U.S. Securities and Exchange Commission
Washington, D.C. 20549



FORM 10-Q



[X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE 
         ACT OF 1934



OR



[  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT
         OF 1934
         For the transition period from _____ to _____





COMMISSION FILE NUMBER: 000-30453



MIV Therapeutics, Inc(Exact name of registrant issuer as specified in its charter)



|Nevada(State or other jurisdiction of
incorporation or organization) | 01-0809204(IRS Employer Identification No.)
|-------------------------------------------------------------------- | -------------------------------------------



Suite 1-8765 ASH STREET, VANCOUVER, B.C., CANADA, V6P 6T3(Address of principal executive offices)



(604) 301-9545 (Issuer's telephone number)
________________________________
(Former address if changed since last report)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [



Indicate by check mark whether the registrant is a large accelerated filer, an accelerate filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.



|Large Accelerate filer [ ]Non-accelerated filer [ ] | Accelerated filer [ ]Smaller Reporting Company [X]
|--------------------------------------------------- | --------------------------------------------------



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes []No [X]



Number of shares of common stock outstanding as of January 16.2009: 20,286,062



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MIV THERAPEUTICS INC.(A development stage company)
Consolidated Financial Statements
			
November 30, 2008
(Unaudited)













IndexConsolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statement of Stockholders' Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements



---



MIV Therapeutics, Inc.(A development stage company)
Consolidated Balance Sheets
Refer to Note 1 - Basis of Presentation, Nature of Operations and Going Concern
(Unaudited)
Expressed in U.S. Dollars

|                                                         |  |   | November 30, 2008 |   | May 31, 2008
|-------------------------------------------------------- |  | - | ----------------- | - | ------------
|                                                         |  |   |                   |   |             
|ASSETS                                                   |  |   |                   |   |             
|Current assets                                           |  |   |                   |   |             
|Cash and cash equivalents                                |  | $ | 98,466            | $ | 1,180,380   
|Accounts receivable                                      |  |   | 324,777           |   | 57,228      
|Employee advances (Note 10)                              |  |   | -                 |   | 6,761       
|Prepaid expenses (Note 3)                                |  |   | 177,581           |   | 321,811     
|Inventories (Note 4)                                     |  |   | 462,490           |   | 630,127     
|Total current assets                                     |  |   | 1,063,314         |   | 2,196,307   
|Property and equipment, net (Note 6)                     |  |   | 1,706,195         |   | 1,933,180   
|CE Mark license, net (Note 7)                            |  |   | 1,166,637         |   | 1,237,701   
|Deposits and other assets                                |  |   | 38,311            |   | 45,924      
|Total assets                                             |  | $ | 3,974,457         | $ | 5,413,112   
|                                                         |  |   |                   |   |             
|LIABILITIES AND STOCKHOLDERS' EQUITY                     |  |   |                   |   |             
|Liabilities                                              |  |   |                   |   |             
|Current liabilities                                      |  |   |                   |   |             
|Accounts payable and other payables (Note 10)            |  | $ | 2,587,253         | $ | 828,447     
|Related party loan (Note 10)                             |  |   | 97,442            |   | -           
|Loan payable (Note 12)                                   |  |   | 58,201            |   | -           
|Deferred lease inducement - current portion (Note 11(a)) |  |   | 8,081             |   | 8,081       
|Total current liabilities                                |  |   | 2,750,977         |   | 836,528     
|Deferred lease inducement (Note 11(a))                   |  |   | 7,407             |   | 11,448      
|Deferred income tax liability                            |  |   | -                 |   | 50,000      
|Total liabilities                                        |  |   | 2,758,384         |   | 897,976     
|Commitments and contingencies (Notes 1, 5, 9 and 11)     |  |   |                   |   |             
|Stockholders' equity                                     |  |   |                   |   |             
|Common stock (Note 8)                                    |  |   |                   |   |             
|Authorized:                                              |  |   |                   |   |             
|20,000,000 preferred shares with a par value of $0.001   |  |   |                   |  
|48,000,000 common shares with a par value of $0.001      |  |   |                   |  
|Issued and outstanding:                                  |  |   |                   |   |             
|14,832,825 common shares at November 30, 2008 and        |  |   |                   |   |             
|11,361,377 common shares at May 31, 2008                 |  |   | 14,833            |   | 11,361      
|Additional paid-in capital                               |  |   | 61,376,177        |   | 59,068,451  
|Deferred compensation                                    |  |   | (26,847)          |   | (95,924)    
|Common stock issuable                                    |  |   | 2,491,391         |   | 988,233     
|Deficit accumulated during the development stage         |  |   | (62,442,813)      |   | (55,260,317)
|Accumulated other comprehensive loss                     |  |   | (196,668)         |   | (196,668)   
|Total stockholders' equity                               |  |   | 1,216,073         |   | 4,515,136   
|Total liabilities and stockholders' equity               |  | $ | 3,974,457         | $ | 5,413,112   
|                                                         |  |   |                   |   |             

The accompanying notes are in integral part of these consolidated financial statements.



---



MIV Therapeutics, Inc.(A development stage company)
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
Expressed in U.S. Dollars

|                                                                                             |   | Period from   |   |                  |   |                    |   |             |   |             
|-------------------------------------------------------------------------------------------- | - | ------------- | - | ---------------- | - | ------------------ | - | ----------- | - | ------------
|                                                                                             |   | inception     |   |                  |   |                    |   |             |   |             
|                                                                                             |   | (January 20,  |   |                  |   |                    |   |             |   |             
|                                                                                             |   | 1999) to      |   | Six months ended |   | Three months ended
|                                                                                             |   | November 30,  |   | November 30,     |   | November 30,      
|                                                                                             |   | 2008          |   | 2008             |   | 2007               |   | 2008        |   | 2007        
|                                                                                             |   |               |   |                  |   |                    |   |             |   |             
|Revenue                                                                                      | $ | 1,755,060     | $ | 457,889          | $ | 551,641            | $ | 272,626     | $ | 250,031     
|Cost of sales (exclusive of amortization of 
  CE Mark license shown below)                  |   | 1,642,437     |   | 236,147          |   | 493,064            |   | 82,154      |   | 195,694     
|Gross profit                                                                                 |   | 112,623       |   | 221,742          |   | 58,577             |   | 190,472     |   | 54,337      
|Expenses                                                                                     |   |               |   |                  |   |                    |   |             |   |             
|General and administrative (Note 13)                                                         |   | 38,859,994    |   | 4,332,845        |   | 3,683,139          |   | 2,176,100   |   | 1,939,968   
|Research and development                                                                     |   | 18,995,994    |   | 2,787,481        |   | 2,350,446          |   | 1,313,539   |   | 1,200,685   
|Interest expense and finance fees                                                            |   | 1,244,427     |   | 14,132           |   | 174,663            |   | 7,490       |   | 152,602     
|Amortization of CE Mark license                                                              |   | 254,646       |   | 71,064           |   | 80,514             |   | 35,532      |   | 35,532      
|Licenses acquired charged to operations                                                      |   | 479,780       |   | -                |   | -                  |   | -           |   | -           
|Finance cost on convertible debentures                                                       |   | 382,307       |   | -                |   | -                  |   | -           |   | -           
|Purchased in-process research 
      and development                                         |   | 2,205,013     |   | -                |   | -                  |   | -           |   | -           
|                                                                                             |   | 62,421,538    |   | 7,205,521        |   | 6,228,762          |   | 3,532,661   |   | 3,328,787   
|Loss from operations                                                                         |   | (62,308,915)  |   | (6,983,779)      |   | (6,230,185)        |   | (3,342,189) |   | (3,274,450) 
|Gain on extinguishment of debt                                                               |   | 462,249       |   | -                |   | -                  |   | -           |   | -           
|Gain (loss) on foreign exchange                                                              |   | (296,459)     |   | (252,121)        |   | 31,141             |   | (283,238)   |   | 27,452      
|Interest income                                                                              |   | 330,016       |   | 3,404            |   | 132,427            |   | -           |   | 77,826      
|Minority interest share of loss                                                              |   | 806,310       |   | -                |   | -                  |   | -           |   | -           
|Loss before deferred income tax recovery                                                     |   | (61,006,799)  |   | (7,232,496)      |   | (6,066,617)        |   | (3,625,426) |   | (3,169172)  
|Deferred income tax recovery                                                                 |   | 324,000       |   | 50,000           |   | 109,000            |   | -           |   | 61,000      
|Loss from continuing operations                                                              |   | (60,682,799)  |   | (7,182,496)      |   | (5,957,617)        |   | (3,625,426) |   | (3,108,172) 
|Loss from discontinued operations                                                            |   | (2,672,723)   |   | -                |   | (600,955)          |   | -           |   | (315,748)   
|Gain on sale of discontinued operations                                                      |   | 68,532        |   | -                |   | -                  |   | -           |   | -           
|Net loss                                                                                     |   | (63,286,990)  |   | (7,182,496)      |   | (6,558,572)        |   | (3,625,426) |   | (3,423,920) 
|Other comprehensive income (loss)                                                            |   |               |   |                  |   |                    |   |             |   |             
|Foreign currency translation                                                                 |   | (196,668)     |   | -                |   | -                  |   | -           |   | -           
|Comprehensive loss                                                                           | $ | (63,483,658)  | $ | (7,182,496)      | $ | (6,558,572)        | $ | (3,625,426) | $ | (3,423,920) 
|Basic and diluted loss per common share
  -continuing operations
  - discontinued operations | $ | (13.43)(0.59) | $ | (0.59)-          | $ | (0.56)(0.06)       | $ | (0.28)-     | $ | (0.28)(0.03)
|- net loss                                                                                   | $ | (14.02)       | $ | (0.59)           | $ | (0.62)             | $ | (0.28)      | $ | (0.31)      
|Weighted average number of common
  shares outstanding                                       |   |               |   |                  |   |                    |   |             |   |             
|- basic and diluted                                                                          |   | 4,518,697     |   | 12,143,193       |   | 10,594,811         |   | 12,784,566  |   | 11,193,050  
|                                                                                             |   |               |   |                  |   |                    |   |             |   |             

The accompanying notes are in integral part of these consolidated financial statements.



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MIV Therapeutics, Inc.(A development stage company)
Consolidated Statements of Stockholders' Equity
(Unaudited)
Expressed in U.S. Dollars

|                                                          |              |         |             |               |                |                | Accumulated    | Deficit          |              
|--------------------------------------------------------- | ------------ | ------- | ----------- | ------------- | -------------- | -------------- | -------------- | ---------------- | -------------
|                                                          |              |         |             |               |                |                | Other          | Accumulated      |              
|                                                          |              |         |             | Additional    | Deferred       | Common         | Compre-        | During the       |              
|                                                          | Common Stock | Paid-in | Compen-     | Stock         | hensive        | Development    |               
|                                                          | Shares       | Amount  | Capital     | sation        | Issuable       | Loss           | Stage          | Total           
|                                                          |              |         |             |               |                |                |                |                  |              
|Balance, May 31, 2008                                     | 11,361,377   |         | $    11,361 | $  59,068,451 | $     (95,924) | $      988,233 | $    (196,668) | $   (55,260,317) | $   4,515,136
|Additional shares issued from 10:1 share
   consolidation | 131          |         | -           | -             | -              | -              | -              | -                | -            
|Issuance of common stock:                                 |              |         |             |               |                |                |                |                  |              
|- for unit offering; private placement                    | -            |         | -           | -             | -              | 793,695        | -              | -                | 793,695      
|- for services                                            | 3,471,317    |         | 3,472       | 1,426,748     | (99,000)       | 709,463        | -              | -                | 2,040,684    
|Fair value of vested stock option grants                  | -            |         | -           | 810,978       | -              | -              | -              | -                | 810,978      
|Fair value of warrants granted for services               | -            |         | -           | 61,800        | -              | -              | -              | -                | 61,800       
|Fair value of extended warrants                           | -            |         | -           | 8,200         | -              | -              | -              | -                | 8,200        
|Amortization of deferred compensation                     |              |         |             |               | 168,077        |                |                |                  | 168,077      
|Comprehensive loss:                                       |              |         |             |               |                |                |                |                  |              
|Net loss                                                  | -            |         | -           | -             | -              | -              | -              | (7,182,496)      | (7,182,496)  
|                                                          |              |         |             |               |                |                |                |                  |              
|Balance, November 30, 2008                                | 14,832,825   |         | $14,833     | $61,376,177   | $   (26,847)   | $2,491,391     | $    (196,668) | $   (62,442,813) | $1,216,073   
|                                                          |              |         |             |               |                |                |                |                  |              



The accompanying notes are in integral part of these consolidated financial statements.









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MIV Therapeutics, Inc.(A development stage company)
Consolidated Statements of Cash Flows
(Unaudited)
Expressed in U.S. Dollars

|                                                       |   | Period from  |   |                  |   |            
|------------------------------------------------------ | - | ------------ | - | ---------------- | - | -----------
|                                                       |   | inception    |   |                  |   |            
|                                                       |   | (January 20, |   |                  |   |            
|                                                       |   | 1999) to     |   | Six months ended
|                                                       |   | November 30, |   | November 30,    
|                                                       |   | 2008         |   | 2008             |   | 2007       
|Cash flows from operating activities                   |   |              |   |                  |   |            
|Net loss                                               | $ | (60,682,799) | $ | (7,182,496)      | $ | (6,558,572)
|Adjustments to reconcile net loss to net cash used in  |   |              |   |                  |   |            
|operating activities:                                  |   |              |   |                  |   |            
|Stock-based compensation                               |   | 14,214,878   |   | 979,055          |   | 940,416    
|Stock issued for other than cash                       |   | 9,933,925    |   | 2,724,379        |   | 695,001    
|Depreciation and amortization                          |   | 1,961,580    |   | 311,297          |   | 258,477    
|Deferred income tax recovery                           |   | (324,000)    |   | (50,000)         |   | (109,000)  
|Fair value of extended warrants                        |   | 482,327      |   | 8,200            |   | 89,300     
|Fair value of warrants included in operating expenses  |   | 78,205       |   | 61,800           |   | 16,405     
|Interest expense on related party loan                 |   | 850,000      |   | -                |   | -          
|Interest expense on convertible debentures             |   | 34,730       |   | -                |   | -          
|Leasehold improvements written down                    |   | 13,300       |   | -                |   | -          
|Purchased in-process research and  development         |   | 2,125,013    |   | -                |   | -          
|Intangible asset impairment                            |   | 150,000      |   | -                |   | -          
|Gain on extinguishment of debt                         |   | (462,249)    |   | -                |   | -          
|Provision for bad debt                                 |   | 160,000      |   | -                |   | -          
|Beneficial conversion feature on convertible debenture |   | 289,800      |   | -                |   | -          
|Minority interest                                      |   | (806,310)    |   | -                |   | -          
|Changes in operating assets and liabilities:           |   |              |   |                  |   |            
|Accounts receivable                                    |   | (535,857)    |   | (267,549)        |   | (29,045)   
|Due from related party                                 |   | -            |   | 6,761            |   | 18,811     
|Prepaid expenses and deposits                          |   | (52,570)     |   | 144,230          |   | 9,404      
|Inventories                                            |   | (217,688)    |   | 167,637          |   | (165,635)  
|Deposits and other assets                              |   | (38,311)     |   | 7,613            |   | (66,355)   
|Accounts payable and other payables                    |   | 2,463,772    |   | 1,754,764        |   | (388,834)  
|Net cash used in operating activities                  |   | (30,362,254) |   | (1,334,309)      |   | (5,289,627)
|                                                       |   |              |   |                  |   |            
|Cash flows from financing activities                   |   |              |   |                  |   |            
|Issuance of common stock, less share issuance costs    |   | 33,743,250   |   | 110,000          |   | 11,916,977 
|Proceeds from (repayments of) loan payable             |   | 558,201      |   | 58,201           |   | (525,000)  
|Increase in customer deposit                           |   | -            |   | -                |   | 119,032    
|Due to related parties                                 |   | 947,442      |   | 97,442           |   | (100,000)  
|Subscriptions received                                 |   | 1,389,310    |   | -                |   | -          
|Cash acquired in reverse acquisition                   |   | 13,824       |   | -                |   | -          
|Proceeds from convertible debentures                   |   | 755,000      |   | -                |   | -          
|Common stock redemption                                |   | (120,000)    |   | -                |   | -          
|Net cash provided by financing activities              |   | 37,287,027   |   | 265,643          |   | 11,411,009 
|                                                       |   |              |   |                  |   |            



The accompanying notes are in integral part of these consolidated financial statements.



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MIV Therapeutics, Inc.(A development stage company)
Consolidated Statements of Cash Flows (continued)
(Unaudited)
Expressed in U.S. Dollars

|                                                                                       |   | Period from  |   |                  |   |          
|-------------------------------------------------------------------------------------- | - | ------------ | - | ---------------- | - | ---------
|                                                                                       |   | inception    |   |                  |   |          
|                                                                                       |   | (January 20, |   |                  |   |          
|                                                                                       |   | 1999) to     |   | Six months ended
|                                                                                       |   | November 30, |   | November 30,    
|                                                                                       |   | 2008         |   | 2008             |   | 2007     
|Cash flows from investing activities                                                   |   |              |   |                  |   |          
|Purchase of property and equipment                                                     |   | (2,643,084)  |   | (13,248)         |   | (531,912)
|Pre-acquisition advances to Biosync                                                    |   | (121,870)    |   | -                |   | -        
|Acquisition of Biosync, net of cash acquired                                           |   | (1,415,885)  |   | -                |   | -        
|Cash acquired on acquisition of Biosync                                                |   | 17,557       |   | -                |   | -        
|Cash transferred on disposition of SagaX                                               |   | (48,802)     |   | -                |   | -        
|Acquisition of license                                                                 |   | (200,000)    |   | -                |   | -        
|Net cash used in investing activities                                                  |   | (4,412,084)  |   | (13,248)         |   | (531,912)
|Net cash provided by (used in) continuing operations                                   |   | 2,512,689    |   | (1,081,914)      |   |          
|Cash flows from discontinued operating activities                                      |   | (2,099,724)  |   | -                |   | (539,605)
|Cash flows from discontinued investing activities                                      |   | (75,515)     |   | -                |   | (937)    
|Foreign exchange effect on cash                                                        |   | (238,984)    |   | -                |   | -        
|Net increase (decrease) in cash and cash equivalents                                   |   | 98,466       |   | (1,081,914)      |   | (532,849)
|Cash and cash equivalents,beginning of period                                          |   |              |   |                  |   | -        
|Continuing operations                                                                  |   | -            |   | 1,180,380        |   | 5,588,533
|Discontinued operations                                                                |   | -            | $ | -                | $ | 473,419  
|Cash and cash equivalents,end of period                                                | $ | 98,466       | $ | 98,466           | $ | 6,061,952
|                                                                                       |   |              |   |                 
|Supplemental disclosure of cash flow information:                                      |   |              |   |                 
|Cash paid for interest                                                                 | $ | 75,993       | $ | 842              | $ | 5,656    
|Cash paid for income taxes                                                             |   | -            |   | -                |   | -        
|                                                                                       |   |              |   |                  |   |          
|Schedule of non-cash investing and financing activities:                               |   |              |   |                 
|Debt settlement with shares                                                            | $ | 621,375      | $ | -                | $ | -        
|Conversion of convertible debentures and accrued interest to 
           common shares |   | 740,810      |   | -                |   | -        
|Shares issued for finders' fees                                                        |   | 387,468      |   | -                |   | -        



The accompanying notes are in integral part of these consolidated financial statements.



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MIV Therapeutics, Inc.(A development stage company)
Notes to Consolidated Financial Statements 
November 30, 2008
(Unaudited)
Expressed in U.S. Dollars



1.     Basis of Presentation, Nature of Operations and Going Concern



The accompanying unaudited interim consolidated balance sheets, statements of operations and comprehensive loss, stockholders' equity and cash flows reflect all adjustments, consisting of normal recurring adjustments and other adjustments, that are, in the opinion of management, necessary for a fair presentation of the financial position of MIV Therapeutics, Inc. (the "Company"), at November 30, 2008, and the results of operations and cash flows for the interim periods ended November 30, 2008. Operating results of this interim period is not necessarily indicative of results that may be expected for the fiscal year ending May 31, 2009.



The accompanying unaudited interim consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles using the same accounting policies and methods of application as those disclosed in Note 2 to the Company's annual consolidated financial statements for the year ended May 31, 2008 except as disclosed in Note 2 and accordingly should be read in conjunction with the Company's annual consolidated financial statements for the year ended May 31, 2008.



Since inception, the Company has suffered recurring losses, totaling $63,286,990 as of November 30, 2008.  To date, management has been able to finance the Company's operations through the issuance of common stock, and through related party loans, in order to meet its strategic objectives.  Management plans to continue to seek other sources of financing on favorable terms; however, there are no assurances that any such financing can be obtained on favorable terms, if at all.



With the severe economic conditions in the United States and the rest of the world during 2008, it has been extremely difficult to negotiate and complete a financing arrangement. Management has been in contact with many groups in an attempt to raise immediate cash for our operating requirements. Throughout this difficult time, the Company has retained all of its key employees. Management has been in constant communication with the Company's vendors to keep them apprised of the current situation and the vendors have been accommodating. Management has been monitoring and controlling the Company's operating costs to a minimum until cash is available through financing or operating activities. Additionally, certain members of the Company's management have deferred receipt of salaries and fees. Some of these amounts have been authorized to be settled by the issuance of common shares and warrants through a unit offering (refer to Note 8 (a)).  The Company's ability to generate revenue primarily depends on its success in completing development and obtaining regulatory approvals for the commercialization of its stent technology.  The Company's ability to obtain sufficient financing to continue the development of, and if successful, to commence the manufacture and sale of its products under development, if and when approved by the applicable regulatory agencies is uncertain.   In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations.  Based on our estimated cash requirements through November 30, 2009, we do not expect our operations to generate sufficient cash flow to fund our obligations as they come due, and we do not currently have other traditional sources of liquidity available to fund these obligations.





---



1.     Basis of Presentation, Nature of Operations and Going Concern



The Company's estimated liquidity during the remainder of the current fiscal year will be at or near the minimum amount necessary to operate its business. Looking into the next fiscal year, even with management's planned actions, our estimated liquidity will fall significantly short of the minimum required to operate the Company's business unless economic conditions improve and a financing transaction is completed. These unaudited interim consolidated financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying unaudited interim consolidated financial statements.



Reclassifications



Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on net loss or loss per common share.



2.     Accounting Policy Change and New Accounting Pronouncements



(a)  Adoption of New Accounting Policy

In September 2006, FASB issued SFAS No. 157, "Fair Value Measurements". The objective of this Statement is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements.  SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The Company does not expect that the adoption of SFAS No. 157 will have a significant impact on its consolidated results of operations or financial position.



In February 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities". This Statement permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007.



The Company adopted the provisions of SFAS No. 159 on June 1, 2007. The adoption of SFAS No. 159 did not result in a cumulative adjustment to equity and there were no unrecognized tax benefits, penalties or interest at the time of, or subsequent to, adoption.

(b)  New Accounting Pronouncements



In May 2008, FASB released SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles".This Statement is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP) for nongovernmental entities. SFAS No. 162 will become effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles". The Company does not anticipate that this pronouncement will have a significant effect on its consolidated financial statements.





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2.     Accounting Policy Change and New Accounting Pronouncements (continued)



In March 2008, FASB released SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133". SFAS No. 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company does not expect that the adoption of SFAS No. 161 will have a significant impact on its consolidated results of operations or financial position.



In February 2008, the FASB released FSP No. FAS 157-2. FSP No. FAS 157-2 defers the effective date of SFAS 157, "Fair Value Measurements", for one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. It does not defer recognition and disclosure requirements for financial assets and financial liabilities, or for nonfinancial assets and nonfinancial liabilities that are remeasured at least annually.



In December 2007, FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements--an amendment of ARB No.51". This Statement establishes accounting and reporting standards that require noncontrolling interest in a subsidiary to be reported as a component of equity, changes in a parent's ownership interest while the parent retains its controlling interest to be accounted for as equity transactions, and any retained noncontrolling equity investment upon the deconsolidation of a subsidiary to be initially measured at fair value. The Statement also establishes reporting requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. SFAS No. 160 is effective as of the beginning of the first fiscal year beginning on or after December 15, 2008, and is effective for the Company at the beginning of fiscal 2010. The Company does not expect that the adoption of SFAS No. 160 will have a significant impact on its consolidated results of operations or financial position.



In December 2007, FASB issued SFAS No. 141(R), "Business Combinations" ("SFAS 141R"). SFAS 141R replaces SFAS No. 141, "Business Combinations" ("SFAS 141"). SFAS 141R retains the fundamental requirements in SFAS 141 that the acquisition method of accounting (which SFAS 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R also establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R will apply prospectively to business combinations for which the acquisition date is on or after April 1, 2009, the beginning of the Company's next fiscal year. While the Company has not yet evaluated this statement for the impact, if any, that SFAS 141R will have on its consolidated financial statements, the Company will be required to expense costs related to any acquisitions after May 31, 2009.





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3.     Prepaid Expenses



Prepaid expenses consisted of the following at:





|                        |   | November 30,2008 |   | May 31,2008
|----------------------- | - | ---------------- | - | -----------
|Prepayment to suppliers | $ | 119,968          | $ | 284,968    
|Other prepaid expenses  |   | 57,613           |   | 36,843     
|                        | $ | 177,581          | $ | 321,811    



4.     Inventories



Inventories consisted of the following at:





|                  |   | November 30,2008 |   | May 31,2008
|----------------- | - | ---------------- | - | -----------
|Raw materials     | $ | 230,029          | $ | 402,991    
|Packing materials |   | 6,513            |   | 20,140     
|Work-in-process   |   | 101,127          |   | 100,421    
|Finished goods    |   | 124,821          |   | 106,575    
|                  | $ | 462,490          | $ | 630,127    



5.     Licenses



(a)     On February 1, 2003, the Company entered into two license agreements with the University of British Columbia ("UBC") which provides the Company with the worldwide right to use, develop and sublicense coating technology for stents and other medical devices.



In consideration of granting the licenses, the Company will pay UBC a royalty of 2.5% of related revenue and a royalty ranging from 10% or 15% of sublicense revenue depending upon the sublicensed technology.  In addition, various minimum annual royalties, maintenance fees and milestone payments are payable over the period of development.  The Company issued 750,000 common shares to UBC as part of the consideration for the grant of the rights.



The 750,000 common shares had a fair value of $187,500 and were issued and recorded as research and development expense in the year ended May 31, 2003.



On May 19, 2005, the Company signed an amendment to the existing license agreements to include some amendments in the definition of "Field of Use".  Also, the royalty terms were amended from 2.5% to range from 2.5% to 5%, depending on the nature of the related revenue.



In consideration for the amendments, the Company agreed to issue 200,000 common shares which had a fair value of $74,000 at the time of the amendment.  This amount was recorded as research and development expense during the year ended May 31, 2005.  The shares were issued in June 2006.



(b)     On March 15, 2004, the Company entered into a collaborative research agreement with UBC to continue with exploratory research on coating technology for stents for a period from April 1, 2004 to March 31, 2006.  During the period of the agreement, various milestone payments were to be made to UBC for the continuation of the research program, estimated to be approximately CAD$220,800 ($164,445).







---



5.     Licenses



On October 28, 2004, the Company and UBC amended the existing collaborative research agreements

and referred to it as Amendment No. 1 and 2.



In Amendment No. 1, the contract period of the existing collaborative agreement was changed to April 1, 2004 to November 30, 2004 and total costs to the Company were estimated at CAD$110,400 ($87,633).  As of May 31, 2005, the Company had accrued/paid and recorded CAD$110,400 ($87,633) to research and development costs in accordance with Amendment No. 1.



In Amendment No. 2, the contract period, work plan and total costs of the existing collaborative agreement as amended by Amendment No. 1 were amended.  The contract period was extended from December 1, 2004 to November 30, 2006 and total costs to the Company were estimated at CAD$400,400 ($317,828), being payable over the term of the Agreement at various stipulated intervals.  As of May 31, 2007, the Company has paid CAD$400,400 ($317,828) for research and development costs in accordance with Amendment No. 2.



The Company obtained financial support of up to CAD$315,000 ($250,040) from the Industrial Research Assistance Program ("IRAP") from the National Research Council Canada.  As of November 30, 2008, the Company had received CAD$265,791 ($268,555) from IRAP.



(c)     On September 14, 2007, the Company and UBC executed the new license agreement with an effective date of September 1, 2007.  The form and content will be similar to that of the license agreements entered into in February 2003 (See Note 5(a) above). Upon execution, the stock certificate for the 100,000 common shares, which was issued during the year ended May 31, 2007, was delivered to UBC on September 18, 2007.



In consideration of granting the license, the Company will pay UBC a royalty of 2.5% or 5% of related revenue and a royalty ranging from 10% or 15% of sublicense revenue depending upon the sublicensed technology.  In addition, various minimum annual royalties, maintenance fees and milestone payments are payable over the period of development.



(d)     On December 1, 2006, the Company extended its collaborative research agreement with UBC to continue with exploratory research on coating technology for stents for a period from December 1, 2006 to November 30, 2007.  During the period of the agreement, four equal payments will be made to UBC for a total budget estimate of CAD$274,896 ($241,264).  As of May 31, 2007, the Company had paid CAD$137,448 ($120,632) and charged the costs to research and development.



On April 4, 2007, the Company and UBC amended the tasks and objectives of the existing collaborative research agreement.  On August 29, 2007, the total costs of the project was revised to be estimated at CAD$190,479 ($167,175) from CAD$274,896 ($241,264).  The Company paid in full the CAD$190,479 due to UBC for this project during the year ended May 31, 2008.



(e)     On February 21, 2008, the Company entered into a new license agreement with UBC with an effective date of February 1, 2008. The form and content of this agreement is similar to previous license agreements (refer to (a) and (c) in this note). Upon execution of this license agreement in March 2008, the Company paid an initial license fee of CAD$50,000 ($50,560).









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5.     Licenses



In consideration of granting the license, the Company will pay UBC a royalty of 5% of related revenue and a 20% royalty for sublicense revenue.  In addition, certain milestone payments related to future pre-clinical and clinical trials are payable over the corresponding periods of development and annual license maintenance fees of CAD$30,000 ($29,634) commence on February 1, 2009. The term of this agreement is the later of: (i) twenty years from the effective date, or (ii) the expiry of the last patent licensed under this agreement.



6.     Property and Equipment



Property and equipment consisted of the following at:



|                                |   | November 30,2008 |   | May 31,2008
|------------------------------- | - | ---------------- | - | -----------
|Laboratory equipment            | $ | 2,550,789        | $ | 2,540,643  
|Furniture and fixtures          |   | 261,165          |   | 261,165    
|Land                            |   | 260,784          |   | 260,784    
|Computer equipment              |   | 244,085          |   | 240,983    
|Building                        |   | 175,011          |   | 175,011    
|Leasehold improvements          |   | 49,158           |   | 49,158     
|                                |   | 3,540,992        |   | 3,527,744  
|Less:  accumulated depreciation |   | 1,834,797        |   | 1,594,564  
|                                | $ | 1,706,195        | $ | 1,933,180  



Depreciation expense for the three and six months ended November 30, 2008 was $116,200 and $240,233 (2007 - $74,929 and $170,213), respectively.



7.     CE Mark License



On February 16, 2007, the Company completed the acquisition of all of the issued and outstanding shares of Biosync Scientific Pvt. Ltd. ("Biosync").  The Company allocated the purchase price to the assets acquired and liabilities assumed based on their fair values. The purchase price in excess of the net tangible assets acquired totaling $1,421,283 was then allocated to the identified intangible asset being the CE Mark license. The fair value of the CE Mark license was based on a discounted future net cash flows analysis that used information and assumptions provided by the Company's management. The CE Mark license is being amortized over a period of 10 years.

The following is a summary of the amortization of the CE Mark license at November 30, 2008:





|CE Mark license                 | $ | 1,421,283
|------------------------------- | - | ---------
|Less:  accumulated amortization |   | 254,646  
|                                | $ | 1,166,637













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8.     Stockholders' Equity



(a)     Common Stock



(i)     On June 16, 2008, the Company's board of directors unanimously approved a 1-for-10 reverse stock split of the company's issued and outstanding common shares.  The share consolidation became effective on June 30, 2008.  On that same date, the Company's authorized capital stock of 500,000,000 shares, consisting of 480,000,000 common shares with par value of $0.001 per share and 20,000,000 preferred shares with par value of $0.001 per share, was reduced to 68,000,000 shares, consisting of 48,000,000 common shares with par value of $0.001 per share and 20,000,000 preferred shares with par value of $0.001 per share. All references to share data, included warrants and stock options, presented in these financial statements reflect the reverse stock split.



(ii)    On November 10, 2008, the Company completed a private placement of 3,048,363 units at a price of $0.20 per unit with members of management in order to settle the debts owed to them by the Company as of October 31, 2008 for service compensation, business expenses as well as loans to the Company.  Each unit is comprised of one common share and one share purchase warrant with an exercise price at $0.40 for a period of up to five years. The warrants have an exercise price of $0.40 and expire on November 10, 2013. The warrants had an estimated fair value of $491,400 using the Black-Scholes option pricing model.  The assumptions used in the calculation were: volatility: 111.33%, discount rate: 2.51%, dividend: nil and expected life of 5 years. No gain or loss was recognized in this debt settlement.



As of November 30, 2008, the Company had not yet issued the 3,048,363 common shares and has recorded $609,728 as common stock issuable in the statement of stockholders' equity. The common shares were issued in December 2008.

(iii)   In November 26, 2008, the Company agreed to issue 255,000 common shares and 82,500 warrants to a consultant to assist the Company with corporate development. The warrants have an exercise price of $0.40 and expire on November 26, 2013. The warrants had an estimated fair value of $14,000 using the Black-Scholes option pricing model.  The assumptions used in the calculation were: volatility: 111.68%, discount rate: 2.01%, dividend: nil and expected life of 5 years.



As of November 30, 2008, the Company had not yet issued the 255,000 common shares and has recorded this amount as common stock issuable in the statement of stockholders' equity. The common shares were issued in December 2008.



(iv)    On November 28, 2008, the Company completed a private placement of 550,000 units at a price of $0.20 per unit for total proceeds of $110,000.  Each unit is comprised of one common share and one share purchase warrant with an exercise price at $0.40 for a period of up to five years. The warrants have an exercise price of $0.40 and expire on November 28, 2013. The warrants had an estimated fair value of $112,200 using the Black-Scholes option pricing model.  The assumptions used in the calculation were: volatility: 111.72%, discount rate: 1.93%, dividend: nil and expected life of 5 years.





8.     Stockholders' Equity (continued)



As of November 30, 2008, the Company had not yet issued the 550,000 common shares and has recorded this amount as common stock issuable in the statement of stockholders' equity. The common shares were issued in January 2009.



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(v)     On November 30, 2008, the Company completed a private placement of 369,833 units at a price of $0.20 per unit with members of management in order to settle the debts owed to them by the Company as of November 30, 2008 for service compensation and business expenses.  Each unit is comprised of one common share and one share purchase warrant with an exercise price at $0.40 for a period of up to five years.The warrants have an exercise price of $0.40 and expire on November 30, 2013. The warrants had an estimated fair value of $62,700 using the Black-Scholes option pricing model.  The assumptions used in the calculation were: volatility: 111.65%, discount rate: 2.01%, dividend: nil and expected life of 5 years.  No gain or loss was recognized in this debt settlement.



As of November 30, 2008, the Company had not yet issued the 369,833 common shares and has recorded $73,967 as common stock issuable in the statement of stockholders' equity. The common shares were issued in December 2008.



(vi)    During the six months ended November 30, 2008, the Company issued an aggregate of 3,433,817 (2007 - 167,233) common shares for research and development, and consulting services and other services with a fair value of $1,182,721 (2007 - $98,686). Of these shares, 22,599 were recorded as common stock issuable at May 31, 2008. In addition, 37,500 common shares were issued to the principal vendor of Biosync in accordance with his executive services agreement (Note 10).



(vii)   During the six months ended November 30, 2008, certain of the Company's employees exercised their stock options in exchange for Company's common shares. In aggregate, 183,059 stock options were exercised in exchange for 183,059 common shares



(viii)  In September 2003, the Company placed 600,000 common shares to a financial custodian acting as trustee pursuant to a listing of the Company's shares on the Frankfurt Stock Exchange.  The Company was then conducting a Regulation S ("Reg S") offering through the facilities of the Berlin Stock Exchange to raise capital in mainly German speaking countries.  The trustee was to receive a fee of 3% of the total number of the shares held in trust was paid in equal installments of 3,000 common shares per month over a ten month period, assuming the maximum offering of up to 1,000,000 common shares were sold. The shares may only be traded on German stock exchanges pursuant to Reg S.  At May 31, 2008, 250,000 Reg S shares were held in trust by the financial custodian and remain available for financing purposes.  However, the Company's management has established a plan by which the Reg S shares will be returned to treasury in exchange for one common share.  Management expects that share exchange will be completed by the end of the 2009 fiscal year.



(b)     Warrants



The following table summarizes information about the warrants issued by the Company.  All regular warrants, and Series A and C warrants are exercisable on a one-for-one basis into common shares.



8.     Stockholders' Equity (continued)





|                                   | Number of shares | Weighted average
exer. price
|---------------------------------- | ---------------- | ----------------------------
|                                   |                  |                             
|Balance, May 31, 2008 - Regular    | 3,680,130        | $    6.11                   
|Balance, May 31, 2008 - Series "A" | 109,213          | 6.60                        
|Balance, May 31, 2008 - Series "C" | 11,932           | 6.60                        
|                                   |                  |                             
|Balance, May 31, 2008              | 3,801,275        | $   6.13                    
|                                   |                  |                             



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|Regular:                                |           |         
|--------------------------------------- | --------- | --------
|Issued - consulting services            | 50,000    | 2.20    
|Issued - consulting services            | 82,500    | 0.40    
|Issued - private placements             | 3,968,476 | 0.40    
|                                        |           |         
|Balance, November 30, 2008 - Regular    | 7,781,106 | 1.96    
|Balance, November 30, 2008 - Series "A" | 109,213   | 6.60    
|Balance, November 30, 2008 - Series "C" | 11,932    | 6.60    
|                                        |           |         
|Balance, November 30, 2008              | 7,902,251 | $   2.03





(b)     Warrants (continued)



During the quarter ended August 31, 2008, the board of directors approved an extension to the expiry date of 87,000 warrants. The incremental fair value of the extended warrants was $8,200 and was charged to operations. The weighted average assumptions used in the Black-Scholes model were: volatility: 87.12%, discount rate: 2.25%, dividend: nil and expected life of one year.



In July 2008, the Company issued 50,000 warrants to a consultant to assist the Company with entering into an equity or debt financing arrangement. The warrants have an exercise price of $2.20 and expire on July 17, 2011. The warrants had an estimated fair value of $47,800 using the Black-Scholes option pricing model.  The assumptions used in the calculation were: volatility: 92.3%, discount rate: 2.97%, dividend: nil and expected life of 3 years.



(c)     Stock Options



The Company's incentive stock options plan provides for the grant of incentive stock options for up to 4,000,000 common shares to employees, consultants, officers and directors of the Company.  Incentive benefits granted under the plan may be either incentive stock options, non-qualified stock options, stock awards, restricted shares or cash awards.  Options are granted for a term not to exceed ten years from the date of grant.  Stock options granted generally vest over a period of two years. As of November 30, 2008, 157,472 options remain available under the plans.



On October 24, 2008, the Company's Board of Directors decided to accelerate the vesting periods of substantially all unvested stock option grants and lower the exercise price on all outstanding stock options to $0.40. As a result, $75,880 of additional stock-based compensation was charged to



8.     Stockholders' Equity (continued)



research and development expense and $81,620 was charged to general and administrative expense during the quarter ended November 30, 2008. Additional stock-based compensation cost of $154,600 will be charged to operations ratably over the remainder of the corresponding vesting periods for certain stock option grants.





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During the six months ended November 30, 2008, the Company granted 188,059 stock options to  employees of the Company.  Each option entitles its holder to acquire one common share of the Company at a price of $0.40 per share, vests immediately and expires in five years from date of grant.



The following weighted average assumptions were used in determining stock-based compensation costs under the Black-Scholes option pricing model:





|                                               | Six months ended
|---------------------------------------------- | ----------------
|                                               | November 30,    
|                                               | 2008            
|Expected volatility                            | 110.59%         
|Risk-free interest rate                        | 2.67%           
|Expected life (years)                          | 5.0             
|Dividend yield                                 | Nil             
|Weighted average fair value of options granted | $    0.28       



The expected volatility is based on the Company's historical stock prices. Computation of expected life was estimated after considering the contractual terms of the stock-based award, vesting schedules and expectations of future employee behavior. The interest rate for period within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.



Option pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility.  Changes in the underlying assumptions can materially affect the fair value estimates and therefore, in management's opinion, existing models may not necessarily provide reliable measure of the fair value of the Company's stock options.



A summary of the weighted average fair value of stock options granted during the six months ended November 30, 2008 is as follows:



8.     Stockholders' Equity (continued)







|                                                           | Number ofoptions | Weighted averageexer. price | Weighted averagefair value
|---------------------------------------------------------- | ---------------- | --------------------------- | --------------------------
|Exercise price equals market price at grant date:          | -                | $    Nil                    | $    Nil                  
|Exercise price less than market price at grant date:       | -                | $    Nil                    | $    Nil                  
|Exercise price greater than market price at grant 
  date: | 188,059          | $  0.47                     | $  0.28                   





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A summary of stock option information for the six months ended November 30, 2008 is as follows:





|                                         | Shares    | Weighted 
averageexer. price | Aggregate 
intrinsic value
|---------------------------------------- | --------- | ---------------------------- | --------------------------
|Options outstanding at May 31, 2008      | 3,088,980 | $   5.09                     |                           
|Options granted                          | 188,059   | 0.47                         |                           
|Options exercised                        | (183,059) | 0.30                         |                           
|Options expired or forfeited             | (91,570)  | 3.71                         |                           
|Options outstanding at November 30, 2008 | 3,002,410 | $   0.40                     | $   1,200,964             
|Exercisable at November 30, 2008         | 2,598,911 | $   0.40                     | $   1,039,564             



The following summarizes information about the stock options outstanding and exercisable at November 30, 2008:



|Options Outstanding | Options Exercisable           
|------------------- | ------------------------------
|Exercise Price      | Number of 
Options Outstanding
|$    0.40           | 3,002,410                     



Stock-based compensation expense is charged to operations over the vesting period of the options using the straight-line amortization method.



Compensation cost during the six months ended November 30, 2008 related to the vesting of stock options granted to employees was charged to operations at the awards' fair value of $810,978 (2007 - $592,845). At November 30, 2008, there was approximately $768,154 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plans. This cost is expected to be recognized over a period of 25 months.



The aggregate intrinsic value of the Company's stock options is calculated as the difference between the exercise price of the options and the quoted price of the common shares that were in-the-money. The aggregate intrinsic value of the Company's stock options exercised under the Plan was $Nil and $107,940 for the six months ended November 30, 2008 and 2007, respectively, determined at the date of option exercise.



During the three and six months ended November 30, 2008, $321,536 and $436,781 (2007 - $221,184 and $366,249), respectively, of stock-based compensation was allocated to research and development expense.





9.     Termination of the Proposed Acquisition of Vascore Medical (Suzhou) Co., Ltd.



In light of the Company's inability to complete its final due diligence and satisfy all remaining conditions precedent to the proposed closing of the terms and conditions of that previously disclosed equity transfer agreement, dated for reference effective on September 5, 2006, as previously entered into among the Company, each of Chimex Hongkong Incorporated Limited and Vascore Scientific Co., Ltd. (collectively, the "Vendors") and Vascore Medical (Suzhou) Co., Ltd. ("Vascore Medical"), the Company terminated the Equity Transfer Agreement to acquire the various equity interests and shareholders' loans of Vascore Medical from the Vendors effective as at August 31, 2007 (the "Termination"). As a consequence, the Company has informed each of the Vendors and Vascore Medical of the Termination and thereby requested that any previous government approved ownership and Board appointments to Vascore Medical be immediately reverted to the direction of the Vendors.



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In October 2007, the Company and certain senior officers and directors were served with summons and complaint documents for an action in New York state court alleging breach of contract, fraud, fraudulent concealment, negligent misrepresentation, unjust enrichment and conspiracy claims in connection with the Termination. The Company learned on May 20, 2008 that, by orders dated March 31, 2008, the New York state court dismissed all the claims against the Company and its subject officers and directors for lack of personal jurisdiction. The Vendors filed a notice of appeal to protect their ability to appeal the order; however, they have not perfected that appeal and there is no briefing schedule as of the release of these financial statements.



10.   Related Party Transactions



The related party transactions not disclosed elsewhere in these financial statements are disclosed as follows.  These transactions, recorded at exchange amounts agreed to by all parties.



During the six months ended November 30, 2008, the Company paid or accrued $1,161,397 (2007 - $1,093,847) of management and consulting fees to its executive officers and directors.  Of this amount, $310,450 (2007 - $120,982) was allocated to research and development expense. Included in accounts payable is nil at November 30, 2008 (May 31, 2008-65,227).



During the three months ended November 30, 2008, the Company paid or accrued $735,463 (2007 - $461,143) of management and consulting fees to its executive officers and directors.  Of this amount, $195,787 (2007 - $81,221) was charged to research and development.



Included in the amount of $735,463, is the accrued amount of $180,783 due to the Chief Operating Officer and President of Biosync which will be issued in common stock on time periods stipulated in the agreement as follows:



The Company and Biosync entered into an executive services agreement with the principal vendor, being Mr. Rajesh Vaishnav, on February 16, 2007.  Mr. Vaishnav will assume the position of Chief Operating Officer and President of Biosync under such commercially competitive compensation terms which will include, but not limited to, (i) a monthly fee of $12,000 plus monthly allowance of $500, (ii) stock options of up to 100,000 common shares at an exercise price of $6.00 for a period of not less than ten years from the date of grant and, (iii) an aggregate of up to 400,000 common shares with an issuance price of $6.60.  Of the 400,000 common shares, 250,000 will be based on the achievement of certain milestones as outlined in the agreement, of which 75,000 common shares were issued upon receiving the CE Mark License, and the other 150,000 common shares to be given in four equal installments over the two-year term of the agreement.  Installments of 37,500 common shares were issued on September 28, 2007, February 19, 2008 and August 22, 2008.



During the quarter ended November 30. 2008, a milestone was achieved according to Mr. Rajesh Vaishnav's executive services. The Company is going to issue 75,000 common shares with an issuance price of $6.60. As of November 30, 2008, the Company had not yet issued the 75,000 common shares and has recorded $495,000 as common stock issuable in the statement of stockholders' equity.





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As at August 31, 2008, amounts due from the employees of Biosync totaled $3,368 (May 31, 2008 - $6,761).  These amounts are unsecured, non-interest bearing and will be repaid by periodic deduction of future wages.  As at November 30, 2008, the amount had been fully repaid and the balance was nil.



During the quarter ended August 31, 2008, the Company signed two promissory notes with its Chairman totaling $96,410 ($102,000CAD). The promissory notes were unsecured, bore interest at 12% per annum and expired on October 14 and 28, 2008, respectively. In November 2008, the Company issued 522,312 common shares and 522,312 common share purchase warrants of the Company to settle the promissory notes and applicable interests for a total amount of $104,462 owed to its Chairman. The warrants have an exercise price of $0.40 and expire on November 11, 2013. The warrants had an estimated fair value of $84,190 using the Black-Scholes option pricing model.  The assumptions used in the calculation were: volatility: 111.33%, discount rate: 2.51%, dividend: nil and expected life of 5 years.  No gain or loss was recognized in this debt settlement.





11.   Commitments and Contingencies

(a)     The Company has obligations under a long-term premises lease that expire in December 2010.  The approximate aggregate minimum rent payments for the annual periods ending November are as follows:



|2009 | 91,432            
|---- | ------------------
|2010 | 91,432            
|2011 | 7,619             
|     | $          190,482



The Company received free rent, including property maintenance and taxes, for the months of November to December 2005 and free basic rent for the months of January to February 2006 for total free rent of $40,404.  At November, 2008, this amount was recorded as a deferred lease inducement with a current portion of $8,081 (May 31, 2008 - $8,081) and long-term portion of $7,407 (May 31, 2008 - $11,448) and is being amortized over the term of the lease.  During the six months ended November 30, 2008, amortization of $4,041 (2007 - $4,041) was recorded as a reduction of rent expense in the statement of operations. Rent expense for the six months and three months ended November 30, 2008 was $75,386 (2007 - $78,393) and $28,975 (2007- $37,923) respectively. Of this amount, $49,760 (2007 - $54,732) and $20,459 (2007 - $26,477) was allocated to research and development expense for the six and three months ended November 30, 2008.



(b)     On November 18, 2002, a lawsuit against the Company was filed in the Supreme Court of British Columbia.  The statement of claim, arising from a settlement agreement dated September 14, 2001, seeks the exchange of 319,240 common shares of the Company for 3,192,399 shares in the capital of one of the Company's subsidiaries or, alternatively, damages and costs.



The Company and M-I Vascular Innovations, Inc. ("M-I") attended a court hearing in chambers during April 2003 on a summary trial application by the plaintiff for an order for a declaration of specific performance that the plaintiff is entitled to an exchange of 3,192,399 common shares of M-I for 319,240 common shares of the Company pursuant to the settlement agreement entered into on September 14, 2001.  The plaintiff was granted the relief sought at the summary trial and the Company was ordered to perform the share exchange.





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On May 16, 2003, the Company delivered a Take-Over Bid Circular (the "Circular") to the plaintiff, offering to exchange its common shares of M-I for shares in the Company pursuant to British Columbia securities laws and regulations.  In late May 2003, after the judgment was received, the Company asked the plaintiff to submit its M-I share certificates and fill in the required forms pursuant to the Circular, so that the Company could comply with the judgment and exchange its shares in accordance with British Columbia securities laws and regulations.



On December 29, 2004, the Company issued 319,240 common shares to exchange for 3,192,399 common shares of M-I. These shares were issued to comply with an order of the Supreme Court of British Columbia dated May 20, 2003.  On May 26, 2005, the Company issued 1,700 common shares to exchange for 17,000 common shares of M-I.



In a counterclaim filed in the Supreme Court of British Columbia, the Company continues to dispute the plaintiff's entitlement to the 3,192,399 M-I shares and any Company shares that he may received pursuant to court order.



No gain or loss provisions have been provided as of November 30, 2008 as the outcome of this legal proceeding is uncertain at this time.



12.   Loan Payable



As at November 30, 2008, the Company had a short term loan payable totaling $58,201 with interest rate of 12% per annum. The loan was unsecured. On December 24, 2008, the loan and its applicable interest were fully paid.



13.   General and Administrative Expenses



General and administrative expenses consisted of the following:



|                                                          | Six months ended |           | Three months ended
|--------------------------------------------------------- | ---------------- | --------- | ------------------
|                                                          | November 30,     |           | November 30,      
|                                                          | 2008             | 2007      |                   
|Legal                                                     | 241,806          | 289,288   |                   
|Public relations, financing and 
   corporate development | 1,335,490        | 381,213   |                   
|Management fees                                           | 1,038,986        | 1,301,806 |                   
|Consulting                                                | 877,315          | 298,951   |                   
|Audit                                                     | 179,469          | 408,500   |                   
|Operating expenses                                        | 659,779          | 985,936   |                   
|                                                          | 4,332,845        | 3,665,694 |                   



During the six months ended November 30, 2008, general and administrative expenses include $132,000 (2007 - $10,616) and nil (2007 - $168,928) of amortized deferred compensation in public relations and consulting, respectively. Included in general and administrative expenses are stock-based compensation chares of $134,179 (2007-$226,597) related to options granted to administrative personnel.

During the three months ended November 30, 2008, general and administrative expenses include $66,000 (2007 - $2,676) and nil (2007 - $84,464) of amortized deferred compensation in public relations and consulting, respectively. Included in general and administrative expenses are stock-based compensation chares of $99,674 (2007-$ 124,948) related to options granted to administrative personnel.



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14.   Segmented Information



The Company operates in one segment which comprises the research, manufacture and development of bio-compatible stent coatings for implantable medical devices and drug-delivery technologies.



The following is a summary of the Company's geographical information as of November 30, 2008 and for the six months and  three months ended November 30, 2008 and 2007:





|                                     |   | Canada    |   | India     |   | Discontinued Operations |   | Total    
|------------------------------------ | - | --------- | - | --------- | - | ----------------------- | - | ---------
|Six months ended November 30, 2008   |   |           |   |           |   |                        
|Net revenue                          | $ | -         | $ | 457,889   | $ | -                       | $ | 457,889  
|Gross profit                         |   | -         |   | 221,742   |   | -                       |   | 221,742  
|Depreciation and amortization        |   | 67,313    |   | 243984    |   | -                       |   | 311,297  
|Net loss                             |   | 6,666,874 |   | 515,622   |   | -                       |   | 7,182,496
|                                     |   |           |   |           |   |                         |   |          
|Three months ended November 30, 2008 |   |           |   |           |   |                        
|Net revenue                          |   | -         |   | 272,626   |   | -                       |   | 272,626  
|Gross profit                         |   | -         |   | 190,472   |   | -                       |   | 190,472  
|Depreciation and amortization        |   | 30,939    |   | 120,793   |   | -                       |   | 151,732  
|Net loss                             |   | 3,604,909 |   | 20,517    |   | -                       |   | 3,625,426
|                                     |   |           |   |           |   |                         |   |          
|As of November 30, 2008              |   |           |   |           |   |                         |   |          
|Total assets                         |   | 2,818,120 |   | 1,156,337 |   | -                       |   | 3,974,457
|Additions to property and equipment  |   | -         |   | 13,242    |   | -                       |   | 13,242   
|CE Mark license                      |   | -         |   | 1,166,637 |   | -                       |   | 1,166,637
|                                     |   |           |   |           |   |                         |   |          
|Six months ended November 30, 2007   |   |           |   |           |   |                         |  
|Net revenue                          | $ | -         | $ | 551,641   | $ | -                       | $ | 551,641  
|Gross profit                         |   | -         |   | 58,577    |   | -                       |   | 58,577   
|Depreciation and amortization        |   | 69,769    |   | 180,958   |   | 7,747                   |   | 258,474  
|Net loss                             |   | 5,449,942 |   | 507,675   |   | 600,955                 |   | 6,558,572
|                                     |   |           |   |           |   |                         |   |          
|Three months ended November 30, 2007 |   |           |   |           |   |                        
|Net revenue                          |   | -         |   | 250,031   |   | -                       |   | 250,031  
|Gross profit                         |   | -         |   | 54,337    |   | -                       |   | 54,337   
|Depreciation and amortization        |   | 40,240    |   | 90,577    |   | 3,876                   |   | 134,693  
|Net loss                             |   | 2,860,285 |   | 247,887   |   | 315,748                 |   | 3,423,920













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ITEM 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



INFORMATION REGARDING FORWARD-LOOKING STATEMENTS



The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Such "forward-looking" information is included in this Form 10-Q, including the MD&A section, and in other materials filed or to be filed by the Company with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by the Company).



Forward-looking statements include all statements based on future expectations and specifically include, among other things, all statements relating to our expectations and beliefs with respect to the uses and adequacy of our capital resources. Any statements that are not based upon historical facts, including the outcome of events that have not yet occurred and our expectations for future performance, are forward-looking statements. The words "potential," "believe," "estimate," "expect," "intend," "may," "could," "will," "plan," "anticipate," and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of our management. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, among others, our ability to successfully implement our corporate strategy and successfully integrate our newly-acquired subsidiary in India and the accuracy of management's beliefs with respect to the uses and adequacy of our capital resources.



The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this Quarterly Report. We expressly disclaim any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.



OVERVIEW



The following discusses the Company's financial condition and results of operations for the six and three months ended November 30, 2008 based upon the Company's unaudited interim consolidated financial statements, included in Item 1 of Part 1 of this Quarterly Report, which have been prepared in accordance with United States generally accepted accounting principles. It should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto and other financial information included in the Company's Form 10-K for our fiscal year ended May 31, 2008.



MIV Therapeutics Inc. (the "Company", "MIVT", "we", "us", or "our") is a research and development company pursuing the commercialization of the next generation of biocompatible coatings for coronary stents and other medical devices and advanced drug delivery systems with the intent of providing healing solutions for cardiovascular disease and other medical conditions. Pursuant to a license agreement from the University of British Columbia (UBC), we have developed unique coating technologies that utilize Hydroxyapatite (HAp) for application on medical devices and drug delivery systems. Simultaneously, alternative polymer-free coatings and advanced polymeric coatings with enhanced biocompatibility and bioavailability were developed by MIVT's R&D team at its wholly-owned subsidiary, MIVI Technologies Inc. MIVT proprietary coating and drug delivery technologies are protected by 36 patents and patent applications worldwide at the time of preparing this document.



On February 16, 2007, we completed the acquisition of all of the issued and outstanding shares of BioSync Scientific Pvt. Ltd. ("Biosync Scientific"), a corporate body subsisting under and registered pursuant to the laws of India and is presently engaged, among other things, in the business of designing, manufacturing and marketing coated and non-coated vascular stents and related accessories. Accordingly, the financial information presented below may not be comparable from period to period.





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Recent Developments



VESTAsyncTM Clinical Trial



In May 2007 we commenced with our first ever human implantation of a HAp-coated stent and the launch of our VESTAsyncTM First-In-Man Pilot Trial ("FIM Trial"). The FIM Trial will evaluate the safety and efficacy of our polymer-free nanoscale microporous HAp drug-eluting stent for the treatment of single de novo lesions in native coronary arteries.



We presented the 4-month results of the FIM Trial at an industry conference in October 2007. The 9-month follow-up results were presented to another industry conference in March 2008. These results suggested that our stent has the potential for superior safety and equivalent efficacy when compared to currently available drug-eluting stents. A 12-month follow-up study released in August 2008 on all FIM Trial patients confirmed the previous 9-month data on safety and efficacy results. Our management was encouraged by the initial 9-month date and the follow-up study on the FIM Trial and began enrolling patients in the VESTAsyncTM II trial.





DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION



SIX MONTHS ENDED NOVEMBER 30, 2008 COMPARED TO NOVEMBER 30, 2007



Revenues. During the six months ended November 30, 2008, revenues were $457,889 compared to $551,641 for the same quarter in the prior year. Cost of sales during the quarter ended November 30, 2008 was $236,147 resulting in a gross profit of $221,742. Cost of sales during the comparative period in 2007 was $493,064 and gross profit was $58,557. The current decrease in revenues from 2007 was primarily a result of the timing of stents being ordered by customers. Our gross profit was lower in 2008 compared to 2007 as a result of higher fixed overhead costs. We expect that revenues will grow in the subsequent quarters of fiscal 2009 because of more aggressive marketing efforts and the introduction of new products. Gross profits vary significantly on different products and the amount of time our production facility spends on research and clinical trial activities which are allocated to research and development expense.



General and Administrative Expenses



General and administrative expenses increased to $4,332,845 during the six months ended November 30, 2008 from $3,683,139 during the six months ended November 30, 2007. We experienced a significant increase in consulting fees and public relations, financing and corporate development costs. The increase was a consequence of entering into contracts with finance-oriented firms to identify and meet potential investors and to assist us in raising capital in order to fund our operations and research program. Some of the payments were made by the issuance of shares and granting of warrants to conserve cash. Management fees decreased in the current quarter primarily as a result of less recognition of share-based compensation attributed to Biosync Scientific compared to the corresponding period of 2007. Legal fees increased in the current quarter due to the involvement of legal counsel required to review and negotiate potential investment documents. Our audit fees were significantly higher during the quarter ended November 30, 2007 compared to 2008 because of the fees associated with the Biosync Scientific acquisition.



The following table compares the general and administrative expenses for the six months ended November 30, 2008 and 2007:



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|                                                          | 2008             | 2007             | Increase/(Decrease)
|--------------------------------------------------------- | ---------------- | ---------------- | -------------------
|Public relations, financing and 
   corporate development | $      1,335,490 | $        381,213 | $       954,277    
|Management fees                                           | 1,038,986        | 1,301,806        | (262,820)          
|Legal                                                     | 241,806          | 289,288          | (47,482)           
|Audit                                                     | 179,469          | 408,500          | (229,031)          
|Consulting                                                | 877,315          | 298,951          | 578,364            
|Operating expenses                                        | 659,779          | 985,936          | (326,157)          
|                                                          | $     4,332,845  | $     3,665,694  | $667,151           



Research and Development Expenses



Research and development costs increased during the six months ended November 30, 2008 to $2,787,481 compared to $2,350,446 for the six months ended November 30, 2007. The increase in the current quarter resulted primarily from the ongoing clinical trial and the beginning of the follow-up clinical trial, increased payments to R&D consultants and clinical trial doctors  We expect research and development costs to increase in the subsequent quarters of fiscal 2009 because we expect the follow-up clinical trial will require substantial funding as the total number of participants increase. In addition, we will incur continuing costs for the initial clinical trial as well as conducting other pre-clinical trials necessary in procuring regulatory approvals.



Interest Expense and Finance Fees



Interest expense and finance fees decreased $160,531 to $14,132 during the six months ended November 30, 2008 from $174,663 during the same period in 2007. We do not expect to incur significant interest expense during the remainder of fiscal 2009; however, if we can arrange financing in the form of debt we would likely incur a significant increase in interest expense.



Depreciation and Amortization Expense



Depreciation and amortization expenses increased to $311,297 during the six months ended November 30, 2008 compared to $258,474 for same period in 2007. Approximately $145,800 of depreciation expense in 2008 has been allocated to cost of sales during the six months ended November 30, 2008 as the majority of our equipment is used for production purposes. The overall increase in the period is due to additions to laboratory equipment, other property and equipment acquired during the end of fiscal 2007 through fiscal 2008. We expect that depreciation expense will have certain increase for the remainder of fiscal 2009, but we do not anticipate any significant equipment purchases in the second half of fiscal 2009.



Discontinued Operations



During the second quarter of fiscal 2008 we entered into a share purchase agreement to sell our wholly-owned subsidiary SagaX, Inc. ("SagaX"). The transaction was completed in December 2007. Accordingly, SagaX's results of operations have been reflected as discontinued operations.  Because the transaction was completed in the previous fiscal year, there were no expenses of SagaX recorded in the six  months ended November 30, 2008.











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Loss from Continuing Operations



The Company incurred a loss from continuing operations of $7,182,496 for the six months ended November 30, 2008 compared to a loss of $5,957,617 for the corresponding period in 2007. The increase in loss from continuing operations of approximately $1,224,879 is primarily a result of the elevated research and development activities and the related administrative costs compared to the same period in 2007, including clinical trial costs, and higher legal and other operating costs associated with the increased level of research. In addition, stock-based compensation increased significantly during 2008 which reflects our efforts to retain key personnel while conserving cash for ongoing trials. We believe this level of activity will increase during the remainder of the current fiscal year as the completion of the first phase of the clinical trial nears and the preparation for the subsequent clinical trial begins.





THREE MONTHS ENDED NOVEMBER 30, 2008 COMPARED TO NOVEMBER 30, 2007



Revenues. During the three months ended November 30, 2008, revenues were $272,626 compared to $250,031 for the same quarter in the prior year. Cost of sales during the quarter ended November 30, 2008 was $82,154 resulting in a gross profit of $190,472. Cost of sales during the comparative period in 2007 was $195,694 and gross profit was $54,337. Our gross profit was significantly higher in 2008 compared to 2007 as a result of the following factors: (i) during the current quarter, a very significant portion of revenues were driven by higher margin stents, Our inflation devices yield much smaller margins and were a larger component of revenues in 2007; (ii) we have refined the manufacturing process for some of our stents which have generated fewer rejection costs; and (iii) our factory has dedicated more of its time to research activities related to our future products and clinical trials. As a result, allocable fixed overhead costs are reclassified out of cost of sales into research and development expense.   Gross profits vary significantly on different products and the amount of time our production facility dedicates to research and clinical trial activities which are allocated to research and development expense. Our coronary stent business is still relatively young and we have not yet established a consistent place in the market; therefore, our future revenues remain difficult to predict. With the ongoing global economic crisis, revenues in the immediate future are even more uncertain. However, we expect that when the financial markets and economies regain stability, and we are successful in raising the necessary capital to meet the demands for manufacturing our products, our revenues will increase at a significant rate.



General and Administrative Expenses



General and administrative expenses increased to $2,176,100 during the quarter ended November 30, 2008 from $1,939,968 during the quarter ended November 30, 2007. We experienced a significant increase in consulting fees and public relations, financing and corporate development costs. The increase was a consequence of entering into contracts with finance-oriented firms to identify and meet potential investors and to assist us in raising capital in order to fund our operations and research program. Some of the payments were made by the issuance of shares and granting of warrants to conserve cash.  Legal fees decreased in the current quarter due to the combination of our reduced spending in the current year and the involvement of legal counsel required for filings associated with registration statements in 2007. Our audit fees were significantly higher during the quarter ended November 30, 2007 compared to 2008 because of the fees associated with the Biosync Scientific acquisition and filing registration statements associated with the July 2007 financing. Our other operating expenses decreased significantly in 2008 compared to 2007 primarily from our efforts to minimize travel costs



The following table compares the general and administrative expenses for the quarters ended November 30, 2008 and 2007:



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|                                                          | 2008             | 2007             | Increase/(Decrease)
|--------------------------------------------------------- | ---------------- | ---------------- | -------------------
|Public relations, financing and 
   corporate development | $        386,600 | $        142,514 | $       244,086    
|Management fees                                           | 639,106          | 649,080          | (9,974)            
|Legal                                                     | 75,664           | 190,466          | (114,802)          
|Audit                                                     | 27,310           | 165,163          | (137,853)          
|Consulting                                                | 775,809          | 192,826          | 582,983            
|Operating expenses                                        | 271,611          | 589,653          | (318,042)          
|                                                          | $     2,176,100  | $     1,929,702  | $246,398           



Research and Development Expenses



Research and development costs increased during the quarter ended November 30, 2008 to $1,313,539 compared to $1,200,685 for the quarter ended November 30, 2007. The increase in the current quarter resulted primarily from the recently commenced follow-up clinical trial and pre-clinical trials, the allocation of direct research costs associated with our manufacturing facility, significant legal fees incurred in order to secure patents and technology protection, and share-based incentives granted to R&D personnel. Upon successful financing, we expect research and development costs to increase in the subsequent quarters of fiscal 2009. The increases will reflect the completion of the enrollment process in the follow-up clinical trial as well as conducting other pre-clinical trials necessary in procuring regulatory approvals.



Interest Expense and Finance Fees



Interest expense and finance fees decreased $145,112 to $7,490 during the quarter ended November 30, 2008 from $152,602 during the same period in 2007. We do not expect to incur significant interest expense during the remainder of fiscal 2009; however, if we can arrange financing in the form of debt we would likely incur a significant increase in interest expense.



Depreciation and Amortization Expense



Depreciation and amortization expenses increased to $151,732 during the quarter ended November 30, 2008 compared to $134,693 for same period in 2007. Approximately $71,300 of depreciation expense in 2008 has been allocated to cost of sales during the current quarter as the majority of our equipment is used for production purposes. The overall increase in the current quarter is due to significant additions to laboratory equipment, building and other property and equipment acquired during the end of fiscal 2007 throughout fiscal 2008. We expect that depreciation expense will have certain increase for the remainder of fiscal 2009, but we do not anticipate any significant equipment purchases during the remainder of fiscal 2009.



Discontinued Operations



During the second quarter of fiscal 2008 we entered into a share purchase agreement to sell our wholly-owned subsidiary SagaX, Inc. ("SagaX"). The transaction was completed in December 2007. Accordingly, SagaX's results of operations have been reflected as discontinued operations.  Because the transaction was completed in the previous fiscal year, there were no expenses of SagaX recorded in the three months ended November 30, 2008.





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Loss from Continuing Operations



The Company incurred a loss from continuing operations of $3,625,426 for the three months ended November 30, 2008 compared to a loss of $3,423,920 for the corresponding period in 2007. The increase in loss from continuing operations of $517,254 is primarily a net result of increases in the follow-up clinical trial costs and costs associated with our efforts to procure sufficient financing to sustain and execute our comprehensive research program. In addition, lower professional fees and other operating costs reflect our efforts to minimize our cash outflows during this difficult stretch. We believe this level of activity will increase during the remainder of the current fiscal year as we near completion of enrollment in the follow-up clinical trial and we conduct other pre-clinical trials necessary in procuring regulatory approvals..



Liquidity and Capital Resources



Since inception, we have incurred significant losses from operations and have financed our operations primarily from proceeds from private financings, the exercise of options and warrants, and interest income. At November 30, 2008, we had cash and cash equivalents of $98,466 and a working capital deficit of $1,687,663. Due to the recent economic instability created primarily by the banking and credit crisis in the U.S., we have not been able to procure funding in order to execute our research programs. We continue to aggressively pursue suitable investment opportunities so that we can maintain continuous research and operations. Our Chairman and Chief Executive Officer have made loans to the Company and have paid for expenses on the Company's behalf in an effort to allow our operations to continue without interruption; however, we will have to complete a financing arrangement during the second half fiscal year in order to avoid any such interruptions.



Net cash used in operations from continuing operations during the six months ended November 30, 2008 was approximately $1.33 million which is a direct result of preparing for the follow-up clinical trial as well as continuing to fund our research program and supporting Biosync Scientific operations. Management anticipates that our clinical trials, along with the continued support of our India operations and other research activities, will lead to further operating losses and substantial cash requirements for the remainder of fiscal 2009.



Net cash provided by financing activities during the six months ended November 30, 2008 was approximately $265,643 which represents funds loaned to us by our Chairman in order to assist us with working capital, proceeds from a private placement and a short term loan.



Net cash used in investing activities during the six months ended November 30, 2008 was $13,248 which represents purchases of equipment necessary to support and maintain our research activities. We anticipate that further investments in laboratory and other equipment will be needed to further develop our manufacturing capabilities in India and to conduct future research activities throughout the remainder of fiscal 2009.



We expect to continue to use substantial resources and available cash to fund operating and investing activities. Our management anticipates that the existing cash balance will not be sufficient to meet the Company's working capital requirements for the next fiscal quarter and we will have to raise funds through private placements or other financing transactions in order to continue our operations and research activities without interruption. However, there can be no assurance that additional financing will become available, or, if available, that such financing can be obtained on terms satisfactory to the Company.



Off-Balance Sheet Arrangements



We have no off-balance sheet arrangements, as that term is used in Item 303(a)(4) of Regulation S-K.





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Contractual Obligations



Our contractual obligations are presented in Management's Discussion and Analysis in our Annual Report on Form 10-K for the year ended May 31, 2008. The total obligations have not materially changed during the six months ended November 30, 2008, except for the balance sheet changes in accounts payable and accrued liabilities which in aggregate totaled approximately $156,000 for the related party loans and loans payables.



Accounting Policy Change and New Accounting Pronouncements



In September 2006, FASB issued SFAS No. 157, "Fair Value Measurements". The objective of this Statement is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements.  SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The Company does not expect that the adoption of SFAS No. 157 will have a significant impact on its consolidated results of operations or financial position.



In February 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities". This Statement permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007.



The Company adopted the provisions of SFAS No. 159 on June 1, 2007. The adoption of SFAS No. 159 did not result in a cumulative adjustment to equity and there were no unrecognized tax benefits, penalties or interest at the time of, or subsequent to, adoption.

In May 2008, FASB released SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles".This Statement is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP) for nongovernmental entities. SFAS No. 162 will become effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles". The Company does not anticipate that this pronouncement will have a significant effect on its consolidated financial statements.



In March 2008, FASB released SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133". SFAS No. 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company does not expect that the adoption of SFAS No. 161 will have a significant impact on its consolidated results of operations or financial position.



In February 2008, the FASB released FSP No. FAS 157-2. FSP No. FAS 157-2 defers the effective date of SFAS 157, "Fair Value Measurements", for one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. It does not defer recognition and disclosure requirements for financial assets and financial liabilities, or for nonfinancial assets and nonfinancial liabilities that are remeasured at least annually.



In December 2007, FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements--an amendment of ARB No.51". This Statement establishes accounting and reporting standards that require noncontrolling interest in a subsidiary to be reported as a component of equity, changes in a parent's ownership interest while the parent retains its controlling interest to be accounted for as equity transactions, and any retained noncontrolling equity investment upon the deconsolidation of a subsidiary to be initially measured at fair value. The Statement also establishes reporting requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. SFAS No. 160 is effective as of the beginning of the first fiscal year beginning on or after December 15, 2008, and is effective for the Company at the beginning of fiscal 2010. The Company does not expect that the adoption of SFAS No. 160 will have a significant impact on its consolidated results of operations or financial position.





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In December 2007, FASB issued SFAS No. 141(R), "Business Combinations" ("SFAS 141R"). SFAS 141R replaces SFAS No. 141, "Business Combinations" ("SFAS 141"). SFAS 141R retains the fundamental requirements in SFAS 141 that the acquisition method of accounting (which SFAS 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R also establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R will apply prospectively to business combinations for which the acquisition date is on or after April 1, 2009, the beginning of the Company's next fiscal year. While the Company has not yet evaluated this statement for the impact, if any, that SFAS 141R will have on its consolidated financial statements, the Company will be required to expense costs related to any acquisitions after May 31, 2009.





ITEM 3.          QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.



Not applicable.





ITEM 4.          CONTROLS AND PROCEDURES



Disclosure Controls and Procedures.  As of the end of the reporting period covered by this report, our management, including our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 15d-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act"). Based on their evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that during the quarterly period covered by this report, our disclosure controls and procedures were effective.



It should be noted that any system of controls is based in part upon certain assumptions designed to obtain reasonable (and not absolute) assurance as to its effectiveness, and there can be no assurance that any design will succeed in achieving its stated goals.



During the quarter ended November 30, 2008, there were no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.







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PART II. OTHER INFORMATION



ITEM 1.          LEGAL PROCEEDINGS



None.





ITEM 1.A.      RISK FACTORS



In addition to the risk factor below and other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A Risk Factors" in our Annual Report on Form 10-K for the year ended May 31, 2008, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.



Recent deterioration in the economy and credit markets may adversely affect our future results of operations.



During 2008, the credit markets and the financial services industry have experienced a period of severe volatility and disruption which led to an unprecedented level of intervention from the United States federal government. This instability has continued with the beginning of 2009 and, as the ultimate outcome of these events cannot be predicted, it may have a material adverse effect on the Company and our ability to borrow money in the credit markets which is needed in order for us to execute our research programs and clinical trials.  Similarly, our customers may be unable to borrow money to fund their operations which may adversely impact their ability to purchase our products or to pay for our products they do purchase on a timely basis, if at all.





ITEM 2.          UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.



During the six months ended November 30, 2008, we issued the following unregistered securities pursuant to prospectus exemptions contained in Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation S, and will bear a restrictive Rule 144 legend to that effect:



On June 6, 2008, our board of directors approved the issuance of 22,599 common shares to two consultants pursuant to their respective research consulting agreements. The shares were issued on July 14, 2008 and the quoted price on this date was $1.85. An additional 5,882 common shares were issued to the consultants on August 22, 2008 under the same agreements. The quoted price on this date was $1.25.



On July 30, 2008, our board of directors approved the issuance of 160,000 common shares to a firm pursuant to a consulting agreement. The shares were issued on July 31, 2008 and the quoted price on this date was $1.65.



On November 10, 2008, our board of directors approved the offering of 3,048,363 units at a price of $0.20 per unit with members of management in order to settle the debts owed to them by the Company as of October 31, 2008 for service compensation, business expenses as well as loans to the Company.  Each unit is comprised of one common share and one share purchase warrant. The warrants have an exercise price of $0.40 and expire on November 28, 2013.  The common shares and warrant certificates were issued in December 2008.





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On November 26, 2008, our board of directors approved the issuance of 255,000 common shares and 82,500 warrants to a consultant pursuant to a consulting agreement. The warrants have an exercise price of $0.40 and expire on November 26, 2013. The common shares and warrant certificate were issued in December 2008.



On November 28, 2008, our board of directors approved the offering of 550,000 units at a price of $0.20 per unit for a private placement for total proceeds of $110,000.  Each unit is comprised of one common share and one share purchase warrant. The warrants have an exercise price of $0.40 and expire on November 28, 2013. The common shares and warrant certificates were issued in January 2009.



On November 30, 2008, our board of directors approved the offering of 369,833 units at a price of $0.20 per unit with members of management in order to settle the debts owed to them by the Company as of November 30, 2008 for service compensation, business expenses as well as loans to the Company.  Each unit is comprised of one common share and one share purchase warrant. The warrants have an exercise price of $0.40 and expire on November 30, 2013. The common shares and warrant certificates were issued in December 2008.



ITEM 3.          DEFAULTS UPON SENIOR SECURITIES.



None.





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



None





ITEM 5.          OTHER INFORMATION.



None





ITEM 6.        EXHIBITS



|EXHIBIT NO.
----------- |                                                                                                                   
|----------------------- | ------------------------------------------------------------------------------------------------------------------
|31.1                    | Certification by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.               
|31.2                    | Certification by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.               
|32.1                    | Certification by the Principal Executive and Financial Officers Pursuant to Section 906 of the Sarbanes-Oxley Act.







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SIGNATURES



In accordance with 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.





| |                         | MIV Therapeutic, Inc.
(Registrant)                                                  
| | ----------------------- | ------------------------------------------------------------------------------------
| | Date:  January 20, 2009 | /s/ Mark Landy
------------------------
Mark Landy
Chief Executive Officer          
| | Date:  January 20, 2009 | /s/ Patrick McGowan
------------------------
Patrick McGowan
Chief Financial Officer