UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,
D.C. 20549

FORM 10-Q

|                                              |                                                                                           
|--------------------------------------------- | ------------------------------------------------------------------------------------------
|x                                             | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
  THE SECURITIES EXCHANGE ACT OF 1934 
|                                              |                                                                                           
|FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009
|                                              |                                                                                           
|o                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
  THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO
_____________.

Commission file number: 0-24921

POWER 3 MEDICAL PRODUCTS, INC.
(Exact name of registrant as specified in its charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|New York                                                       |  | 65-0565144                          
|                                                               |  |                                     
|(State or other Jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

|                                        
|----------------------------------------
|3400 Research Forest Drive, Suite B2-3  
|Woodlands, Texas                        
|                                        
|(Address of principal executive offices)

|                                                    
|----------------------------------------------------
|(281) 466-1600                                      
|                                                    
|(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. 
Yes o
No x

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 (§323.405 of this
chapter) during the preceding 12 months (or shorter period that the registrant
was required to submit and post such files). o Yes
o x No

Indicate by
check mark whether the registrant is a large 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.

|                                                                        |                            
|----------------------------------------------------------------------- | ---------------------------
|Large
  accelerated filer o                                             | Accelerated filer o        
|Non-accelerated
  filer o (do not check if a smaller reporting company) | Smaller reporting company x

Indicate by
check mark whether the registrant is a shell company (as defined in rule 12b-2
of the Exchange Act). Yes o No o

The number of
shares of the registrants common stock outstanding as of May 14, 2009, was 333,538,156.

1

---



POWER 3 MEDICAL PRODUCTS, INC.FORM 10-Q

INDEX

|                                                                                                |  |   
|----------------------------------------------------------------------------------------------- |  | --
|PART I  FINANCIAL INFORMATION                                                                  |  | 3 
|Item 1  Financial Statements                                                                   |  | 3 
|Item 2- Managements Discussion And
  Analysis Of Financial Condition And Results Of Operations |  | 19
|Item 3 - Quantitive And Qualitative
  Disclosures About Market Risk                             |  | 21
|Item 4  Controls and Procedures                                                                |  | 21
|PART II  OTHER INFORMATION                                                                     |  | 22
|Item 1  Legal Proceedings                                                                      |  | 22
|Item 1A  Risk Factors                                                                          |  | 22
|Item 2 - Unregistered Sales of Equity
  Securities                                              |  | 22
|Item 3  Defaults Upon Senior
Securities                                                        |  | 26
|Item 4 - Submission of Matters to a Vote of
  Security Holders                                  |  | 26
|Item 5  Other Information                                                                      |  | 26
|Item 6  Exhibits                                                                               |  | 26
|SIGNATURES                                                                                      |  | 27

2

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PART I  FINANCIAL INFORMATION

ITEM 1  FINANCIAL STATEMENTS

POWER 3
MEDICAL PRODUCTS, INC.
(A Development Stage Enterprise)
BALANCE SHEETS

|                                                                                                                                                      |  |                              |        |                     |   |        | 
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | ------------------- | - | ------ | 
|                                                                                                                                                      |  | March 31,
  2009 (Unaudited) |        | December
  31, 2008 |  
|                                                                                                                                                      |  |                              |        |                     |   |        | 
|ASSETS                                                                                                                                                |  |                              |        |                     |   |        | 
|Cash and equivalents                                                                                                                                  |  | $                            | 21,152 |                     | $ | 8,331  | 
|Other current assets                                                                                                                                  |  |                              | 6,665  |                     |   | 6,645  | 
|                                                                                                                                                      |  |                              |        |                     |   |        | 
|Total current assets                                                                                                                                  |  |                              | 27,817 |                     |   | 14,976 | 
|                                                                                                                                                      |  |                              |        |                     |   |        | 
|Furniture, fixtures and equipment, net of
  accumulated depreciation of $107,506 and $101,253 at March 31, 2009 and
  December 31, 2008, respectively |  |                              |       |                     |   | 6,253  | 
|Deposits                                                                                                                                              |  |                              | 5,450  |                     |   | 5,450  | 
|                                                                                                                                                      |  |                              |        |                     |   |        | 
|Total non-current assets                                                                                                                              |  |                              | 5,450  |                     |   | 11,703 | 
|                                                                                                                                                      |  |                              |        |                     |   |        | 
|                                                                                                                                                      |  |                              |        |                     |   |        | 
|TOTAL ASSETS                                                                                                                                          |  | $                            | 33,267 |                     | $ | 26,679 | 
|                                                                                                                                                      |  |                              |        |                     |   |        | 

3

---



POWER 3 MEDICAL PRODUCTS, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
(Continued)

|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------- | ----------- | ------------------- | - | ----------- | -
|                                                                                                                                                                                     |  | March 31,
  2009 (Unaudited) |             | December
  31, 2008 |  
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                                                                                |  |                              |             |                     |   |             |  
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|Accounts payable                                                                                                                                                                     |  | $                            | 1,015,499   |                     | $ | 1,043,682   |  
|Notes payable  in default                                                                                                                                                           |  |                              | 451,000     |                     |   | 451,000     |  
|Notes payable  net of unamortized
  discounts of $43,841 at March 31, 2009 and December 31, 2008                                                                                    |  |                              | 86,159      |                     |   | 64,174      |  
|Notes payable to related parties                                                                                                                                                     |  |                              | 68,927      |                     |   | 68,927      |  
|Convertible debentures-in default, net of
  unamortized discount of $-0- and $97,036 at March 31, 2009 and December 31,
  2008, respectively                                         |  |                              | 645,347     |                     |   | 767,974     |  
|Convertible debentures, net of unamortized
  discount of $78,590 and $577,668 March 31, 2009 and December 31, 2008,
  respectively                                                   |  |                              | 51,410      |                     |   | 442,332     |  
|Convertible debentures  related party, net
  of unamortized discount of $48,926 and $672,836 at March 31, 2009 and
  December 31, 2008, respectively                                |  |                              | 81,780      |                     |   | 696,599     |  
|Other current liabilities                                                                                                                                                            |  |                              | 540,355     |                     |   | 617,486     |  
|Derivative liabilities                                                                                                                                                               |  |                              | 2,098,591   |                     |   | 1,352,247   |  
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|Total current liabilities                                                                                                                                                            |  |                              | 5,039,068   |                     |   | 5,504,421   |  
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|TOTAL LIABILITIES                                                                                                                                                                    |  |                              | 5,039,068   |                     |   | 5,504,421   |  
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|STOCKHOLDERS DEFICIT                                                                                                                                                                |  |                              |             |                     |   |             |  
|Preferred Stock - $0.01 par value:
  50,000,000 shares authorized; 1,500,000 shares issued and outstanding as of
  March 31, 2009 and December 31, 2008                              |  |                              | 1,500       |                     |   | 1,500       |  
|Common Stock-$0.001 par value: 600,000,000
  shares authorized; 306,404,095 and 149,959,044 shares issued and outstanding
  as of March 31, 2009 and December 31, 2008, respectively |  |                              | 306,405     |                     |   | 149,960     |  
|Additional paid in capital                                                                                                                                                           |  |                              | 65,934,703  |                     |   | 63,499,938  |  
|Stock held in escrow                                                                                                                                                                 |  |                              | (40,000     | )                   |   | (20,000     | )
|Common stock payable                                                                                                                                                                 |  |                              | 131,500     |                     |   | 123,286     |  
|Common stock subscriptions receivable                                                                                                                                                |  |                              | (197,166    | )                   |   |            |  
|Deficit accumulated before entering the
  development stage                                                                                                                          |  |                              | (11,681,500 | )                   |   | (11,681,500 | )
|Deficit accumulated during the development
  stage                                                                                                                                   |  |                              | (59,461,243 | )                   |   | (57,550,926 | )
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|TOTAL STOCKHOLDERS DEFICIT                                                                                                                                                          |  |                              | (5,005,801  | )                   |   | (5,477,742  | )
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  
|TOTAL LIABILITIES AND STOCKHOLDERS
DEFICIT                                                                                                                                          |  | $                            | 33,267      |                     | $ | 26,679      |  
|                                                                                                                                                                                     |  |                              |             |                     |   |             |  

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

4

---



POWER 3 MEDICAL PRODUCTS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)

|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|------------------------------------------------------- |  | ------------------------------ | ----------- | --------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                        |  | Three
  months ended March 31, |             | Period
  from May 18, 2004 to March 31, |  
|                                                        |  | 2009                           |             | 2008                                    |   | 2009        |  
|REVENUES                                                |  |                                |             |                                         |   |             |   |   |             |  
|Sales revenues                                          |  | $                              | 132,766     |                                         | $ |            |   | $ | 560,015     |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|TOTAL REVENUES                                          |  |                                | 132,766     |                                         |   |            |   |   | 560,015     |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|OPERATING EXPENSES                                      |  |                                |             |                                         |   |             |   |   |             |  
|Employee compensation and benefits                      |  |                                | 17,557      |                                         |   | 283,921     |   |   | 31,067,069  |  
|Professional and consulting fees                        |  |                                | 80,817      |                                         |   | 85,698      |   |   | 11,383,757  |  
|Impairment of goodwill                                  |  |                                |            |                                         |   |            |   |   | 13,371,776  |  
|Impairment of intangible assets                         |  |                                |            |                                         |   |            |   |   | 179,788     |  
|Occupancy and equipment                                 |  |                                | 14,699      |                                         |   | 44,496      |   |   | 683,174     |  
|Travel and entertainment                                |  |                                | 729         |                                         |   | 56,456      |   |   | 427,113     |  
|Write off lease                                         |  |                                |            |                                         |   |            |   |   | 34,243      |  
|Other selling, general and administrative
  expenses    |  |                                | 88,004      |                                         |   | 107,173     |   |   | 822,138     |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|Total operating expenses                                |  |                                | 201,806     |                                         |   | 577,744     |   |   | 57,969,058  |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|LOSS FROM OPERATIONS                                    |  |                                | (69,040     | )                                       |   | (577,744    | ) |   | (57,409,043 | )
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|OTHER INCOME/(EXPENSE)                                  |  |                                |             |                                         |   |             |   |   |             |  
|Derivative gain/(loss)                                  |  |                                | (746,344    | )                                       |   | 2,168,616   |   |   | 6,276,629   |  
|Gain on legal settlement                                |  |                                |            |                                         |   | 17,875      |   |   | 36,764      |  
|Interest income                                         |  |                                |            |                                         |   | 1,051       |   |   | 7,867       |  
|Gain/(loss) on settlement of debt                       |  |                                | (883,734    | )                                       |   |            |   |   | 1,125,712   |  
|Mandatory prepayment penalty                            |  |                                |            |                                         |   |            |   |   | (420,000    | )
|Other income/(expense)                                  |  |                                |            |                                         |   |            |   |   | (194,886    | )
|Interest expense                                        |  |                                | (177,096    | )                                       |   | (388,616    | ) |   | (5,439,504  | )
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|Total other income/(expense)                            |  |                                | (1,807,174  | )                                       |   | 1,798,926   |   |   | 1,392,582   |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|NET INCOME/(LOSS)                                       |  |                                | (1,876,214  | )                                       |   | 1,221,182   |   |   | (56,016,461 | )
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|Deemed dividend                                         |  |                                | (34,103     | )                                       |   | (12,071     | ) |   | (63,809     | )
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|Net income/(loss) attributable to common
  stockholders |  |                                | (1,910,317  | )                                       |   | 1,209,111   |   |   | (56,080,270 | )
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|                                                        |  |                                |             |                                         |   |             |   |   |             |  
|Net income/(loss) per share - basic and
  diluted       |  | $                              | 0.00        |                                         | $ | 0.01        |   |   |             |  
|Weighted average number of shares
  outstanding         |  |                                | 200,466,378 |                                         |   | 115,458,242 |   |   |             |  

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

5

---



POWER 3 MEDICAL PRODUCTS, INC.
(A Development Stage Enterprise)
STATEMENT OF SHAREHOLDERS DEFICIT

|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |   |             |   |   |             |   |   |             |  
|--------------------------------------------------------------------- |  | -------------- | ---------- | ----------------- | - | ---------------------- | - | ---------------------- | ---------- | ---------------- | - | ------ | ----- | - | ---------- | - | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                                                      |  | Common
  Stock |            | Preferred
  Stock |   | Addl
  Paid InCapital |   | Other
  EquityItems(1) |            | RetainedEarnings |   |        |      
|                                                                      |  | Shares         |            | Par
  Value       |   | Shares                 |   | Par
  Value            |            |                  |   |        | Total |  
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |  
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |  
|Balances as of
  beginning of development stage May 18, 2004          |  |                | 14,407,630 |                   | $ | 14,407                 |   |                        | 3,870,000  |                  | $ | 3,870  |       | $ | 14,225,974 |   | $ |            |   | $ | (11,681,500 | ) | $ | 2,562,751   |  
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |   |             |   |   |             |   |   |             |  
|Issued shares for
  compensation                                      |  |                | 27,945,000 |                   |   | 27,945                 |   |                        |           |                  |   |       |       |   | 25,423,555 |   |   | (25,451,500 | ) |   |            |   |   |            |  
|Issued shares for
  services                                          |  |                | 4,910,000  |                   |   | 4,910                  |   |                        |           |                  |   |       |       |   | 4,850,090  |   |   | (535,000    | ) |   |            |   |   | 4,320,000   |  
|Issued shares for
  acquisition of equipment                          |  |                | 15,000,000 |                   |   | 15,000                 |   |                        |           |                  |   |       |       |   | 13,485,000 |   |   |            |   |   |            |   |   | 13,500,000  |  
|Stock option
  expense                                                |  |                |           |                   |   |                       |   |                        |           |                  |   |       |       |   | 626,100    |   |   | (626,100    | ) |   |            |   |   |            |  
|Issued shares for
  cash                                              |  |                | 242,167    |                   |   | 242                    |   |                        |           |                  |   |       |       |   | 314,575    |   |   |            |   |   |            |   |   | 314,817     |  
|Cancelled shares
  per cancellation agreement                         |  |                | (160,000   | )                 |   | (160                   | ) |                        |           |                  |   |       |       |   | (71,840    | ) |   |            |   |   |            |   |   | (72,000     | )
|Issued shares to
  convert Series A preferred shares to common shares |  |                | 3,000,324  |                   |   | 3,001                  |   |                        | (3,870,000 | )                |   | (3,870 | )     |   | 3,377,974  |   |   |            |   |   | (3,380,975  | ) |   | (3,870      | )
|Stock based
  compensation                                            |  |                |           |                   |   |                       |   |                        |           |                  |   |       |       |   |           |   |   | 8,311,012   |   |   |            |   |   | 8,311,012   |  
|Net
  reclassification of derivative liabilities                      |  |                |           |                   |   |                       |   |                        |           |                  |   |       |       |   | (3,347,077 | ) |   |            |   |   |            |   |   | (3,347,077  | )
|Net loss 05/18/04
  to 12/31/04                                       |  |                |           |                   |   |                       |   |                        |           |                  |   |       |       |   |           |   |   |            |   |   | (15,236,339 | ) |   | (15,236,339 | )
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |   |             |   |   |             |   |   |             |  
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |   |             |   |   |             |   |   |             |  
|BALANCE, DECEMBER
  31, 2004                                          |  |                | 65,345,121 |                   | $ | 65,345                 |   |                        |           |                  | $ |       |       | $ | 58,884,351 |   | $ | (18,301,588 | ) | $ | (30,298,814 | ) | $ | 10,349,294  |  
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |   |             |   |   |             |   |   |             |  
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |   |             |   |   |             |   |   |             |  
|Cancelled shares
  returned from employee                             |  |                | (1,120,000 | )                 |   | (1,120                 | ) |                        |           |                  |   |       |       |   | (1,307,855 | ) |   |            |   |   |            |   |   | (1,308,975  | )
|Issued shares for
  compensation                                      |  |                | 140,000    |                   |   | 140                    |   |                        |           |                  |   |       |       |   | 41,860     |   |   |            |   |   |            |   |   | 42,000      |  
|Issued shares for
  services                                          |  |                | 850,000    |                   |   | 850                    |   |                        |           |                  |   |       |       |   | 155,150    |   |   |            |   |   |            |   |   | 156,000     |  
|Amortize deferred
  compensation expense                              |  |                |           |                   |   |                       |   |                        |           |                  |   |       |       |   |           |   |   | 13,222,517  |   |   |            |   |   | 13,222,517  |  
|Net loss                                                              |  |                |           |                   |   |                       |   |                        |           |                  |   |       |       |   |           |   |   |            |   |   | (27,134,865 | ) |   | (27,134,865 | )
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |   |             |   |   |             |   |   |             |  
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |   |             |   |   |             |   |   |             |  
|BALANCE, DECEMBER 31, 2005                                            |  |                | 65,215,121 |                   | $ | 65,215                 |   |                        |           |                  | $ |       |       | $ | 57,773,506 |   | $ | (5,079,071  | ) | $ | (57,433,679 | ) | $ | (4,674,029  | )
|                                                                      |  |                |            |                   |   |                        |   |                        |            |                  |   |        |       |   |            |   |   |             |   |   |             |   |   |             |  

1. A more detailed
description of the Other Equity Items in this statement can be found at the end
of the Statement of Shareholders Deficit

6

---



POWER 3 MEDICAL PRODUCTS, INC.
STATEMENT OF SHAREHOLDERS DEFICIT
(Continued)

|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|---------------------------------------- |  | -------------- | ----------- | ----------------- | - | ---------------------- |  | ---------------------- | --------- | ---------------- | - | ----- | ----- | - | ---------- | - | - | --------- | - | - | ----------- | - | - | ---------- | -
|                                         |  | Common
  Stock |             | Preferred
  Stock |   | Addl
  Paid InCapital |  | Other
  EquityItems(1) |           | RetainedEarnings |   |       |      
|                                         |  | Shares         |             | Par
  Value       |   | Shares                 |  | Par
  Value            |           |                  |   |       | Total |  
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |  
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |  
|Issued shares for
  services             |  |                | 2,449,990   |                   |   | 2,449                  |  |                        |          |                  |   |      |       |   | 311,865    |   |   |          |   |   |            |   |   | 314,314    |  
|Issued shares for
  cash                 |  |                | 2,452,746   |                   |   | 2,452                  |  |                        |          |                  |   |      |       |   | 222,548    |   |   |          |   |   |            |   |   | 225,000    |  
|Issued shares for
  compensation         |  |                | 1,253,098   |                   |   | 1,254                  |  |                        |          |                  |   |      |       |   | 176,763    |   |   |          |   |   |            |   |   | 178,017    |  
|Adoption of FAS
  123R                   |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   | (475,324   | ) |   | 475,324   |   |   |            |   |   |           |  
|Amortize deferred
  compensation expense |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   |           |   |   | 4,603,747 |   |   |            |   |   | 4,603,747  |  
|Net loss                                 |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   |           |   |   |          |   |   | (6,415,969  | ) |   | (6,415,969 | )
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|BALANCE, DECEMBER
  31, 2006             |  |                | 71,370,955  |                   | $ | 71,370                 |  |                        |          |                  | $ |      |       | $ | 58,009,358 |   | $ |          |   | $ | (63,849,648 | ) | $ | (5,768,920 | )
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|Issued shares for
  services             |  |                | 1,810,000   |                   |   | 1,810                  |  |                        |          |                  |   |      |       |   | 282,390    |   |   |          |   |   |            |   |   | 284,200    |  
|Issued shares for
  conversion of debt   |  |                | 22,265,224  |                   |   | 22,264                 |  |                        |          |                  |   |      |       |   | 606,412    |   |   |          |   |   |            |   |   | 628,676    |  
|Issued shares for
  warrants exercised   |  |                | 5,270,832   |                   |   | 5,272                  |  |                        |          |                  |   |      |       |   | 336,396    |   |   |          |   |   |            |   |   | 341,668    |  
|Issued shares for
  cash                 |  |                | 7,630,625   |                   |   | 7,632                  |  |                        |          |                  |   |      |       |   | 992,818    |   |   |          |   |   |            |   |   | 1,000,450  |  
|Placement agent
  fees                   |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   | (58,500    | ) |   |          |   |   |            |   |   | (58,500    | )
|Stock received                           |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   | 100        |   |   |          |   |   |            |   |   | 100        |  
|Unreturned shares                        |  |                | 5,000       |                   |   | 5                      |  |                        |          |                  |   |      |       |   | 4,495      |   |   |          |   |   |            |   |   | 4,500      |  
|Deemed dividend                          |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   | 17,635     |   |   |          |   |   | (17,635     | ) |   |           |  
|Net loss                                 |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   |           |   |   |          |   |   | (5,216,288  | ) |   | (5,216,288 | )
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|BALANCE, DECEMBER
  31, 2007             |  |                | 108,352,636 |                   | $ | 108,353                |  |                        |          |                  | $ |      |       | $ | 60,191,104 |   | $ |          |   | $ | (69,083,571 | ) | $ | (8,784,114 | )
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|Issued shares for
  services             |  |                | 7,482,910   |                   |   | 7,483                  |  |                        |          |                  |   |      |       |   | 584,858    |   |   |          |   |   |            |   |   | 592,341    |  
|Issued shares for
  cash                 |  |                | 7,492,875   |                   |   | 7,493                  |  |                        |          |                  |   |      |       |   | 639,911    |   |   |          |   |   |            |   |   | 647,404    |  
|Issued shares for
  conversion of debt   |  |                | 22,172,536  |                   |   | 22,173                 |  |                        |          |                  |   |      |       |   | 1,568,626  |   |   |          |   |   |            |   |   | 1,590,799  |  
|Issued shares for
  lawsuit settlement   |  |                | 325,000     |                   |   | 325                    |  |                        |          |                  |   |      |       |   | 30,550     |   |   |          |   |   |            |   |   | 30,875     |  
|Issued shares for
  payables             |  |                | 2,133,333   |                   |   | 2,133                  |  |                        |          |                  |   |      |       |   | 186,867    |   |   |          |   |   |            |   |   | 189,000    |  
|Stock held in
  escrow                   |  |                | 2,000,000   |                   |   | 2,000                  |  |                        |          |                  |   |      |       |   | 18,000     |   |   | (20,000   | ) |   |            |   |   |           |  
|Issued preferred
  shares                |  |                |            |                   |   |                       |  |                        | 1,500,000 |                  |   | 1,500 |       |   | 357,000    |   |   |          |   |   |            |   |   | 358,500    |  
|Deemed dividend                          |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   | 12,071     |   |   |          |   |   | (12,071     | ) |   |           |  
|Loss on related
  party debt conversion  |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   | (89,049    | ) |   |          |   |   |            |   |   | (89,049    | )
|Common stock
  payable                   |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   |           |   |   | 123,286   |   |   |            |   |   | 123,286    |  
|Net loss                                 |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   |           |   |   |          |   |   | (136,784    | ) |   | (136,784   | )
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  
|BALANCE, DECEMBER
  31, 2008             |  |                | 149,959,290 |                   | $ | 149,960                |  |                        | 1,500,000 |                  | $ | 1,500 |       | $ | 63,499,938 |   | $ | 103,286   |   | $ | (69,232,426 | ) | $ | (5,477,742 | )
|                                         |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |           |   |   |             |   |   |            |  

1. A more detailed
description of the Other Equity Items in this statement can be found at the end
of the Statement of Shareholders Deficit

7

---



POWER 3 MEDICAL PRODUCTS, INC.
(A Development Stage Enterprise)
STATEMENT OF SHAREHOLDERS DEFICIT
(Continued)

|                                          |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |          |   |   |             |   |   |            |  
|----------------------------------------- |  | -------------- | ----------- | ----------------- | - | ---------------------- |  | ---------------------- | --------- | ---------------- | - | ----- | ----- | - | ---------- | - | - | -------- | - | - | ----------- | - | - | ---------- | -
|                                          |  | Common
  Stock |             | Preferred
  Stock |   | Addl
  Paid InCapital |  | Other
  EquityItems(1) |           | RetainedEarnings |   |       |      
|                                          |  | Shares         |             | Par
  Value       |   | Shares                 |  | Par
  Value            |           |                  |   |       | Total |  
|                                          |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |  
|                                          |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |  
|BALANCE, DECEMBER
  31, 2008              |  |                | 149,959,290 |                   | $ | 149,960                |  |                        | 1,500,000 |                  | $ | 1,500 |       | $ | 63,499,938 |   | $ | 103,286  |   | $ | (69,232,426 | ) | $ | (5,477,742 | )
|                                          |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |          |   |   |             |   |   |            |  
|                                          |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |          |   |   |             |   |   |            |  
|Issued shares for
  conversion of debt    |  |                | 119,956,737 |                   |   | 118,756                |  |                        |          |                  |   |      |       |   | 2,957,229  |   |   | 8,256    |   |   |            |   |   | 3,084,241  |  
|Common stock
  payable                    |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   |           |   |   | 22,500   |   |   |            |   |   | 22,500     |  
|Issued shares
  upon exercise of warrants |  |                | 6,883,332   |                   |   | 6,883                  |  |                        |          |                  |   |      |       |   | 61,949     |   |   | (27,166  | ) |   |            |   |   | 41,666     |  
|Issued shares for
  services              |  |                | 900,000     |                   |   | 900                    |  |                        |          |                  |   |      |       |   | 17,100     |   |   |         |   |   |            |   |   | 18,000     |  
|Issued shares for
  cash                  |  |                | 24,285,714  |                   |   | 24,286                 |  |                        |          |                  |   |      |       |   | 145,714    |   |   | (170,000 | ) |   |            |   |   |           |  
|Issued shares for
  payables              |  |                | 5,619,022   |                   |   | 5,620                  |  |                        |          |                  |   |      |       |   | 92,475     |   |   | (14,286  | ) |   |            |   |   | 83,809     |  
|Stock rescinded
  for debt                |  |                | (1,200,000  | )                 |   |                       |  |                        |          |                  |   |      |       |   |           |   |   | (8,256   | ) |   |            |   |   | (8,256     | )
|Revaluation of
  stock held in escrow     |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   | 20,000     |   |   | (20,000  | ) |   |            |   |   |           |  
|Deemed dividends                          |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   | 34,103     |   |   |         |   |   | (34,103     | ) |   |           |  
|Loss on
  related-party debt conversions  |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   | (893,805   | ) |   |         |   |   |            |   |   | (893,805   | )
|                                          |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |          |   |   |             |   |   |            |  
|Net loss                                  |  |                |            |                   |   |                       |  |                        |          |                  |   |      |       |   |           |   |   |         |   |   | (1,876,214  | ) |   | (1,876,214 | )
|                                          |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |          |   |   |             |   |   |            |  
|                                          |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |          |   |   |             |   |   |            |  
|BALANCE, MARCH
  31, 2009                 |  |                | 306,404,095 |                   | $ | 306,405                |  |                        | 1,500,000 |                  | $ | 1,500 |       | $ | 65,934,703 |   | $ | (105,666 | ) | $ | (71,142,743 | ) | $ | (5,005,801 | )
|                                          |  |                |             |                   |   |                        |  |                        |           |                  |   |       |       |   |            |   |   |          |   |   |             |   |   |            |  

1. A more detailed
description of the Other Equity Items in this statement can be found at the end
of the Statement of Shareholders Deficit

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

8

---



POWER 3 MEDICAL PRODUCTS, INC.
(A Development Stage Enterprise)
STATEMENT OF SHAREHOLDERS DEFICIT
SCHEDULE OF OTHER EQUITY ITEMS

|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|---------------------------------------------------------- |  | ------------------------------- | ----------- | ---------------------- | - | ---------------------- | - | ---------------- | ------- | -------------------------- | - | -------------------------- | - | - | -------- | - | - | ----------- | -
|                                                           |  | Deferred
  Compensation Expense |             | Stock
  Held in Escrow |   | Common
  Stock Payable |   | Treasury
  Stock |         | Subscriptions
  Receivable |   | Total
  Other Equity Items |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |  
|Balances as of beginning of development stage May 18, 2004 |  |                                 |            |                        |   |                       |   |                  |        |                            |   |                           |   |   |         |   |   |            |  
|                                                           |  |                                 |            |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|Issued shares for compensation                             |  |                                 | (25,451,500 | )                      |   |                       |   |                  |        |                            |   |                           |   |   |         |   |   | (25,451,500 | )
|Issued shares for services                                 |  |                                 | (535,000    | )                      |   |                       |   |                  |        |                            |   |                           |   |   |         |   |   | (535,000    | )
|Stock option expense                                       |  |                                 | (626,100    | )                      |   |                       |   |                  |        |                            |   |                           |   |   |         |   |   | (626,100    | )
|Issued shares for cash                                     |  |                                 |            |                        |   |                       |   |                  |        |                            |   |                           |   |   |         |   |   |            |  
|Stock based compensation                                   |  |                                 | 8,311,012   |                        |   |                       |   |                  |        |                            |   |                           |   |   |         |   |   | 8,311,012   |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|BALANCE, DECEMBER 31, 2004                                 |  | $                               | (18,301,588 | )                      | $ |                       |   | $                |        |                            | $ |                           |   | $ |         |   | $ | (18,301,588 | )
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|Amortize deferred compensation expense                     |  |                                 | 13,222,517  |                        |   |                       |   |                  |        |                            |   |                           |   |   |         |   |   | 13,222,517  |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|BALANCE, DECEMBER 31, 2005                                 |  | $                               | (5,079,071  | )                      | $ |                       |   | $                |        |                            | $ |                           |   | $ |         |   | $ | (5,079,071  | )
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|Adoption of FAS 123R                                       |  |                                 | 475,324     |                        |   |                       |   |                  |        |                            |   |                           |   |   |         |   |   | 475,324     |  
|Amortize deferred compensation expense                     |  |                                 | 4,603,747   |                        |   |                       |   |                  |        |                            |   |                           |   |   |         |   |   | 4,603,747   |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|BALANCE, DECEMBER 31, 2006                                 |  | $                               |            |                        | $ |                       |   | $                |        |                            | $ |                           |   | $ |         |   | $ |            |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|BALANCE, DECEMBER 31, 2007                                 |  | $                               |            |                        | $ |                       |   | $                |        |                            | $ |                           |   | $ |         |   | $ |            |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|Stock held in escrow                                       |  |                                 |            |                        |   | (20,000                | ) |                  |        |                            |   |                           |   |   |         |   |   | (20,000     | )
|Common stock payable                                       |  |                                 |            |                        |   |                       |   |                  | 123,286 |                            |   |                           |   |   |         |   |   | 123,286     |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|BALANCE, DECEMBER 31, 2008                                 |  | $                               |            |                        | $ | (20,000                | ) | $                | 123,286 |                            | $ |                           |   | $ |         |   | $ | 103,286     |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|Issued shares for conversion of debt                       |  |                                 |            |                        |   |                       |   |                  |        |                            |   | 8,256                      |   |   |         |   |   | 8,256       |  
|Common stock payable                                       |  |                                 |            |                        |   |                       |   |                  | 22,500  |                            |   |                           |   |   |         |   |   | 22,500      |  
|Issued shares upon exercise of warrants                    |  |                                 |            |                        |   |                       |   |                  |        |                            |   |                           |   |   | (27,166  | ) |   | (27,166     | )
|Issued shares for cash                                     |  |                                 |            |                        |   |                       |   |                  |        |                            |   |                           |   |   | (170,000 | ) |   | (170,000    | )
|Issued shares for payables                                 |  |                                 |            |                        |   |                       |   |                  | (14,286 | )                          |   |                           |   |   |         |   |   | (14,286     | )
|Stock rescinded for debt                                   |  |                                 |            |                        |   |                       |   |                  |        |                            |   | (8,256                     | ) |   |         |   |   | (8,256      | )
|Revaluation of stock held in escrow                        |  |                                 |            |                        |   | (20,000                | ) |                  |        |                            |   |                           |   |   |         |   |   | (20,000     | )
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  
|BALANCE, MARCH 31, 2009                                    |  | $                               |            |                        | $ | (40,000                | ) | $                | 131,500 |                            | $ |                           |   | $ | (197,166 | ) | $ | (105,666    | )
|                                                           |  |                                 |             |                        |   |                        |   |                  |         |                            |   |                            |   |   |          |   |   |             |  

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

9

---



POWER 3 MEDICAL PRODUCTS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|-------------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | -------------------------------------------- | - | ---------- | - | - | ----------- | -
|                                                                                       |  |                                |            | Period
  from May 18, 2004 to March 31, 2009 |  
|                                                                                       |  | Three
  Months Ended March 31, |            |                                             
|                                                                                       |  | 2009                           |            | 2008                                         |   |           
|CASH FLOWS FROM OPERATING ACTIVITIES                                                   |  |                                |            |                                              |   |            |   |   |             |  
|Net income/(loss)                                                                      |  | $                              | (1,876,214 | )                                            | $ | 1,221,182  |   | $ | (56,016,461 | )
|Adjustments to reconcile net income/(loss)
  to net cash used in operating activities: |  |                                |            |                                              |   |            |   |   |             |  
|Gain/(loss) on conversion of financial
  instruments                                   |  |                                | 854,988    |                                              |   |           |   |   | (1,151,256  | )
|Impairment of goodwill                                                                 |  |                                |           |                                              |   |           |   |   | 13,371,776  |  
|Impairment of intangible assets                                                        |  |                                |           |                                              |   |           |   |   | 179,788     |  
|Loss on previously capitalized lease                                                   |  |                                |           |                                              |   |           |   |   | 34,243      |  
|Amortization of debt discounts and deferred
  finance costs                            |  |                                | 146,532    |                                              |   | 327,200    |   |   | 3,871,962   |  
|Change in derivative liability, net of
  bifurcation                                   |  |                                | 746,344    |                                              |   | (2,168,616 | ) |   | (5,122,728  | )
|Stock based compensation                                                               |  |                                | 69,071     |                                              |   | 250        |   |   | 33,439,743  |  
|Debt issued for compensation and services                                              |  |                                |           |                                              |   |           |   |   | 1,028,927   |  
|Stock issued for settlement of lawsuit                                                 |  |                                |           |                                              |   | 30,875     |   |   | 30,875      |  
|Depreciation expense                                                                   |  |                                | 6,253      |                                              |   | 548        |   |   | 107,507     |  
|Other non cash items                                                                   |  |                                |           |                                              |   | (17,875    | ) |   | (34,933     | )
|Changes in operating assets and
  liabilities:                                         |  |                                |            |                                              |   |            |   |   |             |  
|Prepaid expenses and other current assets                                              |  |                                |           |                                              |   | 2,793      |   |   | 186,084     |  
|Inventory                                                                              |  |                                |           |                                              |   |           |   |   | 16,602      |  
|Accounts payable and other liabilities                                                 |  |                                | (4,075     | )                                            |   | 4,577      |   |   | 3,169,133   |  
|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|Net cash used in operating activities                                                  |  |                                | (57,101    | )                                            |   | (599,066   | ) |   | (6,888,738  | )
|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                   |  |                                |            |                                              |   |            |   |   |             |  
|Capital expenditures, net                                                              |  |                                |           |                                              |   | (2,798     | ) |   | (141,750    | )
|Increase in other assets                                                               |  |                                |           |                                              |   |           |   |   | (179,786    | )
|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|Net cash used in investing activities                                                  |  |                                |           |                                              |   | (2,798     | ) |   | (321,536    | )
|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                   |  |                                |            |                                              |   |            |   |   |             |  
|Proceeds from sale of common stock                                                     |  |                                | 41,666     |                                              |   | 489,910    |   |   | 2,305,837   |  
|Borrowings on notes payable related party                                              |  |                                | 8,256 -    |                                              |   |           |   |   | 83,632      |  
|Borrowings on notes payable                                                            |  |                                | 20,000     |                                              |   |           |   |   | 3,808,430   |  
|Principal payments on notes payable related
  party                                    |  |                                |           |                                              |   |           |   |   | (47,300     | )
|Principal payments on notes payable                                                    |  |                                |           |                                              |   |           |   |   | (122,478    | )
|Proceeds from CD, warrants and rights net
  of issuance cost                           |  |                                |           |                                              |   | 1,200,709  |   |   |             |  
|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|Net cash provided by financing activities                                              |  |                                | 69,922     |                                              |   | 489,910    |   |   | 7,228,830   |  
|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|                                                                                       |  |                                |            |                                              |   |            |   |   |             |  
|Net change in cash and equivalents                                                     |  | $                              | 12,821     |                                              | $ | (111,954   | ) | $ | 18,556      |  
|Cash and equivalents, beginning of period                                              |  | $                              | 8,331      |                                              | $ | 125,679    |   | $ | 2,596       |  
|Cash and equivalents, end of period                                                    |  | $                              | 21,152     |                                              | $ | 13,725     |   | $ | 21,152      |  

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

10

---



POWER 3 MEDICAL PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                           |  |                                |         |      |   |                                              |  |   |           | 
|---------------------------------------------------------- |  | ------------------------------ | ------- | ---- | - | -------------------------------------------- |  | - | --------- | 
|                                                           |  |                                |         |      |   | Period
  from May 18, 2004 to March 31, 2009 | 
|                                                           |  | Three
  Months Ended March 31, |         |     
|                                                           |  | 2009                           |         | 2008 |   |                                             
|SUPPLEMENTAL DISCLOSURES OF
  CASH FLOW INFORMATION        |  |                                |         |      |   |                                              |  |   |           | 
|Cash paid for interest                                     |  | $                              |        |      | $ |                                             |  | $ | 59,840    | 
|Cash paid for income taxes                                 |  | $                              |        |      | $ |                                             |  | $ |          | 
|                                                           |  |                                |         |      |   |                                              |  |   |           | 
|Non-cash transactions:                                     |  |                                |         |      |   |                                              |  |   |           | 
|Stock for conversion of debt, related
party                |  | $                              | 661,101 |      | $ |                                             |  | $ | 1,676,034 | 
|Stock for subscriptions receivable                         |  | $                              | 170,000 |      | $ |                                             |  | $ | 170,000   | 
|Warrants exercised for subscriptions
  receivable          |  | $                              | 27,166  |      | $ |                                             |  | $ | 27,166    | 
|Stock for common stock payable                             |  | $                              | 14,286  |      | $ |                                             |  | $ | 14,286    | 
|Exchange of debt, related party                            |  | $                              |        |      | $ |                                             |  | $ | 214,075   | 
|Exchange of convertible notes for stock                    |  | $                              |        |      | $ | 342,400                                      |  | $ | 2,525,070 | 
|Stock issued in settlement of payables                     |  | $                              | 55,238  |      | $ |                                             |  | $ | 250,935   | 
|Deemed dividend                                            |  | $                              | 34,103  |      | $ | 12,071                                       |  | $ | 63,809    | 
|Exchange of convertible preferred stock for
  common stock |  | $                              |        |      | $ |                                             |  | $ | 3,380,975 | 
|Preferred stock issued for payables                        |  | $                              |        |      | $ |                                             |  | $ | 358,500   | 
|Stock held in escrow                                       |  | $                              | 20,000  |      | $ | 120,000                                      |  | $ | 40,000    | 

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

11

---



POWER 3 MEDICAL PRODUCTS, INC.
(A Development Stage Enterprise)
NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1  ORGANIZATION AND NATURE OF BUSINESS

Information
Regarding Forward-Looking Statements

This report
contains forward-looking statements that involve risks and uncertainties. We
generally use words such as believe, may, could, will, intend,
expect, anticipate, plan, and similar expressions to identify
forward-looking statements. You should not place undue reliance on these
forward-looking statements. Our actual results could differ materially from
those anticipated in the forward-looking statements for many reasons, including
the risks described below and elsewhere in this report. Although we believe the
expectations reflected in the forward-looking statements are reasonable, they
relate only to events as of the date on which the statements are made, and our
future results, levels of activity, performance or achievements may not meet
these expectations. We do not intend to update any of the forward-looking
statements after the date of this document to conform these statements to
actual results or to changes in our expectations, except as required by law.

History

Power3 Medical
Products, Inc. was incorporated in New York in May 1993. We have been a
development stage company since May 2004, with our primary business activities
focused on the development of our intellectual property assets in the area of
diagnoses for breast cancer, ALS, Alzheimers disease and Parkinsons disease.
In September 2008, Steven B. Rash, our Chief Executive Officer and Chairman of
the Board at the time, resigned from all of his positions with us. Ira L.
Goldknopf, our sole remaining director and Chief Scientific Officer, was
appointed as President and Interim Chairman of the Board. Helen R. Park was
appointed Interim Chief Executive Officer. Under the direction of our
restructured management team, we implemented a new strategy focusing on
commercialization of our intellectual property assets, with less emphasis on research
and development. In connection with our new focus, and in an effort to preserve
cash and reduce operating costs, we reduced the amount of space we occupied and
implemented a reduction in force.

Prior to May
2004, we were engaged in product development, sales, distribution and services
for the healthcare industry. We transitioned to being a development stage
company on May 18, 2004, when we completed the acquisition of certain
intellectual property assets from Advanced Bio/Chem, Inc. and began focusing on
research and development relating to those assets.

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

Basis of
Presentation

The financial
statements of Power3 have been prepared in accordance with generally accepted
accounting principles in the United States of America (GAAP). Certain prior
period amounts have been reclassified to conform to the March 31, 2009
presentation. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the periods presented have been
reflected herein.

Use of Estimates

The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make 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.
Actual results could differ from those estimates.

12

---



Lattice Valuation
Model

Power3 valued
the conversion features in their convertible notes using a lattice valuation
model, with the assistance of a valuation consultant. The lattice model values
the embedded derivatives based on a probability weighted discounted cash flow
model. This model is based on future projections of the five primary
alternatives possible for settlement of the features included within the
embedded derivative, including: (1) payments are made in cash, (2) payments are
made in stock, (3) the holder exercises its right to convert the debentures,
(4) Power3 exercises its right to convert the debentures and (5) Power3
defaults on the debentures. Power3 uses the model to analyze (a) the underlying
economic factors that influence which of these events will occur, (b) when they
are likely to occur, and (c) the common stock price and specific terms of the
debentures such as interest rate and conversion price that will be in effect
when they occur. Based on the analysis of these factors, Power3 uses the model
to develop a set of potential scenarios. Probabilities of each scenario
occurring during the remaining term of the debentures are determined based on
managements projections. These probabilities are used to create a cash flow
projection over the term of the debentures and determine the probability that
the projected cash flow will be achieved. A discounted weighted average cash
flow for each scenario is then calculated and compared to the discounted cash
flow of the debentures without the compound embedded derivative in order to
determine a value for the compound embedded derivative.

Black−Scholes
Valuation Model

Power3 uses
the Black−Scholes pricing model to determine the fair values of its
warrants. The model uses market sourced inputs such as interest rates, stock
prices, and option volatilities, the selection of which requires managements
judgment, and which may impact net income or loss. In particular, Power3 uses volatility
rates based upon the closing stock price of Power3s common stock. Power3 uses
a risk free interest rate which is the U.S. Treasury bill rate for a security
with a maturity that approximates the estimated expected life of the derivative
or security.

Net Loss Per Share

Basic and
diluted net loss per share calculations are calculated on the basis of the
weighted average number of common shares outstanding during the year. The per
share amounts include the dilutive effect of common stock equivalents in years
with net income. Basic and diluted loss per share is the same for the three
months ended March 31, 2009 and 2008 as the effect of our potential common
stock equivalents would be anti-dilutive.

Stock Based
Compensation

Effective
January 1, 2006, Power3 began recording compensation expense associated with
stock options and other forms of equity compensation in accordance with
Statement of Financial Accounting Standards (SFAS) 123R, Share−Based
Payment, as interpreted by SEC Staff Accounting Bulletin No. 107. Prior to
January 1, 2006, Power3 had accounted for stock options according to the
provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees,
and related interpretations, and therefore no related compensation expense was
recorded for awards granted with no intrinsic value. Power3 adopted the
modified prospective transition method provided for under SFAS 123R, and,
consequently, has not retroactively adjusted results from prior periods.

Stock issued
to employees is recorded at the fair value of the shares granted based upon the
closing market price of Power3s stock at the measurement date and recognized
as compensation expense over the applicable requisite service period. Warrants
granted to non-employees are recorded at the estimated fair value of the
options granted using the Black-Scholes pricing model and recognized as general
and administrative expense over the applicable requisite service period.

As of March
31, 2009, the Company has not granted options to employees.

All of the
Companys accounting policies are not included in this Form 10-Q. A more
comprehensive set of accounting policies adopted by the Company are included in
our Form 10-K as of December 31, 2008 and are herein incorporated by reference.

13

---



Recent Accounting Pronouncements

Power3 does
not expect the adoption of recently issued accounting pronouncements to have a
significant impact on its results of operations, financial position or cash
flow.

NOTE 3  GOING CONCERN

As shown in
the accompanying financial statements, Power3 incurred net loss chargeable to
common shareholders of $1,910,317 for the three months ended March 31, 2009 and
has total accumulated deficits of $71,142,743 as of that date. These conditions
create an uncertainty as to Power3s ability to continue as a going concern.
Management is trying to raise additional capital through various funding
arrangements. If the Company is unable to successfully obtain additional
financing, it will not have sufficient cash to continue operations. As of March
31, 2009, the Company had $21,152 in cash and cash equivalents. The Company
needs additional capital immediately to fund its liquidity requirements. The
Company is seeking between $3 million and $5 million in new financing during
2009. The Company believes that $3 million is the minimum amount of financing
it needs to repay existing obligations and to continue funding its new business
strategy for at least 12 months following the date of this report. The Company
will need to raise additional funds from either one or a combination of
additional financings or otherwise obtain capital, in order to satisfy its
future liquidity requirements. The financial statements do not include any
adjustment that might be necessary if Power3 is unable to continue as a going
concern.

NOTE 4  OTHER CURRENT LIABILITIES

Other
liabilities and accrued expenses consisted of the following at March 31, 2009
and December 31, 2008:

|                      |  |          |         |          |   |         | 
|--------------------- |  | -------- | ------- | -------- | - | ------- | 
|                      |  | 03/31/09 |         | 12/31/08 |  
|                      |  |          |         |          |  
|Accrued rent          |  |          | 17,854  |          |   | 28,566  | 
|Accrued interest      |  |          | 319,727 |          |   | 335,033 | 
|Prepayment penalty    |  |          | 25,000  |          |   | 25,000  | 
|Accrued payroll taxes |  |          | 20,870  |          |   | 44,347  | 
|Accrued liabilities   |  |          | 10,939  |          |   | 33,575  | 
|Salaries payable      |  |          | 145,965 |          |   | 150,965 | 
|Totals                |  | $        | 540,355 |          | $ | 617,486 | 

NOTE 5  RELATED PARTY TRANSACTIONS

As is more fully
explained in Note 7 to these financial statements, we issued 46,910,896 common
shares to our President, Chief Scientific Officer and Interim Board Chairman to
retire a portion of his convertible note in the amount of $1,097,940 and
accrued interest.

Also as is
more fully explained in Note 7, we issued 9,571,429 common shares to our
Interim Chief Executive Officer to retire a convertible note in the amount of
$150,000 and accrued interest.

Also as is
more fully explained in Note 7, we received 1,200,000 shares of common stock
from our President, Chief Scientific Officer and Interim Board Chairman in
exchange for a one-year convertible note payable to him in the amount of $8,256
with interest payable at 12% and warrants to purchase 1,200,000 shares at $0.04
per share. The note itself is convertible into 1,200,000 shares of common stock
(or $0.00688 per share).

NOTE 6  OTHER COMMITMENTS AND CONTINGENCIES

A summary of
our commitments and contingencies can be found in Note 8 to the financial
statements filed on Form 10-K as of December 31, 2008.

There have
been no changes to these commitments and contingencies since the filing of that
report.

14

---



NOTE 7 - EQUITY

We are
authorized to issue up to 600 million shares of $0.001 voting common stock and
up to 50 million shares of $0.01 par value preferred stock.

Capital Stock
Transactions

We began 2009
with 149,959,290 shares issued and outstanding. During the three months ended
March 31, 2009, we undertook the following with our common stock:

On January 13,
2009, we received 1,200,000 shares of common stock from our President, Chief
Scientific Officer and Interim Board Chairman in exchange for a one-year
convertible note payable to him in the amount of $8,256 with interest payable
at 12% and warrants to purchase 1,200,000 shares at $0.04 per share. The note
itself is convertible into 1,200,000 shares of common stock (or $0.00688 per
share).

On January 20,
2009, we issued 1,200,000 common shares to Able Income Fund, LLC (Able) to
convert $8,256 of our obligation to them into equity. We recorded a loss of
$3,744 upon conversion.

On February
20, 2009, we issued 14,117,270 common shares to Able to convert $130,000 of our
obligation to them into equity. We recorded a loss of $22,345 upon conversion.

On March 2,
2009, the board granted a holder of 300,000 warrants to purchase common stock a
revision in the terms of the warrants from an exercise price of $0.98 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant
terms and deemed the difference in value a dividend. Variables used in the
calculation were: stock price on measurement date: $0.018; Exercise price of
options: $0.98 (old) and $0.01 (new); option term: 0.25 years, discount rate:
0.28% and computed volatility: 256.59%. We deemed this revaluation as a
dividend in the amount of $3,895. The exercise entitles the Company to receive
$3,000 in cash. As of the date of this report, the amount is still receivable
and is included in equity on the balance sheet under Common stock
subscriptions receivable.

Also on March
2, 2009, we issued 12,680,952 common shares to retire a convertible note in the
amount of $275,000 and accrued interest of $11,301. Per the terms of the
conversion feature of the note, the principal balance was convertible into
9,166,667 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $218,738.

Also on March
2, 2009 we issued 11,428,571 shares to an accredited investor for a
subscription of $80,000. At March 31, 2009, the subscription remains unpaid by
the investor.

Also on March
2, 2009, we issued 12,085,714 common shares to retire a convertible note in the
amount of $275,000 and accrued interest of $11,301. Per the terms of the
conversion feature of the note, the principal balance was convertible into
9,166,667 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $206,833.

Also on March
2, 2009 we issued 12,857,143 shares to an accredited investor for a
subscription of $90,000. At March 31, 2009, the subscription remains unpaid by
the investor.

Also on March
2, 2009, we issued 13,390,476 common shares to retire a convertible note in the
amount of $340,000 and accrued interest of $13,973. Per the terms of the
conversion feature of the note, the principal balance was convertible into
11,333,333 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $224,685.

Also on March
2, 2009, we issued 1,428,572 common shares to an accredited investor who
subscribed to our common stock during 2008. We credited capital in the amount
of $14,286 and retired the liability at December 31, 2008 which was included in
Common Stock Payable. This investor was issued an additional 1,428,572 shares
on that date which we recorded at the fair market value on the grant date,
crediting capital in the amount of $25,714 and charging Loss on Settlement of
Debt.

15

---



Also on March
2, 2009, we issued 46,910,896 common shares to our President, Chief Scientific
Officer and Interim Board Chairman to retire a portion of his convertible note
in the amount of $1,097,940 and accrued interest. Per the terms of the
conversion feature of the note, the principal balance was convertible into
36,598,000 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $725,628 which was recorded as a
reduction of Additional Paid In Capital.

Also on March
2, 2009, we issued 9,571,429 common shares to retire a convertible note to our
Interim Chief Executive Officer in the amount of $150,000 and accrued interest
of $5,819. Per the terms of the conversion feature of the note, the principal
balance was convertible into 5,000,000 shares. The excess of the shares issued
were to retire accrued interest. We recorded a loss on conversion of $168,127
which was recorded as a reduction of Additional Paid In Capital.

On March 13,
2009, we issued 2,761,878 common shares to a vendor to settle outstanding
invoices of $59,047. We recorded these shares at the fair value on the grant
date, $0.019 per share, or $52,476 and included the resulting $6,571 gain as a
reduction of Gain on Settlement of Debt.

On March 17,
2009, the board granted a holder of 3,333,333 warrants to purchase common stock
a revision in the terms of the warrants from an exercise price of $0.10 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant
terms and deemed the difference in value a dividend. Variables used in the
calculation were: stock price on measurement date: $0.018; Exercise price of
options: $0.10 (old) and $0.01 (new); option term: 1 year, discount rate: 0.28%
and computed volatility: 256.59%. We deemed this revaluation as a dividend in
the amount of $17,191. We received cash of $33,333 upon exercise.

On March 17,
2009, the board granted a holder of 416,666 warrants to purchase common stock a
revision in the terms of the warrants from an exercise price of $0.08 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant
terms and deemed the difference in value a dividend. Variables used in the
calculation were: stock price on measurement date: $0.022; Exercise price of
options: $0.08 (old) and $0.01 (new); option term: 0.66 years, discount rate:
0.28% and computed volatility: 256.59%. We deemed this revaluation as a dividend
in the amount of $2,702. The exercise entitles the Company to receive $4,166 in
cash. As of the date of this report, the amount is still receivable and is
included in equity on the balance sheet under Common stock subscriptions
receivable.

On March 20,
2009, we issued 900,000 shares to a consultant pursuant to a consulting
agreement. We valued the shares on the grant date and included $18,000 of
professional fees in Other selling, general and administrative expenses.

On March 16,
2009, we issued 10,000,000 common shares to retire a convertible note in the
amount of $100,000 and accrued interest of $14,345. Per the terms of the
conversion feature of the note, the principal balance was convertible into
1,111,111 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $178,643.

On March 16,
2009, the board granted a holder of 833,333 warrants to purchase common stock a
revision in the terms of the warrants from an exercise price of $0.09 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant
terms and deemed the difference in value a dividend. Variables used in the
calculation were: stock price on measurement date: $0.02; Exercise price of
options: $0.09 (old) and $0.01 (new); option term: 1 year, discount rate: 0.28%
and computed volatility: 256.59%. We deemed this revaluation as a dividend in
the amount of $4,053. We received cash of $8,333 upon exercise.

On March 17,
2009, the board granted a holder of 2,000,000 warrants to purchase common stock
a revision in the terms of the warrants from an exercise price of $0.10 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant
terms and deemed the difference in value a dividend. Variables used in the
calculation were: stock

16

---



price on
measurement date: $0.02; Exercise price of options: $0.10 (old) and $0.01
(new); option term: 1 year, discount rate: 0.28% and computed volatility:
256.59%. We deemed this revaluation as a dividend in the amount of $10,315. The
exercise entitles the Company to receive $20,000 in cash. As of the date of
this report, the amount is still receivable and is included in equity on the
balance sheet under Common stock subscriptions receivable.

Options and Warrants

Potentially
dilutive securities outstanding at December 31, 2008, first quarter 2009
activity, and balances at March 31, 2009 is as follows:

|                                             |  |                                 |      |                                             |  |                      |  |           |           |         |  |                                            |  |  |   |  |  |            | 
|-------------------------------------------- |  | ------------------------------- | ---- | ------------------------------------------- |  | -------------------- |  | --------- | --------- | ------- |  | ------------------------------------------ |  |  | - |  |  | ---------- | 
|                                             |  |                                 |      |                                             |  | Activity During 2009 |  |           |          
|                                             |  |                                 |      |                                             |  |                      |  |           |          
|Weighted Avg. Years Remaining Until
  Expiry |  | Weighted Average Exercise Price |      | Options and Warrants Outstanding
  12/31/08 |  | New Grants           |  | Exercised |           | Expired |  | Options and Warrants Outstanding
  3/31/09 | 
|                                            
|                                            
|                                            
|<1                                           |  | $                               | 0.20 |                                             |  | 2,195,832            |  |           |          |         |  | 300,000                                    |  |  |  |  |  | 1,895,832  | 
|1                                            |  | $                               | 0.11 |                                             |  | 12,883,330           |  |           |          |         |  | 6,583,332                                  |  |  |  |  |  | 6,299,998  | 
|2                                            |  | $                               | 0.10 |                                             |  | 11,510,766           |  |           |          |         |  |                                           |  |  |  |  |  | 11,510,766 | 
|3                                            |  | $                               | 0.05 |                                             |  | 49,978,482           |  |           | 1,200,000 |         |  |                                           |  |  |  |  |  | 51,178,482 | 
|4                                            |  | $                               | 0.25 |                                             |  | 1,000,000            |  |           |          |         |  |                                           |  |  |  |  |  | 1,000,000  | 
|5                                            |  | $                               | 0.14 |                                             |  | 1,000,000            |  |           |          |         |  |                                           |  |  |  |  |  | 1,000,000  | 
|6                                            |  | $                               | 0.06 |                                             |  | 8,000,000            |  |           |          |         |  |                                           |  |  |  |  |  | 8,000,000  | 
|N/A
  (1)                                    |  | $                               | 1.00 |                                             |  | 100,000              |  |           |          |         |  |                                           |  |  |  |  |  | 100,000    | 
|                                            
|Totals                                       |  |                                 |      |                                             |  | 86,668,410           |  |           | 1,200,000 |         |  | 6,883,332                                  |  |  |  |  |  | 80,985,078 | 
|                                            

(1) 100,000 warrants were
issued in June, 2004 which remain exercisable at $1 so long as the individuals
remain on the Companys Scientific Advisory Board. As of the date of this
report, the individuals remain on this board.

NOTE 8  FINANCING ARRANGEMENTS AND
DERIVATIVE LIABILITIES

New Borrowings

During the
three months ended March 31, 2009, we received $20,000 in cash from two
existing creditors. These amounts were appended to their already-existing 12%
notes due September 8, 2009.

Derivative
Liabilities

Our derivative
liabilities increased from $1,352,247 at December 31, 2008 to $2,098,591 at
March 31, 2009.

Many of our
warrants contain a reset provision which was triggered when we reduced the
strike price during March 2009. The amount of increase in liabilities due to
these reset features was $116,147.

The following
tabular presentation reflects the components of derivative financial
instruments on the Companys balance sheet at March 31, 2009 and December 31,
2008:

|                               |  |                  |           |                     |   |           | 
|------------------------------ |  | ---------------- | --------- | ------------------- | - | --------- | 
|                               |  | March 31,
  2009 |           | December
  31, 2008 |  
|                               |  |                  |           |                     |   |           | 
|Common stock
  warrants        |  |                  | 1,476,495 |                     |   | 554,637   | 
|Embedded
  conversion features |  |                  | 622,076   |                     |   | 778,178   | 
|Other
  derivative instruments |  |                  |          |                     |   | 19,432    | 
|                               |  |                  |           |                     |   |           | 
|Total                          |  | $                | 2,098,571 |                     | $ | 1,352,247 | 
|                               |  |                  |           |                     |   |           | 

17

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NOTE 9  TRANSGENOMIC DEFINITIVE AGREEMENT

On January 23,
2009, the Company executed a definitive Collaboration and Exclusive License
agreement with Transgenomic, Inc. The License Agreement grants Transgenomic
exclusive rights in the United States and certain other countries to the
Companys proprietary test kits or systems for performing Neurodegenerative
Diagnostic Tests, for which the Company will receive an up-front license
execution fee, certain milestone fees, including fees payable in cash, fees payable
in shares of Transgenomic common stock, and royalties based upon net sales of
the Companys tests, test kits or systems by Transgenomic.

The License
Agreement also provides for Transgenomic to fund the Companys activities
relating to the clinical validation of its Neurodegenerative Diagnostic Tests.
Funds for such activities will be provided by Transgenomic through a separate
bank account pursuant to a Disbursement Control Agreement. The Company is
obligated to cooperate with Transgenomic during the period of continued
development and to provide Transgenomic with plans, budgets and reports
regarding the progress of the Companys development activities. Transgenomic
has the right to assume the clinical validation activities, with notice and a
cure period, under certain circumstances.

The License
Agreement has an infinite life and provides for each party to maintain the
confidentiality of the other partys confidential information, and to not make
any public announcement concerning the transactions contemplated by the License
Agreement without the consent of the other party. The License Agreement also
contains other covenants and indemnification provisions that are typical for
license agreements entered into by companies in connection with similar licensing
transactions.

During the
three months ended March 31, 2009, we recorded revenues of $132,766 relating to
this agreement which includes the $100,000 up-front license execution fee.

NOTE 10  SUBSEQUENT EVENTS

Subsequent to
March 31, 2009, we issued 19,800,728 unrestricted shares to contractors for
services and 7,333,333 of restricted shares for liabilities owed at March 31,
2009. The shares were valued based on our closing stock price on the date of
grant.

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ITEM 2- MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report
contains forward-looking statements. All statements other than statements of
historical fact are forward-looking statements for purposes of federal and
state securities laws, including: any projections of earnings, revenues or
other financial items; any statements of the plans, strategies and objectives
of management for future operations; any statements concerning proposed new
products, services or developments; any statements regarding future economic
conditions or performance; any statements of belief; and any statements of
assumptions underlying any of the foregoing. Forward-looking statements may
include the words may, will, estimate, intend, continue,
believe,
expect, plan or anticipate and other similar words.

Although we
believe that the expectations reflected in our forward-looking statements are
reasonable, actual results could differ materially from those projected or
assumed. Our future financial condition and results of operations, as well as
any forward-looking statements, are subject to change and to inherent risks
and uncertainties, such as those disclosed in this report. In light of the
significant uncertainties inherent in the forward-looking statements included
in this report, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved. Except for its ongoing obligation to disclose
material information as required by the federal securities laws, we do not
intend, and undertake no obligation, to update any forward-looking statement.
Accordingly, the reader should not rely on forward-looking statements,
because they are subject to known and unknown risks, uncertainties, and other
factors that may cause actual results to differ materially from those
contemplated by the forward-looking statements.

You should
read the following discussion and analysis of our financial condition and
results of operations in conjunction with our unaudited financial statements,
including the notes to those financial statements, included elsewhere in this
report.

The
information contained below is subject to the Risk Factors and other risks
detailed in Our Annual Report on Form 10-K for our fiscal year ended December
31, 2008 and our other reports filed with the Securities and Exchange
Commission. We urge you to review carefully the section Risk Factors included
in our Annual Report on Form 10-K for our fiscal year ended December 31, 2008
for a more complete discussion of the risks associated with an investment in
our securities.

Overview

Power3 Medical
Products, Inc. has been a development stage company since May 2004, with our
primary business activities focused on the development of our intellectual
property assets in the area of diagnoses for breast cancer, ALS, Alzheimers
disease and Parkinsons disease. In September 2008, Steven B. Rash, our then
Chief Executive Officer and Chairman of the Board, resigned from all of his
positions with us. Ira L. Goldknopf, our sole remaining director and Chief
Scientific Officer, was appointed as President and Interim Chairman of the
Board. Helen R. Park was appointed Interim Chief Executive Officer. Under the
direction of our restructured management team, we implemented a new strategy
focusing on commercialization of our intellectual property assets, with less
emphasis on research and development. In connection with our new focus, and in
an effort to preserve cash and reduce operating costs, we reduced the amount of
space we occupied and implemented a reduction in force.

Prior to May
2004, we were engaged in product development, sales, distribution and services
for the healthcare industry. We transitioned to being a development stage
company on May 18, 2004, when we completed the acquisition of certain
intellectual property assets from Advanced Bio/Chem, Inc. and began focusing on
research and development relating to those assets. On September 12, 2003, we
completed a one-for-fifty reverse stock split and changed our name from
Surgical Safety Products, Inc. to Power3 Medical Products, Inc.

19

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Results of
Operations

Revenues

We had our
first substantial influx of revenues resulting from our January 2009 license
agreement with Transgenomic, Inc. Total revenues were $132,766. We had no
revenues in the same period in 2008.

Operating Expenses

Employee
compensation was reduced from $283,921 for the three months ended March 31,
2008 to $17,557 for the same period in 2009 as we replaced our employees with
contractors and significantly reduced headcount. Professional and consulting
fees, mostly resulting from costs associated with our statutory filings, were
substantially unchanged from 2008; $85,698 for the three months ended March 31,
2008 versus $80,817 for the same period in 2009. Occupancy and equipment is
also substantially reduced due to our scaling back of our office space in 2009.
Travel and entertainment was reduced from $56,456 to just $729 for the three
months ended March 31, 2008 and 2009, respectively, reflecting a more scaled
back operation from that in 2008. Similarly, general and administrative
expenses were reduced from $107,173 to $88,004 from 2008 to 2009.

Other Income and Expense

The upward
change in the derivative liabilities resulted mostly from an increase in our
stock price from December 31, 2008 to March 31, 2009. Our change in derivative
liabilities caused a corresponding expense of $746,344 for the three months
ended March 31, 2009 versus a gain of $2,168,616 for the same period in 2008.
Additionally, we had $883,734 in losses on conversion of certain debt
instruments to equity as a result of our attempt to reduce the Companys debt
load. For the same period in 2008, we had no such gain or loss. Interest expense
was significantly reduced from $388,616 for the three months ended March 31,
2008 to $177,096 for the same period in 2009, owing to the above-mentioned
reduction in debt and elimination of debt discounts on their conversion.

Deemed Dividends

Certain of our
warrants were re-priced during the three months ended March 31, 2009, resulting
in a deemed dividend charged to common stockholders of $34,103. For the same
period in 2008, we had $12,071 of such deemed dividends.

Net Income/ (Loss)

Our net loss
attributable to common shareholders for the three months ended March 31, 2009
was $1,910,317 versus net income of $1,209,111 available to common shareholders
for the same period in 2008 due to the factors listed above, most notably, the
change in value of derivative liabilities resulting from the change in our
stock price.

Liquidity and
Capital Resources

Our liquidity
and capital needs relate primarily to working capital, development and other
general corporate requirements. Although we have recorded our first significant
revenues from our January 2009 contract with Transgenomic. Inc., we have not
yet generated any net positive cash from operations. We have an immediate need
for capital to continue our current operations, and in addition, are seeking
additional capital from research grants, collaboration agreements, and other
strategic alliances.

Net cash used
in operating activities amounted to $57,101 for the three months ended March
31, 2009, compared to $599,066 for the three months ended March 31, 2008. The
change in net cash used in operating activities during 2009 was primarily due
to changes in the fair value of derivative liabilities, and net income for the
three months ended March 31, 2009 compared to the same period in 2008.

Net cash
provided by financing activities was $69,922 for the three months ended March
31, 2009, as compared to $489,910 for the three months ended March 31, 2008.
The decrease in cash provided by financing activities during 2009 is due to a
reduction in the sale of our common stock.

20

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As of March
31, 2009, our principal source of liquidity was $21,152 in cash.

Plan of Operation
and Cash Requirements

We currently
have few operating revenues from product sales or the performance of services
and it continues to experience net operating losses. We are actively pursuing
third party licensing agreements, collaboration agreements, distribution
agreements and similar business arrangements in order to establish an adequate
revenue base utilizing its capabilities in disease diagnosis based on protein
and biomarker identification, and drug resistance in the areas of cancers,
neurodegenerative and neuromuscular diseases. We have undertaken clinical
validation studies to demonstrate the diagnostic capabilities of its
technologies. However, there can be no assurances when revenue-generating
agreements will result in continuous revenue streams.

Our goal over
the next several months is to complete Phase II of our testing of our
Alzheimers and Parkinsons Disease clinical trials with Transgenomic, Inc. We
hope to commercialize these tests in the third or fourth quarter of 2009.

We are
currently seeking grants and financing to fund our operation through the point
of commercialization. We expect to incur costs of approximately $900,000 to
that point. There is no guarantee that we can raise the required capital to
fund our operation, or that our products, once commercialized, will generate
adequate revenues to sustain our operation.

Off Balance Sheet
Arrangements

At March 31,
2009, our only off balance sheet agreements in place for were a lease in effect
for its office space, leases in effect for phone equipment, leases in effect
for lab equipment and employment agreements entered with two principal
officers.

ITEM 3 - QUANTITIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

Not
applicable.

ITEM 4  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and
Procedures

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 our disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that
evaluation, our principal executive officer and principal financial officer
concluded that, as of the end of the period covered in this report, our
disclosure controls and procedures were not effective to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
required time periods and is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as
appropriate to allow timely decisions regarding required disclosure.

Our
management, including our principal executive officer and principal financial
officer, does not expect that our disclosure controls and procedures or our
internal controls will prevent all error or fraud. A control system, no matter
how well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the
design of a control system must reflect the fact that there are resource
constraints and the benefits of controls must be considered relative to their
costs. Due to the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances
of fraud, if any, have been detected. To address the material weaknesses, we
performed additional analysis and other post-closing procedures in an effort to
ensure our consolidated financial statements included in this annual report
have been prepared in accordance with generally accepted accounting principles.
Accordingly, management believes that the financial statements included in this
report fairly present in all material respects our financial condition, results
of operations and cash flows for the periods presented.

21

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Because of
these material weaknesses, management has concluded that we did not maintain
effective internal control over financial reporting as of December 31, 2008,
based on the criteria established in Internal Control-Integrated Framework
issued by the COSO.

Change In Internal Control Over Financial
Reporting

There were no
changes in our internal control over financial reporting that occurred during
three months ended March 31, 2009 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

PART II  OTHER INFORMATION

ITEM 1  LEGAL PROCEEDINGS

Except for the
new lawsuit in which we were recently named described in the next paragraph, a
summary of these proceedings can be found in Note 8 to the financial statements
filed on Form 10-K/A as of December 31, 2008. There have been no material
changes in these proceedings since that report was filed.

During the
three months ended March 31, 2009, we were served with a lawsuit in Woodlands
Road Utility versus Power 3 Medical Products, Inc. in Montgomery
County, Precinct 3 alleging personal property taxes owed in the amount of
approximately $4,000 plus interest. The pre-trial conference was set for May
20, 2009. Management believes that, since the personal property was not owned
by us at the time the taxes were assessed that we will prevail on the merits.

ITEM 1A  RISK FACTORS

Not
applicable.

ITEM 2 - UNREGISTERED SALES OF EQUITY
SECURITIES

On January 13,
2009, we issued a convertible promissory note and warrants to Ira L. Goldknopf,
our President, Chief Scientific Officer and sole director. We issued Dr.
Goldknopf a note in the original principal amount of $8,256, which is
convertible into 1,200,000 shares of our common stock, and warrants to purchase
an aggregate of 1,200,000 shares of our common stock for $0.04 per share. The
note was issued in exchange for 1,200,000 shares of our common stock held by
Dr. Goldknopf. The note, the warrant and the shares of our common stock
issuable upon conversion of the note and the warrant, was offered and sold to Dr.
Goldknopf without registration under the Securities Act, or the securities laws
of certain states, in reliance on the exemptions provided by Section 3(9) of
the Securities Act and in reliance on similar exemptions under applicable state
laws for exchanges of securities with existing security holders.

In January and
February of 2009, we issued a total of 15,117,270 shares of our common stock to
Able Income Fund, LLC, a holder of our convertible debentures, upon the
conversion of $138,256 in principal and accrued interest of those convertible
debentures. The issuance of the common stock upon conversion of the convertible
debentures was exempt from registration under the Securities Act, or the
securities laws of certain states, in reliance on the exemptions provided by
Section 3(9) of the Securities Act and in reliance on similar exemptions under
applicable state laws for exchanges of securities with existing security
holders.

On March 1, 2009, we granted an existing security holder warrants to
purchase 300,000 shares of our common stock for $0.01 per share in exchange for
warrants to purchase an equal number of shares for $0.04 per share and the
holders agreement to exercise the new warrants for cash. The
grant of the warrants in exchange for the existing warrants was exempt from
registration under the Securities Act, or the securities laws of certain
states, in reliance on the exemptions provided by Section 3(9) of the
Securities Act and in reliance on similar exemptions under applicable state
laws for exchanges of securities with existing security holders.

22

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On March 2,
2009, we issued a total of 36,671,428 shares of our common stock to three
existing security holders, upon the conversion of $928,683 in principal and
accrued interest of convertible promissory notes. The issuance of the common
stock upon conversion of the convertible notes was exempt from registration
under the Securities Act, or the securities laws of certain states, in reliance
on the exemptions provided by Section 3(9) of the Securities Act and in
reliance on similar exemptions under applicable state laws for exchanges of
securities with existing security holders.

On March 2,
2009, we also issued a total of 46,910,896 shares of our common stock to Ira L.
Goldknopf, our President, Chief Scientific Officer and sole director, upon
conversion of $1,144,415 in principal and accrued interest of a convertible
promissory note. The issuance of the common stock upon conversion of the
convertible note was exempt from registration under the Securities Act, or the
securities laws of certain states, in reliance on the exemptions provided by
Section 3(9) of the Securities Act and in reliance on similar exemptions under
applicable state laws for exchanges of securities with existing security
holders.

On March 2,
2009, we also issued a total of 9,571,429 shares of our common stock to Bronco
Technology, Inc., an affiliate of Helen R. Park, our interim Chief Executive
Officer, upon conversion of $155,171 in principal and accrued interest of a
convertible promissory note. The issuance of the common stock upon conversion
of the convertible note was exempt from registration under the Securities Act,
or the securities laws of certain states, in reliance on the exemptions
provided by Section 3(9) of the Securities Act and in reliance on similar
exemptions under applicable state laws for exchanges of securities with
existing security holders.

On March 13,
we issued 2,761,878 shares of our common stock to a vendor who we reasonably
believe is an accredited investor, as such term is defined in Rule 501
under the Securities Act, in payment of outstanding invoices of $59,047. The
offers and sales were made without registration under the Securities Act, or
the securities laws of certain states, in reliance on the exemptions provided
by Section 4(2) of the Securities Act and Regulation D under the
Securities Act and in reliance on similar exemptions under applicable state
laws. No general solicitation or general advertising was used in connection
with the offering of the shares. We disclosed to the vendor that the shares of
common stock could not be sold unless they are registered under the Securities
Act or unless an exemption from registration is available.

On March 16,
2009, we issued 10,000,000 shares of our common stock in exchange for $117,459
of principal and accrued interest of a non-convertible promissory note. The
issuance of the common stock upon conversion of the convertible note was exempt
from registration under the Securities Act, or the securities laws of certain
states, in reliance on the exemptions provided by Section 3(9) of the
Securities Act and in reliance on similar exemptions under applicable state
laws for exchanges of securities with existing security holders.

On March 16
and 17 of 2009, we granted four
existing security holders warrants to purchase a total 6,683,332 shares of our
common stock for $0.01 per share in exchange for warrants to purchase an equal
number of shares for $0.03 per share and the holders agreement to exercise the
new warrants for cash. We then issued a total of 6,683,332 shares of our common
stock to those existing security holders upon the exercise of the new warrants.
The grant of the new warrants in exchange for the existing warrants, and
the issuance of the shares of our common stock upon exercise of those warrants,
was exempt from registration under the Securities Act, or the securities laws
of certain states, in reliance on the exemptions provided by Section 3(9) of
the Securities Act and in reliance on similar exemptions under applicable state
laws for exchanges of securities with existing security holders.

On March 20,
we issued 900,000 shares of our common stock to a consultant who we reasonably
believe is an accredited investor, as such term is defined in Rule 501
under the Securities Act, in payment of $19,800 in professional fees we owed to
such consultant. The offers and sales were made without registration under the
Securities Act, or the securities laws of certain states, in reliance on the
exemptions provided by Section 4(2) of the Securities Act and
Regulation D under the Securities Act and in reliance on similar
exemptions under applicable state laws. No general solicitation or general
advertising was used in connection with the offering of the shares. We disclosed
to the consultant that the shares of common stock could not be sold unless they
are registered under the Securities Act or unless an exemption from
registration is available.

23

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On January 13,
2009, we received 1,200,000 shares of common stock from our President, Chief
Scientific Officer and Interim Board Chairman in exchange for a one-year
convertible note payable to him in the amount of $8,256 with interest payable
at 12% and warrants to purchase 1,200,000 shares at $0.04 per share. The note
itself is convertible into 1,200,000 shares of common stock (or $0.00688 per
share).

On January 20,
2009, we issued 1,200,000 common shares to Able Income Fund, LLC (Able) to
convert $8,256 of our obligation to them into equity. We recorded a loss of
$3,744 upon conversion.

On February
20, 2009, we issued 14,117,270 common shares to Able to convert $130,000 of our
obligation to them into equity. We recorded a loss of $22,345 upon conversion.

On March 2,
2009, the board granted a holder of 300,000 warrants to purchase common stock a
revision in the terms of the warrants from an exercise price of $0.98 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant
terms and deemed the difference in value a dividend. Variables used in the
calculation were: stock price on measurement date: $0.018; Exercise price of
options: $0.98 (old) and $0.01 (new); option term: 0.25 years, discount rate:
0.28% and computed volatility: 256.59%. We deemed this revaluation as a
dividend in the amount of $3,895. The exercise entitles the Company to receive
$3,000 in cash. As of the date of this report, the amount is still receivable
and is included in equity on the balance sheet under Common stock subscriptions
receivable.

Also on March
2, 2009, we issued 12,680,952 common shares to retire a convertible note in the
amount of $275,000 and accrued interest of $11,301. Per the terms of the
conversion feature of the note, the principal balance was convertible into
9,166,667 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $218,738.

Also on March
2, 2009 we issued 11,428,571 shares to an accredited investor for a
subscription of $80,000. At March 31, 2009, the subscription remains unpaid by
the investor.

Also on March
2, 2009, we issued 12,085,714 common shares to retire a convertible note in the
amount of $275,000 and accrued interest of $11,301. Per the terms of the
conversion feature of the note, the principal balance was convertible into
9,166,667 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $206,833.

Also on March
2, 2009 we issued 12,857,143 shares to an accredited investor for a subscription
of $90,000. At March 31, 2009, the subscription remains unpaid by the investor.

Also on March
2, 2009, we issued 13,390,476 common shares to retire a convertible note in the
amount of $340,000 and accrued interest of $13,973. Per the terms of the
conversion feature of the note, the principal balance was convertible into
11,333,333 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $224,685.

Also on March
2, 2009, we issued 1,428,572 common shares to an accredited investor who
subscribed to our common stock during 2008. We credited capital in the amount
of $14,286 and retired the liability at December 31, 2008 which was included in
Common Stock Payable. This investor was issued an additional 1,428,572 shares
on that date which we recorded at the fair market value on the grant date,
crediting capital in the amount of $25,714 and charging Loss on Settlement of
Debt.

Also on March
2, 2009, we issued 46,910,896 common shares to our President, Chief Scientific
Officer and Interim Board Chairman to retire a portion of his convertible note
in the amount of $1,097,940 and accrued interest. Per the terms of the
conversion feature of the note, the principal balance was convertible into
36,598,000 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $725,628 which was recorded as a
reduction of Additional Paid In Capital.

24

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Also on March
2, 2009, we issued 9,571,429 common shares to retire a convertible note to our
Interim Chief Executive Officer in the amount of $150,000 and accrued interest
of $5,819. Per the terms of the conversion feature of the note, the principal
balance was convertible into 5,000,000 shares. The excess of the shares issued
were to retire accrued interest. We recorded a loss on conversion of $168,127
which was recorded as a reduction of Additional Paid In Capital.

On March 13,
2009, we issued 2,761,878 common shares to a vendor to settle outstanding
invoices of $59,047. We recorded these shares at the fair value on the grant
date, $0.019 per share, or $52,476 and included the resulting $6,571 gain as a
reduction of Gain on Settlement of Debt.

On March 17,
2009, the board granted a holder of 3,333,333 warrants to purchase common stock
a revision in the terms of the warrants from an exercise price of $0.10 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant
terms and deemed the difference in value a dividend. Variables used in the
calculation were: stock price on measurement date: $0.018; Exercise price of
options: $0.10 (old) and $0.01 (new); option term: 1 year, discount rate: 0.28%
and computed volatility: 256.59%. We deemed this revaluation as a dividend in
the amount of $17,191. We received cash of $33,333 upon exercise.

On March 17,
2009, the board granted a holder of 416,666 warrants to purchase common stock a
revision in the terms of the warrants from an exercise price of $0.08 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant
terms and deemed the difference in value a dividend. Variables used in the
calculation were: stock price on measurement date: $0.022; Exercise price of
options: $0.08 (old) and $0.01 (new); option term: 0.66 years, discount rate:
0.28% and computed volatility: 256.59%. We deemed this revaluation as a
dividend in the amount of $2,702. The exercise entitles the Company to receive
$4,166 in cash. As of the date of this report, the amount is still receivable
and is included in equity on the balance sheet under Common stock
subscriptions receivable.

On March 20,
2009, we issued 900,000 shares to a consultant pursuant to a consulting
agreement. We valued the shares on the grant date and included $18,000 of
professional fees in Other selling, general and administrative expenses.

On March 16,
2009, we issued 10,000,000 common shares to retire a convertible note in the
amount of $100,000 and accrued interest of $14,345. Per the terms of the
conversion feature of the note, the principal balance was convertible into
1,111,111 shares. The excess of the shares issued were to retire accrued
interest. We recorded a loss on conversion of $178,643.

On March 16,
2009, the board granted a holder of 833,333 warrants to purchase common stock a
revision in the terms of the warrants from an exercise price of $0.09 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant
terms and deemed the difference in value a dividend. Variables used in the
calculation were: stock price on measurement date: $0.02; Exercise price of
options: $0.09 (old) and $0.01 (new); option term: 1 year, discount rate: 0.28%
and computed volatility: 256.59%. We deemed this revaluation as a dividend in
the amount of $4,053. We received cash of $8,333 upon exercise.

On March 17,
2009, the board granted a holder of 2,000,000 warrants to purchase common stock
a revision in the terms of the warrants from an exercise price of $0.10 to an
exercise price of $0.01. Pursuant to FASB 123 (revised 2004), Share-Based
Payments, we revalued these warrants using the old and new warrant terms
and deemed the difference in value a dividend. Variables used in the
calculation were: stock price on measurement date: $0.02; Exercise price of
options: $0.10 (old) and $0.01 (new); option term: 1 year, discount rate: 0.28%
and computed volatility: 256.59%. We deemed this revaluation as a dividend in
the amount of $10,315. The exercise entitles the Company to receive $20,000 in
cash. As of the date of this report, the amount is still receivable and is
included in equity on the balance sheet under Common stock subscriptions
receivable.

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ITEM 3  DEFAULTS UPON SENIOR SECURITIES

In April 2009,
we were declared in default in the payment of principal and interest with
respect to our 6% Convertible Debenture, in the aggregate principal amount of
$200,000, held by NeoGenomics, Inc. The amount of the total arrearage as of the
date of this report is $200,000 in principal and approximately $10,650 in
interest. .

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS

On January 26,
2009, we held a special meeting of our shareholders to consider and vote upon a
proposal to approve and adopt an amendment to our Certificate of Incorporation
increasing the authorized amount of our common stock from 150,000,000 shares to
600,000,000 shares. The amendment was approved by a vote of 94,280,983 votes in
favor, 18,670,252 votes against and 1,473,805 abstentions. . Reference is made to our Schedule
14A, dated December 12, 2008, containing a definitive Proxy Statement,
which we distributed to shareholders of record as of December 10, 2008.

ITEM 5  OTHER INFORMATION

None.

ITEM 6  EXHIBITS

|            |                   |                                                                                                                                                                
|----------- | ----------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. | INDEX TO EXHIBITS
|            |                   |                                                                                                                                                                
|            | 3.7*              | Certificate
  of Amendment to the Certificate of Incorporation dated January 29, 2009, and
  filed with the Secretary of State of New York on February 4, 2009.
|            |                   |                                                                                                                                                                
|            | 31.1*             | Certification
  of Power3 Medical Products, Inc. Interim Chief Executive Officer, Helen R.
  Park, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  
|            | 31.2*             | Certification
  of Power3 Medical Products, Inc. Chief Financial Officer, John Ginzler,
  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.           
|            | 32.1*             | Certification
  of Power3 Medical Products, Inc. Interim Chief Executive Officer, Helen R.
  Park, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  
|            | 32.2*             | Certification
  of Power3 Medical Products, Inc. John Ginzler, Chief Financial Officer,
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.           

* Filed
herewith

26

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SIGNATURES

In accordance
with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

|                     |                                   |               
|-------------------- | --------------------------------- | --------------
|                     | Power 3 Medical Products, Inc.   
|                     |                                  
|Date: May
  20, 2009 | By:                               | /s/ Helen Park
|                     |                                   |               
|                     | Helen Park                       
|                     | Interim
  Chief Executive Officer

27

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