**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**Form
      10-QSB**




**(Mark
      One)**




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




**For
      the quarterly period ended March 31, 2006****or**




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




**For
      the transition period from
                       
to**




**Commission
      file number   0-21615**




**PRESSURE
      BIOSCIENCES, INC.**


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




**Massachusetts**
            
            **04-2652826**(State
                or Other Jurisdiction of
            
            (I.R.S.
                EmployerIncorporation
                or Organization)
            
            Identification
                No.)**321
                Manley St.****West
                Bridgewater, Massachusetts**
            
            **02379-1040**(Address
                of Principal Executive Offices)
            
            (Zip
                Code)




**(508)
      580-1818**


(Issuer’s
      telephone number, including area code




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




ý Yes o No




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




o Yes ý No









The
      number of shares outstanding of the Issuer’s common stock as of May 12, 2006 was
      2,426,189 **.**


Transitional
      Small Business Disclosure Format (check one):




o Yes ý No












TABLE
      OF
      CONTENTS





PagePART
                I - FINANCIAL INFORMATIONItem
                  1. Financial StatementsConsolidated
                  Balance Sheets as of March 31, 2006 (Unaudited)
                  and December 31, 2005 (Restated)
              3Consolidated
                  Statements of Operations for the Three Months Ended March 31, 2006
                  and
                  2005 (Unaudited)
              4Consolidated
                  Statements of Comprehensive Income (Loss) for the Three Months
                  Ended March
                  31, 2006 and 2005 (Unaudited)
              5Consolidated
                  Statements of Cash Flows for the Three Months Ended March 31, 2006
                  and
                  2005 (Unaudited)
              6Notes
                  to Consolidated Financial Statements as of March 31, 2006
                  (Unaudited)
              7Item
                  2. Management's Discussion and Analysis of Financial Condition
                  or Plan of
                  Operations
              15Item
                  3. Controls and Procedures
              23PART
                  II - OTHER INFORMATIONItem
                  6. Exhibits
              25




-2-


**Part
      I. FINANCIAL INFORMATION**




**Item
      1. Financial Statements**




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


**CONSOLIDATED
      BALANCE SHEETS**





March
                  31,
              
              December
                  31,ASSETS
              
              2006
              
              2005(unaudited)
              
              (restated)CURRENT
                  ASSETS:Cash
                  and cash equivalents
              
              $
              7,732,127
              
              $
              6,416,772Restricted
                  cash
              
              
              138,120
              
              
              255,612Accounts
                  receivable, less allowance of $115,908
              
              
              46,177
              
              
              58,798Inventories,
                  net
              
              
              78,458
              
              
              85,207Investments
                  in marketable securities
              
              
              984
              
              
              1,533Escrow
                  deposit related to sale of assets to SeraCare
              
              
              -
              
              
              1,117,305Prepaid
                  income taxes
              
              
              70,000
              
              
              -Income
                  tax receivable
              
              
              286,477
              
              
              531,122Prepaid
                  expenses, deposits, and other current assets
              
              
              81,653
              
              
              75,286Total
                  current assets
              
              
              8,433,996
              
              
              8,541,635Property
                  and equipment, net
              
              
              262,180
              
              
              282,780OTHER
                  ASSETS:Intangible
                  assets, net
              
              
              413,396
              
              
              425,554Assets
                  transferred under contractual arrangements
              
              
              1,420,996
              
              
              1,420,996Investments
                  in marketable securities
              
              
              3,885,341
              
              
              3,962,810Total
                  other assets
              
              
              5,719,733
              
              
              5,809,360TOTAL
                  ASSETS
              
              $
              14,415,909
              
              $
              14,633,775LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIES:Accounts
                  payable
              
              $
              120,539
              
              $
              56,395Accrued
                  employee compensation
              
              
              251,565
              
              
              94,354Other
                  accrued expenses
              
              
              162,526
              
              
              99,718Income
                  taxes payable
              
              
              84,221
              
              
              63,730Current
                  deferred tax liability
              
              
              -
              
              
              219,949Accrued
                  SeraCare liabilities
              
              
              147,220
              
              
              264,713Liabilities
                  from discontinued operations
              
              
              2,040
              
              
              2,040Total
                  current liabilities
              
              
              768,111
              
              
              800,899LONG
                  TERM LIABILITIESLiabilities
                  from discontinued operations
              
              
              5,634
              
              
              6,120Deferred
                  tax liability
              
              
              1,404,234
              
              
              1,419,662Liabilities
                  transferred under contractual arrangements
              
              
              1,042,493
              
              
              1,042,493Total
                  long term liabilities
              
              
              2,452,361
              
              
              2,468,275TOTAL
                  LIABILITIES
              
              
              3,220,472
              
              
              3,269,174COMMITMENTS
                  AND CONTINGENCIESSTOCKHOLDERS'
                  EQUITY:Common
                  stock, $.01 par value; 20,000,000 shares authorized,2,424,189
                  issued and outstanding
              
              
              24,242
              
              
              24,242Additional
                  paid-in capital
              
              
              6,230,476
              
              
              6,027,020Loan
                  receivable from Director / CEO
              
              
              (1,000,000
              )
              
              (1,000,000
              )Accumulated
                  other comprehensive income
              
              
              2,475,377
              
              
              2,537,963Retained
                  earnings
              
              
              3,465,342
              
              
              3,775,376Total
                  stockholders' equity
              
              
              11,195,437
              
              
              11,364,601TOTAL
                  LIABILITIES & STOCKHOLDERS' EQUITY
              
              $
              14,415,909
              
              $
              14,633,775The
                  accompanying notes are an integral part of these consolidated financial
                  statements




-3-


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


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(UNAUDITED)**


**For
                the Three Months Ended**
              **March
                31,****2006**
            
            **2005**REVENUE:PCT
                Products, services, other
            
            $
            53,414
            
            $
            2,630Total
                revenue
            
            
            53,414
            
            
            2,630COSTS
                AND EXPENSES:Cost
                of PCT products & services
            
            
            51,546
            
            
            6,521Research
                and development
            
            
            258,819
            
            
            103,028Selling
                and marketing
            
            
            67,379
            
            
            15,260General
                and administrative
            
            
            689,626
            
            
            308,888Total
                operating costs and expenses
            
            
            1,067,370
            
            
            433,697Operating
                loss from continuing operations
            
            
            (1,013,956
            )
            
            (431,067
            )OTHER
                INCOME (EXPENSE):Realized
                gain on securities held for sale
            
            
            517,938
            
            
            -Other
                operating (charges), net
            
            
            -
            
            
            (235,352
            )Interest
                income
            
            
            108,506
            
            
            78,932Total
                other income (expense)
            
            
            626,444
            
            
            (156,420
            )Loss
                from continuing operations before income taxes
            
            
            (387,512
            )
            
            (587,487
            )Income
                tax benefit from continuing operations
            
            
            77,478
            
            
            199,746Loss
                from continuing operations
            
            
            (310,034
            )
            
            (387,741
            )Discontinued
                operations:Income
                from discontinued operations (net of income tax benefit of $2,411
                in
                2005)
            
            
            -
            
            
            4,679Income
                from discontinued operations
            
            
            -
            
            
            4,679Net
                Loss
            
            $
            (310,034
            )
            $
            (383,062
            )Loss
                per share from continuing operations - basic and
                diluted
            
            $
            (0.13
            )
            $
            (0.08
            )Income
                per share from discontinued operations - basic and
                diluted
            
            
            -
            
            
            -Net
                loss per share, basic and diluted
            
            $
            (0.13
            )
            $
            (0.08
            )Weighted
                average number of shares used to calculate per share loss - basic
                and
                diluted
            
            
            2,424,189
            
            
            4,649,052




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




-4-


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


**CONSOLIDATED
      STATEMENTS OF COMPREHENSIVE INCOME**


**(UNAUDITED** )




**For
                  the Three Months Ended****March
                  31,**Other
                  Comprehensive Income:
              
              **2006**
              
              **2005**Net
                  Loss
              
              $
              (310,034
              )
              $
              (383,062
              )Reclassification
                  of unrealized gain to realized gain on securities sold during the
                  period
              
              
              (400,722
              )
              
              -Unrealized
                  gain on marketable securities
              
              
              321,138
              
              
              3,049,841Income
                  tax benefit (provision) related to items of other comprehensive
                  income
              
              
              16,998
              
              
              (951,233
              )Total
                  other comprehensive (loss) income, net of taxes
              
              
              (62,586
              )
              
              2,098,608Comprehensive
                  (loss) income
              
              $
              (372,620
              )
              $
              1,715,546




The
        accompanying notes are an integral part of these consolidated financial
        statements
 
 -5-


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


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**





**For
                  the Three Months Ended****March
                  31,****2006**
              
              **2005**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (310,034
              )
              $
              (383,062
              )Less
                  income from discontinued operations
              
              
              -
              
              
              4,679Loss
                  from continuing operations
              
              
              (310,034
              )
              
              (387,741
              )Adjustments
                  to reconcile loss from continuing operations to net cashused
                  in operating activities :Depreciation
                  and amortization
              
              
              33,843
              
              
              13,720Non-cash
                  stock-based compensation expense
              
              
              203,456
              
              
              -Realized
                  gain on sale of marketable securities
              
              
              (517,938
              )
              
              -Interest
                  (receivable) on loan outstanding from Director / CEO
              
              
              -
              
              
              (17,944
              )Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              12,621
              
              
              141,588Inventories
              
              
              6,749
              
              
              (150,422
              )Investments
                  in marketable securities
              
              
              549
              
              
              1,278Income
                  tax receivable
              
              
              244,645
              
              
              (197,335
              )Prepaid
                  income taxes
              
              
              (70,000
              )
              
              -Prepaid
                  expenses and other current assets
              
              
              (6,367
              )
              
              150,536Assets
                  and liabilities transferred under contractual obligations,
                  (net)
              
              
              -
              
              
              359,377Other
                  accrued expenses
              
              
              62,807
              
              
              (5,930
              )Accounts
                  payable
              
              
              64,144
              
              
              85,713Income
                  taxes payable
              
              
              20,491
              
              
              -Deferred
                  tax liability
              
              
              (219,949
              )
              
              -Accrued
                  employee compensation
              
              
              157,211
              
              
              (12,118
              )Net
                  cash used in operating activities
              
              
              (317,772
              )
              
              (19,278
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Payments
                  for additions to property and equipment
              
              
              (2,155
              )
              
              (24,286
              )Proceeds
                  from sale of marketable securities
              
              
              518,463
              
              
              -Net
                  cash provided by (used in) investing activities
              
              
              516,308
              
              
              (24,286
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Use
                  of funds in repurchase of common stock
              
              
              -
              
              
              (16,303,862
              )Restricted
                  cash payable to Seracare
              
              
              -
              
              
              (71,268
              )Net
                  cash used in financing activities
              
              
              -
              
              
              (16,375,130
              )CASH
                  FLOW FROM DISCONTINUED OPERATIONS:Operating
                  cash flows, net of taxes
              
              
              (486
              )
              
              (21,623
              )Investing
                  cash flows
              
              
              1,117,305
              
              
              -Net
                  cash provided by (used in) discontinued operations
              
              
              1,116,819
              
              
              (21,623
              )INCREASE
                  (DECREASE) IN CASH AND CASH EQUIVALENTS:
              
              
              1,315,355
              
              
              (16,440,317
              )Cash
                  and cash equivalents, beginning of period
              
              
              6,416,772
              
              
              21,201,790Cash
                  and cash equivalents, end of period
              
              $
              7,732,127
              
              $
              4,761,473SUPPLEMENTAL
                  INFORMATION:Income
                  Taxes Paid
              
              $
              71,504
              
              $
              -Interest
                  Paid
              
              $
              -
              
              $
              -The
                  accompanying notes are an integral part of these consolidated financial
                  statements
  -6-


PRESSURE
      BIOSCIENCES, INC., AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      MARCH 31, 2006




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





Pressure
      BioSciences, Inc. (“PBI”) is an early-stage company focused on the development
      and commercialization of a novel technology called Pressure Cycling Technology
      (“PCT”). PCT uses cycles of hydrostatic pressure between ambient and ultra-high
      levels (up to 35,000 psi and greater) to control bio-molecular interactions.
      PBI
      currently holds 13 US and 4 foreign patents covering multiple applications
      of
      PCT in the life sciences field, including in such areas as genomic and proteomic
      sample preparation, pathogen inactivation, the control of enzymes,
      immunodiagnostics, and protein purification .




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





The
      accompanying unaudited consolidated financial statements of Pressure
      BioSciences, Inc., have been prepared in accordance with generally accepted
      accounting principles for interim financial information and with the
      instructions to Form 10-QSB. Accordingly, they do not include all of the
      information and footnotes required by generally accepted accounting principles
      for complete financial statements. In the opinion of management, all adjustments
      (consisting of only normal recurring adjustments) considered necessary for
      a
      fair presentation have been included. Operating results for the three months
      ended March 31, 2006 are not necessarily indicative of the results that may
      be
      expected for the year ending December 31, 2006. For further information, refer
      to the audited consolidated financial statements and footnotes thereto included
      in the Company’s Annual Report on Form 10-KSB (the “Form 10-KSB”) and Annual
      Report on Form 10-KSB/A (the “Form 10-KSB/A”) for the fiscal year ended December
      31, 2005.




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




*Principles
      of Consolidation*




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




*Use
      of Estimates*




To
      prepare the unaudited 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 consolidated financial statements and the reported amounts of revenues
      and
      expenses during the reporting periods. In addition, significant estimates were
      made in projecting future cash flows to quantify impairment of assets, in
      estimates regarding the collectability of accounts receivable, the realizability
      of a loan receivable from our President and Chief Executive Officer, deferred
      taxes, the net realizable value of our inventories, the estimates employed
      in
      our calculation of fair value of stock options awarded to directors, officers
      and employees, as well as an estimate for remaining liabilities associated
      with
      discontinued operations. On an on-going basis, we evaluate our estimates. We
      base our estimates on historical experience and on various other assumptions
      that are believed 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.




*Cash
      and Cash Equivalents and Restricted Cash*




We
      invest
      our available cash in short-term, investment grade, interest bearing
      obligations, including money market funds, municipal notes, 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.




Our
      restricted cash consists of payments from customers of our former business
      units
      who remit payments to us erroneously. When this cash is received in our lockbox
      system we isolate it so that we can return it to SeraCare in a timely manner.
      The balances reflected are those indicative of timing of transfers to SeraCare.
      At the time the cash is classified as restricted, we record a corresponding
      liability so the balances have no effect on our net assets.




-7-
 
 PRESSURE
          BIOSCIENCES, INC., AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 AS
          OF
          MARCH 31, 2006





*Computation
      of Earnings (Loss) per Share*




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




Potentially
      dilutive securities having a net effect of 177,879 shares were excluded from
      the
      calculation for the three months ended March 31, 2006. Potentially dilutive
      securities having a net effect of 112,519 shares were excluded from the
      calculation for the three months ended March 31, 2005.




*Accounting
      for Stock-Based Compensation*




On
      January 1, 2006, we adopted SFAS No. 123 (revised 2004), “Share-Based
      Payment,” or SFAS 123R, and its related implementation guidance as promulgated
      by both the Financial Accounting Standards Board (the “FASB”), and the
      Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No.
      107, or SAB 107, associated with the accounting for stock-based compensation
      arrangements of our employees and directors. These pronouncements require that
      equity-based compensation cost be measured at the grant date (based upon an
      estimate of the fair value of the compensation granted) and recorded to expense
      over the requisite service period, which generally is the vesting period. We
      adopted SFAS 123R using the modified prospective method in the first quarter
      of
      2006. Under this method, stock-based compensation expense recognized in the
      first quarter of 2006 includes: (a) compensation expense for all equity-based
      payments granted prior to, but not yet vested as of January 1, 2006, based
      on
      the grant date fair value estimated in accordance with the original provisions
      of FASB Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS
      123”), and (b) compensation expense for all equity-based payments granted
      between January 1, 2006 and March 31, 2006, based on the grant date fair value
      estimated using the Black-Scholes option pricing model. Results for periods
      prior to January 1, 2006 do not include, and have not been restated to reflect
      amounts associated with the requirements of SFAS 123R.




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





-8-
 
 PRESSURE
            BIOSCIENCES, INC., AND SUBSIDIARIES
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 AS
            OF
            MARCH 31, 2006


**Assumptions**
              
              **Outside
                  BoardMembers**
              
              **CEO
                  and other Officers
                  &** **Employees**Expected
                  Term (years)
              
              
              5.0
              
              
              6.0Expected
                  Volatility
              
              
              74.7
              %
              
              88.2
              %Risk-Free
                  Interest Rate
              
              
              4.9
              %
              
              4.9
              %Expected
                  Dividend Yield
              
              
              0.0
              %
              
              0.0
              %




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





As
      a
      result of adopting SFAS 123R on January 1, 2006 we recognized stock-based
      compensation expense of $203,455 for the quarter ended March 31, 2006. The
      following table summarizes the effect of this stock-based expense within our
      Consolidated Statement of Operations:




**Three
                  months ended March 31, 2006**Cost
                  of PCT products & services
              
              $
              2,094Research
                  and development
              
              
              22,474Selling
                  and marketing
              
              
              7,888General
                  and administrative
              
              
              170,999Total
                  stock-based compensation expense
              
              $
              203,455





The
      provisions of SFAS 123R require that we make an estimate of our forfeiture
      rate
      and adjust the expense that we recognize to reflect the estimated number of
      options that will go unexercised. Due to our early stage of development as
      a
      newly focused company and our limited workforce of eight employees as of March
      31, 2006, including executive officers, we are challenged to develop an
      appropriate estimate of forfeitures. Based on these circumstances we have opted
      for a conservative position in that we are estimating forfeitures to be 0%
      at
      this time. We will continue to assess this position as our company develops
      and
      our workforce expands. When we feel that we have sufficient data on which to
      base an assumption we will adjust the expense recognized, if
      necessary.





As
      of
      March 31, 2006, the total estimated fair value of unvested stock options to
      be
      amortized over their remaining vesting period was $670,206. In April 2006,
      our
      board of directors approved additional stock option grants to our outside
      directors and to newly hired executive officers. The total estimated fair value
      of these awards is $491,286. Of this amount, $153,633 represents the estimated
      fair value of the options granted to outside board members. This entire amount
      will be recognized as non-cash, stock-based compensation expense in the second
      quarter of 2006 because the options granted to the outside directors vest
      immediately.





-9-
 
 PRESSURE
            BIOSCIENCES, INC., AND SUBSIDIARIES
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 AS
            OF
            MARCH 31, 2006


Prior
      to
      January 1, 2006, we accounted for our stock-based compensation under the
      recognition and measurement provisions of APB No. 25, and related
      Interpretations, as permitted by SFAS 123, as amended by SFAS No. 148 *“Accounting
      for Stock-Based Compensation - Transition and Disclosure”* .
      No
      stock-based compensation cost was recognized in the Consolidated Statements
      of
      Operations for the three-month period ended March 31, 2005, as all options
      granted under our option plans had an exercise price equal to the fair market
      value of the underlying common stock on the date of grant.





The
      following table illustrates the effect on the net loss and the net loss per
      share for the three months ended March 31, 2005 as if we had applied the fair
      value recognition provisions of SFAS 123 to options granted under our stock
      option plans in effect at that time. For purposes of this pro forma disclosure,
      the value of the options is estimated using the Black-Scholes option pricing
      model and amortized to expense over the options’ vesting periods:




**Three
                  Months Ended****March
                  31, 2005**Net
                  loss - as reported
              
              $
              (383,062
              )Add
                  back: Stock-based compensationin
                  net loss, as reported
              
              
              -Deduct:
                  Stock-based employee compensationexpense
                  determined under fair value based methodfor
                  all awards, net of related tax effects
              
              
              (11,771
              )Net
                  loss - pro forma
              
              $
              (394,833
              )Basic
                  and Diluted net loss per share - as reported
              
              $
              (0.08
              )Basic
                  and Diluted net loss per share - pro forma
              
              $
              (0.08
              )





*Correction
      of an Accounting Error*





In
      May
      2005, the FASB issued SFAS 154, “Accounting Changes and Error Corrections”,
      which replaces APB 20, “Accounting Changes”, and SFAS 3, “Reporting Accounting
      Changes in Interim Financial Statements - An Amendment of APB Opinion No. 28”.
      SFAS 154 provides guidance on the accounting for and the reporting of accounting
      changes and error corrections. It establishes retrospective application, or
      the
      latest practicable date, as the required method for reporting a change in
      accounting principle and the reporting of a correction of an error. SFAS 154
      is
      the required method for reporting a change in accounting principle and the
      reporting of a correction of an error. We have adopted SFAS 154 to correct
      an
      error made during the quarter ended September 30, 2005 and discovered during
      the
      quarter ended March 31, 2006.





On
      March
      15, 2006, we received $1,094,162 from Wells Fargo Corporate Trust Escrow
      Services, representing the remaining principal held in escrow from the 2004
      sale
      of the assets and certain liabilities of our BBI Core Businesses to SeraCare
      Life Sciences Inc., (“SeraCare”), plus interest from January 1 through February
      28, 2006. The receipt of these funds triggered the recognition of taxable
      income, accounted for as an installment sale for federal income tax purposes.
      During the financial statement closing process for the quarter ended March
      31,
      2006, we determined that a deferred tax liability of approximately $220,000
      should have been established during the quarter ended September 30, 2005, the
      period in which we filed our federal income tax return. Upon reexamining
      accounting for income taxes in its entirety, we further determined that the
      deferred tax liability in connection with the unrealized gain on Panacos
      Pharmaceuticals Inc., should be reduced by approximately $60,000, and that
      the
      income tax provision from continuing operations should be increased by $23,000.
      We also determined that the accounting for deferred tax assets needed to be
      adjusted; however, there would be no impact from this adjustment as deferred
      tax
      assets are fully reserved for.





We
      elected to remedy these errors by restating our Annual Report on Form 10-KSB
      for
      the year ended December 31, 2005 and our Quarterly Report on Form 10-QSB for
      the
      quarter ended September 30, 2005. The December 31, 2005 balance sheet presented
      in this Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006,
      reflects the appropriate adjustments to the income tax accounts and to retained
      earnings .





-10-
 
 PRESSURE
              BIOSCIENCES, INC., AND SUBSIDIARIES
 NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS
 AS
              OF
              MARCH 31, 2006


These
      adjustments did not change our reported pre-tax results from continuing
      operations, but income from continuing operations after income taxes for the
      year ended December 31, 2005 has been reduced from approximately $873,000 to
      approximately $850,000.




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





As
      of
      March 31, 2006, we held 361,996 shares (plus an additional 151,938 shares are
      being held in escrow until September 2006) of common stock of Panacos
      Pharmaceuticals Inc. (“Panacos”), a publicly traded company listed on the Nasdaq
      National Market. We account for this investment in accordance with SFAS 115 *“Accounting
      for Certain Investments in Debt and Equity Securities”* as
      securities available for sale. On March 31, 2006, our balance sheet reflected
      the fair value of our investment in Panacos to be approximately $3.9 million,
      based on the closing price of Panacos shares of $7.56 per share. The carrying
      value of our investment in Panacos common stock held will change from period
      to
      period based on the closing price of the common stock of Panacos as of the
      balance sheet date. This change in market value will be recorded by us on a
      quarterly basis as an unrealized gain or loss in Comprehensive Income or Loss.
      As of May 12, 2006, the closing price of Panacos common stock was $6.26. During
      the three months ended March 31, 2006 we sold 57,900 shares and recognized
      a
      pre-tax gain of $517,938.




**5)** **Discontinued
      Operations**





On
      September 14, 2004, we completed the sale of substantially all of the
      assets and selected liabilities of our BBI Diagnostics and BBI Biotech divisions
      to SeraCare. Pursuant to the Asset Purchase Agreement, the businesses were
      sold
      for $30 million in cash of which $27.5 million was paid at the closing
      and the remaining $2.5 million was deposited in escrow pursuant to an
      escrow agreement expiring in March 2006. In December 2004, and again in
      February 2005, we settled disagreements with SeraCare regarding the value of
      the
      inventory and accounts receivable in the closing balance sheets by releasing
      approximately $1.4 million from the escrow account. On March 15, 2006, we
      received approximately $1.1 million in remaining escrow funds.




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




In
      June
      2004, we completed the sale of substantially all of the assets as well as
      selected liabilities of PBI Source Scientific, Inc. (PBI’s laboratory
      instrumentation division) to Source Scientific, LLC, an entity owned 35% by
      Mr.
      Richard W. Henson, 35% by Mr. Bruce A. Sargeant, and 30% by us. Despite our
      intent to exit the laboratory instrumentation business, we may be viewed as
      having a continuing involvement in the business of Source Scientific, LLC.
      Because of this and other factors, even though the transaction is treated as
      a
      divestiture for legal purposes, we have not recognized the transaction as a
      divestiture for accounting purposes in accordance with SEC SAB Topic 5E, *“Accounting
      for Divestiture of a Subsidiary or Other Business Operation”* . 
      In accordance with SAB Topic 5E, we have recorded the assets and liabilities
      associated with the Source Scientific, LLC operation on our consolidated balance
      sheet as of March 31, 2006 under the captions “Assets transferred under
      contractual arrangements” and “Liabilities transferred under contractual
      arrangements”.




During
      the quarter ended March 31, 2006, Source Scientific, LLC recognized net income
      of approximately $100,000. In accordance with SAB Topic 5E we excluded this
      net
      income from our Consolidated Statement of Operations and made no adjustment
      to
      the accounts captioned “Assets transferred under contractual arrangements” and
“Liabilities transferred under contractual arrangements”. SAB Topic 5E requires
      that we recognize the losses of Source Scientific, LLC to the extent such losses
      exceed profits in the same fiscal year. In accordance with SAB Topic 5E, we
      will
      continue this accounting treatment until circumstances have changed or until
      the
      net assets of the Source Scientific, LLC business have been written down to
      zero
      (or a net liability is recognized in accordance with GAAP).





-11-
 
 PRESSURE
              BIOSCIENCES, INC., AND SUBSIDIARIES
 NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS
 AS
              OF
              MARCH 31, 2006


**7)** **Related
      Party Transaction**





As
      of
      March 31, 2006, we evaluated the recoverability of the $1,000,000 loan
      receivable from our President, CEO, and a director, Mr. Richard T.
      Schumacher, which is reflected on the accompanying balance sheet in
      stockholders' equity as a loan receivable. Our evaluation of the recoverability
      of the loan receivable included an analysis of the value of the 479,657 shares
      of our common stock which are held as collateral. This test included a review
      of
      the current trading price of our common stock. After performing the impairment
      test, we determined that the loan receivable was not impaired. We will continue
      to monitor and test the collateral for impairment due in large part to the
      relatively low trading volume of our common stock and recent volatility in
      stock
      price, ranging from a low of $3.81 per share to a high of $4.79 per share from
      January 1, 2006 to March 31, 2006.





**8)** **Inventories**





Inventories
      represented are primarily finished Barocycler TM units
      available for sale and those units at various stages of manufacture. As of
      March
      31, 2006, finished goods included BarocyclerTM NEP3229 units and PULSETM Tubes.




As
      of
      March 31, 2006, inventories were comprised as follows:




March
                  31,2006Raw
                  materials
              
              $
              25,613Work-in-process
              
              
              21,258Finished
                  goods
              
              
              31,587Total
              
              $
              78,458







**9)** **Commitments
      and Contingencies**





*Royalty
      Commitments*




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




*Research
      and Development Collaboration*




On
      February 1, 2006, we entered into an agreement with the University of New
      Hampshire (“UNH”) pursuant to which UNH agreed to perform certain research and
      development services for us through December 31, 2006. Subject to the terms
      of
      the agreement, we will pay UNH an aggregate of $157,850 during the term of
      the
      agreement.




*Operating
      Leases*




On
      March
      1, 2006, we entered into a sub-lease agreement with Proteome Systems, Inc.,
      pursuant to which we have agreed to lease approximately 650 sq. feet of
      laboratory space plus 100 sq. feet of office space from Proteome Systems in
      Woburn, Massachusetts. The lease period will expire on December 31, 2006. We
      will pay $2,350 per month for the use of these facilities.




-12-
 
 PRESSURE
                BIOSCIENCES, INC., AND SUBSIDIARIES
 NOTES
                TO
                CONSOLIDATED FINANCIAL STATEMENTS
 AS
                OF
                MARCH 31, 2006





**10)** **Stockholders’
      Equity**





*Stock
      Options*





On
      June
      16, 2005, our stockholders approved our 2005 Equity Incentive Plan (the “Plan”)
      pursuant to which an aggregate of 1,000,000 shares of common stock were reserved
      for the issuance upon exercise of stock options or other equity awards made
      under the Plan. Under the Plan, our board of directors has authority to grant
      options to employees, officers, directors, consultants, and advisors. As of
      March 31, 2006, there were 481,000 stock options granted and outstanding under
      the 2005 Equity Incentive Plan and 519,000 shares available for future grants.





We
      also
      have 246,000 options issued and outstanding under our 1999 Non-Qualified Plan
      and 9,500 options issued and outstanding under our 1994 Incentive Stock Option
      Plan. As of March 31, 2006, there were 4,800 shares available for future grant
      under the 1999 Non-Qualified Plan. The 1994 Incentive Stock Option Plan has
      expired; therefore, there are no shares available for future grant under this
      plan.





Under
      our
      1999 Employee Stock Purchase Plan, eligible employees are entitled to purchase
      shares of our stock at 85% of the market value as determined at the beginning
      and end of the offering period. A total of 250,000 shares had been reserved
      for
      this plan. As of March 31, 2006, there were 197,326 shares available for future
      issuance under this plan. As of July 29, 2004, this plan was suspended; however,
      the board of directors has the ability to reactivate the Plan at its discretion.





During
      the first quarter of 2006, our board of directors granted stock options to
      our
      employees, officers, and to our board of directors. The following tables present
      summarized data relative to our stock option plans:





The
      following tables summarize information concerning options outstanding and
      exercisable as of March 31, 2006 :







Stock
                  Options
              
              WarrantsWeighted
              
              
              
              WeightedAverage
                  price
              
              
              
              Average
                  price
              
              TotalShares
              
              per
                  share
              
              Shares
              
              per
                  share
              
              Shares
              
              ExercisableBalance
                  outstanding, 12/31/2004
              
              
              1,071,342
              
              $
              2.93
              
              
              135,556
              
              $
              3.60
              
              
              1,206,898
              
              
              511,056Granted
              
              
              360,000
              
              
              2.98
              
              
              -
              
              
              -
              
              
              360,000Exercised
              
              
              (754,275
              )
              
              2.85
              
              
              -
              
              
              -
              
              
              (754,275
              )Expired
              
              
              (42,067
              )
              
              3.75
              
              
              (135,556
              )
              
              3.60
              
              
              (177,623
              )Forfeited
              
              
              (50,000
              )
              
              2.92
              
              
              -
              
              
              -
              
              
              (50,000
              )Balance
                  outstanding, 12/31/2005
              
              
              585,000
              
              $
              2.96
              
              
              -
              
              
              -
              
              
              585,000
              
              
              385,000Granted
              
              
              171,000
              
              
              4.05
              
              
              -
              
              
              -
              
              
              171,000Exercised
              
              
              -
              
              
              
              
              
              -
              
              
              -
              
              
              -Expired
              
              
              (19,500
              )
              
              4.24
              
              
              -
              
              
              -
              
              
              (19,500
              )Forfeited
              
              
              -
              
              
              
              
              
              -
              
              
              -
              
              
              -Balance
                  outstanding, 3/31/2006
              
              
              736,500
              
              $
              3.18
              
              
              -
              
              
              -
              
              
              736,500
              
              
              375,500





-13-
 
 PRESSURE
                  BIOSCIENCES, INC., AND SUBSIDIARIES
 NOTES
                  TO
                  CONSOLIDATED FINANCIAL STATEMENTS
 AS
                  OF
                  MARCH 31, 2006
 Options
                        Outstanding
                    
                    Options
                        ExercisableNumber
                        of
                    Weighted
                        Average
                    
                    Number
                        of
                    
                    
                    Weighted
                        AverageRange
                        of Exercise Prices
                    
                    Weighted
                        Average Remaining Life
                    
                    Options
                    Exercise
                        Price
                    
                    Options
                    
                    
                    Exercise
                        Price$2.50
                    -
                    $2.70
                    
                    6.4
                    
                    161,000
                    $
                        2.64
                    
                    161,000
                    
                    
                    $
                        2.642.71
                    -
                    3.08
                    
                    8.4
                    
                    343,000
                    2.96
                    
                    143,000
                    
                    
                    3.013.09
                    -
                    3.95
                    
                    9.4
                    
                    105,500
                    3.61
                    
                    4,500
                    
                    
                    3.253.96
                    -
                    4.25
                    
                    9.6
                    
                    127,000
                    4.12
                    
                    67,000
                    
                    
                    4.132.50
                    -
                    4.25
                    
                    8.3
                    
                    736,500
                    $
                        3.18
                    
                    375,500
                    
                    
                    $
                        3.06
  **11)** **Subsequent
              Events**




*Purchase
      Commitments*




In
      April
      2006, we executed a purchase order with Source Scientific, LLC under which
      we
      agreed to purchase 25 Barocycler NEP3229 units. In connection with this purchase
      order, we submitted a deposit to Source for $200,000. In accordance with the
      terms of the agreement, we expect that the units will be completed during the
      third and fourth quarters of this year. We will be billed for the complete
      cost
      of each unit as it is completed. Finished goods will stay at Source for shipment
      directly to our customers.




*SFAS
      123R Impact from Additional Option Grants*





In
      April
      2006, the board of directors granted additional stock options to new executive
      officers and the board of directors. The total estimated fair value of these
      awards is $491,286. The incremental non-cash, stock-based compensation expense
      that will be recognized in the quarter ended June 30, 2006 is approximately
      $177,986.





-14-


**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
      OPERATIONS**








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





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





*•*
            *our
                plans and expectations with respect to our pressure cycling technology
                operations;**•*
            *our
                anticipated costs and expenses with respect to our pressure cycling
                technology operations**•*
            *market
                acceptance and the potential for commercial success of our PCT
                products;**•*
            *our
                belief that we have sufficient liquidity to finance operations through
                2007;**•*
            *the
                expected recovery and value of the loan receivable from our President
                and
                Chief Executive Officer;**•*
              
              *•*
            *our
                ability to develop future collaborations with partners who generate
                and
                disseminate meaningful and beneficial scientific data*
              *the
                expected results of our current and future collaboration
                agreements**•*
              *•*
            *our
                ability to sell additional Barocyclers**TM**to existing and future collaboration partners*
              *our
                ability to raise additional capital when and if
                needed;**•*
              *•*
            *general
                economic conditions;*
              *our
                ability to sell our shares in Panacos Pharmaceuticals at a favorable
                price**•*
            *the
                anticipated future financial performance and business operations
                of our
                company.*


*These
      forward-looking statements are only predictions and involve known and unknown
      risks, uncertainties, and other factors that may cause our actual results,
      levels of activity, performance, or achievements to be materially different
      from
      any future results, levels of activity, performance, or achievements expressed
      or implied by such forward-looking statements. Also, these forward-looking
      statements represent our estimates and assumptions only as of the date of this
      report.  Except as otherwise required by law, we expressly disclaim any
      obligation or undertaking to release publicly any updates or revisions to any
      forward-looking statement contained in the report to reflect any change in
      our
      expectations or any change in events, conditions, or circumstances on which
      any
      of our forward-looking statements are based or to conform to actual
      results.  Factors that could cause or contribute to differences in our
      future financial results include those discussed in the risk factors set forth
      in Item 6 of our Annual Report on Form 10-KSB for the year ended December 31,
      2005, as well as those discussed elsewhere in this report. We qualify all of
      our
      forward-looking statements by these cautionary statements.*





*You
      should read this section in combination with the section entitled Management’s
      Discussion and Analysis of Financial Condition and Results of Operations for
      the
      year ended December 31, 2005, included in our Annual Report on Form 10-KSB
      for the year ended December 31, 2005.*




***Overview***


Pressure
      BioSciences, Inc. (“PBI”) is an early-stage company focused on the development
      and commercialization of a novel technology called Pressure Cycling Technology
      (“PCT”). PCT uses cycles of hydrostatic pressure between ambient and ultra-high
      levels (up to 35,000 psi and greater) to control bio-molecular interactions.
      PBI
      currently holds 13 US and 4 foreign patents covering multiple applications
      of
      PCT in the life sciences field, including in such areas as genomic and proteomic
      sample preparation, pathogen inactivation, the control of enzymes,
      immunodiagnostics, and protein purification.




Important
      recent business developments include:





·
            On
                February 1, 2006 we entered into an agreement with the University
                of New
                Hampshire, pursuant to which UNH agreed to perform certain research
                and
                development services for us through December 31, 2006. Subject to
                the
                terms of the agreement, we will pay UNH an aggregate of $157,850
                during
                the term of the agreement.





-15-


·
            On
                March 1, we entered into a sub-lease agreement with Proteome Systems,
                Inc., pursuant to which we have agreed to lease approximately 650
                sq. feet
                of laboratory space plus 100 sq. feet of office space from Proteome
                Systems located in Woburn, Massachusetts until December 31, 2006.
                We will
                pay $2,350 per month for the use of these
                facilities.





·
            On
                March 15, 2006, we received $1,094,162 from Wells Fargo Corporate
                Trust
                Escrow Services, representing the remaining principal held in escrow
                from
                the 2004 sale of the assets and certain liabilities of our BBI Core
                Businesses to SeraCare Life Sciences Inc., (“SeraCare”), plus interest
                from January 1 through February 28,
                2006.





·
            On
                April 3, 2006, we announced that we made important additions to our
                Senior
                Management Team including the promotion of Dr. Nathaniel Lawrence
                to the
                newly created position of Vice President of Marketing & Business
                Development, the hiring of Dr. Alexander V. Lazarev as our Director
                of
                Research and Development, the hiring of Mr. Edward H. Myles as our
                Vice
                President of Finance & CFO, and the hiring of Dr. Edmund Ting as our
                Senior Vice President of Engineering.





·
            In
                April 2006, we entered into an agreement with Source Scientific,
                LLC to
                purchase an additional 25 BarocyclerTMNEP 3229 units.





·
            Throughout
                the first quarter of 2006, we sold a total of 57,900 shares of Panacos
                Pharmaceuticals stock for a realized, pre-tax gain of $517,938.




Our
      pressure cycling technology uses an instrument that is capable of cycling
      pressure between ambient and high levels at controlled temperatures to rapidly
      and repeatedly control the interactions of biomolecules. PCT utilizes our
      BarocyclerTM instrument and disposable PULSETM Tubes (together, the PCT Sample
      Preparation System, or the PCT SPS) to release nucleic acids, proteins, and
      small molecules from plant/animal cells and tissues, as well as other organisms
      that are not easily disrupted by standard chemical and physical methods. Our
      patented and proprietary pressure cycling technology employs a unique approach
      that has the potential for broad applications in a number of established and
      emerging fields, including:




·
            genomics




·
            proteomics




·
            drug
                discovery and development




·
            protein
                purification




·
            pathogen
                inactivation




·
            immunodiagnostics




·
            food
                safety




·
            DNA
                sequencing.




*Near-Term
      Strategy*




Our
      near-term strategy is to market PCT for use in sample preparation in the life
      sciences field, with particular focus in the areas of genomics and proteomics.
      To this end, we have developed scientific collaborations with a number of
      leading laboratories and academic institutions in the United States, which
      we
      expect will remain ongoing throughout 2006 and beyond. We enter into these
      collaborations with parties that we view to have a high likelihood of purchasing
      our BarocyclerTM instrument and disposable PULSETM Tubes. We also pursue
      collaboration partners whose research is synergistic to our plans to expand
      the
      use of PCT into new areas of sample preparation. In both cases, we expect that
      our collaboration partners will generate data that will be publicly disseminated
      in scientific publications and presentations.




-16-




Our
      collaboration program was initiated in June 2005 with the intention of placing
      twelve BarocyclerTM NEP3229 units in selected strategic customer sites for trial
      periods of three months or longer. We believe this trial period will provide
      potential customers with the opportunity to develop and collect independent
      and
      objective data and statistical information. We believe that we will be able
      to
      generate sales of our products from these and other customers after the customer
      experiences the performance, reliability, and safety of the sample preparation
      process provided by the PCT Sample Preparation System. After the trial period,
      it is our expectation that a number of users will either purchase or lease
      the
      PCT BarocyclerTM instrument. During 2005, we placed nine bench top instruments
      with our “collaboration partners”. These partners have full use of the
      instrument in their own facility, have agreed to purchase a certain number
      of
      PULSETM Tubes over the trial period, and have further agreed to use the PCT
      Sample Preparation System to generate data for public dissemination. During
      the
      second half of 2005 and through the first quarter of 2006, we sold four PCT
      Sample Preparation Systems to our collaboration partners.




During
      the first quarter of 2006, our sales and marketing efforts were focused on
      fostering our relationships and providing technical and scientific support
      to
      new and existing collaboration partners. During this period we also participated
      in seven industry trade shows, including the sponsorship of two meetings, to
      generate new leads, expand awareness of our company and products within the
      scientific community, to continue to learn about competitive technologies,
      and
      to learn more about the additional potential uses of PCT. We expect these
      efforts to continue throughout 2006, as our sales and marketing plan calls
      for
      participation in approximately five additional trade and industry shows.




During
      the first quarter of 2006, three of our collaborators presented data that they
      generated with PCT at national scientific meetings. The data generated were
      in
      the areas of genomic and proteomic research. One presentation in particular
      focused on the extraction of protein from adipose tissue, an area of laboratory
      medicine that is important in diabetes research, but that has presented a
      particularly difficult sample preparation task for scientists over the years.
      The collaborators indicated in their presentation that they extracted
      significantly more protein using PCT than they had ever extracted using any
      other current extraction method.




*Mid
      and Long-Term Strategy*




Our
      mid
      and long-term strategy includes the continued evaluation of PCT in the area
      of
      sample preparation, as well as in other potentially large and exciting markets,
      such as:




·
            the
                inactivation of pathogens in human blood, therapeutics, and
                vaccines




·
            the
                purification of proteins




·
            the
                control of enzymatic actions




·
            the
                enhancement of*in
                vitro*diagnostics, particularly
                immunodiagnostics




·
            the
                re-folding and dissaggregation of proteins.




The
      timing and the manner in which we pursue our mid and long-term strategy depends
      on a number of factors. Specifically, it depends on the level of success that
      we
      realize in pursuit of our near-term strategy in sample preparation. Our pursuit
      of these mid and long-term strategic markets also depends on our view regarding
      the cost and the value of these markets to us, and the level of, scale up,
      and
      funding required to enter these markets.




-17-




**RESULTS
      OF OPERATIONS**




**THREE
      MONTHS ENDED MARCH 31, 2006 AND 2005**




*Revenue*




We
      had
      total revenue of $53,414 for the three months ended March 31, 2006, as compared
      to $2,630 for the three months ended March 31, 2005. Our revenue for the first
      quarter of 2006 included the sale of one Barocycler TM ,
      several
      thousand PULSE TM Tubes,
      and various component parts for the Barocycler TM .
      The
      majority of these sales were to Veritas Corporation, our Japanese distributor,
      who purchased these products for its own internal use.




*Cost
      of PCT Products and Services*




The
      cost
      of PCT products and services was $51,546 for the three months ended March 31,
      2006 compared to $6,521 for the comparable period in 2005. The increase in
      2006
      was primarily the result of selling one Barocycler TM ,
      higher
      sales volume of PULSETM Tubes, and the carrying costs associated with the
      component parts sold during the quarter. Additionally, the cost of products
      and
      services includes the increased cost of field support and deployment costs
      related to the placement, and maintenance, of collaboration site units.




Included
      in the cost of PCT Products and Services is a $2,094 non-cash, stock-based
      compensation charge recognized in accordance with SFAS 123R. We expect that
      cost
      of PCT products and services will decrease as a percent of sales as we sell
      more
      units and thereby spread the fixed costs of products and services over a greater
      revenue base.




*Research
      and Development*




PCT
      related research and development expenditures increased to $258,819 in the
      first
      quarter of 2006 as compared to $103,028 in the first quarter of 2005. Primary
      reasons for the increase include the increase in dedicated research and
      development personnel from two full-time employees in the first quarter of
      2005
      to five full-time employees during the first quarter of 2006. This increase
      in
      research and development headcount is in support of our strategy to continue
      to
      evaluate and offer new applications of PCT within the life sciences sample
      preparation field.




We
      plan
      to continue increasing our investment in research and development in both
      existing and new applications in sample preparation, including the areas of
      forensics, anti-bioterrorism, and differential cell lysis. Additionally, in
      April 2006, we hired Dr. Edmund Ting as our Senior Vice President of
      Engineering. Dr. Ting is expected to focus his efforts on the continued
      improvement to the operating performance of our current bench top
      Barocylcer TM ,
      as well
      as to help direct the engineering efforts involved in the design and development
      of additional Barocycler TM instruments,
      from small, portable units to larger, high throughput, fully automatable
      machines. He is also expected to focus on the design and development of new
      PULSE TM Tubes
      and other disposables.




Included
      in the research and development expense recognized in the first quarter of
      2006
      was $22,474 non-cash compensation charges in accordance with SFAS 123R. We
      expect non-cash, stock-based compensation expense charged to research and
      development to increase in future quarters of 2006 as a large portion of the
      expense recognized in the current period was prorated from the date of option
      grant, and did not include the cost of the stock options granted to Dr. Ting.
      Thus, this non-cash compensation expense will further increase in future
      quarters to account for the costs associated with the stock options granted
      to
      Dr. Ting in April 2006.




*Selling
      and Marketing*




Selling
      and marketing expenses increased to $67,379 for the three months ended March
      31,
      2006 from $15,260 for the comparable period in 2005. This increase was driven
      primarily by the increase in trade shows attended and sponsored, and a general
      increase in the amount of selling and marketing activity that we were engaged
      in
      during the first quarter of 2006.




We
      expect
      to continue this increased focus on selling and marketing activities for the
      rest of 2006. Consistent with our increased selling and marketing focus, we
      announced the promotion of Dr. Nathan P. Lawrence to the newly created position
      of Vice President of Marketing and Business Development, on April 4, 2006.
      Beginning in the second quarter of 2006, all of Dr. Lawrence’s costs will be
      accounted for in this function as his activities will be heavily focused on
      fostering new relationships and driving the overall marketing effort of our
      PCT
      business.




-18-




During
      the first quarter of 2006 we recognized $7,888 of non-cash, stock-based
      compensation costs in accordance with the provisions of SFAS 123R. We expect
      non-cash compensation expense charged to selling and marketing to increase
      in
      future quarters of 2006 as a large portion of the expense recognized in the
      current period was prorated from the date of option grant. Future quarters
      will
      include an entire period’s worth of option expense.




*General
      and Administrative*




General
      and administrative costs totaled $689,626 for the three months ended March
      31,
      2006, as compared to $308,888 for the comparable period in 2005. This increase
      was the result of the accrual of a $150,000 bonus paid to Mr. Richard T.
      Schumacher, our President and CEO, as approved by the compensation committee
      of
      the board of directors in March 2006. Also contributing to the increase in
      general and administrative costs were temporary help and consulting fees
      incurred to complete the Form 10-KSB and to manage our on-going financial needs,
      in the absence of a full-time CFO.




We
      expect
      a continued increase in general and administrative costs during the second
      quarter of 2006. Mr. Edward H. Myles was appointed our Vice President of Finance
      & CFO on April 3, 2006. The costs associated with Mr. Myles’ compensation,
      benefits, and stock options will be included for the entire second quarter.
      We
      also expect to add one additional full-time employee to our general and
      administrative staff, at the clerical level. The costs associated with these
      full-time staff increases will be partially offset by a reduction in consulting
      and temporary help. Aside from these additions to our general and administrative
      staff, we do not plan significant additional changes to our corporate
      infrastructure for the remainder of 2006.




Included
      in our general and administrative costs was non-cash, stock-based compensation
      charges of $170,999 in accordance with the provisions of SFAS 123R. Of this
      amount, $159,438 related to a charge for options granted to the independent
      members of our board of directors in March 2006. In accordance with SFAS 123R,
      options that are fully vested upon grant, such as options granted to the
      independent members of our board of directors, are to be expensed for the entire
      fair value in the period of grant. We expect SFAS 123R non-cash compensation
      charges to increase in the second quarter due to a charge of $153,633 associated
      with options granted to the independent members of our board of directors in
      April 2006. Additionally, the March 30 grant of stock options to Mr. Schumacher
      resulted in minimal compensation expense during the first quarter because of
      the
      pro rata recognition of expense. During the second quarter and over the
      remaining 3 year vesting period, these options will have a more significant
      impact on our financial results. The second quarter, and future quarters, will
      also include additional non-cash, stock-based compensation expense associated
      with stock options awarded to Mr. Myles.




*Operating
      Loss from Continuing Operations*




The
      operating loss of the PCT business was $1,013,956 for the three months ended
      March 31, 2006 as compared to an operating loss of $431,067 for the comparable
      period in 2005. The increase in operating loss was the result of increases
      in
      activities within all aspects of our business, most notably a $150,000 bonus
      paid to Mr. Schumacher, option grants to the independent members of our board
      of
      directors and employees, and the increase in staff within our research and
      development function.




We
      plan
      to continue our increasing level of activity in all areas of our business,
      particularly sales and marketing and research and development for the remainder
      of 2006. Consequently we expect our operating loss for 2006 to exceed that
      of
      2005.




The
      operating loss for the three months ended March 31, 2006 included $203,455
      of
      non-cash, stock-based compensation charges in accordance with SFAS 123R. The
      same period for 2005 did not include any such charges as we adopted the modified
      prospective approach to implementing SFAS 123R and therefore we are not required
      to restate prior periods, which did not include any compensation charges in
      the
      financial statements.




-19-




*Gain
      on Sale of Securities*




In
      the
      three months ended March 31, 2006, we recorded a gain on the sale of 57,900
      shares of our Panacos Pharmaceuticals shares being held as available for sale
      securities in accordance with SFAS 115. The shares sold in the three month
      period generated a pre-tax gain of $517,938.




*Other
      Operating (Charges), net*




The
      non-PCT related activities of PBI Source Scientific, Inc. reflect the
      operating results of Source Scientific, LLC. Source generated an operating
      profit of approximately $100,000 during the three months ended March 31, 2006;
      however, we did not reflect any of this profit in our consolidated financial
      statements. In accordance with the provisions of SEC SAB Topic No. 5E we only
      recognize a loss generated from Source Scientific LLC to the extent it exceeds
      net profit in the same fiscal year. Based on this rule, the approximate $100,000
      of net profit generated by Source Scientific, LLC was not recognized in our
      interim financial statements. For the comparative quarter ended March 31, 2005,
      we recorded an operating charge of $235,352.




*Interest
      Income*




Interest
      income totaled $108,506 for the three months ended March 31, 2006 as compared
      to
      interest income of $78,932 in the prior year period. The amount recognized
      in
      2006 includes interest income received from the loan receivable from our
      President and CEO, as well as interest earned on our cash and cash equivalents.
      The total for 2005 does not include interest income from the loan receivable
      from our President and CEO.




*Income
      Taxes*




In the
      quarter ended March 31, 2006, we recorded a tax benefit from continuing
      operations of $77,478. During the same period in 2005, we recorded a tax benefit
      of $199,746. Our benefit rate was less favorable than in the comparable period
      of the prior year primarily because a large portion of the non-cash, stock-based
      compensation expense recognized in 2006, in accordance with SFAS 123R, is not
      deductible for income tax purposes.




*Income
      (Loss) from Discontinued Operations*




For
      the
      three months ended March 31, 2006, the net loss from discontinued operations
      was
      $0, as compared to net income of $4,679 for the same period in 2005.




*Net
      Loss*




Overall,
      for the quarter ended March 31, 2006, we realized a net loss $310,034 compared
      to a net loss of $383,062 for the quarter ended March 31, 2005. The decrease
      in
      our net loss reported from the first quarter of 2005 as compared to the first
      quarter of 2006 is the result of the realized gain of $517,938 from the sale
      of
      57,900 shares of Panacos Pharmaceuticals and an increase in interest income
      recognized during the quarter. Our realized gain on the sale of Panacos shares
      and increased interest income was almost entirely offset by increases in all
      functional line items within our operating expenses, particularly sales and
      marketing and research and development. This increased investment in our
      operating activities is consistent with our business objectives of expanding
      the
      scientific advancement and the commercialization of PCT.




**LIQUIDITY
      AND FINANCIAL CONDITION**




As
      of
      March 31, 2006, our working capital position was $7,665,885, the primary
      components of which were cash and cash equivalents, income taxes receivable,
      prepaid expenses, and inventories, partially offset by accrued employee
      compensation, and other accrued expenses. As of December 31, 2005, our working
      capital balance was $7,740,736, the primary components of which were cash and
      cash equivalents, escrow deposits and income taxes receivable. This decrease
      in
      working capital of $74,851 was primarily a result of the use of cash to fund
      our
      operations for the quarter, partially offset by the proceeds generated from
      the
      sale of Panacos shares and the increase in interest income earned during the
      quarter. We expect our working capital position to decline as we fund our
      operations from our cash and cash equivalents. We believe that we have
      sufficient working capital to fund our operations at their current level, and
      with planned increases in operations, through 2007. The extent to which we
      increase our operations is dependent upon our view of the investment required
      to
      successfully commercialize PCT, balanced with our desire to pursue additional
      external capital. At this time we do not feel that we need to rely on external
      funding to pursue our near-term strategy.




-20-




Net
      cash
      used in continuing operations for the three months ended March 31, 2006 was
      $317,772 as compared to net cash used in continuing operations of $19,278 for
      the three months ended March 31, 2005. The cash used in operations for the
      three
      months of fiscal 2006 was to support on-going operations.




Net
      cash
      provided by investing activities for the three months ended March 31, 2006
      was
      $516,308 as compared to cash used of $24,286 for the same period in the prior
      year. The cash generated in the first quarter of 2006 was entirely from the
      sale
      of 57,900 shares of Panacos common stock, partially offset by minimal purchases
      of fixed assets. We will continue to monitor the market price of Panacos common
      stock with the intent of liquidating our position at what we consider to be
      favorable terms. We expect that our investment in fixed assets will increase
      in
      future quarters as we make modest additions to our staff and operating
      facilities.




Net
      cash
      generated from financing activities for the three months ended March 31, 2006
      was $0. During the first quarter of 2005 we used cash in financing activities
      of
      $16,375,130. On February 2005, we completed our issuer tender offer in which
      we
      purchased from stockholders 5,203,001 shares of our common stock.




Net
      cash
      generated by discontinued operations for the three months ended March 31, 2006
      was $1,116,819 as compared to net cash used in discontinued operations of
      $21,623 for same period of 2005. This cash generated in the first quarter of
      2006 relates to the receipt of the $1,094,162 from Wells Fargo Corporate Trust
      Escrow Services, representing the remaining principal held in escrow from the
      2004 sale of the assets and certain liabilities of our BBI Core Businesses
      to
      SeraCare, and interest from January 1 through February 28, 2006. We also
      received all accrued interest for the prior year.




**RELATED
      PARTY TRANSACTION**




As
      of
      March 31, 2006, we evaluated the recoverability of the $1,000,000 loan
      receivable from Mr. Schumacher, which is reflected on the balance sheet in
      stockholders' equity as a loan receivable. Our evaluation of the recoverability
      of the loan receivable included an analysis of the value of the 479,657 shares
      of our common stock that are held as collateral. This test included a review
      of
      the current trading price of our common stock. After performing the impairment
      test, we determined that the loan receivable was not impaired. We will continue
      to monitor and test the collateral for impairment due in large part to the
      relatively low trading volume of our common stock and recent volatility in
      stock
      price, ranging from a low of $3.81 per share to a high of $4.79 per share from
      January 1, 2006 to March 31, 2006.





**COMMITMENTS
      AND CONTINGENCIES**




*Royalty
      Commitments*




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




-21-




*Research
      and Development Collaboration*




On
      February 1, 2006, we entered into an agreement with the University of New
      Hampshire, pursuant to which UNH agreed to perform certain research and
      development services for us through December 31, 2006. Subject to the terms
      of
      the agreement, we will pay UNH an aggregate of $157,850 during the term of
      the
      agreement.




*Operating
      Leases*





On
      March
      1, 2006, we entered into a sub-lease agreement with Proteome Systems, Inc.,
      pursuant to which we have agreed to lease approximately 650 sq. feet of
      laboratory space plus 100 sq. feet of office space from Proteome Systems in
      Woburn, Massachusetts. The lease period will expire on December 31, 2006. We
      will pay $2,350 per month for the use of these facilities.





*Purchase
      Commitments*




In
      April
      2006, we executed a purchase order with Source Scientific, LLC under which
      we
      agreed to purchase 25 Barocycler NEP3229 units. In connection with this purchase
      order, we submitted a deposit to Source for $200,000. In accordance with the
      terms of the agreement, we expect that the units will be completed during the
      third and forth quarters of this year. We will be billed for the complete cost
      of each unit as it is completed. Finished goods will stay at Source Scientific,
      LLC for shipment directly to our customers *.*




**CRITICAL
      ACCOUNTING POLICIES**





The
      critical accounting policies we utilized in the preparation of the accompanying
      interim financial statements are set forth in Part II, Item 6 of our Annual
      Report on Form 10-KSB/A for the year ended December 31, 2005, under the heading
      "Management's Discussion and Analysis of Financial Condition or Plan of
      Operation”. Additionally, we have adopted the following:




*Correction
      of an Accounting Error*





In
      May
      2005, the FASB issued SFAS 154, “Accounting Changes and Error Corrections”,
      which replaces APB 20, “Accounting Changes”, and SFAS 3, “Reporting Accounting
      Changes in Interim Financial Statements - An Amendment of APB Opinion No. 28”.
      SFAS 154 provides guidance on the accounting for and the reporting of accounting
      changes and error corrections. It establishes retrospective application, or
      the
      latest practicable date, as the required method for reporting a change in
      accounting principle and the reporting of a correction of an error. SFAS 154
      is
      the required method for reporting a change in accounting principle and the
      reporting of a correction of an error. We have adopted SFAS 154 to correct
      an
      error made during the quarter ended September 30, 2005 and discovered during
      the
      quarter ended March 31, 2006.




On
      March
      15, 2006, we received $1,094,162 from Wells Fargo Corporate Trust Escrow
      Services, representing the remaining principal, and interest, held in
      escrow from the 2004 sale of the assets and certain liabilities of our BBI
      Core
      Businesses to SeraCare Life Sciences Inc., (“SeraCare”). The receipt of these
      funds triggered the recognition of taxable income, accounted for as an
      installment sale for federal income tax purposes. During the financial statement
      closing process for the quarter ended March 31, 2006, we determined that a
      deferred tax liability of approximately $220,000 should have been established
      during the quarter ended September 30, 2005, the period in which we filed our
      federal income tax return. Upon reexamining our accounting for income taxes
      in
      entirety we further determined that the deferred tax liability in connection
      with the unrealized gain on Panacos should be reduced by approximately $60,000,
      and that the income tax provision from continuing operations should be increased
      by approximately $23,000. We also determined that the accounting for deferred
      tax assets needed to be adjusted; however, there was no impact from this
      adjustment as deferred tax assets are fully reserved for.




-22-


We
      elected to remedy these errors by restating our Annual Report on Form 10-KSB,
      for the year ended December 31, 2005 and our Quarterly Report on Form 10-QSB
      for
      the quarter ended September 30, 2005. The December 31, 2005 balance sheet
      presented in this Quarterly Report on Form 10-QSB for the quarter ended March
      31, 2006 reflects the appropriate adjustments to the income tax accounts and
      to
      retained earnings .





These
      adjustments did not change our reported pre-tax results from continuing
      operations, but income from continuing operations after income taxes for the
      year ended December 31, 2005 has been reduced from approximately $873,000 to
      approximately $850,000.




**ITEM
      3. CONTROLS AND PROCEDURES**




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




In
      connection with the preparation of this Quarterly Report on Form 10-QSB for
      the
      quarter ended March 31, 2006, we completed an internal review of our tax
      liability associated with the 2004 sale of assets and certain liabilities of
      our
      BBI Core Businesses to SeraCare. As a result of this review, we concluded that
      the tax liability related to discontinued operations recorded in the third
      quarter of 2005 was understated by approximately $220,000. In connection with
      our internal tax review, we also determined to reduce by approximately $60,000
      the estimate of our deferred tax liability for the unrealized gain from our
      investment in Panacos Pharmaceuticals, Inc. and to increase by approximately
      $23,000 the income tax provision from continuing operations. We therefore
      decided to restate our previously issued financial statements for the year
      ended
      December 31, 2005 and our financial statements for the quarter ended September
      30, 2005 to reflect these changes. We will amend our Annual Report on Form
      10-KSB for the year ended December 31, 2005 to restate our financial
      results for the year ended December 31, 2005 and will amend our Quarterly Report
      on Form 10-QSB for the quarter ended September 30, 2005 to restate our
      financial results for the quarter ended September 30, 2005. In connection
      with the filing of these amendments, we carried out a further evaluation, as
      of
      December 31, 2005, under the supervision and with the participation of our
      management, including our President (Principal Executive Officer) and Chief
      Financial Officer (Principal Financial Officer), of the effectiveness of the
      design and operation of our disclosure controls and procedures, as defined
      in
      Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934.
      Based upon that evaluation, our President (Principal Executive Officer) and
      Chief Financial Officer (Principal Financial Officer) concluded that our
      disclosure controls and procedures were not effective as of December 31, 2005
      in
      enabling us to record, process, summarize, and report information required
      to be
      included in our periodic SEC filings within the required time period. We believe
      that the hiring of our new Chief Financial Officer, effective as of April 3,
      2006, has enabled us to conclude that our disclosure controls and procedures
      are
      now effective.





As
      of
      March 31, 2006, we carried out an evaluation, under the supervision and with
      the
      participation of our management, including our President and Chief Executive
      Officer (Principal Executive Officer) and Chief Financial Officer (Principal
      Financial Officer) of the effectiveness of the design and operation of our
      disclosure controls and procedures, as defined in Rules 13a-15(e) and
      15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation,
      our President and Chief Executive Officer (Principal Executive Officer) and
      Chief Financial Officer (Principal Financial Officer) concluded that our
      disclosure controls and procedures are effective in enabling us to record,
      process, summarize and report information required to be included in our
      periodic SEC filings within the required time period.





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





-23-





**PART
      II. OTHER INFORMATION**


**ITEM
      6. EXHIBITS**





**Exhibits**
            Reference31.1Principal
                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
              herewith31.1Principal
                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
              herewith32.1Principal
                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
              herewith32.1Principal
                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


-24-


**SIGNATURES**




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





PRESSURE
              BIOSCIENCES, INC.(Registrant)Date: May
              15, 2006
            By:
            /s/ Richard
              T. Schumacher**Richard
              T. SchumacherPresident,
              Chief
              Executive Officer, and Treasurer(Principal Executive
              Officer)


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





-25-