Item
1.01 Entry into a Material Definitive Agreement.
Conversion
of Series D Preferred Stock
Pressure
BioSciences, Inc. (the “Company”) plans on conducting a registered offering of units consisting of shares of the Company’s
common stock and warrants to purchase shares of the Company’s common stock (the “Offering”). The Company has
filed a Registration Statement on Form S-1, as amended most recently on June 16, 2017, with regard to the Offering.
On
June 16, 2017, the Company entered into a letter agreement with a private investor (the “BG Preferred Stock Letter Agreement”),
whereby the private investor agreed to convert 75 shares of Series D Preferred Stock (the “BG Preferred Stock”) of
the Company owned by him into common stock of the Company. Pursuant to the BG Preferred Stock Letter Agreement, the BG Preferred
Stock will automatically convert upon consummation of the Offering into 6,250 restricted shares of the Company’s common
stock and warrants to purchase 9,945 shares of the Company’s common stock with an exercise price of $8.40 substantially
in the form of the warrants to be included in the Offering except such warrants will be restricted securities and will not publicly
trade on the NASDAQ Capital Market (“NASDAQ”). As an inducement to enter into the BG Preferred Stock Letter Agreement,
the private investor will receive 3,750 restricted shares of common stock upon the closing of the Offering. The private investor
has entered into a lock-up agreement prohibiting the sale or other transfer of all securities of the Company owned by him for
a period of 90 days from the closing of the Offering.
Conversion
of Convertible Debentures
On
June 16, 2017, the Company entered into letter agreements (together the “Debenture Holder Letter Agreements”), as
amended, with 34 investors (each a “Debenture Holder” and together the “Debenture Holders”) holding convertible
debentures (collectively the “Debentures”) and warrants to purchase common stock (the “Debenture Warrants”)
whereby the Debenture Holders agreed to convert all monies due them under the Debentures into restricted shares of common stock
(the “Debenture Conversion Shares”), all contingent upon the completion of the Offering. As of March 31, 2017, the
Debenture Holders were due the aggregate sum of $1,587,706, including principal and interest. This sum, along with the additional
interest due from April 1 through the date of the consummation of the Offering, is referred to herein as the “Debenture
Obligation”. Pursuant to the Debenture Holder Letter Agreements, the Debenture Obligation will automatically convert upon
consummation of the Offering into the Debenture Conversion Shares at a price equal to the lower of $8.40 or the price per share
paid by investors in the Offering. The Debenture Holders will be issued amended Debenture Warrants such that the exercise price
will be the same as the exercise price of the warrants being included in the Offering and the Debenture Warrants will no longer
have a “Subsequent Equity Sales” provision that lowers the exercise price of the Debenture Warrants upon any future
dilutive issuance of shares. As a result of the foregoing, the Company will issue at least 254,440 Debenture Conversion Shares
for principal and interest through March 31, 2017 upon the consummation of the Offering in consideration of the conversion of
their Debenture Obligation assuming a conversion price of $6.24, based on the closing price of the common stock on June 15, 2017.
Each person entering into the Debenture Holder Letter Agreements have entered into lock-up agreements prohibiting the sale or
other transfer of any securities of the Company owned by such persons for a period of 3 months except for 5,262 shares of unrestricted
common stock the Debenture Holders own as of the date of their letter agreements due to issuances by the Company of interest earned
on the Debenture in the form of “payment in kind” shares of common stock.
On
June 16, 2017, the Company entered into letter agreements (together the “Debenture and Fall 2016 Holder Letter Agreements”),
with two (2) investors (each a “Debenture and Fall 2016 Holder” and collectively the “Debenture and Fall 2016
Holders”). The Debenture and Fall 2016 Holders invested in both the Company’s offering of the Debentures and Debenture
Warrants as well as the Company’s offering of restricted common stock and common stock purchase warrants (the “Fall
2016 Warrants”). Pursuant to the Debenture and Fall 2016 Holder Letter Agreements, the Debenture and Fall 2016 Holders agreed
to convert all monies due them under the Debentures into restricted shares of common stock (the “Debenture and Fall 2016
Conversion Shares”) contingent upon the completion of the Offering. As of March 31, 2017, the Debenture and Fall 2016 Holders
were due the aggregate sum of $779,930, including principal and interest. This sum, along with the additional interest due from
April 1 through the date of the consummation of the offering, is referred to herein as the “Debenture and Fall 2016 Obligation”.
As an inducement to enter into the Debenture and Fall 2016 Holder Letter Agreements, the Debenture and Fall 2016 Holders will
receive an aggregate of 17,334 shares of the Company’s common stock. Pursuant to the Debenture and Fall 2016 Holder Letter
Agreements, the Debenture and Fall 2016 Obligation will automatically convert upon consummation of the Offering into the Debenture
and Fall 2016 Conversion Shares at a price equal to the lower of $8.40 or the price per share paid by investors in the Offering
and their Debenture Warrants will be amended to reflect an exercise price equal to the lower of $12.00 or the exercise price per
share of the warrants sold in the Offering. In addition, the Debenture Warrants will no longer have a “Subsequent Equity
Sales” provision that lowers the exercise price of the Debenture Warrants upon any future dilutive issuance of shares. Additionally,
the Fall 2016 Warrants shall be amended to reflect an exercise price equal to the lower of $12.00 or the exercise price per share
of the warrants sold in the Offering. As a result of the foregoing, the Company will issue at least 124,989 Debenture and Fall
2016 Conversion Shares for principal and interest through March 31, 2017 to the Debenture and Fall 2016 Holders upon the consummation
of the Offering in consideration of the conversion of their Debenture Obligation assuming a conversion price of $6.24, based on
the closing price of the Company’s common stock on June 15, 2017. Each person entering into the Debenture and Fall 2016
Holder Letter Agreements have entered into lock-up agreements prohibiting the sale or other transfer of any securities of the
Company owned by such persons for a period of 3 months except for 2,287 shares of unrestricted common stock the Debenture and
Fall 2016 Holders own as of the date of their letter agreements due to issuances by the Company of interest earned on the Debenture
in the form of “payment in kind” shares of common stock.
On
June 16, 2017, the Company entered into a letter agreement (the “Accredited Investor Letter Agreement” together with
the Debenture Holder Letter Agreement and Debenture and Fall 2016 Letter Agreement, the “Letter Agreements”) with
an accredited investor (the “Accredited Investor”). The Accredited Investor currently holds Debentures pursuant to
which he is owed, as of March 31, 2017, principal and interest equal to $4,741,609. This sum, along with the additional interest
due from April 1 through the date of the consummation of the offering, is referred to herein as the “Accredited Investor
Debenture Obligation”. The Accredited Investor also currently holds (i) Debenture Warrants, (ii) Fall 2016 Warrants, (iii)
a promissory note issued in his favor in October 2016 in the principal amount of $3,000,000 (the “Line of Credit Obligation”)
and warrants to purchase common stock in connection therewith (the “Line of Credit Warrants”), and (iv) shares of
the Company’s Series D, Series G, Series J, Series K, Series H1, and Series H2 Preferred Stock (collectively, the “Preferred
Stock”). Pursuant to the letter agreement, the Accredited Investor agreed to convert all shares of Preferred Stock, into
493,557 shares of the Company’s common stock. The Accredited Investor Debenture Obligation will automatically convert upon
consummation of the Offering into 759,874 shares at a price equal to the lower of $8.40 or the price per share paid by investors
in the Offering. The Line of Credit Obligation will automatically convert upon consummation of the Offering into shares at a conversion
price equal to 80% of the price per share of common stock paid by investors in the Offering along with a new warrant substantially
similar to the warrants being included in the Offering, except such new warrants will have a cashless exercise provision, and
will have an exercise price equal to 80% of the exercise price per share of the warrants issued to the investors in the Offering,
will be restricted securities, and will not trade on NASDAQ. As inducement to enter into the Accredited Investor Letter Agreement,
the Accredited Investor’s Debenture Warrants, the Fall 2016 Warrants, and the Line of Credit Warrants shall be amended such
that the exercise price of such warrant shall be the lower of $12.00 and the exercise price of the warrants being sold to investors
in the Offering. In addition, the Debenture Warrants will no longer have a “Subsequent Equity Sales” provision that
lowers the exercise price of the Debenture Warrants upon any future dilutive issuance of shares. The Accredited Investor will
also be issued new warrants to purchase 29,833 shares of common stock at an exercise price of $8.40 substantially in the form
of the warrants being sold to investors in the Offering, except such warrants will be restricted securities and will not publicly
trade on NASDAQ. The Accredited Investor has entered into a lock-up agreement prohibiting the sale or other transfer of any securities
of the Company owned by such person, with the exception of 31,070 shares of restricted common stock previously issued, for a period
of 6 months.
As
an added inducement for investors to enter into the Letter Agreements, the Company agreed that until the earlier of (i) twelve
(12) months after the closing of the Offering in the event that the Company raises at least $11,000,000 by virtue of the sale
of securities thereunder or (ii) ten (10) months after the closing of the Offering in the event that the Company raises less than
$11,000,000 by virtue of the sale of the Company’s securities hereunder; the Company shall not issue or sell common stock,
or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer,
sale, grant or any option to purchase or other disposition) any common stock (including pursuant to the terms of any outstanding
securities issued prior to the date hereof (including, but not limited to, warrants, convertible notes, or other agreements) or
any security entitling the holder thereof to acquire common stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is convertible into or exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive common stock (a “Common Stock Equivalent”) at an effective price per share less than price per
share of common stock sold in the Offering without the prior written consent of the Debenture Holders who hold at least 80% of
the shares represented by the as-converted Debentures as of May 30, 2017, which such consent shall not be unreasonably withheld;
provided however, that such issuances will not apply to Excepted Issuances. Excepted Issuance means (i) the Company’s issuance
of common stock in full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase
of substantially all of the securities or assets of a corporation or other entity, so long as such issuances are not for the purpose
of raising capital, (ii) the Company’s issuances of common stock or the issuances or grants of options to purchase common
stock to employees, directors, and consultants, pursuant to the Company’s stock option plan at or above fair market value,
or (iii) securities upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible
into shares of common stock issued and outstanding as of June 15, 2017.