UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 (Mark
One)
 
 x          Quarterly Report Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934
 
 For the quarterly period ended
March 31,
2010   or
 
  ̈           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 Registrant as Specified in its Charter)
  Massachusetts
                04-2652826(State
      or Other Jurisdiction of
                (I.R.S.
      EmployerIncorporation
      or Organization)
                Identification
      No.)
 
 14
      Norfolk AvenueSouth
      Easton, Massachusetts
                  02375(Address
      of Principal Executive Offices)
                  (Zip
      Code)
 
 (508)
230-1828
 (Registrant’s
Telephone Number, Including Area Code)
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or 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         ̈ No
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
 
 Yes  ̈  No  ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 
(Check one):
 Large
      accelerated filer o
                Accelerated
      filer oNon-accelerated
      filer o
                Smaller
      reporting company x
 
 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 April 28, 2010
was 2,406,311.
  
  TABLE OF
CONTENTS
  PagePART
      I - FINANCIAL INFORMATIONItem
      1. Financial Statements (Unaudited)Consolidated
      Balance Sheets as of March 31, 2010 and December 31, 2009
                  1Consolidated
      Statements of Operations for the Three Months Ended March 31, 2010 and
      2009
                  2Consolidated
      Statements of Cash Flows for the Three Months Ended March 31, 2010 and
      2009
                  3Notes
      to Consolidated Financial Statements
                  4Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
                  17Item
      4T. Controls and Procedures
                  25PART
      II - OTHER INFORMATIONItem
      6. Exhibits
                  26
  
  PART I.  FINANCIAL
INFORMATION
 Item 1. Financial
Statements
 
 PRESSURE
BIOSCIENCES, INC. AND SUBSIDIARY
 CONSOLIDATED
BALANCE SHEETS
 (UNAUDITED)
 
 March 31,
                    
                    
                    December 31,2010
                    
                    
                    2009ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                    
                    $
                    1,617,714
                    
                    
                    $
                    1,609,778Restricted
      cash
                    
                    
                    20,012
                    
                    
                    
                    20,012Accounts
      receivable, net of allowances of $17,020 at March 31, 2010 and $8,400 at
      December 31, 2009
                    
                    
                    217,991
                    
                    
                    
                    203,211Inventories
                    
                    
                    576,133
                    
                    
                    
                    638,350Deposits
                    
                    
                    344,747
                    
                    
                    
                    182,010Prepaid
      income taxes
                    
                    
                    1,442
                    
                    
                    
                    3,176Prepaid
      expenses and other current assets
                    
                    
                    95,981
                    
                    
                    
                    86,563Total
      current assets
                    
                    
                    2,874,020
                    
                    
                    
                    2,743,100PROPERTY
      AND EQUIPMENT, NET
                    
                    
                    241,702
                    
                    
                    
                    249,465OTHER
      ASSETSIntangible
      assets, net
                    
                    
                    218,868
                    
                    
                    
                    231,026TOTAL
      ASSETS
                    
                    $
                    3,334,590
                    
                    
                    $
                    3,223,591LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable
                    
                    $
                    426,413
                    
                    
                    $
                    148,087Accrued
      employee compensation
                    
                    
                    153,327
                    
                    
                    
                    105,824Accrued
      professional fees and other
                    
                    
                    217,733
                    
                    
                    
                    271,926Deferred
      revenue
                    
                    
                    5,266
                    
                    
                    
                    8,058Total
      current liabilities
                    
                    
                    802,739
                    
                    
                    
                    533,895LONG
      TERM LIABILITIESDeferred
      revenue
                    
                    
                    986
                    
                    
                    
                    1,609TOTAL
      LIABILITIES
                    
                    
                    803,725
                    
                    
                    
                    535,504COMMITMENTS
      AND CONTINGENCIES ( Note 4 )STOCKHOLDERS'
      EQUITYSeries
      A convertible preferred stock, $.01 par value; 313,960 designated shares;
      174,440 shares issued and outstanding on March 31, 2010 and 152,213 shares
      on December 31, 2009 (Liquidation value of $2,006,060)
                    
                    
                    1,745
                    
                    
                    
                    1,523Series
      B convertible preferred stock, $.01 par value; 279,256 designated shares;
      88,711 shares issued and outstanding on March 31, 2010 and 62,039 shares
      on December 31, 2009 (Liquidation value of $1,667,767)
                    
                    
                    887
                    
                    
                    
                    620Common
      stock, $.01 par value; 20,000,000 shares authorized; 2,394,311 shares
      issued and outstanding on March 31, 2010 and 2,328,426 shares issued and
      outstanding on December 31, 2009
                    
                    
                    23,943
                    
                    
                    
                    23,284Warrants
      to acquire preferred stock and common stock
                    
                    
                    1,452,878
                    
                    
                    
                    1,352,165Additional
      paid-in capital
                    
                    
                    10,153,875
                    
                    
                    
                    9,297,115Accumulated
      deficit
                    
                    
                    (9,102,463
                    )
                    
                    
                    (7,986,620
                    )Total
      stockholders' equity
                    
                    
                    2,530,865
                    
                    
                    
                    2,688,087TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                    
                    $
                    3,334,590
                    
                    
                    $
                    3,223,591
 
 The
accompanying notes are an integral part of these consolidated financial
statements
  1
  PRESSURE
BIOSCIENCES, INC. AND SUBSIDIARY
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (UNAUDITED)
 
 For the Three Months EndedMarch 31,2010
                      
                      
                      2009REVENUE:PCT
      Products, services, other
                      
                      $
                      189,150
                      
                      
                      $
                      222,142Grant
      revenue
                      
                      
                      101,663
                      
                      
                      
                      84,620Total
      revenue
                      
                      
                      290,813
                      
                      
                      
                      306,762COSTS
      AND EXPENSES:Cost
      of PCT products and services
                      
                      
                      87,103
                      
                      
                      
                      140,243Research
      and development
                      
                      
                      294,141
                      
                      
                      
                      307,224Selling
      and marketing
                      
                      
                      282,578
                      
                      
                      
                      278,416General
      and administrative
                      
                      
                      538,422
                      
                      
                      
                      430,790Total
      operating costs and expenses
                      
                      
                      1,202,244
                      
                      
                      
                      1,156,673Operating
      loss
                      
                      
                      (911,431
                      )
                      
                      
                      (849,911
                      )Interest
      income
                      
                      
                      106
                      
                      
                      
                      2,403Loss
      before income taxes
                      
                      
                      (911,325
                      )
                      
                      
                      (847,508
                      )Income
      tax refund
                      
                      
                      -
                      
                      
                      
                      623,262Net
      loss
                      
                      
                      (911,325
                      )
                      
                      
                      (224,246
                      )Accrued
      and deemed dividends on convertible preferred stock
                      
                      
                      (256,524
                      )
                      
                      
                      (501,425
                      )Net
      loss applicable to common shareholders
                      
                      $
                      (1,167,849
                      )
                      
                      $
                      (725,671
                      )Net
      loss per share attributable to common stockholders - basic and
      diluted
                      
                      $
                      (0.49
                      )
                      
                      $
                      (0.33
                      )Weighted
      average common stock shares outstanding used in the basic and diluted net
      loss per share calculation
                      
                      
                      2,394,311
                      
                      
                      
                      2,195,283
 
 The
accompanying notes are an integral part of these consolidated financial
statements
  2
  PRESSURE
BIOSCIENCES, INC. AND SUBSIDIARY
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 
 For
      the Three Months EndedMarch
      31,2010
                                            
                                            
                                            2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                                            
                                            $
                                            (911,325
                                            )
                                            
                                            $
                                            (224,246
                                            )Adjustments
      to reconcile net loss to operating cash flows:Depreciation
      and amortization
                                            
                                            
                                            49,981
                                            
                                            
                                            
                                            49,430Stock-based
      compensation expense
                                            
                                            
                                            94,736
                                            
                                            
                                            
                                            145,903Bad
      debt expense
                                            
                                            
                                            8,620
                                            
                                            
                                            
                                            55,600Changes
      in operating assets and liabilities:Restricted
      cash
                                            
                                            
                                            -
                                            
                                            
                                            
                                            30,000Accounts
      receivable
                                            
                                            
                                            (23,400
                                            )
                                            
                                            
                                            (13,880
                                            )Inventories
                                            
                                            
                                            62,217
                                            
                                            
                                            
                                            (250,672
                                            )Deposits
                                            
                                            
                                            (162,737
                                            )
                                            
                                            
                                            366,764Income
      tax receivable
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (623,262
                                            )Accounts
      payable
                                            
                                            
                                            278,326
                                            
                                            
                                            
                                            51,515Accrued
      employee compensation
                                            
                                            
                                            47,503
                                            
                                            
                                            
                                            (58,910
                                            )Deferred
      revenue and other accrued expenses
                                            
                                            
                                            (55,733
                                            )
                                            
                                            
                                            59,550Prepaid
      expenses and other current assets
                                            
                                            
                                            (7,684
                                            )
                                            
                                            
                                            162,253Net
      cash used in operating activities
                                            
                                            
                                            (619,496
                                            )
                                            
                                            
                                            (249,955
                                            )CASH
      FLOWS FROM INVESTING ACTIVITIES:Additions
      to property and equipment
                                            
                                            
                                            (30,060
                                            )
                                            
                                            
                                            (47,492
                                            )Net
      cash used in investing activities
                                            
                                            
                                            (30,060
                                            )
                                            
                                            
                                            (47,492
                                            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Net
      proceeds from stock warrant exercise
                                            
                                            
                                            191,625
                                            
                                            
                                            
                                            -Net
      proceeds from the issuance of preferred stock
                                            
                                            
                                            465,867
                                            
                                            
                                            
                                            1,567,924Net
      cash provided by financing activities
                                            
                                            
                                            657,492
                                            
                                            
                                            
                                            1,567,924Change
      in cash and cash equivalents
                                            
                                            
                                            7,936
                                            
                                            
                                            
                                            1,270,477Cash
      and cash equivalents, beginning of period
                                            
                                            
                                            1,609,778
                                            
                                            
                                            
                                            868,208Cash
      and cash equivalents, end of period
                                            
                                            $
                                            1,617,714
                                            
                                            
                                            $
                                            2,138,685SUPPLEMENTAL
      INFORMATION:Income
      taxes paid
                                            
                                            $
                                            1,900
                                            
                                            
                                            $
                                            -Issuance
      of common stock for dividends paid-in-kind
                                            
                                            
                                            52,006
                                            
                                            
                                            
                                            -Issuance
      of preferred stock warrants for services
                                            
                                            
                                            18,122
                                            
                                            
                                            
                                            -Beneficial
      conversion feature on convertible preferred stock
                                            
                                            
                                            154,389
                                            
                                            
                                            
                                            489,803
 
 The
accompanying notes are an integral part of these consolidated financial
statements
  3
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 1)
              Business
      Overview and Management
Plans
 
 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) to control bio-molecular
interactions.
 
 Our
pressure cycling technology uses internally developed instrumentation that is
capable of cycling pressure between ambient and ultra-high levels at controlled
temperatures to rapidly and repeatedly control the interactions of
bio-molecules. Our instrument, the Barocycler®, and our internally developed
consumables product line, which includes PULSE (Pressure Used to Lyse Samples
for Extraction) Tubes as well as application specific kits (which include
consumable products and reagents) together make up the PCT Sample Preparation
System (“PCT SPS”).
 
 We have
experienced negative cash flows from operations with respect to our pressure
cycling technology business since our inception.  As of March 31, 2010, we
had working capital resources of approximately $2 million.  Subsequent to
March 31, 2010, pursuant to a warrant call notice, 15-Month Series A Preferred
Stock Warrants to purchase 98,372 shares of Series A Convertible Preferred Stock
were exercised for gross proceeds to the Company of $1,229,650, before deducting
expenses associated with the warrant call notice.  See Note 6.  Based
on our current projections, we believe our current cash resources, which include
the funds we received from these warrant exercises, are sufficient to fund our
normal operations through the first quarter of 2011.
 
 We
believe we will need substantial additional capital to fund our operations in
periods beyond the first quarter of 2011.  If we are able to obtain
additional capital or otherwise increase our revenues, we may increase spending
in specific research and development applications and engineering projects and
may hire additional sales personnel or invest in targeted marketing
programs.  In the event that we are unable to obtain financing on
acceptable terms, or at all, we may be required to limit or cease our
operations, pursue a plan to sell our operating assets, or otherwise modify our
business strategy, which could materially harm our future business
prospects.
 
 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. 
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 material adjustments (consisting of only
normal recurring adjustments) considered necessary for a fair presentation have
been included.  Operating results for the three months ended March 31, 2010
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2010.  For further information, refer to the audited
consolidated financial statements and footnotes thereto included in the
Company’s Annual Report on Form 10-K (the “Form 10-K”) for the fiscal year ended
December 31, 2009 as filed with the Securities and Exchange Commission on March
31, 2010.
  3)
              Summary
      of Significant Accounting
Policies
 
 FASB
Codification
 
 We follow
accounting standards set by the Financial Accounting Standards Board
(“FASB”).  The FASB sets GAAP that we follow to ensure we consistently
report our financial condition, results of operations, and cash flows. 
References to GAAP issued by the FASB in these footnotes are to the FASB
Accounting Standards Codification, sometimes referred to as the Codification or
ASC.  The FASB finalized the Codification effective for periods ending on
or after September 15, 2009.  Prior FASB standards like FASB Statement No.
13, Accounting for Leases, are no longer being issued by the FASB.  For
further discussion of the Codification see “FASB Codification Discussion” in
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (commonly referred to as MD&A) elsewhere in this
report.
 
 Principles
of Consolidation
 
 The
consolidated financial statements include the accounts of Pressure BioSciences,
Inc., and its wholly-owned subsidiary PBI BioSeq, Inc.
  4
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 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 are made in projecting
future cash flows to quantify impairment of assets, deferred tax assets and the
costs associated with fulfilling our warranty obligations for the instruments
that we sell, in our calculation of fair value of stock options awarded, and our
allocation of the proceeds from our equity financings between the preferred
stock and warrants sold.  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 FASB ASC 605, Revenue Recognition. 
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 collectability is reasonably
assured.
 
 Our
current instruments, the Barocycler NEP3229 and NEP2320, require a basic level
of instrumentation expertise to set-up for initial operation. To support a
favorable first experience for our customers, we send a highly trained technical
representative to the customer site to install every Barocycler that we sell,
lease, or rent through our domestic sales force. The installation process
includes uncrating and setting up the instrument, followed by introductory user
training. Product revenue related to current Barocycler instrumentation is
recognized upon the completion of the installation and introductory training
process of the instrumentation at the customer location, for domestic
installations.  Product revenue related to sales of PCT instrumentation to
our foreign distributors is recognized upon shipment through a common carrier.
We provide for the expected costs of warranty upon the recognition of revenue
for the sales of our instrumentation. Our sales arrangements do not provide our
customers with a right of return. Product revenue related to our consumable
products such as PULSE Tubes, MicroTubes, and application specific kits is
recorded upon shipment through a common carrier.  Shipping costs are
included in sales and marketing expense.  Any shipping costs billed to
customers are recognized as revenue.
 
 In
accordance with FASB ASC 840, 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
agreements is included in the “Cost of PCT products and services” line item in
our consolidated statements of operations.  Many of our lease and rental
agreements allow the lessee to purchase the instrument at any point during the
term of the agreement with partial or full credit for payments previously
made.  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.
 
 Our
transactions sometimes involve multiple elements (i.e., products and
services).  Revenue under multiple element arrangements is recognized in
accordance with FASB ASC 605-25, Multiple-Element
Arrangements.  Under this method, if an element is determined to be
a separate unit of accounting, the revenue for the element is based on fair
value and determined by vendor specific objective evidence (“VSOE”), and
recognized at the time of delivery. If an arrangement includes undelivered
elements that are not essential to the functionality of the delivered elements,
we defer the fair value of the undelivered elements with the residual revenue
allocated to the delivered elements. Fair value is determined based upon the
price charged when the element is sold separately. If there is not sufficient
evidence of the fair value of the undelivered elements, no revenue is allocated
to the delivered elements and the total consideration received is deferred until
delivery of those elements for which objective and reliable evidence of the fair
value is not available. We provide certain customers with extended service
contracts and, to the extent VSOE is established, these service revenues are
recognized ratably over the life of the contract, which is generally one to four
years.
 
 Cash
and Cash Equivalents
 
 Our
policy is to invest available cash in short-term, investment-grade,
interest-bearing obligations, including money market funds, and bank and
corporate debt instruments.  Securities purchased with initial maturities
of three months or less are valued at cost plus accrued interest, which
approximates fair market value, and are classified as cash equivalents.  As
of March 31, 2010, we held $20,000 in a restricted account as collateral for our
corporate credit card and therefore classified this balance as restricted cash
on our consolidated balance sheet.
  5
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Research
and Development
 
 Research
and development costs, which are comprised of costs incurred in performing
research and development activities - including wages and associated employee
benefits, facilities, consumable products and overhead costs - are expensed as
incurred. Our research and development activities are performed at our facility
in Massachusetts in conjunction with our collaboration partner sites.  In
support of our research and development activities, we utilize our Barocycler
instruments that are capitalized as fixed assets and depreciated over their
expected useful lives.
 
 Inventories
 
 Inventories
are valued at the lower of cost (average cost) or market (sales price). 
The cost of Barocyclers consists of the cost charged by the contract
manufacturer.  The cost of manufactured goods includes material,
freight-in, direct labor, and applicable overhead.  As of March 31, 2010,
the recorded cost of all categories was less than the recent sales price. 
The composition of inventory as of March 31, 2010 and December 31, 2009 is as
follows:
 
 March 31,
                      
                      
                      December 31,2010
                      
                      
                      2009Raw
      materials
                      
                      $
                      101,148
                      
                      
                      $
                      92,453Finished
      goods
                      
                      
                      474,985
                      
                      
                      
                      545,897Total
                      
                      $
                      576,133
                      
                      
                      $
                      638,350
 
 Our
finished goods inventory as of March 31, 2010 included 39 Barocycler
instruments.  Our finished goods inventory as of December 31, 2009 included
44 Barocycler instruments.
 
 Property
and Equipment
 
 Property
and equipment are stated at cost, less accumulated depreciation. For financial
reporting purposes, depreciation is recognized using the straight-line method,
allocating the cost of the assets over their estimated useful lives of three
years for certain laboratory equipment, from three to five years for management
information systems and office equipment, and three years for all PCT finished
units classified as fixed assets.  Property and equipment includes total
book value of $146,030 relating to Barocycler instruments held under lease or
collaboration.
 
 Intangible
Assets
 
 We have
classified as intangible assets, costs associated with the fair value of
acquired intellectual property.  Intangible assets including patents are
amortized on a straight-line basis over sixteen years.  The Company’s
intangible assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be
recoverable.  When impairment is indicated, any excess of carrying value
over fair value is recorded as a loss.  As of March 31, 2010, no event has
come to our attention that would cause us to record an impairment of intangible
assets.
 
 Long-Lived
Assets and Deferred Costs
 
 The
Company’s long-lived assets and other assets are reviewed for impairment in
accordance with the guidance of the FASB ASC 360-10-05, Property, Plant, and
Equipment, whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable.  Recoverability of an
asset to be held and used is measured by a comparison of the carrying amount of
an asset to the future undiscounted cash flows expected to be generated by the
asset.  If such asset is considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the asset
exceeds its fair value.  Through March 31, 2010, the Company had not
experienced impairment losses on its long-lived assets.
  6
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Concentrations
 
 Credit
Risk
 
 Our
financial instruments that potentially subject us to concentrations of credit
risk consist primarily of cash, cash equivalents, and trade receivables. 
We have cash investment policies which, among other things, limit investments to
investment-grade securities.  We perform ongoing credit evaluations of our
customers, and the risk with respect to trade receivables is further mitigated
by the fact that many of our customers are government institutions, large
pharmaceutical and biotechnology companies, and academic
laboratories.
 
 The
following table illustrates the level of concentration as a percentage of total
revenues during the three months ended March 31, 2010 and 2009:
 
 For the Three Months EndedMarch 31,2010
                    
                    
                    2009Top
      Five Customers
                    
                    
                    78
                    %
                    
                    
                    67
                    %Federal
      Agencies
                    
                    
                    36
                    %
                    
                    
                    28
                    %
 
 The
following table illustrates the level of concentration as a percentage of net
accounts receivable balance as of March 31, 2010 and December 31,
2009:
 
 March 31,
                    
                    
                    December 31,2010
                    
                    
                    2009Top
      Five Customers
                    
                    
                    78
                    %
                    
                    
                    62
                    %Federal
      Agencies
                    
                    
                    24
                    %
                    
                    
                    12
                    %
 
 Product
Supply
 
 Source
Scientific, LLC has been our sole contract manufacturer for all of our PCT
instrumentation. We have initiated several engineering initiatives to position
us for greater independence from any one supplier, and we are continuing to
develop a network of manufacturers and sub-contractors to reduce our reliance on
any single supplier for PCT components.  Until we develop a network of
manufacturers and subcontractors, obtaining alternative sources of supply or
manufacturing services could involve significant delays and other costs and
challenges, and may not be available to us on reasonable terms, if at all. The
failure of a supplier or contract manufacturer to provide sufficient quantities,
acceptable quality and timely products at an acceptable price, or an
interruption of supplies from such a supplier could harm our business and
prospects.
 
 Computation
of Loss per Share
 
 Basic
loss per share is computed by dividing loss available to common shareholders by
the weighted average number of common shares outstanding.  Diluted loss per
share is computed by dividing loss available to common shareholders by the
weighted average number of common shares outstanding plus additional common
shares that would have been outstanding if dilutive potential common shares had
been issued.  For purposes of this calculation, convertible preferred
stock, common stock dividends, warrants to acquire preferred stock convertible
into common stock, and warrants and options to acquire common stock, are all
considered common stock equivalents in periods in which they have a dilutive
effect and are excluded from this calculation in periods in which these are
anti-dilutive.  The loss per share for the three months ended March 31,
2009 reflects $11,622 accrued dividends on preferred stock and a deemed dividend
of $489,803, which were not shown previously in the loss per share calculation
in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 filed
on May 15, 2009.
 
 The
following table illustrates our computation of loss per share for the three
months ended March 31, 2010 and 2009:
  7
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 For the Three Months EndedMarch 31,2010
                    
                    
                    2009Numerator:Net
      loss
                    
                    $
                    (911,325
                    )
                    
                    $
                    (224,246
                    )Accrued
      preferred stock dividend
                    
                    
                    (50,129
                    )
                    
                    
                    (11,622
                    )Beneficial
      conversion feature for Series B Preferred Stock
                    
                    
                    (154,389
                    )
                    
                    
                    (489,803
                    )Series
      A Preferred dividends paid-in-kind
                    
                    
                    (44,963
                    )
                    
                    
                    -Series
      B Preferred dividends paid-in-kind
                    
                    
                    (7,043
                    )
                    
                    
                    -Net
      loss applicable to common shareholders
                    
                    $
                    (1,167,849
                    )
                    
                    $
                    (725,671
                    )Denominator
      for basic and diluted loss per share:Weighted
      average common stock shares outstanding
                    
                    
                    2,394,311
                    
                    
                    
                    2,195,283Loss
      per common share - basic and diluted
                    
                    $
                    (0.49
                    )
                    
                    $
                    (0.33
                    )
 
 The
following table presents securities that could potentially dilute basic loss per
share in the future.  For all periods presented, the potentially dilutive
securities were not included in the computation of diluted loss per share
because these securities would have been anti-dilutive.  The Series A
Convertible Preferred Stock and Series B Convertible Preferred Stock are
presented below as if they were converted into common shares according to the
conversion terms in Note 5.
 
 March 31,2010
                      
                      
                      2009Stock
      options
                      
                      
                      1,019,500
                      
                      
                      
                      5,352Common
      stock warrants
                      
                      
                      1,619,800
                      
                      
                      
                      1,569,800Preferred
      stock warrants
                      
                      
                      2,025,770
                      
                      
                      
                      1,569,800Convertible
      preferred stock:Series
      A Convertible Preferred
                      
                      
                      1,744,400
                      
                      
                      
                      1,569,800Series
      B Convertible Preferred
                      
                      
                      887,110
                      
                      
                      
                      -7,296,580
                      
                      
                      
                      4,714,752
 
 Accounting
for Income Taxes
 
 Effective
January 1, 2007, we adopted the provisions of FASB ASC 740, Income Taxes.  FASB ASC
740 prescribes the use of the liability method whereby deferred tax asset and
liability account balances are determined based on differences between the
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse.  The Company provides a valuation allowance, if
necessary, to reduce deferred tax assets to their estimated realizable
value.
 
 FASB ASC
740-10 clarifies the accounting for income taxes, by prescribing a minimum
recognition threshold a tax position is required to meet before being recognized
in the financial statements.  It also provides guidance on de-recognition,
measurement and classification of amounts relating to uncertain tax positions,
accounting for and disclosure of interest and penalties, accounting in interim
periods, disclosures and transition relating to the adoption of the new
accounting standard.  FASB ASC 740-10 was effective for fiscal years
beginning after December 15, 2006.
 
 We
account for income taxes under the asset and liability method, which requires
recognition of deferred tax assets, subject to valuation allowances, and
liabilities for the expected future tax consequences of events that have been
included in the financial statements or tax returns.  Deferred income taxes
reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting and income tax
purposes.  A valuation allowance is established if it is more likely than
not that all or a portion of the net deferred tax assets will not be
realized.  If substantial changes in the company’s ownership should occur,
as defined in Section 382 of the Internal Revenue Code, there could be
sufficient limitations on the amount of net loss carry forwards that could be
used to offset future taxable income.
 
 In the
quarter ended March 31, 2009, we recorded a benefit for income taxes of $623,262
due to provisions in the American Recovery and Reinvestment Act of 2009 relating
to net operating loss carry-backs.  The cash was received in August
2009.  Aside from the impact of the passage of this congressional act, we
do not expect any additional income tax benefits relating to carry-backs to
prior periods.  If we are successful in commercializing PCT and in
generating operating income, then we may be able to utilize certain net
operating losses we may have at the time against such future operating
profits.
  8
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Accounting
for Stock-Based Compensation
 
 We
maintain equity compensation plans under which incentive stock options and
non-qualified stock options are granted to employees, independent members of our
Board of Directors and outside consultants.  We recognize equity
compensation expense over the requisite service period using the Black-Scholes
formula to estimate the fair value of the stock options on the date of
grant.
 
 Determining Fair Value of
Stock Option Grants
 
 Valuation
and Amortization Method - The fair value of each option award is estimated on
the date of grant using the Black-Scholes pricing model based on certain
assumptions.  The estimated fair value of employee stock options is
amortized to expense using the straight-line method over the vesting
period.
 
 Expected
Term - The Company uses the simplified calculation of expected life, described
in the FASB ASC 718, Compensation-Stock Compensation, as the Company does not
currently have sufficient historical exercise data on which to base an estimate
of expected term.  Using this method, the expected term is determined using
the average of the vesting period and the contractual life of the stock options
granted.
 
 Expected
Volatility - Expected volatility is based on the Company’s historical stock
volatility data over the expected term of the award.
 
 Risk-Free
Interest Rate - The Company bases the risk-free interest rate used in the
Black-Scholes valuation method on the implied yield currently available on U.S.
Treasury zero-coupon issues with an equivalent remaining term.
 
 Forfeitures
- As required by FASB ASC 718, Compensation-Stock
Compensation, the Company records stock-based compensation expense only
for those awards that are expected to vest.  Specifically, the provisions
of FASB ASC 718 require that the Company estimates the forfeiture rate and
adjust the expense that it recognizes to reflect the estimated number of stock
options that will go unexercised.  The Company estimated a forfeiture rate
of 5% for awards granted based on historical experience and future expectations
of options vesting.
 
 We
recognized stock-based compensation expense of $94,736 and $145,903 for the
three months ended March 31, 2010 and 2009, respectively.  The following
table summarizes the effect of this stock-based compensation expense within each
of the line items of our costs and expenses within our Consolidated Statements
of Operations:
 
 For the Three Months Ended, March
      31,2010
                    
                    
                    2009Research
      and development
                    
                    $
                    18,247
                    
                    
                    $
                    52,972Selling
      and marketing
                    
                    
                    17,175
                    
                    
                    
                    21,208General
      and administrative
                    
                    
                    59,314
                    
                    
                    
                    71,723Total
      stock-based compensation expense
                    
                    $
                    94,736
                    
                    
                    $
                    145,903
 
 Fair
Value of Financial Instruments
 
 Due to
their short maturities, the carrying amounts for cash and cash equivalents,
accounts receivable, accounts payable, and accrued expenses approximate their
fair value.  Long-term liabilities are primarily related to liabilities
transferred under contractual arrangements with carrying values that approximate
fair value.
 
 Reclassifications
 
 Certain
prior year amounts have been reclassified to conform to our current year
presentation.
 
 Advertising
 
 Advertising
costs are expensed as incurred.  During the three months ended March 31,
2010, we incurred $11,993 in advertising expenses but in the same period last
year, we did not incur significant advertising expenses.
  9
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Rent
Expense
 
 Rental
costs are expensed as incurred.  During the three months ended March 31,
2010 and 2009, we incurred $31,916 and $24,573, respectively in rent expense for
the use of our corporate office and research and development
facilities.
 
 4)
              Commitments
      and Contingencies
 
 Operating
Leases
 
 Our
corporate offices are currently located at 14 Norfolk Avenue, South Easton,
Massachusetts 02375.  In November 2007, we signed an 18 month lease
agreement commencing in February 2008 pursuant to which we lease approximately
5,500 square feet of office space, with an option for an additional 12
months.  We exercised the renewal option to extend the lease term until
July 14, 2010.  We pay approximately $6,500 per month for the use of these
facilities.
 
 Effective
January 31, 2009, we terminated our sub-lease agreement with Proteome Systems,
pursuant to which we leased approximately 650 square feet of laboratory space
plus 100 square feet of office space from Proteome Systems in Woburn,
Massachusetts.  We paid approximately $3,200 per month for the use of these
facilities through January 31, 2009 with no further obligation.
 
 Effective
January 1, 2010, we entered into a three-year lease agreement with the
University of Massachusetts, pursuant to which we are leasing laboratory and
office space on campus at the university.  We are paying $5,000 per month
for the use of these facilities.
 
 Royalty
Commitments
 
 In 1996,
we acquired our initial equity interest in BioSeq, Inc., which at the time was
developing our original pressure cycling technology.  BioSeq, Inc. acquired
its pressure cycling technology from BioMolecular Assays, Inc. (“BMA”) under a
technology transfer and patent assignment agreement.  In 1998, we purchased
all of the remaining outstanding capital stock of BioSeq, Inc., and at such
time, the technology transfer and patent assignment agreement was amended to
require us to pay BMA a 5% royalty on our sales of products or services that
incorporate or utilize the original pressure cycling technology that BioSeq,
Inc. acquired from BMA.  We are also required to pay BMA 5% of the proceeds
from any sale, transfer or license of all or any portion of the original
pressure cycling technology.  These payment obligations terminate in
2016.  During the three months ended March 31, 2010 and 2009, we incurred
$6,524 and $8,827, respectively in royalty expense associated with our
obligation to BMA.
 
 In
connection with our acquisition of BioSeq, Inc., we licensed certain limited
rights to the original pressure cycling technology back to BMA.  This
license is non-exclusive and limits the use of the original pressure cycling
technology by BMA solely for molecular applications in scientific research and
development and in scientific plant research and development.  BMA is
required to pay us a royalty equal to 20% of any license or other fees and
royalties, but not including research support and similar payments, it receives
in connection with any sale, assignment, license or other transfer of any rights
granted to BMA under the license.  BMA must pay us these royalties until
the expiration of the patents held by BioSeq, Inc. in 1998, which we anticipate
will be in 2016.  We have not received any royalty payments from BMA under
this license.
 
 Battelle
Memorial Institute
 
 In
December 2008, we entered into an exclusive patent license agreement with the
Battelle Memorial Institute ("Battelle"). The licensed technology is described
in the patent application filed by Battelle on July 31, 2008 (US serial number
12/183,219). This application includes subject matter related to a method and a
system for improving the analysis of protein samples, including through an
automated system utilizing pressure and a pre-selected agent to obtain a
digested sample in a significantly shorter period of time than current methods,
while maintaining the integrity of the sample throughout the preparatory
process.  Pursuant to the terms of the agreement we paid Battelle a
non-refundable initial fee.  In addition to royalty payments on net sales
on “licensed products”, we are obligated to make minimum royalty payments for
each year that we retain the rights outlined in the patent license agreement and
we are required to have our first commercial sale of the licensed products
within one year following the issuance of the patent covered by the licensed
technology.
  10
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Purchase
Commitments
 
 On
December 14, 2009, we submitted a purchase order to Source Scientific, LLC, the
manufacturer of the Company’s PCT Barocycler instrumentation, for 50 Barocycler
NEP2320 units and 12 Barocycler NEP3229 units with various spare parts. 
Pursuant to the terms of the purchase order, we placed a deposit with Source
Scientific, LLC, of approximately $338,000 representing approximately 50% of the
expected total value of the order.  The purchase price for the 50 NEP2320
units and 12 NEP3229 units is based upon a fixed bill of materials.  We
will be billed for the unpaid purchase price of each unit at the time each unit
is completed and ready for sale.
 
 Severance and Change of Control
Agreements
 
 Each of
our executive officers is entitled to receive a severance payment if terminated
by the Company without cause.  The severance benefits would include a
payment in an amount equal to one year of each executive officer’s annualized
base salary compensation plus accrued paid time off.  Additionally, each
executive officer will be entitled to receive medical and dental insurance
coverage for one year following the date of termination.  The total
commitment related to these agreements in the aggregate is approximately $1.0
million.
 
 Each of
our executive officers, other than Mr. Richard T. Schumacher, our President and
Chief Executive Officer, is entitled to receive a change of control payment in
an amount equal to one year of such executive officer’s annualized base salary
compensation, accrued paid time off, and medical and dental coverage, in the
event of a change of control of the Company.  In the case of Mr.
Schumacher, this payment would be equal to two years of annualized base salary
compensation, accrued paid time off, and two years of medical and dental
coverage.  The total commitment related to these agreements in the
aggregate is approximately $1.3 million.  The severance payment is meant to
induce the executive to become an employee of the Company and to remain in the
employ of the Company, in general, and particularly in the occurrence of a
change in control.
 
 5)
              Stockholders’
      Equity
 
 Preferred
Stock
 
 In 1996,
our Board of Directors authorized the issuance of 1,000,000 shares of preferred
stock with a par value of $0.01. As of March 31, 2010, 20,000 shares of
preferred stock have been designated as Series A Junior Participating Preferred
Stock, none of which are issued and outstanding, 313,960 shares of preferred
stock have been designated as Series A Convertible Preferred Stock, par value
$0.01 per share (“Series A Convertible Preferred Stock”), of which 174,440
shares are issued and outstanding, and 279,256 shares of preferred stock have
been designated as Series B Convertible Preferred Stock, par value $0.01 per
share (“Series B Convertible Preferred Stock”), of which 88,711 shares are
issued and outstanding.
 
 Series A Convertible
Preferred Stock
 
 On
February 12, 2009, we completed a private placement, pursuant to which we sold
an aggregate of 156,980 units (the “Series A Units”) for a purchase price of
$11.50 per unit (the “Series A Purchase Price”), resulting in gross proceeds to
us of $1,805,270 (the “Series A Private Placement”).  Each Series A Unit
consisted of  (i) one share of Series A Convertible Preferred Stock
convertible into 10 shares of our common stock, (ii) a warrant to purchase one
share of Series A Convertible Preferred Stock at an exercise price equal to
$12.50 per share, with a term expiring 15 months after the date of closing
(“15-Month Series A Preferred Stock Warrant”); and (iii) a warrant to purchase
10 shares of common stock at an exercise price equal to $2.00 per share, with a
term expiring 30 months after the date of closing (the “30-Month Common Stock
Warrants”).  We did not pay any placement fees associated with this
transaction but the expenses related to the offering totaled approximately
$233,000.
 
 The
proceeds from the sale of each Series A Unit was allocated between the Series A
Convertible Preferred Stock, the 15-Month Series A Preferred Stock Warrant and
the 30-Month Common Stock Warrant based on the relative estimated fair value of
each security.  The estimated fair value of the warrants was determined
using the Black-Scholes formula, resulting in an allocation of the gross
proceeds of $882,253 to the total warrants issued.  The allocation of the
gross proceeds to the Series A Convertible Preferred Stock was $923,017. 
In accordance with the provisions of FASB ASC 470-20, Debt with Conversion and Other
Options, an additional adjustment between Additional Paid in Capital and
Accumulated Deficit of $489,803 was recorded to reflect an implicit non-cash
dividend related to the allocation of proceeds between the stock and warrants
issued.The $489,803
represents the value of the adjustment to additional paid in capital related to
the beneficial conversion feature of the Series A Convertible Preferred
Stock.  The value adjustment was calculated by subtracting the fair market
value of the underlying common stock on February 12, 2009 issuable upon
conversion of the Series A Convertible Preferred Stock from the fair market
value of the Series A Convertible Preferred Stock as determined when the Company
performed a fair market value allocation of the proceeds to the Series A
Convertible Preferred Stock and warrants.
  11
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Each
share of Series A Convertible Preferred Stock receives a cumulative dividend at
the rate of 5% per annum of the Series A Purchase Price, payable semi-annually
on June 30 and December 31, commencing on June 30, 2009 (with the first payment
being pro-rated based on the number of days occurring between the date of
issuance and June 30, 2009).  Dividends may be paid in cash or in shares of
common stock at our option, subject to certain conditions.  The shares of
Series A Convertible Preferred Stock also are entitled to a liquidation
preference, such that in the event of any voluntary or involuntary liquidation,
dissolution or winding up of our company, the holders of Series A Convertible
Preferred Stock will be paid out of the assets of the Company available for
distribution to our stockholders before any payment shall be paid to the holders
of common stock, an amount per share equal to the Series A Purchase Price, plus
accrued and unpaid dividends.  The Series A Convertible Preferred Stock and
the Series B Convertible Preferred Stock (as described below) will be treated on
an equivalent basis with respect to payments made in connection with a
liquidation.  The Board approved the method of payment in the form of
common stock for the June 30, 2009 dividend and the December 31, 2009
dividend.
 
 Each
share of Series A Convertible Preferred Stock is convertible into 10 shares of
common stock at any time at the option of the holder, subject to adjustment for
stock splits, stock dividends, recapitalizations and similar transactions (the
“Series A Conversion Ratio”). Unless waived under certain circumstances by the
holder of Series A Convertible Preferred Stock, such holder’s shares of Series A
Convertible Preferred Stock may not be converted if upon such conversion the
holder’s beneficial ownership would exceed certain thresholds.  Each share
of Series A Convertible Preferred Stock will automatically be converted into
shares of common stock at the Series A Conversion Ratio then in
effect:  (i) if, after 12 months from the closing of the Series A
Private Placement, the common stock trades on the Nasdaq Capital Market (or
other primary trading market or exchange on which the common stock is then
traded) at a price equal to $4.00 for 20 out of 30 consecutive trading days with
average daily trading volume of at least 10,000 shares or (ii) upon a registered
public offering by the Company at a per share price equal to $2.30 with
aggregate gross proceeds to the Company of not less than $10 million.
 
 The
holders of Series A Convertible Preferred Stock are not entitled to vote on any
matters presented to the stockholders of the Company for their action or
consideration at any meeting of stockholders of the Company (or by written
consent of stockholders in lieu of meeting), except that the holders of Series A
Convertible Preferred Stock may vote separately as a class on any matters that
would amend, alter or repeal any provision of our Restated Articles of
Organization, as amended, in a manner that adversely affects the powers,
preferences or rights of the Series A Convertible Preferred Stock and such
holders may also vote on any matters required by law.
 
 At any
time after February 11, 2014, upon 30 days written notice, we have the right to
redeem the outstanding shares of Series A Convertible Preferred Stock at a price
equal to the Series A Purchase Price, plus all accrued and unpaid dividends
thereon.  The redemption price may be paid in two annual
installments.
 
 15-Month Series A Preferred
Stock Warrants and 30-Month Common Stock Warrants
  The
15-Month Series A Preferred Stock Warrants had an exercise price equal to $12.50
per share, with a term expiring on May 12, 2010.  Each of the 15-Month
Series A Preferred Stock Warrants were exercised in connection with the warrant
call described in Note 6 and, therefore, there are no longer any 15-Month Series
A Preferred Stock Warrants outstanding.  The 30-Month Common Stock Warrants
have an exercise price equal to $2.00 per share, with a term expiring on August
12, 2011.Unless
waived under certain circumstances by the holder of the 30-Month Common Stock
Warrant, such holder’s 30-Month Common Stock Warrants may not be exercised if
upon such exercise the holder’s beneficial ownership would exceed certain
thresholds.
 
 Each of
the 15-Month Series A Preferred Stock Warrants permitted, and each of the
30-Month Common Stock Warrants permit the holder to conduct a “cashless
exercise” at any time the holder of the warrant is an “affiliate” (as defined in
the Securities Purchase Agreement) of the Company.
 
 The
warrant exercise price and/or number of shares issuable upon exercise of the
applicable warrant are subject to adjustment for stock dividends, stock splits
or similar capital reorganizations, as set forth in the warrants.  As a
result of the issuance of Common Stock in connection with dividends paid on the
Series A Preferred Stock and the Series B Preferred Stock, the exercise price of
the 30-Month Common Stock Warrants has been adjusted from $2.00 to $1.94 (the
“New Exercise Price”) to prevent dilution.  The number of shares for which
the 30-Month Common Stock Warrants are exercisable is equal to the original per
share exercise price of the Warrant, prior to any adjustment, divided by the New
Exercise Price, multiplied by the original number of Warrant
Shares.
  12
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Subject
to the terms and conditions of the applicable warrants, the Company had the
right to call for cancellation of the 15-Month Series A Preferred Stock Warrants
if the volume weighted average price of our common stock on the Nasdaq Capital
Market (or other primary trading market or exchange on which our common stock is
then traded) equaled or exceeded $1.75 for either (i) 10 consecutive trading
days or (ii) 15 out of 25 consecutive trading days.  Pursuant to these
provisions, on March 30, 2010, the Company called all of the 15-Month Series A
Preferred Stock Warrants.  See Note 6.
 
 Subject
to the terms and conditions of the 30-Month Common Stock Warrant, the Company
has the right to call for cancellation the 30-Month Common Stock Warrant if the
volume weighted average price for our common stock on the Nasdaq Capital Market
(or other primary trading market or exchange on which our common stock is then
traded) equals or exceeds $2.80 for either (i) 10 consecutive trading days or
(ii) 15 out of 25 consecutive trading days.
 
 The
warrants granted in connection with the Series A Units were valued based on a
Black-Scholes pricing model at the date of the grant.  The 15-Month Series
A Preferred Stock Warrants and 30-Month Common Stock Warrants were granted with
an exercise price of $1.25 per share of Series A Convertible Preferred Stock and
$2.00 per share of common stock, respectively.  The 15-Month Series A
Preferred Stock Warrants and 30-Month Common Stock Warrants vested
immediately.  The relative fair value of the warrants was calculated to be
$882,253 and was recorded to Stockholders’ Equity in the first quarter of
2009.  The assumptions for the Black-Scholes pricing model are represented
in the table below.
 
 Assumptions
                    
                    Preferred
                    
                    
                    CommonExpected
      life (in months)
                    
                    
                    15.0
                    
                    
                    
                    30.0Expected
      volatility
                    
                    
                    142.0
                    %
                    
                    
                    109.0
                    %Risk-free
      interest rate
                    
                    
                    0.875
                    %
                    
                    
                    1.375
                    %Exercise
      price
                    
                    $
                    1.25
                    
                    
                    $
                    2.00Stock
      price
                    
                    $
                    0.90
                    
                    
                    $
                    0.90Fair
      value per warrant
                    
                    $
                    0.45
                    
                    
                    $
                    0.41
 
 Series B Convertible
Preferred Stock
 
 On
November 18, 2009, we sold an aggregate of 62,039 units (the “Series B Units”)
for a purchase price of $18.80 per unit (the “Series B Purchase Price”),
resulting in gross proceeds to us of $1,166,333.  This is the first tranche
of a $2.5 million private placement (the “Series B Private Placement”). 
The second tranche closed on March 18, 2010 for the sale of 26,672 Series B
Units with gross proceeds of $501,434.  Each Series B Unit consists of (i)
one share of Series B Convertible Preferred Stock convertible into 10 shares of
our common stock and (ii) a warrant to purchase one share of Series B
Convertible Preferred Stock at an exercise price equal to $23.80 per share for
warrants issued in November 2009 and at an exercise price of $28.80 for warrants
issued in March 2010, in each case with a term expiring on August 11, 2011 (the
“Series B Warrant”).
 
 In
connection with the Series B Private Placements, we paid a finder’s fee of
$100,478, plus warrants to purchase 5,344 shares of Series B Convertible
Preferred Stock at $28.80 per share, expiring August 11, 2012.
 
 The
proceeds from the sale of each Series B Unit were allocated between the Series B
Convertible Preferred Stock and the Series B Warrant based on the relative
estimated fair value of each security.  The estimated fair value of the
Series B Warrants was determined using the Black-Scholes formula, resulting in
an allocation of the gross proceeds of $592,685 to the total warrants issued for
both tranches.  The allocation of the gross proceeds to the Series B
Convertible Preferred Stock was $1,075,083 for both tranches.  In
accordance with the provisions of FASB ASC 470-20, Debt with Conversion and Other
Options, an additional adjustment between Additional Paid in Capital and
Accumulated Deficit of $294,838 was recorded to reflect an implicit non-cash
dividend related to the allocation of proceeds between the Series B Convertible
Preferred Stock and Series B Warrants issued in both tranches. The $294,838 represents
the value of the adjustment to additional paid in capital related to the
beneficial conversion feature of the Series B Convertible Preferred Stock. 
The value adjustment was calculated by subtracting the fair market value of the
underlying common stock on the date of the placement closing issuable upon
conversion of the Series B Convertible Preferred Stock from the fair market
value of the Series B Convertible Preferred Stock as determined when the Company
performed a fair market value allocation of the proceeds to the Series B
Convertible Preferred Stock and Series B Warrants.
 
 Each
share of Series B Convertible Preferred Stock will receive a cumulative dividend
at the rate of 5% per annum of the Series B Purchase Price, payable
semi-annually on June 30 and December 31, commencing on December 31, 2009 (with
the first payment being pro-rated based on the number of days occurring between
the date of issuance and December 31, 2009).  Dividends may be paid in cash
or in shares of common stock at our option, subject to certain conditions. 
The shares of Series B Convertible Preferred Stock also are entitled to a
liquidation preference, such that in the event of any voluntary or involuntary
liquidation, dissolution or winding up of our company, the holders of Series B
Convertible Preferred Stock will be paid out of the assets of the Company
available for distribution to our stockholders before any payment shall be paid
to the holders of common stock, an amount per share equal to the Series B
Purchase Price, plus accrued and unpaid dividends.  The Series B
Convertible Preferred Stock and the Series A Convertible Preferred Stock will be
treated on an equivalent basis with respect to payments made in connection with
a liquidation.  The Board approved the method of payment in the form of
common stock for the December 31, 2009 dividend.
  13
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Each
share of Series B Convertible Preferred Stock is convertible into 10 shares of
common stock at any time at the option of the holder, subject to adjustment for
stock splits, stock dividends, recapitalizations and similar transactions (the
“Series B Conversion
Ratio”).  Each share of Series B Convertible Preferred Stock will
automatically be converted into shares of common stock at the Series B
Conversion Ratio then in effect:  (i) if, after 12 months from the
closing of the applicable tranche of the Series B Private Placement, the common
stock trades on the Nasdaq Capital Market (or other primary trading market or
exchange on which the common stock is then traded) at a price equal to 3/10 of
the Series B Purchase Price, or $5.64, for 20 out of 30 consecutive trading days
with average daily trading volume of at least 10,000 shares or (ii) upon a
registered public offering by the Company at a per share price equal to 3/10 of
the Series B Purchase Price, or $5.64, with aggregate gross proceeds to the
Company of not less than $10 million.  Unless waived under certain
circumstances by the holder of the Series B Convertible Preferred Stock, such
holder’s Series B Convertible Preferred Stock may not be converted if upon such
conversion the holder’s beneficial ownership would exceed certain
thresholds.
 
 The
holders of Series B Convertible Preferred Stock are not entitled to vote on any
matters presented to the stockholders of the Company for their action or
consideration at any meeting of stockholders of the Company (or by written
consent of stockholders in lieu of meeting), except that the holders of Series B
Convertible Preferred Stock may vote separately as a class on any matters that
would amend, alter or repeal any provision of our Restated Articles of
Organization, as amended, in a manner that adversely affects the powers,
preferences or rights of the Series B Convertible Preferred Stock and such
holders may also vote on any matters required by law.
 
 At any
time after February 12, 2014, upon 30 days written notice, we have the right to
redeem the outstanding shares of Series B Convertible Preferred Stock at a price
equal to the Series B Purchase Price, plus all accrued and unpaid dividends
thereon.  The redemption price may be paid in two annual
installments.  The Series B Convertible Preferred Stock and the Series A
Convertible Preferred Stock will be treated on an equivalent basis with respect
to payments made in connection with redemption.
 
 Series B
Warrants
  The
Series B Warrants issued in November 2009 have an exercise price equal to $23.80
and the Series B Warrants issued in March 2010 have an exercise price equal to
$28.80, in each case with a term expiring on August 11, 2011.  The Series B
Warrants permit the holder to conduct a “cashless exercise” at any time the
holder of the Series B Warrant is an “affiliate” (as defined in the Securities
Purchase Agreement) of the Company.
 
 The
Series B Warrant exercise price and/or number of shares issuable upon exercise
of the Series B Warrant will be subject to adjustment for stock dividends, stock
splits or similar capital reorganizations, as set forth in the Series B
Warrants.
 
 Subject
to the terms and conditions of the Series B Warrants, the Company has the right
to call for cancellation of the Series B Warrants if the volume weighted average
price of our common stock on the Nasdaq Capital Market (or other primary trading
market or exchange on which our common stock is then traded) equals or exceeds
5/20 of the Series B Purchase Price, or $4.70, for either (i) 10 consecutive
trading days or (ii) 15 out of 25 consecutive trading days.
 
 In
connection with the Series B Private Placement on March 18, 2010, we issued
warrants to our placement agent to purchase 1,679 shares of Series B Convertible
Preferred Stock at $28.80 per share, expiring August 11, 2012.  The Series
B Warrants and placement agent warrants were valued based on a Black-Scholes
pricing model at the date of the grants.  The Series B Warrants and
placement agent warrants vested immediately.  The relative fair value of
the Series B Warrants was calculated to be $173,060 and was recorded to
Stockholders’ Equity.  The assumptions for the Black-Scholes pricing model
are represented in the table below for the warrants issued in both
tranches.  The assumptions for the placement agent show the range of values
for both tranches.
 
 Assumptions
                    
                    Preferred warrants
                    
                    
                    Placement AgentExpected
      life (in months)
                    
                    
                    17.0
                    
                    
                    
                    33.0Expected
      volatility
                    
                    
                    146.4
                    %
                    
                    
                    125.0
                    %Risk-free
      interest rate
                    
                    
                    1.000
                    %
                    
                    
                    1.000
                    %Exercise
      price
                    
                    $
                    2.88
                    
                    
                    $
                    2.88Fair
      value per warrant
                    
                    $
                    0.95
                    
                    
                    $
                    1.08
  14
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Common
Stock
 
 Shareholders Rights
Plan
 
 On March
3, 2003, our Board of Directors adopted a shareholder rights plan (the “Rights
Plan”) and declared a distribution of one Right for each outstanding share of
our common stock to shareholders of record at the close of business on March 21,
2003 (the “Rights”).  Initially, the Rights will trade automatically with
the common stock and separate Right Certificates will not be issued.  The
Rights Plan is designed to deter coercive or unfair takeover tactics and to
ensure that all of our shareholders receive fair and equal treatment in the
event of an unsolicited attempt to acquire the Company.  The Rights will
expire on February 27, 2013 unless earlier redeemed or exchanged.  Each
Right entitles the registered holder, subject to the terms of a Rights
Agreement, to purchase from the Company one one-thousandth of a share of the
Company’s Series A Junior Participating Preferred Stock at a purchase price of
$45.00 per one one-thousandth of a share, subject to adjustment. In general, the
Rights will not be exercisable until a subsequent distribution date which will
only occur if a person or group acquires beneficial ownership of 15% or more of
our common stock or announces a tender or exchange offer that would result in
such person or group owning 15% or more of the common stock. With respect to any
person or group who currently beneficially owns 15% or more of our common stock,
the Rights will not become exercisable unless and until such person or group
acquires beneficial ownership of additional shares of common stock.
 
 Subject
to certain limited exceptions, if a person or group acquires beneficial
ownership of 15% or more of our outstanding common stock or if a current 15%
beneficial owner acquires additional shares of common stock, each holder of a
Right (other than the 15% holder whose Rights become void once such holder
reaches the 15% threshold) will thereafter have a right to purchase, upon
payment of the purchase price of the Right, that number of shares of our common
stock which at the time of such transaction will have a market value equal to
two times the purchase price of the Right.  In the event that, at any time
after a person or group acquires 15% or more of our common stock, we are
acquired in a merger or other business combination transaction or 50% or more of
our consolidated assets or earning power are sold, each holder of a Right will
thereafter have the right to purchase, upon payment of the purchase price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the purchase
price of the Right.
 
 Our Board
of Directors may exchange the Rights (other than Rights owned by such person or
group which have become void), in whole or in part, at an exchange ratio of one
share of common stock per Right (subject to adjustment).  At any time prior
to the time any person or group acquires 15% or more of our common stock, the
Board of Directors may redeem the Rights in whole, but not in part, at a price
of $0.001 per Right.
 
 Stock Options and
Warrants
 
 Our
stockholders approved our amended 2005 Equity Incentive Plan (the “Plan”)
pursuant to which an aggregate of 1,500,000 shares of our common stock were
reserved for issuance upon exercise of stock options or other equity awards made
under the Plan.  Under the Plan, we may award stock options, shares of
common stock, and other equity interests in the Company to employees, officers,
directors, consultants, and advisors, and to any other persons the Board of
Directors deems appropriate.
 
 As of
March 31, 2010, options to acquire 1,325,500 shares were outstanding under the
Plan with 174,500 shares available for future grant under the Plan.  As of
March 31, 2010, options to acquire 239,000 shares are outstanding under the 1999
Non-qualified Stock Option Plan.  No additional options may be granted
under the 1999 Non-qualified Stock Option Plan.
 
 As of
March 31, 2010, 108,522 of the 15-Month Series A Preferred Stock Warrants were
outstanding and 1,569,800 of the 30-Month Common Stock Warrants were
outstanding.  Series B Warrants to purchase 94,055 shares of Series B
Convertible Preferred Stock, which includes warrants given to our placement
agent, were outstanding.  On March 31, 2010, we issued warrants to an
investor relations firm to purchase 50,000 shares of our common stock at an
exercise price equal to $3.00 per share, with a term expiring on August 11,
2012, in exchange for consulting services provided to us by such
firm.
 
 The
following tables summarize information concerning common stock issuable upon the
exercise of outstanding stock options and warrants to acquire either common
stock or preferred stock convertible into common stock:
  15
  PRESSURE
BIOSCIENCES, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 AS
OF MARCH 31, 2010
 
 Stock Options
                  
                  
                  WarrantsWeighted
                  
                  
                  
                  
                  
                  WeightedAverage price
                  
                  
                  
                  
                  
                  Average price
                  
                  
                  TotalShares
                  
                  
                  per share
                  
                  
                  Shares
                  
                  
                  per share
                  
                  
                  Shares
                  
                  
                  ExercisableBalance outstanding,
      12/31/2008
                  
                  
                  1,222,499
                  
                  
                  $
                  3.30
                  
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  1,222,499
                  
                  
                  
                  932,334Granted
                  
                  
                  485,000
                  
                  
                  
                  0.82
                  
                  
                  
                  3,846,640
                  
                  
                  
                  1.78
                  
                  
                  
                  4,331,640Exercised
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  
                  (40,000
                  )
                  
                  
                  1.25
                  
                  
                  
                  (40,000
                  )Expired
                  
                  
                  (5,000
                  )
                  
                  
                  4.25
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (5,000
                  )Forfeited
                  
                  
                  (137,999
                  )
                  
                  
                  3.40
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (137,999
                  )Balance
      outstanding, 12/31/2009
                  
                  
                  1,564,500
                  
                  
                  $
                  3.30
                  
                  
                  
                  3,806,640
                  
                  
                  $
                  1.78
                  
                  
                  
                  5,371,140
                  
                  
                  
                  4,955,152Granted
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  283,510
                  
                  
                  
                  2.88
                  
                  
                  
                  283,510Exercised
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (444,580
                  )
                  
                  
                  1.25
                  
                  
                  
                  (444,580
                  )Expired
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Forfeited
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Balance
      outstanding, 3/31/2010
                  
                  
                  1,564,500
                  
                  
                  $
                  2.52
                  
                  
                  
                  3,645,570
                  
                  
                  $
                  1.93
                  
                  
                  
                  5,210,070
                  
                  
                  
                  5,019,076
 
 Options Outstanding
                                    
                                    
                                    Options ExercisableWeighted Average
                                    
                                    
                                    
                                    
                                    
                                    Weighted AverageRemaining
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    RemainingRange of Exercise
                                    
                                    Number of
                                    
                                    
                                    Contractual
                                    
                                    
                                    Exercise
                                    
                                    
                                    Number of
                                    
                                    
                                    Contractual
                                    
                                    
                                    ExercisePrices
                                    
                                    Options
                                    
                                    
                                    Life
                                    
                                    
                                    Price
                                    
                                    
                                    Options
                                    
                                    
                                    Life
                                    
                                    
                                    Price$0.77 - $2.70
                                    
                                    
                                    704,000
                                    
                                    
                                    
                                    6.7
                                    
                                    
                                    $
                                    1.25
                                    
                                    
                                    
                                    575,673
                                    
                                    
                                    
                                    6.3
                                    
                                    
                                    $
                                    1.342.71
      - 3.08
                                    
                                    
                                    319,500
                                    
                                    
                                    
                                    4.9
                                    
                                    
                                    
                                    2.93
                                    
                                    
                                    
                                    283,166
                                    
                                    
                                    
                                    4.5
                                    
                                    
                                    
                                    2.953.09
      - 3.95
                                    
                                    
                                    302,000
                                    
                                    
                                    
                                    6.2
                                    
                                    
                                    
                                    3.67
                                    
                                    
                                    
                                    302,000
                                    
                                    
                                    
                                    6.2
                                    
                                    
                                    
                                    3.673.96
      - 5.93
                                    
                                    
                                    239,000
                                    
                                    
                                    
                                    6.9
                                    
                                    
                                    
                                    4.24
                                    
                                    
                                    
                                    212,667
                                    
                                    
                                    
                                    6.8
                                    
                                    
                                    
                                    4.22$0.77
      - $5.93
                                    
                                    
                                    1,564,500
                                    
                                    
                                    
                                    6.3
                                    
                                    
                                    $
                                    2.52
                                    
                                    
                                    
                                    1,373,506
                                    
                                    
                                    
                                    6.0
                                    
                                    
                                    $
                                    2.63
 
 During
the three months ended March 31, 2009, the total fair value of stock options
awarded was $251,730.  We did not grant employee stock options during the
three months ended March 31, 2010.
 
 As of
March 31, 2010, the total estimated fair value of unvested stock options to be
amortized over their remaining vesting period was $163,051.  The non-cash,
stock based compensation expense associated with the vesting of these options is
expected to be $122,487 in 2010 and $40,564 in 2011.
 
 6)
              Subsequent
      Events
 
 We
performed a review of events subsequent to the balance sheet date through the
date the financial statements were issued.
 
 15-Month Series A Preferred
Stock Warrant Call
 
 On March
30, 2010, the Company called for cancellation of any 15-Month Series A Preferred
Stock Warrants that remained unexercised as of April 28, 2010.  In
connection with this warrant call, 15-Month Series A Preferred Stock Warrants to
purchase 98,372 shares of Series A Convertible Preferred Stock were exercised at
$12.50 per share, for gross proceeds to the Company of $1,229,650, before
deducting expenses associated with the warrant call notice.  15-Month
Series A Preferred Stock Warrants to purchase an additional 10,150 shares of
Preferred Stock were exercised on a cashless basis, resulting in the net
issuance of 2,883 shares of Preferred Stock.  Pursuant to the terms of the
15-Month Series A Preferred Stock Warrants, upon exercise of such warrants, the
holders became entitled to receive an aggregate of 62,181 shares of common stock
in payment of dividends on the Series A Convertible Preferred Stock paid on June
30, 2009 and December 31, 2009.
 16
 ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
 This
Quarterly Report on Form 10-Q 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
      ability to raise additional equity or debt financing on acceptable terms,
      if at all;
 -
              our
      belief that we have sufficient liquidity to finance normal operations
      through the first quarter of 2011;
 -
              our need to take additional cost
      reduction measures, cease operations or sell our operating assets, if we
      are unable to obtain sufficient additional financing in the
      future;
 -
              the
      amount of cash necessary to operate our
  business;
 -
              Theamount
      of grant revenue and anticipated uses of grant revenue in future
      periods;
 -
              our
      plans and expectations with respect to our pressure cycling technology
      (PCT) operations;
 -
              the potential applications for
      PCT in, and the demonstration of proof-of-concept of PCT for, sample
      preparation, pathogen inactivation, protein purification, control of
      chemical reactions and immunodiagnostics, among
    others;
 -
              availability
      of additional income tax benefits relating to carry-backs to prior
      periods;
 -
              the
      expected expenses, benefits and results from our research and development
      efforts;
 -
              the
      expected benefits and results from our collaboration
    efforts;
 -
              expected
      increase in number of PCT units installed and the increase in revenues
      from sale of consumable products and extended service
      contracts;
 -
              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.
 
 RISK
FACTORS
  Factors
that could cause or contribute to differences in our future financial and
operating results include those discussed in the risk factors set forth in Item
1 of our Annual Report on Form 10-K for the year ended December 31, 2009, as
well as those discussed elsewhere in this Report, including the
following:
  We
will require additional capital to further develop our pressure cycling
technology products and services and cannot ensure that additional capital will
be available on acceptable terms or at all.
  We have
experienced negative cash flows from operations from our pressure cycling
technology business since we commenced our pressure cycling technology
operations.  As of March 31, 2010, we had working capital resources of
approximately $2 million.  Subsequent to March 31, 2010, pursuant to a
warrant call notice, 15 Month Series A Preferred Stock Warrants to purchase
98,372 shares of Series A Convertible Preferred Stock were exercised for gross
proceeds to the Company of $1,229,650, before deducting expenses associated with
the warrant call notice.  Based on our current projections, we believe our
current cash resources, which include the funds we received from these warrant
exercises, are sufficient to fund our normal operations through the first
quarter of 2011.  Depending upon the results of the Company’s future
financing and partnering activities and sales efforts, we may make cost
reductions as required to accomplish this goal.  We believe we will need
substantial additional capital to fund our operations in periods beyond the
first quarter of 2011
  We will
need additional capital sooner than we currently expect if we experience
unforeseen costs or expenses, unanticipated liabilities or delays in
implementing our business plan, developing our products and achieving commercial
sales. We also believe that we will need substantial capital to accelerate the
growth and development of our pressure cycling technology products and services
in the sample preparation area, as well as for applications in other areas of
life sciences. Our capital requirements will depend on many factors, including
but not limited to:
  17
  ·
              the
      problems, delays, expenses, and complications frequently encountered by
      early-stage companies;
 ·
              market
      acceptance of our pressure cycling technology products and services for
      sample preparation;
 ·
              the
      success of our sales and marketing programs;
and
 ·
              changes
      in economic, regulatory or competitive conditions in the markets we intend
      to serve.
 
 To
satisfy our potential capital requirements to cover the cost of the development
and commercialization of our pressure cycling technology products and services
relating to sample preparation and other life science applications, we expect to
raise additional funds in the public or private capital markets.  We may
seek to raise any necessary additional funds through the issuance of warrants,
equity or debt financings or executing collaborative arrangements with corporate
partners or other sources, which may be dilutive to existing stockholders or
otherwise have a material effect on our current or future business prospects.
Additional financing may not be available to us on a timely basis, if at all, or
on terms acceptable to us. If adequate funds are not available or if we fail to
obtain acceptable additional financing, we may be required to:
  ·
              obtain
      financing with terms that may have the effect of substantially diluting or
      adversely affecting the holdings or the rights of the holders of our
      stock;
 ·
              obtain
      funds through arrangements with future collaboration partners or others
      that may require us to relinquish rights to some or all of our
      technologies or products;
 ·
              implement
      additional cost reduction initiatives;
or
 ·
              limit
      or cease our operations or otherwise reduce planned expenditures and
      forego other business opportunities, which could harm our
      business
 
 Our
actual results and performance, including our ability to raise additional
capital, may be adversely affected by current economic conditions.
 
 Our
actual results and performance could be adversely affected by the current
economic conditions in the global economy, which pose a risk to the overall
demand for our products from our customers who may elect to defer or cancel
purchases of our products in response to tighter credit markets, negative
financial news, and general uncertainty in the economy.  In addition, our
ability to obtain additional financing, on acceptable terms, if at all, may be
adversely affected by the crisis in the credit markets and the uncertainty in
the current economic climate.
 
 We
qualify all of our forward-looking statements by these cautionary statements.
You should read this section in combination with the section entitled
Management’s Discussion and Analysis of Financial Condition and Results of
Operations for the year ended December 31, 2009 included in our Annual
Report on Form 10-K for the year ended December 31, 2009.
  The
holders of our common stock could suffer substantial dilution as the result of
the private placements we completed in 2009 and 2010.
  In
connection with the private placements we completed in 2009 and 2010, we issued
shares of Series A Convertible Preferred Stock and shares of Series B
Convertible Preferred Stock, together with warrants to purchase shares of Series
A Convertible Preferred Stock and common stock in our first private placement,
and together with warrants to purchase shares of Series B Convertible Preferred
Stock in our second private placement.  Each share of Series A Convertible
Preferred Stock and each share of Series B Convertible Preferred Stock is
convertible into 10 shares of common stock.   If all of the shares of
Series A Convertible Preferred Stock and Series B Convertible Preferred Stock,
together with the warrants to purchase Series A Convertible Preferred Stock and
Series B Convertible Preferred Stock and common stock, were converted or
exercised into shares of our common stock, an additional 6,483,620 shares of
common stock would be issued and outstanding.  The additional issuance of
common stock would cause immediate and substantial dilution to our existing
stockholders, and could cause a significant reduction in the market price of our
common stock.
  Our
shares of Series A Convertible Preferred Stock and Series B Convertible
Preferred Stock are entitled to certain rights, privileges and preferences over
our common stock, including the right to receive dividends and a preference upon
a liquidation of the company, which could reduce amounts available for
distribution to our common stockholders.
  We have
never declared or paid any cash dividends on our common stock and do not plan to
pay any cash dividends on our common stock in the foreseeable future.  The
holders of our shares of Series A Convertible Preferred Stock, however, are
entitled to receive a cumulative dividend at the rate of 5% per annum of the
purchase price paid for the Series A Convertible Preferred Stock, payable
semi-annually on June 30 and December 31, which commenced on June 30,
2009.  The holders of our shares of Series B Convertible Preferred Stock
are entitled to receive a cumulative dividend at the rate of 5% per annum of the
purchase price paid for the Series B Convertible Preferred Stock, payable
semi-annually on June 30 and December 31, which commenced on December 31,
2009.  Dividends may be paid in cash or in shares of common stock at our
option, subject to certain conditions.   If we elect to pay the
dividends in cash, we will have less cash available for operations, and less
cash available to the holders of common stock upon a liquidation of the
company.  For the dividend payments on June 30, 2009 and December 31, 2009,
we elected to pay the dividends in common stock.  This had a dilutive
effect on our common stockholders.  If we continue to elect to pay the
dividends in common stock, our common stockholders will suffer additional
dilution.
  18
  The
Series A Convertible Preferred Stock and Series B Convertible Preferred Stock
are also entitled to receive preferential treatment in the event of liquidation,
dissolution or winding up of our company, which could leave significantly less
assets, if any, available for distribution to our common stockholders upon a
liquidation, dissolution or winding up of our company.
  There
is no guarantee that we will continue to meet the standards for continued
listing on the NASDAQ Capital Market.  The value of your investment in our
company may substantially decrease if we were delisted from NASDAQ.
  As of the
filing date of this Quarterly Report on Form 10-Q, we are in compliance with the
continued listing standards of the NASDAQ Capital Market.  However, we
cannot guarantee that we will continue to meet the standards for listing in the
future.  Upon delisting from the NASDAQ Capital Market, our common stock
would be traded on the over-the-counter bulletin board (“OTC”). OTC transactions
involve risks in addition to those associated with transactions in securities
traded on the NASDAQ Capital Market. Many OTC stocks trade less frequently and
in smaller volumes than NASDAQ listed stocks. Accordingly, delisting from the
NASDAQ Capital Market could adversely affect the trading price of our common
stock, significantly limit the liquidity of our common stock and impair our
ability to raise additional funds.
  19
  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) to control bio-molecular
interactions.
 
 Our
pressure cycling technology uses internally developed instrumentation that is
capable of cycling pressure between ambient and ultra-high levels at controlled
temperatures to rapidly and repeatedly control the interactions of
bio-molecules. Our instrument, the Barocycler®, and our internally developed
consumables product line, which includes PULSE (Pressure Used to Lyse Samples
for Extraction) Tubes as well as application specific kits (which include
consumable products and reagents) together make up the PCT Sample Preparation
System (“PCT SPS”).
 
 We have
experienced negative cash flows from operations with respect to our pressure
cycling technology business since our inception.  As of March 31, 2010, we
had working capital resources of approximately $2 million.  Subsequent to
March 31, 2010, pursuant to a warrant call notice, 15 Month Series A Preferred
Stock Warrants to purchase 98,372 shares of Series A Convertible Preferred Stock
were exercised for gross proceeds to the Company of $1,229,650, before deducting
expenses associated with the warrant call notice.  Based on our current
projections, we believe our current cash resources, which include the funds we
received from these warrant exercises, are sufficient to fund our normal
operations through the first quarter of 2011.  Depending upon the results
of the Company’s future financing and partnering activities and sales efforts,
we may make cost reductions as required to accomplish this goal.
 
 We
believe we will need substantial additional capital to fund our operations in
periods beyond the first quarter of 2011.  If we are able to obtain
additional capital or otherwise increase our revenues, we may increase spending
in specific research and development applications and engineering projects and
may hire additional sales personnel or invest in targeted marketing
programs.  In the event that we are unable to obtain financing on
acceptable terms, or at all, we may be required to limit or cease our
operations, pursue a plan to sell our operating assets, or otherwise modify our
business strategy, which could materially harm our future business
prospects.
 
 We hold
13 United States and 6 foreign patents covering multiple applications of PCT in
the life sciences field. Our pressure cycling technology employs a unique
approach that we believe has the potential for broad use in a number of
established and emerging life sciences areas, including;
 
 -
              sample
      preparation for genomic, proteomic, and small molecule
      studies;
 -
              pathogen
      inactivation;
 -
              protein
      purification;
 -
              control
      of chemical (particularly enzymatic) reactions;
  and
 -
              Immunodiagnostics
      (clinical laboratory testing).
 
 Since we
began operations as Pressure BioSciences in February 2005, we have installed 138
Barocycler instruments.  Our customers include researchers at academic
laboratories, government agencies and biotechnology, pharmaceutical and other
life sciences companies in the United States, and six foreign distribution
partners.
 
 2005
                    
                    
                    2006
                    
                    
                    2007
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    YTD 2010Installed
      units
                    
                    
                    5
                    
                    
                    
                    8
                    
                    
                    
                    20
                    
                    
                    
                    41
                    
                    
                    
                    54
                    
                    
                    
                    10
  20
  RESULTS OF
OPERATIONS
  Three
Months Ended March 31, 2010 and 2009
  Revenue
  We
recognized revenue of $290,813 for the three months ended March 31, 2010, as
compared to $306,762 for the same period in the prior year.
 
 PCT Products, Services,
Other. Revenue from the sale of PCT products and services was $189,150
for the three months ended March 31, 2010 as compared to $222,142 for the same
period in the prior year.  During both first quarters of 2010 and 2009, we
completed the installation of ten Barocycler instruments.
 
 For the Three Months EndedMarch 31,2010
                    
                    
                    2009Domestic
                    
                    
                    10
                    
                    
                    
                    7International
                    
                    
                    -
                    
                    
                    
                    3Total
      Installations
                    
                    
                    10
                    
                    
                    
                    10
 
 We expect
the number of units installed will continue to increase in future periods as we
continue to commercialize our technology, although we may continue to experience
some delays in customer purchases due to current economic conditions in the
global economy.  Furthermore, we may realize some difficulties in signing
up new distribution partners if we are unable to secure additional funding
through equity or debt financings.  We also expect that some portion of
future installations will continue to be for the smaller, lower priced,
Barocycler NEP2320 model and some will be placed under lease or short-term
rental agreements.  Therefore, we expect that the average revenue per
installation will continue to fluctuate from period to period as we continue to
drive our installed base and commercialize PCT.  As we expand the installed
base of Barocycler instruments in the field, we expect to realize increasing
revenues from the sale of consumable products and extended service
contracts.  In the short-term, these recurring revenue streams may continue
to fluctuate from period to period.
 
 Grant Revenue. During the
three months ended March 31, 2010 and 2009, we recorded $101,663 and $84,620 of
grant revenue, respectively.  We completed the SBIR Phase I grant this
quarter and received a new SBIR Phase I grant from another federal agency for
approximately $100,000 effective March 30, 2010.  We expect grant revenues
to remain consistent over the next several quarters as the amount of time and
expense incurred in connection with the grants continues.  The level of
grant revenue that we recognize in any given quarter is dependent upon the level
of resources we devote to grant related work in the period.
 
 Cost
of PCT Products and Services
  The cost
of PCT products and services was $87,103 for the three months ended March 31,
2010 compared to $140,243 for the comparable period in 2009.  The decrease
in the cost of PCT products and services as a percentage of PCT revenue was due
primarily to two factors: (a) sales of three Barocycler units to our
international distributors at distributor discounted prices in the prior year
and (b) increased rental rates this year on Barocycler leases.  Our gross
profit margin increased to 54% for the three months ended March 31, 2010, as
compared to 37% for the three months ended March 31, 2009.
 
 The
relationship between the cost of PCT products and services and PCT revenue will
depend greatly on the mix of instruments we sell, the quantity of such
instruments, and the mix of consumable products that we sell in a given
period.
 
 Research
and Development
  Research
and development expenditures were $294,141 in the first quarter of 2010 as
compared to $307,224 in the same period in 2009.  This steady trend
reflects consistent efforts on a number of R&D projects we are currently
funding.
 
 Research
and development expense recognized in the first quarters of 2010 and 2009
included $18,247 and $52,972 of non-cash, stock-based compensation expense,
respectively.
  21
  Selling
and Marketing
  Selling
and marketing expenses increased slightly to $282,578 for the three months ended
March 31, 2010 from $278,416 for the comparable period in 2009.
 
 During
the first quarter of 2010 and 2009, selling and marketing expense included
$17,175 and $21,208 of non-cash, stock-based compensation expense,
respectively.
 
 General
and Administrative
  General
and administrative costs totaled $538,422 for the three months ended March 31,
2010 as compared to $430,790 for the comparable period in 2009, an increase of
$107,632 or 25%.  The increase is due to patent filing activities and
investor relations.
 
 During
the first quarter of 2010 and 2009, general and administrative expense included
$59,314 and $71,723 of non-cash, stock-based compensation expense,
respectively.
 
 Operating
Loss
 
 Our
operating loss was $911,431 for the three months ended March 31, 2010 as
compared to $849,911 for the comparable period in 2009, an increase of $61,520
or 7%.
 
 Interest
Income
  Interest
income totaled $106 for the three months ended March 31, 2010 as compared to
interest income of $2,403 in the prior year period.
 
 Income
Taxes
  During
the first quarter of 2010, we did not record a benefit for income taxes. 
In the quarter ended March 31, 2009, we recorded a benefit for income taxes of
$623,262 due to provisions in the American Recovery and Reinvestment Act of 2009
relating to net operating loss carry-backs.
 
 Net
Loss
 
 During
the first quarter of 2010, we recorded a net loss to common shareholders of
$1,167,849 or $(0.49) per share, as compared to $725,671 or $(0.33) per share in
the first quarter of 2009.  Our net loss in the first quarter of 2010
increased from the corresponding net loss of the first quarter of 2009 because
the prior quarter net loss includes the income tax benefit of $623,262. 
The difference between net loss applicable to common shareholders and net loss
relates to the beneficial conversion calculation associated with the intrinsic
value of the Series A Convertible Preferred Stock and Series B Convertible
Preferred Stock.
 
 LIQUIDITY AND FINANCIAL
CONDITION
 
 As of
March 31, 2010, our working capital position was $2,071,281 the primary
components of which were cash and cash equivalents, accounts receivable,
inventory, prepaid expenses, and deposits, partially offset by accounts payable,
accrued employee compensation, and other accrued expenses.  As of December
31, 2009, our working capital position was $2,209,205.
 
 On March
18, 2010, we sold an aggregate of 26,672 units (the “Series B Units”) for a
purchase price of $18.80 per unit, resulting in net proceeds to us of
$465,867.  An initial tranche of Series B Units was sold in November
2009.  Each Series B Unit consists of (i) one share of a newly created
Series B Convertible Preferred Stock convertible into 10 shares of our common
stock and (ii) a warrant to purchase one share of Series B Convertible Preferred
Stock at an exercise price equal to $28.80 per share with a term expiring on
August 11, 2011 (“Series B Warrant”).  See Note 8 to our Consolidated
Financial Statement in the Annual Report on Form 10-K for the year ended
December 31, 2009 for a further description of the Series B Convertible
Preferred Stock and Series B Warrants issued in the Series B Private
Placement.
 
 In
connection with the warrant call notice issued on March 30, 2010, 15 Month
Series A Preferred Stock Warrants to purchase 98,372 shares of Series A
Convertible Preferred Stock were exercised at $12.50 per share, for net proceeds
to the Company of $191,625 in March 2010 and $1,229,650 in April 2010, before
deducting expenses associated with the warrant call notice.  Warrants to
purchase an additional 10,150 shares of Preferred Stock were exercised on a
cashless basis, resulting in the net issuance of 2,883 shares of Preferred
Stock.
  22
  As of
March 31, 2010, we had working capital resources of approximately $2
million.  Based on our current projections, we believe our current cash
resources, which include the funds we received from the Series A Preferred Stock
Warrant exercise in April 2010, are sufficient to fund our normal operations
through the first quarter of 2011.  Depending upon the results of the
Company’s future financing and partnering activities and sales efforts, we may
make cost reductions as required to accomplish this goal.
 
 We
believe we will need substantial additional capital to fund our operations in
periods beyond the first quarter of 2011.  If we are able to obtain
additional capital or otherwise increase our revenues, we may increase spending
in specific research and development applications and engineering projects and
may hire additional sales personnel or invest in targeted marketing
programs.  In the event that we are unable to obtain financing on
acceptable terms, or at all, we may be required to limit or cease our
operations, pursue a plan to sell our operating assets, or otherwise modify our
business strategy, which could materially harm our future business
prospects.
 
 Net cash
used in operations for the three months ended March 31, 2010 was $619,496 as
compared to $249,955 for the three months ended March 31, 2009.  The
increase in cash used in operations in 2010 as compared to 2009 is principally
the second deposit paid to our supplier for Barocycler inventory and corporate
activities.
 
 Net cash
used in investing activities for the three months ended March 31, 2010 was
$30,060 as compared to cash used of $47,492 for the same period in the prior
year.  During the three months of 2010, we purchased tooling and installed
Barocycler instruments under collaboration or lease agreements while selling one
demonstration unit.  Cash used in investing activities during the three
months of 2009 was for Barocycler instruments that we purchased and installed
under collaboration or lease agreements.
 
 Net cash
provided by financing activities for the three months ended March 31, 2010 was
$657,492 as compared to cash provided for the same period in the prior year was
$1,567,924.  We closed the second tranche of the Series B Private Placement
on March 18, 2010 with the sale of an additional 26,672 Series B Units with net
proceeds of $465,867.  Each Series B Unit consists of (i) one share of
Series B Convertible Preferred Stock convertible into 10 shares of our common
stock and (ii) a warrant to purchase one share of Series B Convertible Preferred
Stock at an exercise price equal to $28.80 per share with a term expiring on
August 11, 2011 (“Series B Warrant”).
 
 During
the three months ended March 31, 2010, 15 Month Series A Preferred Stock
Warrants to purchase 15,330 shares of Series A Convertible Preferred Stock were
exercised at $12.50 per share, for net proceeds to the Company of
$191,625.
 
 COMMITMENTS AND
CONTINGENCIES
  Operating
Leases
 
 Our
corporate offices are currently located at 14 Norfolk Avenue, South Easton,
Massachusetts 02375.  In November 2007, we signed an 18 month lease
agreement commencing in February 2008 pursuant to which we lease approximately
5,500 square feet of office space, with an option for an additional 12
months.  We exercised the renewal option to extend the lease term until
July 14, 2010.  We pay approximately $6,500 per month for the use of these
facilities.
 
 Effective
January 1, 2010, we entered into a three-year lease agreement with the
University of Massachusetts, pursuant to which we are leasing laboratory and
office space on campus at the university.  We are paying $5,000 per month
for the use of these facilities.
 
 Royalty
Commitments
 
 In 1996,
we acquired our initial equity interest in BioSeq, Inc., which at the time was
developing our original pressure cycling technology.  BioSeq, Inc. acquired
its pressure cycling technology from BioMolecular Assays, Inc. (“BMA”) under a
technology transfer and patent assignment agreement.  In 1998, we purchased
all of the remaining outstanding capital stock of BioSeq, Inc., and at such
time, the technology transfer and patent assignment agreement was amended to
require us to pay BMA a 5% royalty on our sales of products or services that
incorporate or utilize the original pressure cycling technology that BioSeq,
Inc. acquired from BMA.  We are also required to pay BMA 5% of the proceeds
from any sale, transfer or license of all or any portion of the original
pressure cycling technology.  These payment obligations terminate in
2016.  During the three months ended March 31, 2010 and 2009, we incurred
$6,524 and $8,827, respectively in royalty expense associated with our
obligation to BMA.
 
 In
connection with our acquisition of BioSeq, Inc., we licensed certain limited
rights to the original pressure cycling technology back to BMA.  This
license is non-exclusive and limits the use of the original pressure cycling
technology by BMA solely for molecular applications in scientific research and
development and in scientific plant research and development.  BMA is
required to pay us a royalty equal to 20% of any license or other fees and
royalties, but not including research support and similar payments, it receives
in connection with any sale, assignment, license or other transfer of any rights
granted to BMA under the license.  BMA must pay us these royalties until
the expiration of the patents held by BioSeq, Inc. in 1998, which we anticipate
will be in 2016.  We have not received any royalty payments from BMA under
this license.
  23
  Battelle
Memorial Institute
 
 In
December 2008, we entered into an exclusive patent license agreement with the
Battelle Memorial Institute ("Battelle"). The licensed technology is described
in the patent application filed by Battelle on July 31, 2008 (US serial number
12/183,219). This application includes subject matter related to a method and a
system for improving the analysis of protein samples, including through an
automated system utilizing pressure and a pre-selected agent to obtain a
digested sample in a significantly shorter period of time than current methods,
while maintaining the integrity of the sample throughout the preparatory
process.  Pursuant to the terms of the agreement we paid Battelle a
non-refundable initial fee.  In addition to royalty payments on net sales
on “licensed products”, we are obligated to make minimum royalty payments for
each year that we retain the rights outlined in the patent license agreement and
we are required to have our first commercial sale of the licensed products
within one year following the issuance of the patent covered by the licensed
technology.
 
 Purchase
Commitments
 
 On
December 14, 2009, we submitted a purchase order to Source Scientific, LLC, the
manufacturer of the Company’s PCT Barocycler instrumentation, for 50 Barocycler
NEP2320 units and 12 Barocycler NEP3229 units with various spare parts. 
Pursuant to the terms of the purchase order, we placed a deposit with Source
Scientific, LLC, of approximately $338,000 representing approximately 50% of the
expected total value of the order.  The purchase price for the 50 NEP2320
units and 12 NEP3229 units is based upon a fixed bill of materials.  We
will be billed for the unpaid purchase price of each unit at the time each unit
is completed and ready for sale.
 
 Severance
and Change of Control Agreements
 
 Each of
our executive officers is entitled to receive a severance payment if terminated
by the Company without cause. The severance benefits would include a payment in
an amount equal to one year of each executive officer’s annualized base salary
compensation plus accrued paid time off. Additionally, each executive officer
will be entitled to receive medical and dental insurance coverage for one year
following the date of termination. The total commitment related to these
agreements in the aggregate is approximately $1.0 million.
  Each of
our executive officers, other than Mr. Richard T. Schumacher, our President and
Chief Executive Officer, is entitled to receive a change of control payment in
an amount equal to one year of such executive officer’s annualized base salary
compensation, accrued paid time off, and medical and dental coverage, in the
event of a change of control of the Company.  In the case of Mr.
Schumacher, this payment would be equal to two years of annualized base salary
compensation, accrued paid time off, and two years of medical and dental
coverage. The total commitment related to these agreements in the aggregate is
approximately $1.3 million.The severance payment is
meant to induce the executive to become an employee of the Company and to remain
in the employ of the Company, in general, and particularly in the occurrence of
a change in control.
  RECENT ACCOUNTING
STANDARDS
 
 In June
2009, the FASB issued FASB ASC 105, Generally Accepted Accounting
Principles, which establishes the FASB Accounting Standards Codification
as the sole source of authoritative generally accepted accounting
principles.  Pursuant to the provisions of FASB ASC 105, the Company has
updated references to GAAP in its financial statements issued for the period
ended December 31, 2009.  The adoption of FASB ASC 105 did not impact the
Company’s financial position or results of operations.
 
 On June
30, 2009, the Company adopted FASB ASC 855, Subsequent Events, which
requires disclosure of the period after the balance sheet date during which
management of a reporting entity should evaluate events or transactions that may
occur for potential recognition or disclosure in the financial statements. 
The adoption of FASB ASC 855 did not have a material impact on our financial
statements.
  The
Financial Accounting Standards Board, or FASB, issued Accounting Standards
Update, or ASU, No. 2009-13, Revenue Recognition (Topic 605) —
Multiple-Deliverable Revenue Arrangements, or ASU 2009-13.  ASU 2009-13
amends existing revenue guidance related to revenue arrangements with multiple
deliverables to allow the use of companies’ estimated selling prices as the
value for deliverable elements under certain circumstances and to eliminate the
use of the residual method for allocation of deliverable elements.  ASU
2009-13 is effective for fiscal years beginning on or after June 15, 2010, with
earlier adoption permitted. The Company is currently evaluating the impact this
standard will have on its financial statements.
  24
   ITEM
4T. 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
filings are 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 was
necessarily required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
  As of
March 31, 2010, we carried out an evaluation, under the supervision and with the
participation of our management, including our Principal Executive Officer and
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 Principal Executive Officer and Principal Financial Officer
concluded that our disclosure controls and procedures are effective at the
reasonable assurance level.
 
 There
have been no changes in our internal controls 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 controls over
financial reporting.
  25
  PART II. OTHER
INFORMATION
 
 ITEM 6. EXHIBITS
  Exhibits
                
                
                
                Reference31.1
                
                Principal
      Executive Officer Certification Pursuant to Item 601(b)(31) of Regulation
      S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002
                
                Filed herewith31.2
                
                Principal
      Financial Officer Certification Pursuant to Item 601(b)(31) of Regulation
      S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002
                
                Filed herewith32.1
                
                Principal
      Executive Officer Certification Pursuant to Item 601(b)(32) of Regulation
      S-K, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002
                
                Filed herewith32.2
                
                Principal
      Financial Officer Certification Pursuant to Item 601(b)(32) of Regulation
      S-K, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002
                
                Filed herewith
  26
  SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
  PRESSURE
      BIOSCIENCES, INC.Date:
      May 17, 2010
                By:
                /s/Richard T.
      SchumacherRichard
      T. SchumacherPresident
      & Chief Executive Officer(Principal
      Executive Officer, Principal Financial Officer andPrincipal
      Accounting Officer)