UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
                                  Amendment #1

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

                  For the quarterly period ended: May 31, 2006

                                       OR

   |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934

  For the transition period from ________________ to __________________________

                           Commission File No. 0-26057

                           BIOPHAN TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

            Nevada                                       82-0507874
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                       150 Lucius Gordon Drive, Suite 215
                         West Henrietta, New York 14586
               (Address of principal executive offices) (Zip Code)

(585) 214-2441 (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes |X| No |_|

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one).

Large Accelerated Filer |_| Accelerated Filer |X| Non-Accelerated Filer | |

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

Yes |_| No |X|

Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

Class outstanding as of July 5, 2006 - Common Stock, $.005 par value -
82,809,199 shares

<PAGE>

EXPLANATORY NOTE

We are filing this Amendment #1 to our Quarterly Report on Form 10-Q for the
quarterly period ended May 31, 2006 for the following purposes:

      (a)   In Part I, Item 1, Financial Statements, to restate our financial
            statements to reflect a change in our accounting for our investment
            in Myotech, LLC a development stage company, and a developer of
            cardiac assist technologies. FASB Interpretation No. 46 (FIN-46R)
            (Revised December 2003), Consolidation of Variable Interest
            Entities, requires that if an enterprise is the primary beneficiary
            of a variable interest entity, the assets, liabilities and results
            of operations of the variable interest entity should be included in
            the consolidated financial statements of the enterprise. On November
            30, 2005 we acquired 3,768,488 Class A (voting) units of Myotech
            (representing a 35% equity interest), in exchange for 4,923,080
            shares of our common stock valued at $8,467,698. This investment was
            previously accounted for using the equity method.

            We have determined that Myotech is a variable interest entity in
            accordance with FIN-46R.and have concluded that we are the primary
            beneficiary as defined by FIN-46R . As a result, we are required to
            consolidate Myotech as of the date of acquisition of November 30,
            2005. Therefore, the consolidated financial statements included in
            this amended Quarterly Report on Form 10-Q have been restated to
            include the accounts of Myotech.

      (b)   In Part I, Item 4, Controls and Procedures, to disclose our
            conclusions regarding the effectiveness of our financial reporting
            controls and procedures.

      (c)   In Part I, Item 2, Management's Discussion and Analysis of Financial
            Condition and Results of Operations, to amend the financial analyses
            to reflect the restatement of financial statements as explained
            above.

      (d)   To amend such other financial information included elsewhere as
            affected by the restatement of our financial statements.

<PAGE>

                                      INDEX

<TABLE>
<CAPTION>
                                                                                      Page
                                                                                     Number
<S>                                                                                   <C>
                          Part I: Financial Information

ITEM 1.  Financial Statements

   Condensed Consolidated Balance Sheets, May 31, 2006 (Unaudited) and
   February 28, 2006                                                                   1

   Condensed Consolidated Statements of Operations, Three Months Ended May 31,
   2006 and 2005 (Unaudited), and from August 1, 1968 (Date of Inception)
   through May 31, 2006 (Unaudited)                                                    2

   Condensed Consolidated Statements of Cash Flows, Three Months Ended May 31,
   2006 and 2005 (Unaudited) and from August 1, 1968 (Date of Inception)
   through May 31, 2006 (Unaudited)                                                    3

   Notes to Condensed Consolidated Financial Statements                                6

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

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk                    15

ITEM 4. Controls and Procedures                                                       16

                           PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings                                                             17

ITEM 1A. Risk Factors                                                                 17

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds                   17

ITEM 3. Defaults Upon Senior Securities                                               17

ITEM 4. Submission of Matters to a Vote of Security Holders                           17

ITEM 5. Other Information                                                             18

ITEM 6. Exhibits                                                                      18

SIGNATURES                                                                            19
</TABLE>

<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                   BIOPHAN TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  May 31,        February 28,
                                                                   2006              2006
                                                                (Unaudited)
                                                                (Restated)        (Restated)
                                                               ------------      ------------
<S>                                                            <C>               <C>
                                     ASSETS
Current assets:
     Cash and cash equivalents                                 $    720,596      $  1,477,716
     Accounts receivable                                             76,510           170,058
     Stock subscription receivable                                1,700,000                --
     Due from related parties                                        36,660             4,801
     Prepaid expenses                                                95,474           147,203
     Other current assets                                            58,677            81,048
                                                               ------------      ------------
         Total current assets                                     2,687,917         1,880,826

Property and equipment, net                                         318,883           126,341

Other assets:
     Intangible assets, net of amortization:
       Myotech, LLC                                              24,107,192        24,451,580
       Other                                                      1,383,147         1.403,270
     Investment in New Scale Technologies, Inc.                     100,000           100,000
     Security deposit                                                 6,049             6,049
     Deferred tax asset, net of valuation allowance of
        $8,539,000 and $7,560,000, respectively                          --                --
                                                               ------------      ------------
                                                                 25,596,388        25,960,899
                                                               ------------      ------------
                                                               $ 28,603,188      $ 27,968,066
                                                               ============      ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued expenses                        1,745,311         1,191,812
     Notes payable                                                   47,258            15,886
     Line of credit - related party, net of discount
        of $1,387,342 and $1,323,921, respectively                3,542,658         1,476,079
     Due to related parties                                          28,691            26,548
     Deferred revenues                                              270,833           520,833
                                                               ------------      ------------
        Total current liabilities                                 5,634,751         3,231,158


Minority interest                                                14,448,205        15,189,109

Stockholders' equity:
     Common stock $.005 par value:
        Authorized, 125,000,000 shares
        Issued, 82,809,199 and
           81,805,243 shares, respectively                          414,046           409,026
     Additional paid-in capital                                  52,426,986        49,576,129
                                                               ------------      ------------
                                                                 52,841,032        49,985,155
     Treasury stock, 4,923,080 shares                            (8,467,698)       (8,467,698)
                                                               ------------      ------------
                                                                 44,373,334        41,517,457
     Deficit accumulated during the
        development stage                                       (35,853,102)      (31,969,658)
                                                               ------------      ------------
                                                                  8,520,232         9,547,799
                                                               ------------      ------------
                                                               $ 28,603,188      $ 27,968,066
                                                               ============      ============
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                       1

<PAGE>

                   BIOPHAN TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                        Period from
                                                                                       August 1, 1968
                                                          Three Months Ended             (date of
                                                    ------------------------------     inception) to
                                                    May 31, 2006      May 31, 2005      May 31, 2006
                                                     (Restated)                          (Restated)
                                                    ------------      ------------      ------------
<S>                                                 <C>               <C>               <C>
Revenues:
    Development payments                            $         --      $         --      $    300,000
    License fees                                         250,000                --           729,166
    Consulting fees                                       94,922                --           435,617
                                                    ------------      ------------      ------------
                                                         344,922                --         1,464,783
Operating expenses:
    Research and development                           2,588,408         1,599,742        15,607,827
    General and administrative                         2,086,191         1,895,984        20,027,563
    Write-down of intellectual property rights                --                --           530,000
                                                    ------------      ------------      ------------
                                                       4,674,599         3,495,726        36,165,390
                                                    ------------      ------------      ------------

Operating loss                                        (4,329,677)       (3,495,726)      (34,700,607)

Other income(expense):
    Interest expense                                    (303,473)               --        (3,175,262)
    Interest income                                        6,343             2,749           135,491
    Other income                                          47,538            83,138           739,735
    Other expense                                             --                --           (65,086)
                                                    ------------      ------------      ------------
                                                        (249,592)           85,887        (2,365,122)
                                                    ------------      ------------      ------------
Loss from continuing operations before minority
  interest in net loss of Myotech, LLC                (4,579,269)               --       (37,065,729)

Minority interest in net loss of Myotech, LLC            695,825                --         1,301,984
                                                    ------------      ------------      ------------

Loss from continuing operations                       (3,883,444)       (3,409,839)      (35,763,745)

Loss from discontinued operations                             --                --           (89,357)
                                                    ------------      ------------      ------------
Net loss                                            $ (3,883,444)     $ (3,409,839)     $(35,853,102)
                                                    ============      ============      ============
Loss per common share - basic and diluted           $      (0.05)     $      (0.05)
                                                    ============      ============
Weighted average shares outstanding                   76,893,764        74,417,378
                                                    ============      ============
</TABLE>

            See Notes to Condensed Consolidated Financial Statements


                                       2
<PAGE>

                   BIOPHAN TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                        Period from
                                                                          Three Months Ended           August 1, 1968
                                                                                May 31,                   (date of
                                                                    ------------------------------     inception) to
                                                                        2006              2005          May 31, 2006
                                                                      (Restated)                         (Restated)
                                                                    ------------      ------------      ------------
<S>                                                                 <C>               <C>               <C>
Cash flows used for operating activities:
    Net loss                                                        $ (3,883,444)     $ (3,409,839)     $(35,853,102)
    Adjustments to reconcile net loss to net cash
      used in operating activities:
        Amortization of intangible assets                                364,511            13,643           769,952
        Depreciation                                                       9,340             9,412           148,774
        Loss on disposal of equipment                                         --             1,505             1,505
        Realized and unrealized losses on marketable securities               --                --            66,948
        Accrued interest on note converted to common stock                    --                --            31,504
        Amortization of interest on convertible notes payable                 --                --         1,050,950
        Write-down of intellectual property rights                            --                --           530,000
        Amortization of discount on payable to related party             209,524                --         1,356,088
        Issuance of common stock for services                                 --                --           406,948
        Issuance of common stock for interest                                 --                --           468,823
        Grant of stock options for services                              580,954         1,462,082         7,144,532
        Expenses paid by stockholder                                          --                --             2,640
        Minority interest                                               (740,904)           76,493        (1,277,520)
    Changes in operating assets and liabilities:
      (Increase) decrease in accounts receivable                          93,548                --           (69,010)
      (Increase) decrease in due from related parties                    (31,859)           29,906           (95,960)
      (Increase) decrease in prepaid expenses                             51,729            15,839           (95,474)
      (Increase) decrease in other current assets                         22,371             5,910           (17,339)
      (Increase) decrease in security deposits                                --              (867)           (3,800)
      Increase (decrease) in accounts payable and
         accrued expenses                                                553,499            (5,045)        1,201,191
      Increase (decrease) in due to related parties                        2,143                --           (14,805)
      Increase (decrease) in deferred revenues                          (250,000)               --           270,833
                                                                    ------------      ------------      ------------
         Net cash used in operating activities                        (3,018,588)       (1,800,961)      (23,976,322)

Cash flows used for investing activities:
    Purchases of property and equipment                                 (201,882)          (23,255)         (437,092)
    Sales of marketable securities                                            --                --         2,369,270
    Purchase of investment                                                    --                --          (100,000)
    Acquisition costs of intangible assets                                    --                --          (466,583)
    Cash paid for investment in Myotech, net of
      cash received of $19,408                                                --                --          (280,594)
    Cash paid for acquisition of Biophan Europe,
      net of cash received of $107,956                                        --                --          (258,874)
    Purchases of marketable securities                                        --                --        (2,436,218)
                                                                    ------------      ------------      ------------
          Net cash provided by (used in) investing activities           (201,882)          (23,255)       (1,610,091)
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.


                                       3
<PAGE>

                   BIOPHAN TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                       Three Months Ended            Period from
                                                                                 ------------------------------     August 1, 1968
                                                                                             May 31,                   (date of
                                                                                 ------------------------------      inception) to
                                                                                     2006              2005          May 31, 2006
                                                                                 ------------      ------------      ------------
<S>                                                                              <C>               <C>               <C>
Cash flows provided by financing activities:
    Proceeds of bridge loans                                                               --                --           986,500
    Loan from stockholder                                                                  --                --           143,570
    Line of credit borrowing from related party, net of
      discount                                                                      3,630,000                --         8,480,950
    Line of credit payments                                                        (1,500,000)               --        (2,072,500)
    Notes payable                                                                      31,372                --          (168,628)
    Proceeds from sales of common stock                                               300,000           900,000        16,563,849
    Exercise of options                                                                 1,978           112,541           647,266
    Exercise of warrants                                                                   --                --         1,142,451
    Swing profits                                                                          --           295,362           696,087
    Deferred equity placement costs                                                        --                --          (112,536)
                                                                                 ------------      ------------      ------------
                                   Net cash provided by financing activities        2,463,350         1,307,903        26,307,009
                                                                                 ------------      ------------      ------------
Net increase(decrease) in cash and cash equivalents                                  (757,120)         (516,313)          720,596

Cash and cash equivalents, beginning                                                1,477,716           753,288                --
                                                                                 ------------      ------------      ------------
Cash and cash equivalents, ending                                                $    720,596      $    236,975      $    720,596
                                                                                 ============      ============      ============
Supplemental schedule for cash paid for:
     Interest                                                                    $     30,000      $         --      $     39,800
                                                                                 ============      ============      ============
Supplemental schedule of non cash investing and financing activities:

    Allocation of proceeds from line of credit - related party
      to beneficial conversion feature and warrants                              $    272,945      $         --      $  2,668,430
                                                                                 ============      ============      ============
    Common stock issued for subscription receivable                              $  1,700,000      $         --      $  2,750,000
                                                                                 ============      ============      ============
    Issuance of common stock upon conversion
      of line of credit loans                                                    $         --      $         --      $  1,978,450
                                                                                 ============      ============      ============
    Issuance of common stock for the acquisition of
      a 35% interest in Myotech, LLC                                             $         --      $         --      $  8,467,698
                                                                                 ============      ============      ============
    Issuance of common stock in satisfaction of
       accounts payable                                                          $         --      $         --      $    134,000
                                                                                 ============      ============      ============
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.


                                       4
<PAGE>

                   BIOPHAN TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                     Three Months Ended         Period from
                                                                               ----------------------------   August 1, 1968
                                                                                            May 31,              (date of
                                                                               ----------------------------    inception) to
                                                                                   2006            2005        May 31, 2006
                                                                               ------------    ------------    ------------
<S>                                                                            <C>             <C>             <C>
Liabilities assumed in conjunction with acquisition of 51% interest in
    Biophan Europe and certain intellectual property rights:
      Fair value of assets acquired                                                                            $  1,105,714
      Cash paid                                                                                                    (366,830)
      Promissory note issued                                                                                       (200,000)
      Restricted stock issued                                                                                      (134,000)
      Payables incurred                                                                                            (226,500)
                                                                                                               ------------
        Liabilities assumed                                                    $         --    $         --    $    178,384
                                                                               ============    ============    ============
Issuance of common stock upon conversion
  of bridge loans                                                              $         --    $         --    $  1,142,068
                                                                               ============    ============    ============
Acquisition of intellectual property                                           $         --    $         --    $    425,000
                                                                               ============    ============    ============
Intellectual property acquired through issuance of
  capital stock and assumption of related party payable                        $         --    $         --    $    175,000
                                                                               ============    ============    ============
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.


                                       5
<PAGE>

                   BIOPHAN TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  May 31, 2006

INTERIM FINANCIAL STATEMENTS:

The condensed consolidated financial statements as of May 31, 2006 and for the
three months ended May 31, 2006 and 2005 are unaudited. However, in the opinion
of management of the Company, these financial statements reflect all
adjustments, consisting solely of normal recurring adjustments, necessary to
present fairly the financial position and results of operations for such interim
periods. The results of operations for the interim periods presented are not
necessarily indicative of the results to be obtained for a full year. These
unaudited condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K/A for the fiscal year ended
February 28, 2006.

BASIS OF CONSOLIDATION:

The consolidated financial statements include the accounts of Biophan
Technologies, Inc. ("Biophan"), its wholly owned subsidiaries, LTR Antisense
Technology, Inc.("Antisense") and Nanolution, LLC, formerly MRIC Drug Delivery
Systems, LLC, ("Nanolution"), its majority owned subsidiaries Biophan Europe
GmbH ("Biophan Europe"), formerly aMRIs GmbH, and TE Bio LLC ("TE Bio"), and
Myotech, LLC ("Myotech"), a variable interest entity, collectively referred to
as the "Company". All significant inter-company accounts and transactions have
been eliminated in consolidation.

FASB Interpretation No. 46 (FIN-46R) (Revised December 2003), Consolidation of
Variable Interest Entities, requires that if an enterprise is the primary
beneficiary of a variable interest entity, the assets, liabilities and results
of operations of the variable interest entity should be included in the
consolidated financial statements of the enterprise.

COMPANY HISTORY:

The Company was incorporated under the laws of the State of Idaho on August 1,
1968 and on January 12, 2000, changed its domicile to Nevada by merging into a
Nevada corporation, and on July 19, 2001, changed its name to Biophan
Technologies, Inc. From the inception of the current line of business on
December 1, 2000, the Company has not generated any material revenues.
Therefore, the Company is in the development stage and will remain so until the
realization of significant revenues. The Company's ability to continue in
business is dependent upon maintaining sufficient financing or attaining future
profitable operations.

PRINCIPAL BUSINESS ACTIVITIES:

The primary mission is to develop and commercially exploit technologies for
improving the performance, and as a result, the competitiveness of biomedical
devices manufactured by third party companies. The Company possesses
technologies for enabling biomedical devices, both implantable and those used in
diagnostic and interventional procedures, to be safe (do not harm the patient or
physician) and compatible (allow effective imaging of the device and its
surrounding tissue) with MRI (magnetic resonance imaging). The Company is also
developing technologies for improving MRI contrast agents; for improved drug
elution and drug delivery systems, including an MRI safe and image compatible
ceramic motor; a system for generating power for implantable devices from body
heat, and a series of implantable devices including an MRI-visible vascular
implants such as a vena cave filter, a heart valve and an occluder for the
treatment of atrial septal defects, a hole in the wall separating the left and
right chambers of he heart. The Company's first licensee for several of these
technologies is Boston Scientific (NYSE: BSX). The Company is also an owner of a
substantial minority interest, with rights to take a majority interest, in
Myotech, (accounted for as a variable interest entity) developers of the
MYO-VAD, a cardiac assist device that does not contact circulating blood and
utilizes technology that has the potential to become a standard of care in the
device market for treating multiple types of acute and chronic heart failure
including congestive heart failure and sudden cardiac arrest.

ACCOUNTING FOR STOCK- BASED COMPENSATION

The Company has a single stock-based compensation plan, entitled Biophan
Technologies, Inc. 2001 Stock Option Plan (the "Plan") which is stockholder
approved. The Plan provides for the granting of incentive and non-qualified
stock options and restricted stock to selected employees, the granting of
non-qualified options and restricted stock to selected consultants, directors,
and advisory board members. The Option Plan is administered by the Compensation
Committee of the Board and authorizes the grant of options or restricted stock
awards for 13,000,000 shares. The Compensation Committee determines which
eligible individuals are to receive options or other awards under the Plan, the
terms and conditions of those awards, the applicable vesting schedule, the
option price and term for any granted options, and all other terms and
conditions governing the option grants and other awards made under the Option
Plan. Non-employee directors also receive periodic option grants pursuant to the
automatic grant program in effect for them under the Plan. The Company's Board
of Directors has adopted a new 2006 Incentive Stock Plan, subject to stockholder
approval. If approved at the Annual Meeting of Stockholders on July 18, 2006,
the new plan would authorize 7,500,000 shares for issuance pursuant to various
types of stock-based awards.Effective March 1, 2006, the Company adopted SFAS
No. 123 (revised), "Share-Based Payment" (SFAS 123(R)) utilizing the modified
prospective approach. Prior to the adoption of SFAS 123(R), we accounted for
stock option grants to employees and directors in accordance with APB Opinion
No. 25, "Accounting for Stock Issued to Employees" (the intrinsic value method)
and adopted the disclosure-only provisions of SFAS 123, "Accounting for
Stock-Based Compensation". Accordingly, employee compensation expense was
recognized only to the extent that the fair value of our common stock on the
date of grant exceeded the stock option exercise price.


                                       6
<PAGE>

Under the modified prospective approach, the Company applies the measurement
principles of SFAS 123(R) to new grants and to grants that were outstanding on
February 28, 2006 that are subsequently modified, repurchased or cancelled.
Compensation cost recognized in the first quarter of fiscal 2007 includes
compensation cost for all share-based payments granted prior to, but not yet
vested as of February 28, 2006, based on the grant-date fair value estimated in
accordance with the original provisions of SFAS 123, and compensation cost for
all share-based payments granted subsequent to February 28, 2006, based on the
grant-date fair value estimated in accordance with the provisions of SFAS
123(R). Prior periods were not restated to reflect the impact of adopting the
new standard.

As a result of adopting SFAS 123(R) on March 1, 2006, our net loss and basic and
diluted loss per share for the three months ended May 31, 2006, were $477,949
and $ 0.006 per share greater than if we had continued to account for
stock-based compensation under APB Opinion No. 25 for our stock option grants.

The following table illustrates the effect on operating results and per share
information had the Company accounted for stock-based compensation in accordance
with SFAS 123(R) for the three months ended May 31, 2005:

            Net loss - as                               $(3,409,839)
            reported

            Add: Stock-based employee compensation
             expense included in reported net loss,
             net of related tax effects                   1,339,000

            Deduct:  Total stock-based employee
             compensation expense determined
             under fair value based method for
             all awards, net of related tax effects      (2,155,000)
                                                        -----------
            Net loss - pro forma                        $(4,225,839)
                                                        ===========
            Basic and diluted loss
             per share - as reported                    $      (.05)
                                                        ===========
            Basic and diluted loss
             per share - pro forma                      $      (.06)
                                                        ===========

We use the Black-Scholes-Merton option pricing model to estimate the fair value
of stock-based awards with the following weighted-average assumptions for the
indicated periods:

            Three months ended May 31,                     2006          2005
                                                           ----          ----
               Expected volatility                      119.7-121.8      87.8
               Risk-free interest rate                     4.6%          4.08%
               Expected life of options (years)         5-10 years    9-10 years
               Weighted-average grant-date fair value      $1.46         $2.06
               Expected dividends                           -0-           -0-

The assumptions above are based on multiple factors, including historical
exercise patterns of employees in relatively homogeneous groups with respect to
exercise and post-vesting employment termination behaviors, expected future
exercising patterns for these same homogeneous groups and the implied volatility
of our stock price.

At May 31, 2006, there was $1,580,163 of unrecognized compensation cost related
to stock-based payments which is expected to be recognized over a
weighted-average period of 1.65 years.The following table represents stock
option activity for the three months ended May 31, 2006:


                                       7
<PAGE>

<TABLE>
<CAPTION>
                                                                      Weighted-Average       Weighted-Average
                                                       Number of          Exercise              Remaining
                                                        Shares              Price             Contract Life
                                                       ---------      ----------------       ----------------
<S>                                                    <C>            <C>                    <C>
      Outstanding options at beginning of period       9,594,020      $            .95
      Granted                                             80,000      $           1.44
      Exercised                                           (3,956)     $            .50
      Forfeited                                          (92,000)     $           1.18
                                                       ---------
      Outstanding options at end of period             9,578,064      $            .95                   7.23
                                                       =========      ================       ================
      Outstanding exercisable at end of period         6,759,314      $            .74                   6.63
                                                       =========      ================       ================
</TABLE>

Shares available for future stock option grants to employees and others under
our 2001 Stock Option Plan were 247,982. At May 31, 2006, the aggregate
intrinsic value of shares outstanding was $3.9 million, and the aggregate
intrinsic value of options exercisable was $ 3.4 million. Total intrinsic value
of options exercised was $3,165 for the three months ended May 31, 2006.

The following table summarizes our nonvested stock option activity for the three
months ended May 31, 2006:

<TABLE>
<CAPTION>
                                                                 Number          Weighted-Average
                                                                of Shares      Grant-Date Fair Value
                                                               ----------      ---------------------
<S>                                                             <C>                  <C>
            Nonvested stock options at beginning of period      3,048,750            $     1.31
            Granted                                                    --                    --
            Vested                                                138,000            $     1.53
            Forfeited                                             (92,000)           $     1.53
                                                                ----------
            Nonvested stock options at end of period            2,818,750            $     1.29
                                                                ==========
</TABLE>

RECLASSIFICATION

For comparative purposes, certain amounts in the accompanying statement of
operations for fiscal 2006 have been reclassified to conform to the presentation
used for fiscal 2007. These reclassifications had no effect on previously
reported results of operations or accumulated deficit.

REVENUE RECOGNITION:

The Company earns and recognizes revenue under development agreements when the
phase of the agreement to which amounts relate is completed and the Company has
no further performance obligation. Completion is determined by the attainment of
specified milestones including a written progress report. Advance fees received
on such agreements are deferred until recognized.

The Company recognizes initial license fees over the term of the related
agreement. Revenue related to a performance milestone is recognized upon the
achievement of the milestone, as defined in the respective agreements.

The Company recognizes revenues from testing services and consulting fees as
services are performed.


                                       8
<PAGE>

STOCKHOLDERS' EQUITY

On May 27, 2005, the Company entered into a Stock Purchase Agreement with SBI
Brightline XI, LLC. The agreement provides a $30 million fixed price financing
for up to 10,000,000 shares at prices ranging from $2 to $4 a share. The sales
of stock must be taken in sequential traunches of 1 million shares each and the
financing agreement requires the shares to be registered for sale by SBI. There
are no resets, warrants, finder's fees or commissions associated with this
financing transaction. Registration of the shares for resale by SBI was
effective on May 18, 2006 and the Company elected to put the first traunche of 1
million shares at $2 per share on May 23, 2006. Of the total proceeds of
$2,000,000, $300,000 was received by May 31, 2006 and the balance was received
on June 7, 2006.

INVESTMENT IN MYOTECH, LLC AND RESTATEMENT OF FINANCIAL STATEMENTS:

Effective November 30, 2005, we entered into a Securities Purchase Agreement for
the acquisition of an initial 35% interest in Myotech, LLC ("Myotech"), a New
York limited liability company, whereby we exchanged 4,923,080 shares of our
common stock, par value $.005, for 3,768,488 Class A (voting) units of Myotech.

Based upon the terms of the Securities Purchase Agreement, we are obligated to
purchase for cash consideration of $2.225 million an additional 811,037 Class A
units. We may elect to acquire up to an additional 3,563,097 Class A units for a
further cash consideration of up to $9.775 million, over a 24-month period,
which may result in the Company owning a majority interest in Myotech.

During the three month period ended February 28, 2006, Biophan provided
$1,185,000 of additional funding for 431,946 newly issued Class A units of
Myotech.

During the three month period ended May 31, 2006, Biophan has provided $675,000
of additional funding toward the cash consideration of $2.225 million cited
above, for 246,045 newly issued Class A units of Myotech, which increased our
ownership to 39.4.%. Biophan has also provided an additional amount of funding
since May 31, 2006 of $250,000.

This investment was previously accounted for using the equity method. However,
the Company has re-evaluated its investment in Myotech and has determined that
Myotech is a variable interest entity in accordance with FASB Interpretation No.
46 (FIN-46R) (Revised December 2003), Consolidation of Variable Interest
Entities. The Company has further concluded that it is the primary beneficiary
as defined by FIN-46R and, as a result, the Company is required to consolidate
Myotech as of the date of acquisition of November 30, 2005. Therefore, the
consolidated financial statements of the Company have been restated to include
the accounts of Myotech, LLC. The principal impact of this consolidation is an
increase in assets due to the recording of the value of intangible assets
acquired of $24,795,968, based on an independent appraisal, over the amount of
the investment, and an increase in the amount of the minority interest
representing outside interests in the equity of Myotech. Aggregate changes were
as follows as of and for the three month period ended May 31, 2006:

<TABLE>
<CAPTION>
                                                   As Previously          Adjustments
                                                      Reported        Increase (Decrease)      As Restated
                                                    ------------         ------------         ------------
<S>                                                 <C>                  <C>                  <C>
      Intangible assets, net                        $    929,522         $ 24,560,817         $ 25,490,339
      Investment in Myotech, LLC                      12,106,730          (12,106,730)                 -0-
      Other assets                                     2,982,772              130,077            3,112,849
                                                    ------------         ------------         ------------
                                                    $ 16,019,024         $ 12,584,164         $ 28,603,188
                                                    ============         ============         ============

      Liabilities                                   $  5,199,034         $    435,717         $  5,634,751

      Minority interest                                   24,464           14,423,741           14,448,205

      Capital stock                                      414,046                  -0-              414,046
      Additional paid-in capital                      45,830,060            6,596,926           52,426,986
      Treasury stock                                         -0-           (8,467,698)          (8,467,698)
      Accumulated deficit                            (35,448,580)            (404,522)         (35,853,102)
                                                    ------------         ------------         ------------
                                                    $ 16,019,024         $ 12,584,164         $ 28,603,188
                                                    ============         ============         ============

      Operating loss-three months ended 5/31/06      $(3,128,438)        $ (1,201,239)        $ (4,329,677)
                                                    ============         ============         ============
      Net loss- three months ended 5/31/06          $ (3,648,277)        $   (235,167)        $ (3,883,444)
                                                    ============         ============         ============
</TABLE>

The $1.20 million increase in the operating loss for the three month period
ended May 31, 2006 is primarily due to additional research and development
charges of approximately $1.05 million, which includes $0.35 million of
amortization of intangible assets.


                                       9
<PAGE>

The following is selected financial data for Myotech, LLC:

                                                                May 31, 2006
                                                             ------------------
                                Total current assets         $           23,167
                                Intangible assets,net                24,107,192
                                Other assets                            218,925
                                                             ------------------
                                Total assets                 $       24,349,284
                                                             ==================
                                Current liabilities          $          547,732
                                Equity                               23,801,552
                                                             ------------------
                                                             $       24,349,284
                                                             ==================

                                                                Three Months
                                                             Ended May 31, 2006
                                                             ------------------
                                Net loss from operations     $       (1,259,843)
                                                             ==================

LINE OF CREDIT AGREEMENT:

On January 24, 2006, we entered into a Line of Credit Agreement (the "Line of
Credit Agreement") with Biomed, a related party, pursuant to which Biomed has
committed to make advances to us, in an aggregate amount of up to $5,000,000.
Under the Line of Credit Agreement, advances may be drawn down in such amounts
and at such times as we determine upon 15 days prior notice to Biomed, except
that we may not draw down more than $1,500,000 in any 30-day period. Amounts
borrowed will bear interest at the rate of 8% per annum and are convertible into
shares of our Common Stock at the rate of $1.46 per share. Biomed's obligation
to lend to us under the Line of Credit Agreement expires on June 30, 2007, on
which date the entire amount borrowed by us (and not converted into shares of
our Common Stock) becomes due and payable. We are obligated to utilize the
entire credit facility. In connection with the establishment of the credit
facility under the Line of Credit Agreement, on January 24, 2006 we issued to
Biomed a Stock Purchase Warrant (the "Warrant") entitling Biomed to purchase up
to 1,198,630 shares of our Common Stock at an exercise price of $1.89 per share.
The Company recorded an additional discount of $272,945 on incremental
borrowings during the quarter of $2,650,000 due to the beneficial conversion
feature of the note. The discount is being amortized as additional interest
expense over the term of the note. During the quarter ended May 31, 2006
amortization of the discount on the note resulted in a non-cash interest expense
of $209,524. Biomed's purchase rights under the Warrant expire on January 23,
2011. The Company is required to make its best efforts to register the common
stock underlying the warrants and it is not required to settle any part or all
of the instruments with cash. Accordingly, these instruments are classified as
equity. The balance of borrowings on the line was $4,430,000 at May 31, 2006.
The fair value of the note is not readily determinable as there is a limited
market for such related party debt.

On May 27, 2005, we entered into a Line of Credit Agreement with Biomed, a
related company, whereby Biomed agreed to provide a line of credit facility of
up to $2 million. Borrowings under the line bear interest at 8% per annum, are
payable on demand after August 31, 2006 and are convertible, at Biomed's
election into the Company's common stock at 90% of the average closing price for
the 20 trading days preceding the date of borrowings under the line. In June
2005, the Company borrowed the entire $2 million under the line in two separate
draws of $1 million each and, in accordance with the agreement, Biomed received
warrants to purchase 500,000 shares of the Company's common stock at an exercise
price of 110% of the average closing price for the 20 trading days preceding the
date of execution of the credit agreement. The Company recorded a discount on
the borrowings of $958,160 due to the beneficial conversion feature of the note
as well as for the value of the warrants. The discount was amortized as
additional interest expense over the term of the note and has been fully
amortized as of November 30, 2005. On August 31, 2005, Biomed elected to convert
$1 million of the note plus accrued interest into 480,899 shares of common stock
at which time, the remaining discount related to the $1 million portion of the
loan was fully expensed. On October 7, 2005, we repaid $500,000 of principal and
all accrued interest on the loan. The balance of borrowings on the line was
$500,000 at May 31, 2006.


                                       10
<PAGE>

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

The discussion and analysis set forth below in this Item 2 have been amended to
reflect the restatement of our consolidated financial statements for the fiscal
year ended February 28, 2006 and for the period ended May 31, 2006, as described
above in the Explanatory Note to this amended Quarterly on Form 10-Q and in the
Note entitled "Investment in Myotech, LLC and Restatement of Financial
Statements," to Condensed Consolidated Financial Statements included in Item 1
above. For this reason, the data set forth in this section may not be comparable
to discussions and data in our previously filed Quarterly Reports.

All statements contained in this Item 2, unless they are specifically otherwise
stated to be made as of a different date, are made as of July 10, 2006, the
original filing date of our Quarterly Report on Form 10-Q for the period ended
May 31, 2006, and do not reflect events occurring after the filing of our
Quarterly Report on Form 10-Q filed on July 10, 2006 other than the restatement,
and we undertake no obligation to update the forward-looking statements in this
amended Quarterly Report on Form 10-Q.

GENERAL

Our primary mission is to develop and commercially exploit technologies for
improving the performance, and the corresponding competitiveness, of biomedical
devices manufactured by third party companies. We do not currently employ our
own manufacturing or distribution channels but rather rely on relationships with
sub-contractors and/or partner companies. We develop technology protected by
strong intellectual property targeted at specific markets within the medical
technology sector.

COMPANY BUSINESS

We are a technology development company with a strong focus on solving
real-world technical challenges facing the medical device industry. When
selecting a market opportunity to address, we have generated a wide range of
potential technical solutions. Each technical solution we pursue is
well-protected by intellectual property to ensure that we have the capability to
effectively market our technologies. Whenever practical, we attempt to develop
and patent multiple solutions for any given technology requirement. This is done
both to strengthen our position against competitors, and to be in a position to
offer multiple manufacturers alternative solutions, such as for MRI safety of
pacemakers, or MRI visibility of Vascular stents, as we introduce our
technologies to the market.

This approach has resulted in the development of a range of core technologies,
in various related segments of the medical device market. We are aggressive in
development and defense of our intellectual property assets and have an
intellectual property portfolio several times the size of many comparable sized
companies.

Over the past quarter, we have:

o Continued to develop and market our technology to solve the problems of MRI
safety that prevent people with pacemakers, cardio-defibrillators,
neurostimulators, pain control devices, pumps, and virtually any implanted or
interventional device with elongated metal leads to undergo MRI;

o Hosted the first Biophan Symposium on MRI Safety at the SMIT2006 Conference in
Pebble Beach, CA, where we presented issues of MRI Safety. Presentations were
given by the FDA and the NIH, validating the issues of MRI heating of medical
devices which have been the subject of some industry debate. The sessions were
attended by Medtronic, Boston Scientific, Guidant, and St. Jude, and workshops
were conducted between several of these companies, Biophan, and the FDA on how
to research and define test methods for measuring MRI safety of medical implants
under MRI, which will be required to eventually remove the current
contraindication of these devices.

o Held meetings with representatives of multiple medical device companies
concerning Biophan's solutions for MRI safety, and entered into currently
ongoing negotiations with several of these companies in which we have responded
to requests for pricing for exclusive and co-exclusive licensing options;

o Recognized over $344,000 in revenue from licensing, MRI testing, and
consulting to the industry. We expect to recognize additional revenue from these
transactions in the next several quarters.

o Supported development of a new cardiac assist device, the MYO-VAD, through our
relationship with Myotech LLC. The MYO-VAD is a life-saving device that provides
benefits and competitive advantages not possible with other cardiac assist
devices. In the past, this technology has saved human lives and holds tremendous
promise for the treatment of multiple forms of acute and chronic heart failure.

o Continued optimization of our technology to improve stents so they can be
imaged with MRI to detect the presence of restenosis (blockage) after
implantation; this technology is licensed exclusively to Boston Scientific
(NYSE:BSX), who has rights to enforce and/or sub-license the technology to third
parties.


                                       11
<PAGE>

o Continued development of an MR image compatible vena cava filter, which allows
MR imaging of blood clots that may be present in the filter to ensure safe
removal of the device. We are also developing a heart valve which can be imaged
and also implanted under MRI and an occluder device to treat atrial septal
defects a hole in the septum between the left and right atria which will be the
first occluder to be visible as well as implantable under MRI.

o We have made progress on our other technology areas including drug elution and
drug delivery systems with "active release" using non-invasive or minimally
invasive activation; a power system to generate electricity from body heat, and
improved contrast agents.

                      LICENSING AND JOINT VENTURE STRATEGY

BOSTON SCIENTIFIC LICENSE

On June 30, 2005, we entered into a licensing agreement with Boston Scientific
Scimed, Inc. The agreement provides Boston Scientific with the right to use
Biophan's MRI safety and image compatibility technology in a broad range of
exclusive and non-exclusive product areas at royalty rates of 3% to 5%. The
exclusive product area includes vascular implants, and RF ablation catheters,
and the non-exclusive product area covers a broad array of medical devices
including MRI safe pacemakers, defibrillators, neurostimulators, guidewires and
catheters.

Boston Scientific has the right to sub-license the exclusive product areas to
third parties, with Biophan and Boston Scientific to share all proceeds from
these parties. The agreement also provides for milestone payments to Biophan for
specific product areas which may be as high as several million dollars per
product. In addition, the agreement required Boston Scientific to make an
initial upfront payment to Biophan of $750,000, which was made on the closing of
the agreement and is being amortized over twelve months and to make annual
minimum royalty and potentially substantial annual earned royalty payments; and
receive a right of first negotiation on new technologies acquired by Biophan in
the fields of MRI safety and image compatibility. The initial $750,000 payment
was made on August 2, 2005 and will be recognized as revenue over the next 12
months. Accordingly, one quarter of the $750,000, or $187,500 was recorded as
revenue in the current quarter ended May 31, 2006.

In December, 2005, we received $250,000 for the first annual minimum payment
under our license. The agreement calls for milestone payments upon achievement
of significant project milestones, and requires payment of royalties for
products sold incorporating our technologies. Boston Scientific has sublicensing
rights to certain technologies, sharing revenue with Biophan, and other product
lines will revert to Biophan in the event of non-performance. The agreement
includes non-exclusive rights to our technology for making pacemakers,
defibrillators and neurostimulators safe and image compatible for use with MRI,
and extends to any companies in which they acquire a 50% or greater interest. As
a result, both Guidant, and Advanced Bionics, acquired by Boston Scientific
since we closed our license with them, are eligible to use our technology in
their products. This agreement is available as an Exhibit to our 10-Q for the
quarter ended August 31, 2005, as amended on January 9, 2005.

Revenue from this $250,000 payment is being recognized over 12 months.
Accordingly, for the three months ended May 31, 2006, the Company recorded
$62,500 in revenue from this payment.

ACQUISITION OF INTELLECTUAL ASSETS

We currently have an overall estate of 237 patents issued and pending. The total
includes 176 U.S. patents licensed, issued, allowed or pending (56 of which have
been issued) and 61 international patents or applications in process.

We believe that a strong and broad intellectual property portfolio is vital to
our ability to achieve and maintain royalties and product sales to major
industrial partners across our product lines.

These technologies cover a broad array of capabilities, with primary focus on
our core businesses of:

o making medical devices safe for use with MRI, as many are contraindicated,
including pacemakers, defibrillators and neurostimulators

o making devices such as stents visible under MRI so that they can be
non-invasively examined for in-stent restenosis. Today an invasive angiogram
procedure is required. We believe that non-invasive imaging of stents is a
feature which can move market share between otherwise competitive devices.


                                       12
<PAGE>

The technologies allowing visualization of implants have been developed at
Biophan, and with technology partners under exclusive license, including aMRIs
Patents GmbH in Germany (via an exclusive license); Aachen Resonance in Germany
(via an exclusive license); and Nanoset, LLC in the U.S. (via an exclusive
license). Biophan holds both sub-licensing and enforcement rights (rights to
litigate) under these agreements. The patents include those licensed from
Nanoset, LLC. Nanoset's technology can be used to reduce image artifacts caused
by implantable and interventional medical devices.

The patent total also includes those licensed as part of the Biophan Europe
acquisition whereby we obtained worldwide exclusive rights to a significant
patent portfolio totaling fifteen issued and pending patents covering critical
capabilities needed by the medical industry as the use of MRI interventional
medicine and MRI diagnostics for examination of stents and other implants
becomes standard medical procedure.

On an ongoing basis we review our patent portfolio to ensure we are protecting
our innovations and new discoveries in those strategic areas of our business
where we believe the medical device industry is heading. To ensure the
continuing value of our intellectual assets, we intend to aggressively defend
our patents and licensed technology, both domestically and abroad. Additionally,
our license agreement with Boston Scientific gives them enforcement rights in
the areas of our business which are exclusive to them. They also have
sub-licensing rights, should they elect to allow one of their competitors to
enjoy access to those technologies.

LIQUIDITY

As further described under the heading "Line of Credit Agreement" in Notes to
Condensed Consolidated Financial Statements, our affiliate Biomed Solutions,
LLC, a related company, provided us with a $5 million Line of Credit. Under the
Line of Credit agreement, advances may be drawn down in such amounts and at such
times as we determine upon 15 days prior notice to Biomed, except that we may
not draw down more than $1,500,000 in any 30-day period. Amounts borrowed will
bear interest at the rate of 8% per annum and are convertible into shares of our
Common Stock at the rate of $1.46 per share. Biomed's obligation to lend to us
under the line of credit agreement expires on June 30, 2007, on which date the
entire amount borrowed by us (and not converted into shares of our Common Stock)
becomes due and payable. We are obligated to utilize the entire credit facility.
at terms we believe to be competitive to comparable transactions. Biomed
Solutions is headed by Biophan CEO Michael Weiner, who is also a substantial
beneficial owner of Biomed Solutions. The balance of borrowings on the line was
$4,430,000 at May 31, 2006.

In addition, on May 27, 2005, we entered into a Line of Credit Agreement with
Biomed, whereby Biomed agreed to provide a line of credit facility of up to $2
million. Borrowings under the line bear interest at 8% per annum, are payable on
demand after August 31, 2006 and are convertible, at Biomed's election into the
Company's common stock at 90% of the average closing price for the 20 trading
days preceding the date of borrowings under the line. In June 2005, the Company
borrowed the entire $2 million under the line in two separate draws of $1
million each, in accordance with the agreement. On August 31, 2005, Biomed
elected to convert $1 million of the note plus accrued interest into 480,899
shares of common stock at which time, the remaining discount related to the $1
million portion of the loan was fully expensed. On October 7, 2005, we repaid
$500,000 of principal and all accrued interest on the loan. The balance of
borrowings on the line was $500,000 at May 31, 2006.

As described in greater detail under the heading "Stockholders' Equity" in the
"Notes to Condensed Consolidated Financial Statements", we have a current
financing agreement with SBI Brightline XI, LLC for a $30 million fixed price
financing for up to 10,000,000 shares at prices ranging from $2 to $4 a share.
The sales of stock must be taken in sequential traunches of 1 million shares
each and the financing agreement requires the shares to be registered for sale
by SBI. Registration of the shares for resale by SBI was effective on May 23,
2006 and the Company elected to sell the first traunche of 1 million shares at
$2 per share on May 23, 2006. The funds from the sale of this first traunches
have been received.

We anticipate the next sale of 1,000,000 shares of common stock to SBI
Brightline XI, LLC in the second fiscal quarter of 2007 and we plan to use this
capital on an as needed basis to fund operations. Additionally, certain
negotiations in process with several medical device companies may generate
additional working capital in the form of up-front licensing fees and/or royalty
advances.

Effective November 30, 2005, we entered into a Securities Purchase Agreement for
the acquisition of an initial 35% interest in Myotech, LLC ("Myotech"). A New
York limited liability company, whereby we exchanged 4,923, 080 shares of our
common stock, par value $.005. for 3,768,488 Class A (voting) units of Myotech.
Based upon the terms of the Securities Purchase Agreement, we were obligated to
purchase for cash consideration of $2.225 million an additional 811,037 Class A
units. We may elect to acquire up to an additional 3,563,097 Class A units for
further cash consideration of up to $9.775 million, over a 24-month period,
which may result in the Company owning a majority interest in Myotech. During
the three month period ended February 28, 2006, Biophan provided $1,185,000 of
additional funding for 431,946 newly issued Class A units of Myotech. During the
three month period ended May 31, 2006, Biophan has provided $675,000 of
additional funding toward the cash consideration of $2.225 million cited above
for 246,045 newly issued Class A units of Myotech, which increased our ownership
to 39.4%. Additional investments of $250,000 have been made since May 31, 2006.



                                       13
<PAGE>

The independent members of our Board of Directors negotiated, recommended and
approved all terms of this transaction. Our Board of Directors, including the
independent members, determined that the transaction was in the best interests
of Biophan's stockholders.

Based upon the terms of the Securities Purchase Agreement, we are obligated to
purchase for cash consideration of $2.225 million an additional 811,037 Class A
units. We may elect to acquire up to an additional 3,563,097 Class A units for a
further cash consideration of up to $9.775 million, over a 24-month period,
which may result in the Company owning a majority interest in Myotech.
Alternatively, the Company has the right to terminate further investment under
provisions of the stock purchase agreement.

During the three month period ended May 31, 2006, Biophan has provided $0.675
million of additional funding, for a total of $1.860 million toward the cash
consideration of $2.225 million cited above, for 677,991 newly issued Class A
units of Myotech, which increased our ownership to 39.4%. Biophan has also
provided an additional amount of funding since May 31, 2006 of $250,000. We
believe that funding available under the SBI stock purchase agreement, the
Biomed lines of credit, and the Boston Scientific investment will provide the
Company with adequate working capital resources for the upcoming 12 months of
operations including the ability to fund, as needed, potential additional
acquisitions and expansion of operations.

RESULTS OF OPERATIONS

The following comments discuss the significant factors affecting the
consolidated operating results, financial condition and liquidity and cash flows
of the Company for the three months ended May 31, 2006 as compared to the three
months ended May 31, 2005.

COMPARISON OF THE THREE MONTHS ENDED MAY 31, 2006 AND 2005

REVENUES

Revenues were $0.345 million for the three months ended May 31, 2006 as compared
to no revenues for the three months ended May 31, 2005. The increase is due to
development contract payments and license fees from Boston Scientific Scimed,
and operating revenues from our European subsidiary, which consisted primarily
of MRI-related testing and consulting services to medical device manufacturers.

OPERATING EXPENSES

Research and Development. Research and development expenses increased by 62%, to
approximately $2.588 million for the three months ended May 31, 2006 from
approximately $1.600 million for the three months ended May 31, 2005. Stock
options expense (non cash expense) amounted to $0.278 million in the three
months ended May 31, 2006 under FAS 123R and $0.794 million in the three months
ended May 31, 2005 due primarily to the accounting for contingent stock options.
After consideration of these expenses, research and development expenses
increased by approximately $1.500 million or 187%, to approximately $2.310
million for the three months ended August 31, 2006 from approximately $0.805
million for the three months ended August 31, 2005.

Because we consolidated Myotech LLC at November 30, 2005, the three months ended
May 31, 2006 include approximately, $0.703 million of operating expenses and
$0.344 million in amortization expenses pertaining to Myotech's
intangible assets. With the inclusion of Myotech, and aside the increase in
expense due to amortization expenses, the increase in expenses is primarily
attributable to spending on certain research projects of approximately $1.125
million and increased salary-related expenses of approximately $0.100 million.

General and Administrative. General and administrative expenses increased by 10%
to approximately $2.086 million for the three months ended May 31, 2006 from
approximately $1.896 million for the three months ended May 31, 2005. Stock
options expense (non cash expense) amounted to $0.303 million in the three
months ended May 31, 2006 under FAS 123R and $0.668 million in the three months
ended May 31, 2005 due primarily to the accounting for contingent stock options.
After consideration of these expenses, general and administrative expenses
increased by approximately $0.555 million or 45%, to approximately $1.783
million for the three months ended May 31, 2006 from approximately $1.228
million for the three months ended May 31, 2005.


                                       14
<PAGE>

Because we consolidated Myotech LLC at November 30, 2005, the three months ended
May 31, 2006 include approximately, $0.156 million of operating expenses With
the inclusion of Myotech, the increase in expenses is primarily attributable to
spending for legal fees of $0.230, outside financial compliance, audit services
and other professional services of $0.200 million, and increased costs related
to salaries $0.195 million, combined with decreased spending for other
activities.

OTHER INCOME (EXPENSE)

Interest Expense. We incurred interest expense amounting to approximately $0.303
million for the three months ended May 31, 2006 compared to no expense for the
three months ended May 31, 2005. The expense pertained to a $5 million line of
credit from Biomed Solutions, LLC ("Biomed"). This borrowing included a
beneficial conversion feature of $0.209 million (non cash expense) and normal
interest expense of $0.094 million.

Minority Interest in Net Loss of Myotech LLC

The loss of $0.696 million is a pro rata share of the loss incurred by Myotech,
LLC attributable to minority interests for the three months ended May 31, 2006.
There was no investment in Myotech LLC or loss on investment in Myotech LLC for
the three months ended May 31, 2005. As further described under the heading
"Investment in Myotech LLC and Restatement of Financial Statements" in the
"Notes to Condensed Consolidated Financial Statements" the Company holds a 39.4%
interest in Myotech LLC, which we must consolidate as a variable interest entity
since the Company is deemed to be the primary beneficiary in the relationship
with Myotech.

CAPITAL RESOURCES

Our current strategic plan does not indicate a need for material capital
expenditures in the conduct of research and development activities.

We currently employ twenty-five full-time individuals, twenty in the U.S. and
five in Europe.

FORWARD LOOKING STATEMENTS

Forward looking statements in this Form 10-Q and in other documents incorporated
herein, as well as in oral statements made by the Company, statements that are
prefaced with the words "may," "will," "expect," "anticipate," "continue,"
"estimate," "project," "intend," "designed" and similar expressions, are
intended to identify forward-looking statements regarding events, conditions,
and financial trends that may affect the Company's future plans of operations,
business strategy, results of operations and financial position. These
statements are based on the Company's current expectations and estimates as to
prospective events and circumstances about which the Company can give no firm
assurance. Further, any forward-looking statement speaks only as of the date on
which such statement is made, and the Company undertakes no obligation to update
any forward-looking statement to reflect subsequent events or circumstances.
Forward-looking statements should not be relied upon as a prediction of actual
future financial condition or results. These forward-looking statements, like
any forward-looking statements, involve risks and uncertainties that could cause
actual results to differ materially from those projected or unanticipated.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Derivative Financial Instruments, Other Financial Instruments, and Derivative
Commodity Instruments.

As of May 31, 2006, the Company did not participate in any derivative financial
instruments, or other financial and commodity instruments for which fair value
disclosure would be required under SFAS No. 107.

Primary Market Risk Exposures.

The Company's primary market risk exposures are in the areas of interest rate
risk and foreign currency exchange rate risk. The Company's investment portfolio
of cash equivalents is subject to interest rate fluctuations, but the Company
believes this risk is immaterial due to the short-term nature of these
investments. For the three months ended May 31, 2006, foreign currency
translation gains were approximately $300 as a result of consolidating the
Company's foreign subsidiaries. During the period, the Company did not engage in
any foreign currency hedging activities.


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<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

(a) Restatement

FASB Interpretation No. 46 (FIN-46R) (Revised December 2003), Consolidation of
Variable Interest Entities, requires that if an enterprise is the primary
beneficiary of a variable interest entity, the assets, liabilities and results
of operations of the variable interest entity should be included in the
consolidated financial statements of the enterprise. The Company has invested in
Myotech, LLC, (Myotech) a development stage business, and a developer of cardiac
assist technologies. This investment was made on November 30, 2005 in the form
of a Securities Purchase Agreement, whereby the Company received 3,768,488 Class
A (voting) units for a 35% interest in Myotech, in exchange for 4,923,080 shares
of our common stock valued at $8,467,698. This investment was previously
accounted for using the equity method.

The Company has re-evaluated its investment in Myotech and has determined that
Myotech is a variable interest entity in accordance with FIN-46R. The Company
has further concluded that it is the primary beneficiary as defined by FIN-46R
and, as a result, the Company is required to consolidate Myotech as of the date
of acquisition of November 30, 2005. Therefore, the consolidated financial
statements of the Company included in this Report on Form 10-Q, have been
restated to include the accounts of Myotech, LLC.

(b) Evaluation of Disclosure Controls and Procedures

In connection with the restatement, under the direction of our Chief Executive
Officer and our Chief Financial Officer, we reevaluated our disclosure controls
and procedures. We identified our failure to recognize and apply the correct
criteria, as explained in FIN 46R, for the proper accounting for our investment
in Myotech, LLC on November 30, 2005 as a material weakness in our internal
control over financial reporting. Solely as a result of this material weakness,
we concluded that our disclosure controls and procedures were not effective as
of November 30, 2005 or for the quarterly periods ended February 28, 3006, May
31, 2006 and August 31, 2006.

(c) Remediation of Material Weakness in Internal Control

We are confident that, as of the date of this filing, we have fully remediated
the material weaknesses in our internal control over financial reporting with
respect to the item cited above. The remedial actions included:

      o     Improving education and accounting reviews to ensure that personnel
            involved in entity investments and asset purchases understand and
            apply the pertinent accounting principles appropriate to the nature
            of the transaction.

In connection with this amended Report on Form 10-Q, our Chief Executive Officer
and Chief Financial Officer have evaluated our disclosure controls and
procedures as currently in effect and as a result of the remedial actions
discussed above, have concluded that as of this date our disclosure controls and
procedures are effective.

(d) Management's Report on Internal Control Over Financial Reporting (as
restated)

The management of Biophan Technologies, Inc. is responsible for establishing and
maintaining adequate internal control over financial reporting for the company.
With the participation of the Chief Executive Officer and the Chief Financial
Officer, our management conducted an evaluation of the effectiveness of our
internal control over financial reporting as of November 30, 2005, February 28,
2006, May 31, 2006 and August 31, 2006, based on the framework and criteria
established in Internal Control -- Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission.

In our Quarterly Report on Form 10-Q for the period ended November 30, 2005
(filed on January 17, 2006 ), in our Annual Report on Form 10-K for the year
ended February 28, 2006 (originally filed on May 15, 2006 and amended on June 6,
2006) and in our Quarterly Reports on Form 10-Q for the periods ended May 31,
2006 (filed on July 10, 2006) and ,August 31, 2006 (filed on October 13, 2006)
management concluded that our internal control over financial reporting was
effective as of the end of the periods covered by such reports. Subsequently,
management identified material weaknesses in internal control over financial
reporting with respect to accounting for the investment in Myotech, LLC on
November 30, 2005. Solely as a result of these material weaknesses, our
management has revised its earlier assessment and has now concluded that our
internal control over financial reporting was not effective as of November 30,
2005, or for the quarterly periods ended February 28, 2006, May 31, 2006 and
August 31, 2006.


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<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any material legal proceedings and there are no material
legal proceedings pending with respect to our property, except as noted below.
We are not aware of any legal proceedings contemplated by any governmental
authorities involving either us or our property. None of our directors, officers
or affiliates is an adverse party in any legal proceedings involving us or our
subsidiaries, or has an interest in any proceeding which is adverse to us or our
subsidiaries.

The Company is pursuing legal claims against one of its former law firms and
certain of its attorneys. Review of the firm's work product and bills recently
revealed questions about the firm's billing practices and other activities. The
amount of potential damages has not yet been quantified. Also, the law firm has
asserted claims seeking payment of additional legal fees, which claims the
Company has denied. The litigation is in an early stage. While, as with any
legal proceedings, no assurance can be given as to ultimate outcome, management
believes that the outcome of the litigation will not have a material adverse
effect upon the Company's financial condition.

ITEM 1A. RISK FACTORS

There are no material changes from risk factors as previously disclosed in the
Company's Form 10-K/A for the fiscal year ended February 28, 2006.

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

On May 23, 2006, we issued and sold to SBI Brightline XI, LLC ("SBI") 1,000,000
shares of our Common Stock, at a price of $2.00 per share (or $2,000,000 in the
aggregate). The purchase price represented a premium of $0.73 per share (or
approximately 57.5%) over the $1.27 per share closing price of our Common Stock
on the over-the-counter market on the date of sale.

We intend to use the proceeds from this sale of shares for general operating
expenses, including the funding of ongoing research and development efforts.

The sale was made pursuant to the Stock Purchase Agreement dated as of May 27,
2005 between us and SBI (as amended by Amendment No. 1 thereto dated January 9,
2006, the "Stock Purchase Agreement"). The shares sold on May 23 constitute the
first of ten traunches of shares which we may require SBI to purchase under the
Stock Purchase Agreement. Each traunche consists of 1,000,000 shares and may be
sold to SBI at any time, in our sole discretion. The shares in the various
traunches are issuable at increasing prices, ranging from $2.00 to $4.00 per
share. If the Stock Purchase Agreement facility is fully utilized, we would
receive aggregate proceeds of $30,000,000, at an average price of $3 per share.

The issuance and sale of the shares was made without registration under the
Securities Act of 1933 in reliance on the exemption for private placements not
involving a public offering provided in Section 4(2) thereof.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

Not applicable


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<PAGE>

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS

Exhibit No.                     Exhibit Description                 Location
-----------   -------------------------------------------------   -------------

31.1          Certification of C.E.O. pursuant to Rule 13a-14(a)  Filed herewith
31.2          Certification of C.F.O. pursuant to Rule 13a-14(a)  Filed herewith
32.1          Certification of C.E.O. pursuant to Rule 13a-14(b)  Filed herewith
                and 18 U.S.C. Section 1350
32.2          Certification of C.F.O. pursuant to Rule 13a-14(b)  Filed herewith
                and 18 U.S.C. Section 1350


                                       18
<PAGE>

                                   SIGNATURES

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

                           BIOPHAN TECHNOLOGIES, INC.
                                  (Registrant)

                       By: /s/ Michael L. Weiner
                           -------------------------------------
                           Name:  Michael L. Weiner,
                           Title: Chief Executive Officer

                       By: /s/ Darryl L. Canfield
                           -------------------------------------
                           Name:  Darryl L. Canfield
                           Title: Chief Financial Officer, Treasurer
                           and Secretary (Principal Financial Officer
                           and Principal Accounting Officer)

                       Date: January 24, 2007


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