**U.S.
      Securities and Exchange Commission**


**Washington,
      D.C. 20549**








**Form 10-QSB**







(Mark
      One)




x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934




For
                the quarterly period ended June 30,
                2007




o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934




For
                the transition period from _______________ to
                ________________




Commission
                file no. 0-24921




**Power3
      Medical Products, Inc.**


(Exact
      name of small business issuer 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 77381**


(Address
      of principal executive offices)




**(281)
      466-1600**


(Issuer’s
      telephone number)




Check
      whether the issuer (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act
      during the past 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  oNo x




As
      of
      August 10, 2007 there were
      97,979,580 shares of voting common stock of the registrant issued and
      outstanding.




Indicate
      by check mark whether the registrant is a shell company (as defined in rule
      12b-2 of the Exchange Act)? Yes oNo
x




Transitional
      Small Business Disclosure Format (check one): Yes oNo x












**INDEX**




PART
                I. FINANCIAL INFORMATION
            
            3Notes
                to Condensed Financial Statements (unaudited)
            
            11Note
                1. Organization, Principal Activities and Basis of
                Presentation
            
            11Note
                2. Management’s Discussion and Analysis or Plan of
                Operation
            
            11Note
                3. Controls and Procedures
            
            12Note
                4. Financial Arrangements
            
            13Note
                5. Other Significant Equity Transactions
            
            18Note
                6. Other Management’s Discussion
            
            18Note
                7. Other Controls and Procedures
            
            30PART
                II. OTHER INFORMATION
            
            33Item
                1. Legal Proceedings
            
            33Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            
            34Item
                3. Defaults upon Senior Securities
            
            34Item
                4. Submission of Matters to a Vote of Security Holders
            
            35Item
                5. Other Information
            
            35Item
                6. Exhibits
            
            35SIGNATURES
            
            38





-2-




**I.
      FINANCIAL INFORMATION**




**POWER3
                MEDICAL PRODUCTS, INC.****(****A
                Development Stage Enterprise)****BALANCE
                SHEET****June
                30, 2007 and December 31, 2006****(unaudited)**


**June
                  30, 2007**
              
              **December
                  31, 2006****ASSETS**CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              647,387
              
              $
              40,602All
                  Other Current Assets
              
              
              900
              
              
              -Total
                  Current Assets
              
              
              648,287
              
              
              40,602OTHER
                  ASSETSFurniture,
                  Fixtures and Equipment, net
              
              
              4,082
              
              
              16,374Intellectual
                  Property
              
              
              179,786
              
              
              179,786Deferred
                  Finance Costs, net
              
              
              113,569
              
              
              253,336Deposits
              
              
              41,073
              
              
              5,900**TOTAL
                  ASSETS**
              
              **$**
              986,797
              
              $
              495,998**LIABILITIES
                  AND STOCKHOLDER'S DEFICIT**CURRENT
                  LIABILITIESAccounts
                  Payable
              
              $
              983,725
              
              $
              899,177Notes
                  Payable - in default, net of amortization
              
              
              511,822
              
              
              777,822Notes
                  Payable to Related Parties
              
              
              1,754,440
              
              
              1,428,346Convertible
                  Debentures-in default
              
              
              1,053,455
              
              
              360,417Other
                  Current Liabilities
              
              
              1,653,880
              
              
              1,517,808Derivative
                  Liabilities
              
              
              5,577,455
              
              
              1,281,348**TOTAL
                  LIABILITIES**
              
              **$**
              11,534,777
              
              $
              6,264,918**STOCKHOLDER'S
                  DEFICIT**Preferred
                  Stock - $0.01 par value 50,000,000 shares of preferred stock authorized
                  0
                  shares issued and outstanding
              
              
              
              
              
              -Common
                  Stock-$0.001 par value:150,000,000 shares authorized; 94,181,525
                  and
                  71,370,955 shares issued and outstanding.
              
              
              94,181
              
              
              71,370Additional
                  Paid-In Capital
              
              
              60,095,424
              
              
              58,009,358Deficit
                  accumulated before entering development stage
              
              
              (11,681,500
              )
              
              (11,681,500
              )Deficit
                  accumulated during development stage
              
              
              (59,056,085
              )
              
              (52,168,148
              )Total
                  Stockholder’s Deficit
              
              
              (10,547,980
              )
              
              (5,768,920
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS DEFICIT**
              
              **$**
              986,797
              
              $
              495,998


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




-3-




**POWER3
                MEDICAL PRODUCTS, INC.****(A
                Development Stage Enterprise)****STATEMENTS
                OF OPERATIONS****(unaudited)**




**For
                the three month**
              **period
                ended June 30**
            
            **For
                the six month**
              **period
                ended June 30**
            
            **Period
                  from**
                **May
                  18, 2004**
                **to
                  June 30,****2007**
            
            **2006**
            
            **2007**
            
            **2006**
            
            **2007****REVENUES**:Sales
            
            $
            -
            
            $
            100,000
            
            $
            121,724
            
            $
            100,000
            
            $
            425,724Total
                revenue
            
            $
            -
            
            $
            100,000
            
            $
            121,724
            
            $
            100,000
            
            $
            425,724**OPERATING
                EXPENSES**:Employee
                compensation and benefits
            
            
            135.350
            
            
            1,937,637
            
            
            586,563
            
            
            5,474,280
            
            
            28,919,058Professional
                and consulting fees
            
            
            177,339
            
            
            168,949
            
            
            381,784
            
            
            356,872
            
            
            8,999,360Impairment
                of Goodwill
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            13,371,776Occupancy
                and equipment
            
            
            41,410
            
            
            25,122
            
            
            74,382
            
            
            51,996
            
            
            464,706Travel
                and entertainment
            
            
            42,935
            
            
            21,508
            
            
            60,745
            
            
            35,898
            
            
            289,242Write
                off lease
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            34,243Other
                selling, general and administrative expenses
            
            
            40,651
            
            
            35,086
            
            
            89,723
            
            
            77,242
            
            
            377,646Total
                operating expenses
            
            $
            437,685
            
            $
            2,188,302
            
            $
            1,193,197
            
            $
            5,996,288
            
            $
            52,456,031**LOSS
                FROM OPERATIONS**
            
            $
            (437,685
            )
            $
            (2,088,302
            )
            $
            (1,071,473
            )
            $
            (5,896,288
            )
            $
            (52,030,307
            )**OTHER
                INCOME AND (EXPENSE)**:Derivative
                gain/(loss)
            
            $
            (321,666
            )
            $
            375,311
            
            
            (3,809,107
            )
            
            (144,843
            )
            
            511,712Interest
                income
            
            
            2,092
            
            
            -
            
            
            3,112
            
            
            -
            
            
            5,378Mandatory
                prepayment penalty
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (420,000
            )Other
                income(expense)
            
            
            -
            
            
            -
            
            
            (531,062
            )
            
            -
            
            
            (727,238
            )Loss
                on conversion of financial instruments
            
            
            -
            
            
            -
            
            
            (397,871
            )
            
            -
            
            
            (397,871
            )Interest
                expense
            
            
            (511,567
            )
            
            (247,386
            )
            
            (1,081,536
            )
            
            (824,994
            )
            
            (2,616,786
            )Total
                other income(expense)
            
            
            (831,141
            )
            
            127,925
            
            
            (5,816,464
            )
            
            (969,837
            )
            
            (3,644,805
            )**NET
                LOSS**
            
            $
            (1,268,826
            )
            $
            (1,960,377
            )
            $
            (6,887,937
            )
            $
            (6,866,125
            )
            $
            (55,675,112
            )**NET
                LOSS PER SHARE BASIC AND DILLUTED**
            
            $
            (0.02
            )
            $
            (0.03
            )
            $
            (.09
            )
            $
            (.10
            )
            $
            (0.77
            )Weighted
                average number of shares outstanding
            
            
            83,793,113
            
            
            70,058,188
            
            
            78,523,532
            
            
            70,058,188
            
            
            72,364,455





The
        accompanying notes are an integral part of these financial
        statements.
  -4-


**POWER3
                MEDICAL PRODUCTS, INC.****(
                A Development Stage Enterprise)****STATEMENT
                OF STOCKHOLDERS' EQUITY (DEFICIT)****Through
                June 30, 2007 and Years Ended December 31, 2006 and 2005****and
                2004 from inception**




**Common
                  Stock**
              
              
              
              **Stock**
              
              **Additional**
              
              **Deferred****Shares**
              
              **Par
                  Value**
              
              **Preferred**
                    **Shares**
              
              **Par
                    Value**
              
              **Paid
                      In**
                    **Capital**
              
              **Compensation**
                    **Expense**
              
              **Retained**
                    **Earnings**
              
              **Equity****Beginning
                  Balances as of beginning of development stage May 17 ,
                  2004**
              
              
              **14,407,630**
              
              **$**
              **14,407**
              
              
              **3,870,000**
              
              **$**
              **3,870**
              
              **$**
              **14,225,974**
              
              **$**
              **-**
              
              **$**
              **(11,681,500**
              **)**
              **$**
              **2,382,751**Issued
                  shares on May 18, 2004 for compensation
              
              
              27,805,000
              
              
              27,805
              
              
              
              
              
              
              
              
              24,996,695
              
              
              (25,024,500
              )Issued
                  shares on May 18, 2004 for services
              
              
              4,550,000
              
              
              4,550
              
              
              
              
              
              
              
              
              4,090,450
              
              
              
              
              
              
              
              
              4,095,000Issued
                  shares on May 18, 2004 for acquisition of equipment
              
              
              15,000,000
              
              
              15,000
              
              
              
              
              
              
              
              
              13,485,000
              
              
              
              
              
              
              
              
              13,500,000Issued
                  shares on June 1, 2004 for services
              
              
              125,000
              
              
              125
              
              
              
              
              
              
              
              
              249,875
              
              
              (250,000
              )Issued
                  shares on June 11, 2004 for services
              
              
              100,000
              
              
              100
              
              
              
              
              
              
              
              
              211,900
              
              
              
              
              
              
              
              
              212,000Stock
                  Option Expense
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              626,100
              
              
              (626,100
              )Issued
                  shares on July 1, 2004 for compensation
              
              
              140,000
              
              
              140
              
              
              
              
              
              
              
              
              426,860
              
              
              (427,000
              )Issues
                  shares on July 23, 2004 for services
              
              
              125,000
              
              
              125
              
              
              
              
              
              
              
              
              284,875
              
              
              (285,000
              )Issued
                  shares on November 10, 2004 for cash
              
              
              242,167
              
              
              242
              
              
              
              
              
              
              
              
              314,575
              
              
              
              
              
              
              
              
              314,817Issued
                  shares on November 10, 2004 for services
              
              
              10,000
              
              
              10
              
              
              
              
              
              
              
              
              12,990
              
              
              
              
              
              
              
              
              13,000Cancelled
                  shares November 15, 2004 per cancellation of agreement
              
              
              (160,000
              )
              
              -160
              
              
              
              
              
              
              
              
              (71,840
              )
              
              
              
              
              
              
              
              (72,000
              )Issued
                  shares on November 17, 2004 to convert Series A Preferred Shares
                  to common
                  shares
              
              
              1,031,316
              
              
              1,031
              
              
              (1,331,280
              )
              
              (1,330
              )
              
              1,391,246
              
              
              
              
              
              (1,392,277
              )
              
              (1,330
              )Issued
                  shares on November 23, 2004 to convert Series A Preferred shares
                  to common
                  shares
              
              
              1,969,008
              
              
              1,970
              
              
              (2,538,720
              )
              
              (2,540
              )
              
              1,986,728
              
              
              
              
              
              (1,988,698
              )
              
              (2,540
              )Stock
                  based compensation
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              8,311,012
              
              
              
              
              
              8,311,012Net
                  reclassification of derivative liabilities
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (3,347,077
              )
              
              
              
              
              
              
              
              (3,347,077
              )Net
                  Loss (from May 18, 2004 to December 31, 2004)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (15,236,339
              )
              
              (15,056,339
              )
  -5-
  **Balances,
                  December 31, 2004**
              
              
              **65,345,121**
              
              
              **65,345**
              
              
              **-**
              
              
              **-**
              
              
              **58,884,351**
              
              
              **(18,301,588**
              **)**
              
              **(30,298,814**
              **)**
              
              **10,349,294**Cancelled
                  Shares from 7/01/04 (returned from employee)
              
              
              (140,000
              )
              
              (140
              )
              
              
              
              
              
              
              
              (426,860
              )
              
              
              
              
              
              
              
              (427,000
              )Issued
                  Shares on 9/14/05 for compensation
              
              
              140,000
              
              
              140
              
              
              
              
              
              
              
              
              41,860
              
              
              
              
              
              
              
              
              42,000Issued
                  Shares on 10/31/05 for services
              
              
              300,000
              
              
              300
              
              
              
              
              
              
              
              
              65,700
              
              
              
              
              
              
              
              
              66,000Issued
                  Shares on 11/11/05 for services
              
              
              250,000
              
              
              250
              
              
              
              
              
              
              
              
              44,750
              
              
              
              
              
              
              
              
              45,000Issued
                  Shares on 12/06/05 for services
              
              
              300,000
              
              
              300
              
              
              
              
              
              
              
              
              44,700
              
              
              
              
              
              
              
              
              45,000Cancelled
                  Shares on 12/31/05 (returned from employee)
              
              
              (975,000
              )
              
              (975
              )
              
              
              
              
              
              
              
              (876,500
              )
              
              
              
              
              
              
              
              (877,475
              )Cancelled
                  Shares on 12/31/05 (returned from employee)
              
              
              (5,000
              )
              
              (5
              )
              
              
              
              
              
              
              
              (4,495
              )
              
              
              
              
              
              
              
              (4,500
              )Amortize
                  Deferred Comp Expense
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              13,222,517
              
              
              
              
              
              13,222,517Net
                  Loss For Year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (27,134,865
              )
              
              (27,134,865
              )
  -6-
  BALANCES,
                  DECEMBER 31, 2005 (restated)
              
              
              65,215,121
              
              
              65,215
              
              
              -
              
              
              -
              
              
              57,773,506
              
              
              (5,079,071
              )
              
              (57,433,679
              )
              
              (4,674,029
              )Issued
                  Shares on 1/06/06 for services
              
              
              50,000
              
              
              50
              
              
              
              
              
              
              
              
              5700
              
              
              
              
              
              
              
              
              5,750Issued
                  Shares on 1/06/06 for cash
              
              
              500000
              
              
              500
              
              
              
              
              
              
              
              
              57000
              
              
              
              
              
              
              
              
              57,500Issued
                  Shares on 1/13/06 for services
              
              
              220,000
              
              
              220
              
              
              
              
              
              
              
              
              28,380
              
              
              
              
              
              
              
              
              28,600Issued
                  Shares on 1/27/06 for compensation
              
              
              451,677
              
              
              452
              
              
              
              
              
              
              
              
              49,233
              
              
              
              
              
              
              
              
              49,685Issued
                  Shares on 2/03/06 for compensation
              
              
              413,234
              
              
              413
              
              
              
              
              
              
              
              
              40,910
              
              
              
              
              
              
              
              
              41,323Issued
                  Shares on 2/03/06 for cash
              
              
              1,114,286
              
              
              1,114
              
              
              
              
              
              
              
              
              81,386
              
              
              
              
              
              
              
              
              82,500Issued
                  Shares on 2/03/06 for services
              
              
              297,843
              
              
              297
              
              
              
              
              
              
              
              
              29,488
              
              
              
              
              
              
              
              
              29,785Issued
                  Shares on 2/14/06 for compensation
              
              
              201,539
              
              
              202
              
              
              
              
              
              
              
              
              38,091
              
              
              
              
              
              
              
              
              38,293Issued
                  Shares on 2/22/06 for services
              
              
              150,000
              
              
              150
              
              
              
              
              
              
              
              
              34,350
              
              
              
              
              
              
              
              
              34,500Issued
                  Shares on 3/08/06 for cash
              
              
              400,000
              
              
              400
              
              
              
              
              
              
              
              
              39,600
              
              
              
              
              
              
              
              
              40,000Issued
                  Shares on 3/09/06 for cash
              
              
              400,000
              
              
              400
              
              
              
              
              
              
              
              
              39,600
              
              
              
              
              
              
              
              
              40,000Issued
                  Shares on 3/23/06 for services
              
              
              300,000
              
              
              300
              
              
              
              
              
              
              
              
              80,700
              
              
              
              
              
              
              
              
              81,000Issued
                  Shares on 3/24/06 for compensation
              
              
              186,648
              
              
              187
              
              
              
              
              
              
              
              
              48,529
              
              
              
              
              
              
              
              
              48,716Issued
                  Shares on 5/09/06 for services
              
              
              60,000
              
              
              60
              
              
              
              
              
              
              
              
              9,240
              
              
              
              
              
              
              
              
              9,300Issued
                  Shares on 5/25/06 for services
              
              
              172,147
              
              
              172
              
              
              
              
              
              
              
              
              22,207
              
              
              
              
              
              
              
              
              22,379Issued
                  Shares on 6/08/06 for cash
              
              
              38,460
              
              
              38
              
              
              
              
              
              
              
              
              4,962
              
              
              
              
              
              
              
              
              5,000Issued
                  Shares on 6/16/06 for services
              
              
              300,000
              
              
              300
              
              
              
              
              
              
              
              
              32,700
              
              
              
              
              
              
              
              
              33,000Issued
                  Shares on 9/15/06 for services
              
              
              400,000
              
              
              400
              
              
              
              
              
              
              
              
              39,600
              
              
              
              
              
              
              
              
              40,000Issue
                  Shares on 10/31/06 for services
              
              
              500,000
              
              
              500
              
              
              
              
              
              
              
              
              29,500
              
              
              
              
              
              [0]
              
              
              30,000Adoption
                  of 123R
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (475,324
              )
              
              475,324Amortize
                  Deferred Comp Expense
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              4,603,747
              
              
              
              
              
              4,603,747Net
                  Loss For Year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (6,415,969
              )
              
              (6,415,969
              )
  -7-
  **BALANCES,
                  DECEMBER 31, 2006**
              
              
              **71,370,955**
              
              **$**
              **71,370**
              
              
              **-**
              
              
              **-**
              
              **$**
              **58,009,358**
              
              
              **-**
              
              
              **($63,849,648**
              **)**
              
              **($5,768,920**
              **)**Issue
                  Shares on 1/2/07 for services
              
              
              100,000
              
              
              100
              
              
              
              
              
              
              
              
              7,300
              
              
              
              
              
              
              
              
              7,400Issue
                  Shares on 1/23/07 for conversion
              
              
              1,000,000
              
              
              1,000
              
              
              
              
              
              
              
              
              59,000
              
              
              
              
              
              
              
              
              60,000Issue
                  Shares on 1/30/07 for services
              
              
              500,000
              
              
              500
              
              
              
              
              
              
              
              
              42,000
              
              
              
              
              
              
              
              
              42,500Issue
                  Shares on 3/14/07 for conversion
              
              
              3,000,000
              
              
              3,000
              
              
              
              
              
              
              
              
              247,000
              
              
              
              
              
              
              
              
              250,000Issue
                  Shares on 4/13/07 for services
              
              
              160,000
              
              
              160
              
              
              
              
              
              
              
              
              35,040
              
              
              
              
              
              
              
              
              35,200Issue
                  Shares on 4/13/07 for services
              
              
              300,000
              
              
              300
              
              
              
              
              
              
              
              
              65,700
              
              
              
              
              
              
              
              
              66,000Issue
                  Shares on 4/30/07 for conversion
              
              
              713,708
              
              
              714
              
              
              
              
              
              
              
              
              99,286
              
              
              
              
              
              
              
              
              100,000Issue
                  Shares on 5/11/07 for conversion
              
              
              157,895
              
              
              158
              
              
              
              
              
              
              
              
              29,842
              
              
              
              
              
              
              
              
              30,000Issued
                  Shares on 5/16/07 for warrants exercised
              
              
              833,333
              
              
              834
              
              
              
              
              
              
              
              
              66,666
              
              
              
              
              
              
              
              
              67,500Issue
                  Shares on 5/16/07 for conversion
              
              
              833,333
              
              
              833
              
              
              
              
              
              
              
              
              49,167
              
              
              
              
              
              
              
              
              50,000Issue
                  Shares on 5/16/07 for conversion
              
              
              713,708
              
              
              714
              
              
              
              
              
              
              
              
              49,286
              
              
              
              
              
              
              
              
              50,000Issue
                  Shares on 5/16/07 for conversion
              
              
              4,127,000
              
              
              4,127
              
              
              
              
              
              
              
              
              235,873
              
              
              
              
              
              
              
              
              240,000Issue
                  Shares on 5/16/07 for conversion
              
              
              359,595
              
              
              360
              
              
              
              
              
              
              
              
              49,640
              
              
              
              
              
              
              
              
              50,000Issue
                  Shares on 5/16/07 for conversion
              
              
              178,427
              
              
              178
              
              
              
              
              
              
              
              
              24,822
              
              
              
              
              
              
              
              
              25,000Issue
                  Shares on 5/17/07 for conversion
              
              
              11,970
              
              
              12
              
              
              
              
              
              
              
              
              1,665
              
              
              
              
              
              
              
              
              1,677Issue
                  Shares on 5/17/07 for conversion
              
              
              71,370
              
              
              71
              
              
              
              
              
              
              
              
              9,929
              
              
              
              
              
              
              
              
              10,000Issue
                  Shares on 6/1/07 for conversion
              
              
              200,000
              
              
              200
              
              
              
              
              
              
              
              
              11,800
              
              
              
              
              
              
              
              
              12,000Issue
                  Shares on 6/7/07 for conversion
              
              
              5,900,231
              
              
              5,900
              
              
              
              
              
              
              
              
              334,100
              
              
              
              
              
              
              
              
              340,000Issue
                  Shares on 6/13/07 for services
              
              
              400,000
              
              
              400
              
              
              
              
              
              
              
              
              79,600
              
              
              
              
              
              
              
              
              80,000Issued
                  Shares on 6/13/07 for cash
              
              
              1,750,000
              
              
              1,750
              
              
              
              
              
              
              
              
              268,250
              
              
              
              
              
              
              
              
              270,000Issued
                  Shares on 6/13/07 for cash
              
              
              1,500,000
              
              
              1,500
              
              
              
              
              
              
              
              
              320,000
              
              
              
              
              
              
              
              
              321,500Stock
                  received from Subsidiary
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              100
              
              
              
              
              
              
              
              
              100Net
                  Loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (6,887,937
              )
              
              (6,887,937
              )BALANCES
                  AS OF JUNE 30, 2007
              
              
              **94,181,525**
              
              
              **94,181**
              
              
              
              
              
              
              
              
              **60,095,424**
              
              
              
              
              
              **(70,737,585**
              **)**
              
              **(10,547,980**
              **)**





-8-





**POWER3
                MEDICAL PRODUCTS, INC****(A
                Development Stage****Enterprise****)****STATEMENTS
                OF CASH FLOWS****(unaudited)**




**For
                the six Months Ended June 30, 2007**
            
            **For
                the six Months Ended June 30, 2006**
            
            **Period
                from**
              **May
                18, 2004 to**
              **June
                30, 2007**Operating
                activities:Net
                loss
            
            $
            (6,887,937
            )
            $
            (6,866,125
            )
            $
            (55,675,112
            )Adjustments
                to reconcile net loss to net cash used in Operating
                activities:Loss
                on conversion of financial instruments
            
            
            397,871
            
            
            
            
            
            397,871Impairment
                of Goodwill
            
            
            -
            
            
            -
            
            
            13,371,776Loss
                on previously capitalized lease
            
            
            -
            
            
            -
            
            
            34,243Amortization
                of deferred finance cost and debt discounts
            
            
            851,039
            
            
            (12,550
            )
            
            1,265,493Change
                in derivative liability, net of bifurcation
            
            
            4,296,107
            
            
            (144,843
            )
            
            1,129,188Stock
                issued for services and compensation
            
            
            231,100
            
            
            4,746,161
            
            
            32,598,445Depreciation expense
            
            
            12,292
            
            
            13,642
            
            
            97,608Other
                non cash items
            
            
            
            
            
            
            
            
            (34,933
            )Changes
                in operating assets and liabilities:Accounts
                Receivable
            
            
            -
            
            
            -
            
            
            -Prepaid
                expenses and other current assets
            
            
            (36,073
            )
            
            -
            
            
            172,709Accounts
                Payable and other liabilities
            
            
            220,620
            
            
            1,575,775
            
            
            2,426,646Net
                cash used in operating activities
            
            
            (914,981
            )
            
            (687,940
            )
            
            (4,216,066
            )Investing
                Activities:Capital
                expenditures, net
            
            
            -
            
            
            (13,742
            )
            
            (135,933
            )Increase
                in other assets.
            
            
            -
            
            
            10,488
            
            
            (179,786
            )Net
                cash used in investing activities
            
            
            -
            
            
            (3,254
            )
            
            (315,719
            )Financing
                Activities:Proceeds
                from borrowings under notes payable
            
            
            875,000
            
            
            588,780
            
            
            3,028,430Proceeds
                from sale of common stock, net
            
            
            591,500
            
            
            253,929
            
            
            1,266,317Principal
                payments on long term debt
            
            
            (11,500
            )
            
            -
            
            
            (43,978
            )Proceeds
                from CD, warrants and rights net of issuance cost
            
            
            66,766
            
            
            -
            
            
            925,807Net
                cash provided by financing activities
            
            
            1,521,766
            
            
            842,709
            
            
            5,176,576Net
                change in cash and cash equivalents
            
            
            606,785
            
            
            151,515
            
            
            644,791Cash
                and cash equivalents, beginning of period
            
            
            40,602
            
            
            1,399
            
            
            2,596Cash
                and cash equivalents, end of period
            
            $
            647,387
            
            $
            152,914
            
            $
            647,387




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





-9-


**POWER3
                MEDICAL PRODUCTS, INC****(A
                Development Stage****Enterprise****)****STATEMENTS
                OF CASH FLOWS (Continued)****(unaudited)**




For
                the six months ended June 30, 2007
            
            For
                the six months ended June 30, 2006
            
            Period
                from
              May
                18, 2004 to June 30, 2007Cash
                paid for:Interest
            
            
            -
            
            
            -
            
            $
            59,840Income
                taxes
            
            
            -
            
            
            -
            
            
            -Non-cash
                transactions:Exchange
                of convertible notes for stock
            
            $
            1,218,677
            
            
            
            
            $
            967,999Restatement
                of notes payable to N/P related parties
            
            
            
            
            
            
            
            $
            1,393,346Exchange
                of convertible preferred stock for common stock
            
            
            
            
            
            
            
            $
            3,380,975




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





-10-


**POWER3
      MEDICAL PRODUCTS, INC**


**(A
      Development Stage Enterprise)**





**NOTES
      TO FINANCIAL STATEMENTS**


**(Unaudited)**





***Note
      1. BASIS OF PRESENTATION***





The
      accompanying consolidated financial statements of Power3 Medical Products,
      Inc.
      at June 30, 2007 have been prepared without audit, pursuant to the rules and
      regulations of the Securities and Exchange Commission. Certain information
      and
      footnote disclosures normally included in financial statements prepared in
      conformity with generally accepted accounting principles have been omitted
      or
      condensed pursuant to such rules and regulations. These statements should be
      read in conjunction with Power3’s Form 10-KSB for the year ended December 31,
      2006. In Management’s Opinion, these interim consolidated financial statements
      reflect all all adjustments (consisting of normal and recurring adjustments)
      necessary for a fair presentation of the consolidated financial position and
      results of a fair presentation of the consolidated financial statements for
      the
      three months ended June 30, 2007 are not necessarily indicative of the results
      which can be expected for the entire year.





***Going
      concern***





As
      shown
      in the accompanying financial statements, Power3 incurred net losses chargeable
      to common shareholders of $6,887,937 and $6,866,125 for the six months ended
      June 30 th for 2007
      and 2006, respectively, and has an accumulated deficit of $10,547,980 as of
      June
      30, 2007. 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.
      The
      financial statements did not include any adjustment that might be necessary
      if
      Power3 is unable to continue as a going concern.





***Note
      2. RELATED PARTY TRANSACTIONS***





In
      order
      to obtain bridge loan financing for the Company, Steven B. Rash, Chief Executive
      Officer of Power3, and Dr. Ira Goldknopf, Director of Proteomics of Power3,
      have
      both pledged a number of Power3 common shares they owned personally, as
      collateral for the bridge loans obtained. In certain instances, these bridge
      loan providers have sold pledged shares they were holding as collateral for
      the
      notes to pay back the notes payable. The amounts obtained from the sale of
      pledged shares have been reported to the Company by the lenders.





The
      following notes were issued to Steven B. Rash during the six month period ended
      June 30, 2007: On January 2 nd ,
      $90,682, maturing on July 2, 2007 at 6% and May 8 th ,
      $206,556, maturing on November 8, 2007 at 6%.





The
      following note was paid to Steven B. Rash during the six month period ended
      June
      30, 2007: On February 26 th ,
      $11,500
      note dated September 5, 2006.





The
      following notes were issued to Ira L. Goldknopf during the six month period
      ended June 30, 2007: On January 2 nd ,
      $4,180,
      maturing on July 2, 2007 at 6% and May 8 th ,
      $36,176, maturing on November 8, 2007 at 6%.





See
      note
      4 for further discussion.





-11-




**Note
      3. COMMITMENTS AND CONTINGIENCES**





Legal
      Proceedings





An
      equipment vendor filed a complaint, regarding equipment which the Company
      acquired in its May 18, 2004 transaction with Advanced BioChem, now known as
      Industrial Enterprises of America, and against Advanced BioChem in April of
      2002
      in a California court alleging breach of contract and seeking damages. Advanced
      BioChem reached a settlement agreement in April of 2003 under which Advanced
      BioChem would pay the vendor $40,000 in installments through August, 2003.
      At
      December 31, 2003, Advanced BioChem had a balance remaining of $20,000. In
      April, 2005, the equipment vendor filed a lawsuit against Advanced BioChem,
      certain former officers of Advanced BioChem and against Power3 in order to
      enforce its claim for the remaining balance which is past due and may have
      been
      assumed by the Company as part of the settlement of the dispute with Advanced
      BioChem. Settlement negotiations are ongoing; however no resolution has been
      achieved thus far.




In
      June,
      2005, Charles Caudle et al filed a lawsuit in Harris County, Texas, against
      Advanced BioChem, Power3 and the officers and directors of both companies.
      The
      suit alleges that Advanced BioChem, Power3 and the officers and directors of
      Power3, are liable to Charles Caudle et al for damages resulting from funds
      loaned to Advanced BioChem and which were subsequently converted into common
      stock of Advanced BioChem. It is unclear as to the specific dollar amount of
      the
      claim. The Company, and its officers and directors, has filed an answer denying
      all claims in the lawsuit. The Company believes that Charles Caudle’s claims are
      without merit with regard to Power3; however the Company cannot be assured
      it
      will prevail or if the outcome of the action will adversely affect the Company’s
      financial position or results of operations. A settlement has been reached
      between Advanced BioChem and Charles Caudle et. al. Power3 and Chares Caudle
      et.
      al. have reached an agreement and The Company will not incur any loss whatsoever
      from this action.




On
      May 19, 2005, Quinn Capital Consulting, Inc. filed suit against Power3
      and Steven B. Rash claiming breach of contract regarding payment for services
      claimed to be provided to Power3, with payment to have been made by issue of
      500,000 shares to Quinn Capital, which Power3 later cancelled or otherwise
      converted. This financial obligation is recorded in the books of the Company
      as
      due and payable to Quinn Capital as of December 31, 2006. In February, 2007,
      the
      Company and Quinn Capital reached a settlement agreement in this matter and
      the
      Company will issue 500,000 shares to Quinn Capital and pay $75,000, over time,
      as settlement of any and all claims in this matter .





On
      September 12, 2005, Focus Partners LLC filed suit against David Zazoff and
      Power3 alleging that Power3 breached its agreement with Focus Partners in that
      it failed to issue stock to the Plaintiff according to the terms of their
      agreement, that the stock in question was issued to Zazoff and that Zazoff
      later
      sold the stock in question for $480,000. Settlement discussions between the
      Power3 and Focus Partners are ongoing; however no resolution has been achieved
      thus far. The Company has moved for summary judgment dismissing the complaint
      on
      the grounds that the agreement that forms the basis of this action was
      superseded by a subsequent agreement entered into between the parties, thereby
      obviating any obligation of Power3 to tender shares pursuant to the prior
      agreement. The Company believes that the Plaintiff’s claims are without merit
      and the Company will continue to vigorously defend this action.





On
      October 28, 2005, Power3 received notice of a Petition to Enforce Foreign
      Judgment citation filed against the Company by KForce regarding an employment
      fee adjudicated in December, 2003 in the state of Florida against the Company,
      in the amount of $15,873, together with $4,735 in interest. Power3 does not
      agree with the Foreign Judgment and is attempting to resolve the issue prior
      to
      enforcement. No resolution has been achieved on this issue at this time; however
      the Company is endeavoring to resolve the petition. This debt is not recorded
      in
      accounts payable by the Company because it is the Company’s position that the
      judgment should never have been entered against Power3, but rather against
      a
      different corporate entity, not related to Power3 in any way, at this time.
      The
      Company’s attorney in this matter feels that no loss is probable, nor will the
      Company be obligated to pay any sums whatsoever on this matter. The Company
      has
      pled improper party and expects to be vacated from the suit since it does not
      apply to the Company.




-12-




In
      2007,
      a lawsuit was filed by Crestview Capital Master, LLC (“Crestview” or
“Plaintiff”), Index No. 601862/07, in the Supreme Court of the State of New
      York, County of New York, seeking specific performance and money damages against
      Power3 Medical Products, Inc. (“Power3”, or the “Company”) The lawsuit arose
      from a dispute concerning the number of shares to be issued to Crestview by
      Power3 in connection with (i) a $150,000 principal amount convertible debenture
      and common stock purchase warrant issued to Crestview on October 28, 2004 and
      (ii) a $150,000 principal amount convertible debenture and common stock purchase
      warrant issued to Crestview on January 26, 2005 (collectively, the “Transaction
      Documents”). On July 31, 2007, Power3 entered into a Settlement Agreement and
      Release (the “Settlement Agreement”), with the Plaintiff. The terms of the
      Settlement Agreement require Power3 to issue an aggregate of 3,793,301 shares
      (the “Shares”) of the Company’s common stock in full satisfaction of the
      Transaction Documents. Upon the filing by Power3 of a Stipulation of
      Discontinuance letter signed by Crestview, the lawsuit shall be dismissed,
      it
      its entirety and with prejudice, and as a result of the Settlement Agreement,
      each of the parties is released by the other from all known and unknown claims.
      As a result of this settlement $531,062 has been recorded as additional expense
      based upon the fair value of the stock granted at the date
      settlement.





***Note
      4. FINANCING ARRANGEMENTS***




**Securities
      Purchase Agreement—Convertible Debentures**





The
      Company entered into a Securities Purchase Agreement, dated October 28, 2004
      (the “Agreement”) with certain accredited investors (the “Purchasers”). Pursuant
      to the Agreement, the Purchasers agreed to purchase convertible debentures
      due
      three (3) years from the date of issuance in the aggregate principal amount
      of
      $3,000,000. The Agreement also provides warrants to purchase shares of the
      Company's common stock and additional investment rights to purchase additional
      convertible debentures. In connection with the Agreement, the Company also
      entered into a Registration Rights Agreement with the Purchasers that requires
      the Company to (i) file a registration statement with the SEC registering the
      resale of the shares of common stock issuable upon conversion of the debentures
      and the exercise of the warrants, (ii) achieve effectiveness within a stated
      period and (iii) maintain effectiveness of the registration statement. Failure
      to meet these requirements will require the Company to incur liquidating damages
      amounting to 2.0% for each month.





On
      October 28, 2004, the Company issued the Purchasers the first $1,000,000 in
      aggregate principal amount of such debentures at the initial closing under
      the
      Agreement. Effective January 26, 2005, the Company issued and sold, to a
      sub-group of the original investors, a second tranche of $400,000 aggregate
      principal amount of debentures. Subject to the conditions set forth in the
      Agreement, all purchasers are required to purchase the remaining $1,600,000
      in
      aggregate principal amount of such debentures at the final closing, which is
      to
      occur on or before the fifth trading day after the effective date of the
      registration statement. The Company is currently in default under the Agreement
      and the previously issued debentures and related registration rights agreement,
      and therefore the conditions of the Agreement will not be satisfied or otherwise
      met on a timely basis. Consequently, there are no assurances that the Purchasers
      will purchase all or any portion of the remaining $1,600,000 aggregate principal
      amount of debentures. The $1,000,000 aggregate principal amount of debentures
      issued in the initial closing and the $400,000 aggregate principal amount of
      debentures issued on January 19, 2005 are due and payable in accordance with
      their original terms in full three years after the date of issuance and bear
      interest at a default rate of 18%. The debentures are convertible into shares
      of
      common stock at the following conversion price, which varies relative to the
      Company’s trading stock price, as follows: $0.90 per share, provided however if
      the lesser of (i) 75% of the average of the 5 consecutive Closing Prices
      immediately prior to the Effective Date, as defined in the Securities Purchase
      Agreement, and (ii) the Closing Price on the Effective Date (the lesser of
      (i)
      and (ii) being referred to as the “Effective Date Price”) is less than the
      Conversion Price, the Conversion Price shall be reduced to equal the Effective
      Date Price .




-13-





Under
      the
      Agreements, the Purchasers also received warrants to purchase an aggregate
      of up
      to 2,500,000 and 333,333 shares of common stock for tranche one and two,
      respectively, and additional investment rights to purchase up to an additional
      $2,500,000 of convertible debentures. The warrants are exercisable at a price
      of
      $1.44 per share, subject to adjustment, including under anti-dilution
      protection . The
      additional investment rights are exercisable at a price equal to the principal
      amount of the debentures to be purchased, for (1) a period of nine months
      following the effective date of the registration statement to be filed pursuant
      to the Registration Rights Agreement, or (2) a period of 18 months from the
      date
      of issuance of the additional investment rights, whichever is shorter. The
      rights debentures will have the same terms as the debentures described above,
      except that the conversion price will be equal to $1.08.




As
      mentioned above, the Company is in default under the provisions of the
      Agreement, Registration Rights Agreement and previously issued debentures.
      The
      aggregate amount payable upon an acceleration by reason of an event of default
      is equal to the greater of 130% of the principal amount of the debentures to
      be
      prepaid or the principal amount of the debentures to be prepaid, divided by
      the
      conversion price on the date specified in the debenture, multiplied by the
      closing price on the date set forth in the debenture. As a result of this
      default Power3 recorded $420,000 during the 12 month period ended December
      31,
      2005 in penalties as described above.




The
      Company has received notice from one of the Purchasers informing the Company
      that it is in default under the debentures and demanding payment of the
      Mandatory Prepayment Amount, together with the liquidated damages, to which
      it
      is entitled pursuant to the agreement. The Company is in discussions with its
      debenture holders regarding a resolution of this matter, and approximately
      37%
      of the debenture holders have converted their debentures to common shares since
      January 1, 2007. The Company has accrued $24,000 as of June 30, 2007 for the
      estimated settlement of these liquidated damages.




In
      connection with such financing, the Company issued warrants to purchase 100,000
      shares of common stock at an exercise price of $3.00 to its placement agent.
      If
      any investor exercises their additional investment rights and purchases
      additional debentures, the placement agent will be entitled to receive
      additional warrants to purchase up to a number of shares of common stock equal
      to ten percent (10%) of the exercise price paid upon exercise of the additional
      investment rights divided by ninety percent (90%) of the market price as of
      the
      initial closing. The Company accounted for the warrants as deferred financing
      costs and is amortizing the fair values thereof through periodic charges to
      interest expense using the effective method over the life of the original
      debentures.





Between
      August 2006 and June 2007, the Company issued convertible short term promissory
      notes with a total face value of $1,232,000. The convertible promissory notes
      have a 7% interest rate and include detachable warrants to purchase a total
      11,249,996 shares of common stock to various investors. Principal and interest
      on the notes are payable one year after the origination of the note, and each
      note has a fixed conversion price of $0.06. The warrants have three-year terms
      and strike prices of $0.08. In the event of a default, the notes will bear
      an
      interest rate of 10%.





On
      April
      3, 2007, the Company entered into a joint venture agreement with NeoGenomics
      to
      form a Contract Research Organization (CRO) and collaborate on research work
      in
      the future. In addition, NeoGenomics agreed to purchase a convertible debenture
      for $200,000 and acquired options to purchase common stock of the Company during
      2007. Under the terms of the Agreement, Power3 agrees to issue, and NeoGenomics
      agrees to purchase, a convertible debenture in the principal amount of $200,000.
      The convertible debenture will be convertible into common shares of the Company
      at $.20 per share; however the conversion price can be reset at any time and
      from time to time, in accordance with paragraphs 7 and 9 of the Agreement.
      The
      debenture shall accrue interest at 6% per annum, payable quarterly, and the
      principal amount of the debenture shall be due and payable two years after
      closing.




Further,
        in consideration of NeoGenomics, Inc.’s commitment to purchase the debenture and
        form the joint venture, Power3 grants NeoGenomics, Inc. an irrevocable option
        (the “Second Option”) to purchase, in one or a series of transactions, voting
        convertible preferred stock that is convertible into such number of shares
        of
        common shares of the Company as is necessary to increase NeoGenomics, Inc.’s
        ownership of the voting common stock of Power3, up to 60% of Power3’s voting
        common stock, after taking into consideration all outstanding First Option
        Preferred Stock and Second Option Preferred Stock, on an as-converted basis.




-14-





As
      discussed above Power 3 has converted several notes and plans to continue doing
      so. In some instances Power 3 has offered terms of conversion greater than
      the
      original agreement including lowering the strike price of warrants attached
      to
      these instruments. As a result of this additional consideration, upon conversion
      the Company has recorded $397,871 of loss on the conversion of notes during
      the
      six month period ended June 30, 2007.





As
      a
      result of the above notes, Power3 has determined that the conversion feature
      of
      the secured convertible debentures and the warrants issued with the secured
      convertible debentures are embedded derivative instruments pursuant to SFAS
      No.
      133, Accounting for Derivative Instruments and Hedging Activities, as amended.
      Under the provisions of EITF Issue No. 00−19, Accounting for Derivative
      Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own
      Stock, the accounting treatment of these derivative financial instruments
      requires that the Company record the derivatives at their fair values as of
      the
      inception date of the note agreements and at fair value as of each subsequent
      balance sheet date as a liability. Any change in fair value is recorded as
      non-operating, noncash income or expense at each balance sheet date. The Company
      estimates fair value of warrants using the Black-Scholes option pricing model
      and the conversion feature of their notes using the binomial lattice model.
      The
      estimates inherent within these models directly affect the reported amounts
      of
      the derivative instrument liabilities.




Convertible
      Debentures, Warrants and Additional Investment Rights :





The
      carrying values of the Company’s convertible debentures amounted to
      $1,053,455and $360,417, at June 30, 2007 and December 31, 2006, respectively.





The
      following tabular presentation reflects the components of derivative financial
      instruments on the Company’s balance sheet at June 30, 2007 and December 31,
      2006:





**Derivative
                Liabilities:**
            
            **June
                30, 2007**
            
            **December
                31, 2006**Common
                stock warrants
            
            $
            4,095,114
            
            $
            875,783Embedded
                conversion feature
            
            
            402,896
            
            
            186,480Additional
                investment rights
            
            
            339,930
            
            
            183,056Other
                derivative instruments
            
            
            739,515
            
            
            36,029$
            5,577,455
            
            $
            1,281,348





-15-




The
      fair
      values of certain other derivative financial instruments (warrants) that existed
      at the time of the initial Debenture Financing were reclassed from stockholders’
equity to liabilities when, in connection with the Debenture Financing, the
      Company no longer controlled its ability to share-settle these instruments.





Other
      Notes, Preferred Stock and Warrants:





During
      November and December 2005, the Company issued $300,000 (2 tranches of $150,000)
      face value, 11% notes and detachable warrants to purchase 2,000,000 shares
      of
      common stock to Trinity Financing Investments Corporation. The warrants have
      eight-year terms and strike prices of $0.25 for 1,000,000 shares and $0.14
      for
      1,000,000 shares.





The
      proceeds from the Trinity financing were allocated first to the warrants, based
      upon their fair values, with the balance of $103,100 allocated to the notes.
      The
      allocation of proceeds to the fair value to the warrants was performed because,
      as discussed in the previous section, share settlement is not within
      management’s control. Such amount was initially classified as a derivative
      liability. The resulting note discount is being amortized through periodic
      charges to interest expense using the effective method over the life of the
      notes. Amortization of note discount amounted to $12,819 during the period
      from
      issuance of the notes to December 31, 2005 and $68,499 during the year ended
      December 31, 2006. The Company did not make its required debt service payments
      in March and April 2006. The first Trinity note was paid off during 2006
      completely; however the second Trinity note is in default and is still
      outstanding and payable. As a result of this default, the Company is required
      to
      accrue interest on this note at a composite rate of 21%. The remaining
      unamortized discount was $94,678 at June 30, 2007.





Other
      derivative financial instruments consist of various warrants that were issued
      prior to and subsequent to the debenture financing and were reclassified from
      stockholders’ equity or initially accounted as liabilities, at fair values,
      since share-settlement was not within the Company’s control after the debenture
      financing.





Notes
      Payable in Default and to Related Parties





During
      2005, the Company received bridge loans in the principal amounts of $251,000,
      $200,000, $150,000, $150,000 and $446,500 from entities outside the Company.
      These loans were used for working capital purposes during 2005.





In
      addition, during 2005, certain holders of bridge loans began selling
      personally-owned shares they had received as collateral for their loans to
      the
      Company, from Steve Rash and Ira Goldknopf. The results of these sales were
      that
      the Company became indebted to Steven B. Rash, CEO of Power3, in the amount
      $55,000 during 2005 and to Ira Goldknopf, Director of Proteomics of the Company,
      in the amount of $102,000. In addition, an officer of the Company at the time
      also loaned the Company $35,000 as a short-term bridge loan. These loans,
      together, totaled $192,000 from related parties during the year ended December
      31, 2005.





During
      January and February, 2006, the Company received an aggregate of $89,400 from
      a
      consulting firm in the form of short-term bridge loans. The loans were
      collateralized by pledged stock. The pledged stock was pledged by officers
      of
      the Company and later sold by the consulting firm to pay back the short-term
      bridge loans.





On
      March
      28, 2006, the Company received a bridge loan in the amount of $400,000, which,
      after discounts and fees, amounted to a net amount of $300,000. This bridge
      loan
      was payable on the sooner of June 28, 2006 or the fifth day following the
      effective date of the Company’s proposed registration statement on Form SB-2.
      The note was secured by a Stock Pledge Agreement wherein Steven B. Rash,
      Chairman and CEO of the Company and Dr. Ira Goldknopf, Director of Proteomics
      of
      the Company, pledged personally-owned shares of the Company’s stock. This note
      was paid off during 2006 by sale of pledged shares by the note holder and is
      no
      longer due and payable to the lender.




-16-





On
      June
      1, 2006, the Company received a bridge loan in the amount of $266,000, which,
      after discounts and fees, amounted to a net amount of $200,000. This bridge
      loan
      was payable on the sooner of August 12, 2006, or the fifth day following the
      effective date of the Company’s proposed registration statement on Form SB-2.
      The note was secured by a Stock Pledge Agreement wherein Steven B. Rash,
      Chairman and CEO of the Company, and Dr. Ira Goldknopf, Director of Proteomics
      of the Company, pledged personally-owned shares of the Company’s stock. This
      note was in default as of December 31, 2006. However, in February, 2007, this
      note was paid off by sale of pledged shares and a transfer of the remaining
      principal balance to a new note holder.





During
      2006, the payoff of Company notes payable from the sale of personally pledged
      shares, resulted in the Company entering into Notes Payable with Steven B.
      Rash,
      Chairman and CEO of the Company and Dr. Ira Goldknopf, Director of Proteomics
      of
      the Company, in the amount of $517,166 and $522,949 respectively. At the end
      of
      the year 2006, the total Notes Payable due Mr. Rash for all such transactions
      were $608,342 and the total Notes Payable due Dr. Goldknopf for such
      transactions were $785,004. These notes, along with the note payable to Mike
      Rosinski in the amount of $35,000, brings the total Notes Payable to related
      parties, as of December 31, 2006, to $1,428,346.




As
      of
      June 30, 2007, the total notes Payable due Mr. Rash for all such transactions
      were $894,080 and the total Notes Payable due Dr. Goldknopf for such
      transactions were $825,360. These notes, along with the note payable to Mike
      Rosinski in the amount of $35,000, brings the total Notes Payable to related
      parties, as of June 30, 2007, to $1,754,440 as follows:





**SCHEDULE
                OF NOTES****As
                of June 30, 2007**
            
            **2006**
            
            **2005****Notes
                payable in default:**Cordillera
                I
            
            $
            251,000
            
            $
            251,000
            
            $
            251,000Cordillera
                II
            
            $
            200,000
            
            $
            200,000
            
            $
            200,000Trinity
                I
            
            
            
            
            
            
            
            $
            150,000Trinity
                II
            
            $
            155,500
            
            $
            155,500
            
            $
            150,000Discount
                on Trinity Notes
            
            
            ($
                94,678
            )
            
            ($
                94,678
            )Nutmeg
            
            
            
            
            
            
            
            
            ($262,992
            )Fife
            
            
            
            
            
            
            
            $
            446,500Fife
            
            
            
            
            $
            266,000Donson
            
            
            
            
            
            
            
            $
            159,231**Totals**
            
            $
            511,822
            
            $
            777,822
            
            $
            1,093,739**Notes
                payable - related parties:**Rash
            
            $
            55,000
            
            $
            55,000
            
            $
            55,000Goldknopf
            
            $
            102,000
            
            $
            102,000
            
            $
            102,000Rosinski
            
            $
            35,000
            
            $
            35,000
            
            $
            35,000Rash
            
            $
            553,342
            
            $
            553,342Goldknopf
            
            $
            683,004
            
            $
            683,004Rash
            
            $
            285,738Goldknopf
            
            $
            40,356**Totals**
            
            $
            1,754,440
            
            $
            1,428,346
            
            $
            192,000




-17-




***Note
      5. OTHER SIGNIFICANT EQUITY TRANSACTIONS***




Sales
      of common stock during the six month period ended June 30, 2007




·
            On
                June 13, 2007, 1,750,000 shares of common stock were sold to private
                investors to raise $300,000 there were no warrants associated with
                this
                transaction.




·
            On
                June 13, 2007, 1,500,000 shares of common stock were sold to private
                investors to raise $350,000 there were no warrants associated with
                this
                transaction.




·
            On
                June 13, 2007, $58,500 was paid to placement agents in connection
                with the
                two sales above, these costs were deducted from the proceeds of this
                transaction and resulted in a reduction of additional paid in
                capital.




Shares
      issued for services during the six month period ended June 30,
      2007




·
            On
                January 1, 2007 100,000 shares were issued for services, the Company
                estimated the fair value of this transaction to be $7,400 based upon
                the
                closing stock price of the Company’s stock at the measurement
                date.




·
            On
                January 30, 2007 500,000 shares were issued for services, the Company
                estimated the fair value of this transaction to be $42,500 based
                upon the
                closing stock price of the Company’s stock at the measurement
                date..




·
            On
                April 13, 2007 460,000 shares were issued for services, the Company
                estimated the fair value of this transaction to be $101,200 based
                upon the
                closing stock price of the Company’s stock at the measurement
                date..




·
            On
                June 13, 2007 400,000 shares were issued for services, the Company
                estimated the fair value of this transaction to be $80,000 based
                upon the
                closing stock price of the Company’s stock at the measurement
                date.




Shares
      issued for conversion of debt during the six month period ended June 30,
      2007




17,267,237
      shares of common stock were issued for the conversion of convertible notes
      as
      discussed in Note 4 above.




***Note
      6**.**OTHER**MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION***





Forward
      Looking Statements





This
      Report contains certain forward-looking statements of the intentions, hopes,
      beliefs, expectations, strategies, and predictions of Power3 Medical Products,
      Inc. (“Power3” or the “Company”) or its management with respect to future
      activities or other future events or conditions within the meaning of Section
      27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
      Exchange Act of 1934, as amended. These statements are usually identified by
      the
      use of words such as “believes,” “will,” “anticipates,” “estimates,” “expects,”
“projects,” “plans,” “intends,” “should,” “could,” or similar expressions. These
      statements are based on certain assumptions and analyses made by the Company’s
      management in light of its experience and its perception of historical trends,
      current conditions, expected future developments and other factors believed
      appropriate. Readers are cautioned that these forward-looking statements are
      only predictions and that the Company’s business is subject to significant risks
      and uncertainties, including, without limitation:




·
            The
                Company’s history of operating
                losses;




·
            The
                Company’s need and ability to raise significant capital and obtain
                adequate financing for its development efforts;




-18-




·
            The
                Company’s ability to successfully develop and complete validation studies
                for its products;




·
            The
                Company’s dependence upon and the uncertainties associated with obtaining
                and enforcing patents and intellectual property rights important
                to its
                business;




·
            The
                uncertainties associated with the lengthy regulatory approval process,
                including uncertainties associated with the United States Food and
                Drug
                Administration (“FDA”) decisions and timing of product development or
                approval;




·
            Development
                by competitors of new or competitive products or
                services;




·
            The
                Company’s ability to retain management, implement its business strategy,
                assimilate and integrate any acquisitions;




·
            The
                Company’s lack of operating experience and present commercial production
                capabilities; and




·
            The
                increasing emphasis on controlling healthcare costs and potential
                legislation or regulation of healthcare
                pricing.




Although
      the Company believes that the assumptions underlying the forward-looking
      statements contained in this report are reasonable, any of the assumptions
      could
      be inaccurate, and, therefore, there can be no assurance that the
      forward-looking statements included in this report will prove to be accurate.
      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, the Company undertakes no obligation to release publicly any
      revisions to any forward-looking statements to reflect events or circumstances
      after the date of this report or to reflect the occurrence of unanticipated
      events. 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.




Overview





Power3
      Medical Products, Inc. (the “Company” or “Power3 ”) was incorporated in the
      State of Florida on May 15, 1992 and merged into a New York Corporation in
      1994,
      under the name of Sheffield Acres, Inc. Power3 and its wholly owned
      subsidiaries, C5 Health, Inc. (“C5”), which was officially dissolved in the
      State of Delaware and in the State of Florida effective December 31, 2003 and
      Power3 Medical, Inc., a Nevada Corporation, were engaged in sales, distribution
      and services for the healthcare industry. On September 12, 2003 Surgical Safety
      Products, Inc. amended its Certificate of Incorporation to (a) declare a 1:50
      reverse split of its common stock; (b) increase its authorized capital to
      150,000,000 shares of common stock and 50,000,000 shares of preferred stock;
      and
      (c) change its name to Power3 Medical Products, Inc.




The
      Company transitioned to the development stage, from previously being an
      operating company, as of the Company’s asset purchase transaction with Advanced
      BioChem on May 18, 2004. As a development stage company, Power3 is primarily
      engaged in commercializing its intellectual properties in the area of diagnosis
      and treatment of breast cancer, ALS, Alzheimer’s disease and Parkinson’s
      disease.





*Scientific
      Developments*





As
      of the
      Company’s acquisition of assets from Advanced BioChem on May 18, 2004, the
      Company’s overall business strategy has changed. The Company’s current business
      directive is to engage in the early detection, monitoring, and targeting of
      diseases through the analysis of proteins. Power3’s development stage business
      objective is to commercialize its intellectual properties by focusing on disease
      diagnosis, protein and biomarkers identification, and drug resistance in the
      areas of cancers, neurodegenerative and neuromuscular diseases. Coincident
      with
      the acquisition of assets from Advanced BioChem, the Company changed its
      management team and established a Scientific Advisory Board to assist in the
      research and development of its products. The members of this Scientific
      Advisory Board are recognized leaders in their chosen fields and the Company
      is
      working with them to find effective therapeutics and novel predictive medicine
      for important human diseases.




-19-




The
      Company’s business strategy, which is dependent upon obtaining sufficient
      additional financing, is to enhance the commercialization of its existing
      diagnostic products and to aggressively pursue appropriate product and company
      strategic partnerships.




As
      a
      result of the acquisition of assets and certain liabilities of Advanced BioChem,
      Power3 has transitioned into an advanced proteomics company that applies
      existing proprietary methodologies to discover and identify protein biomarkers
      associated with diseases. By discovery and development of protein-based disease
      biomarkers, the Company has begun the development of tools for diagnosis,
      prognosis, early detection and identification of new targets for drugs in
      cancer, and neurodegenerative and neuromuscular diseases such as amyotrophic
      lateral sclerosis (commonly known as ALS or Lou Gehrig’s disease), Alzheimer’s
      disease, and Parkinson’s disease.




Proteomics
      is the global study and analysis of proteins. Through proteomics, scientists
      can
      more accurately understand the functioning of a healthy body and are assisted
      in
      the identification of the proteins associated with specific diseases. Proteins
      that change in the course of disease are the building blocks for new screening
      and diagnostic tests, which the Company is developing to provide earlier disease
      detection, enhanced treatment and monitoring assistance.




On
      March
      31, 2007, Power3 received a certification to begin offering CLIA-compliant
      high
      complexity medical testing services. CLIA (Clinical Laboratory Improvement
      Amendments) was passed by the U.S. Congress in 1988 to establish quality
      standards for all laboratory testing, and to ensure accuracy, reliability and
      timeliness of patient test results regardless of where the test was performed.
      Power3 earned its two-year license to offer high complexity tests after meeting
      standards for knowledge, training and experience, reagents and materials
      preparation, characteristics of operational steps, calibration, quality control
      and proficiency testing materials, test system troubleshooting and equipment
      maintenance, and interpretation and judgment. With the CLIA certification,
      Power3 can now offer blood-based testing services to physicians, hospitals
      and
      clinics, with analysis of samples performed by the company in its centralized
      laboratory.





Power3’s
      scientific team is currently headed by its CLIA Laboratory Director and Director
      of Biochemistry, Dr. Essam A. Sheta. Dr. Sheta is a pioneer in the science
      of
      protein chemistry and cancer cell signaling and in so doing made significant
      biochemical discoveries. The team has leveraged these significant insights
      and
      has made progress in the discovery of unique disease protein footprints of
      biomarkers in breast cancer, neurodegenerative disease, and drug resistance
      to
      chemotherapeutic agents.





On
      April
      4, Power3 announced a collaboration agreement with NeoGenomics, Inc.
      ( NGNM ) of
      Fort
      Myers, Florida, to form a joint venture Contract Research Organization (CRO),
      whose mission will be commercialization of Power3's portfolio of Intellectual
      Property. The efforts will center on blood-based tests using the 534 biomarkers
      Power3 has discovered from a broad range of diseases including breast cancer,
      Alzheimer's, Parkinson's and ALS, and the further development of diagnostic
      tests and other services.




-20-





*Product
      Candidates*




The
      Company plans to target the protein-based diagnostic and drug targeting markets
      utilizing the Company’s portfolio of proprietary disease biomarkers. In the area
      of neurodegenerative diseases
      and breast cancer, the Company has completed clinical validation studies
      involving over 2000 patient samples and is utilizing biostatistics to monitor
      appropriate biomarkers for diagnostic sensitivity, specificity, positive
      predictive value, and negative predictive value. By testing patient body fluids
      and tissues, such as serum, nipple aspirate fluid, and bone marrow aspirate,
      the
      Company has discovered unique snapshots of protein patterns in 2000 samples
      that
      cover broad range of diseases including:




·
            cancers
                such as breast, leukemia, bladder, stomach, and esophageal;
                and




·
            Neurodegenerative
                diseases such as Alzheimer’s, ALS, and Parkinson’s disease.




The
      Company’s discovery platform uses proprietary methodologies, trade secrets, and
      accepted proteomic technologies that are optimized and validated for
      reproducible discovery of disease specific biomarkers in clinical patient
      samples. Following sample preparation, a 2D Gel system is used for the
      separation of proteins. The gels are stained, imaged and analyzed with
      unprecedented reproducibility and sensitivity for quantitative differences
      in
      the diseased vs. normal samples. The significance of these differences is
      evaluated using biostatistics to determine significance relative to the status
      of the health of the individual. The proteins of interest are removed from
      the
      gel matrix and analyzed by fingerprinting on a liquid chromatograph - tandem
      mass spectrometer. This information is then cross-referenced on a worldwide
      database to identify the protein of origin. This process requires a great deal
      of proteomics experience and expertise to make the correct accurate
      identification. In addition, all of the procedures are scaleable. The Company’s
      biomarker discovery platform delivers significant discoveries exhibiting
      validated, reproducible, and reliable identification and quantification; and
      displaying broad dynamic range and linearity of assays.




The
      Company has successfully identified more
      than
      534 proteins, protein fragments and isoforms that are differentially expressed
      in
      response to disease by employing proprietary technologies gained from over
      50
      years of combined experience in protein biochemistry .




Power3
      is
      transitioning from a company focused only on research and development to one
      that is demonstrating “proof of concept” of its technology as it enters the
      commercialization stage for its technology, products and services. The Company
      is engaged in the process of developing a portfolio of products including
      BC-SeraProTM biomarkers and blood serum tests (for early detection of breast
      cancer); NuroPro® biomarkers and blood serum tests (for neurodegenerative
      diseases including Alzheimer’s, Parkinson’s and ALS diseases) and biomarkers,
      tests and drug targets for drug resistance to chemotherapeutics.




**License
      and Sponsored Research**




Effective
      June 28, 2004, Power3 entered into an exclusive license agreement with the
      Baylor College of Medicine which grants to the Company an exclusive, worldwide,
      sublicensable license for serum proteomics methods under certain patent rights
      for all biomarkers for both diagnostic and therapeutic use in neurodegenerative
      disease. Under the terms of the agreement, Power3 paid Baylor an initial license
      fee and it has the obligation to pay future royalties and additional licensing
      fees upon the achievement of certain milestones. The Company is obligated under
      the license agreement to indemnify Baylor, its faculty members, scientists,
      researchers, employees, officers, trustees and agents against claims arising
      from the design, process, manufacture or use of any of the patent rights or
      licensed products that are developed through the use of the license from Baylor.
      Subject to customary termination provisions, the term of the agreement is
      established on a country-by-country basis and expires on the date of expiration
      of the last patent rights to expire in that country or the tenth anniversary
      of
      the first commercial sale of licensed products in countries where no patents
      exist in such country. After such expiration the Company will have a perpetual
      paid in full license in such country.




-21-




On
      August
      31, 2004 the Company entered into a research agreement with Baylor College
      of
      Medicine for the purpose of discovering biomarkers in serum and plasma that
      are
      of particular utility in the diagnosis and drug targeting for metabolic syndrome
      and associated disorders including diabetes, cardiovascular disease,
      hypertension and stroke. Under the terms of the agreement, Baylor College of
      Medicine will provide the Company sample materials for use in diagnosis in
      drug
      targeting metabolic syndrome and associated diseases including diabetes,
      cardiovascular disease, hypertension and stroke. With respect to any inventions
      developed pursuant to the agreement, the party who develops such invention
      will
      retain sole and exclusive rights to such invention. The other party will have
      the right to an exclusive license for the invention, which has been developed.
      Inventions developed jointly by the parties will be jointly owned. Power3 does
      not have any obligations for the payment of fees or royalties pursuant to this
      agreement. The agreement has a term ending June 30, 2007 and may be renewed
      for
      successive one-year periods. Since the Company is actively involved in numerous
      Neurodegenerative research agreements with other organizations, it is uncertain,
      at the time, if the Company will renew the Research Agreement with Baylor
      College of Medicine.




On
      May
      24, 2005, the Company entered into a Collaboration Agreement with BioSite
      Incorporated. The Agreement provides that Power3 and BioSite will engage in
      a
      collaborative research program in which BioSite will attempt to develop
      antibodies and diagnostic assays for selected target biomolecules proposed
      by
      the Company. Power3 and BioSite will then assess the diagnostic and therapeutic
      potential of these antibodies and diagnostic assays for breast cancer. If the
      antibodies and diagnostic assays are found to have diagnostic and/or therapeutic
      potential, BioSite will develop and commercialize BioSite Products for the
      detection and/or treatment of breast cancer. BioSite will make milestone
      payments to the Company, as well as pay royalties on the sale of any BioSite
      Products containing antibodies to any selected target biomolecules claimed
      in a
      patent application or an issued patent.




More
      specifically, the Agreement provides that Power3  shall
      propose target biomolecules for the collaborative research program; BioSite
      and
      the Company shall mutually select certain target biomolecules for immunization
      ("Program Target"); and BioSite shall use commercially reasonable efforts to
      develop monoclonal and omniclonal antibodies to the selected target biomolecules
      that meet the specification set out by the parties ("Program Antibodies").
      Upon
      BioSite's written request subsequent to the delivery of Program Antibodies
      to
      the Company, the Company will provide BioSite with blood-based clinical samples
      useful in the assessment of the Program Antibodies.




BioSite
      will use commercially reasonable efforts to generate an ELISA-based assay for
      each Program Target for which BioSite has generated Program Antibodies. If
      BioSite successfully develops an ELISA-based assay for any such Program Target,
      BioSite shall analyze each of the clinical samples provided by Power3 with
      such
      assay and shall provide the resulting data to Power3.




Under
      the
      terms of the Agreement, Power3 grants to BioSite a worldwide, royalty-bearing
      license under the Power3 patent rights for the target biomolecules and Power3
      know-how rights to develop, make, have made, use, offer for sale, sell and
      import BioSite Products for use in the detection, prognosis, diagnosis or
      monitoring of any breast cancer-related disease. This license is exclusive
      with
      the right to grant sublicenses for the assay of less than or equal to 100
      patient samples per hour. This license is semi-exclusive, with the right for
      each party to grant one sublicense, for the assay of 100 or more patient samples
      per hour.




Under
      the
      terms of the Agreement, Power3 grants to BioSite a non-exclusive, worldwide,
      royalty-bearing license under the Power3 patent rights for the target
      biomolecules and Power3 know-how rights to develop, make, have made, use, offer
      for sale, sell and import BioSite Products for use in the detection, prognosis,
      diagnosis or monitoring of any neurological-related disease. This license
      includes the right for BioSite to grant one sublicense for each Program Target,
      provided that the grant of such sublicense will replace BioSite's own rights
      under the license.




-22-




In
      consideration for the collection and transfer of samples, BioSite shall pay
      specified fees to Power3 based on a minimum number of samples delivered to
      BioSite and per unit fees for samples delivered in excess of the minimum.




BioSite
      shall pay the Company milestone payments based on certain specified events
      as
      follows:




·
      upon the earlier of (a) the First
      Commercial Sale by BioSite of a BioSite Product, or the effective date of the
      first written agreement between BioSite and a Third Party sublicensee for a
      sublicense,




·
      upon demonstration, as determined in
      BioSite's sole and reasonable discretion, that a panel of antibodies (including
      one or more antibodies to a Program Target) is suitable for development of
      a
      commercial product,




·
      upon the first submission by BioSite of the
      first 510(k) (premarket notification) or PMA (pre-market approval application)
      to the FDA for the first BioSite Product; and




·
      upon the first FDA approval of the first
      510k or PMA submitted by BioSite for the first BioSite Product.




Commencing
      at the end of the first full calendar year following the date of First
      Commercial Sale for the first BioSite product, and at the end of each subsequent
      calendar year during the term of this Agreement, BioSite shall pay the Company
      specified annual minimum royalties. During the applicable Royalty Term for
      a
      BioSite Product, on a country-by-country basis, BioSite shall pay the Company
      royalties, with respect to each BioSite Product equal to a specified percentage
      of Net Sales of each BioSite product in that country. In addition to the
      specified royalty payments, to the extent that BioSite reaches certain specified
      sales targets, then BioSite shall be obligated to make additional payment to
      the
      Company. The Agreement expires upon the expiration of the last to expire
      applicable Power3 patent right. The agreement may be terminated for cause,
      by
      either party or upon written notice by either party following the twenty four
      month anniversary date of the Agreement, or by BioSite if it is unable to
      develop and deliver Program antibodies to the to the Program Targets.




On
      December 28, 2005, the Company submitted 6 breast cancer blood serum biomarkers
      to BioSite, for consideration under the agreement. The development of antibodies
      was begun by BioSite for the first of this series. During 2006, payments
      totaling $300,000 have been received from BioSite to the Company for blood
      serum
      samples to be used, by BioSite, in the development and testing of
      antibodies.




However,
      effective June 26, 2007, BioSite was acquired by Inverness Medial Innovations,
      Inc. and it is uncertain as to whether or not BioSite will continue with its
      program to develop antibodies based on our protein biomarkers. If they
      discontinue this research effort, it would significantly reduce our projected
      cash flows and therefore, we have considered this factor in our analysis of
      goodwill impairment. Regardless of whether or not BioSite continues its research
      initiative with the Company, the Company is under no obligation to return the
      $300,000 mentioned in the previous paragraph.




On
      May
      16, 2006, Power3 entered into a Materials Transfer and Confidential Disclosure
      Agreement with Innogenetics N.V., a Belgium-based international
      biopharmaceutical company. The current proposal is an assessment of the utility
      of the Company’s NuroPro® to differentiate control subjects from subjects with
      Alzheimer’s disease. Power3 received the shipment of samples from Innogenetics
      N.V. in October 2006 and completed the assessment of the blood serum samples
      in
      January 2007 and reported the results to Innogenetics, N.V. and is awaiting
      the
      final report from Innogenetics N.V.




On
      March
      31, 2007, Power3 received a certification to begin offering CLIA-compliant
      high
      complexity medical testing services. CLIA (Clinical Laboratory Improvement
      Amendments) was passed by the U.S. Congress in 1988 to establish quality
      standards for all laboratory testing, and to ensure accuracy, reliability and
      timeliness of patient test results regardless of where the test was performed.
      Power3 earned its two-year license to offer high complexity tests after meeting
      standards for knowledge, training and experience, reagents and materials
      preparation, characteristics of operational steps, calibration, quality control
      and proficiency testing materials, test system troubleshooting and equipment
      maintenance, and interpretation and judgment. With the CLIA certification,
      Power3 can now offer blood-based testing services to physicians, hospitals
      and
      clinics, with analysis of samples performed by the company in its centralized
      laboratory.




-23-




Power3’s
      scientific team is currently headed by its CLIA Laboratory Director and Director
      of Biochemistry, Dr. Essam A. Sheta. Dr. Sheta is a pioneer in the science
      of
      protein chemistry and cancer cell signaling and in so doing made significant
      biochemical discoveries. The team has leveraged these significant insights
      and
      has made progress in the discovery of unique disease protein footprints of
      biomarkers in breast cancer, neurodegenerative disease, and drug resistance
      to
      chemotherapeutic agents.




On
      April
      3, 2007, the Company entered into a joint venture agreement with NeoGenomics
      to
      form a Contract Research Organization (CRO) and collaborate on research work
      in
      the future. In addition, NeoGenomics agreed to purchase a convertible debenture
      for $200,000 and acquired options to purchase common stock of the Company during
      2007. Under the terms of the Agreement, Power3 agrees to issue, and NeoGenomics
      agrees to purchase, a convertible debenture in the principal amount of $200,000.
      The convertible debenture will be convertible into common shares of the Company
      at $.20 per share; however the conversion price can be reset at any time and
      from time to time, in accordance with paragraphs 7 and 9 of the Agreement.
      The
      debenture shall accrue interest at 6% per annum, payable quarterly, and the
      principal amount of the debenture shall be due and payable two years after
      closing.





**Breast
      Cancer Screening Test (BC-SeraProTM)**




Breast
      cancer is the second leading cause of cancer deaths in women and results in
      40,000 deaths annually, with over $7 billion spent on breast cancer diagnosis
      annually. An important factor in surviving cancer is early detection and
      treatment. According to the American Cancer Society Surveillance Research,
      when
      breast cancer is confined to the breast, the five-year survival rate is close
      to
      100%. Due to the limitations of the current diagnostic techniques of mammograms
      and self-examination, diagnosis of cancer is often missed or inconclusive.
      The
      limitations or absence of current diagnostic tests highlight the need for a
      test
      that can detect the presence of breast cancer much earlier. The Company’s has
      analyzed fluids from the breast called nipple aspirates fluid (NAF). Initial
      success yielded the identification of groups of breast cancer proteins in the
      aspirates. The procedure utilizes a breast pump to obtain a drop of fluid from
      the nipple. The aspirate is analyzed to identify specific breast cancer protein
      footprints. Concurrently, Power3 conducted its own biomarker discovery program
      using blood serum samples collected from the same clinical validation sites,
      in
      collaboration with Dr. Alan Hollingsworth at the Mercy Woman’s Center. The
      Company believes that there are many advantages to a simple blood test over
      other samples taken from patients, not the least of which is the ready
      acceptance by patients to having blood drawn.




The
      Company’s proteomic discovery platform covered by pending patent applications
      and trade secrets was able to identify a panel of 12 blood serum based
      biomarkers and most recently identified an additional 10 biomarkers. These
      proteins have the potential to serve as an early detection tool to identify
      breast cancer long before it becomes detectable by conventional screening
      methods, greatly improving an individual’s chance for survival. Preliminary
      testing results demonstrated that the diagnostic tool is able to correctly
      identify individuals who are cancer-free or have benign disease from patients
      that have cancer with great sensitivity and specificity. These discoveries
      establish the basis of a very sensitive, non-invasive, early detection breast
      caner screening test. Therefore, Power3 has
      decided to focus development efforts for its
      early-detection tests for breast cancer on blood serum. The Company has
      successfully used blood serum as the platform for its NuroPro® neurodegenerative tests and believes that blood serum as a single platform
      is
      the best medium for the development and commercialization of proteomics
      diagnostic tests.




-24-




In
      addition, in consideration of NeoGenomics, Inc.’s commitment to purchase the
      debenture and form the joint venture, Power3 grants, to Neogenomics, Inc.,
      an
      irrevocable option (the “First Option”) to purchase, in one or a series of
      transactions, voting convertible preferred stock that is convertible into such
      number of shares of common stock of Power3, after taking into account, all
      outstanding First Option Preferred Stock, on an as-converted basis.





Further,
      in consideration of NeoGenomics, Inc.’s commitment to purchase the debenture and
      form the joint venture, Power3 grants NeoGenomics, Inc. an irrevocable option
      (the “Second Option”) to purchase, in one or a series of transactions, voting
      convertible preferred stock that is convertible into such number of shares
      of
      common shares of the Company as is necessary to increase NeoGenomics, Inc.’s
      ownership of the voting common stock of Power3, up to 60% of Power3’s voting
      common stock, after taking into consideration all outstanding First Option
      Preferred Stock and Second Option Preferred Stock, on an as-converted basis.




Power3
      concluded a 60 patient blinded validation study of its BC-SeraPro(TM) early
      detection blood serum breast cancer test in May, 2007. For the study, Power3
      used its extensive patient serum sample bank to generate a statistical model
      that differentiates between breast cancer and control profiles. Sixty blinded
      patient samples were then tested against this statistical model. The samples
      were provided by Mercy Women's Center under the direction of Dr. Alan
      Hollingsworth, a member of the Company's Scientific Advisory Board. Twenty-two
      biomarkers were used to obtain the results from this study.





By
      applying decision tree analysis, a method used to model disease and control
      patient demographics at the level of individual biomarkers, Power3 reported
      results of 97% sensitivity and 93% specificity. In addition, the Company used
      Linear Discriminant Analysis, a more robust and flexible method that uses some
      or all biomarkers in a panel rather than individually, which achieved 80%
      sensitivity and 87% specificity. The results are a major step forward in
      commercializing the BC-SeraProTM diagnostic for the early detection of breast
      cancer. Power3 is finalizing the development program and moving forward with
      a
      strategy of providing a test that is utilitarian, accurate, and inexpensive.
      Detection of a patient's protein biomarker profile can now be employed to detect
      abnormal and pathological states reflected in the serum proteome. Application
      of
      this test will have a future impact on how disease will be diagnosed, monitored,
      and managed.





**Neurodegenerative
      Screening Test (NuroPro®)**




Early
      detection of neurodegenerative disease generally results in better patient
      outcomes. Three diseases of particular interest are Alzheimer’s disease,
      Parkinson’s disease and ALS. The Alzheimer’s Association reports that
      Alzheimer’s disease is the most common form of dementia affecting over 5.1
      million Americans, of which 4.9 millions are 65 or older. Every 72 seconds,
      someone in America develops Alzheimer’s disease and by mid-century someone will
      develop Alzheimer’s every 33 seconds. People as young as 30 years old can
      contract the disease and one in ten people age 65 and over have Alzheimer’s
      disease. In addition, the American Parkinson’s Disease Association reports that
      more than 1.5 million people in the U.S. have Parkinson’s disease, affecting
      about 1 in 100 Americans over the age of 60 and a new case of Parkinson’s
      disease is diagnosed every 9 minutes. On a smaller scale, the ALS Association
      reports that an average of approximately 30,000 Americans are afflicted with
      ALS, with 5,000 new cases diagnosed annually.




The
      members of the Company’s scientific team have developed a method for the
      differential diagnosis of neurodegenerative diseases utilizing blood serum,
      which was co-developed with neurologist, Dr. Stan Appel, now Chair of Neurology
      and Co-Director of Methodist Neurological Institute in Houston. With this test,
      which involves monitoring the concentration of 59 differentially expressed
      proteins ,
      the
      Company has identified groups of unique markers that appear to distinguish
      normal patients from those with motor neuron, cognitive, and other neurological
      disorders.




-25-




The
      Company is continuing its ongoing clinical validation program in collaboration
      with the Methodist Neurological Institute. The initial phase was completed
      in
      July 2004 and the latest phase was completed in March, 2006. During this time
      period, the Company’s database has increased from 183 to over 650 unique samples
      classified either as normal or being clinically diagnosed with ALS, Alzheimer’s,
      Parkinson’s, and other related neurological disorders. During this time, the
      number of differentially expressed proteins used in the discriminant analysis
      has increased from 9 to 50. The ability to differentiate diseases from each
      other and from normal and disease controls has improved using the proprietary
      PD3TM process, including PolyiterativeTM biostatistical analysis on the larger
      database and the expanded set of biomarkers. Currently, select panels of
      biomarkers are being employed in development of the NuroPro® blood
      serum-based tests for four disease diagnostics including neurological diseases
      of motor control such as Parkinson’s disease, ALS and their like disorders; ALS
      specific tests for ALS vs. ALS-like disorders; Alzheimer’s disease specific
      tests; and a Parkinson’s disease-specific test. Pre-IDE applications for the
      first two have been filed with the U.S. Food and Drug Administration (FDA).




On
      June
      2006, The American Institute of Biological Science (AIBS) has elected Power3’s
      Director of Biochemistry, Dr. Essam Sheta to be on its review panel for grant
      proposals related to Parkinson’s disease. The AIBS has been tasked by the U.S.
      Army Medical Research and Materiel Command (USAMRMC) Neurotoxin Exposure and
      Treatment Research Program (NETRP) to convene a peer review panel to review
      novel and innovative research proposals related to Parkinson’s disease. The
      USAMRMC is soliciting research proposals for studies on the pathophysiology,
      surrogate markers, mechanisms and treatment of Parkinson's disease and
      Parkinson's-related neurodegenerative conditions to include initiating causes,
      interaction of environmental and genetic risk factors, epigenetic modifying
      factors, with emphasis on exposure factors encountered in military operations
      which may be neurotoxic or lead to neurodegenerative conditions.





In
      July
      2006, Power3 announced a biomarker breakthrough based on applied extensive
      analytical and statistical analysis which resulted in the selection of five
      distinctive biomarkers from its portfolio of 47 previously identified protein
      biomarkers for neurodegenerative diseases. These and other selected biomarkers
      show great promise and represent a major step forward as a tool for the
      diagnosis of Alzheimer's disease.





On
      September 6, 2006, Power3 announced the discovery of 11 biomarkers which
      demonstrate the ability to identify Parkinson’s disease in its early stages
      through blood serum-based testing, as well as differentiate between Parkinson’s
      and Parkinson’s-like diseases.





On
      November 11, 2006, University of Thessaly School of Medicine in Larissa, Greece
      signed a research agreement with Power3 focusing on the proteomic discovery
      of
      biomarkers for Parkinson’s disease. The collaboration will also extend to cover
      other neurodegenerative diseases including Alzheimer’s disease, and ALS
      (Amyotrophic Lateral Sclerosis - Lou Gehrig's disease). According to the
      agreement, The University of Thessaly will provide Power3 with clinically
      confirmed samples of neurodegenerative disease, including age and gender matched
      controls. Power3 will use its existing proprietary and patent-pending
      technologies to analyze the samples, seeking new protein biomarkers for the
      early detection of neurodegenerative diseases to add to its portfolio. The
      initial shipment of Parkinson’s disease samples were received in May 2007 and
      have been analyzed in the Company’s CLIA certified laboratory. The results from
      this initial shipment will be announced later this year.





Dr.
      Ira
      L. Goldknopf, Power3’s director of proteomics, was an invited speaker at both
      the Cancer Proteomics World Congress and the Molecular Diagnostics World
      Congress, held jointly at the Hilton Philadelphia City Avenue in Philadelphia,
      April 26-27. A scientific advisor to both Congresses, Dr. Goldknopf presented
      "Twelve Protein Biomarkers in Blood Serum for Early Detection and Determination
      of Disease Severity of Patients with Breast Cancer" to the Cancer Proteomics
      World Congress. His presentation on "Forty Seven Protein Biomarkers in Blood
      Serum for Early Detection, Differential Diagnosis and Monitoring of Disease
      Severity of Patients with Neurodegenerative Diseases was delivered to the
      Molecular Diagnostics World Congress.




-26-




Dr.
      Goldknopf also served on the "Genetic Markers and Predicting Alzheimer's Disease
      Risk panel. The invitation to Dr. Goldknopf to address these two major
      conferences on diseases of the central nervous system is further validation
      of
      Power3’s leadership position in advancing the science of proteomics for
      development of molecular diagnostics and targeted therapeutics for the
      Alzheimer's, Parkinson's, and Lou Gehrig's diseases. Dr. Goldknopf has reviewed
      the Molecular Diagnostics World Congress for the Journal Expert Review of
      Molecular Diagnostics, which was published in the August issue.




Power3
      was also awarded one of the “Largest Bioscience Companies” designations and was
      featured in the Houston Business Journal for 2006.




On
      July
      2007, Chief Executive Officer, Steven Rash, participated in a Podcast sponsored
      by “Future Pharmaceuticals Magazine” alongside other biotechnology industry
      executives. The Podcast will be available for download on Power3 Medical’s
      website (www.power3medical.com) and on Future Pharmaceuticals website
      ( www.futurepharmaus.com )
      in
      August 2007.




The
      Pod
      cast, titled “Drug Discovery & Development: Biomarker Discovery &
Research Executive Panel Discussion,” was moderated by David Lester, New York
      Site Head, Pfizer Human Health Technologies, Global Clinical Technology, PGRD.
      During the Podcast, Mr. Rash and the other members of the panel discussed the
      importance of biomarkers and the role they play in the drug research and
      development process. Power3 Medical has identified 534 biomarkers that can
      be
      used for the early detection of breast cancer and neurodegenerative diseases.
      The Company is in the final stages of development and is preparing for the
      commercialization of the diagnostic tests for these diseases.




**Drug
      Resistance to Chemotherapeutic Agents**




Drug
      resistance is of particular concern for the use of chemotherapy in treating
      cancer and particularly for chronic myelogenous leukemia. By the time a
      patient’s development of resistance to chemotherapeutic agents is
      detected ,
      it is
      often too late to revise treatment or otherwise save the patient. In 2002,
      the
      Company completed an initial “proof of concept,” which addresses drug resistance
      to a major chemotherapy agent. Determining that a cancer patient is sensitive
      or
      detecting a development of resistance during the early stages of treatment
      may
      eliminate toxic effects from the treatment drugs, and the need for
      trial-and-error treatment regimens. In 2006, the Company discovered a new
      biomarker for drug resistance that is related to a drug specific target. These
      findings may ultimately provide the pharmaceutical industry with the technology
      to screen patients, on a molecular level, prior to clinical trials and design
      new drugs to overcome resistance.




**Intellectual
      Property**




During
      the quarter ending September 30, 2006, Power3 filed four utility patent
      applications with the United States Patent and Trademark Office, entitled “Assay
      for Neuromuscular Diseases”, “Assay for ALS and ALS-Like Disorders”, “Assay for
      Differentiating Alzheimer’s Disease and Alzheimer’s-Like Disorders” “Assay for
      Diagnosis and Therapeutics Employing Similarities and Differences in Blood
      Serum
      Concentrations of 3 Forms of Complement C3c and Related Protein Biomarkers
      in
      Amyotrophic Lateral Sclerosis and Parkinson’s Disease” These were conversions of
      previous provisional applications. The number of pending patent applications
      as
      of quarter ending June 30, 2007, is 17.




**Investor
      Relations/Public Relations**





On
      June
      29, 2007, Power3 Medical Products, Inc. (the “Company”) entered into a service
      agreement with The Investor Relations Group (“IRG”) for services related to the
      Company’s communications program, for corporate promotional materials and for
      communications with media, investors and industry personnel.




-27-





As
      Power3
      transitions from a research and development organization to commercialization,
      the Company feels it is in the best interest of the Company and its shareholders
      to retain the services of The Investor Relations Group in order to fully
      communicate our message to the investing public. With such important milestones
      pending in the development of commercial applications for our proprietary
      technologies, the Company believes a strategic relationship with the right
      investor relations firm is pivotal in accomplishing the Company’s
      goals.





IRG
      will
      strive to increase investor and industry awareness of Power3 within the capital
      markets by introducing the Company and its management to pre-qualified fund
      managers, industry analysts and the media-at-large.





As
      compensation to IRG for services rendered, the Company shall pay to IRG a
      maintenance fee of $13,500.00 per month for a renewable term of 12 months,
      beginning July 1, 2007. Additionally, the Company agreed to issue to IRG
      personnel a total of 400,000 restricted shares of common stock.





*Liquidity
      and Capital Resources*





The
      Company has financed its operations since the date of the Advanced BioChem
      transaction primarily through the net proceeds generated from the sale of common
      stock, the issuance of convertible debentures and the issuance of notes payable
      as bridge loans. From the date of the Advanced BioChem transaction through
      March
      31, 2007, the Company has raised approximately $3,892,978 in debt capital.
      As
      described in “Recent Financing” below, the Company may sell an additional
      $1,600,000 in aggregate principal amount of convertible debentures following
      the
      effectiveness of the Registration Statement on Form SB-2 filed by the
      Company for the resale of certain shares of the Company’s stock by the
      purchasers of the Company’s convertible debentures. The Company is in default
      under the terms of the Securities Purchase Agreement, the previously issued
      debentures and related registration rights agreement. As such, there can be
      no
      assurance that the existing investors will purchase all or any portion of the
      additional $1,600,000 aggregate principal amount of debentures. If additional
      debentures are issued and sold by the Company, the Company will use a portion
      of
      the proceeds from the sale and issuance of such debentures to pay the interest
      due and principal balances owing under the promissory notes incurred in 2005,
      2006 and 2007, the Officer Advances and other notes payable owed by the
      Company.





The
      Company’s liquidity and capital needs relate primarily to working capital,
      development and other general corporate requirements. The Company has not
      received any cash from operations, other than from the sale of blood serum
      samples previously gathered. The Company  has
      an
      immediate need for capital to continue its current operations, and in addition,
      is seeking additional capital from research grants,
      collaboration agreements, and other strategic alliances.




Net
      cash
      used in operating activities amounted to ($914,981) for the six months ended
      June 30 2007, compared to ($687,940) for the six months ended June 30, 2006.
      The
      change in net cash used in operating activities during 2007 was primarily due
      to
      higher overhead and legal and consulting fees, as compared to the same six
      months of 2006.





Net
      cash
      provided by financing activities was $1,521,766 for the six months ended June
      30, 2007, as compared to $842,709 for the six months ended June 30, 2006.





As
      of
      June 30, the Company’s principal source of liquidity was approximately $647,387
      in cash.





*Recent
      Financing*





During
      the quarter ended June 30, 2007, the Company issued common stock at $0.20 per
      share, raising a total of $650,000 in additional working capital.




-28-





*Plan
      of Operation and Cash Requirements*





The
      Company currently does not have significant operating revenues from product
      sales or the performance of services and it continues to experience net
      operating losses. The Company is actively pursuing third party licensing
      agreements, collaboration agreements and similar business arrangements in order
      to establish a 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. The Company has
      undertaken clinical validation studies to demonstrate the diagnostic
      capabilities of its technologies. However, there can be no assurances that
      revenue-generating agreements will be in place in the next twelve
      months.





Absent
      a
      source of revenues, the Company will require funding in order to carry out
      its
      business plan until such time as it is able to generate sustained revenues.
      The
      Company’s current cash requirements are approximately $150,000 per month and the
      Company anticipates that it will require approximately $1,800,000 for the twelve
      months ended June 30, 2008, to continue its development activities, undertake
      and perform clinical validation studies, continue its marketing efforts and
      maintain its administrative infrastructure, as follows:





Estimated
                Expenditures Required
              During
                Next Twelve MonthsGeneral
                and Administrative
            
            $
            1,550,000Patent
                filings and intellectual property
            
            $
            100,000Capital
                Expenditures and research agreements
            
            $
            150,000Total
            
            $
            1,800,000




The
      foregoing is based upon the Company’s current estimated cash requirements. The
      Company has no significant capital expenditure requirements and does not plan
      to
      increase its monthly expenditure rate absent an increase in revenues or
      additional funding.




The
      Company will continue to require additional debt or equity financing for its
      operations, which may not be readily available. The Company’s ability to
      continue as a going concern is subject to its ability to generate a profit
      or
      obtain necessary funding from outside sources.




*Off-Balance
      Sheet Arrangements*





At
      June
      30, 2007, the only off balance sheet agreements in place for the Company were
      a
      lease in effect for its office space, leases in effect for computer equipment,
      leases in effect for lab equipment and employment agreements entered with its
      three principal officers.





However,
      in early April, 2007, the Company signed an agreement to form a Joint Venture
      with and issue a convertible debenture to Neogenomics, Inc., a Florida-based
      research and bioscience company. As part of this agreement, Neogenomics receives
      a First Option to purchase voting, convertible preferred stock that is
      convertible into such number of shares of common stock of the Company equal
      to a
      maximum of 20% of the Company’s voting Common Stock, after taking into
      consideration all outstanding First Option Preferred Stock on an as-converted
      basis. This First Option is irrevocable to the fullest extent permitted by
      law,
      and must be exercised before November 16, 2007 or 10 business days after a
      set
      of conditions have been satisfied, as specified in pages 3 and 4 of the
      agreement. In addition, Neogenomics received a Second Option to purchase voting
      convertible preferred stock that is convertible into such number of shares
      of
      common stock as is necessary to increase its ownership of the voting Common
      Stock of the Company, on an as-converted basis, up to 60% of the Company’s
      voting Common Stock, after taking into consideration all outstanding First
      Option Preferred Stock and Second Option Preferred Stock. Such Second Option
      will only be exercisable following exercise of the First Option, discussed
      previously, and will expire 12 months after the First Option Expiration Date
      as
      specified in paragraph 6 of the agreement.




-29-





*Critical
      Accounting Policies*





The
      Company accounts for equity instruments issued to employees for services based
      on the intrinsic value of the equity instruments issued. Equity instruments
      issued to non-employees that are fully vested and non-forfeitable are measured
      at fair value at the issuance date and expensed in the period over which the
      benefit is expected to be received.





The
      Company has adopted Statement of Financial Accounting Standards No. 148
“Accounting for Stock-Based Compensation - Transition and Disclosure” (SFAS No.
      148). This statement amends FASB statement No. 123, “Accounting for Stock Based
      Compensation”. It provides alternative methods of transition for an entity that
      voluntarily changes to the fair value based method of accounting for employee
      stock based compensation. It also amends the disclosure provision of FASB
      statement No. 123 to require prominent disclosure about the effects on reported
      net income of an entity’s accounting policy decisions with respect to
      stock-based employee compensation. As permitted by SFAS No. 123 and amended
      by
      SFAS No. 148, the Company continues to apply the intrinsic value method under
      Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued
      to Employees,” to account for its stock-based employee compensation
      arrangements.





In
      December 2004, the Financial Accounting Standards Board issued Statement Number
      123 (“FAS 123 (R)”), Share-Based Payments. FAS 123 (R)
      requires all entities to recognize compensation expense in an amount equal
      to
      the fair value of share-based payments such as stock options granted to
      employees. The Company will be required to apply FAS 123 (R) on a
      modified prospective method. Under this method, the Company will be required
      to
      record compensation expense (as previous awards continue to vest) for the
      unvested portion of previously granted awards that remain outstanding at the
      date of adoption. In addition, the Company may elect to adopt
      FAS 123 (R) by restating previously issued financial statements,
      basing the amounts on the expense previously calculated and reported in the
      pro
      forma disclosures that had been required by FAS 123, FAS 123 (R)
      is effective for the first reporting period beginning after June 15, 2005.





***Note
      7. OTHER****CO*** ***NTROLS
      AND PROCEDURES***





*Disclosure
      Controls and Procedures*




Under
      the
      supervision and with the participation of the Company’s management, including
      its Chief Executive Officer and Chief Financial Officer, the Company conducted
      an evaluation of its disclosure controls and procedures (as defined in Rules
      13a-15(e) and 15d-15(e) of the Exchange Act). Based on this evaluation and
      for
      the reasons set forth below, the Chief Executive Officer and Chief Financial
      Officer concluded that the Company’s disclosure controls and procedures were
      ineffective as of June 30, 2007.




As
      reported in the Company’s previous Quarterly Reports on Form 10-QSB, the Company
      identified certain deficiencies which caused management to conclude that the
      Company’s disclosure controls continue to be ineffective as of June 30, 2007.
      The Company has undertaken steps and implemented actions as disclosed in its
      previous Form 10-QSB’s in an effort to resolve these deficiencies. While the
      actions identified in the previously filed Form 10-QSB’s and the actions
      identified below have addressed many of these deficiencies, the Company
      continued to have deficiencies with respect to its disclosure controls and
      procedures at June 30, 2007, including the following:




Although
      the Company has hired accounting personnel as reported in its previous Form
      10-QSB’s, the Company’s limited financing and available capital have restricted
      the Company’s ability to fully implement its procedures for the improvement of
      its internal control over financial reporting and to engage outside
      professionals and advisors to the extent the Company has desired to support
      the
      Company’s accounting personnel in the preparation and/or audit of financial
      statements and reports to be filed with the SEC.




-30-




Management
      is committed to a sound disclosure control and internal control environment
      and
      is continuing its efforts to improve the Company’s infrastructure, personnel,
      processes and controls to help ensure that the Company is able to produce
      accurate financial statements on a timely basis.




In
      addition, during the past year, Power3 faced staffing issues relative to its
      cash flow situation. The Company has retained outside consultants, on an interim
      basis, to provide accounting and legal expertise directed toward improving
      its
      reporting and control procedures. The Company has implemented additional
      controls over its daily operations and has drafted various Internal Controls
      memoranda.




Limitations
      on Effectiveness of Controls




Internal
      control over financial reporting cannot provide absolute assurance of achieving
      financial reporting objectives because of its inherent limitations. Internal
      control over financial reporting is a process that involves human diligence
      and
      compliance and is subject to lapses in judgment and breakdowns resulting from
      human failures. Internal control over financial reporting also can be
      circumvented by collusion or improper management override. Because of such
      limitations, there is a risk that material misstatements may not be prevented
      or
      detected on a timely basis by internal control over financial reporting.
      However, these inherent limitations are known features of the financial
      reporting process. Therefore, it is possible to design into the process,
      safeguards to reduce, though not eliminate, this risk.




*Changes
      in Internal Control Over Financial Reporting*




On
      August
      10, 2007, Malone & Bailey, P.C. was dismissed as the independent auditor for
      Power3 Medical Products, Inc. (the "Registrant").




Malone
      & Bailey, P.C. has served as the independent auditor of the Registrant's
      annual financial statements since the audit of the calendar year ended December
      31, 2005 for the Registrant’s financial statements. From the date on which
      Malone & Bailey, P.C. was engaged until the date they were dismissed, there
      were no disagreements with Malone & Bailey, P.C. on any matter of accounting
      principles or practices, financial statement disclosure, or auditing scope
      or
      procedure, which disagreements, if not resolved to the satisfaction of Malone
      & Bailey, P.C., would have caused Malone & Bailey, P.C. to make
      reference to the subject matter of the disagreements in connection with any
      reports it would have issued, and there were no "reportable events" as that
      term
      is defined in Item 304(a) (1) (iv) of Regulation S-B.




The
      decision to dismiss Malone & Bailey, P.C. resulted primarily from the
      addition of our new Chief Accounting Officer who was a member of the engagement
      team of our most recent annual audit. Her employment could have been deemed
      to
      affect the independence of Malone & Bailey, P.C.




The
      Registrant has provided Malone & Bailey, P.C. with a copy of the foregoing
      disclosure, and has requested that Malone & Bailey, P.C. furnish Registrant
      with a letter addressed to the Securities and Exchange Commission stating
      whether or not it agrees with such disclosure.




On
      August
      10, 2007, the Registrant executed an engagement letter with McElravy, Kinchen
      & Associates, P.C. ("MKA") to assume the role of its new certifying
      accountant. MKA has been asked to perform the quarterly review of Registrant
      for
      the quarter ended June 30, 2007.




-31-




During
      the periods ended December 31, 2005 through 2006 and the subsequent interim
      period ended March 31, 2007, and through the date of the firm's engagement
      the
      Registrant did not consult with MKA with regard to:




(i)
      the
      application of accounting principles to a specified transaction, either
      completed or proposed; or the type of audit opinion that might be rendered
      on
      Registrant's financial statements; or




(ii)
      any
      matter that was either the subject of a disagreement or a reportable event
      (as
      described in Item 304(a) (1) (iv) of Regulation S-B.




The
      engagement of the new principal auditor was recommended and approved by the
      Board of Directors of Registrant.




Other
      than the changes described above, there were no changes in the Company’s
      internal control over financial reporting that occurred during the Company’s
      fiscal quarter ended June 30, 2007 that have materially affected, or are
      reasonably likely to materially affect, the Company’s internal controls over
      financial reporting.





*Changes
      in Accounting Treatment*





On
      June
      26, 2007, Power3 Medical Product Inc.'s (the “Company”) management and Board of
      Directors concluded that the Company's financial statements contained within
      the
      Company's 10-KSB for the year ended December 31, 2005, should be restated,
      and
      that such previously filed financial statements should no longer be relied
      upon,
      as previously presented. The Company filed amended financial statements for
      the
      year ended December 31, 2005, within it's 10-KSB for the year ended December
      31,
      2006.





As
      of and
      for the year ended December 31, 2005, the restatements are related
      to:





1.
            Impairment
                of goodwill. Previously goodwill was not impaired but due to management’s
                analysis of goodwill and determination that the net present value
                of
                future cash flows did not support the carrying value of goodwill
                in
                accordance with SFAS 142, there should have been impairment of goodwill
                in
                the amount of $13,371,776.





2.
            Incorrect
                accounting for stock warrants sold with our notes payable. Previously,
                the
                amounts were expensed but should have been accounted for as a discount
                on
                the notes payable.





3.
            Recording
                of a payroll advances made to officers. Previously these were capitalized
                but should have been expensed.





4.
            Recording
                of rent expense and accrued rent expense. Previously, amounts were
                expensed based on the amount paid but should have been expensed and
                accrued on a straight line basis due to the escalating rent payments
                within the leases.





5.
            Recording
                of leasehold deposit. Previously the deposit amount was capitalized
                but
                the deposit was never made to the landlord by the company and was
                incorrectly capitalized.





6.
            Reporting
                and classification of note payable balances. Previously, amounts
                in
                default at the time were not correctly reported or classified and
                amounts
                due to related parties were not correctly reported or
                classified.





7.
            Unrecorded
                liabilities. These should have been accrued and
                expensed.





8.
            Changes
                in derivative liabilities and derivative gains/losses. Errors in
                the
                original model cause the previously reported amounts to be
                incorrect.





9.
            Deferred
                compensation. Previously deferred compensation was understated.





The
      Board
      of Directors discussed the matters disclosed in this filing with the Company's
      independent registered public accountants.




-32-





*Change
      in Control*





On
      July
      19, 2007, Mr. John P. Burton, Chief Financial Officer of Power3 Medical
      Products, Inc. (the “Company”) resigned and thereby terminated his employment at
      the Company as of July 18, 2007. Mr. Burton resigned to pursue personal
      interests and the Company will be restructuring the duties and responsibilities
      within the finance and accounting organization of the Company.




On
      July
      23, 2007, Ms. Marion McCormick was named Chief Accounting Officer of Power3
      Medical Products, Inc. and will assume her duties beginning August 13,
      2007.





**PART
      II. OTHER INFORMATION**




***Item
      1.***  ***LEGAL
      PROCEEDINGS***




An
      equipment vendor filed a complaint, regarding equipment which the Company
      acquired in its May 18, 2004 transaction with Advanced BioChem, now known as
      Industrial Enterprises of America, and against Advanced BioChem in April of
      2002
      in a California court alleging breach of contract and seeking damages. Advanced
      BioChem reached a settlement agreement in April of 2003 under which Advanced
      BioChem would pay the vendor $40,000 in installments through August, 2003.
      At
      December 31, 2003, Advanced BioChem had a balance remaining of $20,000. In
      April, 2005, the equipment vendor filed a lawsuit against Advanced BioChem,
      certain former officers of Advanced BioChem and against Power3 in order to
      enforce its claim for the remaining balance which is past due and may have
      been
      assumed by the Company as part of the settlement of the dispute with Advanced
      BioChem. Settlement negotiations are ongoing; however no resolution has been
      achieved thus far.




In
      June,
      2005, Charles Caudle et al filed a lawsuit in Harris County, Texas, against
      Advanced BioChem, Power3 and the officers and directors of both companies.
      The
      suit alleges that Advanced BioChem, Power3 and the officers and directors of
      Power3, are liable to Charles Caudle et al for damages resulting from funds
      loaned to Advanced BioChem and which were subsequently converted into common
      stock of Advanced BioChem. It is unclear as to the specific dollar amount of
      the
      claim. The Company, and its officers and directors, has filed an answer denying
      all claims in the lawsuit. The Company believes that Charles Caudle’s claims are
      without merit with regard to Power3; however the Company cannot be assured
      it
      will prevail or if the outcome of the action will adversely affect the Company’s
      financial position or results of operations. A settlement has been reached
      between Advanced BioChem and Charles Caudle et. al. Power3 and Chares Caudle
      et.
      al. have reached an agreement and The Company will not incur any loss whatsoever
      from this action.




On
      May 19, 2005, Quinn Capital Consulting, Inc. filed suit against Power3
      and Steven B. Rash claiming breach of contract regarding payment for services
      claimed to be provided to Power3, with payment to have been made by issue of
      500,000 shares to Quinn Capital, which Power3 later cancelled or otherwise
      converted. This financial obligation is recorded in the obligations of the
      Company as of December 31, 2006. In February, 2007, the Company and Quinn
      Capital reached a settlement agreement in this matter and the Company will
      issue
      500,000 common shares to Quinn Capital and pay $75,000, over time, as settlement
      of any and all claims in this matter .





On
      September 12, 2005, Focus Partners LLC filed suit against David Zazoff and
      Power3 alleging that Power3 breached its agreement with Focus Partners in that
      it failed to issue stock to the Plaintiff according to the terms of their
      agreement, that the stock in question was issued to Zazoff and that Zazoff
      later
      sold the stock in question for $480,000. Settlement discussions between the
      Power3 and Focus Partners are ongoing; however no resolution has been achieved
      thus far. The Company has moved for summary judgment dismissing the complaint
      on
      the grounds that the agreement that forms the basis of this action was
      superseded by a subsequent agreement entered into between the parties, thereby
      obviating any obligation of Power3 to tender shares pursuant to the prior
      agreement. The Company believes that the Plaintiff’s claims are without merit
      and the Company will continue to vigorously defend this action.




-33-




On
      October 28, 2005, Power3 received notice of a Petition to Enforce Foreign
      Judgment citation filed against the Company by KForce regarding an employment
      fee adjudicated in December, 2003 in the state of Florida against the Company,
      in the amount of $15,873 together with $4,735 in interest. Power3 does not
      agree
      with the Foreign Judgment and is attempting to resolve the issue prior to
      enforcement. No resolution has been achieved on this issue at this time; however
      the Company is endeavoring to resolve the petition. This debt is not recorded
      in
      accounts payable by the Company because it is the Company’s position that the
      judgment should never have been entered against Power3, but rather against
      a
      different corporate entity, not related to Power3 in any way, at this time.
      The
      Company’s attorney in this matter feels that no loss is probable, nor will the
      Company be obligated to pay any sums whatsoever on this matter. The Company
      has
      pled improper party and expects to be vacated from the suit since it does not
      apply to the Company.




***Item
      2.*** ***UNREGISTERED
      SALE OF EQUITY SECURITIES AND USE OF PROCEEDS***





During
      the 2 nd Quarter
      ended June 30, 2007, Power3 Medical Products, Inc. (the "Company") entered
      into
      a Settlement Agreement and Release (the "Settlement Agreement and Release")
      with
      seven Convertible Debenture Holders. The Settlement Agreements are being entered
      into in connection with a $285,000 principal amount convertible debenture,
      common stock purchase warrant and investment rights agreement issued to the
      seven Convertible Debenture Holders in October 2004 and a second $50,000
      principal amount convertible debenture, common stock purchase warrant and an
      investment rights agreement issued to a Convertible Debenture Holder in January,
      2005. Pursuant to the Settlement Agreement, Power3 agreed to issue to the
      Convertible Debenture Holders a total of 2,206,673 shares of common stock in
      full satisfaction of the convertible debentures, investment rights, and all
      obligations arising thereto. Under the agreement, the Convertible Debenture
      Holders retain the warrants they were issued at the time of issue of the
      convertible debentures and the Company has agreed to reduce the exercise price
      on all warrants issued to the Convertible Debenture Holders to $0.19. The
      Convertible Debenture Holders accepted the exercise price reduction on the
      condition that all provisions relating to the cashless exercise of the warrants,
      in the original convertible debenture agreements are voided. A portion of the
      2,599,688 loss on conversion of financial instruments is a result of this
      modification and settlement of the previous debt agreements.





In
      2007,
      a lawsuit was filed by Crestview Capital Master, LLC (“Crestview” or
“Plaintiff”), Index No. 601862/07, in the Supreme Court of the State of New
      York, County of New York, seeking specific performance and money damages against
      Power3 Medical Products, Inc. (“Power3”, or the “Company”) The lawsuit arose
      from a dispute concerning the number of shares to be issued to Crestview by
      Power3 in connection with (i) a $150,000 principal amount convertible debenture
      and common stock purchase warrant issued to Crestview on October 28, 2004 and
      (ii) a $150,000 principal amount convertible debenture and common stock purchase
      warrant issued to Crestview on January 26, 2005 (collectively, the “Transaction
      Documents”). On July 31, 2007, Power3 entered into a Settlement Agreement and
      Release (the “Settlement Agreement”), with the Plaintiff. The terms of the
      Settlement Agreement require Power3 to issue an aggregate of 3,793,301 shares
      (the “Shares”) of the Company’s common stock in full satisfaction of the
      Transaction Documents. Upon the filing by Power3 of a Stipulation of
      Discontinuance letter signed by Crestview, the lawsuit shall be dismissed,
      it
      its entirety and with prejudice, and as a result of the Settlement Agreement,
      each of the parties is released by the other from all known and unknown
      claims.





***Item
      3.******DEFAULTS
      UPON SENIOR SECURITIES***





The
      Company is in default under the provisions of its October, 2004 Securities
      Purchase Agreement, and accompanying registration rights agreement and
      debentures. The default stems from the Company’s inability to obtain
      effectiveness of the registration statement on Form SB-2, as amended (File
      No.
      333-122227) filed pursuant to the registration rights agreement. The
      registration statement was withdrawn on June 20, 2007. During the quarter ended
      June 30, 2007, the Company has settled with a number of its Convertible
      Debenture Holders as previously mentioned above.




-34-





***Item
      4.******SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS***





No
      matters were submitted to the security holders for a vote during the quarter
      ended July 30, 2007.





***Item
      5.*** ***OTHER
      INFORMATION***





None.





***Item
      6.******EXHIBITS***





**EXHIBIT
                NO.**
            
            **DESCRIPTION**10.1
            
            Securities
                Purchase Agreement dated October 28, 2004 among the Company and each
                purchaser identified therein (incorporated by reference to Exhibit
                10.1 to
                the Company’s Form 8-K filed on November 3, 2004).10.2
            
            Amendment
                to Securities Purchase Agreement dated January 19, 2005, between
                the
                Company and each purchaser identified therein (incorporated by reference
                to Exhibit 10.8 of the Company’s Registration Statement on Form SB-2 (File
                No. 122227)).10.3
            
            Power3’s
                Registration Statement (incorporated by reference to the SB-2 (File
                No.
                122227) as filed on January 21, 2005).10.4
            
            Promissory
                Note dated November 3, 2005 between Power3 and Trinity financing
                in the
                amount of $150,000 (incorporated by reference to Exhibit 10.1 to
                the
                Company’s Form 8K filed on November 8, 2005).10.5
            
            Promissory
                Note executed on December 12, 2005 between Power3 and Trinity Financing
                (incorporated by reference to Exhibit 10.1 to the Company’s Form 8K filed
                December 12, 2005).10.6
            
            Promissory
                Note, dated June 1, 2006, executed by Power3 and John Fife in the
                amount
                of $266,000 (incorporated by reference to Exhibit 10.6 to the Company’s
                Form 10Qsb filed May 21, 2007).10.7
            
            Stock
                Pledge Agreement for Fife Promissory Note, dated June 1, 2006
                (incorporated by reference to Exhibit 10.6 to the Company’s Form 10Qsb
                filed May 21, 2007).10.8
            
            Amended
                and Restated Employment Agreement for Steven B. Rash (incorporated
                by
                reference to Exhibit 10.1 to the Company’s Form 8-K filed January 5,
                2005).10.9
            
            Amended
                and Restated Employment Agreement for Ira L. Goldknopf, PhD (incorporated
                by reference to Exhibit 10.2 to the Company’s Form 8-K filed on January 5,
                2005)10.10
            
            Employment
                Agreement with John Burton dated September 15, 2005 (incorporated
                by
                reference to Exhibit 10.1 to the Company’s Form 8-K filed on September 21,
                2005).10.11
            
            Exclusive
                License Agreement dated effective June 28, 2005, by and between Power3
                and
                Baylor College of Medicine (incorporated by reference to Exhibit
                10.1 to
                the Company’s Form 10-QSB for the quarter ended September 30,
                2004).10.12
            
            Patent
                and Technology License Agreement dated September 1, 2003 by and between
                The University of Texas System, on behalf of The University of Texas
                M.D.
                Anderson Cancer Center and Advanced BioChem (incorporated by reference
                to
                Exhibit 10.3 to the Company’s Form 10-QSB for the quarter ended September
                30, 2004).10.13
            
            Collaborative
                Research Agreement dated March 21, 2005, by and between New Horizons
                Diagnostics and Power3 (incorporated by reference to Exhibit 10.1
                to the
                Company’s Form 8-K filed on March 28,
                2005).





-35-





**EXHIBIT
                NO.**
            
            **DESCRIPTION**10.14
            
            Collaborative
                Research and Licensing Agreement dated May 17, 2005, by and between
                BioSite Incorporated and Power3 (incorporated by reference to Exhibit
                10.13 to the Company’s Form 10-KSB filed on September 9,
                2005).10.15
            
            Agreement
                between Power3 and Glocap executed on January 5, 2006 (incorporated
                by
                reference to Exhibit 10.22 to the Company’s Form 10-QSB for the quarter
                ended March 31, 2006).10.16
            
            Promissory
                Note dated March 2, 2006 between Power3 and Dr. Ira Goldknopf in
                the
                amount of $89,400 (incorporated by reference to Exhibit 10.19 to
                the
                Company’s Form 10-QSB for the quarter ended March 31,
                2006).10.17
            
            Promissory
                Note dated March 1, 2006 between Power3 and Steven B. Rash in the
                amount
                of $50,000 (incorporated by reference to Exhibit 10.18 to the Company’s
                Form 10-QSB for the quarter ended March 31, 2006).10.18
            
            Promissory
                Note, dated March 28, 2006, executed by Power3 and John Fife in the
                amount
                of $400,000 (incorporated by reference to Exhibit 10.20 to the Company’s
                Form 10-QSB for the quarter ended March 31, 2006).10.19
            
            Stock
                Pledge Agreement for Fife Promissory Note, dated March 28, 2006
                (incorporated by reference to Exhibit 10.21 to the Company’s Form 10-QSB
                for the quarter ended March 31, 2006).10.20
            
            Promissory
                Note, dated January 16, 2007, executed by Power3 and Rich Kraniak
                in the
                amount of $50,000 (incorporated by reference to Exhibit 10.6 to the
                Company’s Form 10Qsb filed May 21, 2007).10.21
            
            Promissory
                Note, dated September 14, 2006, executed by Power3 and Magic Arts
&
                Entertainment, in the amount of $49,999.98(incorporated by reference
                to
                Exhibit 10.21 to the Company’s Form 10Qsb filed May 21, 2007).10.22
            
            Promissory
                Note, dated February 8, 2007, executed by Power3 and Paul Chosid,
                in the
                amount of $200,000.00(incorporated by reference to Exhibit 10.22
                to the
                Company’s Form 10Qsb filed May 21, 2007).10.23
            
            Promissory
                Note, dated August 8, 2006, executed by Power3 and Rich Kraniak,
                in the
                amount of $100,000.00(incorporated by reference to Exhibit 10.6 to
                the
                Company’s Form 10Qsb filed May 21, 2007).10.24
            
            Promissory
                Note, dated February 8, 2007, executed by Power3 and Stephen Wood,
                in the
                amount of $120,000.00(incorporated by reference to Exhibit 10.6 to
                the
                Company’s Form 10Qsb filed May 21, 2007).10.25
            
            Promissory
                Note, dated October 27, 2006, executed by Power3 and Roger Kazanowski,
                in
                the amount of $150,000.00(incorporated by reference to Exhibit 10.25
                to
                the Company’s Form 10Qsb filed May 21, 2007).10.26
            
            Promissory
                Note, dated February 27, 2007, executed by Power3 and Bruce Seyburn,
                in
                the amount of $100,000.00(incorporated by reference to Exhibit 10.26
                to
                the Company’s Form 10Qsb filed May 21, 2007).10.27
            
            Promissory
                Note, dated October 27, 2006, executed by Power3 and Rich Kraniak,
                in the
                amount of $100,000.00(incorporated by reference to Exhibit 10.27
                to the
                Company’s Form 10Qsb filed May 21, 2007).10.28
            
            Promissory
                Note, dated October 27, 2006, executed by Power3 and Steve Scott,
                in the
                amount of $25,000.00(incorporated by reference to Exhibit 10.6 to
                the
                Company’s Form 10Qsb filed May 21, 2007).





-36-


**EXHIBIT
                NO.**
            
            **DESCRIPTION**10.29
            
            Promissory
                Note, dated October 31, 2006, executed by Power3 and Andrew Dahl,
                in the
                amount of $12,000.00(incorporated by reference to Exhibit 10.29 to
                the
                Company’s Form 10Qsb filed May 21, 2007).10.30
            
            Promissory
                Note, dated November 30, 2006, executed by Power3 and Jeffrey Hyde,
                in the
                amount of $10,000.00(incorporated by reference to Exhibit 10.30 to
                the
                Company’s Form 10Qsb filed May 21, 2007).10.31
            
            Promissory
                Note, dated October 31, 2006, executed by Power3 and Mike and Janet Lee,
                in the amount of $60,000.00(incorporated by reference to Exhibit
                10.31 to
                the Company’s Form 10Qsb filed May 21, 2007).10.32
            
            Warrant
                Agreement with Mike and Janet Lee, dated October 30, 2006, for warrants
                to
                purchase 1,000,000 shares of common stock (incorporated by reference
                to
                Exhibit 10.32 to the Company’s Form 10Qsb filed May 21, 2007).10.33
            
            Warrant
                Agreement with Andrew Dahl, dated October 31, 2006, for warrants
                to
                purchase 200,000 shares of common stock (incorporated by reference
                to
                Exhibit 10.33 to the Company’s Form 10Qsb filed May 21, 2007).10.34
            
            Warrant
                Agreement with Rich Kraniak, dated August 27, 2006, for warrants
                to
                purchase 333,333 shares of common stock (incorporated by reference
                to
                Exhibit 10.34 to the Company’s Form 10Qsb filed May 21, 2007).10.35
            
            Warrant
                Agreement with Steve Scott, dated October 27, 2006, for warrants
                to
                purchase 416,666 shares of common stock (incorporated by reference
                to
                Exhibit 10.35 to the Company’s Form 10Qsb filed May 21, 2007).10.36
            
            Warrant
                Agreement with Roger Kazanowski, dated October 27, 2006, for warrants
                to
                purchase 2,500,000 shares of common stock (incorporated by reference
                to
                Exhibit 10.36 to the Company’s Form 10Qsb filed May 21, 2007).10.37
            
            Warrant
                Agreement with Rich Kraniak, dated October 27, 2006, for warrants
                to
                purchase 1,666,666 shares of common stock (incorporated by reference
                to
                Exhibit 10.37 to the Company’s Form 10Qsb filed May 21, 2007).10.38
            
            Warrant
                Agreement with Magic Arts & Entertainment, dated September 14, 2006,
                for warrants to purchase 833,333 shares of common stock (incorporated
                by
                reference to Exhibit 10.38 to the Company’s Form 10Qsb filed May 21,
                2007).10.39
            
            Warrant
                Agreement with Rich Kraniak, dated January 16, 2007, for warrants
                to
                purchase 833,333 shares of common stock (incorporated by reference
                to
                Exhibit 10.39 to the Company’s Form 10Qsb filed May 21, 2007).10.40
            
            Warrant
                Agreement with Paul Chosid, dated February 8, 2007, for warrants
                to
                purchase 3,333,333 shares of common stock (incorporated by reference
                to
                Exhibit 10.40 to the Company’s Form 10Qsb filed May 21, 2007).10.41
            
            Warrant
                Agreement with Stephen Wood, dated February 8, 2007, for warrants
                to
                purchase 2,000,000 shares of common stock (incorporated by reference
                to
                Exhibit 10.41 to the Company’s Form 10Qsb filed May 21, 2007).10.42
            
            Warrant
                Agreement with Bruce Seyburn, dated February 27, 2007, for warrants
                to
                purchase 833,333 shares of common stock (incorporated by reference
                to
                Exhibit 10.42 to the Company’s Form 10Qsb filed May 21, 2007).10.43
            
            Consulting
                Agreement signed with Noble Investments, dated March 1, 2007 (incorporated
                by reference to Exhibit 10.43 to the Company’s Form 10Qsb filed May 21,
                2007).10.44
            
            Agreement
                signed with Neogenomics (incorporated by reference to Exhibit 10.1
                in the
                Form 8-K filed by the Company on April 3, 2007.31.1*
            
            Certification
                of Steven B. Rash, Chief Executive Officer31.2*
            
            Certification
                ofMarion
                McCormick,
                Chief Accounting Officer32.1*
            
            Certification
                Pursuant to Section 906 of Steven B. Rash, Chief Executive
                Officer32.2*
            
            Certification
                Pursuant to Section 906 ofMarion
                McCormick,
                Chief Accounting Officer*Furnished
                with this report.





-37-




**SIGNATURES**





Pursuant
      to the requirements of the Exchange Act, this report has been signed by the
      following persons in the capacities and on the dates indicated.





Signature
            
            Title
            
            Date/s/
              Steven B. Rash
            
            Chairman
              and Chief
              Executive Officer
            
            August
                14, 2007Steven B. Rash/s/
              Marion McCormick
            
            Chief
              Accounting Officer
            
            August
                14, 2007Marion McCormick





-38-