`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, 2004

[ ] 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.
                 (Name of small business issuer in its charter)

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


3400 Research Forest Drive
Woodlands, Texas                                           77381
(Address of principal executive offices)                 (Zip Code)

                                 (281) 466-1600
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

                                      None

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                                (Title of class)

        As of August 15, 2004, there were 52,422,930 shares of voting common stock
of the registrant issued and outstanding. In addition, there are 15,000,000
shares that are pending issuance to Advanced Bio/Chem, Inc. (the "Predecessor")
The registrant also has 3,780,000 shares of Series A Preferred Stock outstanding
and 3,000,000 shares of Series B Preferred Stock outstanding.

        Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]




                                       1




                                      INDEX


Part I. FINANCIAL INFORMATION (UNAUDITED)

Item 1. Financial Statements

        Condensed Consolidated Balance Sheet                           4

        Condensed Consolidated Statements of Operations                5

        Condensed Consolidated Statements of Cash Flows                6

        Notes to Condensed Consolidated Financial Statements           7

Item 2. Management's Discussion and Analysis of Financial              11
        Condition and Results of Operations

Part II. OTHER INFORMATION

Item 1. Legal Proceedings                                              18

Item 2. Changes in Securities                                          19

Item 3. Defaults Upon Senior Securities                                20

Item 4. Submission of Matters to a Vote of Security Holders            20

Item 5. Controls and Procedures                                        20

Item 6. Exhibits and Reports on Form 8-K                               20

SIGNATURES                                                             21




                                       2




                          PART I. FINANCIAL INFORMATION


This Report contains certain forward-looking statements of the intentions,
hopes, beliefs, expectations, strategies, and predictions of Power3 Medical
Products, Inc. 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. Investors are cautioned
that all forward-looking statements involve risks and uncertainty, including,
without limitation, variations in quarterly results, volatility of Power3
Medical Products, Inc.'s stock price, development by competitors of new or
competitive products or services, the entry into the market by new competitors,
the sufficiency of Power3 Medical Products, Inc.'s working capital and the
ability of Power3 Medical Products, Inc. to retain management, to implement its
business strategy, to assimilate and integrate any acquisitions, to retain
customers or attract customers from other businesses and to successfully defend
itself in ongoing and future litigation. Although Power3 Medical Products, Inc.
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 Power3 Medical Products, Inc. or any other person that the
objectives and plans of Power3 Medical Products, Inc. will be achieved. Except
for its ongoing obligation to disclose material information as required by the
federal securities laws, Power3 Medical Products, Inc. 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 our actual results to differ
materially from those contemplated by the forward-looking statements




                                       3




Item 1. Financial Statements

                          Power3 Medical Products, Inc.
                         ( A Development Stage Company)
                      Condensed Consolidated Balance Sheet
                                    30-Jun-04
                                   (Unaudited)

                                ASSETS
Current Assets:
  Cash                                                         $     83,877
  Accounts receivable (net of allowance for
    doubtful accounts of $0.00)                                      13,600
  Other current assets                                                7,853 
    Total Current Assets                                            105,330

Furniture and equipment - net                                       119,001

Intangible assets - net                                              32,554 

TOTAL ASSETS                                                   $    256,885
                                                               =============

                LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
  Accounts payable and accrued liabilities                     $    473,708
  Notes payable                                                      20,000
  Due to affiliate                                                   28,068 
    Total Current Liabilities                                       521,776 

Stockholders (Deficit):
   Preferred Class A Stock (par value of $.001)                       3,870
   Preferred Class B Stock (par value of $.001)                       3,000
   Common stock  (par value of $.001)                                67,423
   Common stock issuable  (par value of $.001)                      165,000
   Additional paid-in capital                                    36,986,024
   Deferred compensation                                           (512,500)
   Deficit accumulated during the development stage             (36,977,708)
    Total Stockholders' (Deficit)                                  (264,891)

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)                  $    256,885
                                                               =============

See the accompanying notes to the condensed consolidated financial statements.




                                       4




                          Power3 Medical Products, Inc.
                         ( A Development Stage Company)
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)


                                     Power3 Medical
                                      Products, Inc.                                    Predecessor Business

                                     For the period
                                      May 18, 2004
                                        (date of       For the Period      For the Three      For the Period     For the Six
                                     acquisition) to   April 1, 2004 to     Months Ended    January 1, 2004 to   Months Ended
                                      June 30, 2004     May 17, 2004       June 30, 2003       May 17, 2004     June 30, 2003

Revenues                              $     13,600      $      3,525        $    55,240       $   141,362       $   191,794

Costs and expenses:
  Stock based compensation              36,772,500                 -                  -                 -                 -
  Interest                                       -             4,498             49,763            56,440            96,831
  Other selling, general and
    administrative expenses                218,808           168,285            334,221           333,942           528,406 
Total costs and expenses                36,991,308           172,783            383,984           390,382           625,237 

Net (loss)                            $(36,977,708)     $   (169,258)       $  (328,744)      $  (249,020)      $  (433,443)
                                      =============     =============       ============      ============      ============

Per share information - basic
    and fully diluted

Net (loss) per share                  $      (0.55)     $      (0.01)       $     (0.05)      $     (0.02)      $     (0.06)
                                      =============     =============       ============      ============      ============

Weighted average shares outstanding     67,422,930        13,247,801          7,280,000        12,179,564         7,280,000
                                      =============     =============       ============      ============      ============

See the accompanying notes to the condensed consolidated financial statements.




Power3 Medical Products, Inc.
                         ( A Development Stage Company)
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

                                     Power3 Medical
                                      Products, Inc.          Predecessor Business

                                     For the period
                                      May 18, 2004
                                        (date of         For the Period       For the Six
                                     acquisition) to   January 1, 2004 to     Months Ended
                                      June 30, 2004       May 17, 2004        June 30, 2003

Net cash provided by (used in)
  operating activities                $    4,000          $  (510,880)         $ (425,761)

Net cash provided by (used in)
  investing activities                   (15,220)              13,847               2,777

Net cash provided by financing
  activities                              95,000              508,430             471,980 

Increase (decrease) in cash               83,780               11,397              48,996

Cash (cash overdraft), beginning
  of period                                   97               (7,498)             19,175 

Cash, end of period                   $   83,877          $     3,899         $    68,171
                                      ===========         ============        ============

See the accompanying notes to the condensed consolidated financial statements.




                                       6




POWER3 MEDICAL PRODUCTS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2004
(UNAUDITED)

(1) Nature of operations and Basis of Presentation

Prior to May 18, 2004, Power 3 Medical Products, Inc. ("Power 3") formally known
as Surgical Safety Products, was engaged in product development, sales and
distribution and services for the healthcare industry. The Company had limited
business activity during 2003 and 2002. Subsequent to the business combination
on May 18, 2004 (as described below), the overall mission of Power3 was changed,
whereby Power 3 is currently engaged in the early detection, monitoring, and
targeting of diseases through the analysis of proteins. Power 3's business
objective currently is to focus on disease diagnosis, protein and biomarkers
identification, and drug resistance in the areas of cancers, neurodegenerative
and neuromuscular diseases.

During the period April 1, 2004 to May 17, 2004, Power 3 had the following
significant transactions:

        o On April 27, 2004, Power3 Medical Products, Inc issued 1,023,334
          restricted common shares to Southbank Capital, Focus Partners,
          and UTEK Corporation.

        o On May 7, 2004, Power3 Medical Products, Inc authorized payment
          of $21,600 and issuance of 50,000 restricted common shares to Dr.
          Gray Bowen Swor in settlement of outstanding debts of $25,000.
          These restricted shares were issued on May 10, 2004

        o On May 7, 2004, Power3 Medical Products, Inc authorized payment
          of $25,533 and issuance of 250,000 restricted common shares to
          Dr. G Michael Swor in settlement of outstanding notes,
          shareholder advances and unpaid salary totaling $210,633. These
          restricted shares were issued on May 10, 2004

        o On May 15, 2004, Core Concepts, Inc. converted shareholder
          advances of $105,775 to Power3 Medical Products, Inc restricted
          common shares at a rate of $0.75 per common shares for a total of
          141,033 common shares. These restricted shares were issued on May
          17, 2004.

        o On May 17, 2004, Power3 Medical Products, Inc authorized issuance
          of 1,000,000 common shares to Emeritus Group LP for consulting
          services rendered. These shares were issued on May 27, 2004.

        o On May 17, 2004, Power3 Medical Products, Inc authorized issuance
          of 1,500,000 common shares to South Shore Harbor Group LP LLLP
          for consulting services rendered. These shares were issued on May
          27, 2004.




                                       7




        o On May 17, 2004, Power3 Medical Products, Inc authorized issuance
          of 2,000,000 common shares to Arborerest Assets LP LLLP for
          consulting services rendered. These shares were issued on June 3,
          2004.

        o Certain liabilities to IBM and Sarasota Memorial Hospital were
          settled for $20,000 and $50,000, respectively when an affiliate
          of a Series A preferred stockholder infused $70,000. As a result
          thereof, the Company has agreed to issue an indeterminate number
          of shares of its common stock to this individual and accordingly,
          the aforementioned amount has been included in common stock
          issuable in the accompanying consolidated balance sheet.

On May 18, 2004, Power 3 executed an Asset Purchase Agreement (the "Agreement")
to purchase all of the assets of Advanced Bio/Chem, Inc. (the "Predecessor") and
assume certain of its liabilities in exchange for 15,000,000 shares of its
common stock. For financial statement purposes, the transaction has been treated
as a recapitalization of the equity structure; therefore the accumulated
deficits of Power 3 and the Predecessor prior to the date of the transaction
were eliminated and the accompanying consolidated statement of operations is for
the period May 18, 2004 to June 30, 2004. Also, no stock based expenses were
recorded as a result of this transaction, and the assets and liabilities of
Power 3 and the Predecessor were combined based on their historical costs.

Since Power 3's planned principal operations have not yet commenced, it is
considered to be in the development stage as defined in Financial Accounting
Standards Board Statement No. 7. Accordingly, some of its accounting policies
and procedures have not yet been established.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
Power3 Medical Products, Inc., a New York Corporation and its wholly owned
subsidiary Power3 Medical, Inc., a Nevada Corporation (collectively "the
Company"). All inter-company transactions and balances have been eliminated in
consolidation.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
("GAAP") for interim financial information and Item 310(b) of Regulation S-B.
They do not include all of the information and footnotes required by GAAP for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. The results of operations for the periods
presented are not necessarily indicative of the results to be expected for the
full year. For further information, refer to the consolidated financial
statements of the Predecessor as of and for the years ended December 31, 2003
and 2002, including notes thereto included in the Company's Form 8-K/A dated May




                                       8




18, 2004, and/or the consolidated financial statements of the Company as of
December 31, 2003 and for the years ended December 31, 2003 and 2002, including
notes thereto included in the Company's Form 10-KSB.

Use of Estimates

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements. The reported amounts of revenues and expenses
during the reporting period may be affected by the estimates and assumptions
management is required to make. Actual results could differ from those
estimates.

Going Concern

The Company's consolidated financial statements are presented on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company is in the development
stage, has stockholder and working capital deficits of $264,891 and $416,446
respectively as of June 30, 2004 and will require a significant amount of
capital to proceed with its business plan. The Company's ability to continue as
a going concern is contingent upon its ability to attain profitable operations
by securing financing and implementing its business plan. Also, the Company's
ability to continue as a going concern must be considered in light of the
problems, expenses and complications often encountered by entrance into the
competitive environment in which the Company operates. These factors, among
others, indicate that the Company may be unable to continue as a going concern
for a reasonable period of time. The Company's financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts and classification of liabilities that
might be necessary should it be unable to continue as a going concern.

(2) Net Loss Per Share

The Company calculates net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is calculated by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and dilutive
common stock equivalents outstanding. For purposes of computing weighted average
shares outstanding, the Company generally includes shares that are contractually
required to be issued (e.g. the 15,000,000 shares that are to be issued to the
Predecessor were assumed to be outstanding as of May 18, 2004, or the effective
date of the recapitalization referenced above). During the periods when they
would be anti-dilutive common stock equivalents, if any, are not considered in
the computation.

(3) Income Taxes

The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (FAS 109), "Accounting for Income Taxes", which requires use




                                       9




of the liability method. FAS 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting
purposes, referred to as temporary differences. Deferred tax assets and
liabilities at the end of each period are determined using the currently enacted
tax rates applied to taxable income in the periods in which the deferred tax
assets and liabilities are expected to be settled, or realized.

The Company's deferred tax asset resulting primarily from net operating loss
carryforwards is fully offset by a valuation allowance. The Company has recorded
a valuation allowance to state its deferred tax assets at estimated net
realizable value due to the uncertainty related to realization of these assets
through future taxable income.

(4) Commitments

Lease

On June 1, 2004, the Predecessor entered a lease having a term of sixty three
months and requiring base monthly minimum lease payments ranging from
approximately $6,000 to $9,600 (exclusive of the first three months for which no
rent was stipulated). The Company anticipates that it will assume this lease in
the third quarter of calendar 2004. In addition to the base minimum rental
payments above, the lease will obligate the Company to pay all operating
expenses (as defined) and to issue shares of its common stock having an initial
value of $25,000 to secure its obligations under the lease. In addition, if at
any time, the value of the shares falls below $25,000 then the Company will be
obligated to issue additional shares of its stock to the extent that the value
of the shares to be held in escrow by the lessor is never less than $25,000. The
lease contains a provision which allows the Company to extend the lease for two
additional terms of sixty months.

Employment Agreements

Effective May 18, 2004, the Company entered two five year employment agreements
and one three year employment agreement with certain officers that require total
minimum base compensation of approximately $500,000 per annum for the first
three years, and $380,000 for the remaining two years, as well as other benefits
and opportunities for bonuses as defined in the agreements. In addition to this
base compensation, the officers received (in total) 26,640,000 shares of common
stock and 3,000,000 shares of Series B preferred stock (which shares are
initially convertible into a like number of common shares). Because these shares
vest immediately, the fair value of the shares of $26,676,000 has been included
in stock based compensation in the accompanying consolidated statement of
operations for the period May 18, 2004 (date of acquisition) to June 30, 2004.

Consulting Agreements

On June 22, 2004, the Company engaged a public relations firm to provide such
services for a period of one year. As consideration for these services, in July
2004, the Company issued 125,000 shares of its common stock to this entity. As a




                                       10




result thereof, the Company has recorded deferred compensation of $262,500 at
June 30, 2004, which amount was based on the number of shares issued and the
market value of the Company's common stock on the date of the agreement. The
deferred compensation will be amortized to stock based expense over the term of
the consulting agreement.

In June 2004, Company entered a consulting agreement having an initial term of
one year with an investor relations consultant that is related to the Company.
As consideration for services to be rendered under the agreement, the consultant
is to receive 125,000 shares of the Company's common stock (which shares were
issued in July 2004) and a monthly retainer of $5,000. The agreement, which may
be canceled upon sixty days written notice, automatically renews on a month to
month basis after the initial term of the lease, if no such notice is provided.
The Company has recorded deferred compensation of $250,000 at June 30, 2004,
which amount was based on the number of shares issued and the market value of
the Company's common stock on the date of the agreement. The deferred
compensation will be amortized to stock based expense over the term of the
consulting agreement.

(5) Other Related Party Transactions

The balance of the Due to Affiliate represents amounts advanced by the
Predecessor. The advances are non-interest bearing, unsecured and due on demand.

In addition to the common shares issued to the officers under the employment
agreements discussed above, the Company has issued 10,985,000 shares of its
common stock to certain other employees, directors, advisors and members of its
Scientific Advisory Board. Because these shares vest immediately, the fair value
of the shares of $9,886,500 has been included in stock based compensation in the
accompanying consolidated statement of operations for the period May 18, 2004
(date of acquisition) to June 30, 2004.

In June 2004, the Company agreed to issue 100,000 shares of its common stock to
a related entity for services provided by such entity prior to June 30, 2004.
The common shares had a value of $210,000 on the date of the agreement, and
accordingly such amount has been included in stock based compensation in the
accompanying consolidated statement of operations for the period May 18, 2004
(date of acquisition) to June 30, 2004. The shares were issued in July 2004.

(6) Preferred Stock

At June 2004, the Company has the following preferred shares outstanding:

        o 3,870,000 shares of Series A preferred stock, which was
          previously included on the books and records of Power 3. Prior to
          May 18, 2004 (date of acquisition) the shares were convertible
          into ten shares of the Company's common stock, however, in
          connection with the recapitalization discussed above, such
          conversion privilege was changed to disallow any conversions
          prior to October 31, 2004 and the conversion rate was reduced to
          .7752 shares of common stock for each share of preferred stock
          converted. The shares have various preferences as to any
          dividends declared and a liquidation preference of $.10 per share
          ($387,000 at June 30, 2004).




                                       11




        o 3,000,000 shares of Series B preferred stock that were issued to
          two officers pursuant to their employment agreements. The shares,
          which are initially convertible into one share of common stock
          for each preferred share converted, have the number of votes
          equal to the votes of all outstanding shares of common stock plus
          one additional vote such that the holders of these preferred
          shares will always constitute a majority of the voting rights of
          the Company.

(7) Other Equity Transactions

The Company has issued 400,000 warrants to various members of its Scientific
Advisory Board which entitles the holders to purchase 300,000 shares of common
stock for market value as of the date the holder joined the Scientific Advisory
Board and 100,000 for a $1.00 per share. The warrants expire in 2007.

The Company has entered into a Securities Purchase Agreement with an
institutional investor covering the purchase of up to $1,500,000 of restricted
common stock at various prices. As of June 30, 2004, $95,000 was advanced under
the terms of this agreement. The amount is included in common stock issuable in
the accompanying consolidated balance sheet.

(8) Subsequent Events

Management has made decision to recommend to the Board of Directors that the
registrant change its domicile from New York to either Delaware or Nevada.




                                       12




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

Overview

        The Company's overall mission is to engage in the early detection,
monitoring, and targeting of diseases through the analysis of proteins. Power
3's business objective currently is to focus on disease diagnosis, protein and
biomarkers identification, and drug resistance in the areas of cancers,
neurodegenerative and neuromuscular diseases. In order to accomplish this
mission, Power3 Medical has established a Scientific Advisory Board whose members
are recognized opinion leaders in their chosen fields and is working with them,
to find effective therapeutics and novel predictive medicine for important human
diseases.

        On May 18, 2004, the Company completed an asset purchase agreement with
Advanced Bio/Chem, Inc. d/b/a ProtcEx at 4800 Research Forest Drive, The
Woodlands, Texas 77381 and has relocated its corporate and administrative
offices to 3400 Research Forest Drive, The Woodlands, TX 77381. As part of the
agreement, the Company purchased all assets and intellectual properties of
Advanced Bio/Chem, Inc. d/b/a ProtcEx and assumed certain liabilities in
exchange for 15,000,000 shares of restricted common stock of Power3 Medical
Products, Inc. As a result of this transaction, the Company has established a
new business direction, and effectively became a new company (from an accounting
perspective) on such date. Accordingly, the accompanying consolidated statements
of operations reflect activity for the period May 18, 2004 (date of acquisition)
to June 30, 2004 for Power 3, and the periods January 1 and April 1, 2004 to May
17, 2004 for the Predecessor's business.

        Effective May 18, 2004, Tim Novak and R. Paul Gray resigned as Chairman/CEO
and Secretary/Treasurer/CFO respectively. Steven B. Rash assumed responsibility
as Chairman and CEO replacing Mr. Novak. Dr. Ira Goldknopf was named as the
Company's Chief Scientific Officer and Secretary/Treasurer effective May 18,
2004.

        Also effective May 18, 2004, Dr. Kamy A. Behzadi was named as the Company's
Vice President, Product and Business Development. Mr. Michael J. Rosinski joined
the Company as of July 1, 2004 as CFO replacing R. Paul Gray.

        As a result of Power3 Medical Products, Inc. acquiring the assets and
certain liabilities of Advanced Bio/Chem, Inc. d/b/a ProtcEx, the company has
transformed itself into an advanced proteomics company that applies years of
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 finally new target drugs in cancer, neurodegenerative and
neuromuscular diseases such as ALS, Alzheimer's, Parkinson's.

        The Power3 Medical scientific team is headed by its Chief Scientific
Officer, Dr. Ira L. Goldknopf, who pioneered the science of clinical proteomics
in the 1970's and 80's and in so doing made a significant biochemistry discovery
-the ubiquitin conjugation of proteins. The team has leveraged these significant




                                       13




insights and discovered unique disease protein footprints of biomarkers in
breast cancer, neurodegenerative disease, and drug resistance to
chemotherapeutic agents.

        Proteomics is the study and analysis of proteins. Through proteomics,
scientists can more accurately understand the functioning of a healthy body and
therefore identify the proteins associated with specific diseases. Proteins that
change in the course of disease are the building blocks for new screening and
diagnostic tests being developed by Power3 to provide earlier disease detection,
enhanced treatment and monitoring assistance.

        Power3 Medical Products, Inc. SutureMate(R)product line is currently used
in operating rooms, emergency rooms, surgical centers and medical provider's
offices. This innovative safety device is specifically engineered to prevent
needle sticks before, during and after suturing procedures.

Corporate Developments

        With the acquisition of Advanced Bio/Chem, Inc. d/b/a ProtcEx, Power3
Medical Products, Inc. changed its management team, and will now focus its
efforts on bringing the acquired technology to the forefront of the
scientific/medical community. The strategy will concentrate on attaining a
dominant position in the protein-based diagnostic and drug targeting markets
utilizing the Company's portfolio of proprietary biomarker disease footprints.
During the quarter ending June 30, 2004, the Company continued to accurately
identify patterns of proteins associated with disease and apply them to
screening diagnostics and drug targets. By testing patient body fluids and
tissues, such as serum, seminal fluid, breast ductal fluid, and bone marrow,
Power3 Medical has discovered unique snapshots of protein patterns in diseases
including, but not limited to: Cancers such as Breast, Leukemia, Prostate,
Bladder, Stomach, and Esophageal, Neurodegenerative Diseases such as
Alzheimer's, ALS, and Parkinson's, and Lymphatic Diseases and Kidney Ailments.

        The Discovery Platform uses IP protected methodologies to discover
biomarkers in clinical samples. Following sample preparation, the 2D Gel system
is used for the separation of protein. The gels are stained, imaged and analyzed
with unprecedented sensitivity for differences in the diseased vs. normal
samples. The significance of these differences is evaluated relative to the
status of the health of the individual. The proteins of interest are removed
from the gel matrix, taken apart and analyzed on a 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 end-data interpretable.

        In addition, all of the procedures are scaleable. The Company's biomarker
discovery platform delivers significant discoveries that detect 20X as many
proteins in NAF as Mud Pit or SELDI TOF (competing technologies), exhibits
reproducible and reliable identification, and displays broad dynamic range and
linearity of disease protein footprints

        To date, Power3 has successfully identified more than 250 specific proteins
by developing its proprietary protein technologies gained from over 50+ years of




                                       14




combined experience in research in protein biochemistry.

        Power3 is transitioning from an R & D company to one of demonstrating
"proof of concept" of its technology in route to the commercialization of its
technology, products and services. The Company is currently developing its
portfolio of products to include its NAF(TM)Test (for early detection of breast
cancer), NuroPro(TM)test (for neurodegenerative screening for Alzheimer's,
Parkinson's and Amytrophic Lateral Sclerosis diseases) and drug resistance
screening in chemotherapeutics.

THE BREAST CANCER SCREENING TEST

        The key to surviving cancer is early detection and treatment. According to
the American Cancer Society, when breast cancer is confined to the breast, the
five-year survival rate is close to 100%. Breast cancer is the second leading
cause of cancer deaths in women, with over $7 billion spent on breast cancer
diagnosis annually. Due to the limitations of the current diagnostic techniques
of mammograms and self-examination, diagnosis of cancer is often missed or
inconclusive.

        Power3's Discovery Platform of patents pending and trade secrets for
identifying proteins which signal early stages of breast cancer
(pre-mammography) have led to what the Company believes to be the first test of
its type that detects breast cancer earlier than current technology allows.
These discoveries establish the basis of a very sensitive, non-invasive, early
detection breast cancer-screening test.

NAF(TM)TEST

        The Breast Cancer NAF(TM)Test, the Company's initial breast cancer
diagnostic test developed in collaboration with The University of Texas MD
Anderson Cancer Center, analyzes 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 the
specific breast cancer protein snapshots.

        The Company has completed the initial proof-of concept stage and is
currently prepared to move forward with validation and product rollout. The
Company has signed a licensing agreement with MD Anderson securing the
intellectual property for the NAF(TM)Test.

        The Company expects to enter the clinical validation phase in the third
quarter of 2004.

THE NEURODEGENERATIVE SCREENING TEST

        Early detection of neurodegenerative disease results in better patient
outcomes. Alzheimer's disease (AD) is the most common form of dementia affecting
over 4 million Americans. People as young as 30 years old can contract the
disease and one in ten people age 65 and over have AD. More than one million
people in the U.S. have Parkinson's disease and it affects about 1 in 100
Americans over the age of 60. On a smaller scale, 30,000 Americans are afflicted
with ALS (Lou Gehrig's disease), with 5,000 new cases annually.




                                       15




        Power3 has discovered a method for the differential diagnosis of
neurodegenerative diseases utilizing blood serum, which was co-developed with
neurologist, Dr. Stan Appel, Chairman of Neurology and his team at Baylor
College of Medicine in Houston. With this test, which involves monitoring the
concentration of 9 proteins in the blood, the Company has demonstrated unique
markers whose profiles appear to distinguish patients from those with other
motor neuron and neurological disorders.

        The Company is continuing its ongoing clinical validation programs in
collaboration with Dr. Stan Appel. The initial phase of this clinical validation
is complete with results above expectations.

        In addition, Power3 Medical Products, Inc. on June 28, 2004 secured the
exclusive worldwide licensing rights from Baylor College of Medicine for serum
Proteomics methods and biomarkers for the diagnosis of neurodegenerative
diseases, differential diagnosis of Alzheimer's, Parkinson's, ALS diseases, and
other motor neuron and neurological disorders. The technology encompassing this
agreement was co-developed by the scientific team at Power3 Medical under the
leadership of Dr. Ira L. Goldkopf and the team at Baylor College of Medicine
under the direction of Dr. Stan Appel. The test employs the Company's patent
pending proteomics methods to monitor the concentrations of a panel of proteins
in the blood, to distinguish patients with Alzheimer's, Lou Gehrig's (ALS), and
Parkinson's diseases from each other as well as from normal individuals and
patients with other neurological disorders.

        Under the terms and agreement, Power3 Medical has paid Baylor College of
Medicine a licensing fee and will make additional payments upon the achievement
of certain developmental milestones. Power3 Medical is responsible for the
continuing costs associated with research and development including the filing
of patents for the technology and will pay Baylor College of Medicine royalties
on the worldwide product sales resulting from the commercialization of this
technology.

DRUG RESISTANCE TO CHEMOTHERAPEUTIC AGENTS

        By the time development of resistance to chemotherapeutic agents is
detected, it is usually too late to save the patient. Power3 Medical completed
an initial "proof of concept", which addresses drug resistance to a major
chemotherapy agent. Knowing if a cancer patient is sensitive or detecting a
development of resistance earlier during treatment could eliminate toxic effects
from the drugs, and the need for trial-and-error treatment regimens. These
findings could allow. the pharmaceutical industry to have the technology to
screen patients, on a molecular level, prior to clinical trials and design new
drugs to overcome resistance.

PROPRIETARY TECHNOLOGY AND INTELLECTUAL PROPERTY

        Power3's current portfolio of pending intellectual property, in conjunction
with secured licensed agreements, allows for growth opportunity through the
licensing of biomarkers and the potential royalty that could be associated with
these agreements. The Company is not aware of any infringement or possible




                                       16




claims of infringement with respect to any of its discoveries or other
intellectual property.

        Power3 pursues an aggressive intellectual property strategy to protect its
inventions and discoveries made on its own and with its collaborators. Power3
works with key physician scientists at major medical research and treatment
centers, including The University of Texas MD Anderson Cancer Center and Baylor
College of Medicine. With access to decisive human clinical samples and trade
secret proteomics methodologies, the Company provides solutions to pressing
challenges in diagnosis and treatment of patients and has concluded research
agreements, technology license agreements, and filed provisional and utility
patents. Power3 is also adding additional layers of research and license
agreements, patent filings and trade secrets, as its technology and product
portfolio develops, to cover:

        o Processes - Manner in which discoveries are made and tests developed
        o Discoveries - Protein disease footprints and tests

        In July 2004, Power3 filed two provisional patents.

        During the Quarter ending June 30, 2004, Power3 developed and implemented
its strategic plan to seek synergistic strategic partners to license and develop
our growing portfolio of protein biomarker disease footprints. These
partnerships will drive the Company's evolution over the next three years
resulting in the rapid commercialization of our proprietary technologies.

        The Company recognizes that the licensing of our proprietary technologies
to industry leaders is the most expedient approach to develop our technology
into important diagnostics tools for the detection of diseases in which there
are no early-detection and drug resistance to chemotherapy agents. This focused
positioning of our products and services will enable the Company to capture not
only clinical and public awareness of its proprietary technologies, but a major
porting of the early detection and screening markets.

Results of Operations for the Period May 18, 2004 (date of acquisition) to June
30, 2004

        During the second quarter, the Company completed an asset purchase
agreement with Advanced Bio/Chem, Inc. d/b/a ProtcEx at 4800 Research Forest
Drive, The Woodlands, Texas 77381 and has relocated its corporate and
administrative offices to 3400 Research Forest Drive, The Woodlands, TX 77381.
As part of the agreement, the Company purchased all assets and intellectual
properties of Advanced Bio/Chem, Inc. d/b/a ProtcEx in exchange for 15,000,000
shares of restricted common stock of Power3 Medical Products, Inc.

        As a part of this transaction, the Company relocated its offices to the
Woodlands, Texas As a result of Power3 Medical Products, Inc. acquiring the
assets and certain liabilities of Advanced Bio/Chem, Inc. d/b/a ProtcEx, the
Company has transformed itself into an advanced proteomics company capable of
identifying protein biomarkers associated with various diseases.

        During the post transaction period from May 18, 2004 to June 30, 2004, the
Company incurred a loss of approximately $36,978,000. Substantially all of this




                                       17




loss resulted from the recording of stock based compensation of approximately
$36,772,500 which arose as a result of the issuance of 3,000,000 shares of our
Series B preferred stock and 36,626,500 shares of our common stock to various
officers, directors, advisors, consultants and other employees. The Company
expects to incurr losses until such time as it has achieved commercialization of
its proprietary technologies.

Liquidity and Capital Resources

        As of June 30, 2004 the Company had $105,330 in current assets which
included $83,877 in cash. In addition it had a stockholders' deficit of $264,891
on June 30, 2004.

        Based on the completion of the Advanced Bio/Chem, Inc. d/b/a ProtcEx
transaction, its current operating plan, and the arrangement in place which
provides for interim equity, the Company believes that its existing resources
including capital investment commmitments will be sufficient to satisfy the
Company's contemplated working capital requirements through year end 2004 fiscal
year. The Company currently is investigating alternatives for financing.

        The Company has no commitments for major capital expenditures at this time.

        The Company currently has an arrangement in place which provides for
interim equity investments and is investigating alternatives for additional
financing.

Risk Factors

        In addition to the risk factors discussed below, the Company is also
subject to additional risks and uncertainties not presently known or currently
deem immaterial. If any of these known or unknown risks or uncertainties
actually occur, the Company's business could be harmed substantially. Operating
results may fluctuate on a quarterly or annual basis in the future. The Company
may not be able to establish and maintain profitability in the future or obtain
adequate financing until such time as it is able to establish sustained
profiability.

        The Company believes that future operating results may be subject to
quarterly and annual fluctuations due to a variety of factors, including:
competition from companies with greater financial capital and resources; the
Company's ability to market and sell products in the markets in which it
competes; competitive pressures on selling prices of its products; regulatory
changes, uncertainties or delays; regulatory approvals, market acceptance and
sales execution of current or new products; whether and when new products are
successfully developed and introduced; research and development efforts,
including clinical studies and new product scale-up activities; ability to
execute, enforce, maintain and attain milestones under license and collaborative
agreements necessary to earn contract revenues; enforcement, defense and
resolution of license, patent or other contract disputes; and costs and timing
associated with business development activities, including potential licensing
of technologies or intellectual property rights.

Item 3. Control and Procedures




                                       18




        The Company maintains disclosure controls and procedures designed to ensure
that information required to be disclosed in reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the specified time periods. As of the end of the period covered
by this report, the Company's Chief Executive and Chief Financial Officers
evaluated the effectiveness of our disclosure controls and procedures. Based on
the evaluation, which disclosed no significant deficiencies or material
weaknesses, these officers concluded that our disclosure controls and procedures
are effective as of the end of the period covered by this report. There were no
changes in our internal control over financial reporting that occurred during
our most recent fiscal period that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

                           Part II. OTHER INFORMATION

Item 1. Legal Proceedings

        On March 25, 2002, Power 3 agreed to pay IBM $20,000 on or before May 31,
2002 as settlement for certain litigation. The settlement was predicated on the
Company paying this amount by May 31, 2002, and since the Company failed to make
this payment, the liability to IBM was increased to $100,000. The Company had
charged operations for the entire $100,000. The Company reached a final
settlement with IBM on May 11, 2004 whereby IBM agreed to accept a one-time
payment consideration of $20,000 as "payment in full". Actual payment was made
on May 18, 2004.

        On January 30, 1998, the Company entered into an agreement with a health
care provider (the "Provider") in which the Provider was to perform clinical
testing of ten surgical or medical products submitted by the Company. The
agreement, which has been personally guaranteed by the Company's predecessor
CEO, expired on January 30, 2003 and required the Company to pay the Provider a
fixed amount of $25,000 for each of the ten studies. The agreement further
provided that the Company was obligated to pay the $250,000 even if the Company
elected to forego having the Provider perform the clinical testing. For various
reasons, the Provider effectively agreed to waive their rights under the
agreement provided that the Company either (1) entered into a new profit
participation agreement with the Company under which the Provider would receive
no less than $250,000 within a four year period commencing on the date of such
agreement or (2) made an immediate payment of $50,000 to the Provider. As a
result thereof, the Company previously recorded a $50,000 liability as a result
of this matter, which amount represented the probable amount of the liability.
The Company and the Provider reached a final settlement on May 18, 2004 when the
Provider agreed to accept a payment of $50,000 in full settlement of any and all
claims as related to the Contract.

        The Company knows of no other significant legal proceedings to which it is
a party or to which any of its property is the subject or any unsatisfied
judgments against the Company and knows of no other material legal proceedings
which are pending, threatened or contemplated.

Item 2. Changes in Securities




                                       19




        1. Effective May 18, 2004, the designation of the Series A Preferred Stock was
           amended such that the 3,870,000 shares presently outstanding are
           convertible into 3,000,000 shares of common stock at any time on or after
           October 31, 2004.

        2. Effective May 18, 2004, the corporation designated 3,000,000 shares of
           Series B Convertible Preferred Stock that, voting as a class, represents a
           majority of the voting interest of the corporation. 1,500,000 shares are
           issued each to Steven B. Rash, Chairman & CEO and Ira L. Goldknopf, Ph.D.,
           Chief Scientific Officer. In the event either holder of shares of Series B
           Convertible Preferred Stock ceases to be an officer, director or employee
           of the corporation, their preferred shares automatically convert to common
           shares at a ratio of one common share for each preferred share.

        3. Effective April 1, 2004, the Company entered into a Securities Purchase
           Agreement with an institutional investor covering the purchase of up to
           $1,500,000 of restricted common stock at various prices.

        4. As of June 30, 2004, $95,000 was advanced under the terms of the Securities
           Purchase Agreement referenced in Item 3 above.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

        During the period ended June 30, 2004, the security holders of Power3
Medical approved the purchase of the business of Advanced Bio/Chem, Inc. d/b/a
ProtcEx, effective May 18, 2004.

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

Exhibits

4.1       Amended and Restated Designation of Series A Preferred Stock of
          Power 3 Medical Products, Inc.
4.2       Designation of Series B Preferred Stock of Power 3 Medical Products, Inc.
10.1      Employment Contract for Ira L. Goldknopf, Ph.D.
10.2      Employment Contract for Michael J. Rosinski
10.3      Employment Contract for Steven B. Rash
31.1      Section 302 Certification for Steven B. Rash
31.2      Section 302 Certification for Micheal Rosinski
32.1      Section 906 Certification for Steven B. Rash
32.2      Section 906 Certification for Micheal Rosinski


(b)  Reports on Form 8-K

             Form 8-K filed on May 18, 2004 reporting on Items 5 & 7
             Form 8-K/A filed on August 3, 2004 reporting on Items 2, 5 & 7




                                       20




                                   SIGNATURES

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

                                   Power3 Medical Products, Inc. (Registrant)

Date: August 17, 2004              By: /s/ Steven B. Rash
                                       Steven B. Rash
                                       Chief Executive Officer


        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         Chief Executive Officer     August 17, 2004
Steven B. Rash



/s/ Michael J. Rosinski    Chief Financial Officer     August 17, 2004
Michael J. Rosinski`