments.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from these estimates.

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Fair Value of Financial Instruments

Accounting standards have established a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting standards have established three levels of inputs that may be used to measure fair value:

Level 1:

Quoted prices in active markets for identical assets and liabilities.

Level 2:

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

Level 3:

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

Marketable securities consist of U.S. Treasury securities, which are categorized in Level 1 and have a short-term maturity.

The carrying value of the ~~Company’s~~Company's financial instruments, cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, are considered reasonable estimates of fair value due to their liquidity or short-term nature.

~~Table of Contents~~

Revenue Recognition

The Company records revenue under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers. We evaluate our revenue contracts with customers based on the five-step model under ASC 606: (i) Identify the contract with the customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to separate performance obligations; and (v) Recognize revenue when (or as) each performance obligation is satisfied.

Revenue is primarily derived from: (1) time and material contracts (representing approximately 99% of total revenues), and (2) short-term fixed-fee contracts or "not to exceed" contracts (representing approximately 1% of total revenues). Time and material contracts are typically based on the number of hours worked at contractually agreed upon rates. These service contracts relate to work which ~~have~~has no alternative use and for which the Company has an enforceable right to payment for the work completed to date. As a result, revenue is recognized over time when or as the Company transfers control of the promised products or services (known as performance obligations) to its customers. Revenue for short term fixed fee contracts or “not to exceed” contracts is recognized similarly, except that certain milestones also have to be reached before revenue is recognized. If the Company determines that a contract will result in a loss, the Company recognizes the estimated loss in the period in which such a determination is made.

Cash Equivalents

For purposes of the consolidated statements of cash flows, cash equivalents include investments in a money market obligations trust that is registered under the U.S. Investment Company Act of 1940, as amended, and liquid investments, including US Treasury securities, with original maturities of three months or less.

Accounts Receivable

Accounts receivable are recorded at their estimated realizable value. Accounts are deemed past due when payment has not been received within the stated time period. The Company’s policy is to review individual past due amounts periodically and write off amounts for which all collection efforts are deemed to have been exhausted. Due to the nature of the Company’s customers, bad debts are ~~mainly~~ accounted for using the direct write-off method whereby an expense is recognized only when a specific balance is determined to be uncollectible in full. The effect of using this method approximates that of the allowance method. However, in the event the Company determines that the collectability of any account receivable reaches a certain uncertainty threshold, the Company will provide an allowance for doubtful account to reduce said balance. As of October 31, 2021 the Company provided an allowance of approximately $5.2 million, to cover the full balance of a customer account receivable. Nevertheless, the Company continues to monitor this account and actively seek full payment from this customer.

Income Taxes

The Company follows an asset and liability approach method of accounting for income taxes. This method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.

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The Company follows guidance from the Financial Accounting Standards Board (“FASB”) related to Accounting for Uncertainty in Income Taxes, which includes a two-step approach to recognizing, de-recognizing and measuring uncertain tax positions. As of July 31, ~~2022,~~2023, the Company had no significant uncertain tax positions that would be reduced as a result of a lapse of the applicable statute of limitations.

Leases

The Company follows accounting standards issued by the FASB for the accounting and disclosure of leases. Under those standards, assets and liabilities that arise from leases are recognized on the balance sheet, and the leases are categorized at their inception as either operating or finance leases.

Operating lease right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date, and lease liability amounts are based on the present value of lease payments made during the lease term.

Property and Equipment

Owned property and equipment are stated at cost. ~~Vehicles under finance leases are stated at the lower of fair market value or net present value of the minimum lease payments at the inception of the leases.~~

~~Table of Contents~~

Depreciation of owned assets isare provided for, when placed in service, in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using straight-line basis. ~~Assets under finance leases are amortized over the lease term. While expenditures~~Expenditures for repairs and maintenance are expensed when incurred. As of July 31, ~~2022~~2023 and October 31, ~~2021,~~2022, the accumulated depreciation amounted to ~~$576,691~~$630,185 and ~~$538,384,~~$587,089, respectively.

Impairment of Long-Lived Assets

The Company evaluates for impairment its long-lived assets to be held and used, and long-lived assets to be disposed of, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Based on management estimates, no impairment of the long-lived assets was present as of July 31, ~~2022~~2023 and October 31, ~~2021.~~2022.

Stock-based Compensation

Stock-based compensation expense is recognized in the consolidated financial statements based on the fair value of the awards granted. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which ~~generally~~ represents the vesting period, and includes an estimate of awards that will be forfeited. The Company calculates the fair value of stock options using the Black-Scholes option-pricing model at the grant date, while for restricted stock units the fair market value of the units is determined by the Company’s share market value at grant date. Excess tax benefits related to stock-based compensation are reflected as cash flows from financing activities rather than cash flows from operating activities. The Company has not recognized such cash flows from financing activities since there has been no tax benefit related to the stock-based compensation.

Earnings Per Share of Common Stock

Basic earnings per share of common stock is calculated by dividing net earnings by the weighted average number of shares of common stock outstanding. Diluted earnings per share includes the dilution of common stock equivalents, which include principally shares that may be issued upon the exercise of warrants, stock option and restricted stock unit awards.

The diluted weighted average shares of common stock outstanding were calculated using the treasury stock method for the respective periods.

Foreign Operations

The functional currency of the Company’s foreign subsidiaries is its local currency. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for subsidiaries using a functional currency other than the U.S. dollar is included as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income.

The Company’s intercompany accounts are typically denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are recorded as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income, while gains and losses resulting from the remeasurement of intercompany receivables from those international subsidiaries for which the Company anticipates settlement in the foreseeable future are recorded in the consolidated statements of operations.

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Subsequent Events

The Company has evaluated subsequent events through the filing date of this report. The Company has determined that there are no events occurring in this period that ~~required~~require disclosure or adjustment.

Reclassifications

Certain reclassifications have been made to the July 31, ~~2021~~2022 condensed consolidated financial statements to conform them to the July 31, ~~2022~~2023 condensed consolidated financial statements presentation. Such reclassifications do not affect net income as previously reported.

Recent Accounting Pronouncements

Recent accounting pronouncements pending adoption not discussed above or in the Annual Report on Form 10-K for the year ended October 31, ~~2021~~2022, are either not applicable or will not have or are not expected to have a material impact on us.

NOTE B – MARKETABLE SECURITIES

Marketable securities consist of short-term U.S. Treasury securities with maturities over three months, which are held until maturity and accordingly, are measured at cost plus accreted interest income.

~~Table of Contents~~

NOTE BC - INCOME TAXES

On December 22, 2017, Public Law 115-97, commonly known as the Tax Cuts and Jobs Act of 2017 (the “Tax Reform”), was enacted. The Tax Reform imposed a mandatory one-time transition tax (the “Transition Tax”) over foreign subsidiaries undistributed earnings and profits (“E&Ps”) earned prior to a date set by the statute. Based on the Company’s E&Ps, the Transition Tax was determined to be approximately $2.7 million. The Transition Tax liability must be paid over a period of eight years which started with the Company’s second quarter of fiscal year 2019. In the past, most of these E&Ps were not repatriated since such E&Ps were considered to be reinvested indefinitely in the foreign location, therefore no US tax liability was incurred unless the E&Ps were repatriated as a dividend. After December 31, 2017, the Tax Reform has established a 100% tax exemption on the foreign-source portion of dividends received attributable to E&Ps, with certain limitations. However, foreign subsidiaries earnings are subject to U.S. tax at a reduced rate of 10.5%.

In June 2011, Pharma-Bio, Pharma-PR and Pharma-Serv obtained a Grant of Industrial Tax Exemption pursuant to the terms and conditions set forth in Act No. 73 of May 28, 2008 (“the Grant”) issued by the Puerto Rico Industrial Development Company (“PRIDCO”). The Grant was effective as of November 1, 2009, and covers a fifteen-year period. The Grant provides relief on various Puerto Rico taxes, including income tax, with certain limitations, for most of the activities carried on within Puerto Rico, including those that are for services to parties located outside of Puerto Rico. Industrial Development Income (“IDI”) covered under the Grant are subject to a fixed income tax rate of 4%. In addition, IDI earnings distributions accumulated since November 1, 2009 are exempt from Puerto Rico earnings distribution tax. Under provisions of Puerto Rico Acts 60-2019 and 73-2008, the Company has requested PRIDCO the renegotiation of the Grant for an additional term of fifteen years.

Puerto Rico operations not covered in the exempt activities of the Grant are subject to Puerto Rico income tax at a maximum tax rate of 37.5% as provided by the 1994 Puerto Rico Internal Revenue Code, as amended. The operations carried ~~out~~ in the United States by the Company’s subsidiaries, is taxed in the United States at a maximum regular federal income tax rate of 21%.

Deferred income tax assets and liabilities are computed for differences between the consolidated financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Pharma-PR, Pharma-Serv and Scienza Labs have established an allowance against a customer account receivable which represents a potential deferred tax asset for those subsidiaries. An allowance has been provided covering the total amount of these potential deferred tax assets, including a deferred tax asset resulting from Pharma-Spain carryforward losses, since it is uncertain whether they can be used in the future. Realization of future tax benefits related to a deferred tax asset is dependent on many factors. Accordingly, the income tax benefit will be recognized when realization is determined to be more probable than not.

The Company files income tax returns in the United States (federal and various states jurisdictions), Puerto Rico, Spain and Brazil. The ~~2017 (2016~~2018 (2017 for Puerto Rico) through ~~2020~~2022 tax years are open and may be subject to potential examination in one or more jurisdictions. Currently, the Company has no federal, state, Puerto Rico or foreign income tax examination.

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NOTE CD – EARNINGS PER SHARE

The following data shows the amounts used in the calculations of basic and diluted earnings per share.

	Three months ended July 31,				Nine months ended July 31,				Three months ended July 31,				Nine months ended July 31,
	2022		2021		2022		2021		2023		2022		2023		2022
Net income available to common equity holders - used to compute basic and diluted earnings per share	$	288,034	$	2,275,118	$	833,305	$	2,783,421	$	526,242	$	288,034	$	1,357,328	$	833,305

Weighted average number of common shares - used to compute basic earnings per share		22,952,009		23,029,215		22,996,584		23,022,950		22,965,496		22,952,009		22,962,113		22,996,584
Effect of options to purchase common stock		18,950		145,390		35,342		155,141		19,062		18,950		29,259		35,342
Weighted average number of shares - used to compute diluted earnings per share		22,970,959		23,174,605		23,031,926		23,178,091		22,984,558		22,970,959		22,991,372		23,031,926

For the three-month and nine-month periods ended July 31, ~~2022,~~2023 options for the purchase of 223,350 shares of ~~400,000 and 300,000~~ common stock ~~respectively,~~ were not considered in computing diluted earnings per share because ~~the~~their effect was antidilutive. Options for the purchase of ~~80,000~~400,000 and 300,000 shares of common stock for the three-month and nine-month periods ended July 31, ~~2021~~2022, respectively, were not included in computing diluted earnings per share because their effects were also antidilutive.

~~Table of Contents~~

NOTE DE – EQUITY TRANSACTIONS

On June 13, 2014, the Board of Directors of the Company authorized the Company to repurchase up to two million shares of its outstanding common stock under the ~~Company’s~~Company Stock Repurchase Program ~~(“Repurchase~~(the “Repurchase Program”). The timing, manner, price and amount of any repurchases under the Repurchase Program iswill be at the discretion of the Company, subject to the requirements of the Securities Exchange Act of 1934, as amended, and related rules. The Repurchase Program does not oblige the Company to repurchase any shares and it may be modified, suspended or terminated at any time and for any reason. No shares will be repurchased under the Repurchase Program directly from directors or officers of the Company. ~~To conserve cash due to the economic uncertainty caused by the coronavirus pandemic, from April 2020 to September 2021, the Company suspended purchases under the Repurchase Program.~~ As of July 31, ~~2022~~2023 and October 31, ~~2021,~~2022, a total of ~~448,057~~485,657 and ~~366,754~~451,057 shares of the Company’s common stock were purchased under the Repurchase Program for an aggregate amount of ~~$436,885~~$472,816 and ~~$357,272,~~$439,264, respectively.

On ~~November 15, 2021,~~February 28, 2023, the Board of Directors of the Company declared a cash dividend of $0.075 per common share for shareholders of record as of the close of business on ~~December 15, 2021.~~March 29, 2023. Accordingly, an aggregate dividend payment of ~~$1,722,391~~$1,723,819 was paid on January 3, 2022. Additionally, the Board of Directors of the Company declared, on February 7, 2022, a cash dividend of $0.075 per common share. This dividend, for an aggregate amount of $1,724,204, was paid on March 15, 2022 to shareholders of record as of the close of business on February 25, 2022.April 14, 2023.

NOTE EF - SEGMENT DISCLOSURES

The Company’s segments are based on the organizational structure for which financial results are regularly evaluated by the Company’s chief operating decision maker to determine resource allocation and assess performance. Each reportable segment is managed by its own management team and reports to executive management. The Company has three reportable segments: (i) Puerto Rico technical compliance consulting, (ii) United States technical compliance consulting, and (iii) Europe technical compliance consulting. These reportable segments provide services primarily to the pharmaceutical, chemical, medical device and biotechnology industries in their respective markets.

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The following table presents information about the reported revenue from services and earnings from operations of the Company for the three-month and nine-month periods ended on July 31, ~~2022~~2023 and ~~2021.~~2022. There is no intersegment revenue for the mentioned periods. Corporate expenses that support the operating units have been allocated to the segments. Asset information by reportable segment is not presented, since the Company does not produce such information internally, nor does it use such data to manage its business.

Three months ended July 31,

Nine months ended July 31,

2022

2021

2022
2021
REVENUES:

Puerto Rico consulting

$
2,982,774

$
3,749,071

$
9,420,588

$
10,861,147
United States consulting

1,105,870

622,669

3,518,556

1,546,889
Europe consulting

648,916

579,793

1,780,723

1,785,115
Other segment

36,543

36,376

40,658

324,733
Total consolidated revenues

$
4,774,103

$
4,987,909

$
14,760,525

$
14,517,884

INCOME (LOSS) BEFORE TAXES:

Puerto Rico consulting

$
163,566

$
2,011,030

$
323,281

$
2,159,988
United States consulting

(30,843
)

149,837

170,307

135,952
Europe consulting

190,924

154,937

506,608

534,981
Other segment

(7,825
)

(2,416
)

(42,877
)

89,859
Total consolidated income before taxes

$
315,822

$
2,313,388

$
957,319

$
2,920,780

For the three and nine months ended July 31, 2021, consolidated income before taxes include the forgiveness of principal and accrued interest of SBA Loans for the Puerto Rico and United States markets of approximately $1.9 and $0.1 million, respectively.

	Three months ended July 31,						Nine months ended July 31,
	2023			2022			2023			2022
REVENUES:
Puerto Rico consulting	$	2,004,993		$	2,982,774		$	6,135,456		$	9,420,588
United States consulting		1,234,509			1,105,870			3,504,031			3,518,556
Europe consulting		1,337,665			648,916			3,732,944			1,780,723
Other segment		-			36,543			6,234			40,658
Total consolidated revenues	$	4,577,167		$	4,774,103		$	13,378,665		$	14,760,525

INCOME (LOSS) BEFORE TAXES:
Puerto Rico consulting	$	234,073		$	163,566		$	288,896		$	323,281
United States consulting		80,575			(30,843	)		241,728			170,307
Europe consulting		281,030			190,924			1,244,253			506,608
Other segment		(8,227	)		(7,825	)		(39,555	)		(42,877	)
Total consolidated income before taxes	$	587,451		$	315,822		$	1,735,322		$	957,319

Long lived assets (property and equipment) as of July 31, ~~2022~~2023 and October 31, ~~2021,~~2022, and related depreciation and amortization expense for the three and nine months ended July 31, ~~2022~~2023 and ~~2021,~~2022, were concentrated in the corporate headquarters in Puerto Rico. Accordingly, depreciation expense and acquisition of property and equipment, as presented in the statements of cash flows are ~~mainly~~ related to the corporate headquarters.

~~Table of Contents~~

NOTE FG - CONCENTRATIONS OF RISK

Cash, Cash Equivalents and ~~cash equivalents~~Marketable Securities

The Company’s domestic cash, ~~and~~ cash equivalents and marketable securities consist of cash deposits in FDIC insured banks (substantially covered by FDIC insurance by the spread of deposits in multiple FDIC insured banks), a money market obligations trust registered under the US Investment Company Act of 1940, as amended, and U.S. Treasury securities with maturities of ~~three~~twelve months or less. In the foreign markets we serve, we also maintain cash deposits in foreign banks, which have no specific insurance. No losses have been experienced ornor are expected on these accounts.

Accounts ~~receivable~~Receivable and ~~revenues~~Revenues

~~Except~~The Company has established a full allowance for doubtful accounts for those accounts receivable balances for which collectability have reached a ~~specific customer account receivable disclosed in Note A, management~~certain uncertainty threshold. Management deems all other of the Company’s accounts receivable to be fully collectible, and, as such, does not maintain any ~~other allowances~~additional allowance for uncollectible receivables.

The Company's revenues, and the related receivables, are concentrated in the pharmaceutical industry in Puerto Rico, the United States, ~~Spain~~Europe and Brazil. Although a few customers represent a significant source of revenue, the Company’s functions are not a continuous process, accordingly, the client base for which the services are typically rendered, on a project-by-project basis, changes regularly.

The Company provided a substantial portion of its services to five customers, which accounted for 10% or more of its revenues in either of the three-month and nine-month periods ended July 31, ~~2022~~2023 and ~~2021.~~2022. During the three months ended July 31, ~~2022,~~2023, revenues from these customers were ~~15.1%~~22.1%, ~~13.1%~~11.0%, ~~9.3%~~14.7%, ~~8.2%~~5.0% and ~~3.6%~~5.5%, or a total of ~~49.3%~~58.3%, as compared to the same period last year of ~~19.7%~~0.0%, ~~14.2%~~13.1%, ~~10.1%~~8.2%, ~~9.9%,~~15.1% and ~~6.8%~~9.3%, or a total of ~~60.7%~~45.7%, respectively. During the nine months ended July 31, ~~2022,~~2023, revenues from these customers were ~~16.9%~~14.9%, ~~13.2%~~11.5%, ~~10.1%~~11.1%, ~~7.7%~~6.6% and ~~3.2%~~7.5%, or a total of ~~51.1%~~51.6%, as compared to the same period last year of ~~20.8%~~0.0%, ~~12.7%~~13.2%, ~~7.8%~~7.7%, ~~10.0%~~16.9% and ~~10.4%~~10.1%, or a total of ~~61.7%~~47.9%, respectively. For the three months ended July 31, 2023 and 2022, these customers represented for the Puerto Rico, United States and Europe consulting reportable segments 21.5%, 0.0% and 36.8%, as compared to 37.5%, 0.0% and 8.2%, respectively. For the nine months ended July 31, 2023 and 2022, these customers represented for the Puerto Rico, United States and Europe consulting reportable segments 25.6%, 0.0% and 26.0%, as compared to 40.2%, 0.0% and 7.7%, respectively. On July 31, ~~2022,~~2023, amounts due from these customers represented ~~37.4%~~42.4% of the Company’s total accounts receivable balance. This customer information is based on revenues earned from said customers at the segment level because in management’s opinion contracts by segments are totally independent of each other, and therefore such information is more meaningful to the reader.

At the global level, ~~five~~six global groups of affiliated companies accounted for 10% or more of its revenues in either of the three-month and nine-month periods ended July 31, ~~2022~~2023 and ~~2021.~~2022. During the three months ended July 31, ~~2022,~~2023, aggregate revenues from these global groups of affiliated companies were ~~15.1%~~22.1%, ~~13.1%~~11.0%, ~~9.3%~~9.9%, ~~8.2%~~14.7%, 5.0% and ~~7.3%~~5.5%, or a total of ~~53.0%~~68.2%, as compared to the same period last year for ~~19.7%~~0.0%, ~~14.2%~~13.1%, ~~10.1%~~6.6%, ~~9.9%~~7.7%, 16.9% and ~~7.4%~~10.1%, or a total of ~~61.3%~~54.4%, respectively. During the nine months ended July 31, ~~2022,~~2023, aggregate revenues from these global group of affiliated companies were ~~16.9%~~14.9%, ~~13.2%~~11.5%, ~~10.1%~~11.2%, ~~7.7%~~11.1%, 6.6% and ~~6.7%~~7.5%, or a total of ~~54.6%~~62.8%, as compared to the same period last year for ~~20.8%~~0.0%, ~~12.7%~~13.2%, ~~7.8%~~6.6%, ~~10.0%~~7.7%, 16.9% and ~~12.1%~~10.1%, or a total of ~~63.4%~~54.5%, respectively. OnFor the three months ended July 31, 2023 and 2022, these customers represented for the Puerto Rico, United States and Europe consulting reportable segments 23.0%, 8.4% and 36.8%, as compared to 43.3%, 3.4% and 7.7%, respectively. For the nine months ended July 31, 2023 and 2022, these customers represented for the Puerto Rico, United States and Europe consulting reportable segments 27.7%, 9.1% and 26.0%, as compared to 43.4%, 3.4% and 7.7%, respectively. At July 31, 2023, amounts due from these global groups of affiliated companies represented ~~41.5%~~64.6% of total accounts receivable balance.

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ITEM 2. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our results of operations and financial condition should be read in conjunction with the financial statements and the related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q. In addition, reference should be made to our audited Consolidated Financial Statements and notes thereto, and related Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in our Annual Report on Form 10-K for the year ended October 31, ~~2021.~~2022. The following discussion includes forward-looking statements. For a discussion of important factors that could cause actual results to differ from results discussed in the forward-looking statements, see “Forward Looking Statements” below and the “Risk Factors” section of our Annual Report on Form 10-K for the year ended October 31, ~~2021,~~2022, our Quarterly ~~Reports~~Report on Form 10-Q for the quarters ended January 31, ~~2022~~2023 and April 30, ~~2022,~~2023, and this Quarterly Report on Form 10-Q.

Overview

We are a compliance and technology transfer services consulting firm with headquarters in Puerto Rico, servicing the Puerto Rico, United States, Europe and Brazil markets. The compliance consulting service sector in those markets consists of local compliance and validation consulting firms, United States dedicated validation and compliance consulting firms and large publicly traded and private domestic and foreign engineering and consulting firms. We provide a broad range of ~~compliance related~~compliance-related consulting services. We market our services to pharmaceutical, chemical, biotechnology, medical devices, cosmetics and food industries, and allied products companies in Puerto Rico, the United States, Europe and Brazil. Our consulting team includes experienced engineering and life science professionals, former quality assurance managers and directors, and professionals with bachelors, masters and doctorate degrees in health sciences and engineering.

We actively operate divisions in Puerto Rico, the United States, Europe (including some managed Asian projects) and to a lesser extent Latin America, and pursue to further expand these markets by strengthening our business development infrastructure and by constantly realigning our business strategies as new opportunities and challenges arise.

We market our services with an active presence in industry trade shows, professional conventions, industry publications and company provided seminars to the industry. Our senior management is also actively involved in the marketing process, especially in marketing to major accounts. Our senior management and staff also concentrate on developing new business opportunities and focus on the larger customer accounts (by number of consultants or dollar volume) and responding to prospective customers’ requests for proposals.

We consider our core business to be Food and Drug Administration (“FDA”) and international agencies regulatory compliance consulting related services.

The Company holds a tax grant issued by the Puerto Rico Industrial Development Company (“PRIDCO”), which provides relief on various Puerto Rico taxes, including income tax, with certain limitations, for most of the activities carried on within Puerto Rico, including those that are for services to parties located outside of Puerto Rico.

The following table sets forth information as to our revenue for the three-month and nine-month periods ended July 31, ~~2022~~2023 and ~~2021,~~2022, by geographic regions (dollars in thousands).

	Three months ended July 31,								Nine months ended July 31,								Three months ended July 31,								Nine months ended July 31,
Revenues by Region:	2022				2021				2022				2021				2023				2022				2023				2022
Puerto Rico	$	2,983	62.5	%	$	3,749	75.2	%	$	9,421	63.8	%	$	10,861	74.8	%	$	2,005	43.8	%	$	2,983	62.5	%	$	6,135	45.9	%	$	9,421	63.8	%
United States		1,106	23.1	%		623	12.5	%		3,518	23.8	%		1,547	10.7	%		1,234	27.0	%		1,106	23.1	%		3,504	26.2	%		3,518	23.8	%
Europe		649	13.6	%		580	11.6	%		1,781	12.1	%		1,785	12.3	%		1,338	29.2	%		649	13.6	%		3,733	27.9	%		1,781	12.1	%
Other¹		36	0.8	%		36	0.7	%		41	0.3	%		325	2.2	%
	$	4,774	100.0	%	$	4,988	100.0	%	$	14,761	100.0	%	$	14,518	100.0	%
Other																		-	0.0	%		36	0.8	%		6	0.0	%		41	0.3	%
Total revenue																	$	4,577	100.0	%	$	4,774	100.0	%	$	13,378	100.0	%	$	14,761	100.0	%

~~_____________________________~~

For the nine-month period ended July 31, 2023, the Company’s total revenues were approximately $13.4 million, a net decrease of approximately $1.4 million when compared to the same period last year. The decrease is mainly attributable to the decrease in Puerto Rico project revenue for approximately $3.3 million, partially offset by the increase in consulting revenue in the European market for approximately $1.9 million. As described below, when compared to the same period last year, gross profit increased by 5.3 percentage points. This increase was mainly attributable to projects yielding higher margins in the European market for the nine-month period ended July 31, 2023.

~~Other segment represents a Brazilian compliance~~

~~division which falls below the reportable threshold.~~

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For the nine-month period ended July 31, 2022, the Company’s total revenues were approximately $14.8 million, a net increase of approximately $0.2 million when compared to the same period last year. The US consulting market had a revenue increase in projects of approximately $1.9 million, which was partially offset by the decrease in project revenue in the Puerto Rico and Brazilian markets of approximately $1.4 and $0.3 million, respectively. The European market sustained no major revenue change when compared to the same period last year. When compared to the same period last year, gross profit decreased by 1.0 percentage points. The net decrease in gross profit percentage points is mainly attributable to overall lower margin projects in the Puerto Rico and US markets. Selling, general and administrative expenses were approximately $2.8 million, a net decrease of approximately $0.1 million. The decline is mainly attributable to the decrease in consulting fees, non-recurring legal fees and other administrative and general expenses. Other income decreased by approximately $2.0 million, as compared to the same period last year, as the result of the forgiveness of principal and accrued interest of the SBA Loans during the nine-month period ended July 31, 2021 for approximately $2.0 million. For the nine-month period ended July 31, 2022, these factors resulted in (i) income from operations of approximately $1.0 million, or an increase of $0.1 million when compared to the same period last year, and (ii) net income of approximately $0.8 million, or a decrease of approximately $2.0 million when compared to the same period last year.

Regional or global conflicts, including ~~wars~~war or economic sanctions between nations, price inflation, the ~~COVID-19~~coronavirus pandemic, the ~~Puerto Rico government financial constraints, the~~ Tax Reform, ~~and~~ possible tax changes on jurisdictions where we do business, bio-pharmaceutical industry consolidations and the trends on managing contract resources, all pose current and future challenges which may adversely affect our future performance. We believe that our future profitability and liquidity will ~~depend~~be dependent on ~~our ability to seek service opportunities and adapt to industry trends, which are affected by variables such as~~the effect the local and global economy, including any impacts of regional or global conflicts, price inflation, ~~any impacts of~~ the coronavirus pandemic, changes in tax laws, worldwide life science manufacturing industry consolidations, operational constraints imposed by our customers due to the coronavirus pandemic and ~~resource~~resources management trends will have on our operations, and our ability to seek service opportunities and adapt to industry trends.

Results of Operations

The following table ~~that~~ sets forth our statements of operations for the three-month and nine-month periods ended July 31, ~~2022~~2023 and ~~2021~~2022 (dollars in thousands, and as a percentage of revenues):

	Three months ended July 31,										Nine months ended July 31,									Three months ended July 31,									Nine months ended July 31,
	2022					2021					2022					2021				2023				2022					2023				2022
Revenues	$	4,774		100.0	%	$	4,988		100.0	%	$	14,761		100.0	%	$	14,518	100.0	%	$	4,577	100.0	%	$	4,774		100.0	%	$	13,378	100.0	%	$	14,761		100.0	%
Cost of services		3,462		72.5	%		3,733		74.8	%		10,988		74.4	%		10,657	73.4	%		3,027	66.1	%		3,462		72.5	%		9,242	69.1	%		10,988		74.4	%
Gross profit		1,312		27.5	%		1,255		25.2	%		3,773		25.6	%		3,861	26.6	%		1,550	33.9	%		1,312		27.5	%		4,136	30.9	%		3,773		25.6	%
Selling, general and administrative expenses		943		19.8	%		895		17.9	%		2,767		18.8	%		2,917	20.1	%		1,090	23.8	%		943		19.8	%		2,967	22.2	%		2,767		18.8	%
Other income (expense), net		(53	)	-1.1	%		1,953		39.1	%		(49	)	-0.3	%		1,976	13.6	%		127	2.7	%		(53	)	-1.1	%		566	4.2	%		(49	)	-0.3	%
Income before income taxes		316		6.6	%		2,313	46..4		%		957		6.5	%		2,920	20.1	%
Income before income tax																					587	12.8	%		316		6.6	%		1,735	12.9	%		957		6.5	%
Income tax expense		28		0.6	%		38		0.8	%		124		0.8	%		137	0.9	%		61	1.3	%		28		0.6	%		378	2.8	%		124		0.8	%
Net income		288		6.0	%		2,275		45.6	%		833		5.6	%		2,783	19.2	%		526	11.5	%		288		6.0	%		1,357	10.1	%		833		5.6	%

Revenues. Revenues for the three and nine months ended July 31, ~~2022~~2023 were ~~$4.8~~$4.6 and ~~$14.8~~$13.4 million, respectively.

For the three months ended July 31, ~~2022,~~2023, this represents a net decrease of approximately $0.2 million when compared to the same period last year. The decrease is mainly attributable to a decrease in projects in the Puerto Rico market ~~for~~of approximately ~~$0.8~~$1.0 million, partially offset by the increase in project revenue in the USEuropean and ~~European~~United States markets of approximately ~~$0.5~~$0.7 and $0.1 million, respectively. The Brazilian market sustained no ~~significant~~major revenue change when compared to the same period last year.

For the nine months ended July 31, ~~2022,~~2023, project revenue ~~increased~~decreased by ~~$0.2~~$1.4 million when compared to the same period last year. The ~~increase~~decrease is mainly attributable ~~tothe increase~~to the decrease in USPuerto Rico project revenue ~~for~~of approximately ~~$1.9~~$3.3 million, partially offset by the ~~decreases~~increase in consulting ~~revenues~~revenue in the ~~Puerto Rico~~European market for approximately $1.9 million. The United States and Brazilian markets ~~for approximately $1.4 and $0.3 million, respectively. The European market~~ sustained no ~~significant~~major revenue change when compared to the same period last year.

Cost of Services; Gross ~~profit~~Profit. Cost of services for the three ~~months ended July 31, 2022 was $3.5 million, a decrease of $0.3 million when compared to same period last year. For the~~and nine months ended July 31, ~~2022 cost~~2023 were $3.0 and $9.2 million, respectively, a decrease of ~~services was $11.0 million, an increase of $0.3~~$0.4 and $1.7 million, when compared to the same ~~period~~periods last ~~year.~~

year, respectively. Gross profit for the three and nine months ended July 31, ~~2022~~2023 increased by ~~2.3~~6.4 and 5.3 percentage points, respectively, when compared to the same ~~period~~periods last year. The ~~increase is mostly attributable to higher margin projects in the European and Puerto Rico markets.~~

~~For the nine months ended July 31, 2022, gross profit reflects a~~ net ~~decrease of 1.0 percentage point. The net decrease~~improvement in gross profit percentage points is mainly attributable to ~~overall lower margin~~ projects yielding higher margins in the ~~Puerto Rico~~European market for the three-month and ~~US markets.~~nine-month periods ended July 31, 2023.

~~Table of Contents~~

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three and nine months ended July 31, ~~2022~~2023 were ~~$0.9~~approximately $1.1 and ~~$2.8~~$3.0 million, ~~respectively. When~~respectively, an increase of $0.1 and $0.2 million when compared to the same periods last year, ~~there was no significant change for the three-month period ended July 31, 2022, while the nine-month period ended July 31, 2022 had a decrease of $0.1 million. This net decline~~respectively. The increase is ~~mainly~~mostly attributable to investments on industry and employee activities aimed to solidify our business and human capital position, plus the ~~decrease~~overall increase in ~~consulting fees, non-recurring legal fees and other administrative and general expenses.~~expenses which support our operations.

Other Income (Expense), ~~net~~Net. Other income, ~~(expense)~~net for the three and nine months ended July 31, ~~2022 resulted in a net expense of~~2023 were approximately ~~$54,000~~$0.1 and ~~$49,000, respectively, when compared to the same periods last year, this represents a decrease of approximately $2.0~~$0.6 million, ~~for both periods.~~respectively. The ~~net decrease is mainly~~balances are mostly attributable to $0.1 and $0.4 million of interest income for the ~~forgiveness of principal~~three and ~~accrued interest of the SBA Loans during the three-month and nine-month periods~~nine months ended July 31, ~~2021~~2023, respectively, and $0.2 million from the settlement of ~~approximately $2.0 million.~~foreign exchange rates on intercompany balances for the nine-month period ended July 31, 2023.

Net Income. Net income for the ~~three-months~~three and ~~nine-months periods~~nine months ended July 31, ~~2022 was~~2023 were approximately ~~$0.3~~$0.5 and ~~$0.8~~$1.4 million, respectively, ~~or a decrease for both periods~~an increase of ~~$2.0~~approximately $0.2 and $0.5 million when compared to the same periods last ~~year. The decrease is due to the forgiveness of principal and accrued interest of the SBA Loans during the three-month and nine-month periods ended July 31, 2021 of approximately $2.0 million.~~year, respectively.

For the three and nine months ended July 31, ~~2022,~~2023, net income per common share for both basic and diluted were ~~$0.013~~$0.023 and ~~$0.036,~~$0.059, respectively, ~~or a per share decrease~~an increase of ~~$0.085~~$0.010 and ~~$0.084~~$0.023 when compared to the same periods last year, respectively. The decrease is mainly the result of the forgiveness of principal and accrued interest of the SBA Loans during the three-month and nine-month periods ended July 31, 2021 of approximately $2.0 million.

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Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential cash requirements, including planned capital expenditures. As of July 31, ~~2022,~~2023, the Company had approximately ~~$17.4~~$17.3 million in working capital.

On June 13, 2014, the Board of Directors of the Company authorized the Company to repurchase up to two million shares of its common stock (the “Repurchase Program”). The Repurchase Program does not have an expiration date. During the nine-month period ended July 31, ~~2022,~~2023, the Company repurchased ~~81,303~~34,600 shares of its common stock. As of July 31, ~~2022,~~2023, the Company has ~~1,551,943~~1,514,343 shares of common stock available for future repurchases under the Repurchase Program.

Our primary cash needs consist of the payment of compensation to our consulting team, overhead expenses, and statutory taxes. Additionally, we may use cash for the repurchase of our common stock under the Repurchase Program, capital expenditures and business development expenses. Management believes that based on the current level of working capital, operations and cash flows from operations, and the collectability of high-quality customer receivables are sufficient to fund anticipated expenses and satisfy other possible long-term contractual commitments.

To the extent that we pursue possible opportunities to expand our operations, either by acquisition or by the establishment of operations in a new market, we will incur additional overhead, and there may be a delay between the period we commence operations and our generation of net cash flow from operations.

While uncertainties relating to the current local and global economic condition, competition, the industries and geographical regions served by us and other regulatory matters exist within the consulting services industry, as described above, management is not aware of any other trends or events likely to have a material adverse effect on liquidity or its financial statements.

Off-Balance Sheet Arrangements

We were not involved in any significant off-balance sheet arrangement during the nine months ended July 31, ~~2022.~~2023.

Critical Accounting Policies and Estimates

There were no material changes during the nine months ended July 31, ~~2022~~2023 to the critical accounting policies reported in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2021.~~2022.

New Accounting Pronouncements

There were no new accounting standards issued since our filing of the Annual Report on Form 10-K for the fiscal year ended October 31, ~~2021,~~2022, which could have a significant effect on our condensed consolidated financial statements.

~~Table of Contents~~

Forward-Looking Statements

Our business, financial condition, results of operations, cash flows and prospects, and the prevailing market price and performance of our common stock, may be adversely affected by a number of factors, including but not limited to, the factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended October 31, ~~2021,~~2022, our Quarterly Reports on Form 10-Q for the quarters ended January 31, ~~2022~~2023 and April 30, ~~2022,~~2023, and this Quarterly Report on Form 10-Q. Certain statements and information set forth in this Quarterly Report on Form 10-Q, as well as other written or oral statements made from time to time by us or by our authorized executive officers on our behalf, constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These statements include all statements other than those made solely with respect to historical fact and identified by words such as “believes”, “anticipates”, “expects”, “intends” and similar expressions, but such words are not the exclusive means of identifying such statements. We intend for our forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we set forth this statement and these risk factors in order to comply with such safe harbor provisions. You should note that our forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q or when made and we undertake no duty or obligation to update or revise our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Although we believe that the expectations, plans, intentions and projections reflected in our forward-looking statements are reasonable, such statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The risks, uncertainties and other factors that our stockholders and prospective investors should consider include, but are not limited to, those set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended October 31, ~~2021,~~2022, our Quarterly Reports on Form 10-Q for the ~~quarters~~quarter ended January 31, ~~2022~~2023 and April 30, ~~2022,~~2023, and this Quarterly Report on Form ~~10-Q.~~10-Q .

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ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report.

Changes in Internal Control Over Financial Reporting

Based on an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, there has been no change in our internal control over financial reporting during our last fiscal quarter identified in connection with that evaluation that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II– OTHER INFORMATION

ITEM 1. LEGAL ~~PROCEEDINGS.~~PROCEEDINGS.

From time to time, we may be a party to legal proceedings incidental to our business. Currently, there are no proceedings threatened or pending against us, which, if determined adversely to us, would have a material effect on our financial position or results of operations and cash flows.

On March 15, 2023, the Company’s subsidiaries Pharma-Bio Serv PR, Inc., Pharma Serv, Inc. and Scienza Labs, Inc., filed a complaint against Romark Global Pharma, LLC, Romark Properties, LLC, Romark Biosciences, LLC and Romark Holdings, LLC (collectively, “Romark”) with the Commonwealth of Puerto Rico Court of First Instance San Juan Superior Section. The complaint sets forth a breach of contract by Romark for lack of payment of $5,246,782 for services rendered by the Company’s subsidiaries, plus interest pursuant to the specific terms of the agreements signed between the parties. On April 26, 2023, the Company’s subsidiaries requested from the Court an entry of default against Romark for the full amount owed to the Company’s subsidiaries. On April 27, 2023, the Court granted such request and made the entry of default against Romark, which default was granted following Romark’s failure to timely answer the complaint. We are currently pursuing collection from Romark. However, we cannot guarantee a successful outcome in collecting any of the funds owed to the Company's subsidiaries.

ITEM 1A. RISK FACTORS.

There have been no material changes to the risk factors included in our Annual Report on Form 10-K for the year ended October ~~31, 2021, except as set forth in our Quarterly Report on Form 10-Q for the quarter ended January~~ 31, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(c) The following table provides information about purchases by the Company of its shares of common stock during the three-month period ended July 31, ~~2022:~~2023:

Period

Total Number
of Shares
Purchased

Average
Price Paid per Share

Total
Number of Shares
Purchased as
Part of Publicly
Announced Plans or Programs (1)

Maximum
Number of Shares
that May Yet Be
Purchased Under the Plans or
Programs (1)

May 1, 2022 through May 31, 2022

400

$ 0.95

400

1,561,943

June 1, 2022 through June 30, 2022

8,200

0.91

8,200

1,553,743

July 1, 2022 through July 31, 2022

1,800

0.84

1,800

1,551,943

Total

10,400

$ 0.90

10,400

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
May 1, 2023 through May 31, 2023		3,300	$	1.03		3,300		1,516,143
June 1, 2023 through June 30, 2023		1,400	$	0.93		1,400		1,514,743
July 1, 2023 through July 31, 2023		400	$	0.98		400		1,514,343
Total		5,100	$	1.00		5,100

(1)

On June 16, 2014, the Company announced that the Board of Directors of the Company approved the Repurchase Program authorizing the Company to repurchase up to two million shares of its outstanding common stock. The timing, manner, price and amount of any repurchases under the Repurchase Program will be at the discretion of the Company, subject to the requirements of the Securities Exchange Act of 1934, as amended, and related rules. The Repurchase Program does not oblige the Company to repurchase any shares and it may be modified, suspended or terminated at any time and for any reason. The Repurchase Program has no expiration date. No shares will be repurchased under the Repurchase Program directly from directors or officers of the Company.

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ITEM 6. EXHIBITS.

(a) Exhibits:

31.1		Certification of chief executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of chief financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of the chief executive officer and chief financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase
104		Cover page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

~~———————~~_______________

*	Furnished herewith.

19-20-

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PHARMA-BIO SERV, INC.

	/s/ Victor Sanchez
	Victor Sanchez
	Chief Executive Officer and President Europe Operations
	(Principal Executive Officer)

	/s/ Pedro J. Lasanta
	Pedro J. Lasanta
	Chief Financial Officer, Vice President Finance and Administration, and Secretary
	(Principal Financial Officer and Principal Accounting Officer)

Dated: September 14, ~~2022~~2023

20-21-

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
May 1, 2022 through May 31, 2022		400	$	0.95		400		1,561,943
June 1, 2022 through June 30, 2022		8,200		0.91		8,200		1,553,743
July 1, 2022 through July 31, 2022		1,800		0.84		1,800		1,551,943
Total		10,400	$	0.90		10,400