UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September 30, 2020~~March 31, 2021

[ ] 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 001-38185

PRESSURE BIOSCIENCES, INC.

(Exact name of registrant as specified in its charter)

Massachusetts		04-2652826
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

14 Norfolk Avenue
South Easton, Massachusetts		02375
(Address of principal executive offices)		(Zip Code)

(508) 230-1828

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X] Yes [ ] No

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

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
Emerging Growth Company	[ ]

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

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

[ ] Yes [X] No

The number of shares outstanding of the Issuer’s common stock as of ~~November 12, 2020~~May 13, 2021 was ~~3,884,825.~~5,211,612.

TABLE OF CONTENTS

	Page

PART I - FINANCIAL INFORMATION	3

Item 1. Unaudited Financial Statements	3

Consolidated Balance Sheets as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020	3

Consolidated Statements of Operations for the ~~Three-~~Three Months Ended March 31, 2021 and ~~Nine-Months Ended September 30,~~ 2020 ~~and 2019~~	4

Consolidated Statements of Cash Flows for the ~~Nine-Months~~Three Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	5

Consolidated Statements of Changes in Stockholders’ Deficit for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	6

Notes to Unaudited Consolidated Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2827

Item 3. Quantitative and Qualitative Disclosure About Market Risk	3332

Item 4. Controls and Procedures	3332

PART II - OTHER INFORMATION	3433

Item 1. Legal Proceedings	3433

Item 1A. Risk Factors	3433

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	3534

Item 3. Defaults Upon Senior Securities	3534

Item 4. Mine Safety Disclosures	3534

Item 5. Other Information	3534

Item 6. Exhibits	3635

SIGNATURES	3736

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	94,752		$	29,625		$	50,530		$	18,540
Accounts receivable		330,459			229,402			504,496			131,228
Inventories, net of $342,496 reserve at September 30, 2020 and December 31, 2019		516,205			617,716
Loan receivable		801,250			-
Inventories, net of $342,496 reserve at March 31, 2021 and December 31, 2020								559,365			592,767
Prepaid expenses and other current assets		159,739			213,549			271,645			314,936
Total current assets		1,902,405			1,090,292			1,386,036			1,057,471
Investment in equity securities		503,366			16,643			409,098			517,001
Property and equipment, net		18,733			55,590			14,897			16,490
Right of use asset leases		20,958			76,586			205,856			221,432
Intangible assets, net		512,019			576,923			468,750			490,385
TOTAL ASSETS	$	2,957,481		$	1,816,034		$	2,484,637		$	2,302,779

LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	706,319		$	815,764		$	711,332		$	771,945
Accrued employee compensation		450,591			451,200			460,280			417,578
Accrued professional fees and other		2,035,252			1,658,452			2,116,468			2,037,806
Accrued interest		5,593,508			2,949,621
Other current liabilities								7,490,366			6,330,722
Deferred revenue		47,623			23,248			41,828			47,328
Convertible debt, net of unamortized discounts of $2,184,810 and $3,948,167, respectively								9,892,777			7,545,670
Other debt, net of unamortized discounts of $2,223 and $0, respectively								1,372,651			1,135,469
Operating lease liability		20,958			76,586			67,168			65,193
Convertible debt, net of unamortized discounts of $4,738,724 and $619,227, respectively		7,095,113			6,121,338
Other debt, net of unamortized discounts of $0 and $1,769, respectively		886,501			1,675,667
Other related party debt		105,000			81,500			181,000			166,000
Total current liabilities		16,940,865			13,853,376			22,333,870			18,517,711
LONG TERM LIABILITIES
Long term debt		527,039			-			527,038			527,039
Operating lease liability – long term								138,688			156,239
Deferred revenue		25,957			18,065			12,404			19,382
TOTAL LIABILITIES		17,493,861			13,871,441			23,012,000			19,220,371
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS’ DEFICIT
Series D Convertible Preferred Stock, $.01 par value; 850 shares authorized; 300 shares issued and outstanding on September 30, 2020 and December 31, 2019, respectively (Liquidation value of $300,000)		3			3
Series G Convertible Preferred Stock, $.01 par value; 240,000 shares authorized; 80,570 shares issued and outstanding on September 30, 2020 and December 31, 2019, respectively		806			806
Series H Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 10,000 shares issued and outstanding on September 30, 2020 and December 31, 2019, respectively		100			100
Series H2 Convertible Preferred Stock, $.01 par value; 21 shares authorized; 21 shares issued and outstanding on September 30, 2020 and December 31, 2019, respectively		-			-
Series J Convertible Preferred Stock, $.01 par value; 6,250 shares authorized; 3,458 shares issued and outstanding on September 30, 2020 and December 31, 2019, respectively		35			35
Series K Convertible Preferred Stock, $.01 par value; 15,000 shares authorized; 6,880 shares issued and outstanding on September 30, 2020 and December 31, 2019, respectively		68			68
Series AA Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 7,983 and 7,939 shares issued and outstanding on September 30, 2020 and December 31, 2019, respectively		80			80
Common stock, $.01 par value; 100,000,000 shares authorized; 3,839,256 and 2,549,620 shares issued and outstanding on September 30, 2020 and December 31, 2019 respectively		38,392			25,496
Series D Convertible Preferred Stock, $.01 par value; 850 shares authorized; 300 shares issued and outstanding on March 31, 2021 and December 31, 2020, respectively (Liquidation value of $300,000)								3			3
Series G Convertible Preferred Stock, $.01 par value; 240,000 shares authorized; 80,570 shares issued and outstanding on March 31, 2021 and December 31, 2020, respectively								806			806
Series H Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 10,000 shares issued and outstanding on March 31, 2021 and December 31, 2020, respectively								100			100
Series H2 Convertible Preferred Stock, $.01 par value; 21 shares authorized; 21 shares issued and outstanding on March 31, 2021 and December 31, 2020, respectively								-			-
Series J Convertible Preferred Stock, $.01 par value; 6,250 shares authorized; 3,458 shares issued and outstanding on March 31, 2021 and December 31, 2020, respectively								35			35
Series K Convertible Preferred Stock, $.01 par value; 15,000 shares authorized; 6,880 shares issued and outstanding on March 31, 2021 and December 31, 2020, respectively								68			68
Series AA Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 8,083 and 8,043 shares issued and outstanding on March 31, 2021 and December 31, 2020, respectively								81			81
Common stock, $.01 par value; 100,000,000 shares authorized; 5,271,707, tie to equity statement and 4,168,324 shares issued and outstanding on March 31, 2021 and December 31, 2020 respectively								52,717			41,683
Warrants to acquire common stock		28,207,172			22,599,177			30,005,307			29,192,471
Additional paid-in capital		49,079,182			44,261,105			52,860,129			50,312,968
Accumulated deficit		(91,862,218	)		(78,942,277	)		(103,446,609	)		(96,465,807	)
Total stockholders’ deficit		(14,536,380	)		(12,055,407	)		(20,527,363	)		(16,917,592	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,957,481		$	1,816,034		$	2,484,637		$	2,302,779

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

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	2020			2019			2020			2019			2021			2020
Revenue:
Products, services, other	$	533,862		$	501,158		$	1,055,889		$	1,530,061		$	559,874		$	253,873
Total revenue		533,862			501,158			1,055,889			1,530,061			559,874			253,873

Costs and expenses:
Cost of products and services		247,013			285,794			557,041			899,678			226,275			175,146
Research and development		247,432			276,712			807,724			832,954			299,943			265,690
Selling and marketing		173,372			133,032			524,586			507,856			93,328			189,116
General and administrative		684,807			874,611			2,711,032			3,155,800			1,015,430			1,019,010
Total operating costs and expenses		1,352,624			1,570,149			4,600,383			5,396,288			1,634,976			1,648,962

Operating loss		(818,762	)		(1,068,991	)		(3,544,494	)		(3,866,227	)		(1,075,102	)		(1,395,089	)

Other (expense) income:
Interest expense, net		(2,204,593	)		(2,124,477	)		(5,501,272	)		(4,001,711	)		(4,668,064	)		(1,571,800	)
Unrealized gain on investment in equity securities		140,461			-			486,723			-
Unrealized (loss) gain on investment in equity securities														(107,903	)		149,371
Loss on extinguishment of liabilities		(395,854	)		(185,203	)		(3,242,372	)		(332,474	)		(725,159	)		(1,136,367	)
Other income		-			4,674			-			4,400
Other (expense) income														(1,359	)		-
Total other expense		(2,459,986	)		(2,305,006	)		(8,256,921	)		(4,329,785	)		(5,502,485	)		(2,558,796	)
Income tax benefit					217,168						217,168
Net loss		(3,278,748	)		(3,156,829	)		(11,801,415	)		(7,978,844	)		(6,577,587	)		(3,953,885	)
Deemed dividend on beneficial conversion feature		-			(675,979	)		-			(2,625,710	)
Deemed dividends on beneficial conversion feature													$	(57,884	)		-
Preferred stock dividends		(396,970	)		(492,494	)		(1,118,526	)		(1,268,593	)		(403,215	)		(324,586	)
Net loss attributable to common stockholders	$	(3,675,718	)	$	(4,325,302	)	$	(12,919,941	)	$	(11,873,147	)	$	(7,038,686	)	$	(4,278,471	)
Basic and diluted net loss per share attributable to common stockholders	$	(1.02	)	$	(2.20	)	$	(4.22	)	$	(6.29	)	$	(1.45	)	$	(1.62	)

Weighted average common stock shares outstanding used in the basic and diluted net loss per share calculation		3,612,958			1,967,872			3,059,095			1,887,393			4,865,826			2,648,039

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

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the Nine Months Ended
September 30,
2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (11,801,415 ) $ (7,978,844 )
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash lease expense 55,628 43,435
Common stock issued for interest and extension fees 242,350 -
Depreciation and amortization 103,424 68,849
Accretion of interest and amortization of debt discount 3,454,470 886,950
Issuance of shares for services rendered - 245,000
Loss on extinguishment of accrued liabilities and debt 1,036,638 332,474
Stock-based compensation expense 373,652 722,576
Gain on investment in equity securities (486,723 ) -
Common stock issued for services 87,963 -
Changes in operating assets and liabilities:
Accounts receivable (101,057 ) 63,388
Inventories 101,511 51,593
Prepaid expenses and other assets 53,810 (177,066 )
Accounts payable (109,445 ) 838,278
Accrued employee compensation (609 ) (63,434 )
Operating lease liability (55,628 ) (43,435 )
Deferred revenue and other accrued expenses 3,138,667 (9,109 )
Net cash used in operating activities (3,906,764 ) (5,019,345 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Advance on loan receivable (801,250 ) -
Purchases of property plant and equipment (1,663 ) (28,915 )
Net cash used in investing activities (802,913 ) (28,915 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from Series AA Convertible Preferred Stock - 3,185,100
Net proceeds from convertible debt 6,977,800 4,601,300
Net proceeds from non-convertible debt – third party 990,539 2,956,750
Net proceeds from non-convertible debt – related party 38,500 239,000
Payments on convertible debt (1,972,007 ) (3,705,485 )
Payments on non-convertible debt – related party (15,000) (175,000 )
Payments on non-convertible debt (1,245,028 ) (2,021,159 )
Net cash provided by financing activities 4,774,804 5,080,506

NET INCREASE IN CASH AND CASH EQUIVALENTS 65,127 32,246
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 29,625 103,118
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 94,752 $ 135,364

SUPPLEMENTAL INFORMATION
Interest paid in cash $ 530,009 $ 2,571,231
NON CASH TRANSACTIONS:
Loan extension fees and interest added to principal $ 152,552 $ 77,500
Conversion of debt for Series AA preferred stock 110,000 -
Common stock issued for debt settlement 374,550 -
Common stock issued to settle accrued liabilities 127,855 -
Common stock issued with debt 147,775 226,133
Discount from warrants issued with debt 4,261,055 -
Common stock issued in lieu of cash for dividend 221,374 190,123
Preferred stock dividends 1,118,526 1,268,593
Conversion of debt and interest into common stock 1,830,543 342,250
Conversion of preferred stock into common stock - 160
Discount due to beneficial conversion feature 1,353,694 451,665
Deemed dividend-beneficial conversion feature - 2,625,710

	For the Three Months Ended March 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,577,587	)	$	(3,953,885	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on loan forgiveness		(367,039	)		-
Change in operating lease right-of-use-asset		15,576			17,408
Common stock and warrants issued for interest and extension fees		2,622,078			60,560
Depreciation and amortization		27,190			45,000
Accretion of interest and amortization of debt discount		2,165,780			878,242
Loss on extinguishment of accrued liabilities and debt		-			635,000
Stock-based compensation expense		61,237			241,769
Loss (gain) on investment in equity securities		107,903			(149,371	)
Common stock issued for services		238,512			-
Changes in operating assets and liabilities:
Accounts receivable		(373,268	)		108,472
Inventories		33,402			(38,074	)
Prepaid expenses and other assets		43,291			9,699
Accounts payable		(60,613	)		54,463
Accrued employee compensation		42,702			(35,885	)
Operating lease liability		(15,576	)		(17,408	)
Deferred revenue and other accrued expenses		799,397			779,371
Net cash used in operating activities		(1,237,015	)		(1,364,639	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property plant and equipment		(3,962	)		-
Net cash used in investing activities		(3,962	)		-

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Series AA Convertible Preferred Stock		100,000			-
Proceeds from stock option exercises		14,773			-
Net proceeds from convertible debt		730,000			1,865,500
Net proceeds from non-convertible debt – third party		854,538			463,500
Proceeds from non-convertible debt – related party		85,000			8,500
Payments on convertible debt		(191,250	)		(520,500	)
Payments on non-convertible debt – related party		(70,000	)		-
Payments on non-convertible debt		(250,094	)		(450,167	)
Net cash provided by financing activities		1,272,967			1,366,833

NET INCREASE IN CASH AND CASH EQUIVALENTS		31,990			2,194
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		18,540			29,625
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	50,530		$	31,819

SUPPLEMENTAL INFORMATION
Interest paid in cash	$	37,375		$	219,224
NON CASH TRANSACTIONS:
Interest added to principal		-			132,314
Common stock issued for debt settlement		-			25,000
Common stock issued to settle accrued liabilities		-			127,855
Discount from warrants issued with debt		162,654			1,205,010
Preferred stock dividends		403,215			324,586
Conversion of debt and interest into common stock		118,000			-
Discount due to beneficial conversion feature		53,777			404,608
Deemed dividend-beneficial conversion feature		57,884			-

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

PRESSURE BIOSCIENCES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

Series D Series G Series H Series H(2) Series J Series K Series AA
Preferred
Stock Preferred
Stock Preferred
Stock Preferred
Stock Preferred
Stock Preferred
Stock Preferred
Stock Common Stock Stock
Additional
Paid-In
Accumulated Total
Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Warrants Capital Deficit Deficit
BALANCE, December 31, 2018 300 $ 3 80,570 $ 806 10,000 $ 100 21 $ - 3,458 $ 35 6,880 $ 68 6,499 65 1,684,184 $ 16,842 $ 19,807,247 $ 39,777,301 $ (65,727,538 ) $ (6,125,071 )
Stock-based compensation - - - - - - - - - - - - - - - - - 245,392 - 245,392
Series AA Preferred Stock dividend - - - - - - - - - - - - - - - - - - (355,610 ) (355,610 )
Issuance of shares for services - - - - - - - - - - - - - - 50,000 500 167,500 - 168,000
Beneficial conversion feature on Series AA convertible preferred stock - - - - - - - - - - - - - - - - - 1,060,199 - 1,060,199
Deemed dividend-beneficial conversion feature - - - - - - - - - - - - - - - - - (1,060,199 ) - (1,060,199 )
Preferred Stock offering - - - - - - - - - - - - 560 6 - - 738,528 661,466 - 1,400,000
Offering costs for issuance of preferred stock - - - - - - - - - - - - - - - - 160,764 (300,764 ) - (140,000 )
Common Stock issued for debt extension - - - - - - - - - - - - - - 16,350 163 - 38,825 38,988
Stock issued with debt - - - - - - - - - - - - - - 17,958 180 - 50,553 - 50,733
Net loss - - - - - - - - - - - - - - - - - - (2,055,173 ) (2,055,173 )
BALANCE, March 31, 2019 300 $ 3 80,570 $ 806 10,000 $ 100 21 $ - 3,458 $ 35 6,880 $ 68 7,059 $ 71 1,768,492 $ 17,685 $ 20,706,539 $ 40,640,273 $ (68,138,321 ) $ (6,772,741 )
Stock-based compensation - - - - - - - - - - - - - - - - - 362,182 - 362,182
Series AA Preferred Stock dividend - - - - - - - - - - - - - (420,489 ) (420,489 )
Beneficial conversion feature on Series AA convertible preferred stock - - - - - - - - - - - - - - - - - 889,532 - 889,532
Deemed dividend-beneficial conversion feature - - - - - - - - - - - - - - - - - (889,532 ) - (889,532 )
Issuance of common stock for dividends paid-in-kind - - - - - - - - - - - - 42,456 425 151,568 - 151,993
Preferred Stock offering - - - - - - - - - - - - 459 5 608,852 538,062 - 1,146,919
Offering costs for issuance of preferred stock - - - - - - - - - - - - - 131,251 (245,870 ) - (114,619 )
Stock issued with debt - - - - - - - - - - - - - 29,641 296 105,293 - 105,589
Common Stock issued for debt extension - - - - - - - - - - - - - - 49,027 490 125,418 - 125,908
Net loss - - - - - - - - - - - - - - - - - (2,766,842 ) (2,766,842 )
BALANCE, June 30, 2019 300 $ 3 80,570 $ 806 10,000 $ 100 21 $ - 3,458 $ 35 6,880 $ 68 7,518 $ 76 1,889,616 $ 18,896 $ 21,446,642 $ 41,676,926 $ (71,325,652 ) $ (8,182,100 )
Stock-based compensation - - - - - - - - - - - - - - - - - 115,002 - 115,002
Issuance of common stock for services - - - - - - - - - - - - - - 25,000 250 76,750 - 77,000
Series AA Preferred Stock dividend - - - - - - - - - - - - - - - - - (492,494 ) (492,494 )
Conversion of debt and interest for common stock - - - - - - - - - - - - - - 120,000 1,200 - 341,050 - 342,250
Issuance of common stock for dividends paid-in-kind - - - - - - - - - - - - 19,454 195 37,935 - 38,130
Conversion of Series AA convertible preferred stock - - - - - - - - - - (16 ) (0 ) 16,000 160 (160 ) - (0 )
Deemed dividend-beneficial conversion feature - - - - - - - - - - (675,979 ) - (675,979 )
Beneficial feature on Preferred Stock Offering - - - - - - - - - - - - - - - - - 675,979 - 675,979
Preferred Stock offering - - - - - - - - - - - - 397 4 - - 511,739 480,257 - 992,000
Offering costs for issuance of preferred stock - - - - - - - - - - - - - - 105,926 (205,126 ) - (99,200 )
Stock issued with debt - - - - - - - - - - - - - - 22,483 225 - 58,509 - 58,734
Common Stock/Warrants issued for debt extension - - - - - - - - - - - - - - 79,610 796 - $ 230,517 - 231,313
Beneficial conversion feature on convertible debt - - - - - - - - - - - - - - - - - $ 451,665 - 451,665
Net loss - - - - - - - - - - - - - - - - - (3,156,829 ) (3,156,829 )
BALANCE, September 30, 2019 300 $ 3 80,570 $ 806 10,000 $ 100 21 $ - 3,458 $ 35 6,880 $ 68 7,899 $ 80 2,172,163 $ 21,722 $ 22,064,307 $ 43,263,325 $ (74,974,975 ) $ (9,624,529 )

	Series D				Series G				Series H				Series H(2)				Series J				Series K				Series AA										Additional						Total
	Preferred Stock				Preferred Stock				Preferred Stock				Preferred Stock				Preferred Stock				Preferred Stock				Preferred Stock				Common Stock				Stock		Paid-In			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Warrants		Capital			Deficit			Deficit
BALANCE, December 31, 2020		300	$	3		80,570	$	806		10,000	$	100		21	$	-		3,458	$	35		6,880	$	68		8,043		81		4,168,324	$	41,683	$	29,192,471	$	50,312,968		$	(96,465,807	)	$	(16,917,592	)
Stock-based compensation		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		61,237			-			61,237
Stock option exercise		-		-		-		-		-		-		-		-		-		-		-		-		-		-		21,411		214		-		14,559			-			14,773
Series AA Preferred Stock dividend		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			(403,215	)		(403,215	)
Issuance of warrants for interest paid-in-kind																														-		-		600,298		-			-			600,298
Issuance of common stock for services		-		-		-		-		-		-		-		-		-		-		-		-		-		-		112,400		1,124				237,388			-			238,512
Beneficial conversion feature on debt		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		53,777			-			53,777
Series AA Preferred Stock offering		-		-		-		-		-		-		-		-		-		-		-		-		40		-		-		-		49,884		50,116			-			100,000
Beneficial conversion option on convertible preferred stock		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		57,884			-			57,884
Deemed dividend on convertible preferred stock		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		(57,884	)		-			(57,884	)
Conversion of debt and interest for common stock		-		-		-		-		-		-		-		-		-		-		-		-		-		-		47,200		472		-		117,528			-			118,000
Issuance of common stock for interest paid in kind		-		-		-		-		-		-		-		-		-		-		-		-		-		-		922,372		9,224		-		2,012,556			-			2,021,780
Warrants issued with debt		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		162,654		-			-			162,654
Net loss		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			(6,577,587	)		(6,577,587	)
BALANCE, March 31, 2021		300	$	3		80,570	$	806		10,000	$	100		21	$	-		3,458	$	35		6,880	$	68		8,083	$	81		5,271,707	$	52,717	$	30,005,307	$	52,860,129		$	(103,446,609	)	$	(20,527,363	)

Series D
Preferred Stock
Series G Preferred Stock Series H Preferred Stock Series H(2) Preferred Stock Series J Preferred Stock Series K Preferred Stock Series AA Preferred Stock Common Stock Stock Additional Paid-In Accumulated Total Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Warrants Capital Deficit Deficit
BALANCE, December 31, 2019 300 $ 3 80,570 $ 806 10,000 $ 100 21 $ - 3,458 $ 35 6,880 $ 68 7939 $ 80 2,549,620 $ 25,496 $ 22,599,177 $ 44,261,105 $ (78,942,277 ) $ (12,055,407 )
Stock-based compensation - - - - - - - - - - - - - - - - - 241,769 - 241,769
Series AA Preferred Stock dividend - - - - - - - - - - - - - - - - - (324,586 ) (324,586 )
Issuance of common stock to settle accrued liabilities - - - - - - - - - - - - - - 66,500 665 - 127,190 - 127,855
Common stock issued for debt settlement - - - - - - - - - - - - - - 10,000 100 - 24,900 - 25,000
Beneficial conversion feature on debt - - - - - - - - - - - - - - - - - 404,608 - 404,608
Warrants issued for debt extension - - - - - - - - - - - - - - - - 609,143 - - 609,143
Issuance of common stock for debt extension and interest paid in kind - - - - - - - - - - - - - - 38,521 385 - 60,175 - 60,560
Warrants issued with debt - - - - - - - - - - - - - - - - 1,205,010 - - 1,205,010
Net loss - - - - - - - - - - - - - - - - - - (3,953,885 ) (3,953,885 )
BALANCE, March 31, 2020 300 $ 3 80,570 $ 806 10,000 $ 100 21 $ - 3,458 $ 35 6,880 $ 68 7,939 $ 80 2,664,641 $ 26,646 $ 24,413,330 $ 45,119,747 $ (83,220,748 ) $ (13,659,933 )
Stock-based compensation - - - - - - - - - - - - - - - - - 65,341 - 65,341
Series AA Preferred Stock dividend - - - - - - - - - - - - - - - - - - (396,970 ) (396,970 )
Beneficial conversion feature on debt - - - - - - - - - - - - - - - - - 577,489 - 577,489
Issuance of common stock for services - - - - - - - - - - - - - - 25,000 250 - 87,713 - 87,963
Issuance of common stock for interest paid-in-kind - - - - - - - - - - - - - - 42,510 425 - 98,799 - 99,224
Issuance of common stock for dividends paid-in-kind - - - - - - - - - - - - - - 64,388 644 - 176,104 - 176,748
Conversion of debt and interest for common stock - - - - - - - - - - - - - - 410,746 4,107 - 1,288,542 - 1,292,649
Warrants issued with debt - - - - - - - - - - - - - - - 1,753,683 - - 1,753,683
Warrants issued for debt extension - - - - - - - - - - - - - - - 360,602 - - 360,602
Net loss - - - - - - - - - - - - - - - - - - (4,568,782 ) (4,568,782 )
BALANCE, June 30, 2020 300 $ 3 80,570 $ 806 10,000 $ 100 21 $ - 3,458 $ 35 6,880 $ 68 7,939 $ 80 3,207,285 $ 32,072 $ 26,527,615 $ 47,413,735 $ (88,186,500 ) $ (14,211,986 )
Stock-based compensation - - - - - - - - - - - - - - - - - 66,542 - 66,542
Issuance of common stock for interest paid-in-kind - - - - - - - - - - - - - - 46,021 460 - 82,106 - 82,566
Issuance of common stock for dividends paid-in-kind - - - - - - - - - - - - - - 23,130 232 - 44,394 - 44,626
Series AA Preferred Stock dividend - - - - - - - - - - - - - - - - (396,970 ) (396,970 )
Conversion of debt and interest for common stock - - - - - - - - - - - - - - 299,042 2,990 - 534,904 - 537,894
Warrants issued with debt - - - - - - - - - - - - - - - - 1,302,362 - 1,302,362
Conversion of debt into Series AA convertible preferred stock - - - - - - - - - - 44 - - - 38,783 71,217 - 110,000
Beneficial conversion feature on debt - - - - - - - - - - - - - - - 371,597 - 371,597
Common stock issued for debt settlement - - - - - - - - - - - - - - 178,778 1,788 - 347,762 - 349,550
Warrants issued for debt settlement - - - - - - - - - - - - - - - - 338,412 - - 338,412
Common Stock issued with debt - - - - - - - - - - - - - - 85,000 850 - 146,925 - 147,775
Net loss - - - - - - - - - - - - - - - - - - (3,278,748 ) (3,278,748 )
BALANCE, September 30, 2020 300 $ 3 80,570 $ 806 �� 10,000 $ 100 21 $ - 3,458 $ 35 6,880 $ 68 7,983 $ 80 3,839,256 $ 38,392 $ 28,207,172 $ 49,079,182 $ (91,862,218 ) $ (14,536,380 )

	Series D Preferred Stock				Series G Preferred Stock				Series H Preferred Stock				Series H(2) Preferred Stock				Series J Preferred Stock				Series K Preferred Stock				Series AA Preferred Stock				Common Stock			Stock		Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount	Warrants		Capital		Deficit			Deficit
BALANCE, December 31, 2019		300	$	3		80,570	$	806		10,000	$	100		21	$	-		3,458	$	35		6,880	$	68		7,939	$	80		2,549,620		$	25,496	$	22,599,177	$	(78,942,277	)	$	(12,055,407	)
Stock-based compensation		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-		-		-			241,769
Series AA Preferred Stock dividend		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-		-		(324,586	)		(324,586	)
Issuance of common stock to settle accrued liabilities		-		-		-		-		-		-		-		-		-		-		-		-		-		-		66,500		$	665		-		-			127,855
Common stock issued or debt settlement		-		-		-		-		-		-		-		-		-		-		-		-		-		-		10,000		$	100		-		-			25,000
Issuance of common stock for debt extension and interest paid-in-kind		-		-		-		-		-		-		-		-		-		-		-		-		-		-		38,521		$	385		-		-			60,560
Beneficial conversion feature on debt		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-		-		-			404,608
Warrants issued with debt		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-		1,205,010		-			1,205,010
Warrants issued for debt extension		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-		609,143		-			609,143
Net loss		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-		-		(3,953,885	)		(3,953,885	)
BALANCE, March 31, 2020		300	$	3		80,570	$	806		10,000	$	100		21	$	-		3,458	$	35		6,880	$	68		7,939	$	80		2,664,641		$	26,646	$	24,413,330	$	(83,220,748	)		(13,659,933	)

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

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30, 2020~~MARCH 31, 2021

(UNAUDITED)

Business Overview, Liquidity and Management Plans

Pressure ~~Biosciences,~~BioSciences, Inc. (“we”, “our”, “the Company”) develops and sells innovative, broadly enabling, pressure-based platform solutions for the worldwide life sciences industry. Our solutions are based on the unique properties of both constant (i.e., static) and alternating (i.e., pressure cycling technology, or “PCT”) hydrostatic pressure. PCT is a patented enabling technology platform that uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels to ~~safely and reproducibly~~ control bio-molecular interactions (e.g., cell lysis, biomolecule extraction). safely and reproducibly. Our primary focus ishas historically been in the development of PCT-based products for biomarker and target discovery, drug design and development, biotherapeutics characterization and quality control, soil & plant biology, forensics, and counter-bioterror applications. Additionally, major new market opportunities have emerged in the use of our pressure-based ~~technologies~~technology expertise in ~~the following~~two new platform technology areas: (1) the use of our recently acquired, patented technology from BaroFold, Inc. for gently controlled disaggregation and refolding of biotherapeutic proteins (the “BaroFold” technology) to allow entry into the bio-pharma contract services sector, and (2) the use of our recently-patented, scalable, high-efficiency, pressure-based Ultra Shear Technology (“UST”) platform to (i) create stable nanoemulsions of otherwise immiscible fluids (e.g., oils and water) for greatly improved cost-effectiveness, high bioavailability, safer and improved sensory experience in products spanning pharmaceuticals, nutraceuticals, cosmeceuticals, personal care products, agrochemicals, food/beverage and many industrial products and to (ii) prepare higher quality, homogenized, extended shelf-life or room temperature stable low-acid liquid foods that cannot be effectively preserved using existing non-thermal technologies.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. However, we have experienced losses from operations and negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of ~~September 30, 2020,~~March 31, 2021, we do not have adequate working capital resources to satisfy our current liabilities and as a result, there is substantial doubt regarding our ability to continue as a going concern. We have been successful in raising debt and equity capital in the past and as described in Notes 65 and 7.6. In addition we raised debt and equity capital after ~~September 30, 2020~~March 31, 2021 as described in Note 8.7. We have financing efforts in place to continue to raise cash through debt and equity offerings. Although we have successfully completed financings and reduced expenses in the past, we cannot assure you that our plans to address these matters in the future will be successful. These financial statements do not include any adjustments that might result from this uncertainty.

Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim financial statements of Pressure BioSciences, Inc. and its consolidated subsidiaries (collectively, the “Company”) included herein have been prepared by the Company in accordance with the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission. Under these rules and regulations, some information and footnote disclosures normally included in financial statements prepared under accounting principles generally accepted in the United States of America have been shortened or omitted. Management believes that all adjustments necessary for a fair statement of the financial position and the results of operations for the periods shown have been made. All adjustments are normal and recurring. These financial statements should be read together with the Company’s audited financial statements included in its Form 10-K for the fiscal year ended December 31, ~~2019.~~2020.

Use of Estimates

The Company’s consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates, judgements and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Global concerns about the COVID-19 pandemic have adversely affected, and we expect will continue to adversely affect, our business, financial condition and results of operations including the estimates and assumptions made by management. Significant estimates and assumptions include valuations of share-based awards, investments in equity securities and intangible asset impairment. Actual results could differ from the estimates, and such differences may be material to the Company’s consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of Pressure BioSciences, Inc., and its ~~wholly-owned~~wholly owned subsidiary PBI BioSeq, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

~~Recent Accounting Pronouncements~~

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The standard is effective for the Company for interim and annual periods beginning after December 15, 2022. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In December 2019, the FASB, issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The standard is effective for the Company for interim and annual periods beginning after December 15, 2020 for the Company and for annual periods beginning after December 15, 2021 and interim periods beginning after December 15, 2022. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity. The standard is effective for interim and annual periods beginning after December 15, 2023 for the Company. The Company is evaluating the impact of this standard on its Consolidated Financial Statements.

Revenue Recognition

We recognize revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers,and ASC 340-40, Other Assets and Deferred Costs—Contracts with Customers. Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. We enter into sales contracts that may consist of multiple distinct performance obligations where certain performance obligations of the sales contract are not delivered in one reporting period. We measure and allocate revenue according to ASC 606-10.

We identify a performance obligation as distinct if both the following criteria are true: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determining the standalone selling price (“SSP”) and allocation of consideration from a contract to the individual performance obligations, and the appropriate timing of revenue recognition, is the result of significant qualitative and quantitative judgments. Management considers a variety of factors such as historical sales, usage rates, costs, and expected margin, which may vary over time depending upon the unique facts and circumstances related to each performance obligation in making these estimates. While changes in the allocation of the SSP between performance obligations will not affect the amount of total revenue recognized for a particular contract, any material changes could impact the timing of revenue recognition, which would have a material effect on our financial position and result of operations. This is because the contract consideration is allocated to each performance obligation, delivered or undelivered, at the inception of the contract based on the SSP of each distinct performance obligation.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are in included in cost of revenues as consistent with treatment in prior periods.

Our current Barocycler® instruments require a basic level of instrumentation expertise to set-up for initial operation. To support a favorable first experience for our customers, upon customer request, and for an additional fee, we will send a highly trained technical representative to the customer site to install ~~Barocycler®s~~Barocyclers® that we sell, lease, or rent through our domestic sales force. The installation process includes uncrating and setting up the instrument, followed by introductory user training. Our sales arrangements do not provide our customers with a right of return. Any shipping costs billed to customers are recognized as revenue.

The majority of our instrument and consumable contracts contain pricing that is based on the market price for the product at the time of delivery. Our obligations to deliver product volumes are typically satisfied and revenue is recognized when control of the product transfers to our customers. Concurrent with the transfer of control, we typically receive the right to payment for the shipped product and the customer has significant risks and rewards of ownership of the product. Payment terms require customers to pay shortly after delivery and do not contain significant financing components.

Revenue from scientific services customers is recognized upon completion of each stage of service as defined in service agreements.

We apply ASC 845, “Accounting for Non-Monetary Transactions”, to account for products and services sold through non-cash transactions based on the fair values of the products and services involved, where such values can be determined. Non-cash exchanges would require revenue to be recognized at recorded cost or carrying value of the assets or services sold if any of the following conditions apply:

	a)	The fair value of the asset or service involved is not determinable.

	b)	The transaction is an exchange of a product or property held for sale in the ordinary course of business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties to the exchange.

	c)	The transaction lacks commercial substance.

~~We currently record~~

We recognize revenue for ~~its~~ non-cash transactions at recorded cost or carrying value of the assets or services sold.

~~In accordance with FASB ASC 842,~~ ~~Leases~~, we account for our lease agreements under the operating method. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’ for our instrument leases, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

We account for lease agreements of our instruments in accordance with ASC 842, Leases. We record revenue over the life of the lease term, and we record depreciation expense on a straight-line basis over the thirty-six-month estimated useful life of the Barocycler® instrument. The depreciation expense associated with assets under lease agreement is included in the “Cost of PCT products and services” line item in our accompanying consolidated statements of operations. Many of our lease and rental agreements allow the lessee to purchase the instrument at any point during the term of the agreement with partial or full credit for payments previously made. We pay all maintenance costs associated with the instrument during the term of the leases.

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

Deferred revenue represents amounts received from ~~grants and~~ service contracts for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. Revenue from service contracts is recorded ratably over the length of the contract.

Disaggregation of revenue

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.

In thousands of US dollars ($)	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
Primary geographical markets	2020		2019		2020		2019		2021		2020
North America	$	387	$	381	$	694	$	973	$	208	$	143
Europe		2		9		6		103		84		54
Asia		145		111		356		454		268		57
	$	534	$	501	$	1,056	$	1,530	$	560	$	254

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
Major products/services lines	2020		2019		2020		2019		2021		2020
Hardware	$	313	$	186	$	569	$	571	$	377	$	129
Consumables		49		112		156		265		102		56
Contract research services		84		149		128		498		6		10
Sample preparation accessories		40		19		98		61		29		25
Technical support/extended service contracts		33		25		69		93		24		19
Shipping and handling		11		8		26		27		19		9
Other		4		2		10		15		3		6
	$	534	$	501	$	1,056	$	1,530	$	560	$	254

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
Timing of revenue recognition	2020		2019		2020		2019		2021		2020
Products transferred at a point in time	$	417	$	326	$	859	$	939	$	538	$	225
Services transferred over time		117		175		197		591		22		29
	$	534	$	501	$	1,056	$	1,530	$	560	$	254

Contract balances

In thousands of US dollars ($)	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Receivables, which are included in ‘Accounts Receivable’	$	330	$	229	$	505	$	131
Contract liabilities (deferred revenue)		74		41		54		67

Transaction price allocated to the remaining performance ~~obligations~~obligations.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

In thousands of US dollars ($)		2020				2021				2022				Total				2021				2022				Total
Extended warranty service		$	48				26				-			$	74			$	42				12			$	54

All consideration from contracts with customers is included in the amounts presented above.

Contract Costs

The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses. The costs to obtain a contract are recorded immediately in the period when the revenue is recognized either upon shipment or installation. The costs to obtain a service contract are considered immaterial when spread over the life of the contract so the Company records the costs immediately upon billing.

Concentrations

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Credit Risk

Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, and trade receivables. We have cash investment policies which, among other things, limit investments to investment-grade securities. We perform ongoing credit evaluations of our customers, and the risk with respect to trade receivables is further mitigated by the fact that many of our customers are government institutions, large pharmaceutical and biotechnology companies, and academic laboratories.

The following table illustrates the level of concentration as a percentage of total revenues during the three months ended March 31, 2021 and ~~nine months ended September 30, 2020 and 2019.~~2020.

	For the Three Months Ended						For the Three Months Ended
	September 30,						March 31,
	2020			2019			2021			2020
Top Five Customers		59	%		56	%		88	%		68	%
Federal Agencies		2	%		12	%		1	%		6	%

For the Nine Months Ended
September 30,
2020 2019
Top Five Customers 36 % 41 %
Federal Agencies 3 % 13 %

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. The Top Five Customers category may include federal agency receivable balances if applicable.

	September 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
Top Five Customers		76	%		83	%		94	%		89	%
Federal Agencies		1	%		17	%		1	%		10	%

Product Supply

~~CBM Industries (Taunton, MA) has recently become the manufacturer of the~~We utilize a contract assembler for our Barocycler® 2320EXT. ~~CBM is ISO 13485:2003 and 9001:2008 Certified. CBM provides~~They provide us with precision manufacturing services that include management support services to meet our specific application and operational requirements. Among the services provided ~~by CBM~~ to us are:

	●	CNC Machining

	●	Contract Assembly & Kitting

	●	Component and Subassembly Design

	●	Inventory Management

	●	ISO certification

At this time, we believe that outsourcing ~~the manufacturing~~contract assembly of our ~~new~~ Barocycler® 2320EXT ~~to CBM~~ is the most cost-effective method for us to obtain ~~and maintain~~ ISO Certified, CE and CSA Marked instruments. CBM’s close proximity to our South Easton, MA facility is a significant asset enabling interactions between our Engineering, R&D, and Manufacturing groups and their counterparts at CBM. CBM was instrumental in helping PBI achieve CE Marking on our Barocycler 2320EXT, as announced on February 2, 2017.

~~Although we~~We currently manufacture and assemble the ~~Barozyme HT48,~~ Barocycler®, HUB440, HUB880, the SHREDDER SG3, and most of our consumables at our South Easton, MA ~~facility, we plan to take advantage~~facility. We will regularly reassess the tradeoffs between in-house assembly versus the benefits of outsourced ~~manufacturing~~ relationships ~~such as that with CBM and outsource manufacturing~~for of the entire Barocycler® product line, and future ~~instruments, and other products to CBM.~~instruments.

Investment in Equity Securities

As of ~~September 30, 2020,~~March 31, 2021, we held 100,250 shares of common stock of ~~Everest Investments Holdings S.A. (“Everest”), a~~Nexity Global SA, (a Polish publicly traded ~~company listed on the Warsaw Stock Exchange.~~ company).

We account for this investment in accordance with ASC ~~321~~ ~~“Investments —Equity Securities.”~~320 “Investments — Debt and Equity Securities”. ASC ~~321~~320 requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income.

As of ~~September 30, 2020,~~March 31, 2021, our consolidated balance sheet reflected the fair value, determined on a recurring basis based on Level 1 inputs of our investment in ~~Everest~~Nexity, to be ~~approximately $503,366.~~$409,098. We recorded ~~$486,723~~$107,903 as an unrealized ~~gain~~loss during the ~~nine months~~quarter ended ~~September 30, 2020~~March 31, 2021 for changes in ~~Everest~~ market value.

Computation of Loss per Share

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

The following table illustrates our computation of loss per share for the three months ended March 31, 2021 and ~~nine months ended September 30, 2020 and 2019:~~2020:

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Numerator:
Net loss $ (3,278,748 ) $ (3,156,829 ) $ (11,801,415 ) $ (7,978,844 )
Deemed dividend on beneficial conversion feature - (675,979 ) - (2,625,710 )
Preferred stock dividends (396,970 ) (492,494 ) (1,118,526 ) (1,268,593 )
Net loss applicable to common shareholders $ (3,675,718 ) $ (4,325,302 ) $ (12,919,941 ) $ (11,873,147 )

Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding 3,612,958 1,967,872 3,059,095 1,887,393

Loss per common share – basic and diluted $ (1.02 ) $ (2.20 ) $ (4.22 ) $ (6.29 )

	For the Three Months Ended
	March 31,
	2021			2020
Numerator:
Net loss attributable to common stockholders	$	(7,038,686	)	$	(4,278,471	)

Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding		4,865,826			2,648,039

Loss per common share – basic and diluted	$	(1.45	)	$	(1.62	)

The following table presents securities that could potentially dilute basic loss per share in the future. For all periods presented, the potentially dilutive securities were not included in the computation of diluted loss per share because these securities would have been anti-dilutive to our net loss. The Series D Convertible Preferred Stock, Series G Convertible Preferred Stock, Series H and H2 Convertible Preferred Stock, Series J Convertible Preferred Stock, Series K Convertible Preferred Stock, and Series AA Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

	As of September 30,				As of March 31,
	2020		2019		2021		2020
Stock options		1,392,370		409,064		1,358,490		1,393,551
Convertible debt		4,610,868		984,703		4,757,701		3,125,633
Common stock warrants		13,831,497		9,297,034		14,901,211		11,295,764
Convertible preferred stock:
Series D Convertible Preferred Stock		25,000		25,000		25,000		25,000
Series G Convertible Preferred Stock		26,857		26,857		26,857		26,857
Series H Convertible Preferred Stock		33,334		33,334		33,334		33,334
Series H2 Convertible Preferred Stock		70,000		70,000		70,000		70,000
Series J Convertible Preferred Stock		115,267		115,267		115,267		115,267
Series K Convertible Preferred Stock		229,334		229,334		229,334		229,334
Series AA Convertible Preferred Stock		7,983,000		7,899,422		8,083,000		7,939,000
		28,317,527		19,090,015		29,600,194		24,253,740

Accounting for Stock-Based Compensation Expense

We maintain equity compensation plans under which incentive stock options and non-qualified stock options are granted to employees, independent members of our Board of Directors and outside consultants. We recognize stock-based compensation expense over the requisite service period using the Black-Scholes formula to estimate the fair value of the stock options on the date of grant.

Determining Fair Value of Stock Option Grants

Valuation and Amortization Method - The fair value of each option award is estimated on the date of grant using the Black-Scholes pricing model based on certain assumptions. The estimated fair value of employee stock options is amortized to expense using the straight-line method over the vesting period.

Expected Term - The Company uses the simplified calculation of expected life, as the Company does not currently have sufficient historical exercise data on which to base an estimate of expected term. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted.

Expected Volatility - Expected volatility is based on the Company’s historical stock volatility data over the expected term of the award.

Risk-Free Interest Rate - The Company bases the risk-free interest rate used in the Black-Scholes valuation method on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

Forfeitures - The Company records stock-based compensation expense only for those awards that are expected to vest. The Company estimated a forfeiture rate of 5% for awards granted based on historical experience and future expectations of options vesting. The Company used this historical rate as our assumption in calculating future stock-based compensation expense.

The Company recognized stock-based compensation expense of ~~$66,542~~$61,237 and ~~$115,002~~$241,769 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. The Company recognized stock-based compensation expense of $373,652 and $722,576 for the nine months ended September 30, 2020 and 2019,~~ respectively. The following table summarizes the effect of this stock-based compensation expense within each of the line items of our costs and expenses within our Consolidated Statements of Operations:

	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended
	September 30,				September 30,				March 31,
	2020		2019		2020		2019		2021		2020
Cost of sales	$	5,164	$	5,468	$	18,227	$	25,865	$	5,053	$	7,956
Research and development		26,423		22,464		91,386		107,037		25,862		38,826
Selling and marketing		6,428		14,520		26,722		65,598		4,595		13,936
General and administrative		28,527		72,550		237,317		524,076		25,727		181,051
Total stock-based compensation expense	$	66,542	$	115,002	$	373,652	$	722,576	$	61,237	$	241,769

Fair Value of Financial Instruments

Due to their short maturities, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and debt approximate their fair value. Long-term liabilities include debt and deferred revenue with a carrying value that approximates fair value.

Fair Value Measurements

The Company follows the guidance of FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) as it related to all financial assets and financial liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.

The Company generally defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company uses a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values. These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring the Company to develop its own assumptions. A slight change in an unobservable input like volatility could have a significant impact on fair value measurement.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that its financial assets are classified within Level 1 in the fair value hierarchy. The development of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of ~~September 30, 2020:~~March 31, 2021:

			Fair value measurements at September 30, 2020 using:								Fair value measurements at March 31, 2021 using:
	September 30, 2020		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		March 31, 2021		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Equity Securities	$	503,366	$	503,366		-		-	$	409,098	$	409,098		-		-
Total Financial Assets	$	503,366	$	503,366	$	-	$	-	$	409,098	$	409,098	$	-	$	-

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, ~~2019:~~2020:

Fair value measurements at
December 31, 2019 using:

December 31, 2019
Quoted
prices in
active
markets
(Level 1)

Significant
other
observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)

Equity Securities 16,643 16,643 - -
Total Financial Assets $ 16,643 $ 16,643 $ - $ -

			Fair value measurements at December 31, 2020 using:
	December 31, 2020		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Equity Securities		517,001		517,001		-		-
Total Financial Assets	$	517,001	$	517,001	$	-	$	-

Commitments and Contingencies

Operating Leases

The Company accounts for its leases under ASC 842. The Company has elected to apply the short-term lease exception to leases of one year or less. Consequently, as a result of adoption of ASC 842, we recognized an operating liability of $136,385 on our Medford lease with a corresponding Right-Of-Use (“ROU”) asset of the same amount based on present value of the minimum rental payments of the lease. As of September 30, 2020 the Company carries a ROU asset and operating lease liability of $20,958.

Our corporate office is currently located at 14 Norfolk Avenue, South Easton, Massachusetts 02375. We are currently paying $6,950 per month, on a lease extension, signed on December ~~31, 2019,~~30, 2020, that expires December 31, ~~2020,~~2021, for our corporate office. We expanded our space to include offices, warehouse, and a loading dock on the first floor starting May 1, 2017 with a monthly rent increase already reflected in the current payments.

We extended our lease for our space in Medford, MA (the “Medford Lease”) from December 30, 2020 to December 30, ~~2020.~~2023. The lease requires monthly payments of ~~$7,130~~$7,282 subject to annual cost of living increases. The lease shall be automatically extended for an additional three years unless either party terminates at least six months prior to the expiration of the current lease term.

The Company accounted for the lease extension of our Medford Lease as a lease modification under ASC 842. At the effective date of modification, the Company recorded an adjustment to the right-of-use asset and lease liability in the amount of $221,432 based on the net present value of lease payments discounted using an estimated borrowing rate of 12%.

Following is a schedule by years of future minimum rental payments required under operating leases with initial or remaining non-cancelable lease terms as of ~~September 30, 2020:~~March 31, 2021:

2020 $ 42,240
Thereafter -
Total Minimum Payments Required $ 42,240

2021	$	128,087
2022		87,383
2023		87,383
Total minimum payments required	$	302,853

~~Loan Receivable~~

In the nine months ended September 30, 2020, the Company issued three loans for $875,000 to its pending merger partner, Cannaworx who agreed to repay the loans directly to the lender, on the Company’s behalf. The Cannaworx loans have one-year terms and interest (12% for a $325,000 note, 18% for a $250,000 note and 18%, for a $300,000 note) that is only payable upon an event of default. Cannaworx loans receivable are carried on the Company’s consolidated balance sheet net of a $73,750 debt discount.

Convertible Debt and Other Debt

Convertible Debt

On various dates during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company issued convertible notes for ~~net proceeds~~a total of ~~approximately $7.0 million~~$860,000 which contained varied terms and conditions as follows: a) 126-12 month maturity date; b) interest ~~rate~~rates of ~~10%~~10-18%; c) convertible to the Company’s common stock at issuance at a fixed rate of $2.50. These notes were issued with ~~common stock and~~ warrants to purchase common stock that were fair valued at issuance date. The aggregate relative fair value of ~~common stock issued with the notes of $0.15 million was recorded as a debt discount to be amortized over the term of the notes. The aggregate relative fair value of the~~ warrants issued with the notes of ~~$4.0 million~~$162,654 was ~~also~~ recorded as a debt discount to be amortized over the term of the notes. We then computed the effective conversion price of the notes, and recorded a ~~$1.4 million~~$53,777 beneficial conversion feature as a debt discount to be amortized over the term of the notes. We also evaluated the convertible notes for derivative liability treatment and determined that the notes did not qualify for derivative accounting treatment at ~~September 30, 2020.~~March 31, 2021.

The specific terms of the convertible notes and outstanding balances as of ~~September 30, 2020~~March 31, 2021 are listed in the tables below.

Inception Date Term Loan Amount Outstanding balance
with OID Original Issue Discount (OID) Interest
Rate Conversion Price Deferred Finance Fees Discount for conversion feature and warrants/
shares
May 17, 2018 (2) 12 months $ 380,000 $ 166,703 $ 15,200 8 % $ 2.50 $ 15,200 $ 332,407
June 8, 2018 (1) (4) 6 months $ 50,000 $ 50,000 $ 2,500 2 % $ 7.50 $ 2,500 $ 3,271
June 16, 2018 (2) 9 months $ 110,000 $ 79,000 $ - 5 % $ 2.50 $ - $ -
July 17, 2018 (1) (3) (4) 3 months $ 100,000 $ 56,250 $ 15,000 5 % $ 2.50 $ - $ 52,897
October 19, 2018 (1) 6 months $ 100,000 $ 100,000 $ - 5 % $ 7.50 $ - $ -
November 13, 2018 (1) (3) (4) 6 months $ 200,000 $ 220,000 $ - 5 % $ 2.50 $ - $ 168,634
January 3, 2019 (4) 6 months $ 50,000 $ 50,000 $ 2,500 24 % $ 7.50 $ 2,500 $ -
February 21, 2019 (2) 12 months $ 215,000 $ 215,000 $ - 4 % $ 2.50 $ 15,000 $ 107,709
March 18, 2019 (1) 6 months $ 100,000 $ 100,000 $ - 4 % $ 7.50 $ - $ 10,762
June 4, 2019 (2) 9 months $ 500,000 $ 302,484 $ - 8 % $ 2.50 $ 40,500 $ 70,631
June 19, 2019 (2) 12 months $ 105,000 $ 105,000 $ - 4 % $ 2.50 $ 5,000 $ 2,646
May 20, 2019 (1) (4) 3 months $ 100,000 $ 100,000 $ - 5 % $ 2.50 $ - $ 13,439
June 7, 2019 (1) (4) 6 months $ 125,000 $ 110,000 $ - 5 % $ 7.50 $ - $ 18,254
July 1, 2019 (2) 12 months $ 107,500 $ 107,500 $ - 4 % $ 2.50 $ 7,500 $ 85,791
July 19, 2019 (2) 12 months $ 115,000 $ 115,000 $ - 4 % $ 2.50 $ 5,750 $ 15,460
July 19, 2019 (2) 12 months $ 130,000 $ 130,000 $ - 6 % $ 2.50 $ 6,500 $ -
August 14, 2019 (1) (4) 6 months $ 50,000 $ 50,000 $ - 2 % $ 7.50 $ - $ -
September 27,2019 (2) 12 months $ 78,750 $ 78,750 $ - 4 % $ 2.50 $ 3,750 $ 13,759
October 24, 2019 (2) 12 months $ 78,750 $ 78,750 $ - 4 % $ 2.50 $ 3,750 $ -
November 1, 2019 (2) 12 months $ 270,000 $ 270,000 $ - 6 % $ 2.50 $ 13,500 $ -
November 15, 2019 12 months $ 385,000 $ 385,000 $ 35,000 10 % $ 2.50 $ 35,000 $ 90,917
December 4, 2019 12 months $ 495,000 $ 495,000 $ 45,000 10 % $ 2.50 $ 45,000 $ 56,387
December 20, 2019 12 months $ 275,000 $ 275,000 $ 25,000 10 % $ 2.50 $ 25,000 $ 40,601
January 2, 2020 12 months $ 330,000 $ 330,000 $ 30,000 10 % $ 2.50 $ 30,000 $ 91,606
January 24, 2020 12 months $ 247,500 $ 247,500 $ 22,500 10 % $ 2.50 $ 22,500 $ 89,707
January 29, 2020 12 months $ 363,000 $ 363,000 $ 33,000 10 % $ 2.50 $ 33,000 $ 297,000
February 12, 2020 12 months $ 275,000 $ 275,000 $ 25,000 10 % $ 2.50 $ 25,000 $ 225,000
February 19, 2020 12 months $ 165,000 $ 165,000 $ 15,000 10 % $ 2.50 $ 15,000 $ 135,000
March 11, 2020 12 months $ 330,000 $ 330,000 $ 30,000 10 % $ 2.50 $ 30,000 $ 232,810
March 13, 2020 12 months $ 165,000 $ 165,000 $ 15,000 10 % $ 2.50 $ 15,000 $ 60,705
March 26, 2020 12 months $ 111,100 $ 111,100 $ 10,100 10 % $ 2.50 $ 10,100 $ 90,900
April 8, 2020 12 months $ 276,100 $ 276,100 $ 25,100 10 % $ 2.50 $ 25,000 $ 221,654
April 17, 2020 12 months $ 143,750 $ 143,750 $ 18,750 10 % $ 2.50 $ - $ 96,208
April 30, 2020 12 months $ 546,250 $ 546,250 $ 71,250 10 % $ 2.50 $ 47,500 $ 427,500
May 6, 2020 12 months $ 460,000 $ 460,000 $ 60,000 10 % $ 2.50 $ 40,000 $ 360,000
May 18, 2020 12 months $ 546,250 $ 546,250 $ 71,250 10 % $ 2.50 $ 35,500 $ 439,500
June 2, 2020 12 months $ 902,750 $ 902,750 $ 117,750 10 % $ 2.50 $ 58,900 $ 708,500
June 12, 2020 12 months $ 57,500 $ 57,500 $ 7,500 10 % $ 2.50 $ 5,000 $ 45,000
June 22, 2020 12 months $ 138,000 $ 138,000 $ 18,000 10 % $ 2.50 $ 12,000 $ 108,000
July 7, 2020 12 months $ 586,500 $ 586,500 $ 76,500 10 % $ 2.50 $ 51,000 $ 400,234
July 17, 2020 12 months $ 362,250 $ 362,250 $ 47,250 10 % $ 2.50 $ 31,500 $ 185,698
July 29, 2020 12 months $ 345,000 $ 345,000 $ 45,000 10 % $ 2.50 $ 30,000 $ 241,245
July 21, 2020 (5) 12 months $ 115,000 $ 115,000 $ 15,000 10 % $ 2.50 $ 10,000 $ 24,875
August 14, 2020 12 months $ 762,450 $ 762,450 $ 99,450 10 % $ 2.50 $ 66,300 $ 580,124
September 10, 2020 12 months $ 391,000 $ 391,000 $ 51,000 10 % $ 2.50 $ 34,000 $ 231,043
September 21, 2020 (5) 12 months $ 345,000 $ 345,000 $ 45,000 10 % $ 2.50 $ 30,000 $ 66,375
September 23, 2020 (5) 12 months $ 115,000 $ 115,000 $ 15,000 10 % $ 2.50 $ 10,000 $ 20,500
September 25, 2020 12 months $ 115,000 $ 115,000 $ 15,000 10 % $ 2.50 $ - $ 19,125

$ 11,833,837 $ 1,119,600 $ 893,750 $ 6,481,874

Inception Date	Term	Loan Amount		Outstanding balance with OID			Original Issue Discount (OID)		Interest Rate			Conversion Price		Deferred Finance Fees		Discount for conversion feature and warrants/shares

May 17, 2018 (2)	12 months	$	380,000	$	166,703		$	15,200		8	%	$	2.50	$	15,200	$	332,407
October 19, 2018 (1)	6 months	$	100,000	$	100,000		$	-		5	%	$	7.50	$	-	$	-
November 13, 2018 (1) (3) (4)	6 months	$	200,000	$	220,000		$	-		5	%	$	2.50	$	-	$	168,634
January 3, 2019 (1)(4)	6 months	$	50,000	$	50,000		$	2,500		24	%	$	7.50	$	2,500	$	-
February 21, 2019 (2)	12 months	$	215,000	$	215,000		$	-		4	%	$	2.50	$	15,000	$	107,709
March 18, 2019 (1)	6 months	$	100,000	$	100,000		$	-		4	%	$	7.50	$	-	$	10,762
June 4, 2019 (2)	9 months	$	500,000	$	302,484		$	-		8	%	$	2.50	$	40,500	$	70,631
June 19, 2019 (2)	12 months	$	105,000	$	105,000		$	-		4	%	$	2.50	$	5,000	$	2,646
June 7, 2019 (1) (4)	6 months	$	125,000	$	25,000		$	-		5	%	$	7.50	$	-	$	18,254
July 1, 2019 (2)	12 months	$	107,500	$	107,500		$	-		4	%	$	2.50	$	7,500	$	85,791
July 19, 2019 (2)	12 months	$	115,000	$	115,000		$	-		4	%	$	2.50	$	5,750	$	15,460
July 19, 2019 (2)	12 months	$	130,000	$	130,000		$	-		6	%	$	2.50	$	6,500	$	-
September 27,2019 (2)	12 months	$	78,750	$	78,750		$	-		4	%	$	2.50	$	3,750	$	13,759
October 24, 2019 (2)	12 months	$	78,750	$	78,750		$	-		4	%	$	2.50	$	3,750	$	-
November 1, 2019 (2)	12 months	$	270,000	$	270,000		$	-		6	%	$	2.50	$	13,500	$	-
November 15, 2019 (1)	12 months	$	385,000	$	320,000		$	35,000		10	%	$	2.50	$	35,000	$	90,917
January 2, 2020 (1)	12 months	$	330,000	$	330,000		$	30,000		10	%	$	2.50	$	30,000	$	91,606
January 24, 2020 (1)	12 months	$	247,500	$	247,500		$	22,500		10	%	$	2.50	$	22,500	$	89,707
January 29, 2020 (1)	12 months	$	363,000	$	363,000		$	33,000		10	%	$	2.50	$	33,000	$	297,000
February 12, 2020 (1)	12 months	$	275,000	$	275,000		$	25,000		10	%	$	2.50	$	25,000	$	225,000
February 19, 2020 (1)	12 months	$	165,000	$	165,000		$	15,000		10	%	$	2.50	$	15,000	$	135,000
March 11, 2020 (1)	12 months	$	330,000	$	330,000		$	30,000		10	%	$	2.50	$	30,000	$	232,810
March 13, 2020 (1)	12 months	$	165,000	$	165,000		$	15,000		10	%	$	2.50	$	15,000	$	60,705
March 26, 2020 (1)	12 months	$	111,100	$	111,100		$	10,100		10	%	$	2.50	$	10,100	$	90,900
April 8, 2020 (1)	12 months	$	276,100	$	276,100		$	25,100		10	%	$	2.50	$	25,000	$	221,654
April 17, 2020 (1)	12 months	$	143,750	$	143,750		$	18,750		10	%	$	2.50	$	-	$	96,208
April 30, 2020 (1)	12 months	$	546,250	$	546,250		$	71,250		10	%	$	2.50	$	47,500	$	427,500
May 6, 2020 (1)	12 months	$	460,000	$	460,000		$	60,000		10	%	$	2.50	$	40,000	$	360,000
May 18, 2020	12 months	$	546,250	$	221,250		$	46,250		10	%	$	2.50	$	35,500	$	439,500
June 2, 2020	12 months	$	902,750	$	652,750		$	92,750		10	%	$	2.50	$	58,900	$	708,500
June 12, 2020	12 months	$	57,500	$	57,500		$	7,500		10	%	$	2.50	$	5,000	$	45,000
June 22, 2020	12 months	$	138,000	$	138,000		$	18,000		10	%	$	2.50	$	12,000	$	108,000
July 7, 2020	12 months	$	586,500	$	586,500		$	76,500		10	%	$	2.50	$	51,000	$	400,234
July 17, 2020	12 months	$	362,250	$	362,250		$	47,250		10	%	$	2.50	$	31,500	$	185,698
July 29, 2020	12 months	$	345,000	$	345,000		$	45,000		10	%	$	2.50	$	30,000	$	241,245
July 21, 2020 (5)	12 months	$	115,000	$	115,000		$	15,000		10	%	$	2.50	$	10,000	$	24,875
August 14, 2020	12 months	$	762,450	$	462,450		$	69,450		10	%	$	2.50	$	66,300	$	580,124
September 10, 2020	12 months	$	391,000	$	391,000		$	51,000		10	%	$	2.50	$	34,000	$	231,043
September 21, 2020 (5)	12 months	$	345,000	$	345,000		$	45,000		10	%	$	2.50	$	30,000	$	66,375
September 23, 2020 (5)	12 months	$	115,000	$	115,000		$	15,000		10	%	$	2.50	$	10,000	$	20,500
September 25, 2020 (5)	12 months	$	115,000	$	115,000	��	$	15,000		10	%	$	2.50	$	-	$	19,125
December 3, 2020	12 months	$	299,000	$	299,000		$	39,000		10	%	$	2.50	$	26,000	$	197,882
December 21, 2020	6 months	$	100,000	$	100,000		$	5,000		12	%	$	2.50	$	29,964	$	24,400
October 22, 2020 (5)	12 months	$	115,000	$	115,000		$	15,000		10	%	$	2.50	$	10,000	$	18,875
December 23, 2020 (5)	6 months	$	1,000,000	$	1,000,000		$	100,000		10	%	$	2.50	$	-	$	833,536
January 5, 2021	6 months	$	575,000	$	575,000		$	75,000		18	%	$	2.50	$	-	$	-
February 17, 2021	12 months	$	230,000	$	230,000		$	30,000		10	%	$	2.50	$	20,000	$	180,000
March 23, 2021	12 months	$	55,000	$	55,000		$	5,000		10	%	$	2.50	$	-	$	36,431

				$	12,077,587		$	1,221,100						$	907,214	$	7,606,403

	(1)	The Note is past due. The Company and the lender are negotiating in good faith to extend the loan.
	(2)	As of ~~September 30, 2020~~March 31, 2021 the Company and lender have ~~verbally~~ agreed to the extension of the Standstill and Forbearance agreements (as described below). Loan is convertible at $2.50 as of ~~September 30, 2020.~~March 31, 2021.
	(3)	Interest was capitalized and added to outstanding principal.
	(4)	During the ~~nine months~~year ended ~~September 30, 2020~~December 31,2020 the Company entered into Rate Modification Agreements with these lenders. In these agreements five lenders agreed to reduce their interest rate and were granted the right to convert loans using a variable conversion price if more than one other variable rate lender converted at a variable rate.
	(5)	The Company has agreed to issue shares of its common stock to lenders if their notes are not repaid by a defined date.

As of ~~September 30, 2020~~March 31, 2021 one lender holds approximately ~~$8.7~~$7.5 million of the ~~$11.8~~$12.1 million convertible notes outstanding.

For the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company recognized amortization expense related to the debt discounts indicated above of ~~$3,100,990.~~$2,124,788. The unamortized debt discounts as of ~~September 30, 2020~~March 31, 2021 related to the convertible debentures and other convertible notes amounted to ~~$4,738,724.~~$2,184,810.

Standstill and Forbearance Agreements

~~On December 13, 2019, the~~The Company has entered into Standstill and Forbearance Agreements with lenders who hold convertible ~~promissory~~ notes with a total principal as of ~~$2,267,066.~~March 31, 2021 of $1.57 million. Pursuant to the Standstill and Forbearance Agreements, the lenders agreed to not convert any portion of their notes into shares of common stock at a variable rate until ~~either January 30~~^th ~~or January~~March 31,^st 2021 for convertible notes with a principal balance of ~~2020,~~$469 thousand and ~~to waive, through January 30~~^th~~or January 31~~^stuntil April 16, 2021 for convertible notes with a principal balance of 2020, all of the Company’s defaults under their notes including, but not limited to, the late filing of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019.

On January 31, 2020 and again on March 3, 2020, April 6, 2020, April 30, 2020, May 15, 2020, May 31, 2020, June 15, 2020, June 30, 2020, July 15, 2020, July 31, 2020, August 15, 2020, August 31, 2020, September 15, 2020 and September 30, 2020 the Company extended these Standstill and Forbearance Agreements until dates ranging from November 16, 2020 to December 31, 2020.$1.1 million. For the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company incurred fees of approximately ~~$2.1~~$0.5 million ~~to extend the~~in connection with these agreements.

Convertible Loan Modifications and Extinguishments

We refinanced certain convertible loans during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 at substantially the same terms for extensions ranging over a period of three to six months. We amortized any remaining unamortized debt discount as of the modification date over the remaining, extended term of the new loans. We applied ASC 470 of modification accounting to the debt instruments which were modified during the quarter or those settled with new notes issued concurrently for the same amounts but different maturity dates. The terms such as the interest rate, prepayment penalties, and default rates will be the same over the new extensions. According to ASC 470, an exchange of debt instruments between or a modification of a debt instrument by a debtor and a creditor in a nontroubled debt situation is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. If the terms of a debt instrument are changed or modified and the cash flow effect on a present value basis is less than 10 percent, the debt instruments are not considered to be substantially different and will be accounted for as modifications.

The cash flows of new debt exceeded 10% of the remaining cash flows of the original debt on several loans. During the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 we recorded losses on extinguishment of liabilities of approximately ~~$3.2~~$1.1 million by calculating the difference of the fair value of the new debt and the carrying value of the old debt. ~~The reported loss on extinguishment of liabilities includes $1,036,638 of non-cash expenses for common stock and warrants issued and writeoffs of any unamortized discount at the date of modification.~~

The following table provides a summary of the changes in convertible debt, net of unamortized discounts, during ~~2020:~~2021:

	2020			2021
Balance at January 1,	$	6,121,338		$	7,545,670
Issuance of convertible debt, face value		8,688,150			860,000
Deferred financing cost		(1,710,350	)		(130,000	)
Beneficial conversion feature on convertible note		(1,353,694	)		(53,777	)
Debt discount from shares and warrants issued with debt		(4,156,442	)		(162,654	)
Payments		(1,972,007	)		(191,250	)
Conversion of debt into equity		(1,622,872	)		(100,000	)
Accretion of interest and amortization of debt discount to interest expense		3,100,990			2,124,788
Balance at September 30,		7,095,113
Balance at March 31,					9,892,777
Less: current portion		7,095,113			9,892,777
Convertible debt, long-term portion	$	–		$	–

Other Notes

On September 9, 2019 and February ~~28, 2020~~28,2020 we received a total of $966,500 unsecured non-convertible loans from a private investor with a one-month term. During the ~~nine months~~year ended ~~September 30,~~December 31, 2020, the Company received net proceeds of $463,500, issued 150,000 warrants to purchase common stock (five-year term and $3.50 exercise price) and repaid $275,000. The relative fair value of $185,660 of the warrants issued with the note was recorded as a debt discount to be amortized over the term of the notes. As of ~~September 30, 2020~~March 31, 2021 the Company owes $691,500 on these notes which are past due. The Company and the investor are negotiating in good faith to extend the loans.

On October 1, 2019, the Company and the holder of the $170,000 non-convertible loan issued in May 2017 agreed to extend the term of the loan to December 31, 2019. The Company agreed to issue 1,200 shares of its common stock per month while the note remains outstanding. The note will continue to earn 10% annual interest. The loan is currently past due, and the Company and the investor are negotiating in good faith to extend the loan.

On October 11, 2019 we received a non-convertible loan with a ~~one month~~one-month term and a 2% interest charge for $25,000 from a private investor. The loan is past due, and the Company and the investor are negotiating in good faith to extend the loan.

~~For the nine months ended September 30, 2020, the Company recognized amortization expense related to debt discounts attributable to other notes of $353,480.~~

Merchant Agreements

~~During 2020 we had~~We have signed various Merchant Agreements which ~~were~~are secured by second position rights to all customer receipts until the loan has been repaid in full and subject to interest rates ~~ranging from 6%~~of 4% - ~~76%.~~5.7% per month. As illustrated in the following table, under the terms of these agreements, we received the disclosed Purchase Price and agreed to repay the disclosed Purchase Amount, which is collected by the Merchant lenders at the disclosed Daily Payment Rate. The Company’s Chief Executive Officer is personally guaranteeing the performance of the merchant loans.

The following table shows our Merchant Agreements as of March 31, 2021:

Inception Date	Purchase Price		Purchased Amount		Outstanding Balance		Daily Payment Rate		Deferred Finance Fees
November 19, 2020		100,000		137,900		38,468		985.00		-
February 4, 2021		125,000		165,000		102,084		1,032.00		-
March 11, 2021		125,000		167,500		111,565		1,396.00	$	2,500
March 26, 2021		240,000		330,960		236,257		2,364.00		-
	$	590,000	$	801,360	$	488,374	$	5,777.00	$	2,500

The following table shows our Merchant Agreements as of December 31, ~~2019:~~2020:

Inception Date
Purchase
Price
Purchased Amount Outstanding Balance Daily Payment Rate Deferred Finance Fees
August 5, 2019 $ 600,000 $ 816,000 $ 421,024 4,533 $ 6,000
August 19, 2019 350,000 479,500 272,315 2,664 3,000
August 23, 2019 175,000 239,750 132,284 1,410 1,750
September 19, 2019 275,000 384,275 256,812 2,138 5,000
$ 1,400,000 $ 1,919,525 $ 1,082,435 $ 10,745 $ 15,750

Inception Date	Purchase Price		Purchased Amount		Outstanding Balance		Daily Payment Rate		Deferred Finance Fees
November 5, 2020	$	200,000	$	275,800	$	163,955		1,724.00	$	-
November 19, 2020		100,000		137,900		85,013		985.00		-
	$	300,000	$	413,700	$	248,968	$	2,709.00	$	-

~~On November 15, 2019~~We have accounted for the ~~Company~~Merchant Agreements as loans under ASC 860 because while we provided rights to current and ~~its Merchant lenders agreed to a temporary reduction in~~future receipts, we still had control over the ~~Daily Payment Rate. Subsequently, on January 31, 2020, March 2, 2020 and April 6, 2020~~receipts. The difference between the Company and its Merchant lenders agreed to extend the term of the reduction of its Daily Payment Rate, ultimately to April 30, 2020. The Company issued 495,000 warrants to lenders (valued at $969,745) as compensation for these agreements. The warrants have a three year life and a $3.50 exercise Price. During the nine months ended September 30, 2020 the Company repaid these loans in full for $970,028 in cash, 112,885 shares of common stock (valued at $225,770) and 56,442 warrants that have a three year life and a $3.50 exercise price (valued at $97,654)Purchase Amount and the ~~loss incurred from the settlements~~Purchase Price is ~~$58,476.~~imputed interest that is recorded as interest expense when paid each day.

Related Party Notes

In June 2018, we received a non-convertible loan of $15,000 from a private investor. The loan includes a one-year term and 15% guaranteed interest. This loan remains outstanding at ~~September 30, 2020~~March 31, 2021 and is currently past due.

~~As of September 30, 2020~~During the three months ended March 31, 2021, we ~~also hold $90,000 of~~received short-term non-convertible loans of $85,000 from related ~~parties.~~parties and repaid $70,000 of related party loans. These notes bear interest ranging from 0%5% to 15% ~~interest~~ and are due upon demand.

Long term debt

During the ~~nine months~~quarter ended ~~September 30, 2020,~~March 31, 2021, the Company borrowed ~~$527,039~~$367,038 through a COVID-19 ~~programs~~program that ~~were~~was sponsored by the United States and administered by the Small Business Administration (the “SBA”). The most notable programs were the Payroll Protection Program (or “PPP”) and the Economic Injury Disaster Loan program (or “EIDL”). ~~The Company’s~~ PPP loan ~~$377,039,~~ has a ~~two- year term~~1% interest rate and ~~bears interest at 1% per annum. Under~~a five-year term. During this period, the Company’s first PPP loan borrowed in 2020 ($367,039) was forgiven by the ~~Company can be granted forgiveness for all or a portion~~SBA. This gain was reported in losses on extinguishment of ~~these loans based~~liabilities on the ~~Company’s spending on payroll, mortgage interest, rent and utilities.~~ consolidated statements of operations.

The Company’s EIDL loan, $150,000, accrues interest at 3.75% and requires monthly payments of $731 for principal and interest beginning in June 2021. The balance of the principal will be due in 30 years. In connection with the EIDL loan the Company entered into a security agreement with the SBA, whereby the Company granted the SBA a security interest in all of the Company’s right, title and interest in all of the Company’s assets.

7)6)

Stockholders’ Deficit

Preferred Stock

We are authorized to issue 1,000,000 shares of preferred stock with a par value of $0.01. Of the 1,000,000 shares of preferred stock:

	1)	20,000 shares have been designated as Series A Junior Participating Preferred Stock (“Junior A”)

	2)	313,960 shares have been designated as Series A Convertible Preferred Stock (“Series A”)

	3)	279,256 shares have been designated as Series B Convertible Preferred Stock (“Series B”)

	4)	88,098 shares have been designated as Series C Convertible Preferred Stock (“Series C”)

	5)	850 shares have been designated as Series D Convertible Preferred Stock (“Series D”)

	6)	500 shares have been designated as Series E Convertible Preferred Stock (“Series E”)

	7)	240,000 shares have been designated as Series G Convertible Preferred Stock (“Series G”)

	8)	10,000 shares have been designated as Series H Convertible Preferred Stock (“Series H”)

	9)	21 shares have been designated as Series H2 Convertible Preferred Stock (“Series H2”)

	10)	6,250 shares have been designated as Series J Convertible Preferred Stock (“Series J”)

	11)	15,000 shares have been designated as Series K Convertible Preferred Stock (“Series K”)

	12)	10,000 shares have been designated as Series AA Convertible Preferred Stock (“Series AA”)

As of ~~September 30, 2020,~~March 31, 2021, there were no shares of Junior A, and Series A, B, C and E issued and outstanding. See our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 for the pertinent disclosures of preferred stock.

During the three months ended March 31, 2021, the Company entered into Securities Purchase Agreements with accredited investors pursuant to which the Company sold an aggregate of 40 shares of Series AA Convertible Preferred Stock, each preferred share convertible into 1,000 shares of the Company’s common stock, par value $0.01 per share, for an aggregate Purchase price of $100,000. We issued to the investors warrants to purchase an aggregate 40,000 shares of common stock with an exercise price of $3.50 per share. The Company did not incur any placement agent fees for this transaction.

Stock Options and Warrants

At the Company’s December 12, 2013 Special Meeting, the shareholders approved the 2013 Equity Incentive Plan (the “2013 Plan”) pursuant to which 3,000,000 shares of our common stock were reserved for issuance upon exercise of stock options or other equity awards. Under the 2013 Plan, we may award stock options, shares of common stock, and other equity interests in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. As of ~~September 30, 2020,~~March 31, 2021, options to acquire ~~1,392,370~~1,358,490 shares were outstanding under the Plan.

On November 29, 2015 the Company’s Board of Directors adopted the 2015 Nonqualified Stock Option Plan (the “2015 Plan”) pursuant to which 5,000,000 shares of our common stock were reserved for issuance upon exercise of non-qualified stock options. Under the 2015 Plan, we may award non-qualified stock options in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate.

As of ~~September 30, 2020,~~March 31, 2021, total unrecognized compensation cost related to the unvested stock-based awards was ~~$430,979,~~$285,781, which is expected to be recognized over weighted average period of ~~1.57~~1.68 years. The aggregate intrinsic value associated with the options outstanding and exercisable, and the aggregate intrinsic value associated with the warrants outstanding and exercisable as of ~~September 30, 2020,~~March 31, 2021, based on the ~~September 30, 2020~~March 31, 2021 closing stock price of ~~$1.52,~~$2.10, was ~~$445,830.~~$1,298,874.

The following table summarizes information concerning options and warrants outstanding and exercisable:

	Stock Options					Warrants										Stock Options					Warrants
	Weighted					Weighted										Weighted					Weighted
	Average					Average										Average					Average
	Shares			price per share		Shares			price per share		Shares			Total Exercisable		Shares			price per share		Shares			price per share		Shares			Total Exercisable
Balance outstanding, December 31, 2019		1,396,302		$	0.71		9,893,034		$	3.52		11,289,336			10,148,543
Balance outstanding, December 31, 2020																	1,355,901		$	0.69		14,434,702		$	3.50		15,790,603			15,302,830
Granted		-			-		4,212,531			3.50		4,212,531					24,000			2.17		561,200			3.50		585,200
Exercised		-			-		-			-		-					(21,411	)		0.69		-			-		(21,411	)
Expired		-			-		(274,068	)	$	4.21		(274,068	)				-			-		(94,691	)	$	3.50		(94,691	)
Forfeited		(3,932	)		1.68		-			-		(3,932	)
Balance outstanding, September 30, 2020		1,392,370		$	0.69		13,831,497		$	3.50		15,223,867			14,368,641
Balance outstanding, March 31, 2021																	1,358,490		$	0.69		14,901,211		$	3.50		16,259,701			15,822,398

In the three months ended March 31, 2021 the Company issued 24,000 stock options to an employee ($49,135 fair value, $2.17 exercise price, three-year vesting term and ten-year expiration term). As of ~~September 30, 2020,~~March 31, 2021, the ~~1,392,370~~1,358,490 stock options outstanding have a ~~$0.69~~$0.72 weighted average exercise price and ~~8.94~~8.47 years weighted average remaining term. Of these options, ~~537,144~~921,187 are currently exercisable.

Common Stock and Warrant Issuances

As profiled in the following table, for five loans we are obligated to issue common stock if not paid by defined dates.

~~During the nine months ended September 30,~~

Loan Issuance

Loan

Defined

Loan

Date

Principal

Issuable

Date

Frequency

Loan 1

July 21, 2020

115,000

5,000

September 30, 2020

Monthly

Loan 2

September 21, 2020

345,000

12,500

November 16, 2020

Weekly

Loan 3

September 23, 2020

115,000

12,500

December 1, 2020

Weekly

Loan 4

September 25, 2020

115,000

12,500

December 1, 2020

Weekly

Loan 5

October 22, 2020

115,000

12,500

December 1, 2020

Weekly

For our loan dated December 23, 2020, we ~~issued~~are obligated to ~~Series AA holders 87,518~~issue 100,000 warrants if the loan is not repaid before January 23, 2021 and an additional 10,000 shares of common stock and 100,000 warrants if the loan is not repaid before February 23, 2021. We are also obligated to issue 10,000 shares of common stock and 200,000 warrants if the loan is not repaid before March 23, 2021. During the quarter ended March 31,2021 the Company issued 400,000 warrants to this lender ($3.50 exercise price and five-year term) with a fair value of $600,298. The Company is also obligated to issue 10,000 shares of common stock to this lender every 31 days up to the loan’s maturity date on June 23, 2021.

During the three months ended March 31, 2021, we issued 922,372 shares of common stock with a fair value of approximately $2.0 million to lenders for ~~dividends totaling~~interest paid-in-kind, 112,400 shares with a fair value of ~~$221,374 issued in~~$238,512 for services rendered, 47,200 shares with a fair value of $118,000 for conversions of debt principal and interest and 21,411 shares for stock ~~in lieu~~option exercises at an exercise price of ~~cash.~~$0.69 per share. During this period, we also issued 1,202,118 shares of restricted common stock at a fair value of $2.8 million to accredited investors and consultants. 709,788 of the shares with a fair value of $1.8 million were issued for conversions of debt principal and interest; 315,830 of the shares with a fair value of $616,900 were issued for debt extensions, settlements and interest payments; 66,500 shares with a fair value of $127,855 were issued to settle an accrued liability; 85,000 shares with a fair value of $147,775 were issued with new convertible debt issuances; and 25,000 shares with a fair value of $87,963 were issued for services rendered. During this period, we also issued 4,168,531521,200 warrants ~~(three-year or five-year~~(five-year term at a $3.50 exercise price) to acquire common stock at a fair value of ~~$5.6~~$0.8 million to lenders in conjunction with signing of new convertible loans and debt extensions and settlement. In this time we also converted $110,000 of debt into 44 shares of Series AA preferred stock and 44,000 warrants to acquire common stock (five-year term and $3.50 exercise price). The relative fair value of warrants is $38,783.interest paid-in-kind.

For our loan issued July 21, 2020 we are obligated to issue the lesser of 5,000 shares of common stock or .0435% of the outstanding principal in shares every 30 days after September 30, 2020 if the loan remains outstanding. Similarly, for our loan issued September 21, 2020 we are obligated 12,500 shares of common stock or .0362% of the outstanding principal in shares every week after November 16, 2020 if the loan remains outstanding.

During the nine months ended September 30, 2019, we issued Series AA holders 61,910 shares of common stock for dividends totaling $190,123 issued in stock in lieu of cash. Of the 61,910 shares issued, 5,432 were issued to members of the Company’s Board of Directors, who are also Series AA holders. During this period shareholders also converted 16 shares of Series AA Convertible Preferred Stock into 16,000 shares of common stock.

On various dates ~~during~~in the ~~nine months~~quarter ended ~~September 30, 2019 we~~March 31, 2020 the Company issued a total of ~~335,069~~115,021 shares of restricted common stock at a fair value of ~~$953,515~~approximately $213,415 to accredited ~~investors. 140,937~~investors and consultants. 66,500 of the shares with a fair value of ~~$385,132~~$127,855 were issued to ~~existing holders of convertible loans who agreed~~settle accrued liabilities to ~~extend the terms for various months; 74,132~~consultants, 38,521 of the shares with a fair value of ~~$226,133~~$60,560 were issued for debt extension and interest payments and 10,000 shares with a fair value of $25,000 were issued for debt settlement. During the quarter ended March 31, 2020, the Company also issued 1,095,230 warrants to acquire common stock at a fair value of $1,205,010 in conjunction with the signing of new convertible ~~loans;~~loans and ~~120,000 shares were issued for the conversion of $342,250 of convertible notes and related interest. During the nine months ended September 30, 2019 we also issued 75,000 shares with~~307,500 warrants to acquire common stock at a fair value of ~~$245,000~~$609,143 to lenders for ~~services rendered.~~

debt extension.

8)7)

Subsequent Events

~~Effective October~~From April 1, 2021 through May 5, ~~2020~~2021 the Company ~~and Cannaworx Holdings, Inc. (CWX) entered into~~received convertible loans for a ~~second amendment to the Company’s binding letter~~total of intent to acquire CWX, extending the execution deadline to October 31, 2020. On November 6, 2020 the Company and CWX entered into a third amendment to the Company’s binding letter of intent to acquire CWX. Pursuant to this amendment the parties extended the completion deadline from October 31, 2020 to December 31, 2020, however the amendment will expire if CWX does not receive $335,000 by November 16, 2020.

~~From October 1, 2020 through November 12, 2020 the~~$747,500. The Company issued loans convertible into common stock at $2.50 per share for $356,500 (through November 12, 2020 the Company had received proceeds on $241,500 of the loans). The loans carry 10% interest rates and one-year terms. To secure these loans, the Company issued 12,500 shares of common stock and299,000 warrants ~~exercisable into 50,600 common shares~~ (five-year life and a $3.50 ~~exercise~~strike price)~~. During this period,~~ as fees paid to the ~~Company received $200,000 under a Merchant Agreement secured by second position rights to all customer receipts. Under the~~lender. These loans have conversion prices of $2.50, carry interest rates of 10%, and terms of ~~this agreement the Company agreed to repay $275,800 through daily payments of $1,724 over eight~~twelve months. In this time, the Company ~~also repaid a portion~~received $50,000 of ~~a convertible loan issued July 17,2018 for $25,000 and partially repaid three~~new related party loans and entered into a Merchant Cash lender agreement (collecting $200,000 of which $27,580 was used to settle an existing merchant agreement dated November 19, 2020). Under the Merchant Cash agreement, the Company pays $1,970 each business day to the Merchant Cash lender until the lender has received cumulative payments of $275,800. The Company also partially repaid $300,000 of a loan dated December 23, 2020 and issued 331,370 shares of common stock (valued at $671,066) for ~~$49,175.~~interest-paid-in-kind.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 need for, and our ability to raise, additional equity or debt financing on acceptable terms, if at all;
	●	our need to take additional cost reduction measures, cease operations or sell our operating assets, if we are unable to obtain sufficient additional financing;
	●	our belief that we will have sufficient liquidity to finance normal operations for the foreseeable future;
	●	the options we may pursue in light of our financial condition;
	●	the potential applications for Ultra Shear Technology (UST);
	●	the potential applications of the BaroFold high-pressure protein refolding and disaggregation technology
	●	the amount of cash necessary to operate our business;
	●	the anticipated uses of grant revenue and the potential for increased grant revenue in future periods;
	●	our plans and expectations with respect to our continued operations;
	●	the expected increase in the number of pressure cycling technology (“PCT”) and constant pressure (“CP”) based units that we believe will be installed and the expected increase in revenues from the sale of consumable products, extended service contracts, and biopharma contract services;
	●	our belief that PCT has achieved initial market acceptance in the mass spectrometry and other markets;
	●	the expected development and success of new instrument and consumables product offerings;
	●	the potential applications for our instrument and consumables product offerings;
	●	the expected expenses of, and benefits and results from, our research and development efforts;
	●	the expected benefits and results from our collaboration programs, strategic alliances and joint ventures;
	●	our expectation of obtaining additional research grants from the government in the future;
	●	our expectations of the results of our development activities funded by government research grants;
	●	the potential size of the market for biological sample preparation, biopharma contract services and ~~ultra shear technology;~~Ultra Shear Technology;
	●	general economic conditions;
	●	the anticipated future financial performance and business operations of our company;
	●	our reasons for focusing ~~our~~ resources in the market for genomic, proteomic, lipidomic and small molecule sample preparation;
	●	the importance of mass spectrometry as a laboratory tool;
	●	the advantages of PCT over other current technologies as a method of biological sample preparation and protein characterization in biomarker discovery, forensics, and histology, as well as for other applications;
	●	the capabilities and benefits of our PCT Sample Preparation System, consumables and other products;
	●	our belief that laboratory scientists will achieve results comparable with those reported to date by certain research scientists who have published or presented publicly on PCT and our other products and services;
	●	our ability to retain our core group of scientific, administrative and sales personnel; and
	●	our ability to expand our customer base in sample preparation and for other applications of PCT, ~~and~~as well as for our other products and ~~services.~~services in both the BaroFold and Ultra Shear Technology areas.

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 Quarterly Report on Form 10-Q. Except as otherwise required by law, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q 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. Factors that could cause or contribute to differences in our future financial and other results include those discussed in the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 and in this Report. We qualify all of our forward-looking statements by these cautionary statements.

OVERVIEW:

We are a leader in the development and sale of innovative, broadly enabling, pressure-based platform solutions for the worldwide life sciences industry. Our solutions are based on the unique properties of both constant (i.e., static) and alternating (i.e., pressure cycling technology, or “PCT”) hydrostatic pressure. PCT is a patented enabling technology platform that uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels to control bio-molecular interactions safely and reproducibly ~~control bio-molecular interactions~~ (e.g., cell lysis, biomolecule extraction). Our primary focus has historically been in the development of PCT-based products for biomarker and target discovery, drug design and development, biotherapeutics characterization and quality control, soil & plant biology, forensics, and counter-bioterror applications. Additionally, major new market opportunities have emerged in the use of our pressure-based ~~technologies~~technology expertise in ~~the following~~two new platform technology areas: (1) the use of our recently acquired, patented technology from BaroFold, Inc. for gently controlled disaggregation and refolding of biotherapeutic proteins (the “BaroFold” ~~technology platform)~~technology) to allow entry into the bio-pharma contract services sector, and (2) the use of our recently-patented, scalable, high-efficiency, pressure-based Ultra Shear Technology (“UST”) platform to (i) create stable nanoemulsions of otherwise immiscible fluids (e.g., oils and water) for greatly improved cost-effectiveness, high bioavailability, safer and improved sensory experience in products spanning pharmaceuticals, nutraceuticals, cosmeceuticals, personal care products, agrochemicals, food/beverage and many industrial products and to (ii) prepare higher quality, homogenized, extended shelf-life or room temperature stable low-acid liquid foods that cannot be ~~acceptably~~effectively preserved using existing non-thermal technologies.

On April 29, 2020, we ~~signed~~entered into a binding letter of intent to merge with Cannaworx Holdings, Inc. ~~(USA)~~(Cannaworx), and their portfolio of products and intellectual property (the “Cannaworx LOI” ~~and “Cannaworx merger”~~). ~~Cannaworx founders Bobby Ghalili, DMD and Adrienne Denese, MD, PhD bring extensive medical expertise and product innovation into the newly combined public company.~~ Post-merger, certain Cannaworx products ~~will~~were expected to utilize our proprietary UST platform.

~~Subsequently, we announced two letters~~ Throughout the course of ~~intent by Cannaworx which we will assume in the Cannaworx merger. On April 30,~~ 2020, we announced a signed Cannaworx agreement to acquire SkinScience Labs, Inc or “SSL” (the SSL LOI). SSL is the parent company of Dr. Denese’s skin care and anti-aging product lines. Subsequently, on May 7, 2020 we announced a signed Cannaworx agreement to acquire Five Leaf Labs or “FFL” (the FLL LOI). FLL is based in Louisiana and will expand the Cannaworx sales and distribution network to over 50 sales representatives in 21 states.

The Cannaworx LOI, as later amended, had a September 30, 2020 deadline for the (i) negotiation of definitive documentation regarding the merger transaction and (ii) exclusivity period with regard to each of the Company and Cannaworx being prohibited from negotiating a controlling interest transaction with any third party.

~~The Company and Cannaworx~~ entered into ~~the Second Amendment~~four amendments to the Cannaworx LOI, ~~(the “Second Amendment”). Although~~with the ~~Second Amendment is dated October 1, 2020, it became effective on October 5~~^th ~~upon both parties executing. Pursuant to~~last amendment making the ~~Second Amendment,~~LOI mutually non-exclusive and extending the ~~parties extended the September 30, 2020~~ deadline to ~~October 31, 2020. Subsequently, on November 6,~~January 30, 2021 after which it expired. On June 12, 2020, ~~the Company and Cannaworx~~we entered into a ~~Third amendment to the~~one-year Collaboration Agreement with Cannaworx ~~LOI (the Third Amendment) extending the October 31, 2020 deadline to December 31, 2020. The Company is required to pay Cannaworx $335,000 before November 16, 2020 to comply with the Third Amendment.~~and its parent company, Availa Bio, Inc. on developing UST applications for prospective use and licensing in Cannaworx’s products. All parties remain actively engaged in this collaborative effort.

In the nine months ended September 30, 2020, the Company issued three loans for $875,000 to its pending merger partner, Cannaworx who agreed to repay the loans directly to the lender, on the Company’s behalf. The Cannaworx loans have one-year terms and interest (12% for a $325,000 note, 18% for a $250,000 note and 18%, for a $300,000 note) is only payable upon an event of default. Cannaworx loans receivable are carried on the Company’s balance sheet net of a $73,750 debt discount.

The Cannaworx LOI and SSL LOI are subject to certain closing conditions, including completion of all due diligence and acquisition financing. The FLL LOI is subject to the completion of all due diligence.

On May 7, 2020 we also announced that, if the mergers are completed, Jim Morrison would be appointed as the new CEO of the rebranded public company and that following the completion of the Cannaworx merger we would change our name to “Availa Bio”.

Developments and Accomplishments:

We reported the following accomplishments during ~~2020:~~the first quarter of 2021:

~~On October 6, 2020 PBI achieved a critical milestone in revolutionary nanoemulsions technology development and entered the production era for commercial system (BaroShear 45) development.~~

On August 12, 2020 PBI was awarded a pivotal U.S. patent for novel, high pressure enhanced consumable device. The new patent secures and protects PBI's best selling PCT Sample Preparation Consumable Product, the PCT MicroPestle.

~~On June 20, 2020: PBI and Leica Microsystems sign worldwide co-marketing alliance: combination of proprietary technologies expected to accelerate cancer R&D with innovative tumor processing workflow~~

~~On June 4, PBI announces first manufacturing build completely sold out for revolutionary UST System for processing hemp-derived cannabinoid oil into stable, water-soluble nanoemulsions~~

~~On May 14, 2020, Pressure BioSciences announced the launch of FDA-registered hand sanitizer as first product developed through pending merger partners.~~

On May 7, 2020, former L’Oreal President Jim Morrison, one of the top brand strategists in the personal care space worldwide, was announced as the person who would become CEO of Availa Bio upon merger completion.

~~On May 5, 2020, PBI announced plans to change name to Availa Bio following completion of the Cannaworx and SkinScience Labs merger.~~

~~On April 30, 2020, PBI announced plans to acquire SkinScience Labs and their profitable and award-winning Dr. Denese Skin Care and Anti-Aging Lines.~~

~~On April 29, 2020, PBI announced plans to acquire Cannaworx, Inc. and their portfolio of innovative consumer products.~~

~~On April 16, 2020, PBI and RedShiftBio demonstrate potential of combining proprietary technologies to enable new tool for development and production of biotherapeutics.~~

~~On March 12, 2020, PBI announced that it is nearing a complete sellout on its pre-launch offering of game-changing UST Platform for processing CBD Oil into water-soluble nanoemulsions.~~

~~On February 27, 2020, PBI launched new era in preparation of water-soluble nanoemulsions for CBD and other valuable oils with opening of UST Demonstration Laboratory.~~

On January 30, 2020, PBI announced acceleration of UST Platform rollout for water-soluble CBD with planned release of additional BaroShear product – a benchtop, R&D scale, BaroShear ‘Mini” instrument.

On January 24, 2020, PBI announced significant new order and near sellout on revolutionary nanoemulsification system for water-soluble CBD oil. Company said that additional orders are expected shortly.

On January 17, 2020, PBI reported the Company’s UST Platform was featured in a leading North American Cannabis Magazine and that the article highlighted the potential of the UST Platform to play a significant role in multiple billion-dollar markets, such as CBD, nutraceuticals, cosmetics, biopharmaceuticals, and food/beverage.

On January 9, 2020, PBI reported that the number of published scientific papers in 2019 citing the advantages of the Company’s PCT Platform remained strong, with over 20 journal articles for the second straight year.

30	●	On March 15, 2021, PBI discussed partnerships with Leica Microsystems (cancer diagnostics) and Ohio State University (food industry consortium) with the Stock Day Podcast.

	●	On March 4, 2021, PBI reported that the transformative impact of the food industry consortium formed by Pressure BioSciences and Ohio State University was discussed in a showcase video from Emerging Technology Insider.

	●	On February 24, 2021, PBI and Ohio State University announced the formation of a food industry consortium to advance commercialization of the Company’s Ultra Shear Technology (UST) platform.

	●	On February 8, 2021, PBI announced plans to acquire the assets of a global eco-friendly agrochemical supplier.

	●	On January 20, 2021, PBI targeted a revolution in effectiveness of therapeutics via improved drug delivery and dosing safety when the Company announced a collaboration with SinuSys Corp to improve and optimize their lead sinus health product candidate prior to Phase IIb trials.

Results of Operations

The following disclosure compares the results of operations for the quarter ended ~~September 30,~~March 31, 2021 (“Q1 2021”) with March 31, 2020 (“Q3Q1 2020”) ~~with September 30, 2019 (“Q3 2019”), and also compares the nine months ended September 30, 2020 with September 30, 2019.~~.

Products and Services Revenue

We recognized total revenue of ~~$533,862~~$559,874 for ~~Q3 2020~~Q1 2021 compared to ~~$501,158~~$253,873 for ~~Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 we recognized total revenue of $1,055,889 and $1,530,061, respectively.~~Q1 2020. The reported 7%121% increase ~~for the quarterly periods~~ was principally attributable to increased sales of PCT instruments. The reported 31% decrease for the year-to-date periods was from a decrease in Scientific Services revenue which was primarily attributable to the negative impact that the COVID-19 pandemic had on our operationsinstruments and ~~on the operations of our customers.~~associated consumables.

Cost of Products and Services

The cost of products and services was ~~$247,013~~$226,275 for ~~Q3 2020~~Q1 2021 compared to ~~$285,794~~$175,146 for ~~Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 our~~Q1 2020. The 29% increase in cost ~~of products and services~~ was ~~$557,041 and $899,678, respectively. Gross profit margin on products and services decreased in line~~not consistent with the ~~percentage change~~growth in ~~revenue.~~Products and Services Revenue principally because of discounts provided to purchasers of PCT instruments in the first quarter of 2020, which did not persist to the same degree in the first quarter of 2021.

Research and Development

Research and development expenses were ~~$247,432~~$299,943 for ~~Q3 2020~~Q1 2021 compared to ~~$276,712~~$265,690 for ~~Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 these expenses were $807,724 and $832,954, respectively.~~Q1 2020. The reported ~~decreases were approximately 11% for the quarterly and 3% for the year-to-date periods.~~increase was 13%.

Selling and Marketing

Selling and marketing expenses were ~~$173,372~~$93,328 for ~~Q3 2020~~Q1 2021 compared to ~~$133,032~~$189,116 for ~~Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 these expenses were $524,586 and $507,856, respectively.~~Q1 2020. The reported ~~increases~~decrease of ~~30% for the quarterly periods and 3% for the year-to-date periods were~~51% was primarily attributable to ~~new hires~~reduced employees in sales and marketing.

General and Administrative

General and administrative expenses were ~~$684,807~~$1,015,430 for ~~Q3 2020~~Q1 2021 compared to ~~$874,611~~$1,019,010 for ~~Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 these expenses were $2,711,032 and $3,155,800 respectively.~~Q1 2020. The reported ~~decreases of 22% for the quarterly periods and 14% for the year-to-date periods were primarily attributable to lower investor relations and stock-based compensation expense.~~decrease was 0.4%.

Operating Loss

Operating loss was ~~$818,762~~$1,075,102 for ~~Q3 2020~~Q1 2021 compared to ~~$1,068,991~~$1,395,089 for ~~Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 the operating loss was $3,544,494 and $3,866,227 respectively.~~Q1 2020. The reported ~~decreases~~decrease of 23% ~~for the quarterly periods and 8% for the year-to-date periods were~~is primarily attributable to ~~lower operating expenses, which offset the decreases~~revenue growth in ~~revenues.~~2021.

Interest Expense, net

Interest expense was ~~$2,204,593~~$4,668,064 for ~~Q3 2020~~Q1 2021 compared to ~~$2,124,477~~$1,571,800 for ~~Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 these expenses were $5,501,272 and $4,001,711, respectively.~~Q1 2020. The ~~reported increases~~increase of ~~4% for the quarterly periods and 37% for the year-to-date periods were~~197% was primarily attributable to ~~increases~~the increase in convertible and other ~~debt.~~debt and the issuance of common stock for interest paid-in-kind.

Unrealized (loss) gain on investment in equity securities

Unrealized ~~gain~~loss on investments in equity securities was ~~$140,461~~$107,903 for ~~Q3 2020~~Q1 2021 compared to ~~zero for Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 the~~an unrealized gain ~~was $486,723 and zero, respectively.~~of $149,371 for Q1 2020. The reported ~~increases were~~change was attributable ~~the increase~~to movement in the market price of the Company’s investment in ~~Everest.~~Nexity.

Loss on extinguishment of liabilities

In connection with ~~payments of interest in common stock and~~ debt extensions and forgiveness, we recognized net losses of ~~$395,854~~$725,159 for ~~Q3 2020~~Q1 2021 compared to ~~$185,203~~$1,136,367 for ~~Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 these losses were $3,242,372 and $332,474, respectively. These increases were~~Q1 2020. The decrease was related to ~~extension fees incurred and warrants issued for~~ the ~~recent Standstill and Forbearance Agreements and merchant~~gain recognized on the forgiveness of our first PPP loan, ~~extension and settlement.~~$367,039.

Net loss attributable to common stockholders

Net loss attributable to common stockholderswas ~~$3,675,718~~$7,038,686 ($~~1.02~~1.45 per share) for ~~Q3 2020~~Q1 2021 compared to ~~$4,325,302~~$4,278,471 ($~~2.20~~1.62 per share) for ~~Q3 2019. For the year-to-date periods ending on September 30, 2020 and 2019 the losses were $12,919,941 ($4.22 per share) and $11,873,147 ($6.29 per share), respectively.~~Q1 2020. The decreases in the loss per share ~~for~~was principally attributable to the ~~quarterly and year-to-date periods was attributable the 2019 deemed dividend on beneficial conversion feature (which did not recur in 2020) and a~~ 84% increase in weighted shares ~~outstanding for the quarterly period and a 62% increase for the year-to-date period.~~outstanding.

Liquidity and Financial Condition

We have experienced negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of ~~September 30, 2020,~~March 31, 2021, we did not have adequate working capital resources to satisfy our current liabilities and as a result, we have substantial doubt regarding our ability to continue as a going concern. WeAs described in Notes 5 and 6 of the accompanying consolidated financial statements, we have been successful in raising debt and equity ~~capital and as described in Notes 6 and 7 of the accompanying consolidated financial statements, we~~capital. We received ~~$8.0~~$1.8 million in net proceeds from loans and sales of preferred stock in the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. We have efforts in place to continue to raise cash through debt and equity offerings.

We will need substantial additional capital to fund our operations in future periods. If we are unable to obtain financing on acceptable terms, or at all, we will likely be required to cease our operations, pursue a plan to sell our operating assets, or otherwise modify our business strategy, which could materially harm our future business prospects.

Net cash used in operations for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 was ~~$3,906,764~~$1,237,015 as compared to ~~$5,019,345~~$1,364,639 for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020.

Net cash used in investing activities for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 was ~~$802,913~~$3,962 compared to ~~$28,915~~$0 in the ~~prior period. Cash capital expenditures in the current year included a loan advance to our pending merger partner and purchases of laboratory equipment and IT equipment.~~three months ended March 31, 2020.

Net cash provided by financing activities for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 was ~~$4,774,804~~$1,272,967 as compared to ~~$5,080,506~~$1,366,833 for the ~~same period in the prior year.~~three months ended March 31,2020. The cash flows from financing activities in the ~~period~~quarter ended ~~September 30, 2020~~March 31, 2021 included ~~$6,977,800~~$100,000 from the sale of Series AA preferred stock, $1.7 million loan proceeds from convertible debt and ~~$1,029,039~~other debt. In this period, cash flow from ~~other~~financing was reduced by debt ~~and less debts~~ payments ~~($1,972,007~~ of $191,250 on convertible debt, and ~~$1,260,028 of~~$320,094 on other ~~debt).~~debt.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This Item 3 is not applicable to us as a smaller reporting company and has been omitted.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act of 1934 filings are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management was necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of ~~September 30, 2020,~~March 31, 2021, we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective.

Our conclusion that our disclosure controls and procedures were not effective as of ~~September 30, 2020~~March 31, 2021 is due to the continued presence of the material weaknesses in our internal control over financial reporting identified in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. These material weaknesses are the following:

	●	We identified a lack of sufficient segregation of duties. Specifically, this material weakness is such that the design over these areas relies primarily on detective controls and could be strengthened by adding preventative controls to properly safeguard Company assets.

	●	Management has identified a lack of sufficient personnel in the accounting function due to our limited resources with appropriate skills, training and experience to perform the review processes to ensure the complete and proper application of generally accepted accounting principles, particularly as it relates to valuation of warrants and other complex debt /equity transactions. Specifically, this material weakness resulted in audit adjustments to the annual consolidated financial statements and revisions to related disclosures, valuation of warrants and other equity transactions.

	●	Limited policies and procedures that cover recording and reporting of financial transactions.

	●	Lack of multiple levels of review over the financial reporting process

	We continue to plan to remediate those material weaknesses as follows:

	●	Improve the effectiveness of the accounting group by augmenting our existing resources with additional consultants or employees to assist in the analysis and recording of complex accounting transactions, and to simultaneously achieve desired organizational structuring for improved segregation of duties. We plan to mitigate this identified deficiency by hiring an independent consultant once we generate significantly more revenue or raise significant additional working capital.

	●	Improve expert review and achieve desired segregation procedures by strengthening cross approval of various functions including quarterly internal audit procedures where appropriate.

During the period covered by this Report, we implemented and performed additional substantive procedures, such as supervisory review of work papers and consistent use of financial models used in equity valuations, to ensure our consolidated financial statements as of and for the three-month period ended ~~September 30, 2020,~~March 31, 2021, are fairly stated in all material respects in accordance with GAAP. We have not, however, been able to fully remediate the material weaknesses due to our limited financial resources. Our remediation efforts are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

Except as described above, there have been no changes in our internal controls over financial reporting that occurred during the period ended ~~September 30, 2020~~March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

Factors that could cause or contribute to differences in our future financial and operating results include those discussed in the risk factors set forth in Item 1 of our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the period ended March 31, ~~2020~~2021 (the “Q1 10-Q”). The risks described in our Form 10-K, the Q1 10-Q and this Report are not the only risks that we face. Additional risks not presently known to us or that we do not currently consider significant may also have an adverse effect on the Company. If any of the risks actually occur, our business, results of operations, cash flows or financial condition could suffer.

There have been no material changes to the risk factors set forth in Item 1A of our 10-K for the year ended December 31, ~~2019~~2020 or in Part II, Item 1A of our Q2Q1 10-Q other than the following:

During 2019, the Company issued notes to one holder in the principal amount of $1,155,000. Through ~~September 30, 2020,~~March 31, 2021, we have issued other Notes to the same holder such that the current gross amount owed to the holder is approximately ~~$8.7~~$7.5 million. Our obligations under the Notes and the transaction documents relating to the Notes are secured by a security interest in all of our assets. As a result, if we default under our obligations under the Notes or the transaction documents, the holders of the Notes, acting through their appointed agent, could foreclose on their security interests and liquidate some or all of these assets, which could harm our business, financial condition and results of operations and could require us to reduce or cease operations. In addition, the pledge of these assets and other restrictions may limit our flexibility in raising capital for other purposes. Because all of our assets are pledged under these financing arrangements, our ability to incur additional secured indebtedness or to sell or dispose of assets to raise capital may be impaired, which could have an adverse effect on our financial flexibility.

The holders of our Common Stock could suffer substantial dilution due to our corporate financing practices.

The holders of our common stock could suffer substantial dilution due to our corporate financing practices which, in the past few years has included private placements. As of ~~September 30, 2020,~~March 31, 2021, we had ~~3,839,256~~5,271,707 shares outstanding. As of ~~September 30, 2020,~~March 31, 2021, if all of the outstanding shares of Series D Convertible Preferred Stock, Series G Convertible Preferred Stock, Series H Convertible Preferred Stock, Series H2 Convertible Preferred Stock, Series J Convertible Preferred Stock, Series K Convertible Preferred Stock and Series AA Convertible Preferred Stock were converted into shares of common stock and all outstanding options and warrants to purchase shares of common stock were exercised and all fixed rate convertible notes and debentures were converted, each as of ~~September 30, 2020,~~March 31, 2021, an additional ~~28,317,527~~29,600,194 shares of common stock would be issued and outstanding. The full cash exercise of the options and warrants would result in approximately ~~$49.4~~$53.1 million in cash proceeds to the Company. This additional issuance of shares of common stock would cause immediate and substantial dilution to our existing stockholders and could cause a significant reduction in the market price of our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Except where noted, all the securities discussed in this Part II, Item 2 were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.

On various dates in the quarter ended ~~September 30, 2020~~March 31, 2021 the Company issued a total of ~~631,971~~1,103,383 shares of restricted common stock ~~at a fair value of approximately $1,162,411~~ to accredited investors and consultants. ~~299,042~~47,200 of the shares with a fair value of ~~$537,894~~$118,000 were issued for the conversion of debt and interest for common stock; ~~23,130~~922,372 of the shares with a fair value of ~~$44,626~~$2,021,780 were issued for ~~dividends paid-in-kind; 46,021~~interest paid-in-kind, 112,400 of the shares with a fair value of ~~$82,566~~$238,512 were issued for ~~interest paid-in-kind, 178,778~~services rendered and 21,411 of the shares with a fair value of ~~$349,550~~$14,773 were issued for ~~debt settlement and 85,000 of~~stock option exercises.

During the ~~shares with~~three months ended March 31, 2021, we issued 521,200 warrants (five-year term at a $3.50 exercise price) to acquire common stock at a fair value of ~~$147,775 were issued~~$0.8 million to lenders in conjunction with signing of new ~~debt issuances.~~convertible loans and interest paid-in-kind.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits

~~10.1~~		First Amendment to Binding Letter of Intent by and between Pressure BioSciences, Inc. and Cannaworx, Inc., dated July 6, 2020 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2020)

~~10.2~~		Form of Amendment to Standstill and Forbearance Agreement entered into in each fiscal quarter of 2020 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on June 29, 2020)

31.1*		Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))

31.2*		Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))

32.1**		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2**		Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are furnished and not filed.

SIGNATURES

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

	PRESSURE BIOSCIENCES, INC.

Date: ~~November 16, 2020~~May 17, 2021	By:	/s/ Richard T. Schumacher
		Richard T. Schumacher
		President & Chief Executive Officer
		(Principal Executive Officer and Principal Financial Officer)

3736

	Series D Preferred Stock				Series G Preferred Stock					Series H Preferred Stock				Series H(2) Preferred Stock				Series J Preferred Stock				Series K Preferred Stock				Series AA Preferred Stock				Common Stock				Stock		Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount			Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Warrants		Capital		Deficit			Deficit
BALANCE, December 31, 2019		300	$	3		80,570	$	806			10,000	$	100		21	$	-		3,458	$	35		6,880	$	68		7939	$	80		2,549,620	$	25,496	$	22,599,177	$	44,261,105	$	(78,942,277	)	$	(12,055,407	)
Stock-based compensation		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-		241,769		-			241,769
Series AA Preferred Stock dividend		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-				(324,586	)		(324,586	)
Issuance of common stock to settle accrued liabilities		-		-		-		-			-		-		-		-		-		-		-		-		-		-		66,500		665		-		127,190		-			127,855
Common stock issued for debt settlement		-		-		-		-			-		-		-		-		-		-		-		-		-		-		10,000		100		-		24,900		-			25,000
Beneficial conversion feature on debt		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-		404,608		-			404,608
Warrants issued for debt extension		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		609,143		-		-			609,143
Issuance of common stock for debt extension and interest paid in kind		-		-		-		-			-		-		-		-		-		-		-		-		-		-		38,521		385		-		60,175		-			60,560
Warrants issued with debt		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		1,205,010		-		-			1,205,010
Net loss		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-		-		(3,953,885	)		(3,953,885	)
BALANCE, March 31, 2020		300	$	3		80,570	$	806			10,000	$	100		21	$	-		3,458	$	35		6,880	$	68		7,939	$	80		2,664,641	$	26,646	$	24,413,330	$	45,119,747	$	(83,220,748	)	$	(13,659,933	)
Stock-based compensation		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-		65,341		-			65,341
Series AA Preferred Stock dividend		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-		-		(396,970	)		(396,970	)
Beneficial conversion feature on debt		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-		577,489		-			577,489
Issuance of common stock for services		-		-		-		-			-		-		-		-		-		-		-		-		-		-		25,000		250		-		87,713		-			87,963
Issuance of common stock for interest paid-in-kind		-		-		-		-			-		-		-		-		-		-		-		-		-		-		42,510		425		-		98,799		-			99,224
Issuance of common stock for dividends paid-in-kind		-		-		-		-			-		-		-		-		-		-		-		-		-		-		64,388		644		-		176,104		-			176,748
Conversion of debt and interest for common stock		-		-		-		-			-		-		-		-		-		-		-		-		-		-		410,746		4,107		-		1,288,542		-			1,292,649
Warrants issued with debt		-		-		-		-			-		-		-		-		-		-		-		-		-		-				-		1,753,683		-		-			1,753,683
Warrants issued for debt extension		-		-		-		-			-		-		-		-		-		-		-		-		-		-				-		360,602		-		-			360,602
Net loss		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-		-		(4,568,782	)		(4,568,782	)
BALANCE, June 30, 2020		300	$	3		80,570	$	806			10,000	$	100		21	$	-		3,458	$	35		6,880	$	68		7,939	$	80		3,207,285	$	32,072	$	26,527,615	$	47,413,735	$	(88,186,500	)	$	(14,211,986	)
Stock-based compensation		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-		66,542		-			66,542
Issuance of common stock for interest paid-in-kind		-		-		-		-			-		-		-		-		-		-		-		-		-		-		46,021		460		-		82,106		-			82,566
Issuance of common stock for dividends paid-in-kind		-		-		-		-			-		-		-		-		-		-		-		-		-		-		23,130		232		-		44,394		-			44,626
Series AA Preferred Stock dividend		-		-		-		-			-		-		-		-						-		-		-		-		-		-		-		-		(396,970	)		(396,970	)
Conversion of debt and interest for common stock		-		-		-		-			-		-		-		-		-		-		-		-		-		-		299,042		2,990		-		534,904		-			537,894
Warrants issued with debt		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		1,302,362				-			1,302,362
Conversion of debt into Series AA convertible preferred stock		-		-							-		-		-		-		-		-		-		-		44		-		-		-		38,783		71,217		-			110,000
Beneficial conversion feature on debt		-		-		-		-			-		-		-		-						-		-		-		-		-		-		-		371,597		-			371,597
Common stock issued for debt settlement		-		-		-		-			-		-		-		-		-		-		-		-		-		-		178,778		1,788		-		347,762		-			349,550
Warrants issued for debt settlement		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		338,412		-		-			338,412
Common Stock issued with debt		-		-		-		-			-		-		-		-		-		-		-		-		-		-		85,000		850		-		146,925		-			147,775
Net loss		-		-		-		-			-		-		-		-		-		-		-		-		-		-		-		-		-		-		(3,278,748	)		(3,278,748	)
BALANCE, September 30, 2020		300	$	3		80,570	$	806	��		10,000	$	100		21	$	-		3,458	$	35		6,880	$	68		7,983	$	80		3,839,256	$	38,392	$	28,207,172	$	49,079,182	$	(91,862,218	)	$	(14,536,380	)

2020	$	42,240
Thereafter		-
Total Minimum Payments Required	$	42,240

Inception Date	Purchase Price		Purchased Amount		Outstanding Balance		Daily Payment Rate		Deferred Finance Fees
August 5, 2019	$	600,000	$	816,000	$	421,024		4,533	$	6,000
August 19, 2019		350,000		479,500		272,315		2,664		3,000
August 23, 2019		175,000		239,750		132,284		1,410		1,750
September 19, 2019		275,000		384,275		256,812		2,138		5,000
	$	1,400,000	$	1,919,525	$	1,082,435	$	10,745	$	15,750