10-Q

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, 2017

or

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

For the transition period from _____________ to _____________

Commission File Number 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)

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

[X] Yes [  ] No

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

[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 [  ]	Smaller reporting company [X]	Emerging growth company [  ]
		(Do not check if a smaller reporting 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 7, 2017 was 1,154,422.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Consolidated Balance Sheets as of September 30, 2017 (Unaudited) and December 31, 2016	3
Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2017 and 2016 (Unaudited)	4
Consolidated Statements of Comprehensive Loss for the Three Months and Nine Months Ended September 30, 2017 and 2016 (Unaudited)	5
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016 (Unaudited)	6
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosure About Market Risk	30
Item 4. Controls and Procedures	30
PART II - OTHER INFORMATION	31
Item 1. Legal Proceedings	31
Item 1A. Risk Factors	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3. Defaults Upon Senior Securities	31
Item 4. Mine Safety Disclosures	31
Item 5. Other Information	31
Item 6. Exhibits	32
SIGNATURES	33

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30, 2017			December 31, 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	18,723		$	138,363
Accounts receivable, net of $28,169 reserve at September 30, 2017 and December 31, 2016		548,316			281,320
Inventories, net of $20,000 reserve at September 30, 2017 and December 31, 2016		1,122,782			905,284
Prepaid income taxes		7,482			7,405
Prepaid expenses and other current assets		146,278			258,103
Total current assets		1,843,581			1,590,475
Investment in available-for-sale equity securities		25,986			25,865
Property and equipment, net		19,004			9,413
TOTAL ASSETS	$	1,888,571		$	1,625,753
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	853,173		$	407,249
Accrued employee compensation		298,675			249,596
Accrued professional fees and other		1,352,658			956,884
Deferred revenue		313,992			159,654
Revolving note payable, net of unamortized debt discounts of $335,833 and $637,030, respectively		3,164,167			612,970
Related party convertible debt, net of debt discount of $65,240 and $0, respectively		225,894			-
Convertible debt, net of unamortized debt discounts of $355,375 and $2,235,839, respectively		6,315,995			4,005,702
Other debt, net of unamortized discounts of $80,747 and $380, respectively		1,952,859			238,157
Warrant derivative liability		-			1,685,108
Conversion option liability		-			951,059
Total current liabilities		14,477,413			9,266,379
LONG TERM LIABILITIES
Related party convertible debt, net of debt discount of $0 and $165,611, respectively		-			125,523
Convertible debt, net of debt discount of $0 and $740,628, respectively		-			529,742
Deferred revenue		61,592			87,527
TOTAL LIABILITIES		14,539,005			10,009,171
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS’ DEFICIT
Series D Convertible Preferred Stock, $.01 par value; 850 shares authorized; 300 shares issued and outstanding on September 30, 2017 and December 31, 2016, 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, 2017 and December 31, 2016, respectively		806			866
Series H Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 10,000 shares issued and outstanding on September 30, 2017 and December 31, 2016, respectively		100			100
Series H2 Convertible Preferred Stock, $.01 par value; 21 shares authorized; 21 shares issued and outstanding on September 30, 2017 and December 31, 2016, respectively		-			-
Series J Convertible Preferred Stock, $.01 par value; 6,250 shares authorized; 3,458 shares issued and outstanding on September 30, 2017 and December 31, 2016, respectively		34			35
Series K Convertible Preferred Stock, $.01 par value; 15,000 shares authorized; 6,816 shares issued and outstanding on September 30, 2017 and December 31, 2016, respectively		68			68
Common stock, $.01 par value; 100,000,000 shares authorized; 1,154,422 and 1,033,328 shares issued and outstanding on September 30, 2017 and December 31, 2016, respectively		11,544			10,333
Warrants to acquire common stock		9,721,627			6,325,102
Additional paid-in capital		29,976,405			27,544,265
Accumulated other comprehensive income		6,190			-
Accumulated deficit		(52,367,211	)		(42,264,190	)
Total stockholders’ deficit		(12,650,434	)		(8,383,418	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,888,571		$	1,625,753

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

3

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Revenue:
Products, services, other	$	603,726		$	500,949		$	1,610,124		$	1,429,487
Grant revenue		42,335			34,385			127,666			127,289
Total revenue		646,061			535,334			1,737,790			1,556,776
Costs and expenses:
Cost of products and services		328,743			262,894			852,039			727,698
Research and development		239,326			268,317			744,565			925,015
Selling and marketing		301,676			224,380			814,796			609,501
General and administrative		901,588			231,550			2,655,054			1,853,010
Total operating costs and expenses		1,771,333			987,141			5,066,454			4,115,224
Operating loss		(1,125,272	)		(451,807	)		(3,328,664	)		(2,558,448	)
Other (expense) income:
Interest expense, net		(1,554,379	)		(1,116,328	)		(4,431,950	)		(2,961,708	)
Other expense		-			(200	)		(1,039	)		(1,112	)
Impairment loss on investment		-			-			(6,069	)		-
Incentive warrants for warrant exercises		-			-			(186,802	)		-
Gain on extinguishment of debt		90,862			-			90,862			-
Change in fair value of derivative liabilities		245,213			623,128			(26,014	)		(412,500	)
Total other expense		(1,218,304	)		(493,400	)		(4,561,012	)		(3,375,320	)
Net loss		(2,343,576	)		(945,207	)		(7,889,676	)		(5,933,768	)
Net loss per share attributable to common stockholders – basic and diluted	$	(2.07	)	$	(0.96	)	$	(7.28	)	$	(6.81	)
Weighted average common stock shares outstanding used in the basic and diluted net loss per share calculation		1,133,791			980,846			1,084,370			871,325

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

4

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Comprehensive Loss
Net loss	$	(2,343,576	)	$	(945,207	)	$	(7,889,676	)	$	(5,933,768	)
Other comprehensive loss
Unrealized (loss) income on marketable securities		-			(22,233	)		6,190			(234,972	)
Comprehensive loss	$	(2,343,576	)	$	(967,440	)	$	(7,883,486	)	$	(6,168,740	)

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

5

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended
	September 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(7,889,676	)	$	(5,933,768	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for debt extension		10,000			-
Depreciation and amortization		7,027			15,489
Accretion of interest and amortization of debt discount		3,548,244			2,848,058
Incentive warrants for warrant exercises		186,802			-
Penalty interest added to debt principal		-			41,200
Gain on extinguishment of debt		(90,862	)		-
Stock-based compensation expense		318,910			282,811
Amortization of third party fees paid in common stock and warrants		-			332,700
Warrants issued for service		15,558			-
Shares issued for service		31,000			-
Impairment loss on investment		6,069			-
Change in fair value of derivative liabilities		26,014			412,500
Changes in operating assets and liabilities:
Accounts receivable		(266,996	)		(476,426	)
Inventories		(217,498	)		30,233
Prepaid expenses and other assets		111,748			33,948
Accounts payable		445,924			(409,175	)
Accrued employee compensation		49,079			9,900
Deferred revenue and other accrued expenses		618,890			75,014
Net cash used in operating activities		(3,089,767	)		(2,737,516	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property plant and equipment		(16,617	)		(3,273	)
Net cash used in investing activities		(16,617	)		(3,273	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from the issuance of common stock		-			382,965
Net proceeds from related party convertible debt		-			96,667
Net proceeds from revolving note payable		2,070,000			-
Net proceeds from warrant exercises		140,215			-
Net proceeds from convertible debt		-			2,102,382
Net proceeds from non-convertible debt		2,400,752			865,152
Payments on convertible debt		(840,541	)		-
Payments on non-convertible debt		(783,682	)		(781,221	)
Net cash provided by financing activities		2,986,744			2,665,945
NET DECREASE IN CASH		(119,640	)		(74,844	)
CASH AT BEGINNING OF YEAR		138,363			116,783
CASH AT END OF PERIOD	$	18,723		$	41,939
SUPPLEMENTAL INFORMATION
Interest paid in cash	$	282,906		$	1,154
NON CASH TRANSACTIONS:
Discount due to warrants issued with debt		668,544			-
Unrealized gain from available-for-sale equity securities		6,190			234,972
Derivative liability released upon warrant exercise		49,327			-
Debt discount from derivative liability		-			1,304,049
Cashless exercise of warrants		-			11,100
Conversion of preferred stock into common stock		55,200			63,904
Convertible debt exchanged for common stock		-			117,837
Common stock issued with debt		321,127			104,731
Common stock issued to settle non-convertible debt		-			41,200
Common stock issued in lieu of cash for interest		185,603			-
Discount due to beneficial conversion feature		-			20,721
Discount due to warrants issued with debt		-			39,755
Reclassification of derivative liabilities to equity and cumulative effect of adoption of ASU 2017-11		1,689,386			-
Discount from one-time interest		225,000			-

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

6

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

1) Business Overview, Liquidity and Management Plans

Pressure BioSciences, Inc. (“we”, “our”, “the Company”) is focused on solving the challenging problems inherent in biological sample preparation, a crucial laboratory step performed by scientists worldwide working in biological life sciences research. Sample preparation is a term that refers to a wide range of activities that precede most forms of scientific analysis. Sample preparation is often complex, time-consuming, and in our belief, one of the most error-prone steps of scientific research. It is a widely-used laboratory undertaking, the requirements of which drive what we believe is a large and growing worldwide market. We have developed and patented a novel, enabling technology platform that can control the sample preparation process. It is based on harnessing the unique properties of high hydrostatic pressure. This process, called pressure cycling technology, or PCT, uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels (45,000 psi or greater) to safely, conveniently and reproducibly control the actions of molecules in biological samples, such as cells and tissues from human, animal, plant, and microbial sources.

Our pressure cycling technology uses internally developed instrumentation that is capable of cycling pressure between ambient and ultra-high levels - at controlled temperatures and specific time intervals - to rapidly and repeatedly control the interactions of bio-molecules, such as DNA, RNA, proteins, lipids, and small molecules. Our laboratory instrument, the Barocycler®, and our internally developed consumables product line, including PULSE® (Pressure Used to Lyse Samples for Extraction) Tubes, other processing tubes, and application specific kits (which include consumable products and reagents) together make up our PCT Sample Preparation System, or PCT SPS.

In 2015, together with an investment bank, we formed a subsidiary called Pressure BioSciences Europe (“PBI Europe”) in Poland. We have 49% ownership interest with the investment bank retaining 51%. As of now, PBI Europe does not have any operating activities and we cannot reasonably predict when operations will commence. Therefore, we do not have control of the subsidiary and did not consolidate in our financial statements. PBI Europe did not have any operations in the nine months ending September 30, 2017 or in fiscal year 2016.

2) 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 negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of September 30, 2017, 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 cash through debt and equity offerings in the past and as described in Notes 6 and 7, we received $4,610,967 in net proceeds from loans and warrant exercises in the nine months ended September 30, 2017. We have financing efforts in place to continue to raise cash through debt and equity offerings.

Management has developed a plan to continue operations. This plan includes obtaining equity or debt financing. During the nine months ended September 30, 2017 we received $4,610,967 in net proceeds from warrant exercises, additional convertible and non-convertible debt. 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.

We need substantial additional capital to fund normal operations in future periods. In the event that 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. These financial statements do not include any adjustments that might result from this uncertainty.

7

3) Interim Financial Reporting

The accompanying unaudited consolidated balance sheet as of December 31, 2016, which was derived from audited financial statements, and the unaudited interim consolidated financial statements of Pressure BioSciences, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all material adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K (the “Form 10-K”) for the fiscal year ended December 31, 2016 as filed with the Securities and Exchange Commission on March 22, 2017.

On June 5, 2017, we effected a 1-for-30 reverse stock split of our common stock. All common shares, stock options, and per share information presented in the consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis for all periods presented. In lieu of issuing fractional shares, stockholders who otherwise would have been entitled to receive fractional shares because they held a number of shares not evenly divisible by the reverse stock split ratio were automatically entitled to receive an additional fraction of a share of Common Stock to round up to the next whole share. There was no change in the par value of the Company’s common stock. The ratio by which shares of preferred stock are convertible into shares of common stock were adjusted to reflect the effects of the reverse stock split.

4) Summary of Significant Accounting Policies

Principles of Consolidation

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

Recent Accounting Standards

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity transactions. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 with early adoption permitted. The Company early adopted the ASU 2017-11 in the third quarter of 2017.

Adoption of ASU 2017-11

The Company changed its method of accounting for the Debentures and Warrants through the early adoption of ASU 2017-11 during the three months ended September 30, 2017 on a modified retrospective basis. Accordingly, the Company reclassified the warrant derivative and conversion option derivative liabilities to additional paid in capital on its January 1, 2017 consolidated balance sheets totaling approximately $2.6 million, reduced debt discount by approximately $0.9 million and recorded the cumulative effect of the adoption to the beginning balance of accumulated deficit of approximately $2.2 million. This resulted to an increase in stock warrants by $2.5 million and additional paid-in capital by $1.4 million. In addition, because of the modified retrospective adoption, the Company credited the change in fair value of warrant derivative and conversion option derivative liabilities on its consolidated statements of operations by $245,215 and reduced amortization of debt discount by $812,904 for the nine months ended September 30, 2017. The following table provides a reconciliation of the warrant derivative liability, convertible debt, conversion option derivative liability, stock warrant, additional paid-in capital and accumulated deficit on the consolidated balance sheet as of December 31, 2016:

	Convertible debt, current portion			Convertible debt, long term portion			Warrant Derivative Liability			Conversion Option Liability			Warrants to acquire common stock		Additional Paid-in Capital		Accumulated deficit
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$	4,005,702		$	529,742		$	1,685,108		$	951,059		$	6,325,102	$	27,544,265	$	(42,264,190	)
Reclassified derivative liabilities and cumulative effect of adoption		(769,316	)		(154,152	)	$	(1,661,795	)		(951,059	)	$	2,525,623		1,377,108		(2,213,345	)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$	3,236,386		$	375,590		$	23,313		$	-		$	8,850,725	$	28,921,373	$	(44,477,535	)

Use of Estimates

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

8

Concentrations

Credit Risk

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

The following table illustrates the level of concentration as a percentage of total revenues during the three months and nine months ended September 30, 2017 and 2016. The Top Five Customers category may include federal agency revenues if applicable.

	For the Three Months Ended
	September 30,
	2017			2016
Top Five Customers		73	%		60	%
Federal Agencies		30	%		9	%

	For the Nine Months Ended
	September 30,
	2017			2016
Top Five Customers		38	%		31	%
Federal Agencies		19	%		3	%

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of September 30, 2017 and December 31, 2016. The Top Five Customers category may include federal agency revenues if applicable

	September 30, 2017			December, 31, 2016
Top Five Customers		74	%		82	%
Federal Agencies		28	%		1	%

Product Supply

CBM Industries (Taunton, MA) has recently become the manufacturer of the Barocycler® 2320EXT. CBM is ISO 13485:2003 and 9001:2008 Certified. CBM provides 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 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 currently manufacture and assemble the Barozyme HT48, Barocycler® HUB440, the SHREDDER SG3, and most of our consumables at our South Easton, MA facility, we plan to take advantage of the established relationship with CBM and transfer manufacturing of the entire Barocycler® product line, future instruments, and other products to CBM.

The Barocycler® NEP3229, launched in 2008, and manufactured by the BIT Group, will be phased out over the next several years and replaced by the new state-of-the-art Barocycler® HUB and Barozyme HT48 product lines.

9

Investment in Available-For-Sale Equity Securities

As of September 30, 2017, we held 100,250 shares of common stock of Everest Investments Holdings S.A. (“Everest”), a Polish publicly traded company listed on the Warsaw Stock Exchange. We account for this investment in accordance with ASC 320 “Investments — Debt and Equity Securities” as securities available for sale. On September 30, 2017, our consolidated balance sheet reflected the fair value of our investment in Everest to be approximately $30,000, based on the closing price of Everest shares of $0.29 USD per share on that day. The carrying value of our investment in Everest common stock held will change from period to period based on the closing price of the common stock of Everest as of the balance sheet date. The change in market value since the receipt of stock was determined to be other than temporary. We recorded $6,069 as an impairment loss in the first quarter of 2017. The carrying value increased in the first nine months of 2017 by $6,190 and was reflected as an unrealized gain in our Comprehensive Loss Statement.

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 and nine months ended September 30, 2017 and 2016:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Numerator:
Net loss	$	(2,343,576	)	$	(945,207	)	$	(7,889,676	)	$	(5,933,768	)
Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding		1,133,791			980,846			1,084,370			871,325
Loss per common share – basic and diluted	$	(2.07	)	$	(0.96	)	$	(7.28	)	$	(6.81	)

10

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 and Series K Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

	As of September 30,
	2017		2016
Stock options		249,636		175,642
Convertible debt		828,870		899,058
Common stock warrants		902,033		827,490
Convertible preferred stock:
Series D Convertible Preferred Stock		25,000		25,000
Series G Convertible Preferred Stock		26,857		28,857
Series H Convertible Preferred Stock		33,334		33,334
Series H2 Convertible Preferred Stock		70,000		70,000
Series J Convertible Preferred Stock		115,267		117,367
Series K Convertible Preferred Stock		227,200		227,200
		2,478,197		2,403,948

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.

11

The Company recognized stock-based compensation expense of $139,399 and $90,500 for the three months ended September 30, 2017 and 2016, respectively. The Company recognized stock-based compensation expense of $318,910 and $282,811 for the nine months ended September 30, 2017 and 2016, 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
	September 30,				September 30,
	2017		2016		2017		2016
Research and development	$	37,345	$	14,735	$	76,263	$	50,766
Selling and marketing		21,778		9,911		46,112		32,404
General and administrative		80,276		65,854		196,535		199,641
Total stock-based compensation expense	$	139,399	$	90,500	$	318,910	$	282,811

Fair Value of Financial Instruments

Due to their short maturities, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value. Long-term liabilities are primarily related to convertible debentures and deferred revenue with carrying values that approximate 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 the fair value measurement of the derivative liability.

12

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 and its financial liabilities are currently classified within Level 3 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, 2017:

			Fair value measurements at September 30, 2017 using:
	September 30, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		25,986		25,986		-		-
Total Financial Assets	$	25,986	$	25,986	$	-	$	-

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs for the nine months ended September 30, 2017:

	December 31, 2016		Issuance fair value		Change in fair value		Settlement			Adjustment due to ASU 2017-11			September 30, 2017
Series D Preferred Stock Purchase Warrants	$	23,313	$	-	$	26,014	$	(49,327	)		-		$	-
Warrants Issued with Convertible Debt		1,661,795		-		-		-			(1,661,795	)		-
Conversion Option Derivative Liabilities		951,059		-		-		-			(951,059	)		-
Total Derivatives	$	2,636,167	$	-	$	26,014	$	(49,327	)	$	(2,612,854	)		-

Refer to this Note for accounting of early adoption of ASU 2017-11.

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, 2016:

			Fair value measurements at December 31, 2016 using:
	December 31, 2016		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		25,865		25,865		-		-
Total Financial Assets	$	25,865	$	25,865	$	-	$	-

	December 31, 2016		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Series D Preferred Stock Purchase Warrants	$	23,313		-		-	$	23,313
Warrants Issued with Convertible Debt		1,661,795		-		-		1,661,795
Conversion Option Derivative Liabilities		951,059		-		-		951,059
Total Derivatives	$	2,636,167	$	-	$	-	$	2,636,167

13

5) Commitments and Contingencies

Operating Leases

Our corporate offices are currently located at 14 Norfolk Avenue, South Easton, Massachusetts 02375. We are currently paying $4,800 per month, on a lease extension, signed on December 29, 2016, that expires December 31, 2017, 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 an increase in monthly rent of $2,150.

On October 18, 2017 we signed a lease extension for our lab space in Medford, MA. The lease will now expire December 30, 2020 and requires monthly payments of $6,912.75 starting January 1, 2018 subject to annual cost of living increases.

Rental costs are expensed as incurred. During the nine months ended September 30, 2017 and 2016 we incurred $112,438 and $108,038 in rent expense, respectively for the use of our corporate office and research and development facilities.

Government Grants

We have received a $1.02 million NIH SBIR Phase II Grant. Under the grant, the NIH has committed to pay the Company to develop a high-throughput, high pressure-based DNA Shearing System for Next Generation Sequencing and other genomic applications.

6) Convertible Debt and Other Debt

We entered into Subscription Agreements (the “Subscription Agreement”) with various individuals (each, a “Purchaser”) between July 23, 2015 and March 31, 2016, pursuant to which the Company sold Senior Secured Convertible Debentures (the “Debentures”) and warrants to purchase shares of common stock equal to 50% of the number of shares issuable pursuant to the subscription amount (the “Warrants”) for an aggregate purchase price of $6,329,549 (the “Purchase Price”).

The Company issued a principal aggregate amount of $6,962,504 in Debentures which includes a 10% original issue discount on the Purchase Price. The Debenture does not accrue any additional interest during the first year it is outstanding but accrues interest at a rate equal to 10% per annum for the second year it is outstanding. The Debenture has a maturity date of two years from issuance. The Debenture is convertible any time after its issuance date. The Purchaser has the right to convert the Debenture into shares of the Company’s common stock at a fixed conversion price equal to $8.40 per share, subject to applicable adjustments. In the second year that the Debenture is outstanding, any interest accrued shall be payable quarterly in either cash or common stock, at the Company’s discretion.

On various dates for the nine months ended September 30, 2017, the Company issued 38,606 shares of common stock based on the 10-day VWAP prior to quarter end to holders of the Debentures in payment of the quarterly interest accrued from the Debentures first anniversary date through March 31, 2017 for an aggregate amount of $309,465. We recognized a $123,862 gain on extinguishment of debt by calculating the difference of the shares valued on the issuance date and the amount of accrued interest through March 31, 2017.

At any time after the Issuance Date until the maturity date, the Company has the option, subject to certain conditions, to redeem some or all of the then outstanding principal amount of the Debenture for cash in an amount equal to the sum of (i) 120% of the then outstanding principal amount of the Debenture, (ii) accrued but unpaid interest and (iii) any liquidated damages and other amounts due in respect of the Debenture.

On September 11, 2017, we notified Debenture holders that their Debentures will be extended 180 days beyond the original maturity date as permitted in the Debenture agreement. We will continue to pay interest on the Debentures until the extended maturity date. We accounted for the Debenture extensions as debt modifications and not extinguishment of debt since the changes in fair value are not substantial in accordance with ASC 470-50. We started amortizing the remaining unamortized discount as of September 11, 2017 over the new term which extends 180 days beyond the original maturity date.

14

Warrants

The Company issued warrants exercisable into a total of 376,757 shares of our common stock. The Warrants issued in this transaction are immediately exercisable at an exercise price of $12.00 per share, subject to applicable adjustments including full ratchet anti-dilution in the event that we issue any securities at a price lower than the exercise price then in effect. The Warrants have an expiration period of five years from the original issue date. The Warrants are subject to adjustment for stock splits, stock dividends or recapitalizations and also include anti-dilution price protection for subsequent equity sales below the exercise price. The warrants were issued pursuant to an exemption to the registration requirements of the Securities Act and are considered restricted securities. Upon exercise, the warrant shares will be considered restricted securities and will be issued with a restrictive legend unless the shares have been registered or the legend can be removed pursuant to Rule 144 promulgated pursuant to the Securities Act.

Subject to the terms and conditions of the Warrants, at any time commencing six months from the Final Closing, the Company has the right to call the Warrants for cancellation if the volume weighted average price of its Common Stock on the OTCQB (or other primary trading market or exchange on which the Common Stock is then traded) equals or exceeds three times the per share exercise price of the Warrants for 15 out of 20 consecutive trading days.

Security Agreement

In connection with the Subscription Agreement and Debenture, the Company entered into Security Agreements with the Purchasers whereby the Company agreed to grant to Purchasers an unconditional and continuing, first priority security interest in all of the assets and property of the Company to secure the prompt payment, performance and discharge in full of all of Company’s obligations under the Debentures, Warrants and the other Transaction Documents.

ASC 470-20 states that the proceeds from the issuance of debt with detachable stock warrants should be allocated between the debt and warrants on the basis of their relative fair market values. The debt discount will be amortized to interest expense over the two year term of these loans. We amortized $4,736,571 of the debt discount to interest expense through the third quarter of 2017. The warrants issued in connection with the convertible debentures are classified as warrant derivative liabilities because the warrants are entitled to certain rights in subsequent financings and the warrants contain “down-round protection” and therefore, do not meet the scope exception for treatment as a derivative under ASC 815, Derivatives and Hedging, (“ASC 815”). Since “down-round protection” is not an input into the calculation of the fair value of the warrants, the warrants cannot be considered indexed to the Company’s own stock which is a requirement for the scope exception as outlined under ASC 815. The estimated fair value of the warrants was determined using the binomial model, resulting in an allocation of $2,847,624 to the total warrants out of the gross proceeds of $6,329,549. The fair value will be affected by changes in inputs to that model including our stock price, expected stock price volatility, the contractual term, and the risk-free interest rate. We reclassified the fair value of the warrant derivative liabilities to stockholders’ equity when we adopted ASU 2017-11.

15

The specific terms of the convertible debts and outstanding balances as of September 30, 2017 are listed in the table below.

Inception Date	Term	Loan Amount		Outstanding Balance		Original Issue Discount			Interest Rate			Deferred Finance Fees		Discount related to fair value of conversion feature and warrants/shares
July 22, 2015	30 months1	$	2,180,000	$	2,180,000	$	218,000	2		10	%3	$	388,532	$	2,163,074
September 25, 2015	30 months1		1,100,000		1,100,000		110,000	2		10	%3		185,956		1,022,052
October 2, 2015	30 months1		150,000		150,000		15,000	2		10	%3		26,345		140,832
October 6, 2015	30 months1		30,000		30,000		3,000	2		10	%3		5,168		26,721
October 14, 2015	30 months1		50,000		50,000		5,000	2		10	%3		8,954		49,377
November 2, 2015	30 months1		250,000		250,000		25,000	2		10	%3		43,079		222,723
November 10, 2015	24 months		50,000		50,000		5,000	2		10	%3		8,790		46,984
November 12, 2015	24 months		215,000		215,000		21,500	2		10	%3		38,518		212,399
November 20, 2015	24 months		200,000		200,000		20,000	2		10	%3		37,185		200,000
December 4, 2015	24 months		170,000		170,000		17,000	2		10	%3		37,352		170,000
December 11, 2015	24 months		360,000		360,000		36,000	2		10	%3		75,449		360,000
December 18, 2015	24 months		55,000		55,000		5,500	2		10	%3		11,714		55,000
December 31, 2015	24 months		100,000		100,000		10,000	2		10	%3		20,634		100,000
January 11, 2016	24 months		100,000		100,000		10,000	2		10	%3		24,966		80,034
January 20, 2016	24 months		50,000		50,000		5,000	2		10	%3		9,812		40,188
January 29, 2016	24 months		300,000		300,000		30,000	2		10	%3		60,887		239,113
February 26, 2016	24 months		200,000		200,000		20,000	2		10	%3		43,952		156,048
March 10, 2016	24 months		125,000		125,000		12,500	2		10	%3		18,260		106,740
March 18, 2016	24 months		360,000		360,000		36,000	2		10	%3		94,992		265,008
March 24, 2016	24 months		106,667		106,667		10,667	2		10	%3		15,427		91,240
March 31, 2016	24 months		177,882		177,882		17,788	2		10	%3		2,436		175,446
June 15, 2016	6 months		40,000		-		-			12	%		-		3,680
June 17, 2016	6 months		40,000		-		-			12	%		-		3,899
June 22, 2016	6 months		35,000		-		-			12	%		-		3,373
July 6, 2016	6 months		85,000		-		-			12	%		-		15,048
July 29, 2016	6 months		100,000		-		-			12	%		-		25,518
September 15, 2016	8 months		500,000		-		85,541			9	%		-		65,972
April 3, 2017	8 months		50,000		-		-			10	%		-		-
		$	7,179,549	$	6,329,549	$	718,496					$	1,158,408	$	6,040,469

1 The loan term was extended by 180 days.

2 The original issue discount is reflected in the first year.

3 The annual interest starts accruing in the second year.

The closings above included a total of approximately $291,000 of convertible debentures purchased by related parties who were members of the Company’s Board of Directors and management and their family members.

At any time after six months from the original Issue Date until the maturity date, the Company has the right to prepay the above Debentures in cash for 120% of the principal amount outstanding and any accrued interest.

In January 2017, we executed an amendment to the July 6, 2016 convertible note that was due on January 6, 2017. We received an extension of up to three months on the note’s due date. In exchange for the extension, we agreed to issue 1,667 shares of restricted common stock and pay the investor $10,000 for each 30-day extension. The shares issued for the extension were valued at $10,000 and recorded as interest expense. We made a payment of $34,000 in January 2017 for the first one-month extension and 12% annual interest on the note from the initial close date through February 6, 2017. The Investor had the right, at any time, to convert all or part of the outstanding and unpaid principal sum and accrued interest into shares of common stock at the conversion price of $13.50. On February 28, 2017, the note was paid in full. We accounted for the loan extension as a debt modification.

On April 3, 2017, we signed a six-month agreement with an investor relations firm. The agreement includes a cash payment of $10,000 plus a convertible 8-month note for $50,000 with the following significant terms: (i) convertible at $12.00/share, (ii) bears 10% annual interest, (iii) a 20% pre-payment penalty if the Company wants to pre-pay the Note, and (iv) a default rate of 18%. We terminated the agreement on June 7, 2017 and the investor relations firm agreed to forgive the loan. Since we did not receive any cash in connection with the note and neither did the IR firm provide any services, the forgiveness did not result in any gain upon termination of the agreement.

16

Revolving Note Payable

On October 28, 2016, an accredited investor (the “Investor”) purchased from us a promissory note in the aggregate principal amount of up to $2,000,000 (the “Revolving Note”) due and payable on the earlier of October 28, 2017 (the “Maturity Date”) or on the seventh business day after the closing of a Qualified Offering (as defined in the Revolving Note). The Investor is obligated to provide us with advances of $250,000 under the Revolving Note, but the Investor shall not be required to advance more than $250,000 in any individual fifteen (15) day period and no more than $500,000 in the thirty (30) day period immediately following the date of the initial advance. We received $3,500,000 pursuant to the Revolving Note as amended and we issued to the Investor warrants to purchase 250,000 shares of our Common Stock at an exercise price per share equal to $12.00 per share. The terms of the Warrants are identical except for the exercise date, issue date, and termination date which are based on the advance date.

The Revolving Note was amended on May 2, 2017 to increase the aggregate principal amount to $3,000,000, to issue 16,667 shares of our Common Stock to the Investor, to decrease the exercise price per share of the warrants to the lower of (i) $12.00 or (ii) the per share purchase price of the shares of our Common Stock sold in the Qualified Offering, and to change the references in the Revolving Note from “the six (6) month anniversary of October 28, 2016” to “July 25, 2017.” The fair value of the 16,667 shares issued was accounted for as a note discount and are amortized to interest expense over the life of the loan. We evaluated the accounting impact of the Revolving Note amendment and deemed that the amendment did not have a material impact on our consolidated financial statements.

The Revolving Note was further amended on August 18, 2017 to increase the aggregate principal amount to $3,500,000 with all other terms unchanged.

In the event that a Qualified Offering had occurred after July 25, 2017, but prior to the Maturity Date, within seven (7) Business Days of the closing of the Qualified Offering, the Company was to pay a cash fee equal to five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the closing date of the Qualified Offering or, at the option of the Company, issue to the Holder a number of restricted shares of the Company’s common stock equal to (x) five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the closing date of the Qualified Offering divided by (y) the purchase price provided by the documents governing the Qualified Offering. A Qualified Offering means the completion of a public offering of the Company’s securities pursuant to which the Company receives aggregate gross proceeds of at least Seven Million United States Dollars (US$7,000,000) in consideration of the purchase of its securities and resulting in, pursuant to the effectiveness of the registration statement for such offering, the Company’s common stock being traded on the NASDAQ Capital Market, NASDAQ Global Select Market or the New York Stock Exchange. A Qualified Offering did not occur on or prior to the Maturity Date.

In the event that a Qualified Offering had not occurred after July 25, 2017, but prior to the Maturity Date, within seven (7) Business Days of the closing of the Qualified Offering, the Company shall pay a cash fee equal to five percent (5%) of the total outstanding amount owed by the Company to the Holder or, at the option of the Company, issue to the Holder a number of restricted shares of the Company’s common stock equal to (x) five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the Maturity Date divided by (y) the VWAP of the Company’s common stock for the last ten trading days preceding the Maturity Date. A Qualified Offering did not occur on or prior to the Maturity Date.

Interest on the principal balance of the Revolving Note shall be paid in full on the Maturity Date, unless otherwise paid prior to the Maturity Date. Interest shall be assessed as follows: (i) a one-time interest of 10% on all principal amounts advanced prior to April 28, 2017; (ii) the foregoing and 4% on any amount remaining outstanding if the principal amount is repaid between April 28, 2017 and July 28, 2017; or (iii) both of the foregoing and 4% on any amount remaining outstanding if the principal amount is repaid between July 28, 2017 and October 28, 2017.

Broker fees amounting to $296,500, the one-time interest of $350,000 and the fair value of the 250,000 warrants issued to the Investor amounting to $1,148,275 were recorded as debt discounts and amortized over the term of the revolving note. The unamortized debt discounts as of September 30, 2017 related to the Revolving Note amounted to $335,833.

The Revolving Note was still outstanding as of October 28, 2017. We continue to accrue interest on the note.

The following table provides a summary of the changes in convertible debt and revolving note payable, net of unamortized discount, during 2017:

	2017
Balance at January 1,	$	5,273,937
Adjustment due to ASU 2017-11		923,468
Issuance of convertible debt, face value		2,300,000
Forgiveness of Debt		(50,000	)
Deferred financing cost		(180,000	)
Debt discount related to one-time interest charge		(225,000	)
Debt discount from incentive shares to increase the Revolving Note aggregate principal limit		(150,000	)
Debt discount from shares and warrants issued with the notes		(668,544	)
Payments		(840,541	)
Accretion of interest and amortization of debt discount to interest expense through September 30,		3,322,736
Balance at September 30,		9,706,056
Less: current portion		9,706,056
Convertible debt, long-term portion	$	-

17

Other Notes

On January 6, 2016 we signed a Merchant Agreement with a lender. Under the agreement we received $250,000 in exchange for second position rights to all customer receipts until the lender is paid $322,500, which is collected at the rate of $1,280 per business day. The payments were secured by second position rights to all customer receipts until the loan has been paid in full. $138,840 of the proceeds were used to pay off the outstanding balance of a previous loan from another lender. The Company recognized a gain on the settlement of the previous loan of $5,044 which was credited to interest expense. The Company paid $2,500 in fees in connection with this loan. We received an additional $93,161 in June 2016 under the existing Merchant Agreement. The note is no longer outstanding as of September 30, 2017.

On February 8, 2016 we signed a Merchant Agreement with a lender. Under the agreement we received $100,000 in exchange for third position rights to all customer receipts until the lender is paid $129,900, which is collected at the rate of $927 per business day. The Company paid $2,000 in fees in connection with this loan. We received an additional $125,000 in June 2016 under the existing Merchant Agreement of which $48,420 was used to pay off the prior loan. The lender provided an additional $70,000 on August 16, 2016. As of September 30, 2017, the outstanding balance on this note was zero.

On August 26, 2016 we signed a Merchant Agreement with a lender. Under the agreement we received $122,465 net proceeds in exchange for third position rights to all customer receipts which is collected at the rate of $1,386 per business day. As of September 30, 2017, the outstanding balance on this note was zero.

On February 6, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $125,000. The Company paid $1,250 in fees in connection with this loan. Under the agreement, $16,180 was used to pay off the prior loan. The loan was no longer outstanding as of September 30, 2017.

On February 15, 2017, we received six-month, non-convertible loans in the aggregate of $220,000 from two accredited investors. We agreed to issue each investor 5,667 shares of restricted common stock. The loans earn no interest but carry a 10% original issue fee. We recorded the fair value of the shares amounting to $43,616 as debt discounts that will be amortized to interest expense during the term of the loans. We received a one-month extension on one loan and two one-month extensions on the other. Each extension required a 10% fee to the lender. We treated these extensions as loan extinguishments and accordingly wrote off the original debt and recorded new debt to include the extension fees as part of the principal amount. The extension fees of $33,000 were recorded as losses on extinguishment of debt in the consolidated financial statements. One loan remains outstanding as of September 30, 2017 with a balance of $132,000 that was subsequently paid off entirely by October 31, 2017. We amortized $59,794 of debt discounts in the nine months ended September 30, 2017. The unamortized debt discounts as of September 30, 2017 were $3,822.

On March 2, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $75,750. The Company paid no fees in connection with this loan. The loan was no longer outstanding as of September 30, 2017.

On March 14, 2017, we received an eight-month, non-convertible loan of $250,000 from a privately-held investment firm. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We also agreed to issue the investor 8,333 shares of restricted common stock. We recorded the fair value of the shares amounting to $46,748 as a debt discount that will be amortized to interest expense during the term of the loan. The loan still remains outstanding as of September 30, 2017 with a balance of $250,000. We amortized $62,651 of the debt discount in the nine months ended September 30, 2017. The unamortized debt discount as of September 30, 2017 was $14,097. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the lowest closing stock price for the 15 trading days prior to conversion.

18

On March 21, 2017, we received an eight-month, non-convertible loan of $170,000 from an accredited investor. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We also agreed to issue the investor 5,667 shares of restricted common stock. We recorded the fair value of the shares amounting to $35,079 as a debt discount that will be amortized to interest expense during the term of the loan. The loan still remains outstanding as of September 30, 2017 with a balance of $170,000. We amortized $41,025 of debt discounts in the nine months ended September 30, 2017. The unamortized debt discount as of September 30, 2017 was $11,054.

On April 19, 2017, we received a 7-month non-convertible loan of $250,000 from a privately-held investment firm. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We agreed to issue 833 shares at closing. Until the loan was repaid, we agreed that over the next one hundred eighty (180) days to issue 2,500 shares to the Investor every sixty (60) days for a total issuance of 8,333 shares. The loan remains outstanding and we have issued 5,833 shares including the closing shares since inception of the loan. We recorded the fair value of the 5,833 shares amounting to $32,684 as a debt discount that will be amortized to interest expense during the term of the loan. We amortized $45,264 of debt discounts in the nine months ended September 30, 2017. The unamortized debt discount as of September 30, 2017 was $12,420. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the lowest closing stock price for the 15 trading days prior to conversion.

On May 19, 2017, we received a 45-day non-convertible loan of $630,000 from a private investor. The loan provides guaranteed interest of $63,000 and has an origination fee of $32,000. We paid a broker $31,500 in connection with this loan. The unamortized debt discount as of September 30, 2017 was zero. We used these proceeds to pay off in full our September 2016 loan of $589,189. The loan remains outstanding and accrues interest at a 20% annual rate from the maturity date.

On June 6, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $250,000. The lender is entitled to receipts which are collected at the rate of $1,833 per business day. The Company paid $6,250 in fees in connection with this loan. Under the agreement, $119,021 was used to pay off three prior loans. The unamortized debt discount as of September 30, 2017 was $2,357. The loan remains outstanding as of September 30, 2017 with a balance of approximately $157,820.

On June 21, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $150,000. The lender is entitled to receipts which are collected at the rate of $1,361 per business day. The Company paid $1,498 in fees in connection with this loan. The unamortized debt discount as of September 30, 2017 was $509. The loan remains outstanding as of September 30, 2017 with a balance of approximately $81,000. We accounted for the Merchant Agreement as a loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On July 17, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $125,000. The lender is entitled to receipts which are collected at the rate of $1,250 per business day. The Company paid $1,250 in fees in connection with this loan. The loan remains outstanding as of September 30, 2017 with a balance of approximately $82,000.

On August 1, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $75,000. The loan includes $18,750 representing an original issue discount, interest and fees resulting in a total payable of $93,750. The loan remains outstanding as of September 30, 2017 with a balance of approximately $56,000.

On September 12, 2017, we received a 9-month non-convertible loan of $225,000 from a privately-held investment firm. The loan earns an annual interest rate of 10%. The Company paid total fees of $25,000 including original issue discount and other costs related to this loan. We agreed to issue 3,333 shares at closing. We recorded the fair value of the shares as a debt discount that will be amortized to interest expense during the term of the loan. We amortized $2,505 of debt discounts in the nine months ended September 30, 2017. The unamortized debt discount as of September 30, 2017 was $35,495. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the average of the two lowest daily volume weighted average closing stock price for the 20 trading days prior to conversion.

7) 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”)

As of September 30, 2017, 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, 2016 for the pertinent disclosures of preferred stock.

19

Stock Options and Warrants

Our stockholders approved our amended 2005 Equity Incentive Plan (the “Plan”) pursuant to which an aggregate of 1,800,000 shares of our common stock were reserved for issuance upon exercise of stock options or other equity awards made under the Plan. Under the Plan, we may award stock options, shares of common stock, and other equity interests in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. As of September 30, 2017, options to acquire 35,274 shares were outstanding under the Plan.

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, 2017, options to acquire 84,425 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, 2017, non-qualified options to acquire 129,937 shares were outstanding under the Plan.

All of the outstanding non-qualified options had an exercise price that was at or above the Company’s common stock share price at time of issuance.

The following tables summarize information concerning options and warrants outstanding and exercisable:

	Stock Options					Warrants
	Weighted					Weighted
	Average					Average								Total
	Shares			Price per share		Shares			Price per share		Shares			Exercisable
Balance outstanding, 12/31/16		175,642		$	12.60		881,990		$	12.00		1,057,632			991,032
Granted		87,198			8.40		230,610			11.40		317,808
Exercised		—					(19,889	)		7.50		(19,889	)
Expired		(3,202	)		30.00		(190,678	)		11.70		(193,880	)
Forfeited		(10,002	)		10.10		—			—		(10,002	)
Balance outstanding, 9/30/2017		249,636		$	10.93		902,033		$	12.00		1,151,669			1,061,140

20

	Options Outstanding						Options Exercisable
	Weighted Average						Weighted Average
Range of Exercise Prices	Number of Options		Remaining Contractual Life (Years)		Exercise Price		Number of Options		Remaining Contractual Life (Years)		Exercise Price
$7.50 - $11.99		135,524		8.5	$	8.63		70,995		7.7	$	8.83
12.00 – 14.99		88,705		8.0		12.00		62,705		7.9		12.00
15.00 – 17.99		7,547		4.9		15.00		7,547		4.9		15.00
18.00 – 20.99		12,854		2.4		18.00		12,854		2.4		18.00
21.00 – 30.00		5,006		2.9		30.00		5,006		2.9		30.00
$7.50 - $30.00		249,636		7.8	$	10.93		159,107		7.0	$	11.78

As of September 30, 2017, the total estimated fair value of unvested stock options to be amortized over their remaining vesting period was $488,912. The non-cash, stock-based compensation expense associated with the vesting of these options is expected to be $87,359 remaining in 2017, $272,539 in 2018, $106,477 in 2019 and $22,537 in 2020. The fair value of options granted in 2017 was $487,914.

The aggregate intrinsic value associated with the options outstanding and exercisable as of September 30, 2017 was zero. The aggregate intrinsic value associated with the warrants outstanding and exercisable as of September 30, 2017 was zero.

In January 2017, we issued warrants to purchase 3,334 shares of restricted common stock with a fair value of $15,558 to an investor relations firm for services performed.

Common Stock Issuances

On various dates from January to March 2017, the Company issued 27,000 shares of restricted common stock to investors as compensation for loans provided to us.

On June 9, 2017, one shareholder converted 6,000 shares of Series G Convertible Preferred Stock into 2,000 shares of common stock and converted 6,300 shares of Series J Convertible Preferred Stock into 2,100 shares of common stock.

On various dates for the nine months ended September 30, 2017, the Company issued 38,606 shares of common stock based on the 10-day VWAP prior to quarter end to holders of the Debentures in payment of the quarterly interest accrued from the Debentures first anniversary date through March 31, 2017 for an aggregate amount of $309,466. We recognized a $123,862 gain on extinguishment of debt by calculating the difference of the shares valued on the issuance date and the amount of accrued interest through March 31, 2017.

On April 1, 2017, we issued 1,667 shares of restricted common stock to an investor relations firm and recorded the common stock’s fair value of $15,000 as administrative expense in the nine months ended September 30, 2017.

On April 19, 2017, we received a 7-month non-convertible loan of $250,000 from a privately-held investment firm. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We agreed to issue 833 shares at closing. Until the loan was repaid, we agreed that over the next one hundred eighty (180) days to issue 2,500 shares to the Investor every sixty (60) days for a total issuance of 8,333 shares. The loan remains outstanding and we have issued 5,833 shares including the closing shares since inception of the loan.

The Revolving Note was amended on May 2, 2017 to increase the aggregate principal amount to $3,000,000. In exchange for this increase, we agreed to issue 16,667 shares of our Common Stock to the Investor, to decrease the exercise price per share of the warrants to the lower of (i) $12.00 or (ii) the per share purchase price of the shares of our Common Stock sold in a qualified offering, and to change the trigger date in the Revolving Note from April 28, 2017 (the six month anniversary of October 28, 2016) to July 25, 2017. The Revolving Note was further amended on August 18, 2017 to increase the aggregate principal amount to $3,500,000 with all other terms unchanged.

On May 10, 2017, we received $149,164 from the exercise of 19,889 stock purchase warrants from the Series D registered direct offering on November 10, 2011. We paid $8,949 to a broker in connection with the warrant exercises. In consideration for the warrant exercises, we issued to the investors warrants to purchase 39,778 shares of our Common Stock at an exercise price per share equal to $8.40 per share. The warrants expire on the third year anniversary date. We determined the fair value of $186,802 for these warrants and recorded the value as other expenses.

On September 12, 2017, we received a 9-month non-convertible loan of $225,000 from a privately-held investment firm. The loan earns an annual interest rate of 10%. The Company paid total fees of $25,000 including original issue discount and other costs related to this loan. We agreed to issue 3,333 shares at closing. We recorded the fair value of the shares amounting to $13,000 as a debt discount that will be amortized to interest expense during the term of the loan.

On September 20, 2017, we issued 4,000 shares of restricted common stock to an investor relations firm and recorded the common stock’s fair value of $16,000 as administrative expense in the nine months ended September 30, 2017.

8) Subsequent Events

On September 29, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $75,000 that was disbursed to us on October 4, 2017. The lender is entitled to receipts which are collected at the rate of $1,200 per business day for approximately four months. The Company paid $1,500 in fees in connection with this loan. We accounted for the Merchant Agreement as a loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On October 11, 2017, we received a one-year convertible loan of $85,000 from a privately-held investment firm. The Company paid total fees of $4,250 related to this loan. This loan was repaid in full on October 27, 2017.

On October 25, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $110,000. The lender is entitled to receipts which are collected at the rate of $1,539 per business day for approximately five months. The Company paid $1,250 in fees in connection with this loan. We accounted for the Merchant Agreement as a loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On October 25, 2017, we received a nine month convertible loan of $103,000 from a privately-held investment firm. The Company paid total fees of $3,000 related to this loan and will pay 12% interest annually. Six months after the issuance date and at the option of the holder, the loan is convertible into common stock at a 42% discount to the average of the two lowest closing stock prices for the 15 trading days prior to conversion.

On October 27, 2017, we received a one-year convertible loan of $170,000 less $4,250 fees and less $85,000 used to retire the convertible note dated October 11, 2017. Six months after the issuance date and at the option of the holder, the loan is convertible into common stock at a 38% discount to the lowest daily volume weighted average closing stock price for the 15 trading days prior to conversion.

On November 2, 2017, EMA Financial, LLC issued us a one-year convertible loan of $150,000 less $7,500 fees. The loan is convertible at $7.50 per share and has 5% annual interest rate. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the lowest daily volume weighted average closing stock price for the 20 trading days prior to conversion.

21

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 have sufficient liquidity to finance normal operations;

● the options we may pursue in light of our financial condition;

● 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;

● our belief that PCT has achieved initial market acceptance in the mass spectrometry and other markets;

● the expected increase in the number of pressure cycling technology (“PCT”)and constant pressure (“CP”) based units installed and the increase in revenues from the sale of consumable products and extended service contracts;

● 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;

● 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;

22

● the advantages of PCT over other current technologies as a method of biological sample preparation in biomarker discovery, forensics, and histology and 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;

● 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 our other products.

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, 2016. We qualify all of our forward-looking statements by these cautionary statements.

23

OVERVIEW

We are focused on solving the challenging problems inherent in biological sample preparation, a crucial laboratory step performed by scientists worldwide working in biological life sciences research. Sample preparation is a term that refers to a wide range of activities that precede most forms of scientific analysis. Sample preparation is often complex, time-consuming and, in our belief, one of the most error-prone steps of scientific research. It is a widely-used laboratory undertaking – the requirements of which drive what we believe is a large and growing worldwide market. We have developed and patented a novel, enabling technology platform that can control the sample preparation process. It is based on harnessing the unique properties of high hydrostatic pressure. This process, which we refer to as Pressure Cycling Technology, or PCT, uses alternating cycles of hydrostatic pressure between ambient and 45,000 psi or greater to safely, conveniently and reproducibly control the actions of molecules in biological samples, such as cells and tissues from human, animal, plant and microbial sources.

Our pressure cycling technology uses internally developed instrumentation that is capable of cycling pressure between ambient and ultra-high levels at controlled temperatures and specific time intervals, to rapidly and repeatedly control the interactions of bio-molecules, such as deoxyribonucleic acid (“DNA”), ribonucleic acid (“RNA”), proteins, lipids and small molecules. Our laboratory instrument, the Barocycler^®, and our internally developed consumables product line, which include our Pressure Used to Lyse Samples for Extraction (“PULSE”) tubes, and other processing tubes, and application specific kits such as consumable products and reagents, together make up our PCT Sample Preparation System (“PCT SPS”).

We have experienced negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of September 30, 2017, we did not have adequate working capital resources to satisfy our current liabilities and as a result we have substantial doubt about our ability to continue as a going concern. Based on our current projections, including equity financing subsequent to September 30, 2017, we believe we will have the cash resources that will enable us to continue to fund normal operations into the foreseeable future.

We need substantial additional capital to fund normal operations in future periods. If we are able to obtain additional capital or otherwise increase our revenues, we may increase spending in specific research and development applications and engineering projects and may hire additional sales personnel or invest in targeted marketing programs. In the event that we are unable to obtain financing on acceptable terms, or at all, we 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.

We have 14 United States granted patents and one foreign granted patent (Japan: 5587770, EXTRACTION AND PARTITIONING OF MOLECULES) covering multiple applications of PCT in the life sciences field. PBI also has 19 pending patents in the USA, Canada, Europe, Australia, China, and Taiwan. PCT employs a unique approach that we believe has the potential for broad use in a number of established and emerging life sciences areas, which include, but are not limited to:

● biological sample preparation – including but not limited to sample extraction, homogenization, and digestion - in such study areas as genomic, proteomic, lipidomic, metabolomic and small molecules;

● pathogen inactivation;

● protein purification;

● control of chemical reactions, particularly enzymatic; and

● immunodiagnostics.

24

We reported a number of accomplishments in the first nine months of 2017:

On November 1, 2017, the Company announced it had initiated an aggressive marketing and sales strategy expected to drive significant expansion in China.

On October 18, 2017, the Company and Phasex Corporation announced a strategic collaboration addressing broad markets for stable, water-soluble nanoemulsions.

On October 10, 2017, the Company announced that its penetration into the European biopharma and high pressure markets was continuing to expand via multiple scientific presentations in Germany, Poland, and Ireland.

On October 2, 2017, the Company announced it was issued two patents on its widely-applicable, high pressure-based Ultra Shear Technology. PBI believes that UST can be used to create or improve a broad range of medical, consumer, and industrial products through the preparation of high quality nanoemulsions and “clean label” food.

On September 18, 2017, the Company announced that the Barocycler 2320EXTREME was named a finalist in the prestigious 2017 R&D 100 Awards. Known as the “Oscars of Innovation”, the R&D 100 Awards recognize the top 100 revolutionary technologies of the past year.

On June 5, 2017, the Company announced that Professor Ruedi Aebersold, a worldwide expert in proteomics and one of PBI’s most well-known clients, received the prestigious Karger Medal for significant contributions to the development of new bioanalytical methods.

On June 2, 2017, the Company announced a one-for-thirty reverse split of our common stock, to become effective on June 5, 2017. Please see the Company’s second quarter Form 10Q for more details.

On April 10, 2017, the Company announced that Joseph Damasio, Jr. had joined the Company as its full-time Chief Financial Officer and Vice President of Finance.

On March 23, 2017, the Company announced that it had significantly bolstered its marketing and sales capabilities by contracting with EKG Sales Associates, a lead generation company and by hiring two of its planned four additional field sales directors.

On March 1, 2017, the Company announced that its Barocycler 2320EXTREME had been named the “Best New Instrument for Sample Preparation 2017” by Corporate America News (“Corp America”) as part of the publication’s 2017 North American Excellence Awards.

On February 2, 2017, the Company announced that it had achieved CE Marking for the Barocycler 2320EXTREME, the Company’s recently released, next-generation PCT-based sample preparation instrument. CE Marking permits PBI to begin sales of the Barocycler 2320EXT to the 31 countries of the European Economic Area.

Results of Operations

Comparison for the three months ended September 30, 2017 (“Q3 2017”) and 2016 (“Q3 2016”)

Total Revenue

We recognized total revenue of $646,061 for Q3 2017 compared to $535,334 for Q3 2016, an increase of $110,727 or 21%. This increase was primarily attributable to increases in both instrument and consumable sales.

Products, Services, Other. Revenue from the sale of products and services increased 21% to $603,726 for Q3 2017 compared to $500,949 for the same period in 2016. Sales of consumables increased to an all-time record of $84,594 for Q3 2017 compared to $32,811 during the same period in 2016, an increase of 158%. Products, Services, and Other Revenue included $60,000 from non-cash instrument transactions in the current quarter. Revenue from non-cash instrument transactions was recognized on the fair value of the assets involved per ASC 845.

Grant Revenue. During the three months ended September 30, 2017, we recorded grant revenue of $42,335 compared to grant revenue of $34,385 in the comparable period in 2016, an increase of $7,950 or 23%.

Cost of Products and Services

The cost of products and services was $328,743 for the three months ended September 30, 2017 compared to $262,894 for the comparable period in 2016. Gross profit margin on products and services decreased slightly to 46% for Q3 2017 compared to 47% for the prior year period.

Research and Development

Research and development expenditures were $239,326 during the three months ended September 30, 2017 as compared to $268,317 in the same period in 2016, a decrease of $28,991 or 11%. The prior period included one-time expenditures related to efforts to get the Barocycler 2320EXTREME CE Marked.

Research and development expense recognized in the three months ended September 30, 2017 and 2016 included $37,345 and $14,735 of non-cash, stock-based compensation expense, respectively.

Selling and Marketing

Selling and marketing expenses increased to $301,676 for the three months ended September 30, 2017 from $224,380 for the comparable period in 2016, an increase of $77,296 or 34%. This increase was primarily attributable to expansion of the company’s sales force from one to five field sales directors during Q3 2017, plus recruitment fees.

During the three months ended September 30, 2017 and 2016, selling and marketing expense included $21,778 and $9,911 of non-cash, stock-based compensation expense, respectively.

General and Administrative

General and administrative costs totaled $901,588 for Q3 2017 compared to $231,550 for the comparable period in 2016 (Q3 2016 included approximately $400,000 of credits received from charges incurred several years earlier with a former professional service provider). Without these credits, the increase in General and Administrative expenses for Q3 2017 was approximately $270,000. This increase included one-time support activities related to our failed $12.5 million financing and concomitant up-list, including investor and public relations, the reverse stock split, consulting charges, and travel expenses. The increase in Q3 2017 expenses also included costs related to the hire of a chief financial officer, the complete over-haul of our website, and other activities that we believed would augment and support our 2017 fund raising and business growth efforts.

During the three months ended September 30, 2017 and 2016, general and administrative expense included $80,276 and $65,854 of non-cash, stock-based compensation expense, respectively.

25

Operating Loss

Our operating loss was $1,125,272 for the three months ended September 30, 2017 compared to $451,807 for the comparable period in 2016. This increase was due primarily to the one-time credits received from a former professional service provider in Q3 2016, headcount increases in sales and marketing during Q3 2017, and charges related to our failed $12.5 million financing and concomitant up-list.

Other Income (Expense), Net

Interest (Expense) Income

Interest expense was $1,554,381 for the three months ended September 30, 2017 compared to interest expense of $1,116,328 for the three months ended September 30, 2016. Interest expense reflected amortization of debt discounts related primarily to the sale of senior secured convertible debentures. The increase is primarily from deferred finance charges on our Revolving Note that closed October 2016 and amended in 2017 and discussed in Note 6 of the accompanying consolidated financial statements.

Change in fair value of warrant derivative liability

During the three months ended September 30, 2017, we reclassified non-cash charges for the six months ended June 30, 2017 of $288,886 for the Debenture warrant revaluation to stockholders’ equity based on new guidance in 2017. We recorded $227,131 non-cash income in the prior comparable period. The components for determining the fair value of the warrants are contained in the table in Note 4 of the accompanying consolidated financial statements.

Change in fair value of conversion option liability

During the three months ended September 30, 2017, we reclassified non-cash income for the six months ended June 30, 2017 of $43,673 for conversion option revaluation to stockholders’ equity based on new guidance in 2017. For the three months ended September 30, 2016 we recorded non-cash income $395,997 for conversion option liability revaluation. The components for determining the fair value of the conversion option liabilities are contained in the table in Note 4 of the accompanying consolidated financial statements.

26

Comparison for the nine months ended September 30, 2017 and 2016

Total Revenue

We recognized total revenue of $1,737,790 for the nine months ended September 30, 2017 as compared to $1,556,776 during the nine months ended September 30, 2016, an increase of $181,014 or 12%. This increase is attributable to increases in the sales of our products and services as detailed below.

Products, Services, Other. Revenue from the sale of products and services increased 13% to $1,610,124 for the first nine months of 2017 compared to $1,429,487 during the same period of 2016. This increase was primarily attributable to sales of the recently released Barocycler 2320EXT units. Sales of consumables were $200,233 for the nine month period ended September 30, 2017 compared to $149,819 during the same period in 2016, an increase of 34%.

Grant Revenue. During the first three quarters of 2017, we recorded grant revenue of $127,666 compared to grant revenue of $127,289 for the comparable period in 2016.

Cost of Products and Services

The cost of products and services was $852,039 for the nine month period ended September 30, 2017 compared to $727,698 for the comparable period in 2016. Gross profit margin on products and services was 47% for the nine months ended September 30, 2017, as compared to 49% for the prior period, a minimal decrease.

Research and Development

Research and development expenditures were $744,565 during the first nine months of 2017 compared to $925,015 during the same period in 2016, a decrease of $180,450 or 20%. The prior period included one-time expenditures related to our efforts to get the Barocycler 2320EXTREME CE Marked.

Research and development expense recognized in the nine months ended September 30, 2017 and 2016 included $76,263 and $50,766 of non-cash, stock-based compensation expense, respectively.

Selling and Marketing

Selling and marketing expenses increased to $814,796 for the nine months ended September 30, 2017 from $609,501 for the comparable period in 2016, an increase of $205,295 or 34%. This increase is primarily attributable to expansion of the company’s sales force by four individuals plus recruitment fees.

During the nine months ended September 30, 2017 and 2016, selling and marketing expense included $46,112 and $32,404 of non-cash, stock-based compensation expense, respectively.

General and Administrative

General and administrative costs totaled $2,655,056 for the nine months ended September 30, 2017 compared to $1,853,010 for the comparable period in 2016, an increase of $802,046 (Q1-Q3 2016 included approximately $400,000 of credits received from charges incurred several years earlier with a former professional service provider. Without these credits, the increase in General and Administrative expenses for Q1-Q3 2017 was approximately $400,000.) This increase included one-time support activities related to our failed $12.5 million financing and concomitant up-list, including investor and public relations, the reverse stock split, consulting charges, and travel expenses. The increase in Q1-Q3 2017 expenses also included costs related to the hire of a chief financial officer, the complete over-haul of our website, and other activities that we believed would augment and support our 2017 fund raising and business growth efforts.

27

During the nine months ended September 30, 2017 and 2016, general and administrative expense included $196,535 and $199,641 of non-cash, stock-based compensation expense, respectively.

Operating Loss

Our operating loss was $3,328,666 for the nine months ended September 30, 2017 compared to $2,558,448 for the comparable period in 2016. This 30% increase was primarily due to the hiring of four field sales directors, costs related to our failed $12.5 million financing and concomitant up-list, the hire of a CFO, and other expenses related to the growth of the business. Our Q1-Q3 2017 operating loss increase was also due to the approximately $400,000 of credits received from charges incurred with a former professional service provider in the prior year period.

Other Income (Expense), Net

Interest (Expense) Income

Interest expense was $4,431,950 for the nine months ended September 30, 2017 as compared to interest expense of $2,961,708 for the nine months ended September 30, 2016. The increase in interest expense is primarily from the amortization of debt discounts relating to the sale of senior secured convertible debentures and other convertible and non-convertible notes. See Note 6 for ASU 2017-11 early adoption accounting impact.

Change in fair value of warrant derivative liability

We adopted new guidance early relating to derivative accounting in 2017. Accordingly, we did not record a change in fair value measurement for the nine months ended September 30, 2017.

Change in fair value of conversion option liability

We adopted new guidance early relating to derivative accounting in 2017. Accordingly, we did not record a change in fair value measurement for the nine months ended September 30, 2017.

Incentive warrants for warrant exercises

On May 10, 2017, we received $149,164 from the exercise of 19,889 stock purchase warrants from the Series D registered direct offering on November 10, 2011. In consideration for the warrant exercises, we issued to the investors warrants to purchase 39,778 shares of our Common Stock at an exercise price per share equal to $8.40 per share. The warrants expire on the third year anniversary date. We determined the fair value of $186,802 for these warrants and recorded the value as other expenses.

28

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, 2017, 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. We have been successful in raising cash through debt and equity offerings in the past and as described in Note 6 of the accompanying consolidated financial statements, we received $4,610,967 in net proceeds from loans and warrant exercises in the first nine months of 2017. 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. In the event that 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 months ended September 30, 2017 was $3,139,767 as compared to $2,737,516 for the nine months ended September 30, 2016. We had a slightly higher operating loss in the current period because of the reasons previously detailed, plus additional interest expense.

Net cash used in investing activities for the nine months ended September 30, 2017 totaled $16,617 compared to $3,273 in the prior period. Cash capital expenditures included laboratory equipment and IT equipment.

Net cash provided by financing activities for the nine months ended September 30, 2017 was $3,036,744 as compared to $2,665,945 for the same period in the prior year. The cash from financing activities in the period ending September 30, 2017 included $2,070,000 from our Revolving Note and $140,215 from warrant exercises. We also received $2,400,752 from non-convertible debt, net of fees, less payment on non-convertible debt of $783,682 and payment on convertible debt of $840,541. The prior period included proceeds from senior secured convertible debt.

29

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, 2017, 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, 2017 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, 2016. 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, 2017, 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, 2017 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

30

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, 2016. The risks described in our Form 10-K 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 1 of our Annual Report on Form 10-K for the year ended December 31, 2016.

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

The Revolving Note discussed in Note 6 of the accompanying consolidated financial statements was amended on May 2, 2017 to increase the aggregate principal amount to $3,000,000, to issue 16,667 shares of our Common Stock to the Investor, to decrease the exercise price per share of the warrants to the lower of (i) $12.00 or (ii) the per share purchase price of the shares of our common stock sold in a Qualified Offering, and to change the trigger date in the Revolving Note from April 28, 2017 (the six month anniversary of October 28, 2016) to July 25, 2017.

On May 10, 2017, we received $149,164 from the exercise of 19,889 stock purchase warrants from the Series D registered direct offering on November 10, 2011. In consideration for the warrant exercises, we issued to the investors warrants to purchase 39,778 shares of our Common Stock at an exercise price per share equal to $8.40 per share. The warrants expire on the third year anniversary date.

For the three months ended September 30, 2017, we received $750,000 pursuant to the Revolving Note as amended and we issued to the Investor warrants to purchase 62,500 shares of our Common Stock at an exercise price per share equal to $12.00 per share.

On September 12, 2017, we received a 9-month non-convertible loan of $225,000 from a privately-held investment firm. The loan earns an annual interest rate of 10%. The Company paid total fees of $25,000 including original issue discount and other costs related to this loan. We agreed to issue 3,333 shares at closing. We recorded the fair value of the shares amounting to $13,000 as a debt discount that will be amortized to interest expense during the term of the loan.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

31

Item 6. Exhibits

Exhibits
31.1*	Principal Executive Officer and Principal Financial Officer Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Principal Financial Officer Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Principal Executive Officer Certification Pursuant to Item 601(b)(32) of Regulation S-K, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Principal Financial Officer Certification Pursuant to Item 601(b)(32) of Regulation S-K, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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.

32

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 13, 2017	By:	/s/ Richard T. Schumacher
		Richard T. Schumacher
		President & Chief Executive Officer
		(Principal Executive Officer)
Date: November 13, 2017	By:	/s/ Joseph L. Damasio, Jr.
		Joseph L. Damasio, Jr.
		Vice President of Finance & Chief Financial Officer
		(Principal Financial Officer)

33

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard T. Schumacher, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Pressure BioSciences, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 13, 2017

/s/ Richard T. Schumacher

Richard T. Schumacher

President & Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph L. Damasio, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Pressure BioSciences, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 13, 2017

/s/ Joseph L. Damasio, Jr.

Joseph L. Damasio, Jr.

Vice President of Finance & Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

In connection with the Quarterly Report on Form 10-Q of Pressure BioSciences, Inc., a Massachusetts corporation (the “Company”) for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard T. Schumacher, President and Chief Executive Officer of the Company, do hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) that:

(1) The Report of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2017	By:	/s/ Richard T. Schumacher
		Richard T. Schumacher
		President & Chief Executive Officer
		(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Pressure BioSciences, Inc. and will be retained by Pressure BioSciences, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

In connection with the Quarterly Report on Form 10-Q of Pressure BioSciences, Inc., a Massachusetts corporation (the “Company”) for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph L. Damasio, Jr., Principal Financial Officer of the Company, do hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) that:

(1) The Report of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2017	By:	/s/ Joseph L. Damasio, Jr.
		Joseph L. Damasio, Jr.
		Vice President & Chief Financial Officer
		(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Pressure BioSciences, Inc. and will be retained by Pressure BioSciences, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 07, 2017
Document And Entity Information
Entity Registrant Name	PRESSURE BIOSCIENCES INC
Entity Central Index Key	0000830656
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,154,422
Trading Symbol	PBIO
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2017

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
CURRENT ASSETS
Cash and cash equivalents	$ 18,723	$ 138,363
Accounts receivable, net of $28,169 reserve at September 30, 2017 and December 31, 2016	548,316	281,320
Inventories, net of $20,000 reserve at September 30, 2017 and December 31, 2016	1,122,782	905,284
Prepaid income taxes	7,482	7,405
Prepaid expenses and other current assets	146,278	258,103
Total current assets	1,843,581	1,590,475
Investment in available-for-sale equity securities	25,986	25,865
Property and equipment, net	19,004	9,413
TOTAL ASSETS	1,888,571	1,625,753
CURRENT LIABILITIES
Accounts payable	853,173	407,249
Accrued employee compensation	298,675	249,596
Accrued professional fees and other	1,352,658	956,884
Deferred revenue	313,992	159,654
Revolving note payable, net of unamortized debt discounts of $335,833 and $637,030, respectively	3,164,167	612,970
Related party convertible debt, net of debt discount of $65,240 and $0, respectively	225,894
Convertible debt, net of unamortized debt discounts of $355,375 and $2,235,839, respectively	6,315,995	4,005,702
Other debt, net of unamortized discounts of $80,747 and $380, respectively	1,952,859	238,157
Warrant derivative liability		1,685,108
Conversion option liability		951,059
Total current liabilities	14,477,413	9,266,379
LONG TERM LIABILITIES
Related party convertible debt, net of debt discount of $0 and $165,611, respectively		125,523
Convertible debt, net of debt discount of $0 and $740,628, respectively		529,742
Deferred revenue	61,592	87,527
TOTAL LIABILITIES	14,539,005	10,009,171
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS’ DEFICIT
Common stock, $.01 par value; 100,000,000 shares authorized; 1,154,422 and 1,033,328 shares issued and outstanding on September 30, 2017 and December 31, 2016, respectively	11,544	10,333
Warrants to acquire common stock	9,721,627	6,325,102
Additional paid-in capital	29,976,405	27,544,265
Accumulated other comprehensive income	6,190
Accumulated deficit	(52,367,211)	(42,264,190)
Total stockholders’ deficit	(12,650,434)	(8,383,418)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	1,888,571	1,625,753
Series D Convertible Preferred Stock [Member]
STOCKHOLDERS’ DEFICIT
Convertible Preferred Stock, value	3	3
Series G Convertible Preferred Stock [Member]
STOCKHOLDERS’ DEFICIT
Convertible Preferred Stock, value	806	866
Series H Convertible Preferred Stock [Member]
STOCKHOLDERS’ DEFICIT
Convertible Preferred Stock, value	100	100
Series H2 Convertible Preferred Stock [Member]
STOCKHOLDERS’ DEFICIT
Convertible Preferred Stock, value
Series J Convertible Preferred Stock [Member]
STOCKHOLDERS’ DEFICIT
Convertible Preferred Stock, value	34	35
Series K Convertible Preferred Stock [Member]
STOCKHOLDERS’ DEFICIT
Convertible Preferred Stock, value	$ 68	$ 68

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Accounts receivable, reserve	$ 28,169	$ 28,169
Inventories reserve	20,000	20,000
Revolving note payable, unamortized discount	335,833	637,030
Convertible debt related party unamortized debt discount current, net	65,240	0
Convertible debt, current unamortized discounts	355,375	2,235,839
Other debt, unamortized discounts net	80,747	380
Convertible debt related party unamortized debt discount net	0	165,611
Convertible debt, non current unamortized discounts	$ 0	$ 740,628
Convertible preferred stock, par value	$ 0.01
Convertible preferred stock, authorized	1,000,000
Convertible preferred stock, shares issued	1,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	1,154,422	1,033,328
Common stock, shares outstanding	1,154,422	1,033,328
Series D Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ .01
Convertible preferred stock, authorized	850	850
Convertible preferred stock, shares issued	300	300
Convertible preferred stock, shares outstanding	300	300
Convertible preferred stock, liquidation value	$ 300,000	$ 300,000
Series G Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	240,000	240,000
Convertible preferred stock, shares issued	80,570	80,570
Convertible preferred stock, shares outstanding	80,570	80,570
Series H Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	10,000	10,000
Convertible preferred stock, shares issued	10,000	10,000
Convertible preferred stock, shares outstanding	10,000	10,000
Series H2 Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	21	21
Convertible preferred stock, shares issued	21	21
Convertible preferred stock, shares outstanding	21	21
Series J Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	6,250	6,250
Convertible preferred stock, shares issued	3,458	3,458
Convertible preferred stock, shares outstanding	3,458	3,458
Series K Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	15,000	15,000
Convertible preferred stock, shares issued	6,816	6,816
Convertible preferred stock, shares outstanding	6,816	6,816

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenue:
Products, services, other	$ 603,726	$ 500,949	$ 1,610,124	$ 1,429,487
Grant revenue	42,335	34,385	127,666	127,289
Total revenue	646,061	535,334	1,737,790	1,556,776
Costs and expenses:
Cost of products and services	328,743	262,894	852,039	727,698
Research and development	239,326	268,317	744,565	925,015
Selling and marketing	301,676	224,380	814,796	609,501
General and administrative	901,588	231,550	2,655,054	1,853,010
Total operating costs and expenses	1,771,333	987,141	5,066,454	4,115,224
Operating loss	(1,125,272)	(451,807)	(3,328,664)	(2,558,448)
Other (expense) income:
Interest expense, net	(1,554,379)	(1,116,328)	(4,431,950)	(2,961,708)
Other expense		(200)	(1,039)	(1,112)
Impairment loss on investment			(6,069)
Incentive warrants for warrant exercises			(186,802)
Gain on extinguishment of debt	90,862		90,862
Change in fair value of derivative liabilities	245,213	623,128	(26,014)	(412,500)
Total other expense	(1,218,304)	(493,400)	(4,561,012)	(3,375,320)
Net loss	$ (2,343,576)	$ (945,207)	$ (7,889,676)	$ (5,933,768)
Net loss per share attributable to common stockholders – basic and diluted	$ (2.07)	$ (0.96)	$ (7.28)	$ (6.81)
Weighted average common stock shares outstanding used in the basic and diluted net loss per share calculation	1,133,791	980,846	1,084,370	871,325

XML

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Comprehensive Loss
Net loss	$ (2,343,576)	$ (945,207)	$ (7,889,676)	$ (5,933,768)
Other comprehensive loss
Unrealized (loss) income on marketable securities		(22,233)	6,190	(234,972)
Comprehensive loss	$ (2,343,576)	$ (967,440)	$ (7,883,486)	$ (6,168,740)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (7,889,676)	$ (5,933,768)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for debt extension	10,000
Depreciation and amortization	7,027	15,489
Accretion of interest and amortization of debt discount	3,548,244	2,848,058
Incentive warrants for warrant exercises	186,802
Penalty interest added to debt principal		41,200
Gain on extinguishment of debt	90,862
Stock-based compensation expense	318,910	282,811
Amortization of third party fees paid in common stock and warrants		332,700
Warrants issued for service	15,558
Shares issued for service	31,000
Impairment loss on investment	6,069
Change in fair value of derivative liabilities	26,014	412,500
Changes in operating assets and liabilities:
Accounts receivable	(266,996)	(476,426)
Inventories	(217,498)	30,233
Prepaid expenses and other assets	111,748	33,948
Accounts payable	445,924	(409,175)
Accrued employee compensation	49,079	9,900
Deferred revenue and other accrued expenses	618,890	75,014
Net cash used in operating activities	(3,089,767)	(2,737,516)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property plant and equipment	(16,617)	(3,273)
Net cash used in investing activities	(16,617)	(3,273)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from the issuance of common stock		382,965
Net proceeds from related party convertible debt		96,667
Net proceeds from revolving note payable	2,070,000
Net proceeds from warrant exercises	140,215
Net proceeds from convertible debt		2,102,382
Net proceeds from non-convertible debt	2,400,752	865,152
Payments on convertible debt	(840,541)
Payments on non-convertible debt	(783,682)	(781,221)
Net cash provided by financing activities	2,986,744	2,665,945
NET DECREASE IN CASH	(119,640)	(74,844)
CASH AT BEGINNING OF YEAR	138,363	116,783
CASH AT END OF PERIOD	18,723	41,939
SUPPLEMENTAL INFORMATION
Interest paid in cash	282,906	1,154
NON CASH TRANSACTIONS:
Discount due to warrants issued with debt	668,544
Unrealized gain from available-for-sale equity securities	6,190	234,972
Derivative liability released upon warrant exercise	49,327
Debt discount from derivative liability		1,304,049
Cashless exercise of warrants		11,100
Conversion of preferred stock into common stock	55,200	63,904
Convertible debt exchanged for common stock		117,837
Common stock issued with debt	321,127	104,731
Common stock issued to settle non-convertible debt		41,200
Common stock issued in lieu of cash for interest	185,603
Discount due to beneficial conversion feature		20,721
Discount due to warrants issued with debt		39,755
Reclassification of derivative liabilities to equity upon adoption of ASU 2017-11	1,689,386
Discount from one-time interest	$ 225,000

XML

Business Overview, Liquidity and Management Plans

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Overview, Liquidity and Management Plans

1) Business Overview, Liquidity and Management Plans

Pressure BioSciences, Inc. (“we”, “our”, “the Company”) is focused on solving the challenging problems inherent in biological sample preparation, a crucial laboratory step performed by scientists worldwide working in biological life sciences research. Sample preparation is a term that refers to a wide range of activities that precede most forms of scientific analysis. Sample preparation is often complex, time-consuming, and in our belief, one of the most error-prone steps of scientific research. It is a widely-used laboratory undertaking, the requirements of which drive what we believe is a large and growing worldwide market. We have developed and patented a novel, enabling technology platform that can control the sample preparation process. It is based on harnessing the unique properties of high hydrostatic pressure. This process, called pressure cycling technology, or PCT, uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels (45,000 psi or greater) to safely, conveniently and reproducibly control the actions of molecules in biological samples, such as cells and tissues from human, animal, plant, and microbial sources.

Our pressure cycling technology uses internally developed instrumentation that is capable of cycling pressure between ambient and ultra-high levels - at controlled temperatures and specific time intervals - to rapidly and repeatedly control the interactions of bio-molecules, such as DNA, RNA, proteins, lipids, and small molecules. Our laboratory instrument, the Barocycler®, and our internally developed consumables product line, including PULSE® (Pressure Used to Lyse Samples for Extraction) Tubes, other processing tubes, and application specific kits (which include consumable products and reagents) together make up our PCT Sample Preparation System, or PCT SPS.

In 2015, together with an investment bank, we formed a subsidiary called Pressure BioSciences Europe (“PBI Europe”) in Poland. We have 49% ownership interest with the investment bank retaining 51%. As of now, PBI Europe does not have any operating activities and we cannot reasonably predict when operations will commence. Therefore, we do not have control of the subsidiary and did not consolidate in our financial statements. PBI Europe did not have any operations in the nine months ending September 30, 2017 or in fiscal year 2016.

XML

Going Concern

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern

2) 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 negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of September 30, 2017, 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 cash through debt and equity offerings in the past and as described in Notes 6 and 7, we received $4,610,967 in net proceeds from loans and warrant exercises in the nine months ended September 30, 2017. We have financing efforts in place to continue to raise cash through debt and equity offerings.

Management has developed a plan to continue operations. This plan includes obtaining equity or debt financing. During the nine months ended September 30, 2017 we received $4,610,967 in net proceeds from warrant exercises, additional convertible and non-convertible debt. 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.

We need substantial additional capital to fund normal operations in future periods. In the event that 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. These financial statements do not include any adjustments that might result from this uncertainty.

XML

Interim Financial Reporting

9 Months Ended

Sep. 30, 2017

Quarterly Financial Information Disclosure [Abstract]

Interim Financial Reporting

3) Interim Financial Reporting

The accompanying unaudited consolidated balance sheet as of December 31, 2016, which was derived from audited financial statements, and the unaudited interim consolidated financial statements of Pressure BioSciences, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all material adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K (the “Form 10-K”) for the fiscal year ended December 31, 2016 as filed with the Securities and Exchange Commission on March 22, 2017.

On June 5, 2017, we effected a 1-for-30 reverse stock split of our common stock. All common shares, stock options, and per share information presented in the consolidated financial statements have been adjusted to reflect the reverse stock split on a retroactive basis for all periods presented. In lieu of issuing fractional shares, stockholders who otherwise would have been entitled to receive fractional shares because they held a number of shares not evenly divisible by the reverse stock split ratio were automatically entitled to receive an additional fraction of a share of Common Stock to round up to the next whole share. There was no change in the par value of the Company’s common stock. The ratio by which shares of preferred stock are convertible into shares of common stock were adjusted to reflect the effects of the reverse stock split.

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

4) Summary of Significant Accounting Policies

Principles of Consolidation

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

Recent Accounting Standards

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity transactions. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 with early adoption permitted. The Company early adopted the ASU 2017-11 in the third quarter of 2017.

Adoption of ASU 2017-11

The Company changed its method of accounting for the Debentures and Warrants through the early adoption of ASU 2017-11 during the three months ended September 30, 2017 on a modified retrospective basis. Accordingly, the Company reclassified the warrant derivative and conversion option derivative liabilities to additional paid in capital on its January 1, 2017 consolidated balance sheets totaling approximately $2.6 million, reduced debt discount by approximately $0.9 million and recorded the cumulative effect of the adoption to the beginning balance of accumulated deficit of approximately $2.2 million. This resulted to an increase in stock warrants by $2.5 million and additional paid-in capital by $1.4 million. In addition, because of the modified retrospective adoption, the Company credited the change in fair value of warrant derivative and conversion option derivative liabilities on its consolidated statements of operations by $245,215 and reduced amortization of debt discount by $812,904 for the nine months ended September 30, 2017. The following table provides a reconciliation of the warrant derivative liability, convertible debt, conversion option derivative liability, stock warrant, additional paid-in capital and accumulated deficit on the consolidated balance sheet as of December 31, 2016:

	Convertible debt, current portion			Convertible debt, long term portion			Warrant Derivative Liability			Conversion Option Liability			Warrants to acquire common stock		Additional Paid-in Capital		Accumulated deficit
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$	4,005,702		$	529,742		$	1,685,108		$	951,059		$	6,325,102	$	27,544,265	$	(42,264,190	)
Reclassified derivative liabilities and cumulative effect of adoption		(769,316	)		(154,152	)	$	(1,661,795	)		(951,059	)	$	2,525,623		1,377,108		(2,213,345	)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$	3,236,386		$	375,590		$	23,313		$	-		$	8,850,725	$	28,921,373	$	(44,477,535	)

Use of Estimates

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

Concentrations

Credit Risk

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

The following table illustrates the level of concentration as a percentage of total revenues during the three months and nine months ended September 30, 2017 and 2016. The Top Five Customers category may include federal agency revenues if applicable.

	For the Three Months Ended
	September 30,
	2017			2016
Top Five Customers		73	%		60	%
Federal Agencies		30	%		9	%

	For the Nine Months Ended
	September 30,
	2017			2016
Top Five Customers		38	%		31	%
Federal Agencies		19	%		3	%

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of September 30, 2017 and December 31, 2016. The Top Five Customers category may include federal agency revenues if applicable

	September 30, 2017			December, 31, 2016
Top Five Customers		74	%		82	%
Federal Agencies		28	%		1	%

Product Supply

CBM Industries (Taunton, MA) has recently become the manufacturer of the Barocycler® 2320EXT. CBM is ISO 13485:2003 and 9001:2008 Certified. CBM provides 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 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 currently manufacture and assemble the Barozyme HT48, Barocycler® HUB440, the SHREDDER SG3, and most of our consumables at our South Easton, MA facility, we plan to take advantage of the established relationship with CBM and transfer manufacturing of the entire Barocycler® product line, future instruments, and other products to CBM.

The Barocycler® NEP3229, launched in 2008, and manufactured by the BIT Group, will be phased out over the next several years and replaced by the new state-of-the-art Barocycler® HUB and Barozyme HT48 product lines.

Investment in Available-For-Sale Equity Securities

As of September 30, 2017, we held 100,250 shares of common stock of Everest Investments Holdings S.A. (“Everest”), a Polish publicly traded company listed on the Warsaw Stock Exchange. We account for this investment in accordance with ASC 320 “Investments — Debt and Equity Securities” as securities available for sale. On September 30, 2017, our consolidated balance sheet reflected the fair value of our investment in Everest to be approximately $30,000, based on the closing price of Everest shares of $0.29 USD per share on that day. The carrying value of our investment in Everest common stock held will change from period to period based on the closing price of the common stock of Everest as of the balance sheet date. The change in market value since the receipt of stock was determined to be other than temporary. We recorded $6,069 as an impairment loss in the first quarter of 2017. The carrying value increased in the first nine months of 2017 by $6,190 and was reflected as an unrealized gain in our Comprehensive Loss Statement.

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 and nine months ended September 30, 2017 and 2016:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Numerator:
Net loss	$	(2,343,576	)	$	(945,207	)	$	(7,889,676	)	$	(5,933,768	)
Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding		1,133,791			980,846			1,084,370			871,325
Loss per common share – basic and diluted	$	(2.07	)	$	(0.96	)	$	(7.28	)	$	(6.81	)

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 and Series K Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

	As of September 30,
	2017		2016
Stock options		249,636		175,642
Convertible debt		828,870		899,058
Common stock warrants		902,033		827,490
Convertible preferred stock:
Series D Convertible Preferred Stock		25,000		25,000
Series G Convertible Preferred Stock		26,857		28,857
Series H Convertible Preferred Stock		33,334		33,334
Series H2 Convertible Preferred Stock		70,000		70,000
Series J Convertible Preferred Stock		115,267		117,367
Series K Convertible Preferred Stock		227,200		227,200
		2,478,197		2,403,948

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 $139,399 and $90,500 for the three months ended September 30, 2017 and 2016, respectively. The Company recognized stock-based compensation expense of $318,910 and $282,811 for the nine months ended September 30, 2017 and 2016, 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
	September 30,				September 30,
	2017		2016		2017		2016
Research and development	$	37,345	$	14,735	$	76,263	$	50,766
Selling and marketing		21,778		9,911		46,112		32,404
General and administrative		80,276		65,854		196,535		199,641
Total stock-based compensation expense	$	139,399	$	90,500	$	318,910	$	282,811

Fair Value of Financial Instruments

Due to their short maturities, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value. Long-term liabilities are primarily related to convertible debentures and deferred revenue with carrying values that approximate 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 the fair value measurement of the derivative liability.

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 and its financial liabilities are currently classified within Level 3 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, 2017:

			Fair value measurements at September 30, 2017 using:
	September 30, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		25,986		25,986		-		-
Total Financial Assets	$	25,986	$	25,986	$	-	$	-

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs for the nine months ended September 30, 2017:

	December 31, 2016		Issuance fair value		Change in fair value		Settlement			Adjustment due to ASU 2017-11			September 30, 2017
Series D Preferred Stock Purchase Warrants	$	23,313	$	-	$	26,014	$	(49,327	)		-		$	-
Warrants Issued with Convertible Debt		1,661,795		-		-		-			(1,661,795	)		-
Conversion Option Derivative Liabilities		951,059		-		-		-			(951,059	)		-
Total Derivatives	$	2,636,167	$	-	$	26,014	$	(49,327	)	$	(2,612,854	)		-

Refer to this Note for accounting of early adoption of ASU 2017-11.

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, 2016:

			Fair value measurements at December 31, 2016 using:
	December 31, 2016		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		25,865		25,865		-		-
Total Financial Assets	$	25,865	$	25,865	$	-	$	-

	December 31, 2016		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Series D Preferred Stock Purchase Warrants	$	23,313		-		-	$	23,313
Warrants Issued with Convertible Debt		1,661,795		-		-		1,661,795
Conversion Option Derivative Liabilities		951,059		-		-		951,059
Total Derivatives	$	2,636,167	$	-	$	-	$	2,636,167

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5) Commitments and Contingencies

Operating Leases

Our corporate offices are currently located at 14 Norfolk Avenue, South Easton, Massachusetts 02375. We are currently paying $4,800 per month, on a lease extension, signed on December 29, 2016, that expires December 31, 2017, 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 an increase in monthly rent of $2,150.

On October 18, 2017 we signed a lease extension for our lab space in Medford, MA. The lease will now expire December 30, 2020 and requires monthly payments of $6,912.75 starting January 1, 2018 subject to annual cost of living increases.

Rental costs are expensed as incurred. During the nine months ended September 30, 2017 and 2016 we incurred $112,438 and $108,038 in rent expense, respectively for the use of our corporate office and research and development facilities.

Government Grants

We have received a $1.02 million NIH SBIR Phase II Grant. Under the grant, the NIH has committed to pay the Company to develop a high-throughput, high pressure-based DNA Shearing System for Next Generation Sequencing and other genomic applications.

XML

Convertible Debt and Other Debt

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Convertible Debt and Other Debt

6) Convertible Debt and Other Debt

We entered into Subscription Agreements (the “Subscription Agreement”) with various individuals (each, a “Purchaser”) between July 23, 2015 and March 31, 2016, pursuant to which the Company sold Senior Secured Convertible Debentures (the “Debentures”) and warrants to purchase shares of common stock equal to 50% of the number of shares issuable pursuant to the subscription amount (the “Warrants”) for an aggregate purchase price of $6,329,549 (the “Purchase Price”).

The Company issued a principal aggregate amount of $6,962,504 in Debentures which includes a 10% original issue discount on the Purchase Price. The Debenture does not accrue any additional interest during the first year it is outstanding but accrues interest at a rate equal to 10% per annum for the second year it is outstanding. The Debenture has a maturity date of two years from issuance. The Debenture is convertible any time after its issuance date. The Purchaser has the right to convert the Debenture into shares of the Company’s common stock at a fixed conversion price equal to $8.40 per share, subject to applicable adjustments. In the second year that the Debenture is outstanding, any interest accrued shall be payable quarterly in either cash or common stock, at the Company’s discretion.

On various dates for the nine months ended September 30, 2017, the Company issued 38,606 shares of common stock based on the 10-day VWAP prior to quarter end to holders of the Debentures in payment of the quarterly interest accrued from the Debentures first anniversary date through March 31, 2017 for an aggregate amount of $309,465. We recognized a $123,862 gain on extinguishment of debt by calculating the difference of the shares valued on the issuance date and the amount of accrued interest through March 31, 2017.

At any time after the Issuance Date until the maturity date, the Company has the option, subject to certain conditions, to redeem some or all of the then outstanding principal amount of the Debenture for cash in an amount equal to the sum of (i) 120% of the then outstanding principal amount of the Debenture, (ii) accrued but unpaid interest and (iii) any liquidated damages and other amounts due in respect of the Debenture.

On September 11, 2017, we notified Debenture holders that their Debentures will be extended 180 days beyond the original maturity date as permitted in the Debenture agreement. We will continue to pay interest on the Debentures until the extended maturity date. We accounted for the Debenture extensions as debt modifications and not extinguishment of debt since the changes in fair value are not substantial in accordance with ASC 470-50. We started amortizing the remaining unamortized discount as of September 11, 2017 over the new term which extends 180 days beyond the original maturity date.

Warrants

The Company issued warrants exercisable into a total of 376,757 shares of our common stock. The Warrants issued in this transaction are immediately exercisable at an exercise price of $12.00 per share, subject to applicable adjustments including full ratchet anti-dilution in the event that we issue any securities at a price lower than the exercise price then in effect. The Warrants have an expiration period of five years from the original issue date. The Warrants are subject to adjustment for stock splits, stock dividends or recapitalizations and also include anti-dilution price protection for subsequent equity sales below the exercise price. The warrants were issued pursuant to an exemption to the registration requirements of the Securities Act and are considered restricted securities. Upon exercise, the warrant shares will be considered restricted securities and will be issued with a restrictive legend unless the shares have been registered or the legend can be removed pursuant to Rule 144 promulgated pursuant to the Securities Act.

Subject to the terms and conditions of the Warrants, at any time commencing six months from the Final Closing, the Company has the right to call the Warrants for cancellation if the volume weighted average price of its Common Stock on the OTCQB (or other primary trading market or exchange on which the Common Stock is then traded) equals or exceeds three times the per share exercise price of the Warrants for 15 out of 20 consecutive trading days.

Security Agreement

In connection with the Subscription Agreement and Debenture, the Company entered into Security Agreements with the Purchasers whereby the Company agreed to grant to Purchasers an unconditional and continuing, first priority security interest in all of the assets and property of the Company to secure the prompt payment, performance and discharge in full of all of Company’s obligations under the Debentures, Warrants and the other Transaction Documents.

ASC 470-20 states that the proceeds from the issuance of debt with detachable stock warrants should be allocated between the debt and warrants on the basis of their relative fair market values. The debt discount will be amortized to interest expense over the two year term of these loans. We amortized $4,736,571 of the debt discount to interest expense through the third quarter of 2017. The warrants issued in connection with the convertible debentures are classified as warrant derivative liabilities because the warrants are entitled to certain rights in subsequent financings and the warrants contain “down-round protection” and therefore, do not meet the scope exception for treatment as a derivative under ASC 815, Derivatives and Hedging, (“ASC 815”). Since “down-round protection” is not an input into the calculation of the fair value of the warrants, the warrants cannot be considered indexed to the Company’s own stock which is a requirement for the scope exception as outlined under ASC 815. The estimated fair value of the warrants was determined using the binomial model, resulting in an allocation of $2,847,624 to the total warrants out of the gross proceeds of $6,329,549. The fair value will be affected by changes in inputs to that model including our stock price, expected stock price volatility, the contractual term, and the risk-free interest rate. We reclassified the fair value of the warrant derivative liabilities to stockholders’ equity when we adopted ASU 2017-11.

The specific terms of the convertible debts and outstanding balances as of September 30, 2017 are listed in the table below.

Inception Date	Term	Loan Amount		Outstanding Balance		Original Issue Discount			Interest Rate			Deferred Finance Fees		Discount related to fair value of conversion feature and warrants/shares
July 22, 2015	30 months1	$	2,180,000	$	2,180,000	$	218,000	2		10	%3	$	388,532	$	2,163,074
September 25, 2015	30 months1		1,100,000		1,100,000		110,000	2		10	%3		185,956		1,022,052
October 2, 2015	30 months1		150,000		150,000		15,000	2		10	%3		26,345		140,832
October 6, 2015	30 months1		30,000		30,000		3,000	2		10	%3		5,168		26,721
October 14, 2015	30 months1		50,000		50,000		5,000	2		10	%3		8,954		49,377
November 2, 2015	30 months1		250,000		250,000		25,000	2		10	%3		43,079		222,723
November 10, 2015	24 months		50,000		50,000		5,000	2		10	%3		8,790		46,984
November 12, 2015	24 months		215,000		215,000		21,500	2		10	%3		38,518		212,399
November 20, 2015	24 months		200,000		200,000		20,000	2		10	%3		37,185		200,000
December 4, 2015	24 months		170,000		170,000		17,000	2		10	%3		37,352		170,000
December 11, 2015	24 months		360,000		360,000		36,000	2		10	%3		75,449		360,000
December 18, 2015	24 months		55,000		55,000		5,500	2		10	%3		11,714		55,000
December 31, 2015	24 months		100,000		100,000		10,000	2		10	%3		20,634		100,000
January 11, 2016	24 months		100,000		100,000		10,000	2		10	%3		24,966		80,034
January 20, 2016	24 months		50,000		50,000		5,000	2		10	%3		9,812		40,188
January 29, 2016	24 months		300,000		300,000		30,000	2		10	%3		60,887		239,113
February 26, 2016	24 months		200,000		200,000		20,000	2		10	%3		43,952		156,048
March 10, 2016	24 months		125,000		125,000		12,500	2		10	%3		18,260		106,740
March 18, 2016	24 months		360,000		360,000		36,000	2		10	%3		94,992		265,008
March 24, 2016	24 months		106,667		106,667		10,667	2		10	%3		15,427		91,240
March 31, 2016	24 months		177,882		177,882		17,788	2		10	%3		2,436		175,446
June 15, 2016	6 months		40,000		-		-			12	%		-		3,680
June 17, 2016	6 months		40,000		-		-			12	%		-		3,899
June 22, 2016	6 months		35,000		-		-			12	%		-		3,373
July 6, 2016	6 months		85,000		-		-			12	%		-		15,048
July 29, 2016	6 months		100,000		-		-			12	%		-		25,518
September 15, 2016	8 months		500,000		-		85,541			9	%		-		65,972
April 3, 2017	8 months		50,000		-		-			10	%		-		-
		$	7,179,549	$	6,329,549	$	718,496					$	1,158,408	$	6,040,469

1 The loan term was extended by 180 days.

2 The original issue discount is reflected in the first year.

3 The annual interest starts accruing in the second year.

The closings above included a total of approximately $291,000 of convertible debentures purchased by related parties who were members of the Company’s Board of Directors and management and their family members.

At any time after six months from the original Issue Date until the maturity date, the Company has the right to prepay the above Debentures in cash for 120% of the principal amount outstanding and any accrued interest.

In January 2017, we executed an amendment to the July 6, 2016 convertible note that was due on January 6, 2017. We received an extension of up to three months on the note’s due date. In exchange for the extension, we agreed to issue 1,667 shares of restricted common stock and pay the investor $10,000 for each 30-day extension. The shares issued for the extension were valued at $10,000 and recorded as interest expense. We made a payment of $34,000 in January 2017 for the first one-month extension and 12% annual interest on the note from the initial close date through February 6, 2017. The Investor had the right, at any time, to convert all or part of the outstanding and unpaid principal sum and accrued interest into shares of common stock at the conversion price of $13.50. On February 28, 2017, the note was paid in full. We accounted for the loan extension as a debt modification.

On April 3, 2017, we signed a six-month agreement with an investor relations firm. The agreement includes a cash payment of $10,000 plus a convertible 8-month note for $50,000 with the following significant terms: (i) convertible at $12.00/share, (ii) bears 10% annual interest, (iii) a 20% pre-payment penalty if the Company wants to pre-pay the Note, and (iv) a default rate of 18%. We terminated the agreement on June 7, 2017 and the investor relations firm agreed to forgive the loan. Since we did not receive any cash in connection with the note and neither did the IR firm provide any services, the forgiveness did not result in any gain upon termination of the agreement.

Revolving Note Payable

On October 28, 2016, an accredited investor (the “Investor”) purchased from us a promissory note in the aggregate principal amount of up to $2,000,000 (the “Revolving Note”) due and payable on the earlier of October 28, 2017 (the “Maturity Date”) or on the seventh business day after the closing of a Qualified Offering (as defined in the Revolving Note). The Investor is obligated to provide us with advances of $250,000 under the Revolving Note, but the Investor shall not be required to advance more than $250,000 in any individual fifteen (15) day period and no more than $500,000 in the thirty (30) day period immediately following the date of the initial advance. We received $3,500,000 pursuant to the Revolving Note as amended and we issued to the Investor warrants to purchase 250,000 shares of our Common Stock at an exercise price per share equal to $12.00 per share. The terms of the Warrants are identical except for the exercise date, issue date, and termination date which are based on the advance date.

The Revolving Note was amended on May 2, 2017 to increase the aggregate principal amount to $3,000,000, to issue 16,667 shares of our Common Stock to the Investor, to decrease the exercise price per share of the warrants to the lower of (i) $12.00 or (ii) the per share purchase price of the shares of our Common Stock sold in the Qualified Offering, and to change the references in the Revolving Note from “the six (6) month anniversary of October 28, 2016” to “July 25, 2017.” The fair value of the 16,667 shares issued was accounted for as a note discount and are amortized to interest expense over the life of the loan. We evaluated the accounting impact of the Revolving Note amendment and deemed that the amendment did not have a material impact on our consolidated financial statements.

The Revolving Note was further amended on August 18, 2017 to increase the aggregate principal amount to $3,500,000 with all other terms unchanged.

In the event that a Qualified Offering had occurred after July 25, 2017, but prior to the Maturity Date, within seven (7) Business Days of the closing of the Qualified Offering, the Company was to pay a cash fee equal to five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the closing date of the Qualified Offering or, at the option of the Company, issue to the Holder a number of restricted shares of the Company’s common stock equal to (x) five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the closing date of the Qualified Offering divided by (y) the purchase price provided by the documents governing the Qualified Offering. A Qualified Offering means the completion of a public offering of the Company’s securities pursuant to which the Company receives aggregate gross proceeds of at least Seven Million United States Dollars (US$7,000,000) in consideration of the purchase of its securities and resulting in, pursuant to the effectiveness of the registration statement for such offering, the Company’s common stock being traded on the NASDAQ Capital Market, NASDAQ Global Select Market or the New York Stock Exchange. A Qualified Offering did not occur on or prior to the Maturity Date.

In the event that a Qualified Offering had not occurred after July 25, 2017, but prior to the Maturity Date, within seven (7) Business Days of the closing of the Qualified Offering, the Company shall pay a cash fee equal to five percent (5%) of the total outstanding amount owed by the Company to the Holder or, at the option of the Company, issue to the Holder a number of restricted shares of the Company’s common stock equal to (x) five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the Maturity Date divided by (y) the VWAP of the Company’s common stock for the last ten trading days preceding the Maturity Date. A Qualified Offering did not occur on or prior to the Maturity Date.

Interest on the principal balance of the Revolving Note shall be paid in full on the Maturity Date, unless otherwise paid prior to the Maturity Date. Interest shall be assessed as follows: (i) a one-time interest of 10% on all principal amounts advanced prior to April 28, 2017; (ii) the foregoing and 4% on any amount remaining outstanding if the principal amount is repaid between April 28, 2017 and July 28, 2017; or (iii) both of the foregoing and 4% on any amount remaining outstanding if the principal amount is repaid between July 28, 2017 and October 28, 2017.

Broker fees amounting to $296,500, the one-time interest of $350,000 and the fair value of the 250,000 warrants issued to the Investor amounting to $1,148,275 were recorded as debt discounts and amortized over the term of the revolving note. The unamortized debt discounts as of September 30, 2017 related to the Revolving Note amounted to $335,833.

The Revolving Note was still outstanding as of October 28, 2017. We continue to accrue interest on the note.

The following table provides a summary of the changes in convertible debt and revolving note payable, net of unamortized discount, during 2017:

	2017
Balance at January 1,	$	5,273,937
Adjustment due to ASU 2017-11		923,468
Issuance of convertible debt, face value		2,300,000
Forgiveness of Debt		(50,000	)
Deferred financing cost		(180,000	)
Debt discount related to one-time interest charge		(225,000	)
Debt discount from incentive shares to increase the Revolving Note aggregate principal limit		(150,000	)
Debt discount from shares and warrants issued with the notes		(668,544	)
Payments		(840,541	)
Accretion of interest and amortization of debt discount to interest expense through September 30,		3,322,736
Balance at September 30,		9,706,056
Less: current portion		9,706,056
Convertible debt, long-term portion	$	-

Other Notes

On January 6, 2016 we signed a Merchant Agreement with a lender. Under the agreement we received $250,000 in exchange for second position rights to all customer receipts until the lender is paid $322,500, which is collected at the rate of $1,280 per business day. The payments were secured by second position rights to all customer receipts until the loan has been paid in full. $138,840 of the proceeds were used to pay off the outstanding balance of a previous loan from another lender. The Company recognized a gain on the settlement of the previous loan of $5,044 which was credited to interest expense. The Company paid $2,500 in fees in connection with this loan. We received an additional $93,161 in June 2016 under the existing Merchant Agreement. The note is no longer outstanding as of September 30, 2017.

On February 8, 2016 we signed a Merchant Agreement with a lender. Under the agreement we received $100,000 in exchange for third position rights to all customer receipts until the lender is paid $129,900, which is collected at the rate of $927 per business day. The Company paid $2,000 in fees in connection with this loan. We received an additional $125,000 in June 2016 under the existing Merchant Agreement of which $48,420 was used to pay off the prior loan. The lender provided an additional $70,000 on August 16, 2016. As of September 30, 2017, the outstanding balance on this note was zero.

On August 26, 2016 we signed a Merchant Agreement with a lender. Under the agreement we received $122,465 net proceeds in exchange for third position rights to all customer receipts which is collected at the rate of $1,386 per business day. As of September 30, 2017, the outstanding balance on this note was zero.

On February 6, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $125,000. The Company paid $1,250 in fees in connection with this loan. Under the agreement, $16,180 was used to pay off the prior loan. The loan was no longer outstanding as of September 30, 2017.

On February 15, 2017, we received six-month, non-convertible loans in the aggregate of $220,000 from two accredited investors. We agreed to issue each investor 5,667 shares of restricted common stock. The loans earn no interest but carry a 10% original issue fee. We recorded the fair value of the shares amounting to $43,616 as debt discounts that will be amortized to interest expense during the term of the loans. We received a one-month extension on one loan and two one-month extensions on the other. Each extension required a 10% fee to the lender. We treated these extensions as loan extinguishments and accordingly wrote off the original debt and recorded new debt to include the extension fees as part of the principal amount. The extension fees of $33,000 were recorded as losses on extinguishment of debt in the consolidated financial statements. One loan remains outstanding as of September 30, 2017 with a balance of $132,000 that was subsequently paid off entirely by October 31, 2017. We amortized $59,794 of debt discounts in the nine months ended September 30, 2017. The unamortized debt discounts as of September 30, 2017 were $3,822.

On March 2, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $75,750. The Company paid no fees in connection with this loan. The loan was no longer outstanding as of September 30, 2017.

On March 14, 2017, we received an eight-month, non-convertible loan of $250,000 from a privately-held investment firm. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We also agreed to issue the investor 8,333 shares of restricted common stock. We recorded the fair value of the shares amounting to $46,748 as a debt discount that will be amortized to interest expense during the term of the loan. The loan still remains outstanding as of September 30, 2017 with a balance of $250,000. We amortized $62,651 of the debt discount in the nine months ended September 30, 2017. The unamortized debt discount as of September 30, 2017 was $14,097. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the lowest closing stock price for the 15 trading days prior to conversion.

On March 21, 2017, we received an eight-month, non-convertible loan of $170,000 from an accredited investor. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We also agreed to issue the investor 5,667 shares of restricted common stock. We recorded the fair value of the shares amounting to $35,079 as a debt discount that will be amortized to interest expense during the term of the loan. The loan still remains outstanding as of September 30, 2017 with a balance of $170,000. We amortized $41,025 of debt discounts in the nine months ended September 30, 2017. The unamortized debt discount as of September 30, 2017 was $11,054.

On April 19, 2017, we received a 7-month non-convertible loan of $250,000 from a privately-held investment firm. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We agreed to issue 833 shares at closing. Until the loan was repaid, we agreed that over the next one hundred eighty (180) days to issue 2,500 shares to the Investor every sixty (60) days for a total issuance of 8,333 shares. The loan remains outstanding and we have issued 5,833 shares including the closing shares since inception of the loan. We recorded the fair value of the 5,833 shares amounting to $32,684 as a debt discount that will be amortized to interest expense during the term of the loan. We amortized $45,264 of debt discounts in the nine months ended September 30, 2017. The unamortized debt discount as of September 30, 2017 was $12,420. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the lowest closing stock price for the 15 trading days prior to conversion.

On May 19, 2017, we received a 45-day non-convertible loan of $630,000 from a private investor. The loan provides guaranteed interest of $63,000 and has an origination fee of $32,000. We paid a broker $31,500 in connection with this loan. The unamortized debt discount as of September 30, 2017 was zero. We used these proceeds to pay off in full our September 2016 loan of $589,189. The loan remains outstanding and accrues interest at a 20% annual rate from the maturity date.

On June 6, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $250,000. The lender is entitled to receipts which are collected at the rate of $1,833 per business day. The Company paid $6,250 in fees in connection with this loan. Under the agreement, $119,021 was used to pay off three prior loans. The unamortized debt discount as of September 30, 2017 was $2,357. The loan remains outstanding as of September 30, 2017 with a balance of approximately $157,820.

On June 21, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $150,000. The lender is entitled to receipts which are collected at the rate of $1,361 per business day. The Company paid $1,498 in fees in connection with this loan. The unamortized debt discount as of September 30, 2017 was $509. The loan remains outstanding as of September 30, 2017 with a balance of approximately $81,000. We accounted for the Merchant Agreement as a loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On July 17, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $125,000. The lender is entitled to receipts which are collected at the rate of $1,250 per business day. The Company paid $1,250 in fees in connection with this loan. The loan remains outstanding as of September 30, 2017 with a balance of approximately $82,000.

On August 1, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $75,000. The loan includes $18,750 representing an original issue discount, interest and fees resulting in a total payable of $93,750. The loan remains outstanding as of September 30, 2017 with a balance of approximately $56,000.

On September 12, 2017, we received a 9-month non-convertible loan of $225,000 from a privately-held investment firm. The loan earns an annual interest rate of 10%. The Company paid total fees of $25,000 including original issue discount and other costs related to this loan. We agreed to issue 3,333 shares at closing. We recorded the fair value of the shares as a debt discount that will be amortized to interest expense during the term of the loan. We amortized $2,505 of debt discounts in the nine months ended September 30, 2017. The unamortized debt discount as of September 30, 2017 was $35,495. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the average of the two lowest daily volume weighted average closing stock price for the 20 trading days prior to conversion.

XML

Stockholders' Deficit

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Stockholders' Deficit

7) 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”)

As of September 30, 2017, 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, 2016 for the pertinent disclosures of preferred stock.

Stock Options and Warrants

Our stockholders approved our amended 2005 Equity Incentive Plan (the “Plan”) pursuant to which an aggregate of 1,800,000 shares of our common stock were reserved for issuance upon exercise of stock options or other equity awards made under the Plan. Under the Plan, we may award stock options, shares of common stock, and other equity interests in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. As of September 30, 2017, options to acquire 35,274 shares were outstanding under the Plan.

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, 2017, options to acquire 84,425 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, 2017, non-qualified options to acquire 129,937 shares were outstanding under the Plan.

All of the outstanding non-qualified options had an exercise price that was at or above the Company’s common stock share price at time of issuance.

The following tables summarize information concerning options and warrants outstanding and exercisable:

	Stock Options					Warrants
	Weighted					Weighted
	Average					Average								Total
	Shares			Price per share		Shares			Price per share		Shares			Exercisable
Balance outstanding, 12/31/16		175,642		$	12.60		881,990		$	12.00		1,057,632			991,032
Granted		87,198			8.40		230,610			11.40		317,808
Exercised		—					(19,889	)		7.50		(19,889	)
Expired		(3,202	)		30.00		(190,678	)		11.70		(193,880	)
Forfeited		(10,002	)		10.10		—			—		(10,002	)
Balance outstanding, 9/30/2017		249,636		$	10.93		902,033		$	12.00		1,151,669			1,061,140

	Options Outstanding						Options Exercisable
	Weighted Average						Weighted Average
Range of Exercise Prices	Number of Options		Remaining Contractual Life (Years)		Exercise Price		Number of Options		Remaining Contractual Life (Years)		Exercise Price
$7.50 - $11.99		135,524		8.5	$	8.63		70,995		7.7	$	8.83
12.00 – 14.99		88,705		8.0		12.00		62,705		7.9		12.00
15.00 – 17.99		7,547		4.9		15.00		7,547		4.9		15.00
18.00 – 20.99		12,854		2.4		18.00		12,854		2.4		18.00
21.00 – 30.00		5,006		2.9		30.00		5,006		2.9		30.00
$7.50 - $30.00		249,636		7.8	$	10.93		159,107		7.0	$	11.78

As of September 30, 2017, the total estimated fair value of unvested stock options to be amortized over their remaining vesting period was $488,912. The non-cash, stock-based compensation expense associated with the vesting of these options is expected to be $87,359 remaining in 2017, $272,539 in 2018, $106,477 in 2019 and $22,537 in 2020. The fair value of options granted in 2017 was $487,914.

The aggregate intrinsic value associated with the options outstanding and exercisable as of September 30, 2017 was zero. The aggregate intrinsic value associated with the warrants outstanding and exercisable as of September 30, 2017 was zero.

In January 2017, we issued warrants to purchase 3,334 shares of restricted common stock with a fair value of $15,558 to an investor relations firm for services performed.

Common Stock Issuances

On various dates from January to March 2017, the Company issued 27,000 shares of restricted common stock to investors as compensation for loans provided to us.

On June 9, 2017, one shareholder converted 6,000 shares of Series G Convertible Preferred Stock into 2,000 shares of common stock and converted 6,300 shares of Series J Convertible Preferred Stock into 2,100 shares of common stock.

On various dates for the nine months ended September 30, 2017, the Company issued 38,606 shares of common stock based on the 10-day VWAP prior to quarter end to holders of the Debentures in payment of the quarterly interest accrued from the Debentures first anniversary date through March 31, 2017 for an aggregate amount of $309,466. We recognized a $123,862 gain on extinguishment of debt by calculating the difference of the shares valued on the issuance date and the amount of accrued interest through March 31, 2017.

On April 1, 2017, we issued 1,667 shares of restricted common stock to an investor relations firm and recorded the common stock’s fair value of $15,000 as administrative expense in the nine months ended September 30, 2017.

On April 19, 2017, we received a 7-month non-convertible loan of $250,000 from a privately-held investment firm. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We agreed to issue 833 shares at closing. Until the loan was repaid, we agreed that over the next one hundred eighty (180) days to issue 2,500 shares to the Investor every sixty (60) days for a total issuance of 8,333 shares. The loan remains outstanding and we have issued 5,833 shares including the closing shares since inception of the loan.

The Revolving Note was amended on May 2, 2017 to increase the aggregate principal amount to $3,000,000. In exchange for this increase, we agreed to issue 16,667 shares of our Common Stock to the Investor, to decrease the exercise price per share of the warrants to the lower of (i) $12.00 or (ii) the per share purchase price of the shares of our Common Stock sold in a qualified offering, and to change the trigger date in the Revolving Note from April 28, 2017 (the six month anniversary of October 28, 2016) to July 25, 2017. The Revolving Note was further amended on August 18, 2017 to increase the aggregate principal amount to $3,500,000 with all other terms unchanged.

On May 10, 2017, we received $149,164 from the exercise of 19,889 stock purchase warrants from the Series D registered direct offering on November 10, 2011. We paid $8,949 to a broker in connection with the warrant exercises. In consideration for the warrant exercises, we issued to the investors warrants to purchase 39,778 shares of our Common Stock at an exercise price per share equal to $8.40 per share. The warrants expire on the third year anniversary date. We determined the fair value of $186,802 for these warrants and recorded the value as other expenses.

On September 12, 2017, we received a 9-month non-convertible loan of $225,000 from a privately-held investment firm. The loan earns an annual interest rate of 10%. The Company paid total fees of $25,000 including original issue discount and other costs related to this loan. We agreed to issue 3,333 shares at closing. We recorded the fair value of the shares amounting to $13,000 as a debt discount that will be amortized to interest expense during the term of the loan.

On September 20, 2017, we issued 4,000 shares of restricted common stock to an investor relations firm and recorded the common stock’s fair value of $16,000 as administrative expense in the nine months ended September 30, 2017.

XML

Subsequent Events

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

8) Subsequent Events

On September 29, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $75,000 that was disbursed to us on October 4, 2017. The lender is entitled to receipts which are collected at the rate of $1,200 per business day for approximately four months. The Company paid $1,500 in fees in connection with this loan. We accounted for the Merchant Agreement as a loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On October 11, 2017, we received a one-year convertible loan of $85,000 from a privately-held investment firm. The Company paid total fees of $4,250 related to this loan. This loan was repaid in full on October 27, 2017.

On October 25, 2017, we signed a Merchant Agreement with a lender. Under the agreement we received a loan of $110,000. The lender is entitled to receipts which are collected at the rate of $1,539 per business day for approximately five months. The Company paid $1,250 in fees in connection with this loan. We accounted for the Merchant Agreement as a loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On October 25, 2017, we received a nine month convertible loan of $103,000 from a privately-held investment firm. The Company paid total fees of $3,000 related to this loan and will pay 12% interest annually. Six months after the issuance date and at the option of the holder, the loan is convertible into common stock at a 42% discount to the average of the two lowest closing stock prices for the 15 trading days prior to conversion.

On October 27, 2017, we received a one-year convertible loan of $170,000 less $4,250 fees and less $85,000 used to retire the convertible note dated October 11, 2017. Six months after the issuance date and at the option of the holder, the loan is convertible into common stock at a 38% discount to the lowest daily volume weighted average closing stock price for the 15 trading days prior to conversion.

On November 2, 2017, EMA Financial, LLC issued us a one-year convertible loan of $150,000 less $7,500 fees. The loan is convertible at $7.50 per share and has 5% annual interest rate. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the lowest daily volume weighted average closing stock price for the 20 trading days prior to conversion.

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

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

Recent Accounting Standards

Recent Accounting Standards

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity transactions. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 with early adoption permitted. The Company early adopted the ASU 2017-11 in the third quarter of 2017.

Adoption of ASU 2017-11

The Company changed its method of accounting for the Debentures and Warrants through the early adoption of ASU 2017-11 during the three months ended September 30, 2017 on a modified retrospective basis. Accordingly, the Company reclassified the warrant derivative and conversion option derivative liabilities to additional paid in capital on its January 1, 2017 consolidated balance sheets totaling approximately $2.6 million, reduced debt discount by approximately $0.9 million and recorded the cumulative effect of the adoption to the beginning balance of accumulated deficit of approximately $2.2 million. This resulted to an increase in stock warrants by $2.5 million and additional paid-in capital by $1.4 million. In addition, because of the modified retrospective adoption, the Company credited the change in fair value of warrant derivative and conversion option derivative liabilities on its consolidated statements of operations by $245,215 and reduced amortization of debt discount by $812,904 for the nine months ended September 30, 2017. The following table provides a reconciliation of the warrant derivative liability, convertible debt, conversion option derivative liability, stock warrant, additional paid-in capital and accumulated deficit on the consolidated balance sheet as of December 31, 2016:

	Convertible debt, current portion			Convertible debt, long term portion			Warrant Derivative Liability			Conversion Option Liability			Warrants to acquire common stock		Additional Paid-in Capital		Accumulated deficit
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$	4,005,702		$	529,742		$	1,685,108		$	951,059		$	6,325,102	$	27,544,265	$	(42,264,190	)
Reclassified derivative liabilities and cumulative effect of adoption		(769,316	)		(154,152	)	$	(1,661,795	)		(951,059	)	$	2,525,623		1,377,108		(2,213,345	)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$	3,236,386		$	375,590		$	23,313		$	-		$	8,850,725	$	28,921,373	$	(44,477,535	)

Use of Estimates

Use of Estimates

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

Concentrations Credit Risk

Concentrations

Credit Risk

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

The following table illustrates the level of concentration as a percentage of total revenues during the three months and nine months ended September 30, 2017 and 2016. The Top Five Customers category may include federal agency revenues if applicable.

	For the Three Months Ended
	September 30,
	2017			2016
Top Five Customers		73	%		60	%
Federal Agencies		30	%		9	%

	For the Nine Months Ended
	September 30,
	2017			2016
Top Five Customers		38	%		31	%
Federal Agencies		19	%		3	%

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of September 30, 2017 and December 31, 2016. The Top Five Customers category may include federal agency revenues if applicable

	September 30, 2017			December, 31, 2016
Top Five Customers		74	%		82	%
Federal Agencies		28	%		1	%

Product Supply

Product Supply

CBM Industries (Taunton, MA) has recently become the manufacturer of the Barocycler® 2320EXT. CBM is ISO 13485:2003 and 9001:2008 Certified. CBM provides 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 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 currently manufacture and assemble the Barozyme HT48, Barocycler® HUB440, the SHREDDER SG3, and most of our consumables at our South Easton, MA facility, we plan to take advantage of the established relationship with CBM and transfer manufacturing of the entire Barocycler® product line, future instruments, and other products to CBM.

The Barocycler® NEP3229, launched in 2008, and manufactured by the BIT Group, will be phased out over the next several years and replaced by the new state-of-the-art Barocycler® HUB and Barozyme HT48 product lines.

Investment in Available-For-Sale Equity Securities

Investment in Available-For-Sale Equity Securities

As of September 30, 2017, we held 100,250 shares of common stock of Everest Investments Holdings S.A. (“Everest”), a Polish publicly traded company listed on the Warsaw Stock Exchange. We account for this investment in accordance with ASC 320 “Investments — Debt and Equity Securities” as securities available for sale. On September 30, 2017, our consolidated balance sheet reflected the fair value of our investment in Everest to be approximately $30,000, based on the closing price of Everest shares of $0.29 USD per share on that day. The carrying value of our investment in Everest common stock held will change from period to period based on the closing price of the common stock of Everest as of the balance sheet date. The change in market value since the receipt of stock was determined to be other than temporary. We recorded $6,069 as an impairment loss in the first quarter of 2017. The carrying value increased in the first nine months of 2017 by $6,190 and was reflected as an unrealized gain in our Comprehensive Loss Statement.

Computation of Loss Per Share

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 and nine months ended September 30, 2017 and 2016:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Numerator:
Net loss	$	(2,343,576	)	$	(945,207	)	$	(7,889,676	)	$	(5,933,768	)
Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding		1,133,791			980,846			1,084,370			871,325
Loss per common share – basic and diluted	$	(2.07	)	$	(0.96	)	$	(7.28	)	$	(6.81	)

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 and Series K Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

	As of September 30,
	2017		2016
Stock options		249,636		175,642
Convertible debt		828,870		899,058
Common stock warrants		902,033		827,490
Convertible preferred stock:
Series D Convertible Preferred Stock		25,000		25,000
Series G Convertible Preferred Stock		26,857		28,857
Series H Convertible Preferred Stock		33,334		33,334
Series H2 Convertible Preferred Stock		70,000		70,000
Series J Convertible Preferred Stock		115,267		117,367
Series K Convertible Preferred Stock		227,200		227,200
		2,478,197		2,403,948

Accounting for Stock-Based Compensation Expense

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 $139,399 and $90,500 for the three months ended September 30, 2017 and 2016, respectively. The Company recognized stock-based compensation expense of $318,910 and $282,811 for the nine months ended September 30, 2017 and 2016, 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
	September 30,				September 30,
	2017		2016		2017		2016
Research and development	$	37,345	$	14,735	$	76,263	$	50,766
Selling and marketing		21,778		9,911		46,112		32,404
General and administrative		80,276		65,854		196,535		199,641
Total stock-based compensation expense	$	139,399	$	90,500	$	318,910	$	282,811

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Due to their short maturities, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value. Long-term liabilities are primarily related to convertible debentures and deferred revenue with carrying values that approximate fair value.

Fair Value Measurements

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 the fair value measurement of the derivative liability.

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 and its financial liabilities are currently classified within Level 3 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, 2017:

			Fair value measurements at September 30, 2017 using:
	September 30, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		25,986		25,986		-		-
Total Financial Assets	$	25,986	$	25,986	$	-	$	-

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs for the nine months ended September 30, 2017:

	December 31, 2016		Issuance fair value		Change in fair value		Settlement			Adjustment due to ASU 2017-11			September 30, 2017
Series D Preferred Stock Purchase Warrants	$	23,313	$	-	$	26,014	$	(49,327	)		-		$	-
Warrants Issued with Convertible Debt		1,661,795		-		-		-			(1,661,795	)		-
Conversion Option Derivative Liabilities		951,059		-		-		-			(951,059	)		-
Total Derivatives	$	2,636,167	$	-	$	26,014	$	(49,327	)	$	(2,612,854	)		-

Refer to this Note for accounting of early adoption of ASU 2017-11.

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, 2016:

			Fair value measurements at December 31, 2016 using:
	December 31, 2016		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		25,865		25,865		-		-
Total Financial Assets	$	25,865	$	25,865	$	-	$	-

	December 31, 2016		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Series D Preferred Stock Purchase Warrants	$	23,313		-		-	$	23,313
Warrants Issued with Convertible Debt		1,661,795		-		-		1,661,795
Conversion Option Derivative Liabilities		951,059		-		-		951,059
Total Derivatives	$	2,636,167	$	-	$	-	$	2,636,167

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Schedule of Change in Fair Value of Derivative Liabilities

	Convertible debt, current portion			Convertible debt, long term portion			Warrant Derivative Liability			Conversion Option Liability			Warrants to acquire common stock		Additional Paid-in Capital		Accumulated deficit
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$	4,005,702		$	529,742		$	1,685,108		$	951,059		$	6,325,102	$	27,544,265	$	(42,264,190	)
Reclassified derivative liabilities and cumulative effect of adoption		(769,316	)		(154,152	)	$	(1,661,795	)		(951,059	)	$	2,525,623		1,377,108		(2,213,345	)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$	3,236,386		$	375,590		$	23,313		$	-		$	8,850,725	$	28,921,373	$	(44,477,535	)

Summary of Customer Concentration Risk Percentage

The following table illustrates the level of concentration as a percentage of total revenues during the three months and nine months ended September 30, 2017 and 2016. The Top Five Customers category may include federal agency revenues if applicable.

	For the Three Months Ended
	September 30,
	2017			2016
Top Five Customers		73	%		60	%
Federal Agencies		30	%		9	%

	For the Nine Months Ended
	September 30,
	2017			2016
Top Five Customers		38	%		31	%
Federal Agencies		19	%		3	%

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of September 30, 2017 and December 31, 2016. The Top Five Customers category may include federal agency revenues if applicable

	September 30, 2017			December, 31, 2016
Top Five Customers		74	%		82	%
Federal Agencies		28	%		1	%

Summary of Computation of Loss Per Share

The following table illustrates our computation of loss per share for the three months and nine months ended September 30, 2017 and 2016:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Numerator:
Net loss	$	(2,343,576	)	$	(945,207	)	$	(7,889,676	)	$	(5,933,768	)
Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding		1,133,791			980,846			1,084,370			871,325
Loss per common share – basic and diluted	$	(2.07	)	$	(0.96	)	$	(7.28	)	$	(6.81	)

Summary of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

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 and Series K Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

	As of September 30,
	2017		2016
Stock options		249,636		175,642
Convertible debt		828,870		899,058
Common stock warrants		902,033		827,490
Convertible preferred stock:
Series D Convertible Preferred Stock		25,000		25,000
Series G Convertible Preferred Stock		26,857		28,857
Series H Convertible Preferred Stock		33,334		33,334
Series H2 Convertible Preferred Stock		70,000		70,000
Series J Convertible Preferred Stock		115,267		117,367
Series K Convertible Preferred Stock		227,200		227,200
		2,478,197		2,403,948

Summary of Stock Based Compensation Expense

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
	September 30,				September 30,
	2017		2016		2017		2016
Research and development	$	37,345	$	14,735	$	76,263	$	50,766
Selling and marketing		21,778		9,911		46,112		32,404
General and administrative		80,276		65,854		196,535		199,641
Total stock-based compensation expense	$	139,399	$	90,500	$	318,910	$	282,811

Schedule of Liabilities Measured at Fair Value On Recurring Basis

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, 2017:

			Fair value measurements at September 30, 2017 using:
	September 30, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		25,986		25,986		-		-
Total Financial Assets	$	25,986	$	25,986	$	-	$	-

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs for the nine months ended September 30, 2017:

	December 31, 2016		Issuance fair value		Change in fair value		Settlement			Adjustment due to ASU 2017-11			September 30, 2017
Series D Preferred Stock Purchase Warrants	$	23,313	$	-	$	26,014	$	(49,327	)		-		$	-
Warrants Issued with Convertible Debt		1,661,795		-		-		-			(1,661,795	)		-
Conversion Option Derivative Liabilities		951,059		-		-		-			(951,059	)		-
Total Derivatives	$	2,636,167	$	-	$	26,014	$	(49,327	)	$	(2,612,854	)		-

Refer to this Note for accounting of early adoption of ASU 2017-11.

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, 2016:

			Fair value measurements at December 31, 2016 using:
	December 31, 2016		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		25,865		25,865		-		-
Total Financial Assets	$	25,865	$	25,865	$	-	$	-

	December 31, 2016		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Series D Preferred Stock Purchase Warrants	$	23,313		-		-	$	23,313
Warrants Issued with Convertible Debt		1,661,795		-		-		1,661,795
Conversion Option Derivative Liabilities		951,059		-		-		951,059
Total Derivatives	$	2,636,167	$	-	$	-	$	2,636,167

XML

Convertible Debt and Other Debt (Tables)

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Schedule of Convertible Debts and Outstanding Balances

The specific terms of the convertible debts and outstanding balances as of September 30, 2017 are listed in the table below.

Inception Date	Term	Loan Amount		Outstanding Balance		Original Issue Discount			Interest Rate			Deferred Finance Fees		Discount related to fair value of conversion feature and warrants/shares
July 22, 2015	30 months1	$	2,180,000	$	2,180,000	$	218,000	2		10	%3	$	388,532	$	2,163,074
September 25, 2015	30 months1		1,100,000		1,100,000		110,000	2		10	%3		185,956		1,022,052
October 2, 2015	30 months1		150,000		150,000		15,000	2		10	%3		26,345		140,832
October 6, 2015	30 months1		30,000		30,000		3,000	2		10	%3		5,168		26,721
October 14, 2015	30 months1		50,000		50,000		5,000	2		10	%3		8,954		49,377
November 2, 2015	30 months1		250,000		250,000		25,000	2		10	%3		43,079		222,723
November 10, 2015	24 months		50,000		50,000		5,000	2		10	%3		8,790		46,984
November 12, 2015	24 months		215,000		215,000		21,500	2		10	%3		38,518		212,399
November 20, 2015	24 months		200,000		200,000		20,000	2		10	%3		37,185		200,000
December 4, 2015	24 months		170,000		170,000		17,000	2		10	%3		37,352		170,000
December 11, 2015	24 months		360,000		360,000		36,000	2		10	%3		75,449		360,000
December 18, 2015	24 months		55,000		55,000		5,500	2		10	%3		11,714		55,000
December 31, 2015	24 months		100,000		100,000		10,000	2		10	%3		20,634		100,000
January 11, 2016	24 months		100,000		100,000		10,000	2		10	%3		24,966		80,034
January 20, 2016	24 months		50,000		50,000		5,000	2		10	%3		9,812		40,188
January 29, 2016	24 months		300,000		300,000		30,000	2		10	%3		60,887		239,113
February 26, 2016	24 months		200,000		200,000		20,000	2		10	%3		43,952		156,048
March 10, 2016	24 months		125,000		125,000		12,500	2		10	%3		18,260		106,740
March 18, 2016	24 months		360,000		360,000		36,000	2		10	%3		94,992		265,008
March 24, 2016	24 months		106,667		106,667		10,667	2		10	%3		15,427		91,240
March 31, 2016	24 months		177,882		177,882		17,788	2		10	%3		2,436		175,446
June 15, 2016	6 months		40,000		-		-			12	%		-		3,680
June 17, 2016	6 months		40,000		-		-			12	%		-		3,899
June 22, 2016	6 months		35,000		-		-			12	%		-		3,373
July 6, 2016	6 months		85,000		-		-			12	%		-		15,048
July 29, 2016	6 months		100,000		-		-			12	%		-		25,518
September 15, 2016	8 months		500,000		-		85,541			9	%		-		65,972
April 3, 2017	8 months		50,000		-		-			10	%		-		-
		$	7,179,549	$	6,329,549	$	718,496					$	1,158,408	$	6,040,469

Summary of Changes in Convertible Debt, Net of Unamortized Discounts

The following table provides a summary of the changes in convertible debt and revolving note payable, net of unamortized discount, during 2017:

	2017
Balance at January 1,	$	5,273,937
Adjustment due to ASU 2017-11		923,468
Issuance of convertible debt, face value		2,300,000
Forgiveness of Debt		(50,000	)
Deferred financing cost		(180,000	)
Debt discount related to one-time interest charge		(225,000	)
Debt discount from incentive shares to increase the Revolving Note aggregate principal limit		(150,000	)
Debt discount from shares and warrants issued with the notes		(668,544	)
Payments		(840,541	)
Accretion of interest and amortization of debt discount to interest expense through September 30,		3,322,736
Balance at September 30,		9,706,056
Less: current portion		9,706,056
Convertible debt, long-term portion	$	-

XML

Stockholders' Deficit (Tables)

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Schedule of Concerning Options and Warrants Outstanding and Exercisable

The following tables summarize information concerning options and warrants outstanding and exercisable:

	Stock Options					Warrants
	Weighted					Weighted
	Average					Average								Total
	Shares			Price per share		Shares			Price per share		Shares			Exercisable
Balance outstanding, 12/31/16		175,642		$	12.60		881,990		$	12.00		1,057,632			991,032
Granted		87,198			8.40		230,610			11.40		317,808
Exercised		—					(19,889	)		7.50		(19,889	)
Expired		(3,202	)		30.00		(190,678	)		11.70		(193,880	)
Forfeited		(10,002	)		10.10		—			—		(10,002	)
Balance outstanding, 9/30/2017		249,636		$	10.93		902,033		$	12.00		1,151,669			1,061,140

Schedule of Share-based Compensation Stock Option Plans by Exercise Price Range

	Options Outstanding						Options Exercisable
	Weighted Average						Weighted Average
Range of Exercise Prices	Number of Options		Remaining Contractual Life (Years)		Exercise Price		Number of Options		Remaining Contractual Life (Years)		Exercise Price
$7.50 - $11.99		135,524		8.5	$	8.63		70,995		7.7	$	8.83
12.00 – 14.99		88,705		8.0		12.00		62,705		7.9		12.00
15.00 – 17.99		7,547		4.9		15.00		7,547		4.9		15.00
18.00 – 20.99		12,854		2.4		18.00		12,854		2.4		18.00
21.00 – 30.00		5,006		2.9		30.00		5,006		2.9		30.00
$7.50 - $30.00		249,636		7.8	$	10.93		159,107		7.0	$	11.78

XML

Business Overview, Liquidity and Management Plans (Details Narrative)	9 Months Ended
	Sep. 30, 2017 lb
Pounds per square inch	45,000
PBI Europe [Member]
Percentage of ownership interest	49.00%
Investment Bank [Member]
Percentage of ownership interest	51.00%

XML

Going Concern (Details Narrative)	9 Months Ended
	Sep. 30, 2017 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Gross proceeds from loans	$ 4,610,967
Net proceeds from additional convertible and non-convertible debt	$ 4,610,967

XML

Interim Financial Reporting (Details Narrative)	Jun. 05, 2017
Quarterly Financial Information Disclosure [Abstract]
Common stock, reverse stock split	1-for-30 reverse stock split

XML

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Warrant and option derivative to additional paid in capital	$ 2,600,000			$ 2,600,000
Reduced debt discount	900,000			900,000
Cummulative accumulated deficit	2,200,000			2,200,000
Increase decrease in stock warrants				2,500,000
Increase in additional paid in capital				1,400,000
Change in fair value of warrant and option derivative liabilities				245,215
Reduced amortization of debt discount				812,904
Impairment loss on investment		$ 6,069		6,069
Accumulated other comprehensive income	6,190			$ 6,190
Forfeiture rate				5.00%
Stock-based compensation expense	139,399		$ 90,500	$ 318,910	$ 282,811
Everest Investments Holdings S.A. [Member]
Sale of stock number of shares received				100,250
Fair value of investment	$ 30,000			$ 30,000
Shares closing price per share	$ 0.29			$ 0.29

XML

Summary of Significant Accounting Policies - Schedule of Warrant and Conversion Option Liability, Additional Paid-in Capital, Accumulated Deficit (Details)	9 Months Ended
	Sep. 30, 2017 USD ($)
Convertible Debt Current Portion [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$ 4,005,702
Reclassified derivative liabilities	(769,316)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	3,236,386
Convertible Debt Long Term Portion [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	529,742
Reclassified derivative liabilities	(154,152)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	375,590
Warrant Derivative Liability [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	1,685,108
Reclassified derivative liabilities	(1,661,795)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	23,313
Conversion Option Liability [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	951,059
Reclassified derivative liabilities	(951,059)
Balance, January 1, 2017 (After adoption of ASU 2017-11)
Warrant To Acquire Common Stock [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	6,325,102
Reclassified derivative liabilities	2,525,623
Balance, January 1, 2017 (After adoption of ASU 2017-11)	8,850,725
Additional Paid-in Capital [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	27,544,265
Reclassified derivative liabilities	1,377,108
Balance, January 1, 2017 (After adoption of ASU 2017-11)	28,921,373
Accumulated Deficit [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	(42,264,190)
Reclassified derivative liabilities	(2,213,345)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$ (44,477,535)

XML

Summary of Significant Accounting Policies - Summary of Customer Concentration Risk Percentage (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Top Five Customers [Member] | Revenue [Member]
Concentration as a percentage	73.00%	60.00%	38.00%	31.00%
Top Five Customers [Member] | Accounts Receivable [Member]
Concentration as a percentage			74.00%		82.00%
Federal Agencies [Member] | Revenue [Member]
Concentration as a percentage	30.00%	9.00%	19.00%	3.00%
Federal Agencies [Member] | Accounts Receivable [Member]
Concentration as a percentage			28.00%		1.00%

XML

Summary of Significant Accounting Policies - Summary of Computation of Loss Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Accounting Policies [Abstract]
Net loss	$ (2,343,576)	$ (945,207)	$ (7,889,676)	$ (5,933,768)
Weighted average common stock shares outstanding	1,133,791	980,846	1,084,370	871,325
Loss per common share - basic and diluted	$ (2.07)	$ (0.96)	$ (7.28)	$ (6.81)

XML

Summary of Significant Accounting Policies - Summary of Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Stock Options [Member]
Total potentially dilutive shares	249,636	175,642
Convertible Debt [Member]
Total potentially dilutive shares	828,870	899,058
Common Stock Warrants [Member]
Total potentially dilutive shares	902,033	827,490
Series D Convertible Preferred Stock [Member]
Total potentially dilutive shares	25,000	25,000
Series G Convertible Preferred Stock [Member]
Total potentially dilutive shares	26,857	28,857
Series H Convertible Preferred Stock [Member]
Total potentially dilutive shares	33,334	33,334
Series H2 Convertible Preferred Stock [Member]
Total potentially dilutive shares	70,000	70,000
Series J Convertible Preferred Stock [Member]
Total potentially dilutive shares	115,267	117,367
Series K Convertible Preferred Stock [Member]
Total potentially dilutive shares	227,200	227,200
Potentially Dilutive Shares [Member]
Total potentially dilutive shares	2,478,197	2,403,948

XML

Summary of Significant Accounting Policies - Summary of Stock Based Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Total stock-based compensation expense	$ 139,399	$ 90,500	$ 318,910	$ 282,811
Research and Development [Member]
Total stock-based compensation expense	37,345	14,735	76,263	50,766
Selling and Marketing [Member]
Total stock-based compensation expense	21,778	9,911	46,112	32,404
General and Administrative [Member]
Total stock-based compensation expense	$ 80,276	$ 65,854	$ 196,535	$ 199,641

XML

Summary of Significant Accounting Policies - Schedule of Liabilities Measured at Fair Value On Recurring Basis (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Total Financial Assets	$ 25,986	$ 25,865
Fair value of derivative liability		2,636,167
Balance	2,636,167
Issuance fair value
Change in Fair Value	26,014
Settlement	(49,327)
Adjustment due to ASU 2017-11	(2,612,854)
Balance
Quoted Prices in Active Markets (Level 1) [Member]
Total Financial Assets	25,986	25,865
Fair value of derivative liability
Significant Other Observable Inputs (Level 2) [Member]
Total Financial Assets
Fair value of derivative liability
Significant Unobservable Inputs (Level 3) [Member]
Total Financial Assets
Fair value of derivative liability		2,636,167
Available-For-Sale Equity Securities [Member]
Total Financial Assets	25,986	25,865
Available-For-Sale Equity Securities [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Total Financial Assets	25,986	25,865
Available-For-Sale Equity Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Total Financial Assets
Available-For-Sale Equity Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Total Financial Assets
Series D Preferred Stock Purchase Warrants [Member]
Fair value of derivative liability		23,313
Balance	23,313
Issuance fair value
Change in Fair Value	26,014
Settlement	(49,327)
Adjustment due to ASU 2017-11
Balance
Series D Preferred Stock Purchase Warrants [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair value of derivative liability
Series D Preferred Stock Purchase Warrants [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair value of derivative liability
Series D Preferred Stock Purchase Warrants [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair value of derivative liability		23,313
Warrants Issued with Convertible Debt [Member]
Fair value of derivative liability		1,661,795
Balance	1,661,795
Issuance fair value
Change in Fair Value
Settlement
Adjustment due to ASU 2017-11	(1,661,795)
Balance
Warrants Issued with Convertible Debt [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair value of derivative liability
Warrants Issued with Convertible Debt [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair value of derivative liability
Warrants Issued with Convertible Debt [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair value of derivative liability		1,661,795
Conversion Option Derivative Liabilities [Member]
Fair value of derivative liability		951,059
Balance	951,059
Issuance fair value
Change in Fair Value
Settlement
Adjustment due to ASU 2017-11	(951,059)
Balance
Conversion Option Derivative Liabilities [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair value of derivative liability
Conversion Option Derivative Liabilities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair value of derivative liability
Conversion Option Derivative Liabilities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair value of derivative liability		$ 951,059

XML

Commitments and Contingencies (Details Narrative) - USD ($)		9 Months Ended
	Dec. 29, 2016	Sep. 30, 2017	Sep. 30, 2016
Rental expenses		$ 112,438	$ 108,038
Grants receivable		1,020,000
May 1, 2017 [Member]
Rental expenses		2,150
October 18, 2017 [Member]
Rental expenses		$ 6,913
Lease expire date		Dec. 30, 2020
Corporate Office [Member]
Rental expenses	$ 4,800
Lease expire date	Dec. 31, 2017

XML

Convertible Debt and Other Debt (Details Narrative) - USD ($)																						1 Months Ended		3 Months Ended		9 Months Ended
	Sep. 20, 2017	Sep. 12, 2017	Aug. 02, 2017	Jul. 25, 2017	Jun. 21, 2017	Jun. 17, 2017	Jun. 06, 2017	May 19, 2017	May 02, 2017	Apr. 19, 2017	Apr. 03, 2017	Mar. 31, 2017	Mar. 21, 2017	Mar. 14, 2017	Mar. 02, 2017	Feb. 15, 2017	Feb. 06, 2017	Aug. 26, 2016	Aug. 16, 2016	Feb. 08, 2016	Jan. 06, 2016	Jan. 31, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Aug. 18, 2017	Dec. 31, 2016	Oct. 28, 2016
Debt principal amount												$ 309,465												$ 2,300,000		$ 2,300,000
Percentage of annual interest rates		10.00%																				12.00%
Debt conversion price per share																								$ 13.50		$ 13.50
Number of shares issued		3,333																								38,606
Gain on extinguishment of debt												$ 123,862												$ 90,862		$ 90,862
Warrants rights description																										Subject to the terms and conditions of the Warrants, at any time commencing six months from the Final Closing, the Company has the right to call the Warrants for cancellation if the volume weighted average price of its Common Stock on the OTCQB (or other primary trading market or exchange on which the Common Stock is then traded) equals or exceeds three times the per share exercise price of the Warrants for 15 out of 20 consecutive trading days.
Amortized of debt discount																										$ 4,736,571
Fair value of warrant																										2,847,624
Number of restricted stock issued during period	4,000																					1,667
Number of restricted stock issued during period , value	$ 16,000																					$ 10,000
Interest expense																						10,000		$ 1,554,379	$ 1,116,328	$ 4,431,950	$ 2,961,708
Payment of debt																						$ 34,000
Common stock outstanding, percentage																								5.00%		5.00%
Unamortized debt discount		$ 25,000																						$ 355,375		$ 355,375			$ 2,235,839
Proceeds from loan																										$ 4,610,967
Original issue of discount percentage		35.00%
Convertible debt		$ 225,000
Convertible Debentures [Member]
Prepayment of debentures, percentage																								120.00%		120.00%
Revolving Note [Member]
Debt principal amount																												$ 3,500,000
Issuance of warrants to purchase of common stock shares																								250,000		250,000
Fees and commission																										$ 296,500
One-time interest amount																										350,000
Unamortized debt discount																								$ 335,833		335,833
Revolving Note [Member] | Investor [Member]
Amortized of debt discount																										$ 1,148,275
Revolving Note [Member] | Prior to April 28, 2017 [Member]
Percentage of annual interest rates																								10.00%		10.00%
Revolving Note [Member] | April 28, 2017 And July 28, 2017 [Member]
Percentage of annual interest rates																								4.00%		4.00%
Revolving Note [Member] | July 28, 2017 And October 28, 2017 [Member]
Percentage of annual interest rates																								4.00%		4.00%
Non Convertible Loan [Member]
Percentage of annual interest rates										10.00%			10.00%	10.00%
Number of shares issued										5,833
Amortized of debt discount										$ 32,684				$ 46,748										$ 62,651
Unamortized debt discount																								$ 14,097		$ 14,097
Proceeds from loan										$ 250,000				$ 250,000
Original issue of discount percentage										10.00%			10.00%	10.00%										35.00%		35.00%
Convertible debt														$ 250,000										$ 170,000		$ 170,000
Number of shares issued										833
Non Convertible Loan [Member] | Investor [Member]
Amortized of debt discount													$ 35,079													41,025
Number of restricted stock issued during period													5,667	8,333
Unamortized debt discount																								11,054		11,054
Non Convertible Loan [Member] | Accredited Investor [Member]
Proceeds from loan													$ 170,000
Non Convertible Loan 1 [Member]
Unamortized debt discount																								$ 12,420		$ 12,420
Original issue of discount percentage																								35.00%		35.00%
90 Month Non Convertible Loan [Member]
Amortized of debt discount																										$ 2,505
Unamortized debt discount																								$ 35,495		35,495
Board Of Directors [Member] | Convertible Debentures [Member]
Convertible debentures issued to related parties																								291,000		291,000
Investor [Member]
Number of shares issued										8,333
Investor [Member] | Revolving Note [Member]
Debt conversion price per share									$ 12.00
Number of shares issued									16,667
Issuance of warrants to purchase of common stock shares																														250,000
Warrant exercise price per share																														$ 12.00
Fair value of convertible note																														$ 2,000,000
Advance pursuant to revolving note																														3,500,000
Increase in debt principal amount									$ 3,000,000
Debt instrument description									the per share purchase price of the shares of our Common Stock sold in the Qualified Offering, and to change the references in the Revolving Note from “the six (6) month anniversary of October 28, 2016” to “July 25, 2017.”
Investor [Member] | Revolving Note [Member] | Maximum [Member] | 15 Day Period [Member]
Advance pursuant to revolving note																														500,000
Investor [Member] | Revolving Note [Member] | Maximum [Member] | 30 Day Period [Member]
Advance pursuant to revolving note																														$ 250,000
Investor [Member] | Non Convertible Loan [Member]
Number of shares issued										2,500
Investor [Member] | Non Convertible Loan [Member] | 60 Days [Member]
Number of shares issued										8,333
Holder [Member]
Percentage of outstanding principal amount of debenture				5.00%
Equity ownership, percentage				5.00%
Gross proceeds of purchase consideration				$ 7,000,000
Private Investor [Member] | Non Convertible Loan [Member]
Percentage of annual interest rates								20.00%
Unamortized debt discount																								$ 0		$ 0
Proceeds from loan								$ 630,000
Debt fee amount								32,000
Debt instrument interest amount								63,000
Due to related parties								31,500
Private Investor [Member] | Non Convertible Loan [Member] | September 2016 Loan [Member]
Proceeds from loan								$ 589,189
Subscription Agreement [Member] | Individuals [Member] | July 23, 2015 and March 31, 2016 [Member]
Percentage of warrants to purchase shares of common stock																								50.00%		50.00%
Purchase warrants price amount																										$ 6,329,549
Debt principal amount																								$ 6,962,504		$ 6,962,504
Percentage of debt original issue discount on purchase price																										10.00%
Percentage of annual interest rates																								10.00%		10.00%
Debt conversion price per share																								$ 8.40		$ 8.40
Convertible debentures term																										2 years
Percentage of outstanding principal amount of debenture																										120.00%
Issuance of warrants to purchase of common stock shares																								376,757		376,757
Warrant exercise price per share																								$ 12.00		$ 12.00
Warrants expiration period																										5 years
Six-month agreement [Member
Payment of debt											$ 10,000
Agreement termination date											Jun. 07, 2017
Six-month agreement [Member | Convertible 8-month Note [Member]
Percentage of annual interest rates											10.00%
Debt conversion price per share											$ 12.00
Payment of debt											$ 50,000
Pre-payment penalty percentage											20.00%
Default interest rate											18.00%
Merchant Agreement [Member]
Other note outstanding balance																								$ 0		$ 0
Merchant Agreement [Member] | Lenders [Member]
Payment of debt			$ 93,750
Unamortized debt discount					$ 509
Collected rate business day					1,361	$ 1,250	$ 1,833
Proceeds from loan			75,000		150,000	125,000	250,000								$ 75,750
Debt fee amount					$ 1,498		6,250
Pay off prior loan amount							$ 119,021
Loan fees paid			$ 18,750			$ 1,250
Merchant Agreement [Member] | Lenders One [Member]
Unamortized debt discount																								2,357		2,357
Convertible debt																								157,820		157,820
Merchant Agreement [Member] | Lenders Two [Member]
Convertible debt																								81,000		81,000
Merchant Agreement [Member] | Non Convertible Loan [Member] | Two Accredited Investor [Member]
Debt principal amount																$ 220,000
Gain on extinguishment of debt																$ 33,000
Amortized of debt discount																										59,794
Number of restricted stock issued during period																5,667
Unamortized debt discount																$ 43,616								3,822		3,822
Debt fee percentage																10.00%
Original issue of discount percentage																10.00%
Convertible debt																								132,000		132,000
Merchant Agreement [Member] | Convertible Debt [Member]
Convertible debt																								82,000		82,000
Merchant Agreement [Member] | Convertible Debt Two [Member]
Convertible debt																								56,000		56,000
Merchant Agreement [Member] | Lender [Member]
Gain on extinguishment of debt																					$ 5,044
Received in exchange for rights to all customer receipts																				$ 100,000	250,000
Payment of other notes																				129,900	322,500
Collected rate business day																		$ 1,386		927	1,280
Proceeds from loan																	$ 125,000				138,840
Debt fee amount																				$ 2,000	2,500
Additional convertible debentures																			$ 70,000		$ 93,161		$ 125,000
Pay off prior loan amount																	16,180						$ 48,420
Proceeds from pay off outstanding balance of previous loan																		$ 122,465
Loan fees paid																	$ 1,250
Merchant Agreement [Member] | Lender [Member]
Other note outstanding balance																								$ 0		$ 0

XML

Convertible Debt and Other Debt - Schedule of Convertible Debts and Outstanding Balances (Details) - USD ($)		9 Months Ended
		Sep. 30, 2017	Sep. 12, 2017	Mar. 31, 2017	Jan. 31, 2017
Loan Amount		$ 2,300,000		$ 309,465
Outstanding Balance			$ 225,000
Interest Rate			10.00%		12.00%
Fixed Rate Convertible Notes [Member]
Loan Amount		7,179,549
Outstanding Balance		6,329,549
Original Issue Discount		718,496
Deferred Finance Fees		1,158,408
Discount related to Fair value of conversion feature and warrants		$ 6,040,469
Fixed Rate Convertible Notes [Member] | Convertible Debt [Member]
Inception Date		Jul. 22, 2015
Term	[1]	30 months
Loan Amount		$ 2,180,000
Outstanding Balance		2,180,000
Original Issue Discount	[2]	$ 218,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 388,532
Discount related to Fair value of conversion feature and warrants		$ 2,163,074
Fixed Rate Convertible Notes [Member] | Convertible Debt Two [Member]
Inception Date		Sep. 25, 2015
Term	[1]	30 months
Loan Amount		$ 1,100,000
Outstanding Balance		1,100,000
Original Issue Discount	[2]	$ 110,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 185,956
Discount related to Fair value of conversion feature and warrants		$ 1,022,052
Fixed Rate Convertible Notes [Member] | Convertible Debt Three [Member]
Inception Date		Oct. 02, 2015
Term	[1]	30 months
Loan Amount		$ 150,000
Outstanding Balance		150,000
Original Issue Discount	[2]	$ 15,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 26,345
Discount related to Fair value of conversion feature and warrants		$ 140,832
Fixed Rate Convertible Notes [Member] | Convertible Debt Four [Member]
Inception Date		Oct. 06, 2015
Term	[1]	30 months
Loan Amount		$ 30,000
Outstanding Balance		30,000
Original Issue Discount	[2]	$ 3,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 5,168
Discount related to Fair value of conversion feature and warrants		$ 26,721
Fixed Rate Convertible Notes [Member] | Convertible Debt Five [Member]
Inception Date		Oct. 14, 2015
Term	[1]	30 months
Loan Amount		$ 50,000
Outstanding Balance		50,000
Original Issue Discount	[2]	$ 5,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 8,954
Discount related to Fair value of conversion feature and warrants		$ 49,377
Fixed Rate Convertible Notes [Member] | Convertible Debt Six [Member]
Inception Date		Nov. 02, 2015
Term	[1]	30 months
Loan Amount		$ 250,000
Outstanding Balance		250,000
Original Issue Discount	[2]	$ 25,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 43,079
Discount related to Fair value of conversion feature and warrants		$ 222,723
Fixed Rate Convertible Notes [Member] | Convertible Debt Seven [Member]
Inception Date		Nov. 10, 2015
Term		24 months
Loan Amount		$ 50,000
Outstanding Balance		50,000
Original Issue Discount	[2]	$ 5,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 8,790
Discount related to Fair value of conversion feature and warrants		$ 46,984
Fixed Rate Convertible Notes [Member] | Convertible Debt Eight [Member]
Inception Date		Nov. 12, 2015
Term		24 months
Loan Amount		$ 215,000
Outstanding Balance		215,000
Original Issue Discount	[2]	$ 21,500
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 38,518
Discount related to Fair value of conversion feature and warrants		$ 212,399
Fixed Rate Convertible Notes [Member] | Convertible Debt Nine [Member]
Inception Date		Nov. 20, 2015
Term		24 months
Loan Amount		$ 200,000
Outstanding Balance		200,000
Original Issue Discount	[2]	$ 20,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 37,185
Discount related to Fair value of conversion feature and warrants		$ 200,000
Fixed Rate Convertible Notes [Member] | Convertible Debt Ten [Member]
Inception Date		Dec. 04, 2015
Term		24 months
Loan Amount		$ 170,000
Outstanding Balance		170,000
Original Issue Discount	[2]	$ 17,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 37,352
Discount related to Fair value of conversion feature and warrants		$ 170,000
Fixed Rate Convertible Notes [Member] | Convertible Debt Eleven [Member]
Inception Date		Dec. 11, 2015
Term		24 months
Loan Amount		$ 360,000
Outstanding Balance		360,000
Original Issue Discount	[2]	$ 36,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 75,449
Discount related to Fair value of conversion feature and warrants		$ 360,000
Fixed Rate Convertible Notes [Member] | Convertible Debt Twelve [Member]
Inception Date		Dec. 18, 2015
Term		24 months
Loan Amount		$ 55,000
Outstanding Balance		55,000
Original Issue Discount	[2]	$ 5,500
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 11,714
Discount related to Fair value of conversion feature and warrants		$ 55,000
Fixed Rate Convertible Notes [Member] | Convertible Debt Thirteen [Member]
Inception Date		Dec. 31, 2015
Term		24 months
Loan Amount		$ 100,000
Outstanding Balance		100,000
Original Issue Discount	[2]	$ 10,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 20,634
Discount related to Fair value of conversion feature and warrants		$ 100,000
Fixed Rate Convertible Notes [Member] | Convertible Debt Fourteen [Member]
Inception Date		Jan. 11, 2016
Term		24 months
Loan Amount		$ 100,000
Outstanding Balance		100,000
Original Issue Discount	[2]	$ 10,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 24,966
Discount related to Fair value of conversion feature and warrants		$ 80,034
Fixed Rate Convertible Notes [Member] | Convertible Debt Fifteen [Member]
Inception Date		Jan. 20, 2016
Term		24 months
Loan Amount		$ 50,000
Outstanding Balance		50,000
Original Issue Discount	[2]	$ 5,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 9,812
Discount related to Fair value of conversion feature and warrants		$ 40,188
Fixed Rate Convertible Notes [Member] | Convertible Debt Sixteen [Member]
Inception Date		Jan. 29, 2016
Term		24 months
Loan Amount		$ 300,000
Outstanding Balance		300,000
Original Issue Discount	[2]	$ 30,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 60,887
Discount related to Fair value of conversion feature and warrants		$ 239,113
Fixed Rate Convertible Notes [Member] | Convertible Debt Seventeen [Member]
Inception Date		Feb. 26, 2016
Term		24 months
Loan Amount		$ 200,000
Outstanding Balance		200,000
Original Issue Discount	[2]	$ 20,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 43,952
Discount related to Fair value of conversion feature and warrants		$ 156,048
Fixed Rate Convertible Notes [Member] | Convertible Debt Eighteen [Member]
Inception Date		Mar. 10, 2016
Term		24 months
Loan Amount		$ 125,000
Outstanding Balance		125,000
Original Issue Discount	[2]	$ 12,500
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 18,260
Discount related to Fair value of conversion feature and warrants		$ 106,740
Fixed Rate Convertible Notes [Member] | Convertible Debt Nineteen [Member]
Inception Date		Mar. 18, 2016
Term		24 months
Loan Amount		$ 360,000
Outstanding Balance		360,000
Original Issue Discount	[2]	$ 36,000
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 94,992
Discount related to Fair value of conversion feature and warrants		$ 265,008
Fixed Rate Convertible Notes [Member] | Convertible Debt Twenty [Member]
Inception Date		Mar. 24, 2016
Term		24 months
Loan Amount		$ 106,667
Outstanding Balance		106,667
Original Issue Discount	[2]	$ 10,667
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 15,427
Discount related to Fair value of conversion feature and warrants		$ 91,240
Fixed Rate Convertible Notes [Member] | Convertible Debt Twenty One [Member]
Inception Date		Mar. 31, 2016
Term		24 months
Loan Amount		$ 177,882
Outstanding Balance		177,882
Original Issue Discount	[2]	$ 17,788
Interest Rate	[3]	10.00%
Deferred Finance Fees		$ 2,436
Discount related to Fair value of conversion feature and warrants		$ 175,446
Fixed Rate Convertible Notes [Member] | Convertible Debt Twenty Two [Member]
Inception Date		Jun. 15, 2016
Term		6 months
Loan Amount		$ 40,000
Outstanding Balance
Original Issue Discount
Interest Rate		12.00%
Deferred Finance Fees
Discount related to Fair value of conversion feature and warrants		$ 3,680
Fixed Rate Convertible Notes [Member] | Convertible Debt Twenty Three [Member]
Inception Date		Jun. 17, 2016
Term		6 months
Loan Amount		$ 40,000
Outstanding Balance
Original Issue Discount
Interest Rate		12.00%
Deferred Finance Fees
Discount related to Fair value of conversion feature and warrants		$ 3,899
Fixed Rate Convertible Notes [Member] | Convertible Debt Twenty Four [Member]
Inception Date		Jun. 22, 2016
Term		6 months
Loan Amount		$ 35,000
Outstanding Balance
Original Issue Discount
Interest Rate		12.00%
Deferred Finance Fees
Discount related to Fair value of conversion feature and warrants		$ 3,373
Fixed Rate Convertible Notes [Member] | Convertible Debt Twenty Five [Member]
Inception Date		Jul. 06, 2016
Term		6 months
Loan Amount		$ 85,000
Outstanding Balance
Original Issue Discount
Interest Rate		12.00%
Deferred Finance Fees
Discount related to Fair value of conversion feature and warrants		$ 15,048
Fixed Rate Convertible Notes [Member] | Convertible Debt Twenty Six [Member]
Inception Date		Jul. 29, 2016
Term		6 months
Loan Amount		$ 100,000
Outstanding Balance
Original Issue Discount
Interest Rate		12.00%
Deferred Finance Fees
Discount related to Fair value of conversion feature and warrants		$ 25,518
Fixed Rate Convertible Notes [Member] | Convertible Debt Twenty Seven [Member]
Inception Date		Sep. 15, 2016
Term		8 months
Loan Amount		$ 500,000
Outstanding Balance
Original Issue Discount		$ 85,541
Interest Rate		9.00%
Deferred Finance Fees
Discount related to Fair value of conversion feature and warrants		$ 65,972
Fixed Rate Convertible Notes [Member] | Convertible Debt Twenty Eight [Member]
Inception Date		Apr. 03, 2017
Term		8 months
Loan Amount		$ 50,000
Outstanding Balance
Original Issue Discount
Interest Rate		10.00%
Deferred Finance Fees
Discount related to Fair value of conversion feature and warrants

[1] The loan term was extended by 180 days.

[2] The original issue discount is reflected in the first year.

[3] The annual interest starts accruing in the second year.

XML

Convertible Debt and Other Debt - Summary of Changes in Convertible Debt, Net of Unamortized Discounts (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Mar. 31, 2017	Dec. 31, 2016
Debt Disclosure [Abstract]
Balance at January 1,	$ 5,273,937
Adjustment due to ASU 2017-11	923,468
Issuance of convertible debt, face value	2,300,000		$ 309,465
Forgiveness of Debt	(50,000)
Deferred financing cost	(180,000)
Debt discount related to one-time interest charge	(225,000)
Debt discount from incentive shares to increase the Revolving Note aggregate principal limit	(150,000)
Debt discount from shares and warrants issued with the notes	(668,544)
Payments	(840,541)
Accretion of interest and amortization of debt discount to interest expense through March 31,	3,322,736
Balance at September 30,	9,706,056
Less: current portion	6,315,995			$ 4,005,702
Convertible debt, long-term portion				$ 529,742

XML

Stockholders’ Deficit (Details Narrative) - USD ($)								1 Months Ended	3 Months Ended			9 Months Ended
	Sep. 20, 2017	Sep. 12, 2017	Jun. 09, 2017	May 10, 2017	Apr. 19, 2017	Apr. 02, 2017	Mar. 31, 2017	Jan. 31, 2017	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Aug. 18, 2017	May 02, 2017	Mar. 21, 2017	Mar. 14, 2017	Dec. 31, 2016	Nov. 29, 2015	Dec. 12, 2013
Convertible preferred stock, authorized									1,000,000			1,000,000
Convertible preferred stock, par value									$ 0.01			$ 0.01
Convertible preferred stock, shares issued									1,000,000			1,000,000
Common stock, shares outstanding under the plan									1,151,669			1,151,669						1,057,632
Estimated fair value of unvested stock options												$ 488,912
Fair value of options granted												487,914
Aggregate intrinsic value options outstanding									$ 0			0
Aggregate intrinsic value options exercisable									0			0
Number of restricted common stock shares issued	4,000							1,667
Number of restricted stock value	$ 16,000							$ 10,000
Debt principal amount							$ 309,465		2,300,000	$ 309,465		2,300,000
Gain on extinguishment of debt							$ 123,862		90,862			$ 90,862
Percentage of annual interest rates		10.00%						12.00%
Original issue of discount percentage		35.00%
Number of shares issued to investor, shares		3,333										38,606
Number of warrant to purchase common stock									9,721,627			$ 9,721,627						$ 6,325,102
Fair value of warrant												2,847,624
Convertible debt		$ 225,000
Unamortized debt discount		25,000							$ 355,375			$ 355,375						$ 2,235,839
Amortization of interest expenses		$ 13,000
Revolving Note [Member]
Debt principal amount														$ 3,500,000
Number of warrant to purchase common stock															$ 3,000,000
Number of warrants to purchase common stock, shares															16,667
Warrant exercise price															$ 12.00
Non Convertible Loan [Member]
Percentage of annual interest rates					10.00%											10.00%	10.00%
Original issue of discount percentage					10.00%				35.00%			35.00%				10.00%	10.00%
Number of shares issued to investor, shares					5,833
Convertible debt									$ 170,000			$ 170,000					$ 250,000
Unamortized debt discount									$ 14,097			$ 14,097
Investor [Member]
Number of shares issued to investor, shares					8,333
Investor [Member] | Every Sixty Days [Member]
Number of shares issued to investor, shares					2,500
Privately-Held Investment Firm [Member]
Percentage of annual interest rates					10.00%
Original issue of discount percentage					10.00%
Number of shares issued at closing					833
Number of shares issued to investor, shares					5,833
Privately-Held Investment Firm [Member] | Non Convertible Loan [Member]
Proceeds from non convertible debt					$ 250,000
Warrants [Member]
Common stock, shares outstanding under the plan									902,033			902,033						881,990
Aggregate intrinsic value options outstanding									$ 0			$ 0
Aggregate intrinsic value options exercisable									$ 0			0
Restricted Common Stock [Member]
Number of restricted common stock shares issued								3,334
Number of restricted stock value								$ 15,558
Remaining in 2017 [Member]
Non-cash, stock-based compensation expense												87,359
2018 [Member]
Non-cash, stock-based compensation expense												272,539
2019 [Member]
Non-cash, stock-based compensation expense												106,477
2020 [Member]
Non-cash, stock-based compensation expense												$ 22,537
2005 Equity Incentive [Member]
Common stock reserved for stock option plan									1,800,000			1,800,000
Common stock, shares outstanding under the plan									35,274			35,274
2013 Equity Incentive Plan [Member]
Common stock reserved for stock option plan																				3,000,000
Common stock, shares outstanding under the plan									84,425			84,425
2015 Equity Incentive Plan [Member]
Common stock reserved for stock option plan																			5,000,000
Common stock, shares outstanding under the plan									129,937			129,937
Restricted Common Stock [Member] | Administrative Expenses [Member]
Number of restricted stock value						$ 15,000
Restricted Common Stock [Member] | Investor [Member]
Number of restricted common stock shares issued										27,000
Restricted Common Stock [Member] | Investor Relations Firm [Member]
Number of restricted common stock shares issued						1,667
Series D Registered Direct Offering [Member]
Number of shares issued to investor, shares				19,889
Number of shares issued to investor				$ 149,164
Number of warrants to purchase common stock, shares				39,778
Warrant exercise price				$ 8.40
Due to related party				$ 8,949
Fair value of warrant				$ 186,802
Series A Junior Participating Preferred Stock [Member]
Number of stock designated									20,000			20,000
Series A Convertible Preferred Stock [Member]
Number of stock designated									313,960			313,960
Series B Convertible Preferred Stock [Member]
Number of stock designated									279,256			279,256
Series C Convertible Preferred Stock [Member]
Number of stock designated									88,098			88,098
Series D Convertible Preferred Stock [Member]
Convertible preferred stock, authorized									850			850						850
Convertible preferred stock, par value									$ 0.01			$ 0.01						$ .01
Convertible preferred stock, shares issued									300			300						300
Number of stock designated									850			850
Series E Convertible Preferred Stock [Member]
Number of stock designated									500			500
Series G Convertible Preferred Stock [Member]
Convertible preferred stock, authorized									240,000			240,000						240,000
Convertible preferred stock, par value									$ 0.01			$ 0.01						$ 0.01
Convertible preferred stock, shares issued									80,570			80,570						80,570
Number of stock designated									240,000			240,000
Conversion of stock			6,000
Conversion of stock into shares			2,000
Series H Convertible Preferred Stock [Member]
Convertible preferred stock, authorized									10,000			10,000						10,000
Convertible preferred stock, par value									$ 0.01			$ 0.01						$ 0.01
Convertible preferred stock, shares issued									10,000			10,000						10,000
Number of stock designated									10,000			10,000
Series H2 Convertible Preferred Stock [Member]
Convertible preferred stock, authorized									21			21						21
Convertible preferred stock, par value									$ 0.01			$ 0.01						$ 0.01
Convertible preferred stock, shares issued									21			21						21
Number of stock designated									21			21
Series J Convertible Preferred Stock [Member]
Convertible preferred stock, authorized									6,250			6,250						6,250
Convertible preferred stock, par value									$ 0.01			$ 0.01						$ 0.01
Convertible preferred stock, shares issued									3,458			3,458						3,458
Number of stock designated									6,250			6,250
Conversion of stock			6,300
Conversion of stock into shares			2,100
Series K Convertible Preferred Stock [Member]
Convertible preferred stock, authorized									15,000			15,000						15,000
Convertible preferred stock, par value									$ 0.01			$ 0.01						$ 0.01
Convertible preferred stock, shares issued									6,816			6,816						6,816
Number of stock designated									15,000			15,000

XML

Stockholders' Deficit - Schedule of Concerning Options and Warrants Outstanding and Exercisable (Details)	9 Months Ended
	Sep. 30, 2017 $ / shares shares
Shares, Beginning balance	1,057,632
Shares, Granted	317,808
Shares, Exercised	(19,889)
Shares, Expired	(193,880)
Shares, Forfeited	(10,002)
Shares, Ending balance	1,151,669
Stock Option [Member]
Shares, Beginning balance	175,642
Shares, Granted	87,198
Shares, Exercised
Shares, Expired	(3,202)
Shares, Forfeited	(10,002)
Shares, Ending balance	249,636
Weighted average price per share, Beginning balance | $ / shares	$ 12.60
Weighted average price per share, Granted | $ / shares	8.40
Weighted average price per share, Exercised | $ / shares
Weighted average price per share, Expired | $ / shares	30.00
Weighted average price per share, Forfeited | $ / shares	10.10
Weighted average price per share, Ending balance | $ / shares	$ 10.93
Warrants [Member]
Shares, Beginning balance	881,990
Shares, Granted	230,610
Shares, Exercised	(19,889)
Shares, Expired	(190,678)
Shares, Forfeited
Shares, Ending balance	902,033
Weighted average price per share, Beginning balance | $ / shares	$ 12.00
Weighted average price per share, Granted | $ / shares	11.40
Weighted average price per share, Exercised | $ / shares	7.50
Weighted average price per share, Expired | $ / shares	11.70
Weighted average price per share, Forfeited | $ / shares
Weighted average price per share, Ending balance | $ / shares	$ 12.00
Exercisable, Beginning balance	991,032
Exercisable, Ending balance	1,061,140

XML

Stockholders' Deficit - Schedule of Share-based Compensation Stock Option Plans by Exercise Price Range (Details)	9 Months Ended
	Sep. 30, 2017 $ / shares shares
Exercise price range, lower range limit	$ 7.50
Exercise price range, upper range limit	$ 30.00
Options outstanding, number of options | shares	249,636
Options outstanding, weighted average remaining contractual life (years)	7 years 9 months 18 days
Options outstanding, weighted average exercise price	$ 10.93
Options exercisable, number of options | shares	159,107
Options exercisable, weighted average remaining contractual life (years)	7 years
Options exercisable, weighted average exercise price	$ 11.78
Exercise Price 1 [Member]
Exercise price range, lower range limit	7.50
Exercise price range, upper range limit	$ 11.99
Options outstanding, number of options | shares	135,524
Options outstanding, weighted average remaining contractual life (years)	8 years 6 months
Options outstanding, weighted average exercise price	$ 8.63
Options exercisable, number of options | shares	70,995
Options exercisable, weighted average remaining contractual life (years)	7 years 8 months 12 days
Options exercisable, weighted average exercise price	$ 8.83
Exercise Price 2 [Member]
Exercise price range, lower range limit	12.00
Exercise price range, upper range limit	$ 14.99
Options outstanding, number of options | shares	88,705
Options outstanding, weighted average remaining contractual life (years)	8 years
Options outstanding, weighted average exercise price	$ 12.00
Options exercisable, number of options | shares	62,705
Options exercisable, weighted average remaining contractual life (years)	7 years 10 months 25 days
Options exercisable, weighted average exercise price	$ 12.00
Exercise Price 3 [Member]
Exercise price range, lower range limit	15.00
Exercise price range, upper range limit	$ 17.99
Options outstanding, number of options | shares	7,547
Options outstanding, weighted average remaining contractual life (years)	4 years 10 months 25 days
Options outstanding, weighted average exercise price	$ 15.00
Options exercisable, number of options | shares	7,547
Options exercisable, weighted average remaining contractual life (years)	4 years 10 months 25 days
Options exercisable, weighted average exercise price	$ 15.00
Exercise Price 4 [Member]
Exercise price range, lower range limit	18.00
Exercise price range, upper range limit	$ 20.99
Options outstanding, number of options | shares	12,854
Options outstanding, weighted average remaining contractual life (years)	2 years 4 months 24 days
Options outstanding, weighted average exercise price	$ 18.00
Options exercisable, number of options | shares	12,854
Options exercisable, weighted average remaining contractual life (years)	2 years 4 months 24 days
Options exercisable, weighted average exercise price	$ 18.00
Exercise Price 5 [Member]
Exercise price range, lower range limit	21.00
Exercise price range, upper range limit	$ 30.00
Options outstanding, number of options | shares	5,006
Options outstanding, weighted average remaining contractual life (years)	2 years 10 months 25 days
Options outstanding, weighted average exercise price	$ 30.00
Options exercisable, number of options | shares	5,006
Options exercisable, weighted average remaining contractual life (years)	2 years 10 months 25 days
Options exercisable, weighted average exercise price	$ 30.00

XML

Subsequent Events (Details Narrative) - USD ($)											9 Months Ended
	Nov. 02, 2017	Oct. 27, 2017	Oct. 25, 2017	Oct. 11, 2017	Oct. 04, 2017	Aug. 02, 2017	Jun. 21, 2017	Jun. 17, 2017	Jun. 06, 2017	Mar. 02, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 12, 2017	Jan. 31, 2017
Proceeds from loan											$ 4,610,967
Proceeds from convertible debt												$ 2,102,382
Debt interest rate													10.00%	12.00%
Debt conversion price per share											$ 13.50
Merchant Agreement [Member] | Lenders [Member]
Proceeds from loan						$ 75,000	$ 150,000	$ 125,000	$ 250,000	$ 75,750
Collected rate business day							1,361	1,250	1,833
Loan fees paid						$ 18,750		$ 1,250
Debt instrument, fee							$ 1,498		$ 6,250
Subsequent Event [Member] | EMA Financial, LLC [Member]
Proceeds from convertible debt	$ 150,000
Debt interest rate	5.00%
Debt instrument, fee	$ 7,500
Debt conversion price per share	$ 7.50
Debt conversion, percentage	35.00%
Subsequent Event [Member] | Convertible Loan [Member]
Proceeds from convertible debt		$ 170,000	$ 103,000	$ 85,000
Debt interest rate			12.00%
Debt instrument, fee		4,250	$ 3,000	$ 4,250
Debt maturity date				Oct. 27, 2017
Fees used to retire convertible note		$ 85,000
Debt conversion, percentage		38.00%	42.00%
Subsequent Event [Member] | Merchant Agreement [Member]
Proceeds from loan			$ 110,000
Collected rate business day			1,539
Loan fees paid			$ 1,250
Subsequent Event [Member] | Merchant Agreement [Member] | Lenders [Member]
Proceeds from loan					$ 75,000
Collected rate business day					1,200
Loan fees paid					$ 1,500