**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**  **September
      30, 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**


(Address
      of Principal Executive Offices)





**02379-1040**


(Zip
      Code)





**(508)
      580-1818**


(Issuer’s
      Telephone Number, Including Area Code)




Check
      whether the Issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act 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 of the Exchange Act).




o Yes x No




The
      number of shares outstanding of the Issuer’s common stock as of November 9, 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 Statements (Unaudited)Consolidated
                Balance Sheets as of September 30, 2007 and December 31,
                2006
            3Consolidated
                Statements of Operations for the Three Months and Nine Months Ended
                September 30, 2007 and 2006
            4Consolidated
                Statements of Comprehensive Loss for the Three Months and Nine Months
                Ended September 30, 2007 and 2006
            5Consolidated
                Statements of Cash Flows for the Nine Months Ended September 30,
                2007 and
                2006
            6Notes
                to Consolidated Financial Statements
            7Item
                2. Management's Discussion and Analysis or Plan of
                Operation
            14Item
                3. and Item 3A(T). Controls and Procedures
            24PART
                II - OTHER INFORMATIONItem
                6. Exhibits
            25




2




**PART
      I.   FINANCIAL INFORMATION**


**Item
      1. Financial Statements**





**PRESSURE
      BIOSCIENCES, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEETS**


**(UNAUDITED)**




**September
                  30,**
              
              **December
                  31,**ASSETS
              
              **2007**
              
              **2006**CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              6,005,462
              
              $
              5,335,282Accounts
                  receivable
              
              
              75,142
              
              
              37,495Inventories
              
              
              238,109
              
              
              19,658Prepaid
                  income taxes
              
              
              56,863
              
              
              38,687Income
                  tax receivable
              
              
              23,494
              
              
              710,013Prepaid
                  expenses, deposits, and other current assets
              
              
              583,418
              
              
              246,776Investments
                  in marketable securities
              
              
              -
              
              
              2,060,875Total
                  current assets
              
              
              6,982,488
              
              
              8,448,786PROPERTY
                  AND EQUIPMENT, NET
              
              
              233,773
              
              
              207,696OTHER
                  ASSETSIntangible
                  assets, net
              
              
              340,448
              
              
              376,922Assets
                  of discontinued operation
              
              
              -
              
              
              1,420,996Total
                  other assets
              
              
              340,448
              
              
              1,797,918TOTAL
                  ASSETS
              
              $
              7,556,709
              
              $
              10,454,400LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              260,859
              
              $
              174,289Accrued
                  employee compensation
              
              
              280,717
              
              
              242,497Other
                  accrued expenses
              
              
              143,528
              
              
              150,978Income
                  taxes payable
              
              
              43,339
              
              
              45,962Deferred
                  taxes
              
              
              -
              
              
              669,520Deferred
                  revenue
              
              
              20,814
              
              
              4,099Total
                  current liabilities
              
              
              749,257
              
              
              1,287,345LONG
                  TERM LIABILITIESDeferred
                  revenue
              
              
              7,568
              
              
              9,126Liabilities
                  of discontinued operation
              
              
              -
              
              
              1,042,493Total
                  long term liabilities
              
              
              7,568
              
              
              1,051,619TOTAL
                  LIABILITIES
              
              
              756,825
              
              
              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
              
              
              5,600,110
              
              
              5,347,641Accumulated
                  other comprehensive income
              
              
              -
              
              
              1,384,876Retained
                  earnings
              
              
              1,179,120
              
              
              1,362,265Total
                  stockholders' equity
              
              
              6,799,884
              
              
              8,115,436TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              7,556,709
              
              $
              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**
              
              **For
                  the Nine Months Ended****September
                  30,**
              
              **September
                  30,****2007**
              
              **2006**
              
              **2007**
              
              **2006**REVENUE:PCT
                  products, services, other
              
              $
              106,787
              
              $
              92,211
              
              $
              281,084
              
              $
              174,409Grant
                  revenue
              
              
              31,265
              
              
              -
              
              
              190,715
              
              
              -Total
                  revenue
              
              
              138,052
              
              
              92,211
              
              
              471,799
              
              
              174,409COSTS
                  AND EXPENSES:Cost
                  of PCT products and services
              
              
              42,276
              
              
              90,037
              
              
              131,558
              
              
              188,688Research
                  and development
              
              
              519,303
              
              
              324,525
              
              
              1,518,851
              
              
              984,844Selling
                  and marketing
              
              
              379,448
              
              
              127,419
              
              
              986,801
              
              
              322,803General
                  and administrative
              
              
              578,238
              
              
              380,065
              
              
              1,683,782
              
              
              1,665,172Total
                  operating costs and expenses
              
              
              1,519,265
              
              
              922,046
              
              
              4,320,992
              
              
              3,161,507Operating
                  loss from continuing operations
              
              
              (1,381,213
              )
              
              (829,835
              )
              
              (3,849,193
              )
              
              (2,987,098
              )OTHER
                  INCOME:Realized
                  gain on securities available for sale
              
              
              -
              
              
              -
              
              
              2,028,720
              
              
              517,938Interest
                  income
              
              
              75,732
              
              
              88,190
              
              
              227,816
              
              
              305,982Total
                  other income
              
              
              75,732
              
              
              88,190
              
              
              2,256,536
              
              
              823,920Loss
                  from continuing operations before income taxes
              
              
              (1,305,481
              )
              
              (741,645
              )
              
              (1,592,657
              )
              
              (2,163,178
              )Income
                  tax benefit from continuing operations
              
              
              209,503
              
              
              111,106
              
              
              253,539
              
              
              408,344Loss
                  from continuing operations
              
              
              (1,095,978
              )
              
              (630,539
              )
              
              (1,339,118
              )
              
              (1,754,834
              )DISCONTINUED
                  OPERATIONS:Gain
                    on sale of net assets related to discontinued operations (net
                    of income
                    tax of $218,060)
              
              
              -
              
              
              -
              
              
              1,155,973
              
              
              -Net
                  loss
              
              $
              (1,095,978
              )
              $
              (630,539
              )
              $
              (183,145
              )
              $
              (1,754,834
              )Loss
                      per share from continuing operations - basic and
                  diluted
              
              $
              (0.53
              )
              $
              (0.26
              )
              $
              (0.65
              )
              $
              (0.72
              )Income
                  per share from discontinued operations - basic and
                  diluted
              
              
              -
              
              
              -
              
              
              0.56
              
              
              -Net
                  loss per share - basic and diluted
              
              $
              (0.53
              )
              $
              (0.26
              )
              $
              (0.09
              )
              $
              (0.72
              )Weighted
                  average number of shares used to calculate income (loss) per share
                  -
                  basic
              
              
              2,065,425
              
              
              2,422,675
              
              
              2,065,425
              
              
              2,424,351




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**
                
                **For
                    the Nine Months Ended****September
                    30,**
                
                **September
                    30,**Other
                    Comprehensive Loss
                
                **2007**
                
                **2006**
                
                **2007**
                
                **2006**Net
                    loss
                
                $
                (1,095,978
                )
                $
                (630,539
                )
                $
                (183,145
                )
                $
                (1,754,834
                )Holding
                    gain
                
                
                -
                
                
                (289,456
                )
                
                (27,479
                )
                
                (898,461
                )Reclassification
                      of unrealized gain to realized gain on securities during the
                      period
                
                
                -
                
                
                -
                
                
                (2,028,720
                )
                
                (517,938
                )Unrealized
                    loss on marketable securities
                
                
                -
                
                
                (289,456
                )
                
                (2,056,199
                )
                
                (1,416,399
                )Income
                      tax benefit related to items of other comprehensive
                      loss
                
                
                -
                
                
                115,898
                
                
                671,323
                
                
                553,528Total
                    other comprehensive loss, net of taxes
                
                
                -
                
                
                (173,558
                )
                
                (1,384,876
                )
                
                (862,871
                )Comprehensive
                    loss
                
                $
                (1,095,978
                )
                $
                (804,097
                )
                $
                (1,568,021
                )
                $
                (2,617,705
                )




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 Nine Months Ended****September
                  30,****2007**
              
              **2006**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (183,145
              )
              $
              (1,754,834
              )Less
                  gain on sale of discontinued operations
              
              
              (1,155,973
              )
              
              -Loss
                  from continuing operations
              
              $
              (1,339,118
              )
              $
              (1,754,834
              )Adjustments
                  to reconcile loss to net cash used in operating
                  activities:Depreciation
                  and amortization
              
              
              130,436
              
              
              108,733Non-cash,
                  stock-based compensation expense
              
              
              252,469
              
              
              543,220Loss
                  on disposal of property and equipment
              
              
              -
              
              
              42,781Realized
                  gain on sale of marketable securities
              
              
              (2,028,720
              )
              
              (517,938
              )Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              (37,647
              )
              
              13,750Inventories
              
              
              (218,451
              )
              
              40,348Income
                  tax receivable
              
              
              686,519
              
              
              (250,335
              )Prepaid
                  income taxes
              
              
              (18,176
              )
              
              (28,687
              )Prepaid
                  expenses, deposits and other current assets
              
              
              (336,642
              )
              
              (199,569
              )Accounts
                  payable
              
              
              86,570
              
              
              86,367Accrued
                  employee compensation
              
              
              38,220
              
              
              50,295Other
                  accrued expenses
              
              
              (33,183
              )
              
              100,383Deferred
                  revenue
              
              
              15,157
              
              
              13,500Income
                  taxes payable
              
              
              (2,623
              )
              
              109,526Deferred
                  taxes
              
              
              (218,060
              )
              
              (219,949
              )Net
                  cash used in operating activities from continuing
                  operations
              
              
              (3,023,249
              )
              
              (1,862,409
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Payments
                  for additions to property and equipment
              
              
              (120,039
              )
              
              (34,097
              )Proceeds
                  from sale of marketable securities
              
              
              2,033,397
              
              
              518,463Net
                  cash provided by investing activities from continuing
                  operations
              
              
              1,913,358
              
              
              484,366CASH
                  FLOWS FROM FINANCING ACTIVITIES:Use
                  of funds in repurchase of common stock
              
              
              -
              
              
              (309,140
              )Proceeds
                  from the issuance of common stock
              
              
              -
              
              
              5,400Net
                  cash used in financing activities from continuing
                  operations
              
              
              -
              
              
              (303,740
              )CASH
                  FLOWS FROM DISCONTINUED OPERATIONS:Operating
                  cash flows, net of taxes
              
              
              -
              
              
              (1,867
              )Cash
                  flows from investing activities
              
              
              1,780,071
              
              
              1,117,305Net
                  cash provided by discontinued operations
              
              
              1,780,071
              
              
              1,115,438CHANGE
                  IN CASH AND CASH EQUIVALENTS:
              
              
              670,180
              
              
              (566,345
              )Cash
                  and cash equivalents, beginning of period
              
              
              5,335,282
              
              
              6,416,772Cash
                  and cash equivalents, end of period
              
              $
              6,005,462
              
              $
              5,850,427SUPPLEMENTAL
                  INFORMATION:Income
                  taxes paid
              
              $
              20,800
              
              $
              104,619Income
                  taxes received
              
              $
              723,801
              
              $
              -




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 SEPTEMBER 30, 2007**
 
 **1)**
              **Organization
                  and Business
                  Activities**





Pressure
      BioSciences, Inc. (“PBI”) is a 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) to control
      bio-molecular interactions. PBI currently holds 13 US and 6 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 chemical reactions (particularly 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 accounting principles
      generally accepted in the United States of America (“generally accepted
      accounting principles” or “GAAP”) 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 and nine
      months ended September 30, 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 BioSeq, Inc., and PBI Source Scientific, 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 to the customer; the seller’s price to
      the buyer is fixed or determinable; and collectibility is reasonably
      assured.




7


**PRESSURE
        BIOSCIENCES, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF SEPTEMBER 30, 2007**


Our
      current instruments, the Barocycler NEP3229 and NEP2320, require 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 representative
      to the customer site to “commission” every Barocycler that we sell through our
      domestic sales force. The “commissioning” process includes uncrating and setting
      up the instrument and conducting an introductory user training course. Product
      revenue related to current Barocycler instrumentation is recognized upon the
      “commissioning” of our instrumentation at the customer location. Product revenue
      related to sales of PCT products to our foreign distributors is recognized
      upon
      shipment through common carrier. Our sales arrangements do not provide a right
      of return to our customers. Product revenue related to disposable PULSE Tubes
      is
      recorded upon shipment through a common carrier.





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. Debt securities purchased with original maturities
      of three months or less are valued at cost plus accrued interest, which
      approximates fair market value, and are classified as cash
      equivalents.





*Accounting
      for Research and Development Expense*




Our
      policy is to record all costs of our scientific and engineering staff as
      research and development in our consolidated statement of operations. These
      costs are incurred to advance the scientific application of PCT and to develop
      and continuously improve our Barocycler instrumentation and consumable products.





*Computation
      of Income (Loss) per Share*




Basic
      income (loss) per share is computed by dividing income (loss) available to
      common shareholders by the weighted average number of common shares outstanding.
      Diluted income (loss) per share is computed by dividing income (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 167,565 and 167,873 shares were
      excluded from this calculation for the three and nine months ended September
      30,
      2007, respectively. Potentially dilutive securities having a net effect of
      47,842 and 117,369 shares were excluded from this calculation for the three
      and
      nine months ended September 30, 2006, respectively.





*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.




8


**PRESSURE
        BIOSCIENCES, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF SEPTEMBER 30, 2007**




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 and nine
      months ended September 30, 2007 and the three and nine months ended September
      30, 2006:




Assumptions
                Outside
                    Board Members
                CEO
                    and other Officers & EmployeesExpected
                    life
                5.0
                    (yrs)
                6.0
                    (yrs)Expected
                    volatility
                55.66%
                    - 77.86%
                55.66%
                    - 92.53%Risk-free
                    interest rate
                3.69%
                    - 4.94%
                3.69%
                    - 4.94%Forfeiture
                    rate
                5.00%
                5.00%Expected
                    dividend yield
                0.0%
                0.0%





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. 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 $99,876 and $95,811 for the
      three
      months ended September 30, 2007 and 2006, respectively. The following table
      summarizes the effect of this stock-based compensation expense within our
      Consolidated Statement of Operations:




Three
                  Months Ended, September 30,2007
              
              2006Cost
                  of PCT products and services
              
              $
              1,759
              
              $
              2,621Research
                  and development
              
              
              36,023
              
              
              47,748Selling
                  and marketing
              
              
              19,698
              
              
              11,761General
                  and administrative
              
              
              42,396
              
              
              33,681Total
                  stock-based compensation expense
              
              $
              99,876
              
              $
              95,811




9


**PRESSURE
        BIOSCIENCES, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF SEPTEMBER 30, 2007**


We
      recognized stock-based compensation expense of $252,469 and $543,220 for the
      nine months ended September 30, 2007 and 2006, respectively. The following
      table
      summarizes the effect of this stock-based compensation expense within our
      Consolidated Statement of Operations:




Nine
                  Months Ended, September 30,2007
              
              2006Cost
                  of PCT products and services
              
              $
              4,746
              
              $
              7,335Research
                  and development
              
              
              100,450
              
              
              113,363Selling
                  and marketing
              
              
              39,191
              
              
              32,259General
                  and administrative
              
              
              108,082
              
              
              390,263Total
                  stock-based compensation expense
              
              $
              252,469
              
              $
              543,220




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 circumstances indicate it is appropriate to do so. The stock
      option expense recognized for the three and nine months ended September 30,
      2007
      reflects our estimated annual forfeiture rate of 5% for all of our unvested
      options outstanding.





As
      of
      September 30, 2007, the total estimated fair value of unvested stock options
      to
      be amortized over their remaining vesting period was $691,195.





*Accounting
      for Income Taxes*





Effective
      January 1, 2007, we adopted the provisions of FASB Interpretation
      No. 48, “Accounting *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. We do not expect the adoption of SFAS 157 to have a material
      impact on our consolidated financial statements.




10
 **PRESSURE
          BIOSCIENCES, INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
          OF SEPTEMBER 30, 2007**
 
 **4)**
                **Investment
                    in Marketable
                    Securities**
 
 As
          of
          September 30, 2007, we had no remaining shares of common stock of Panacos
          Pharmaceuticals Inc. (“Panacos”), a publicly traded company listed on the NASDAQ
          Global Market. During the nine months ended September 30, 2007 we sold
          513,934
          shares to generate a realized gain of $2,028,720, on proceeds of
          $2,033,397.
  **5)**
                **Discontinued
                    Operations**
  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 owned 35% and we owned 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 offered Mr. Henson and Mr. Sargeant the option (“the
          Option”) 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 first paid off the Notes in their
          entirety.
 
 On
          May
          29, 2007, we executed a consent agreement with Mr. Henson and Mr. Sargeant,
          Source Scientific LLC, and BIT Analytical Instruments, Inc. (“the Consent
          Agreement”) pursuant to which the Notes were repaid in full in the aggregate
          amount of $1,201,534 in principal and interest, and Mr. Henson and Mr.
          Sargeant
          exercised their Option (through BIT Analytical Instruments, Inc.) to purchase
          our remaining 30% ownership interest in Source Scientific, LLC for an aggregate
          price of $578,573. As a result of these transactions we no longer retain
          any
          direct or indirect ownership interest in Source Scientific, LLC.
 
 The
          execution of these transactions, and receipt of the funds, triggered our
          recognition of a gain on the sale of assets related to discontinued operations
          of $1,534,476, net of income taxes of $218,060, during the nine months
          ended
          September 30, 2007.
  **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
          September 30, 2007 and December 31, 2006, inventories were comprised as
          follows:


September
                  30,
              
              December
                  31,2007
              
              2006Raw
                  materials
              
              $
              23,385
              
              $
              3,158Finished
                  goods
              
              
              214,724
              
              
              16,500Total
              
              $
              238,109
              
              $
              19,658




**7)**
              **Commitments**





*Royalty
      Commitments*




In
      1998,
      we acquired all of 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, to a third party. For
      purposes of the royalty calculation, net sales include the revenues related
      to
      Barocycler units sold or leased as well as PULSETM Tube revenue. The royalty
      obligation that we accrued for the three and nine months ended September 30,
      2007 was $4,122 and $12,915, respectively. The royalty obligation that we
      accrued and paid for the three and nine months ended September 30, 2006 was
      approximately $4,000 and $8,000, respectively.




11


**PRESSURE
        BIOSCIENCES, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF SEPTEMBER 30, 2007**


*Operating
      Leases*




On
      October 4, 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 December 31, 2008
      and the monthly rent remains $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 expired
      on
      May 31, 2007, and is currently on a month-to-month basis. 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 connection with this purchase order,
      we
      submitted total deposits to Source Scientific, LLC, in the amount of $260,000.
      The nine demonstration (NEP2320) instruments were prototype units and were
      therefore billable on a time and materials basis. As of September 30, 2007
      we
      have taken possession of all of these completed units and the cost was expensed
      as incurred in research and development expense within our consolidated
      statement of operations. The order for 20 NEP3229 units is based on a fixed
      bill
      of materials and 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
      September 30, 2007, none of the NEP3229’s had been completed. We expect all of
      these units to be competed and available for sale, lease or collaboration in
      early 2008.





In
      June
      2007, we executed a purchase order with Source Scientific, LLC under which
      we
      agreed to purchase 40 Barocycler NEP2320 units. In connection with this purchase
      order we submitted a deposit for $140,000. In accordance with the terms of
      this
      purchase order, we expect that the units will be completed during late 2007
      and
      early 2008. We will be billed, based on a fixed bill of materials, 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 September 30, 2007 we have not been billed
      for
      any of these units.




**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 September 30, 2007, there were 831,000 stock
      options granted and outstanding under the Plan and 169,000 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 September 30, 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.




12


**PRESSURE
        BIOSCIENCES, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
        OF SEPTEMBER 30, 2007**


The
      following tables summarize information concerning options outstanding and
      exercisable as of September 30, 2007:


`
              
              Stock
                  OptionsWeighted
              
              
              
              WeightedAverage
                  price
              
              
              
              Average
                  priceShares
              
              per
                  share
              
              Exercisable
              
              per
                  shareBalance
                  outstanding, 12/31/2006
              
              
              945,500
              
              $
              3.32
              
              
              524,000
              
              $
              3.17Granted
              
              
              164,000
              
              
              3.88Exercised
              
              
              -Expired
              
              
              -Forfeited
              
              
              (25,000
              )
              
              3.58Balance
                  outstanding, 9/30/2007
              
              
              1,084,500
              
              $
              3.40
              
              
              686,834
              
              $
              3.23






Options
                  Outstanding
              
              Options
                  ExercisableWeighted
                  Average
              
              
              
              Weighted
                  AverageRange
                  of Exercise Prices
              
              Number
                  of Options
              
              Remaining
                  Contractual Life
              
              Exercise
                  Price
              
              Number
                  of Options
              
              Remaining
                  Contractual Life
              
              Exercise
                  Price$2.50
                  - $2.70
              
              
              159,000
              
              
              4.9
              
              $
              2.64
              
              
              159,000
              
              
              4.9
              
              $
              2.642.71
                  - 3.08
              
              
              343,000
              
              
              6.9
              
              
              2.96
              
              
              276,333
              
              
              6.7
              
              
              2.973.09
                  - 3.95
              
              
              389,500
              
              
              8.6
              
              
              3.71
              
              
              124,501
              
              
              8.1
              
              
              3.703.96
                  - 5.44
              
              
              193,000
              
              
              8.7
              
              
              4.18
              
              
              127,000
              
              
              8.1
              
              
              4.05$2.50
                  - $5.44
              
              
              1,084,500
              
              
              7.5
              
              $
              3.40
              
              
              686,834
              
              
              6.8
              
              $
              3.23




The
      aggregate intrinsic value of options outstanding as of September 30, 2007 was
      $639,855. The aggregate intrinsic value of options exercisable as of September
      30, 2007 was $525,291.





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
                  preparation;*
 *-*
              *the
                  potential applications for
                  PCT;*
 *-*
              *our
                  plans to expand our foreign distribution
                  network;*
 *-*
              *the
                  potential results of our experiments funded with SBIR Phase I
                  grants;*
 *-*
              *our
                  expectations as to SBIR Phase II grants;*
 *-*
              *our
                  belief that we have sufficient liquidity to fund operations based
                  upon
                  current projections into late
                  2008;*
 *-*
              *our
                  expectations as to future gross
                  profit;*
 *-*
              *our
                  intention to add research and development personnel to our staff
                  and the
                  potential impact that such staff may have on our efforts to develop
                  and
                  commercialize PCT;*
 *-*
              *our
                  expectations regarding our expenses, financial results, and certain
                  accounting and tax matters;*
 *-*
              *our
                  reliance on Source Scientific, LLC as a supplier of our PCT
                  instrumentation and certain engineering expertise for future product
                  development;*
 *-*
              *our
                  expectations as to the completion of Barocycler units by Source
                  Scientific, LLC;*
 *-*
              *the
                  amount of cash necessary to operate our
                  business;*
 *-*
              *our
                  ability to raise additional capital when and if needed and on terms
                  acceptable or beneficial to
                  us;*
 *-*
              *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 this 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 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 a
      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), often at controlled temperatures, to rapidly
      and
      repeatedly control the interactions of bio-molecules.





Our
      pressure generating instrument, the Barocycler, and our disposable processing
      vials, 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 (particularly 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.
        Since
        that time we have taken a number of important steps that not only support
        our
        commercialization plan but also position our company to drive toward successful
        achievement of our long-term objectives. Selected milestones that we have
        achieved are illustrated below:
 
 -
              The
                  unveiling of the Barocycler NEP2320, a smaller, more compact version
                  of
                  our Barocycler NEP3229. The NEP2320 was initially developed as
                  a
                  demonstration unit for our sales staff; however, favorable market
                  feedback
                  prompted us to launch this instrument as a separate product for
                  sale. We
                  subsequently placed an order for 40 NEP2320 units to be delivered
                  in late
                  2007 and early 2008.
  -
              Receipt
                  of approval to CE Mark our Barocycler NEP3229 instrument. The CE
                  Mark on
                  our instrumentation is an important step towards our plan to launch
                  the
                  PCT product line in Europe and other geographic regions in
                  2008.
 
 -
              Completion
                  of the divestiture of Source Scientific, LLC and the receipt of
                  $1,780,071
                  as payment in full for all of our ownership interests in the
                  company.
 
 -
              Development
                  of a novel, potentially revolutionary method for the safe, rapid,
                  efficient, and reproducible extraction of proteins from lipid-rich
                  samples, including adipose and brain tissues, organelles, and membrane
                  preparations, without the use of potentially harmful detergents.
                  This
                  patent-pending method combines the use of our pressure cycling
                  technology
                  with certain organic solvents and was recently launched as a new
                  product,
                  ProteoSolveLRS.
 
 -
              The
                  expansion of our domestic sales force from one regional sales director
                  at
                  the beginning of the year to six as of September 30, 2007. Each
                  of these
                  sales directors has experience selling life science instrumentation
                  in the
                  genomics or proteomics field and is expected to make a contribution
                  to our
                  commercialization efforts upon completion of our internally developed
                  pressure cycling technology training program.


15




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 disposable products such as PULSE Tubes and
      ProteoSolve LRS kits.





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 expect to have the opportunity to apply for larger Phase
      II
      grants. Additionally, if our work with the SBIR Phase I grants is successful,
      the generation of data and the subsequent 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.





**RESULTS
      OF OPERATIONS**




**THREE
      MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**




*Revenue*




We
      recognized revenue of $138,052 for the three months ended September 30, 2007,
      as
      compared to $92,211 for the three months ended September 2006.





Revenue
      from the sale of PCT products and services was $106,787 for the three months
      ended September 30, 2007 as compared to $92,211 for the same period in the
      prior
      year. During the third quarter of 2007 we commissioned eight Barocycler
      instruments at customer locations, as compared to three in the same period
      of
      2006. Although the number of installed instruments more than doubled in the
      third quarter of 2007 as compared to the same period in 2006, the increase
      in
      revenue was not as significant. There are three primary factors that contributed
      to this minimal increase in revenue despite a significant increase in the number
      of instruments commissioned. First, two of the eight units commissioned during
      the current period were leased and rented rather than sold so the revenue is
      recorded over the life of the respective lease or rental agreement. Second,
      we
      issued a credit of approximately $30,000, for the full price of a Barocycler
      instrument purchased in the previous year that was returned because it did
      not
      offer the researcher the sample throughput that he required. Finally, four
      of
      the eight units commissioned during the current period were from our initial
      prototype lot of Barocycler NEP2320’s. The Barocycler NEP2320 has a list price
      of approximately half of the Barocycler NEP3229. In the prior year period all
      three of the more expensive Barocycler NEP3229 units were sold rather than
      leased.





We
      expect
      that the number of units commissioned will continue to increase on a quarter
      to
      quarter basis. We also expect that some portion of future placements will be
      for
      the smaller, less expensive, Barocycler NEP2320 and some will be placed under
      lease agreement or short-term rental agreements. Therefore the average revenue
      per installation may fluctuate from quarter to quarter as we continue to drive
      our installed base and commercialize pressure cycling technology.





During
      the third quarter of 2007 we recorded $31,265 of grant revenue. The majority
      of
      this revenue was billed pursuant to our work on our second SBIR Phase 1 grant
      for the simultaneous extraction and purification of nucleic acids by PCT. During
      2006 we did not record any grant revenue.




16




*Cost
      of PCT Products and Services*




The
      cost
      of PCT products and services was $42,276 for the three months ended September
      30, 2007 compared to $90,037 for the comparable period in 2006. This significant
      decrease in cost of PCT products and services despite an increase in revenue
      from PCT products and services is due primarily to the fact that during the
      third quarter of 2007 four of the Barocycler instruments that we sold were
      prototype NEP2320 units that had been expensed in the first half of 2007, as
      they were developed and built. Also contributing to the favorable shift in
      our
      cost of PCT products and services relative to our revenue from the sale of
      PCT
      products and services was the 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. Furthermore, we have reduced
      the
      overall cost to manufacture our Barocycler NEP3229 through the re-engineering
      of
      several component parts.




Included
      in the cost of PCT products and services for the three months ended September
      30, 2007 is $1,759 non-cash, stock-based compensation expense that we recognized
      in accordance with SFAS 123R. The same period in the prior year included $2,621
      of non-cash, stock-based compensation expense associated with SFAS
      123R.





*Research
      and Development*




Research
      and development expenditures increased to $519,303 in the third quarter of
      2007
      as compared to $324,525 in the same period in 2006. This increase in research
      and development expense was due primarily to the planned expansion of our
      research and development staff and an increase in the number of scientific
      projects 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 third quarter of 2007 and 2006
      included $36,023 and $47,748, 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 if we continue to hire additional scientific personnel.





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 continue
      to drive our commercialization efforts. We believe that increased investment
      in
      research and development will support our commercialization efforts in two
      ways:
      continued publication of application notes in areas that we have already
      utilized PCT, and new inventions that rely on PCT, such as our June 2007
      announcement of our discovery of a process to extract proteins from lipid-rich
      samples without the use of harsh detergents.




*Selling
      and Marketing*




Selling
      and marketing expenses increased to $379,448 for the three months ended
      September 30, 2007 from $127,419 for the comparable period in 2006. This
      increase was the result of our growth from two selling and marketing employees
      in the third quarter of 2006 to nine in the third quarter of 2007. During the
      third quarter of 2007 we hired four regional sales directors, bringing our
      total
      number of regional sales directors on staff to six, as of September 30, 2007.





During
      the third quarter of 2007 and 2006, selling and marketing expense included
      $19,698 and $11,761, 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
      selling and marketing expense in the fourth quarter to be higher than the amount
      recorded in the third quarter because many of our newly hired sales directors
      were brought on in the middle of the period; therefore they had a partial impact
      on our operating expenses during the current period. Furthermore we plan to
      continue our expansion of our marketing programs for the remainder of 2007,
      and
      into 2008, in order to drive toward successful commercialization of PCT.




17




*General
      and Administrative*




General
      and administrative costs totaled $578,238 for the three months ended September
      30, 2007, as compared to $380,065 for the comparable period in 2006. The
      increase in general and administrative costs is due an increase in general
      and
      administrative headcount from three to four full-time employees, increasing
      expenses incurred in connection with Sarbanes-Oxley compliance, and our investor
      relations program.





Our
      general and administrative costs for 2007 included $42,396 of SFAS 123R expense
      as compared to $33,681 in the third quarter of 2006. We expect that the level
      of
      SFAS 123R expense to be recorded in the fourth quarter of 2007 will approximate
      the amount recorded in the current quarter. The amount of such expense to be
      recorded in 2008 will depend largely on whether the Board of Directors again
      suspends the grant of stock options to the directors as it did in 2007. Stock
      options awarded to the Board of Directors vest immediately therefore the entire
      expense is recorded in the period of grant.





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 as we continue to
      increase spending in the areas of patent legal expense, Sarbanes-Oxley
      compliance and our investor relations program.





*Operating
      Loss from Continuing Operations*





Our
      operating loss from continuing operations was $1,381,213 for the three months
      ended September 30, 2007 as compared to an operating loss from continuing
      operations of $829,835 for the comparable period in 2006. The increase in
      operating loss from continuing operations was primarily the result of increases
      in activities within our research and development, selling and marketing, and
      general and administrative functions, partially offset by our increase in
      revenue.





The
      operating loss from continuing operations for the three months ended September
      30, 2007 included $99,876 of non-cash, stock-based compensation charges
      recognized in accordance with SFAS 123R. The same period for 2006 included
      $95,811 of SFAS 123R expense.




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




*Interest
      Income*




Interest
      income totaled $75,732 for the three months ended September 30, 2007 as compared
      to interest income of $88,190 in the prior year period. The prior year period
      included approximately $25,000 of interest income from the CEO in connection
      with his loan from the Company. This note was satisfied in December 2006. Aside
      from the interest earned on the note receivable, we earned slightly more
      interest income in the third quarter of 2007 than in the same period in 2006.
      This is due to a slightly higher average cash balance and higher yields on
      invested cash.




*Income
      Taxes from Continuing Operations*




In
      the
      quarter ended September 30, 2007, we recorded an income tax benefit from
      continuing operations of $209,503. During the same period in 2006, we recorded
      a
      benefit of $111,106. We expect to record a total tax benefit of approximately
      $250,000 during 2007, due to our Federal income tax carry-back position. This
      amount is less than that recorded during 2006 because we have a smaller Federal
      income tax carry-back position available to us this year than we did in the
      previous year.




*Net
      loss*





During
      the third quarter of 2007 we recorded net loss of $1,095,978 as compared to
      net
      loss of $630,539 in the third quarter of 2006. This increase in 2007 as compared
      to 2006 is due to an increase in spending in all areas of our business as we
      continue to pursue the continued development and commercialization of pressure
      cycling technology.




18




**NINE
      MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**





*Revenue*




We
      recognized revenue of $471,799 for the nine months ended September 30, 2007,
      as
      compared to $174,409 for the nine months ended September 30, 2006.





Revenue
      from the sale of PCT products and services was $281,084 for the nine months
      ended September 30, 2007 as compared to $174,409 for the same period in the
      prior year. The increase in revenue from PCT products and services was primarily
      the result of the sale of 11 Barocycler instruments, and the lease or rental
      of
      two additional Barocycler instruments in the first nine months 2007 versus
      five
      in the first nine months of 2006. Also contributing to the increase in revenue
      from PCT products and services is the increase in the number of PULSE Tubes
      sold. The increase in revenue from the sale and rental of instruments, and
      the
      sale of PULSE Tubes, was partially offset by a credit, of approximately $30,000,
      that we issued for the full price of a Barocycler instrument in connection
      with
      the return of a unit that had been purchased in the previous year, because
      it
      did not offer the researcher the sample throughput that he required.





We
      expect
      that the number of units commissioned will continue to increase on a quarter
      to
      quarter basis. We also expect that some portion of future placements will be
      for
      the smaller, less expensive, Barocycler NEP2320 and some will be placed under
      lease agreement or short-term rental agreements. Therefore the average revenue
      per installation may fluctuate from quarter to quarter as we continue to drive
      our installed base and commercialize pressure cycling technology.





During
      the first nine months of 2007, we recorded $190,715 of grant revenue. This
      revenue was billed pursuant to our two SBIR Phase 1 grants; approximately
      $150,000 under our first grant, for the extraction and subsequent study of
      organelles and approximately $40,000 under our second grant, for the
      simultaneous extraction and purification of nucleic acids by PCT. We have billed
      the entire $150,000 allowed under the first grant and expect to bill the
      remaining $110,000 on the second grant during the fourth quarter of 2007 and
      first quarter of 2008.





*Cost
      of PCT Products and Services*




The
      cost
      of PCT products and services was $131,558 for the nine months ended September
      30, 2007 compared to $188,688 for the comparable period in 2006. The decrease
      in
      cost of PCT products and services, despite an increase in the sale of PCT
      products and services, was due primarily to the fact that four of the Barocycler
      instruments that we placed during the nine months ended September 30, 2007
      were
      prototype units and were therefore expensed as research and development as
      they
      were developed and built. Also contributing to the favorable shift in our cost
      of PCT products and services relative to our revenue from the sale of PCT
      products and services was the 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. Furthermore, we have reduced
      the
      overall cost to manufacture our Barocycler NEP3229 through the re-engineering
      of
      several component parts.





Included
      in the cost of PCT products and services for the nine months ended September
      30,
      2007 was $4,746 non-cash, stock-based compensation expense that we recognized
      in
      accordance with SFAS 123R. The same period in the prior year included $7,335
      of
      compensation expense associated with SFAS 123R.





*Research
      and Development*




Research
      and development expenditures increased to $1,518,851 in the nine months ended
      September 30, 2007 as compared to $984,844 in the same period in 2006. This
      increase in research and development expense was due primarily to our growth
      in
      research and development staff and to an increased number of scientific projects
      that 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. Also contributing to the increase in spending was
      the approximately $350,000 incurred by our engineering department in
      connection with the development of our eleven prototype Barocycler NEP2320
      instruments.




19




Research
      and development expense recognized in the first nine months of 2007 and 2006
      included $100,450 and $113,363, 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 if we continue to hire additional scientific personnel.





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 continue
      to drive our commercialization efforts. We believe that increased investment
      in
      research and development will support our commercialization efforts in two
      ways:
      continued publication of application notes in areas that we have already
      utilized PCT, and new inventions that rely on PCT, such as our June 2007
      announcement of our discovery of a process to extract proteins from lipid-rich
      samples without the use of harsh detergents.




*Selling
      and Marketing*





Selling
      and marketing expenses increased to $986,801 for the nine months ended September
      30, 2007 from $322,803 for the comparable period in 2006. This increase was
      due
      to our expansion of our selling and marketing staff from two selling and
      marketing employees in the first nine months of 2006 to nine as of September
      30,
      2007. Of our nine employees in selling and marketing as of September 30, 2007,
      six are sales directors who are responsible for covering specific regions of
      the
      US. In addition to increasing our staff, we have also increased our spending
      on
      several marketing programs to support our commercialization plan.





During
      the first nine months of 2007 and 2006, selling and marketing expense included
      $39,191 and $32,259 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
      that selling and marketing expense in the fourth quarter to increase relative
      to
      the previous three quarters of 2007 as many of our new sales directors were
      hired during the third quarter; therefore they only had a partial impact on
      the
      operational expense during the third quarter of 2007. 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 $1,683,782 for the nine months ended September
      30, 2007, as compared to $1,665,172 for the comparable period in 2006. The
      increase in general and administrative costs recognized during the first nine
      months of 2007 as compared to the first nine months of 2006 is due to an overall
      increase in spending primarily in the areas of patent legal expense,
      Sarbanes-Oxley compliance, and investor relations, partially offset by a
      decrease in non-cash, stock-based compensation expense in accordance with the
      provisions of SFAS 123R.





During
      the first nine months of 2007 and 2006, general and administrative expense
      included $108,082 and $390,263 respectively, of non-cash, stock-based
      compensation expense in accordance with the provisions of SFAS 123R. The
      decrease in such expense from 2006 to 2007 was due to the decision by the Board
      of Directors not to award themselves their annual stock options during 2007.
      During 2006 the stock options granted to the Board of Directors accounted for
      $313,071 of the $390,263 of non-cash, stock-based compensation expense recorded
      during the period. We expect that the level of SFAS 123R expense to be recorded
      in the fourth quarter of 2007 will approximate the amount recorded in the
      current quarter. The amount of such expense to be recorded in 2008 will depend
      largely on whether the Board of Directors again suspends the grant of stock
      options to the directors as it did in 2007. Stock options awarded to the Board
      of Directors vest immediately therefore the entire expense is recorded in the
      period of grant.




20




We
      expect
      that general and administrative spending for the rest of 2007 will be slightly
      higher on a quarterly basis than what we experienced in the first nine months
      of
      2007. These increases will be driven primarily by continued spending in the
      areas of patent legal expense, Sarbanes-Oxley compliance, and our investor
      relations program.





*Operating
      Loss from Continuing Operations*




Our
      operating loss from continuing operations was $3,849,193 for the nine months
      ended September 30, 2007 as compared to an operating loss from continuing
      operations of $2,978,098 for the first nine months of 2006. The increase in
      operating loss from continuing operations 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
      non-cash, stock-based compensation expense associated with SFAS
      123R.





The
      operating loss from continuing operations for the nine months ended September
      30, 2007 included $252,469 of non-cash, stock-based compensation charges
      recognized in accordance with SFAS 123R. The same period for 2006 included
      $543,220 of SFAS 123R expense.




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





*Realized
      Gain on Sale of Securities*




In
      the
      nine months ended September 30, 2007, we sold 513,934 shares of Panacos
      Pharmaceuticals and realized a gain on securities sold of $2,028,720. During
      the
      same period in 2006, we sold 57,900 shares of Panacos Pharmaceuticals and
      realized a gain on securities sold of $517,938. As of September 30, 2007 we
      had
      sold all of our shares of Panacos Pharmaceuticals and invested the proceeds
      in
      short-term, investment grade, interest-bearing obligations, including money
      market funds, and bank and corporate debt instruments. These funds are now
      available for our use in the development and commercialization of pressure
      cycling technology.




*Interest
      Income*




Interest
      income totaled $227,816 for the nine months ended September 30, 2007 as compared
      to interest income of $305,982 in the prior year period. The prior year period
      included approximately $75,000 of interest income from the CEO in connection
      with his loan from the Company. This note was satisfied in December, 2006.
      Aside
      from the interest earned on the note receivable, we earned approximately the
      same interest income during the first nine months of 2007 as we did in 2006.




*Income
      Taxes from Continuing Operations*




In
      the
      nine months ended September 30, 2007, we recorded a tax benefit from continuing
      operations of $253,539. During the same period in 2006, we recorded a benefit
      of
      $408,344. We expect to record a total tax benefit of approximately $250,000
      during 2007, due to our Federal income tax carry-back position. This amount
      is
      less than that recorded during 2006 because we have a smaller Federal income
      tax
      carry-back position available to us this year than we did in the previous
      year.




*Gain
      on Sale of Net Assets Related to Discontinued Operations*





During
      the first nine months of 2007 we realized a gain on the sale of Source
      Scientific, LLC of $1,155,973. This gain is comprised of the $378,503 charge
      that we recorded in the first quarter of 2007 under the provisions of SAB Topic
      5E and the gain of $1,534,476, net of income taxes of $218,060, that we recorded
      during the second quarter of 2007. We recorded this gain in connection with
      the
      receipt on May 29, 2007 of $1,780,071 from Mr. Richard W. Henson and Mr. Bruce
      A. Sargeant, the principals of Source Scientific, LLC, as full payment for
      their
      purchase of our remaining interest in that business.




21




*Net
      loss*




For
      the
      nine months ended September 30, 2007, we recorded net loss of $183,145 as
      compared to a net loss of $1,754,834 for the same period in 2006. This
      significant reduction in net loss was due entirely to the gain of $2,028,720
      from the sale of our remaining shares of Panacos Pharmaceuticals common stock
      and from the recognition of a $1,155,973 gain on the sale of net assets related
      to discontinued operations of Source Scientific, LLC. Excluding these
      non-recurring items, we would have recorded a loss in the first nine months
      of
      2007 higher than that recorded during the same period in 2006. This increase
      in
      loss is due to an increase in spending in all areas of our business and is
      consistent with our plans to continue to increase our investment in selling
      and
      marketing and research and development in order to drive the commercialization
      and scientific expansion of PCT.




**LIQUIDITY
      AND FINANCIAL CONDITION**




As
      of
      September 30, 2007, our working capital position was $6,233,231, the primary
      components of which were cash and cash equivalents, accounts receivable,
      inventory, and prepaid expenses and deposits, partially offset by accounts
      payable, accrued employee compensation, other accrued expenses, and accrued
      income taxes. 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, and excluding our
      investment in marketable securities and the related deferred tax liability.
      The
      increase in working capital of $463,145 was due to the receipt of $1,780,071
      from the sale of Source Scientific, LLC, and the receipt of $2,033,397 from
      the
      sale of 513,934 shares of Panacos Pharmaceuticals common stock, partially offset
      by our utilization of working capital resources to fund our operations for
      the
      nine months ended September 30, 2007. We expect to continue to fund our
      operating losses from our working capital balance. We believe that we have
      sufficient cash and working capital to fund our operations into late 2008.




Net
      cash
      used in continuing operations for the nine months ended September 30, 2007
      was
      $3,023,249 as compared to net cash used in continuing operations of $1,862,409
      for the nine months ended September 30, 2006.





Net
      cash
      provided by investing activities for the nine months ended September 30, 2007
      was $1,913,358 as compared to cash provided of $484,366 for the same period
      in
      the prior year. The cash generated in the first nine months of 2007 was entirely
      from the sale of our remaining shares of Panacos Pharmaceuticals common stock,
      partially offset by purchases of fixed assets. 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 expect that our
      investment in fixed assets will increase in future quarters as we continue
      to
      increase our staff and operating facilities.





There
      were no cash flows from financing activities during the first nine months of
      2007. Net cash used in financing activities in the nine months ended September
      30, 2006 was $303,740, primarily relating the use of approximately $308,000
      to
      purchase 106,600 shares of our common stock from an unaffiliated shareholder
      for
      $2.88 per share. The stock purchase from the unaffiliated shareholder was
      approved by our Board of Directors in September, 2006.





Net
      cash
      provided by discontinued operations during 2007 of $1,780,071 was due to the
      completion of the divestiture of Source Scientific, LLC. During the same period
      in 2006 we received cash from discontinued operations of $1,117,305. This amount
      was due entirely to the receipt of the final escrow payment in connection with
      the 2004 sale of the Boston Biomedica core businesses to SeraCare Life Sciences,
      Inc.




**COMMITMENTS**




*Royalty
      Commitments*




In
      1998,
      we acquired all of 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, to a third party. For
      purposes of the royalty calculation, net sales include the revenues related
      to
      Barocycler units sold or leased as well as PULSETM Tube revenue. The royalty
      obligation that we accrued for the three and nine months ended September 30,
      2007 was $4,122 and $12,915, respectively. The royalty obligation that we
      accrued and paid for the three and nine months ended September 30, 2006 was
      approximately $4,000 and $8,000, respectively.




22




*Operating
      Leases*




On
      October 4, 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 December 31, 2008
      and the monthly rent remains $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 expired
      on
      May 31, 2007, and is currently on a month-to-month basis. 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 connection with this purchase order,
      we
      submitted total deposits to Source Scientific, LLC, in the amount of $260,000.
      The nine demonstration (NEP2320) instruments were prototype units and were
      therefore billable to us on a time and materials basis. As of September 30,
      2007
      we have taken possession of all of these completed NEP2320 prototype units
      and
      the full cost of these units was recorded within our consolidated statement
      of
      operations as research and development expense. The order for 20 NEP3229 units
      is based on a fixed bill of materials and 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 September 30, 2007, none of the NEP3229’s had
      been completed. We expect all of these units to be completed and available
      for
      sale, lease or collaboration in early 2008.





In
      June
      2007, we executed a purchase order with Source Scientific, LLC under which
      we
      agreed to purchase 40 Barocycler NEP2320 units. In connection with this purchase
      order we submitted a deposit for $140,000. In accordance with the terms of
      this
      purchase order, we expect that the units will be completed during late 2007
      and
      early 2008. We will be billed, based on a fixed bill of materials, 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 September 30, 2007 we have not been billed
      for
      any of these units.




**RECENT
      ACCOUNTING STANDARDS**





*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. We do not expect the adoption of SFAS 157 to have a material
      impact on our consolidated financial statements.




23




**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 of 1934
      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.




As
      of
      September 30, 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.




24




**PART
      II. OTHER INFORMATION**





**None**





**ITEM
      6. EXHIBITS**




**Exhibits**
            
            
            **Reference**31.1
            Principal
                Executive Officer Certification Pursuant to Item 601(b)(31) of Regulation
                S-B, 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-B, 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-B, 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-B, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002
            
            Filed
                herewith




25




**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
                BIOSCIENCES, INC.**Date: November
                12, 2007
            By:
            */s/* *Richard
              T. Schumacher*Richard
                T. Schumacher
              President,
                  Chief Executive Officer & Treasurer
                (Principal
                  Executive Officer)




By:
            */s/ Edward
                H. Myles*Edward
                H. Myles
              Senior
                  Vice President of Finance&
                  Chief Financial Officer
                (Principal
                  Financial and Accounting Officer)






26