**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB**





**(Mark
      One)**





x  **Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act
      of 1934**





**For
      the quarterly period ended**  **March
      31, 2007**  **or**





o  **Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act
      of 1934**





**For
      the transition period from _____________ to _____________**





**Commission
      file number**  **0-21615**




**PRESSURE
      BIOSCIENCES, INC.**


(Exact
      Name of Small Business Issuer as Specified in its Charter)




**Massachusetts**
            
            **04-2652826**(State
                or Other Jurisdiction of
            
            (I.R.S.
                EmployerIncorporation
                or Organization)
            
            Identification
                No.)





**321
                Manley St.****West
                Bridgewater, Massachusetts**
            
            **02379-1040**(Address
                of Principal Executive Offices)
            
            (Zip
                Code)





**(508)
      580-1818**


(Issuer’s
      telephone number, including area code




Check
      whether the Issuer: (1) has filed all reports required to be filed by Section
      13
      or 15(d) of the Exchange Act of 1934 during the past 12 months (or for 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.




x Yes o No




Indicate
      by check mark whether the registrant is a shell company (as defined in Exchange
      Act Rule 12b-2).




o Yes x No




The
      number of shares outstanding of the Issuer’s common stock as of May 14, 2007 was
      2,065,425.




Transitional
      Small Business Disclosure Format (check one):


o Yes x No









TABLE
      OF
      CONTENTS




PagePART
                I - FINANCIAL INFORMATIONItem
                1. Financial StatementsConsolidated
                Balance Sheets as of March 31, 2007 (Unaudited) and December 31,
                2006
            
            3Consolidated
                Statements of Operations for the Three Months Ended March 31, 2007
                and
                2006 (Unaudited)
            
            4Consolidated
                Statements of Comprehensive Loss for the Three Months Ended March
                31, 2007
                and 2006 (Unaudited)
            
            5Consolidated
                Statements of Cash Flows for the Three Months Ended March 31, 2007
                and
                2006 (Unaudited)
            
            6Notes
                to Consolidated Financial Statements as of March 31, 2007
                (Unaudited)
            
            7Item
                2. Management's Discussion and Analysis or Plan of
                Operation
            
            14Item
                3. and Item 3A(T). Controls and Procedures
            
            20PART
                II - OTHER INFORMATIONItem
                6. Exhibits
            
            22





-2-


**PART
      I.   FINANCIAL INFORMATION**


**Item
      1. Financial Statements**





**PRESSURE
      BIOSCIENCES, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEETS**


**March
                  31,**
              
              **December
                  31,**ASSETS
              
              **2007**
              
              **2006****(unaudited)**CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              4,836,656
              
              $
              5,335,282Accounts
                  receivable
              
              
              131,106
              
              
              37,495Inventories
              
              
              69,860
              
              
              19,658Investments
                  in marketable securities
              
              
              1,634,084
              
              
              2,060,875Prepaid
                  income taxes
              
              
              49,487
              
              
              38,687Income
                  tax receivable
              
              
              750,532
              
              
              710,013Prepaid
                  expenses, deposits, and other current assets
              
              
              472,959
              
              
              246,776Total
                  current assets
              
              
              7,944,684
              
              
              8,448,786PROPERTY
                  AND EQUIPMENT, NET
              
              
              214,054
              
              
              207,696OTHER
                  ASSETSIntangible
                  assets, net
              
              
              364,764
              
              
              376,922Assets
                  transferred under contractual arrangements
              
              
              1,420,996
              
              
              1,420,996Total
                  other assets
              
              
              1,785,760
              
              
              1,797,918TOTAL
                  ASSETS
              
              $
              9,944,498
              
              $
              10,454,400LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              296,366
              
              $
              174,289Accrued
                  employee compensation
              
              
              170,128
              
              
              242,497Other
                  accrued expenses
              
              
              160,900
              
              
              150,978Income
                  taxes payable
              
              
              45,962
              
              
              45,962Deferred
                  tax liability
              
              
              546,610
              
              
              669,520Deferred
                  revenue
              
              
              6,288
              
              
              4,099Total
                  current liabilities
              
              
              1,226,254
              
              
              1,287,345LONG
                  TERM LIABILITIESDeferred
                  revenue
              
              
              10,558
              
              
              9,126Liabilities
                  transferred under contractual arrangements
              
              
              1,420,996
              
              
              1,042,493Total
                  long term liabilities
              
              
              1,431,554
              
              
              1,051,619TOTAL
                  LIABILITIES
              
              
              2,657,808
              
              
              2,338,964COMMITMENTS
                  (Note 7)STOCKHOLDERS'
                  EQUITYCommon
                  stock, $.01 par value; 20,000,000 shares authorized;2,065,425
                  shares issued and outstanding
              
              
              20,654
              
              
              20,654Additional
                  paid-in capital
              
              
              5,459,398
              
              
              5,347,641Accumulated
                  other comprehensive income
              
              
              1,082,459
              
              
              1,384,876Retained
                  earnings
              
              
              724,179
              
              
              1,362,265Total
                  stockholders' equity
              
              
              7,286,690
              
              
              8,115,436TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              9,944,498
              
              $
              10,454,400


The
      accompanying notes are an integral part of these consolidated financial
      statements


-3-





**PRESSURE
      BIOSCIENCES, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(UNAUDITED)**


**For
                  the Three Months Ended****March
                  31,****2007**
              
              **2006**REVENUE:PCT
                  Products, services, other
              
              $
              37,943
              
              $
              53,414Grant
                  revenue
              
              
              93,678
              
              
              -Total
                  revenue
              
              
              131,621
              
              
              53,414COSTS
                  AND EXPENSES:Cost
                  of PCT products and services
              
              
              31,654
              
              
              51,546Research
                  and development
              
              
              461,532
              
              
              258,819Selling
                  and marketing
              
              
              256,530
              
              
              67,379General
                  and administrative
              
              
              481,082
              
              
              689,626Total
                  operating costs and expenses
              
              
              1,230,798
              
              
              1,067,370Operating
                  loss
              
              
              (1,099,177
              )
              
              (1,013,956
              )OTHER
                  INCOME (EXPENSE):Realized
                  gain on securities available for sale
              
              
              727,473
              
              
              517,938Other
                  operating, net
              
              
              (378,503
              )
              
              -Interest
                  income
              
              
              71,602
              
              
              108,506Total
                  other income
              
              
              420,572
              
              
              626,444Loss
                  before income taxes
              
              
              (678,605
              )
              
              (387,512
              )Income
                  tax benefit
              
              
              40,519
              
              
              77,478Net
                  loss
              
              
              (638,086
              )
              
              (310,034
              )Net
                  loss per share - basic and diluted
              
              $
              (0.31
              )
              $
              (0.13
              )Weighted
                  average number of shares used to calculate net loss per share -
                  basic and
                  diluted
              
              
              2,065,425
              
              
              2,424,189




The
      accompanying notes are an integral part of these consolidated financial
      statements




-4-





**PRESSURE
      BIOSCIENCES, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF COMPREHENSIVE LOSS**


**(UNAUDITED** )


**For
                  the Three Months Ended****March
                  31,**Other
                  Comprehensive Loss
              
              **2007**
              
              **2006**Net
                  loss
              
              $
              (638,086
              )
              $
              (310,034
              )Holding
                  gain
              
              
              302,146
              
              
              438,354Reclassification
                  of unrealized gain to realized gain on securities during the
                  period
              
              
              (727,473
              )
              
              (517,938
              )Unrealized
                  loss on marketable securities
              
              
              (425,327
              )
              
              (79,584
              )Income
                  tax benefit related to itemsother
                  comprehensive loss
              
              
              122,910
              
              
              16,998Total
                  other comprehensive loss, net of taxes
              
              
              (302,417
              )
              
              (62,586
              )Comprehensive
                  loss
              
              $
              (940,503
              )
              $
              (372,620
              )




The
      accompanying notes are an integral part of these consolidated financial
      statements




-5-





**PRESSURE
      BIOSCIENCES, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**




**For
                  the Three Months Ended****March
                  31,****2007**
              
              **2006**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (638,086
              )
              $
              (310,034
              )Adjustments
                  to reconcile loss to net cash used in operating
                  activities:Depreciation
                  and amortization
              
              
              35,478
              
              
              33,843Non-cash,
                  stock-based, compensation expense
              
              
              111,757
              
              
              203,456Loss
                  recognized from Source Scientific, LLC
              
              
              378,503
              
              
              -Realized
                  gain on sale of marketable securities
              
              
              (727,473
              )
              
              (517,938
              )Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              (93,611
              )
              
              12,621Inventories
              
              
              (50,202
              )
              
              6,749Income
                  tax receivable
              
              
              (40,519
              )
              
              244,645Prepaid
                  income taxes
              
              
              (10,800
              )
              
              (70,000
              )Prepaid
                  expenses, deposits and other current assets
              
              
              (226,183
              )
              
              (5,818
              )Accounts
                  payable
              
              
              122,077
              
              
              64,144Accrued
                  employee compensation
              
              
              (72,369
              )
              
              157,211Other
                  accrued expenses
              
              
              9,922
              
              
              62,807Deferred
                  revenue
              
              
              3,621
              
              
              -Income
                  taxes payable
              
              
              -
              
              
              20,491Deferred
                  tax liability
              
              
              -
              
              
              (219,949
              )Net
                  cash used in operating activities
              
              
              (1,197,885
              )
              
              (317,772
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Payments
                  for additions to property and equipment
              
              
              (29,679
              )
              
              (2,155
              )Proceeds
                  from sale of marketable securities
              
              
              728,938
              
              
              518,463Net
                  cash provided by investing activities
              
              
              699,259
              
              
              516,308CASH
                  FLOW FROM DISCONTINUED OPERATIONS:Cash
                  flows from investing activities
              
              
              -
              
              
              1,116,819Net
                  cash provided by discontinued operations
              
              
              -
              
              
              1,116,819CHANGE
                  IN CASH AND CASH EQUIVALENTS:
              
              
              (498,626
              )
              
              1,315,355Cash
                  and cash equivalents, beginning of period
              
              
              5,335,282
              
              
              6,416,772Cash
                  and cash equivalents, end of period
              
              $
              4,836,656
              
              $
              7,732,127SUPPLEMENTAL
                  INFORMATION:Income
                  Taxes Paid
              
              $
              10,800
              
              $
              71,504




The
      accompanying notes are an integral part of these consolidated financial
      statements




-6-




**PRESSURE
      BIOSCIENCES, INC., AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**AS
      OF MARCH 31, 2007**





**1)**
            **Organization
                and Business
                Activities**





Pressure
      BioSciences, Inc. (“PBI”) is an early-stage company focused on the development
      and commercialization of a novel, enabling, platform technology called Pressure
      Cycling Technology (“PCT”). PCT uses cycles of hydrostatic pressure between
      ambient and ultra-high levels (up to 35,000 psi and greater) to control
      bio-molecular interactions. PBI currently holds 13 US and 5 foreign patents
      covering multiple applications of PCT in the life sciences field, including
      in
      such areas as genomic and proteomic sample preparation, pathogen inactivation,
      the control of enzymes, immunodiagnostics, and protein
      purification.




**2)**
            **Interim
                Financial Reporting**





The
      accompanying unaudited consolidated financial statements of Pressure
      BioSciences, Inc. have been prepared in accordance with generally accepted
      accounting principles for interim financial information and with the
      instructions to Form 10-QSB. Accordingly, they do not include all of the
      information and footnotes required by generally accepted accounting principles
      for complete financial statements. In the opinion of management, all adjustments
      (consisting of only normal recurring adjustments) considered necessary for
      a
      fair presentation have been included. Operating results for the three months
      ended March 31, 2007 are not necessarily indicative of the results that may
      be
      expected for the year ending December 31, 2007. For further information, refer
      to the audited consolidated financial statements and footnotes thereto included
      in the Company’s Annual Report on Form 10-KSB, (the “Form 10-KSB”) for the
      fiscal year ended December 31, 2006.




**3)**
            **Summary
                of Significant Accounting
                Policies**




*Principles
      of Consolidation*




The
      consolidated financial statements include the accounts of Pressure BioSciences,
      Inc., and its wholly-owned subsidiaries, PBI Biotech Research Laboratories,
      Inc., PBI Source Scientific, Inc., and PBI BioSeq, Inc.




*Use
      of Estimates*




To
      prepare our consolidated financial statements in conformity with generally
      accepted accounting principles, we are required to make significant estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. In addition, significant estimates were made in projecting
      future cash flows to quantify impairment of assets, deferred tax assets, the
      costs associated with fulfilling our warranty obligations for the instruments
      that we sell, and the estimates employed in our calculation of fair value of
      stock options awarded. We base our estimates on historical experience and on
      various other assumptions that we believe to be reasonable under the
      circumstances, the results of which form the basis for making judgments about
      the carrying values of assets and liabilities that are not readily apparent
      from
      other sources. Actual results could differ from the estimates and assumptions
      used.




*Revenue
      Recognition*





We
      recognize revenue in accordance with the Securities and Exchange Commission’s
      (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, *Revenue
      Recognition* ("SAB
      104"). Revenue is recognized when realized or earned when all the following
      criteria have been met: persuasive evidence of an arrangement exists; delivery
      has occurred and risk of loss has passed; the seller’s price to the buyer is
      fixed or determinable; and collectibility is reasonably assured.





Our
      current instrument, the Barocycler NEP3229 requires a basic level of
      instrumentation expertise to set-up for initial operation. In order to support
      a
      favorable first experience for our customers, we send a technical representative
      to the customer site to “commission **”** every
      NEP3229 that we sell. The “commissioning” process includes uncrating and setting
      up the instrument and delivering an introductory user training course. Product
      revenue related to current Barocycler instrumentation is generally recognized
      upon the “commissioning” of our instrumentation at the customer location.
      Product revenue related to disposable PULSE Tubes is recorded upon shipment
      through a common carrier.






-7-


**PRESSURE
        BIOSCIENCES, INC., AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF MARCH 31, 2007**


In
      accordance with the Financial Accounting Standards Board (“FASB”) Statement of
      Financial Accounting Standards (“SFAS”) No. 13, *“Accounting
      for Leases”* ,
      we
      account for our lease agreements under the operating method. We record revenue
      over the life of the lease term and we record depreciation expense on a
      straight-line basis over the thirty-six month estimated useful life of the
      Barocycler instrument. The depreciation expense associated with assets under
      lease agreement is included in the “Cost of PCT products and services” line item
      in our Consolidated Statements of Operations. We pay all maintenance costs
      associated with the instrument during the term of the leases.





Revenue
      from government grants is recorded when expenses are incurred under the grant
      in
      accordance with the terms of the grant award.





Revenue
      from extended service contracts is recorded over the life of the contracts.





*Cash
      and Cash Equivalents*




Our
      policy is to invest available cash in short-term, investment grade,
      interest-bearing obligations, including money market funds, and bank and
      corporate debt instruments. Securities purchased with initial maturities of
      three months or less are valued at cost plus accrued interest, which
      approximates fair market value, and are classified as cash
      equivalents.





*Computation
      of Loss per Share*




Basic
      loss per share is computed by dividing loss available to common shareholders
      by
      the weighted average number of common shares outstanding. Diluted earnings
      per
      share is computed by dividing loss available to common shareholders by the
      weighted average number of common shares outstanding plus additional common
      shares that would have been outstanding if dilutive potential common shares
      had
      been issued. For purposes of this calculation, stock options are considered
      common stock equivalents in periods in which they have a dilutive effect. Stock
      options that are anti-dilutive are excluded from this calculation.




Potentially
      dilutive securities having a net effect of 139,972 shares were excluded from
      the
      calculation for the three months ended March 31, 2007. Potentially dilutive
      securities having a net effect of 177,879 shares were excluded from the
      calculation for the three months ended March 31, 2006.




*Accounting
      for Stock-Based Compensation*




On
      January 1, 2006, we adopted SFAS No. 123 (revised 2004), *“Share-Based
      Payment”* ,
      or SFAS
      123R, and its related implementation guidance as promulgated by both the
      Financial Accounting Standards Board (the “FASB”), and the Securities and
      Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 107, or SAB
      107, associated with the accounting for stock-based compensation arrangements
      of
      our employees and directors. These pronouncements require that equity-based
      compensation cost be measured at the grant date (based upon an estimate of
      the
      fair value of the compensation granted) and recorded to expense over the
      requisite service period, which generally is the vesting period.




We
      estimate the fair value of equity-based compensation utilizing the Black-Scholes
      option pricing model. This model requires the input of several factors such
      as
      the expected option term, expected volatility of our stock price over the
      expected term, expected risk-free interest rate over the expected option term,
      expected dividend yield rate over the expected option term, and an estimate
      of
      expected forfeiture rates, and is subject to various assumptions. We believe
      this valuation methodology is appropriate for estimating the fair value of
      stock
      options granted to employees and directors which are subject to SFAS 123R
      requirements. These amounts are estimates and thus may not be reflective of
      actual future results, nor amounts ultimately realized by recipients of these
      grants. These amounts, and the amounts applicable to future quarters, are also
      subject to future quarterly adjustments based upon a variety of factors. The
      following table summarizes the assumptions we have utilized for grants of stock
      options from which we incurred compensation expense during the three months
      ended March 31, 2007 and March 31, 2006:




Assumptions
              
              Outside
                  Board Members
              
              CEO
                  and other Officers & EmployeesExpected
                  Life
              
              
              5.0
              
              
              6.0Expected
                  Volatility
              
              
              74.6%
                  - 77.9%
              
              
              88.2%
                  - 92.5%Risk-Free
                  Interest Rate
              
              
              4.94%
              
              
              4.94%Expected
                  Dividend Yield
              
              
              0.0%
              
              
              0.0%







-8-




**PRESSURE
        BIOSCIENCES, INC., AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF MARCH 31, 2007**




We
      developed the above referenced assumptions based on the following rationale.
      We
      utilized the simplified method provided by SAB No. 107 to develop our estimate
      of expected term of the stock options granted. Under this method, stock options
      granted to outside board members are estimated to have an expected term of
      5
      years and stock options granted to our CEO and all other officers and employees
      are estimated to have an expected term of 6 years. All stock options granted
      have a 10 year contractual life. The stock options granted to outside directors
      vest immediately and the stock options granted to the CEO and all other officers
      and employees vest annually, on an equal basis over three years. SAB 107
      provides a simplified approach to developing the estimate of expected term
      based
      on the average of the midpoint of the vesting period and the contractual life.
      The expected volatility is assumed to approximate the historical volatility
      that
      was observed during the corresponding expected term for each sub-group of option
      recipients. The risk-free interest rate is a weighted average approximation
      based on the U.S. Treasury yields in effect at the time of the grants. We used
      a
      dividend yield of zero for the calculation because we have never paid cash
      dividends and we have no intention to begin paying dividends in the foreseeable
      future. While we believe these estimates are reasonable, the compensation
      expense recorded would increase if the assumed expected term was increased
      or a
      higher expected volatility was used.





We
      recognized stock-based compensation expense of $111,757 for the three months
      ended March 31, 2007 and $203,456 for the three months ended March 31, 2006.
      The
      following table summarizes the effect of this stock-based compensation expense
      within our Consolidated Statement of Operations for both periods:


For
                  the Three Months EndedMarch
                  31,2007
              
              2006Cost
                  of PCT products and services
              
              $
              2,620
              
              $
              2,094Research
                  and development
              
              
              49,494
              
              
              22,475Selling
                  and marketing
              
              
              15,995
              
              
              7,888General
                  and administrative
              
              
              43,648
              
              
              170,999Total
                  stock-based compensation expense
              
              $
              111,757
              
              $
              203,456





The
      provisions of SFAS 123R require that we make an estimate of our forfeiture
      rate
      and adjust the expense that we recognize to reflect the estimated number of
      stock options that will go unexercised. We estimate that our forfeiture rate
      will approximate 5% for the foreseeable future. As our workforce expands and
      our
      business matures we will continue to monitor this rate and consider adjusting
      our estimate if we feel it is appropriate to do so. The stock option expense
      recognized for the three months ended March 31, 2007 reflects our estimated
      forfeiture rate of 5%.





As
      of
      March 31, 2007, the total estimated fair value of unvested stock options to
      be
      amortized over their remaining vesting period was $952,715.





*Accounting
      for Income Taxes*





Effective
      January 1, 2007, we adopted the provisions of FASB Interpretation
      No. 48, “A *ccounting
      for Uncertainty in Income Taxes - an Interpretation of FASB Statement
      No. 109”* (FIN
      48). This interpretation clarifies the accounting for uncertainty in income
      taxes by prescribing a minimum recognition threshold for a tax position taken
      or
      expected to be taken in a tax return that is required to be met before being
      recognized in the financial statements. FIN 48 also provides guidance on
      de-recognition, measurement, classification, interest and penalties, accounting
      in interim periods, disclosure and transition.




-9-




**PRESSURE
        BIOSCIENCES, INC., AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF MARCH 31, 2007**




In
      accordance with FIN 48, we have analyzed filing positions in all of the federal,
      state, and other jurisdictions where we are required to file income tax returns,
      as well as all open tax years in these jurisdictions. The periods subject to
      examination for all federal, state and other jurisdictions are the 2003 through
      2005 tax years. We do not believe there are any tax positions that would
      increase within the next twelve-month period. Therefore, no reserves for
      uncertain income tax positions have been recorded and we did not record a
      cumulative effect adjustment related to the adoption of FIN 48.





*Fair
      Value Measurements*





In
      September 2006, FASB issued SFAS 157, *“Fair
      Value Measurements”* .
      SFAS
      No. 157 establishes a formal framework for measuring fair value under GAAP
      and
      expands on disclosure of fair value measurements. Although SFAS No. 157 applies
      to and amends the provisions of existing FASB and AICPA pronouncements, it
      does
      not, of itself, require any new fair value measurements, nor does it establish
      valuation standards. SFAS No. 157 applies to all other accounting pronouncements
      requiring or permitting fair value measurements, except for; SFAS No. 123R,
      share based payment and related pronouncements, the practicability exceptions
      to
      fair value determinations allowed by various other authoritative pronouncements,
      and AICPA Statements of Position 97-2 and 98-9 that deal with software revenue
      recognition. This statement is effective for financial statements issued for
      fiscal years beginning after November 15, 2007, and interim periods within
      those
      fiscal years.





*Effects
      of Prior Year Misstatements*





In
      September 2006, the SEC staff released Staff Accounting Bulletin No. 108, *"Considering
      the Effects of Prior Year Misstatements When Quantifying Misstatements in
      Current Year Financial Statements,"* or SAB
      108.  SAB 108 provides for a "one-time" special transition provision for
      correcting certain prior year misstatements that were uncorrected as of the
      beginning of the fiscal year of adoption. SAB 108 permits existing public
      companies to initially apply its provisions either by (i) restating prior
      financial statements as if the dual approach had always been used or (ii)
      recording the cumulative effect of initially applying the dual approach as
      adjustments recorded to the opening balance of retained earnings.  SAB 108
      is effective for fiscal years ending after November 15, 2006.  The adoption
      of SAB 108 did not have a material impact on our consolidated financial
      statements.





**4)**
            **Investment
                in Marketable
                Securities**





As
      of
      March 31, 2007, we held 352,934 shares of common stock of Panacos
      Pharmaceuticals Inc. (“Panacos”), a publicly traded company listed on the NASDAQ
      Global Market. We account for this investment in accordance with SFAS 115 *“Accounting
      for Certain Investments in Debt and Equity Securities”* as
      securities available for sale. On March 31, 2007, our balance sheet reflected
      the fair value of our investment in Panacos to be approximately $1.6 million,
      based on the closing price of Panacos shares of $4.63 per share on that day.
      The
      carrying value of our investment in Panacos common stock held will change from
      period to period based on the closing price of the common stock of Panacos,
      and
      the number of shares we hold, as of the balance sheet date. This change in
      market value will be recorded by us on a quarterly basis in Comprehensive Income
      or Loss.




**5)**
            **Assets
                and Liabilities Transferred Under Contractual
                Arrangements**




In
      June 2004, we transferred certain assets and liabilities of our PBI Source
      Scientific, Inc. subsidiary to a newly formed limited liability company
      known as Source Scientific, LLC. At the time of the transfer, we owned 100%
      of
      the ownership interests of Source Scientific, LLC. We subsequently sold 70%
      of
      our ownership interests of Source Scientific, LLC to Mr. Richard Henson and
      Mr. Bruce A. Sargeant pursuant to a purchase agreement (the “Source
      Scientific Agreement”). As a result of the sale of 70% of our ownership
      interests, Mr. Henson and Mr. Sargeant each own 35% and we own the
      remaining 30% of Source Scientific, LLC. Under the Source Scientific Agreement,
      we received notes receivable in the aggregate amount of $900,000 (the “Notes”)
      payable at the end of three years bearing 8% interest. The Source Scientific
      Agreement offers Mr. Henson and Mr. Sargeant the opportunity to
      purchase our 30% ownership interest in Source Scientific, LLC until May 31,
      2007, at an escalating premium (10-50%) over our initial ownership value,
      provided that they have first paid off the Notes in their entirety.






-10-




**PRESSURE
        BIOSCIENCES, INC., AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF MARCH 31, 2007**




Despite
      our intent to exit the laboratory instrumentation business, we may be viewed
      as
      having a continuing involvement in the business of Source Scientific, LLC.
      Because of this and other factors, even though the transaction is treated as
      a
      divestiture for legal purposes, we have not recognized the transaction as a
      divestiture for accounting purposes in accordance with SEC SAB Topic 5E, *“Accounting
      for Divestiture of a Subsidiary or Other Business Operation”* . 
      In accordance with SAB Topic 5E, we have recorded the assets and liabilities
      associated with the Source Scientific, LLC operation on our consolidated balance
      sheet as of December 31, 2006 under the captions *“Assets
      transferred under contractual arrangements”* and *“Liabilities
      transferred under contractual arrangements”* .




During
      the three months ended March 31, 2007, Source Scientific, LLC reported a net
      loss of approximately $483,000. In accordance with SAB Topic 5E we have recorded
      a charge in our Consolidated Statement of Operations equal to the net book
      value
      on our Consolidated Balance Sheet of $378,503. SAB Topic 5E requires that we
      recognize the losses of Source Scientific, LLC to the extent such losses exceed
      profits in the same fiscal year. In accordance with SAB Topic 5E, we have
      reduced our net carrying value of our investment in Source Scientific, LLC
      to
      zero as of March 31, 2007.





During
      the three months ended March 31, 2007, total purchases from Source Scientific,
      LLC by us amounted to $100,299. During the same period in 2006, total purchases
      from Source Scientific, LLC by us amounted to $4,359. These purchases were
      for
      services in connection with the design and manufacture of our Barocycler
      instrumentation. All of our purchases from Source Scientific, LLC are negotiated
      as arms length transactions and paid through our normal accounts payable
      process. As of March 31, 2007, we had accounts payable to Source Scientific,
      LLC
      of $96,595 and deposits receivable of $344,000. As of December 31, 2006, we
      had
      accounts payable to Source Scientific, LLC of $38,605 and deposits receivable
      of
      $168,000.





**6)**
            **Inventories**





Inventories
      represented are comprised of Barocycler instruments, PULSE Tubes, and purchased
      sub-components to be used in the manufacture of Barocycler instruments. As
      of
      March 31, 2007 and December 31, 2006, inventories were comprised as
      follows:




March
                  31,
              
              December
                  31,2007
              
              2006Raw
                  materials
              
              $
              41,618
              
              $
              3,158Finished
                  goods
              
              
              28,242
              
              
              16,500Total
              
              $
              69,860
              
              $
              19,658




**7)**
            **Commitments**





*Royalty
      Commitments*




In
      1998,
      we acquired all the remaining outstanding common stock of BioSeq, Inc., a
      development-stage company involved with PCT. In accordance with the provisions
      of a technology transfer agreement assumed in the transaction, we are obligated
      to pay a 5% royalty on net sales until March 2016. For purposes of the
      royalty calculation, net sales include the revenues related to units sold or
      leased as well as PULSETM Tube revenue. The royalty obligation that we accrued
      for the three months ended March 31, 2007 was approximately $2,100. The royalty
      obligation that we accrued and paid for the same period in 2006 was
      $2,500.








-11-




**PRESSURE
        BIOSCIENCES, INC., AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF MARCH 31, 2007**




*Operating
      Leases*




On
      April
      9, 2007, we extended our sub-lease agreement with Proteome Systems, Inc.,
      pursuant to which we have agreed to lease approximately 650 sq. feet of
      laboratory space plus 100 sq. feet of office space from Proteome Systems in
      Woburn, Massachusetts. The lease period was extended through August 31, 2007
      and
      the monthly rent was increased to $3,200 for the use of these facilities.





On
      June
      1, 2006, we entered into a lease agreement with Scheer Partners and the Maryland
      Economic Development Corporation, pursuant to which we have agreed to lease
      laboratory and office space in Rockville, Maryland. The lease period will expire
      on May 31, 2007, and will continue on a month-to-month basis thereafter. We
      will
      pay $2,600 per month for the use of these facilities.





*Purchase
      Commitments*





In
      March
      2007, we executed a purchase order with Source Scientific, LLC under which
      we
      agreed to purchase 20 Barocycler NEP3229 units and nine demonstration (NEP2320)
      units to be used by our sales force in 2007. This purchase order is in addition
      to the 20 units on order under the previously placed purchase order with Source
      Scientific. In connection with each of these purchase orders, we submitted
      a
      deposit to Source Scientific, LLC for $200,000. In accordance with the terms
      of
      these agreements, we expect that the units will be completed during 2007. We
      will be billed for the complete cost of each unit as it is completed, net of
      the
      deposit we placed for each instrument. Finished goods will stay at Source
      Scientific, LLC for shipment directly to our customers. As of March 31, 2007,
      Source Scientific completed and billed us for seven units under the first
      purchase order.





**8)**
            **Stockholders’
                Equity**





*Stock
      Options*





On
      September 16, 2005, our stockholders approved our 2005 Equity Incentive Plan
      (the “Plan”) pursuant to which an aggregate of 1,000,000 shares of common stock
      were reserved for the issuance upon exercise of stock options or other equity
      awards made under the Plan. Under the Plan, our board of directors has authority
      to grant stock options or other equity awards to employees, officers, directors,
      consultants, and advisors. As of March 31, 2007, there were 790,000 stock
      options granted and outstanding under the 2005 Equity Incentive Plan and 210,000
      shares available for future grants.





We
      also
      have 244,000 stock options outstanding under our 1999 Non-Qualified Plan and
      9,500 stock options outstanding under our 1994 Incentive Stock Option Plan.
      As
      of March 31, 2007, there were 4,800 shares available for future grant under
      the
      1999 Non-Qualified Plan. The 1994 Incentive Stock Option Plan has expired;
      therefore, there are no shares available for future grants under this
      plan.





The
      following tables summarize information concerning options outstanding and
      exercisable as of March 31, 2007:




Options
                    Outstanding
              Options
                  ExercisableWeighted
                    Average
              
              
              
              Weighted
                  AverageRange
                  of Exercise
                Prices
              
              
              Number
                  of
                Options
              
              
              Contractual
                Life
              
              
              Exercise
                Price
              
              
              Number
                  of
                Options
              
              
              Contractual
                Life
              
              
              Exercise
                Price$2.50
                  - $2.70
              
              
              159,000
              
              
              5.4
              
              $
              2.64
              
              
              159,000
              
              
              5.4
              
              $
              2.642.71
                  - 3.08
              
              
              343,000
              
              
              7.4
              
              
              2.96
              
              
              209,000
              
              
              6.9
              
              
              2.983.09
                  - 3.97
              
              
              414,500
              
              
              9.1
              
              
              3.70
              
              
              65,630
              
              
              8.4
              
              
              3.703.98
                  - 4.25
              
              
              127,000
              
              
              8.6
              
              
              4.05
              
              
              127,000
              
              
              8.6
              
              
              8.63$2.50
                  - $4.25
              
              
              1,043,500
              
              
              7.9
              
              
              3.34
              
              
              560,630
              
              
              7.0
              
              
              3.21




-12-


**PRESSURE
          BIOSCIENCES, INC., AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
          OF MARCH 31, 2007**


Stock
                  OptionsWeighted
              
              
              
              
              
              WeightedAverage
                  price
              
              
              
              
              
              Average
                  priceShares
              
              
              per
                  share
              
              
              Exercisable
              
              
              per
                  shareBalance
                  outstanding, 12/31/2006
              
              
              945,500
              
              $
              3.32
              
              
              524,000
              
              $
              3.17Granted
              
              
              98,000
              
              
              3.51Exercised
              
              
              -Expired
              
              
              -Forfeited
              
              
              -Balance
                  outstanding, 3/31/2007
              
              
              1,043,500
              
              $
              3.34
              
              
              560,630
              
              $
              3.21





The
      aggregate intrinsic value of options outstanding as of March 31, 2007 was
      $876,540. The aggregate intrinsic value of options exercisable as of March
      31,
      2007 was $543,811.




-13-




**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





***SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS***





*This
      Quarterly Report on Form 10-QSB contains forward-looking statements within
      the
      meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
      Securities Exchange Act of 1934.  In some cases, forward-looking statements
      are identified by terms such as “may”, “will”, “should”, “could”, “would”,
“expects”, “plans”, “anticipates”, “believes”, “estimates”, “projects”,
“predicts”, “potential”, and similar expressions intended to identify
      forward-looking statements. Such statements include, without limitation,
      statements regarding:*





*-
                our plans and expectations with respect to our pressure cycling technology
                (PCT) operations;**-
                potential growth in the market for our PCT
                products;**-
                market acceptance and the potential for commercial success of our
                PCT
                products;**-
                our belief that PCT provides a superior solution for sample
                extraction;**-
                the potential applications for PCT;**-
                our plans to expand our domestic sales force and our foreign distribution
                network;**-
                the potential results of our experiments funded with SBIR Phase I
                grants;**-
                our belief that we will complete the divesture of Source Scientific,
                LLC
                during the second quarter of 2007**-
                our belief that we have sufficient liquidity to finance operations
                based
                upon current projections;**-
                our intent to sell our shares of Panacos Pharmaceuticals and the
                timing
                thereof;**-
                the amount of cash necessary to operate our
                business;**-
                our ability to raise additional capital when and if
                needed;**-
                general economic conditions; and**-
                the anticipated future financial performance and business operations
                of
                our Company.*





*These
      forward-looking statements are only predictions and involve known and unknown
      risks, uncertainties, and other factors that may cause our actual results,
      levels of activity, performance, or achievements to be materially different
      from
      any future results, levels of activity, performance, or achievements expressed
      or implied by such forward-looking statements. Also, these forward-looking
      statements represent our estimates and assumptions only as of the date of this
      report.  Except as otherwise required by law, we expressly disclaim any
      obligation or undertaking to release publicly any updates or revisions to any
      forward-looking statement contained in the report to reflect any change in
      our
      expectations or any change in events, conditions, or circumstances on which
      any
      of our forward-looking statements are based or to conform to actual
      results.  Factors that could cause or contribute to differences in our
      future financial results include those discussed in the risk factors set forth
      in Item 6 of our Annual Report on Form 10-KSB for the year ended December 31,
      2006, as well as those discussed elsewhere in this report. We qualify all of
      our
      forward-looking statements by these cautionary statements.*





*You
      should read this section in combination with the section entitled Management’s
      Discussion and Analysis of Financial Condition or Plan of Operation for the
      year
      ended December 31, 2006, included in our Annual Report on Form 10-KSB, for
      the year ended December 31, 2006.*




-14-





**OVERVIEW**





We
      are an
      early-stage life sciences company focused on the development and
      commercialization of a novel, enabling, platform technology called Pressure
      Cycling Technology (“PCT”). PCT uses cycles of hydrostatic pressure between
      ambient and ultra-high levels (up to 35,000 psi and greater) at controlled
      temperatures to rapidly and repeatedly control the interactions of
      bio-molecules.





Our
      instrument, the Barocycler, and our internally developed disposable PULSE
      (Pressure Used to Lyse Samples for Extraction) Tubes together make up the PCT
      Sample Preparation System (“PCT SPS”).





Our
      pressure cycling technology employs a unique approach that has the potential
      for
      broad applications in a number of established and emerging life sciences areas,
      including;





-
            sample
                preparation for genomic, proteomic and small molecule
                studies;


-
            control
                of chemical (enzymatic) reactions;


-
            protein
                purification;


-
            pathogen
                inactivation;


-
            immunodiagnostics;


-
            DNA
                sequencing; and


-
            food
                safety.





Since
      we
      began significant operations as Pressure BioSciences in February 2005, we have
      been focusing substantially all of our research and development and
      commercialization efforts on sample preparation for genomic, proteomic, and
      small molecule studies.





On
      March
      27, 2007, we announced our 2007 PCT Product Line commercialization plan. This
      plan includes the expansion of our domestic sales force from one full-time,
      sales director in 2006 to five by June 30, 2007. In addition to a planned
      increase in our domestic sales force, our commercialization plan also includes
      expanding our foreign distribution network in an effort to commercialize PCT
      globally in 2008. In support of this commercialization plan we also increased
      the number of Barocycler NEP3229’s that we had on order with Source Scientific,
      LLC from 20 to 40 units; we expect all 40 units will be available for sale
      in
      2007. Additionally, we announced that we had developed a light-weight, more
      portable model for use on a demonstration basis. We subsequently announced
      that
      this demonstration unit will also be launched as a product (Barocycler NEP2320)
      that would be available for sale by September 2007.





If
      we are
      successful commercializing our technology in the sample preparation market,
      we
      believe that our financial results will be positively effected by a combination
      of the sale and lease of our Barocycler instruments and a recurring revenue
      stream from the sale of our single-use PULSE Tubes.





We
      also
      derive revenues from Small Business Innovation Research (“SBIR”) grants awarded
      to us by the National Institutes of Health. In September 2006, and in March
      2007, we received SBIR Phase I grants in the aggregate amount of $300,000.
      These
      grants are funding experiments to demonstrate the feasibility of using pressure
      cycling technology in various contexts. If our work in SBIR Phase 1 grants
      is
      successful, then we will have the opportunity to apply for larger Phase II
      grants. Additionally, if our work with the SBIR grants is successful, the
      publication of application notes in specific areas of research should further
      support our commercialization efforts.





Another
      source of revenue is derived from the sale of extended service contracts on
      our
      instrumentation. These extended service contracts allow a customer who purchases
      a Barocycler NEP3229, or an NEP2320, to receive on-site scheduled preventative
      maintenance, on-site repair and replacement of all worn or defective component
      parts, and telephone support, all at no incremental cost, for the life of the
      service contract.




-15-




**RESULTS
      OF OPERATIONS**




**THREE
      MONTHS ENDED MARCH 31, 2007 AND 2006**




*Revenue*




We
      recognized revenue of $131,621 for the three months ended March 31, 2007, as
      compared to $53,414 for the three months ended March 2006.





Revenue
      for the sale of PCT products and services was $37,943 for the three months
      ended
      March 31, 2007 as compared to $53,414 for the same period in the prior year.
      During both periods we recognized revenue from the sale of one Barocycler
      NEP3229 instrument and PULSE Tubes. During the first quarter of 2006 we also
      sold various sub-component parts for our Barocycler instrumentation. During
      the
      first quarter of 2007 we did not sell any sub-component parts however we did
      record rental revenue from two instruments under lease agreement.





During
      the first quarter of 2007 we recorded $93,678 of grant revenue. All of this
      revenue was billed pursuant to our SBIR Phase 1 grant for the extraction and
      subsequent study of organelles. During the first quarter of 2006 we did not
      record any grant revenue.





*Cost
      of PCT Products and Services*




The
      cost
      of PCT products and services was $31,654 for the three months ended March 31,
      2007 compared to $51,546 for the comparable period in 2006. The decrease in
      cost
      of PCT products and services is due primarily to the decrease in product
      revenue. Also contributing to our decreased cost of PCT products and services
      is
      fact that we now account for the majority of our technical services departmental
      costs as part of selling and marketing to reflect the shift in departmental
      activities.




Included
      in the cost of PCT products and services for the three months ended March 31,
      2007 is $2,620 non-cash, stock-based compensation expense that we recognized
      in
      accordance with SFAS 123R. The same period in the prior year included $2,094
      of
      compensation expense associated with SFAS 123R.





We
      expect
      that our future gross profit will continue to be favorably impacted by grant
      revenue. Additionally, we anticipate an expansion of our product gross margins
      from increasing sales of Barocycler units and PULSE Tubes if we are successful
      commercializing PCT.





*Research
      and Development*




Research
      and development expenditures increased to $461,532 in the first quarter of
      2007
      as compared to $258,819 in the same period in 2006. This increase in research
      and development expense is due primarily to our growth in research and
      development staff from five full-time employees to eight full-time employees.
      Also contributing to the increased costs is the increased number of scientific
      experiments our staff is managing within our own laboratories. This increase
      in
      headcount and project spending is consistent with our strategy to continue
      to
      evaluate and potentially offer new applications of PCT within the life sciences
      sample preparation field.





Research
      and development expense recognized in the first quarter of 2007 and 2006
      included $49,494 and $22,474, respectively, of non-cash, stock-based
      compensation expense associated with SFAS 123R. We expect non-cash, stock-based
      compensation expense charged to research and development to increase in future
      periods as we continue to hire additional scientific personnel.





Consistent
      with our strategy, we plan to continue to add research and development personnel
      to our staff. We believe that expanding the number and the scope of research
      and
      development projects being performed by our internal staff, and by our
      collaborators, will have a direct effect on the number of application notes
      developed and published by our own researchers, and by our collaboration
      partners. We are also investing research and development resources on the
      continued improvement of the operating performance of our current bench top
      Barocycler, including the re-engineering of several key component parts, as
      well
      as the design and development of additional Barocycler instruments. One recent
      example of our engineering investment is our introduction of the Barocycler
      NEP2320 as a demonstration unit for our sales force and as a product that will
      be available for sale by September 2007.




-16-





*Selling
      and Marketing*




Selling
      and marketing expenses increased to $256,530 for the three months ended March
      31, 2007 from $67,379 for the comparable period in 2006. This increase was
      the
      result of our growth from one selling and marketing employee in the first
      quarter of 2006 to four in the first quarter of 2007. In addition to increasing
      our staff we have also increased our spending on several marketing programs
      to
      support our commercialization plan.





During
      the first quarter of 2007 and 2006, selling and marketing expense included
      $15,995 and $7,888, respectively, of non-cash, stock-based compensation expense
      in accordance with the provisions of SFAS 123R. We expect SFAS 123R expense
      to
      increase in future quarters as we continue to hire our domestic sales force
      and
      award stock options to these employees.




We
      expect
      to continue our increased focus on selling and marketing activities for the
      remainder of 2007 to drive our commercialization plan. Consistent with our
      plans, we intend to hire three additional domestic sale directors in the second
      quarter. We also plan to continue our expansion of our advertising and marketing
      programs to further raise awareness of PCT within the scientific community.




*General
      and Administrative*




General
      and administrative costs totaled $481,082 for the three months ended March
      31,
      2007, as compared to $689,626 for the comparable period in 2006. Our general
      and
      administrative costs for 2006 included $170,999 of SFAS 123R expense as compared
      to $43,648 in the first quarter of 2007. This decrease in SFAS 123R expense
      was
      due to the decision by the Board of Directors not to award themselves their
      annual stock options during 2007. The stock options awarded to the Board of
      Directors during the first quarter of 2006 resulted in the recognition of
      $159,438 of SFAS 123R expense. The results for the first quarter of 2006 also
      included the expense recorded for the payment of a bonus of $150,000, to Richard
      T. Schumacher, our President and CEO, in recognition of his 2005 performance.
      Beginning in the first quarter of 2007, we accrue a target bonus award of
      approximately $30,000 for our entire senior executive management team, on a
      quarterly basis. This amount will be adjusted in the fourth quarter based on
      our
      compensation committee’s decision on the amount of bonuses to award, if any.
      Aside from these items our general and administrative costs increased due to
      the
      increase in general and administrative headcount from one full-time employee
      in
      the first quarter of 2006 to four in the first quarter of 2007.





We
      expect
      that general and administrative spending for the rest of 2007 will be slightly
      higher on a quarterly basis than in the current quarter. These increases will
      be
      driven primarily by a continued increase in spending on investor relations
      programs and spending required to conform to section 404 of the Sarbanes-Oxley
      Act.





*Operating
      Loss*




Our
      operating loss was $1,099,177 for the three months ended March 31, 2007 as
      compared to an operating loss of $1,013,956 for the comparable period in 2006.
      The increase in operating loss was primarily the result of increases in
      activities within our research and development and selling and marketing
      functions, partially offset by our increase in revenue and a decrease in general
      and administrative expense and non-cash, stock-based compensation expense
      associated with SFAS 123R.





The
      operating loss from continuing operations for the three months ended March
      31,
      2007 included $111,757 of non-cash, stock-based compensation charges recognized
      in accordance with SFAS 123R. The same period for 2006 included $203,456 of
      SFAS
      123R expense.




We
      plan
      to continue to increase our level of activity in all areas of our business,
      particularly sales and marketing and research and development, for the remainder
      of 2007. Consequently we expect our operating loss for 2007 to exceed that
      of
      2006.




-17-




*Gain
      on Sale of Securities*




In
      the
      three months ended March 31, 2007, we sold 161,000 shares of Panacos
      Pharmaceuticals and realized a gain on securities sold of $727,473. During
      the
      same period in 2006 we sold 57,900 shares of Panacos Pharmaceuticals and
      realized gain on securities sold of $517,938. We expect to sell additional
      shares of Panacos Pharmaceuticals during 2007 to increase our cash position
      for
      continued investment into our pressure cycling technology.





*Other
      Operating (Charges), net*




During
      the first quarter of 2007 Source Scientific, LLC reported a loss of
      approximately $483,000. In accordance with the provisions of SEC SAB Topic
      No.
      5E we recorded a charge to “Other operating, net” of $378,503, to reduce our net
      carrying value in Source Scientific, LLC to zero as of March 31, 2007. During
      the same period in 2006, Source Scientific, LLC recognized a profit of
      approximately $100,000, which, pursuant to the provisions of SAB Topic 5E,
      we
      did not record.





We
      expect
      to complete our divestiture of the Source Scientific, LLC business during the
      second quarter. If we are successful completing this divestiture we will
      write-off the *“Assets
      transferred under contractual arrangements”* and *“Liabilities
      transferred under contractual arrangements”,* and
      recognize any proceeds from the sale as a gain.




*Interest
      Income*




Interest
      income totaled $71,602 for the three months ended March 31, 2007 as compared
      to
      interest income of $108,506 in the prior year period. The decrease in interest
      income is due to a lower average cash balance.




*Income
      Taxes*




In
      the
      quarter ended March 31, 2007, we recorded a tax benefit from continuing
      operations of $40,519. During the same period in 2006, we recorded a benefit
      of
      $77,478. The unfavorable change in benefit rate in 2007 as compared to 2006
      was
      consistent with our expectations and was due to a significant reduction in
      Federal Income Tax carry-back, against which we can apply current operating
      losses. We expect to record a total benefit of approximately $230,000 during
      2007, due to our Federal Income Tax carry-back position. Our benefit rate was
      also unfavorably impacted by the difference in treatment of the loss from Source
      Scientific, LLC for tax purposes as compared to accounting purposes.




*Net
      Loss*




For
      the
      quarter ended March 31, 2007, we realized a net loss of $638,086 compared to
      a
      net loss of $310,034 for the same period in 2006. The increase in loss was
      due
      to the many factors described above including, increases in research and
      development and selling and marketing expenses to support our business plan,
      a
      charge of $378,503 related to the net loss recorded by Source Scientific, LLC
      and an unfavorable change in our income tax benefit rate, all partially offset
      by an increase in gain from the sale of Panacos Pharmaceuticals shares, an
      increase in revenue and a decrease in general and administrative costs.




**LIQUIDITY
      AND FINANCIAL CONDITION**




As
      of
      March 31, 2007, our working capital position was $5,630,956, the primary
      components of which were cash and cash equivalents, accounts receivable, income
      taxes receivable, and prepaid expenses and deposits, partially offset by
      accounts payable, accrued employee compensation, other accrued expenses, and
      accrued income taxes. Working capital excludes our investment in Panacos
      Pharmaceuticals and the related deferred tax liability. As of December 31,
      2006,
      our working capital balance was $5,770,086, the primary components of which
      were
      cash and cash equivalents, income taxes receivable and prepaid expenses and
      deposits. This decrease in working capital of $139,130 was the result of our
      operating losses and increases in our current assets to support our growth,
      partially offset by proceeds from the sale of 161,000 shares of Panacos
      Pharmaceuticals of $728,938. We expect to continue to fund our operating losses
      from our working capital balance and by liquidating our investment in Panacos
      Pharmaceuticals.




-18-




Net
      cash
      used in continuing operations for the three months ended March 31, 2007 was
      $1,197,885 as compared to net cash used in continuing operations of $317,772
      for
      the three months ended March 31, 2006. The cash used in operations for the
      three
      months ended March 31, 2007 included our net loss, an increase in accounts
      receivable, inventory, income taxes receivable, prepaid income taxes, and
      prepaid expenses and deposits, all partially offset by an increase in accounts
      payable. We expect to continue to use cash in continuing operations for the
      foreseeable future.




Net
      cash
      provided by investing activities for the three months ended March 31, 2007
      was
      $699,259 as compared to cash provided of $516,308 for the same period in the
      prior year. The cash generated in the first quarter of 2007 was entirely from
      the sale of 161,000 shares of Panacos common stock, partially offset by
      purchases of fixed assets of approximately $29,000. The cash generated in the
      same period in 2006 was entirely from the sale of 57,900 shares of Panacos
      common stock, also partially offset by purchases of fixed assets. We will
      continue to monitor the market price of Panacos common stock with the intent
      of
      liquidating our position at what we consider to be favorable terms. We expect
      that our investment in fixed assets will increase in future quarters as we
      continue to increase our staff and operating facilities.





For
      the
      three months ended March 31, 2007 there were no cash flows from discontinued
      operations. For the same period in 2006 we received approximately $1.1 million
      as the final escrow payment from the sale of the Boston Biomedica, Inc., core
      business units in September 2004.





**COMMITMENTS**




*Royalty
      Commitments*




In
      1998,
      we acquired all the remaining outstanding common stock of BioSeq, Inc., a
      development-stage company involved with PCT. In accordance with the provisions
      of a technology transfer agreement assumed in the transaction, we are obligated
      to pay a 5% royalty on net sales until March 2016. For purposes of the
      royalty calculation, net sales include the revenues related to units sold or
      leased as well as PULSETM Tube revenue. The royalty obligation that we accrued
      for the three months ended March 31, 2007 was approximately $2,100. The royalty
      obligation that we accrued and paid for the same period in 2006 was $2,500.




*Operating
      Leases*




On
      April
      9, 2007, we extended our sub-lease agreement with Proteome Systems, Inc.,
      pursuant to which we have agreed to lease approximately 650 sq. feet of
      laboratory space plus 100 sq. feet of office space from Proteome Systems in
      Woburn, Massachusetts. The lease period was extended through August 31, 2007
      and
      the monthly rent was increased to $3,200 for the use of these
      facilities.





On
      June
      1, 2006, we entered into a lease agreement with Scheer Partners and the Maryland
      Economic Development Corporation, pursuant to which we have agreed to lease
      laboratory and office space in Rockville, Maryland. The lease period will expire
      on May 31, 2007, and will continue on a month-to-month basis thereafter. We
      will
      pay $2,600 per month for the use of these facilities.





*Purchase
      Commitments*





In
      March
      2007, we executed a purchase order with Source Scientific, LLC under which
      we
      agreed to purchase 20 additional Barocycler NEP3229 units and nine demonstration
      (NEP2320) units to be used by our sales force in 2007. This purchase order
      is in
      addition to the 20 units on order under the previously placed purchase order
      with Source Scientific. In connection with each of these purchase orders, we
      submitted a deposit to Source Scientific, LLC for $200,000. In accordance with
      the terms of these agreements, we expect that the units will be completed during
      2007. We will be billed for the complete cost of each unit as it is completed,
      net of the deposit we placed for each instrument. Finished goods will stay
      at
      Source Scientific, LLC for shipment directly to our customers. As of March
      31,
      2007, Source Scientific completed and billed us for seven units under the first
      purchase order.




-19-




**RECENT
      ACCOUNTING STANDARDS**





*Accounting
      for Income Taxes*





Effective
      January 1, 2007, we adopted the provisions of FASB Interpretation
      No. 48, “A *ccounting
      for Uncertainty in Income Taxes - an Interpretation of FASB Statement
      No. 109”* (FIN
      48). This interpretation clarifies the accounting for uncertainty in income
      taxes by prescribing a minimum recognition threshold for a tax position taken
      or
      expected to be taken in a tax return that is required to be met before being
      recognized in the financial statements. FIN 48 also provides guidance on
      de-recognition, measurement, classification, interest and penalties, accounting
      in interim periods, disclosure and transition.





In
      accordance with FIN 48, we have analyzed filing positions in all of the federal,
      state and other jurisdictions where we are required to file income tax returns,
      as well as all open tax years in these jurisdictions. The periods subject to
      examination for all federal, state and other jurisdictions are the 2003 through
      2005 tax years. We do not believe there are any tax positions that would
      increase within the next twelve-month period. Therefore, no reserves for
      uncertain income tax positions have been recorded and we did not record a
      cumulative effect adjustment related to the adoption of FIN 48.





*Fair
      Value Measurements*





In
      September 2006, FASB issued SFAS 157, *“Fair
      Value Measurements”* .
      SFAS
      No. 157 establishes a formal framework for measuring fair value under GAAP
      and
      expands on disclosure of fair value measurements. Although SFAS No. 157 applies
      to and amends the provisions of existing FASB and AICPA pronouncements, it
      does
      not, of itself, require any new fair value measurements, nor does it establish
      valuation standards. SFAS No. 157 applies to all other accounting pronouncements
      requiring or permitting fair value measurements, except for; SFAS No. 123R,
      share based payment and related pronouncements, the practicability exceptions
      to
      fair value determinations allowed by various other authoritative pronouncements,
      and AICPA Statements of Position 97-2 and 98-9 that deal with software revenue
      recognition. This statement is effective for financial statements issued for
      fiscal years beginning after November 15, 2007, and interim periods within
      those
      fiscal years.





*Effects
      of Prior Year Misstatements*





In
      September 2006, the SEC staff released Staff Accounting Bulletin No. 108, *"Considering
      the Effects of Prior Year Misstatements When Quantifying Misstatements in
      Current Year Financial Statements,"* or SAB
      108.  SAB 108 provides for a "one-time" special transition provision for
      correcting certain prior year misstatements that were uncorrected as of the
      beginning of the fiscal year of adoption. SAB 108 permits existing public
      companies to initially apply its provisions either by (i) restating prior
      financial statements as if the dual approach had always been used or (ii)
      recording the cumulative effect of initially applying the dual approach as
      adjustments recorded to the opening balance of retained earnings.  SAB 108
      is effective for fiscal years ending after November 15, 2006.  The adoption
      of SAB 108 did not have a material impact on our consolidated financial
      statements.





**ITEM
      3. AND ITEM 3A(T). CONTROLS AND PROCEDURES**




We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in our Securities Exchange Act reports
      is
      recorded, processed, summarized and reported within the time periods specified
      in the SEC’s rules and forms, and that such information is accumulated and
      communicated to our management, including our President and Chief Executive
      Officer (Principal Executive Officer) and Chief Financial Officer (Principal
      Financial Officer), as appropriate, to allow timely decisions regarding required
      disclosure. In designing and evaluating the disclosure controls and procedures,
      management recognized that any controls and procedures, no matter how well
      designed and operated, can provide only reasonable assurance of achieving the
      desired control objectives, as ours are designed to do, and management
      necessarily was required to apply its judgment in evaluating the cost-benefit
      relationship of possible controls and procedures.




-20-




As
      of
      March 31, 2007, we carried out an evaluation, under the supervision and with
      the
      participation of our management, including our President and Chief Executive
      Officer (Principal Executive Officer) and Chief Financial Officer (Principal
      Financial Officer) of the effectiveness of the design and operation of our
      disclosure controls and procedures, as defined in Rules 13a-15(e) and
      15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation,
      our President and Chief Executive Officer (Principal Executive Officer) and
      Chief Financial Officer (Principal Financial Officer) concluded that our
      disclosure controls and procedures are effective in enabling us to record,
      process, summarize and report information required to be included in our
      periodic SEC filings within the required time period and to ensure that
      information required to be disclosed in such reports that we file or submit
      under the Securities Exchange Act of 1934 is accumulated and communicated to
      our
      management, including our President and Chief Executive Officer (Principal
      Executive Officer) and Chief Financial Officer (Principal Financial Officer)
      to
      allow timely decisions regarding required disclosure.





There
      have been no changes in our internal control over financial reporting that
      occurred during the period covered by this Report that have materially affected,
      or are reasonably likely to materially affect, our internal control over
      financial reporting.




-21-





**PART
      II. OTHER INFORMATION**





**ITEM
      6. EXHIBITS**




**Exhibits**
            
            **Reference**10.1
            Extension
                of Sub-Lease Agreement with Proteome Systems, Inc
            
            Filed
                herewith31.1
            Principal
                Executive Officer Certification Pursuant to Item 601(b)(31) of Regulation
                S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
                of
                2002
            
            Filed
                herewith31.2
            Principal
                Financial Officer Certification Pursuant to Item 601(b)(31) of Regulation
                S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
                of
                2002
            
            Filed
                herewith32.1
            Principal
                Executive Officer Certification Pursuant to Item 601(b)(32) of Regulation
                S-K, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002
            
            Filed
                herewith32.2
            Principal
                Financial Officer Certification Pursuant to Item 601(b)(32) of Regulation
                S-K, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002
            
            Filed
                herewith




-22-




**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned thereunto duly
      authorized.




**PRESSURE
                BIOSCIENCE, INC.**Date: May
              15,
              2007
            By:
            /s/ Richard
              T. SchumacherRichard
              T. SchumacherPresident,
                Chief Executive Officer & Treasurer
              (Principal
                Executive Officer)




By:
              /s/ Edward
                H.
                MylesEdward
                H. MylesSenior
                  Vice President of Finance
                &
                  Chief Financial Officer
                (Principal
                  Financial and Accounting Officer)
  -23-