**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549




**FORM
      10-Q/A**




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




For
      the
      quarterly period ended: May 31, 2008




OR




**o
      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
              incorporation
                or organization)
            (I.R.S.
                Employer Identification No.)





15
      Schoen
      Place


Pittsford,
      New York 14534


(Address
      of principal executive offices) (Zip Code)




(585)
      267-4800


(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 o


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




**Large
      Accelerated Filer** o  **Accelerated
      Filer**  o  **Non-Accelerated
      Filer**  o  **Smaller
      Reporting Company**  x




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




Yes
o
      No 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 10, 2008 - Common Stock, $.005 par value: 174,040,411





**Explanatory
      Note:**





This
      10Q
      is being amended to include Exhibit 99.1 - Press Release of Biophan
      Technologies, Inc. dated July 14, 2008, which was inadvertently omitted with
      the
      original filing.








**INDEX**





**PART
                I. FINANCIAL INFORMATION**ITEM
                1. Financial StatementsCondensed
                Consolidated Balance Sheets, May 31, 2008 (Unaudited) and February
                29,
                2008
            1Condensed
                Consolidated Statements of Operations, Three Months Ended May 31,
                2008 and
                2007 (Unaudited), and from August 1, 1968 (Date of Inception) through
                May
                31, 2008 (Unaudited)
            2Condensed
                Consolidated Statements of Cash Flows, Three Months Ended May 31,
                2008 and 2007 (Unaudited), and from August 1, 1968 (Date of Inception)
                through May 31, 2008 (Unaudited)
            3Notes
                to Condensed Consolidated Financial Statements
            6ITEM
                2. Management's Discussion and Analysis of Financial Condition and
                Results
                of Operations
            14ITEM
                3. Quantitative and Qualitative Disclosures About Market
                Risk
            16ITEM
                4. Controls and Procedures
            16PART
                II. OTHER INFORMATIONITEM
                1. Legal Proceedings
            18ITEM
                1A. Risk Factors
            18ITEM
                2. Unregistered Sales of Equity
                Securities and Use of Proceeds
            18ITEM
                3. Defaults Upon Senior
                Securities
            18ITEM
                4. Submission of Matters to a Vote of
                Security Holders
            18ITEM
                5. Other Information
            18ITEM
                6. Exhibits
            18SIGNATURES
            19





**PART
      I. FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS**





**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)





**CONDENSED
      CONSOLIDATED BALANCE SHEETS**





May
                31,
            
            February 29,2008
            
            2008(Unaudited)ASSETSCurrent
                assets:Cash
                and cash equivalents
            
            $
            5,652,497
            
            $
            6,970,205Accounts
                receivable
            
            
            179,858
            
            
            114,566Prepaid
                expenses
            
            
            73,705
            
            
            103,212Other
                current assets
            
            
            81,120
            
            
            44,437Total
                current assets
            
            
            5,987,180
            
            
            7,232,420Property
                and equipment, net
            
            
            277,531
            
            
            309,692Other
                assets:Intangible
                assets, net of amortization:Myotech,
                LLC
            
            
            16,602,279
            
            
            17,120,242Other
            
            
            1,297,419
            
            
            1,320,128Deferred
                financing costs, net of amortization of $807,516 and $683,283,
                respectively
            
            
            724,694
            
            
            848,927Deposits
            
            
            206
            
            
            20618,624,598
            
            
            19,289,503Total
                assets
            
            $
            24,889,309
            
            $
            26,831,615LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIENCY)Current
                liabilities:Current
                portion of capital lease obligation
            
            $
            11,423
            
            $
            10,885Current
                portion of senior secured convertible notes payable, net of discount
                of
                $1,462,230 and $1,297,913, respectively
            
            
            1,033,151
            
            
            1,428,251Accounts
                payable and accrued expenses
            
            
            1,216,210
            
            
            1,110,680Note
                payable
            
            
            58,290
            
            
            58,864Line
                of credit - former related party
            
            
            1,200,000
            
            
            1,200,000Due
                to related parties
            
            
            137,247
            
            
            126,717Deferred
                revenue
            
            
            145,833
            
            
            208,333Total
                current liabilities
            
            
            3,802,154
            
            
            4,143,730Long-term
                debt:Capital
                lease obligation
            
            
            11,471
            
            
            14,795Senior
                secured convertible notes payable, net of discount of $383,095 and
                $853,599
            
            
            270,679
            
            
            345,628Total
                liabilities
            
            
            4,084,304
            
            
            4,504,153Minority
                interest
            
            
            6,670,405
            
            
            7,053,950Stockholders'
                equity:Common
                stock, $.005 par value:Authorized,
                250,000,000Issued,
                146,814,918 and 119,128,504 shares, respectively
            
            
            734,075
            
            
            595,643Additional
                paid-in capital
            
            
            78,990,503
            
            
            78,015,52779,724,578
            
            
            78,611,170Less
                treasury stock, 4,923,080 shares, at cost
            
            
            (8,467,698
            )
            
            (8,467,698
            )71,256,880
            
            
            70,143,472Deficit
                accumulated during the development stage
            
            
            (57,122,280
            )
            
            (54,869,960
            )Total
                stockholders' equity
            
            
            14,134,600
            
            
            15,273,512Total
                    liabilities and stockholders' equity
            
            $
            24,889,309
            
            $
            26,831,615





**See
      Notes to Condensed Consolidated Financial Statements**


1


**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


(Unaudited)




Three Months Ended
              
              Period from
                August 1, 1968
                (date of
                inception) toMay
                  31, 2008
              
              May
                  31, 2007
              
              May 31, 2008Revenues:Sale
                  of intellectual property
              
              $
              -
              
              $
              -
              
              $
              11,000,000Development
                  fees
              
              
              45,000
              
              
              -
              
              
              420,000License
                  fees
              
              
              62,500
              
              
              62,500
              
              
              1,354,166Grant
                  revenues
              
              
              -
              
              
              50,000
              
              
              100,000Testing
                  services and consulting fees
              
              
              114,214
              
              
              59,833
              
              
              1,142,622221,714
              
              
              172,333
              
              
              14,016,788Operating
                  expenses:Research
                  and development
              
              
              1,028,315
              
              
              1,319,947
              
              
              25,473,641General
                  and administrative
              
              
              1,033,139
              
              
              1,487,670
              
              
              30,830,014Write-down
                  of intellectual property rights
              
              
              -
              
              
              -
              
              
              530,0002,061,454
              
              
              2,807,617
              
              
              56,833,655Operating
                  loss
              
              
              (1,839,740
              )
              
              (2,635,284
              )
              
              (42,816,867
              )Other
                  income(expense):Interest
                  income
              
              
              32,910
              
              
              15,441
              
              
              388,760Interest
                  expense
              
              
              (762,172
              )
              
              (1,384,901
              )
              
              (18,359,056
              )Additional
                  expense related to warrants
              
              
              -
              
              
              -
              
              
              (7,304,105
              )Change
                  in fair value of warrant liability
              
              
              -
              
              
              4,339,214
              
              
              9,657,278Loss
                  on extinguishment of debt
              
              
              -
              
              
              -
              
              
              (3,859,240
              )Gain
                  on sale of investment
              
              
              -
              
              
              -
              
              
              337,250Liquidated
                  damages
              
              
              -
              
              
              (652,500
              )
              
              (652,500
              )Other
                  income
              
              
              46,962
              
              
              28,175
              
              
              1,347,117Other
                  expense
              
              
              (7,177
              )
              
              -
              
              
              (77,705
              )(689,477
              )
              
              2,345,429
              
              
              (18,522,201
              )Loss
                  from continuing operations before minority interest in
                  subsidiaries
              
              
              (2,529,217
              )
              
              (289,855
              )
              
              (61,339,068
              )Minority
                  interest in subsidiaries
              
              
              276,897
              
              
              471,819
              
              
              4,306,145Income
                  (loss) from continuing operations
              
              
              (2,252,320
              )
              
              181,964
              
              
              (57,032,923
              )Loss
                  from discontinued operations
              
              
              -
              
              
              -
              
              
              (89,357
              )Net
                  income (loss)
              
              $
              (2,252,320
              )
              $
              181,964
              
              $
              (57,122,280
              )Net
                  income (loss) per common share:Basic
              
              $
              (0.02
              )
              $
              0.00Diluted
              
              $
              n/a
              
              $
              0.00Weighted
                  average shares outstanding:Basic
              
              
              131,071,518
              
              
              78,508,619Diluted
              
              
              n/a
              
              
              78,886,445




See
      Notes to Condensed Consolidated Financial
      Statement




2




**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


(Unaudited)


Three Months Ended May 31,
              
              Period from
                August 1, 1968
                (date of inception)
                to May 31,2008
              
              2007
              
              2008Cash
                  flows from operating activities:Net
                  income (loss)
              
              $
              (2,252,320
              )
              $
              181,964
              
              $
              (57,122,280
              )Adjustments
                  to reconcile net loss to net cashprovided
                  by (used in) operating activities:Amortization
                  of intangible assets
              
              
              293,141
              
              
              368,011
              
              
              3,495,510Amortization
                  of deferred financing costs
              
              
              124,233
              
              
              124,233
              
              
              807,516Depreciation
                  and amortization
              
              
              26,053
              
              
              31,066
              
              
              402,711Loss
                  on disposal of equipment
              
              
              7,177
              
              
              -
              
              
              24,858Gain
                  on sale of investment
              
              
              -
              
              
              -
              
              
              (337,250
              )Non-cash
                  charge related to warrants
              
              
              -
              
              
              -
              
              
              7,304,105Change
                  in fair value of warrant liability
              
              
              -
              
              
              (4,339,214
              )
              
              (9,657,278
              )Realized
                  and unrealized losses on marketable securities
              
              
              -
              
              
              -
              
              
              66,948Loss
                  on extinguishment of debt
              
              
              -
              
              
              -
              
              
              3,859,240Amortization
                  of discount on senior secured convertible notes
              
              
              306,187
              
              
              1,005,774
              
              
              9,092,2381Write-down
                  of intellectual property rights
              
              
              -
              
              
              -
              
              
              530,000Amortization of discount on payable to relatedparty
              
              
              -
              
              
              -
              
              
              2,887,555Issuance
                  of common stock for services
              
              
              59,544
              
              
              -
              
              
              724,302Fair
                  value of beneficial conversion feature of debt
              
              
              -
              
              
              -
              
              
              3,021,197Issuance
                  of common stock for interest
              
              
              224,214
              
              
              -
              
              
              1,646,460Grant
                  of stock options for services
              
              
              53,414
              
              
              347,643
              
              
              9,374,673Expenses
                  paid by stockholder
              
              
              -
              
              
              -
              
              
              2,640Change
                  in investment in subsidiary, net
              
              
              140,883
              
              
              -
              
              
              265,908Minority
                  interest
              
              
              (276,897
              )
              
              (482,611
              )
              
              (4,306,145
              )Changes
                  in operating assets and liabilities:(Increase)
                  decrease in accounts receivable
              
              
              (65,292
              )
              
              9,021
              
              
              (172,358
              )(Increase)
                  decrease in due from related parties
              
              
              -
              
              
              27,2461
              
              
              (59,300
              )(Increase)
                  decrease in prepaid expenses
              
              
              29,507
              
              
              57,321
              
              
              (73,705
              )(Increase)
                  decrease in other current assets
              
              
              (36,683
              )
              
              (20,414
              )
              
              (39,782
              )(Increase)
                  decrease in deposits
              
              
              -
              
              
              3,498
              
              
              2,043Increase
                      (decrease) in accounts payable and accrued
                      expenses
              
              
              105,530
              
              
              1,124,670
              
              
              656,204Increase
                  (decrease) in due to related parties
              
              
              10,530
              
              
              (28,096
              )
              
              93,751Increase
                  (decrease) in deferred revenues
              
              
              (62,500
              )
              
              (62,500
              )
              
              145,833Net
                  cash used in operating activities
              
              
              (1,313,279
              )
              
              (1,652,388
              )
              
              (27,364,406
              )





(Continued
      on Following Page)





**See
      Notes to Condensed Consolidated Financial Statements**




3


**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)**


(Unaudited)


Three Months Ended May 31,
              
              Period from
                August 1, 1968
                (date of
                inception) to
                May 31,2008
              
              2007
              
              2008Cash
                  flows from investing activities:Purchases
                  of property and equipment
              
              
              (1,069
              )
              
              (6,984
              )
              
              (645,986
              )Sales
                  of marketable securities
              
              
              -
              
              
              -
              
              
              2,369,270Purchase
                  of investment
              
              
              -
              
              
              -
              
              
              (100,000
              )Proceeds
                  from sale of investment
              
              
              -
              
              
              -
              
              
              437,250Acquisition
                  costs of intangible assets
              
              
              -
              
              
              -
              
              
              (616,583
              )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 used in investing activities
              
              
              (1,069
              )
              
              (6,984
              )
              
              (1,531,735
              )Cash
                  flows from financing activities:Proceeds
                  of bridge loans
              
              
              -
              
              
              -
              
              
              986,500Loan
                  from stockholder
              
              
              -
              
              
              -
              
              
              143,570Line
                  of credit borrowing from related party
              
              
              -
              
              
              -
              
              
              7,980,950Line
                  of credit payments
              
              
              -
              
              
              -
              
              
              (2,072,500
              )Proceeds
                  of convertible notes payable
              
              
              -
              
              
              -
              
              
              7,250,000Proceeds
                  (payments) on debt and notes payable
              
              
              (574
              )
              
              (17,957
              )
              
              (528,925
              )Payments
                  of capital lease obligation, net
              
              
              (2,786
              )
              
              (868
              )
              
              (4,155
              )Proceeds
                  from sales of capital stock
              
              
              -
              
              
              -
              
              
              19,438,849Exercise
                  of options
              
              
              -
              
              
              -
              
              
              658,467Exercise
                  of warrants
              
              
              -
              
              
              -
              
              
              1,142,451Swing
                  profits
              
              
              -
              
              
              -
              
              
              696,087Deferred
                  financing costs
              
              
              -
              
              
              -
              
              
              (1,030,120
              )Deferred
                  equity placement costs
              
              
              -
              
              
              -
              
              
              (112,536
              )Net
                  cash provided by (used in) financing activities
              
              
              (3,360
              )
              
              (18,825
              )
              
              34,548,638Net
                  increase in cash and equivalents
              
              
              (1,317,708
              )
              
              (1,678,197
              )
              
              5,652,497Cash
                  and equivalents, beginning
              
              
              6,970,205
              
              
              2,418,551
              
              
              —Cash
                  and equivalents, ending
              
              $
              5,652,497
              
              $
              740,354
              
              $
              5,652,497




(Continued
      on Following Page)





**See
      Notes to Condensed Consolidated Financial Statements**




4




**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)**


(Unaudited)




Three Months Ended May 31,
              
              Period from
                August 1, 1968
                (date of
                inception) to
                May 31,2008
              
              2007
              
              2008Supplemental
                  schedule of cash paid for:Interest
              
              $
              5,489
              
              $
              -
              
              $
              251,538Supplemental
                    schedule of non-cash investing and  financing
                    activities:Allocation
                    of proceeds from line of credit - related partyto
                    beneficial conversion feature and warrants
              
              $
              -
              
              $
              -
              
              $
              2,812,555Allocation
                  of proceeds from notes payable and warrants
              
              $
              -
              
              $
              -
              
              $
              7,250,000Change
                      in fair value of warrants reclassified from equity to warrants
                      liability
              
              $
              -
              
              $
              -
              
              $
              755,876Capital
                  lease obligation
              
              $
              -
              
              $
              7,186
              
              $
              34,235Change
                  in fair value of derivative liability
              
              $
              -
              
              $
              6,154,792
              
              $
              6,154,792Discount
                  on senior secured convertible notes
              
              $
              -
              
              $
              -
              
              $
              2,636,612Forgiveness
                  of debt - line of credit
              
              $
              -
              
              $
              -
              
              $
              1,050,000Issuance
                    of common stock upon conversion of line
                    of credit loans
              
              $
              -
              
              $
              -
              
              $
              4,158,450Issuance
                    of common stock for principal paymentsfor
                    senior secured convertible notes
              
              $
              776,236
              
              $
              -
              
              $
              3,713,630Issuance
                    of common stock for the acquisition ofinitial
                    35% interest in Myotech, LLC
              
              $
              -
              
              $
              -
              
              $
              8,467,698Issuance
                    of common stock in satisfaction of
                    accounts payable
              
              $
              -
              
              $
              -
              
              $
              302,854Liabilities
                      assumed in conjunction with acquisition of 51% interest
                      in Biophan Europe and certain intellectual property
                      rights
              
              $
              -
              
              $
              -
              
              $
              178,384Issuance
                    of common stock upon conversionof
                    bridge loans
              
              $
              -
              
              $
              -
              
              $
              1,142,068Acquisition
                  of intellectual property
              
              $
              -
              
              $
              -
              
              $
              425,000Intellectual
                    property acquired through issuance of capital
                    stock and assumption of related party payable
              
              $
              -
              
              $
              -
              
              $
              175,000




**See
      Notes to Condensed Consolidated Financial Statements**


5


**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


MAY
      31,
      2008




**INTERIM
      FINANCIAL STATEMENTS:**




The
      condensed consolidated financial statements as of May 31, 2008 and for the
      three
      months ended May 31, 2008 and 2007 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 for the fiscal year ended February 29,
      2008.





**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, TE Bio LLC ("TE Bio"), and Myotech, LLC
      ("Myotech"), collectively referred to as the "Company". All significant
      inter-company accounts and transactions have been eliminated in
      consolidation.




**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 and operating profits from
      its
      planned principal business activities. Therefore, the Company is in the
      development stage and will remain so until the realization of significant
      revenues and operating profits. The Company's ability to continue in business
      is
      dependent upon maintaining sufficient financing or attaining future profitable
      operations.




**PRINCIPAL
      BUSINESS ACTIVITIES:**




The
      Company's primary mission is to develop and commercially exploit
      technologies for improving the performance of medical devices manufactured
      by
      third party companies, including the creation, protection and sale of
      intellectual property. The Company possesses technologies for enabling
      biomedical devices, both implantable and those used in diagnostic and
      interventional procedures, to be safe and image compatible with MRI (magnetic
      resonance imaging). The Company is also developing and marketing a system for
      generating power for implantable devices from body heat, and a series of
      implantable devices including MRI-visible vascular implants such as a vena
      cava
      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 the heart.
      The Company's first licensee for several of these technologies was Boston
      Scientific (NYSE: BSX). The Company is also a majority owner of Myotech
      (accounted for as a variable interest entity prior to October 2, 2007) the
      developer of the Myotech CSS, a circulatory support system that does not contact
      circulating blood and utilizes technology that the Company believes has the
      potential to become a standard of care for treating acute heart failure
      including sudden cardiac arrest.




**INCOME
      TAXES**





Deferred
      tax assets and liabilities are recognized for future tax consequences
      attributable to differences between the financial statement carrying amounts
      of
      existing assets and liabilities and their respective tax bases. Deferred tax
      assets and liabilities are measured using enacted rates expected to apply when
      the differences are expected to be realized. Deferred tax assets are reduced
      by
      a valuation allowance when, in the opinion of management, it is more likely
      than
      not that some portion or all of the deferred tax assets will not be realized.
      Realization of the deferred income tax asset is dependent on generating
      sufficient taxable income in future years. The Company has recorded a 100%
      valuation allowance against net deferred tax assets due to uncertainty of their
      ultimate realization.




In
      June
      2006, the Financial Accounting Standards Board ("FASB") issued FASB
      Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
      interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the
      accounting for uncertainty in income taxes recognized in a company's financial
      statements in accordance with SFAS No. 109, "Accounting for Income Taxes."
      FIN
      48 prescribes a recognition threshold and measurement attribute for the
      financial statement recognition and measurement of a tax position taken or
      expected to be taken in a tax return. The Company adopted FIN 48 effective
      March
      1, 2007. The adoption of FIN48 did not have a material effect on it’s
      consolidated financial position or results of operations as the Company has
      no
      unrecognized tax liabilities and has not incurred any interest or penalties
      in
      any of its tax jurisdictions. It is the Company policy to charge interest and
      penalties incurred on the underpayment of income taxes to interest
      expense and other expense, respectively. The Company has open tax years
      beginning in fiscal years ended February 28, 2005 through February 29, 2008.
      The
      Company is currently being audited by certain state tax authorities for the
      2006
      tax year.




6


**BIOPHAN
          TECHNOLOGIES, INC. AND SUBSIDIARIES**
 (A
          DEVELOPMENT STAGE COMPANY)
  **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 MAY
          31,
          2008
 **RECENT
        ACCOUNTING PRONOUNCEMENTS:**
 
 In
        June
        2006, The FASB issued Interpretation No. 48 “Accounting for Uncertainty in
        Income Taxes—an interpretation of FASB Statement No. 109” (“FIN 48”). This
        Interpretation clarifies the accounting for uncertainty in income taxes
        recognized in an enterprise’s financial statements in accordance with FASB
        Statement No. 109, “Accounting for Income Taxes” *.* FIN 48
        prescribes a recognition threshold and measurement attribute for the financial
        statement recognition and measurement of a tax position taken or expected
        to be
        taken in a tax return. This Interpretation also provides guidance on
        derecognition, classification, interest and penalties, accounting in interim
        periods, disclosure, and transition. The Company adopted the provisions of
        FIN 48 in the first quarter of fiscal 2008.
  In
        September 2006, the FASB issued SFAS No. 157 ("SFAS 157"), "Fair
        Value Measurements," which defines fair value, establishes guidelines for
        measuring fair value and expands disclosures regarding fair value measurements.
        SFAS 157 does not require any new fair value measurements but rather
        eliminates inconsistencies in guidance found in various prior accounting
        pronouncements. SFAS 157 is effective for fiscal years beginning after
        November 15, 2007. However, on December 14, 2007, the FASB issued
        proposed FSP FAS 157-b which would delay the effective date of
        SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except
        those that are recognized or disclosed at fair value in the financial statements
        on a recurring basis (at least annually). This proposed FSP partially defers
        the
        effective date of Statement 157 to fiscal years beginning after
        November 15, 2008, and interim periods within those fiscal years for items
        within the scope of this FSP. The Company is currently evaluating the
        impact of adoption of FIN 157 on our financial position, result of operations
        and cash flows.
  In
        December 2006, the FASB issued Staff Position No. EITF 00-19-2. This FSP
        addresses an issuer's accounting for registration payment arrangements and
        specifies that the contingent obligation to make future payments or otherwise
        transfer consideration under a registration payment arrangement should be
        separately recognized and measured in accordance with FASB No. 5. The guidance
        in this FSP amends FASB Statements 133 and 150 and FASB Interpretation No.
        45 to
        include scope exceptions for registration payment arrangements. This FSP
        further
        clarifies that a financial instrument subject to a registration payment
        arrangement should be accounted for without regard to the contingent obligation
        to transfer consideration pursuant to the registration payment arrangement.
        The
        Company adopted this EITF in the first quarter of 2007 in connection with
        the
        issuance of the Senior Secured Convertible Notes and related
        warrants.
  In
        February 2007, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 159, The Fair Value Option for Financial
        Assets and Financial Liabilities ("SFAS No. 159"). SFAS No. 159 permits
        companies to elect to follow fair value accounting for certain financial
        assets
        and liabilities in an effort to mitigate volatility in earnings without having
        to apply complex hedge accounting provisions. The standard also establishes
        presentation and disclosure requirements designed to facilitate comparison
        between entities that choose different measurement attributes for similar
        types
        of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning
        after November 15, 2007. The Company chose not to apply the provisions of
        SFAS
        No. 159.
  In
        June
        2007, the Financial Accounting Standards Board ratified EITF Issue
        No. 07-3, which clarifies the method and timing for recognition of
        nonrefundable advance payments for goods and services to be used or rendered
        in
        future research and development activities pursuant to an executory contractual
        arrangement. In particular, it addresses whether nonrefundable advance payments
        for goods or services that will be used or rendered for research and development
        activities should be expensed when the advance payment is made or when the
        research and development activity has been performed. The Company adopted
        the
        consensus in this Issue on March 1, 2008
  In
        December 2007, the FASB issued SFAS No. 141(R), Business Combinations
        and SFAS No. 160, Accounting and Reporting of Noncontrolling Interest
        in Consolidated Financial Statements, an amendment of ARB No. 51. These new
        standards will significantly change the accounting for and reporting of business
        combinations and non-controlling (minority) interests in consolidated financial
        statements. Statement Nos. 141(R) and 160 are required to be adopted
        simultaneously and are effective for the first annual reporting period beginning
        on or after December 15, 2008. Earlier adoption is prohibited.
        SFAS Nos. 141(R) and SFAS 160 will be applied prospectively to
        business combinations with an acquisition date after the effective date.
        The
        adoption of SFAS Nos. 141(R) and 160 are expected to have an impact on the
        Company’s financial statements for current and future subsidiary
        investments.
  Management
        does not believe that any recently issued, but not yet effective accounting
        standards, if currently adopted, would have a material effect on the
        accompanying financial statements.
  **INVESTMENT
        IN MYOTECH, LLC:**
 
 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.
  7
 **BIOPHAN
          TECHNOLOGIES, INC. AND SUBSIDIARIES**
 (A
          DEVELOPMENT STAGE COMPANY)
  **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 MAY
          31,
          2008
  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 and could have elected 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 would have resulted in the Company owning a majority interest
        in
        Myotech. Through October 1, 2007, Biophan provided an aggregate of $4,636,040
        of
        additional funding in exchange for 1,682,234 newly issued Class A units of
        Myotech, which raised our ownership percentage to 44.1%.
 
 On
        October 2, 2007, we entered into a revised Securities Purchase Agreement
        with
        Myotech pursuant to which the Company agreed to purchase from Myotech an
        additional 15,496,547 Class A membership units for an aggregate purchase
        price
        of $3,200,000. Prior to the execution of the Agreement, Biophan owned 5,408,194
        Class A membership units. Upon execution of the Agreement, Biophan purchased
        an
        additional 9,316,547 Class A membership units upon the payment of an aggregate
        initial purchase price of $1,200,000 bringing our ownership percentage as
        of
        November 30, 2007 to 68.02%. Thereafter, upon the satisfaction of certain
        conditions, Biophan will purchase an additional 6,180,000 Class A membership
        units for a purchase price of $2,000,000, which will increase our ownership
        percentage to approximately 75%. The increase in our equity interest for
        consideration of $1,200,000 was at a per-unit price that was less than the
        then
        book value per unit. This excess of the book value over the cost, or negative
        goodwill, in the amount of $4,697,552 was allocated to reduce the stated
        value
        of the Myotech intellectual property in consolidation.
 
 On
        May 1,
        2008 Biophan purchased an additional 618,000 units for $200,000 increasing
        ownership to 68.9%. Subsequent to the quarter ended May 31, 2008 Biophan
        purchased an additional 1,236,000 units for $400,000 increasing ownership to 70.6%.
  Prior
        to
        our obtaining a majority interest, we determined Myotech was a Variable Interest
        Entity within the meaning of FIN 46(R) and the Company is the primary
        beneficiary (as defined in FIN 46(R)). Consequently, the financial statements
        of
        Myotech have been consolidated with our consolidated financial statements
        for
        all periods ending on or after November 30, 2005, the date of our initial
        investment in Myotech.
  The
        following is selected financial data for Myotech, LLC for the three months
        ended:
 May
                    31,2008
                
                2007Total
                    current assets
                
                $
                128,448
                
                $
                46,594Intangible
                    assets, net of amortization
                
                
                21,352,088
                
                
                22,729,640Other
                    assets
                
                
                112,487
                
                
                178,907Total
                    assets
                
                $
                21,593,023
                
                
                22,955,141Current
                    liabilities
                
                $
                153,676
                
                $
                375,341Equity
                
                
                21,439,346
                
                
                22,579,800$
                21,593,023
                
                $
                22,955,141Net
                    loss from operations
                
                $
                (869,438
                )
                $
                (956,632
                )
  **LINE
        OF CREDIT AGREEMENTS:**
 
 On
        May
        27, 2005, we entered into a Line of Credit Agreement (LOC #1) with Biomed
        Solutions, LLC, at the time a related party, whereby Biomed agreed to provide
        a
        line of credit facility of up to $2 million. Upon the resignation of Biophan’s
        former CEO, Michael Weiner, on October 3, 2007 Biomed was no longer deemed
        a
        related party. Borrowings under the line bear interest at 8% per annum, are
        payable on demand 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, 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 which was valued utilizing the
        Black-Scholes Option Pricing Model. The discount was amortized as additional
        interest expense over the term of the note. In August 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, 2008 and 2007.
  8
 **BIOPHAN
          TECHNOLOGIES, INC. AND SUBSIDIARIES**
 (A
          DEVELOPMENT STAGE COMPANY)
  **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 MAY
          31,
          2008
  On
        January 24, 2006, we entered into an additional Line of Credit Agreement
        (the
        "Line of Credit Agreement")(LOC #2) with Biomed Solutions, LLC, pursuant
        to
        which Biomed committed to make advances to us, in an aggregate amount of
        up to
        $5,000,000. Amounts borrowed bear interest at the rate of 8% per annum, and
        principal and interest were 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 expired on June 30, 2007, on which date the entire amount
        borrowed by us (and not converted into shares of our Common Stock) became
        due
        and payable. In connection with the establishment of the credit facility,
        we
        issued to Biomed a warrant to purchase up to 1,198,630 shares of our Common
        Stock at an exercise price of $1.89 per share. The Company recorded a discount
        on the borrowings of $1,678,425 due to the beneficial conversion feature
        of the
        note as well as for the value of the warrant.
  On
        October 11, 2006, in connection with our Securities Purchase Agreement dated
        October 11, 2006 with Iroquois Master Fund Ltd and other private investors
        (the
        "Purchase Agreement"), we amended our January 24, 2006 Line of Credit Agreement
        (the "Biomed Line of Credit Agreement") with Biomed and the Convertible
        Promissory Note in the original principal amount of $5,000,000 issued by
        us to
        Biomed on January 24, 2006 pursuant to the Biomed Line of Credit Agreement
        (the
        "$5,000,000 Biomed Note"). The amendment reduced the price at which the
        $5,000,000 Biomed Note is convertible into shares of our Common Stock from
        $1.46
        per share to a conversion price of $0.67. In connection with the Purchase
        Agreement, we also entered into a Subordination and Standstill Agreement
        (the
        "Subordination Agreement") with Biomed and the investors who are parties
        to the
        Purchase Agreement, pursuant to which Biomed agreed (i) to subordinate its
        rights to payment under the $5,000,000 Biomed Note and the Convertible
        Promissory Note in the original principal amount of $2,000,000 issued by
        us to
        Biomed on May 27, 2005 to the rights of the investors under the Notes and
        (ii)
        to convert the entire outstanding amount of principal and interest due under
        the
        $5,000,000 Biomed Note in excess of $700,000 into shares of our common stock
        upon the effectiveness of an amendment to our Articles of Incorporation to
        increase the number of our authorized shares which was effective May 9, 2007.
        On
        July 19, 2007, Biomed converted $2,180,000 of principal and $195,899 of accrued
        interest into a total of 3,546,118 shares of our common stock leaving a balance
        outstanding at August 31, 2007 of $1,750,000. On November 5, 2007, Biophan
        and
        Biomed entered into a Settlement Agreement with SBI to settle all claims,
        causes
        of action and disputes between and among them. As a result of SBI’s forgiveness
        of Biomed’s debt, Biomed forgave $1,050,000 of the Biophan’s Line of Credit
        leaving a balance outstanding of $700,000 as of May 31, 2008 and $3,930,000
        at
        May 31, 2007. This forgiveness of debt by Biomed, a stockholder of the Company
        at that time, was recorded as a credit to additional paid-in capital in
        stockholders’ equity.
 
 The
        total
        balance of borrowings on the lines of credit was $1,200,000 and $4,430,000
        at
        May 31, 2008 and 2007, respectively.
  The
        fair
        value of the notes is not readily determinable as there is a limited market
        for
        such related party debt.
 
 **SENIOR
        SECURED CONVERTIBLE NOTES:**
 
 On
        October 11, 2006, we entered into a Securities Purchase Agreement (the "Purchase
        Agreement") with 10 private investors led by Iroquois Master Fund Ltd
        ("Iroquois"). Pursuant to the Purchase Agreement, on October 12, 2006 we
        issued
        $7,250,000 of Senior Secured Convertible Notes (the "Notes") to the investors
        and received proceeds of $6,219,880 after paying estimated fees and expenses
        of
        $1,030,120 related to the transaction. The holders of the Notes may elect
        to
        convert the Notes at any time into shares of our common stock based upon
        a price
        of $0.67 per share (the "Conversion Price"). Interest on the outstanding
        principal amount under the Notes is payable quarterly at a rate equal to
        the
        six-month London InterBank Overnight Rate plus 500 basis points, with a minimum
        rate of 10% per annum and a maximum rate of 12% per annum, payable at our
        option
        in cash or shares of our common stock registered for resale under the Securities
        Act of 1933, as amended (the "Securities Act"). If we elect to make principal
        or
        interest payments in common stock, the number of shares issuable by us will
        be
        based upon the lower of (i) 90% of the 20-day trailing average volume weighted
        average price per share as reported on Bloomberg LP (the "VWAPS") or (ii)
        the
        Conversion Price. Principal on the Notes amortizes and payments are due in
        33
        equal monthly installments commencing four months following issuance of the
        Notes, and may be made at our option in cash or shares of our common stock
        registered for resale under the Securities Act. If we elect to make an interest
        payment in common stock, the number of shares issuable by us will be based
        upon
        the lower of (i) 90% of the 20-day trailing average volume weighted average
        price per share as reported on Bloomberg LP (the "VWAPS") or (ii) the Conversion
        Price. Our obligations under the Notes are secured by a first priority security
        interest in substantially all of our assets pursuant to a Security
 
 Agreement
        dated as of October 11, 2006 among us, the investors and Iroquois, as agent
        for
        the investors (the "Security Agreement").  The scheduled maturity date of
        the notes is October 2009.
  As
        further consideration to the investors, we issued to the investors one-year
        warrants to purchase an aggregate of 10,820,896 shares of our common stock
        at a
        price of $0.67 per share. If the investors had elected to exercise these
        one-year warrants, they would have received additional five-year warrants
        to
        purchase the shares of our common stock equal to the number of shares purchased
        under the one-year warrants, with 50% of the additional warrants having an
        exercise price of 115% of the per share purchase price, and the remaining
        50% of
        the additional five-year warrants having an exercise price of 125% of the
        per
        share purchase price. These one year warrants expired May 7, 2008. We also
        issued to the investors five-year warrants to purchase an aggregate of
        10,820,896 shares of our common stock. The first five-year warrants allowed
        for
        the purchase of 5,410,448 shares of our common stock at an exercise price
        of
        $0.81 per share, and the second five-year warrants allowed for the purchase
        of
        5,410,448 shares of our common stock at an exercise price of $0.89 per share.
        The warrants contain anti-dilution protection that, should we issue equity
        or
        equity-linked securities at a price per common share below the exercise price
        of
        the five-year warrants, it will automatically adjust the exercise price of
        the
        warrants to the price at which we issue such equity or equity-linked securities.
        The total fair value of the warrants was $14,554,105 which was calculated
        utilizing the Black-Scholes Option Pricing Model. The Company recorded a
        discount on the Notes of $7,250,000 for the fair value of the related warrants.
        The excess of the fair value of the warrants over the carrying value of the
        notes, which amounted to $7,304,105, was recognized as additional expense
        related to warrants in the statement of operations for the year ended February
        28, 2007. The discount on the Notes is being amortized over the life of the
        Notes using the effective interest method. The discount amortization for
        the
        year ended February 29, 2008 and February 28, 2007 amounted to $3,200,692
        and $1,707,066, respectively and is included in interest expense in the
        accompanying statements of operations.
  9
 **BIOPHAN
          TECHNOLOGIES, INC. AND SUBSIDIARIES**
 (A
          DEVELOPMENT STAGE COMPANY)
  **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 MAY
          31,
          2008
  On
        February 21, 2007, we entered into a Forbearance Agreement (the "Forbearance
        Agreement") with the investors pursuant to which the investors agreed that,
        during the period commencing on February 16, 2007 and ending on the earlier
        of(i) March 31, 2007 or (ii) the date on which any Termination Event (as
        defined
        in the Forbearance Agreement) first occurs (the "Forbearance Period"), they
        will
        forbear from exercising any and all of the rights and remedies which they
        may
        have against us or any of our assets under the Notes or the Purchase Agreement
        or at law or in equity as a result of any default under the Notes or as a
        result
        of the occurrence of certain events with respect to the Purchase Agreement.
        In
        exchange for entering into the Forbearance Agreement, we issued pro rata
        to the
        investors three-year warrants for the purchase of an aggregate of 60,000
        shares
        of our common stock at an exercise price of $0.51 per share (the "Fee
        Warrants"). The warrants were valued at $19,980, utilizing the Black-Scholes
        Option Pricing Model and charged to expense. In consideration for a payment
        of
        $652,500 on October 9, 2007 all the existing defaults under the Notes or
        Purchase Agreement were waived.
  Upon
        the
        issuance of the Fee Warrants, the exercise prices of the five-year warrants
        issued to the investors pursuant to the Purchase Agreement (the "Original
        Warrants") for the purchase of an aggregate of 10,820,896 shares of our common
        stock were automatically adjusted from $0.81 per share and $0.89 per share,
        respectively, to $0.51 per share, and the number of shares of our common
        stock
        issuable upon exercise of the Original Warrants was automatically adjusted,
        proportionately, to an aggregate of 18,034,830 shares. In the Forbearance
        Agreement, the investors waived, with respect to the issuance of the Fee
        Warrants, application of similar anti-dilution adjustments contained in the
        Notes and in a third series of warrants for the purchase, on or before October
        12, 2007, of an aggregate of 10,820,896 additional shares of our common stock
        at
        an exercise price of $0.67 per share (the "One Year Warrants"). Collins Stewart,
        LLC, formerly known as C.E. Unterberg Towbin, which holds a warrant for the
        purchase of 865,672 shares of our common stock at an exercise price of $0.67
        per
        share, issued to it in connection with its services as exclusive placement
        agent
        under the Purchase Agreement, separately agreed to waive, with respect to
        the
        issuance of the Fee Warrants, application of the anti-dilution provisions
        set
        forth in that warrant. Because the anti-dilution adjustment to the Original
        Warrants is accounted for as a modification of the Original Warrants, we
        recorded an expense in the amount of $5,318,064 for this modification in
        the period ended February 28, 2007.
 
 On
        October 3, 2007, we entered into Amendment No. 1 to the Securities Purchase
        Agreement, Senior Secured Convertible Notes, Warrants and Security Agreement
        with the independent private investors. Pursuant to the Amendment, we agreed
        to
        amend the Notes to provide that even if we elect to make a monthly installment
        payment in cash, the holder will have the right to request payment in common
        stock of the Company. In addition, the Conversion Price was reduced to $0.15.
        As
        of May 31, 2008 2,440,000 shares have been converted at $0.15.  The
        Amendment also amended the warrants to reduce the exercise prices of the
        various
        warrants to $0.23. In exchange for the foregoing, the investors released
        certain
        intellectual property for the Security Agreement, allowing the Company to
        transfer and sell such intellectual property. Further, in the Amendment,
        we
        agreed to certain spending covenants in connection with the proceeds we received
        from the sale of the intellectual property under the Intellectual Property
        Assignment Agreement dated as of August 6, 2007 by and between Biophan and
        Medtronic, Inc. For accounting purposes, these amendments as they pertain
        to
        re-pricing of the convertible debt and warrants, have been treated as an
        extinguishment of the old debt. Accordingly, during fiscal 2008 the remaining
        unamortized discount on the old debt of $3,352,581 was written off, a loss
        on
        extinguishment of $3,189,187 on the old debt was recognized, and a new discount
        in the amount of $2,636,612 was recorded. In addition, a beneficial conversion
        charge to interest expense was recorded in the amount of
        $3,021,197.
  On
        February 7, 2008, the Securities Purchase Agreement was amended further to,
        among other things, allow the Company to withdraw the Registration Statement
        on
        Form S-1 (SEC File Number 333-146930) which was filed with the Securities
        and
        Exchange Commission on October 25, 2007 on behalf of the Investors, without
        any
        liquidated damages or penalties or further obligations to file a registration
        statement in connection with any securities held by the Investors. While
        the
        Registration Statement was pending, in order to continue to satisfy its payment
        obligations to the Investors under the Agreement, the Company issued 11,869,235
        shares of its common stock from November 30, 2007 through February 29, 2008.
        The
        shares were issued without registration under the Securities Act of 1933
        in
        reliance on the exemption provided in Section 4(2) of such Act. In exchange,
        we
        agreed to change the definition of Market Price if the average for the 20
        Trading Days ending immediately prior to the applicable Principal Payment
        Date
        is below $0.15 (the conversion price). Market Price will be calculated on
        80% of
        the arithmetic average of the VWAP for each of the 20 Trading Days ending
        immediately prior to the applicable Principal Payment Date. The discount
        from
        the market price of 20% is recognized as additional interest
        expense.
  The
        outstanding principal on the senior secured convertible notes was $3,149,155
        and
        $7,250,000 at May 31, 2008 and 2007, respectively.
 
 10
 **BIOPHAN
          TECHNOLOGIES, INC. AND SUBSIDIARIES**
 (A
          DEVELOPMENT STAGE COMPANY)
  **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 MAY
          31,
          2008
  **FAIR
        VALUE OF WARRANT LIABILITY:**
  In
        accordance with the guidance provided by EITF 00-19, Accounting for Derivative
        Financial Instruments Indexed to and Potentially Settled in, a Company's
        Own
        Stock, we have recorded a liability for the fair value of the warrants related
        to the Senior Secured Convertible Notes from time to time in order to provide
        for the possibility that we would not be able to comply with the registration
        rights of the lenders as contained in the Securities Purchase Agreement because
        we did not have sufficient available authorized shares to execute a potential
        conversion of the Notes and related warrants and thus we would be required
        to
        settle the contract in cash. In addition, if we did not have sufficient
        available authorized shares to execute a potential conversion of other
        outstanding warrants, if requested to do so by the grantees, we could be
        required to settle any conversion requests in cash. Therefore, we would be
        required to reclassify warrants from equity to a warrant liability account
        and
        based on the fair value of the warrants at the time, reverse this transaction
        when the condition no longer exists.
 
 On
        May
        31, 2008 and February 29, 2008, the Company was not required to record a
        warrant
        liability as defined by EITF 00-19.
 
 **STOCKHOLDERS'
        EQUITY:**
 
 Event
              
              Number of
                Shares
                Issued
              
              Common Stock
              
              Additional Paid
                in CapitalBalance
                  at February 29, 2008
              
              
              114,205,424
              
              $
              595,643
              
              $
              78,015,527Shares
                  issued for principal and interest on convertible notes
              
              
              26,138,910
              
              
              130,694
              
              
              869,756Shares
                  issued to directors
              
              
              900,000
              
              
              4,500
              
              
              31,500Shares
                  issued for services
              
              
              647,504
              
              
              3,238
              
              
              20,306Stock
                  option expense
              
              
              -
              
              
              -
              
              
              53,414Balance
                  at May 31, 2008
              
              
              141,891,838
              
              $
              734,075
              
              $
              78,990,503
 
 **STOCK-BASED
        COMPENSATION PLANS:**
  The
        Company accounts for stock-based compensation in accordance with SFAS No.
        123R,
        "Share-Based Payment," using the fair value recognition provisions of SFAS
        No.
        123, "Accounting for Stock-Based Compensation." The Company recognized expense
        under SFAS No. 123R in the amount of $53,414 for the quarter. The related
        impact
        on basic and diluted earnings per share for the quarter ended May 31, 2008
        was a
        reduction of $0.0004. There was no impact on the Company's cash flow.
  The
        Company’s stock incentive plans consist of the Biophan Technologies, Inc. 2001
        Stock Option Plan and the Biophan Technologies, Inc. 2006 Incentive Stock
        Plan
        (the "Plans") which are shareholder approved.   In March 2008, the Board of
        Directors approved and adopted the 2008 Incentive Stock Plan reserving
        10,000,000 which has not yet been approved by stockholders. The Plans provide
        for the grant of incentive and non-qualified stock options to selected
        employees, and the grant of non-qualified options and other stock-based awards
        to selected consultants and to directors and advisory board members. The
        Plans
        are administered by the Compensation Committee of the Board and authorizes
        the
        grant of options or restricted stock awards for 13,000,000 shares under the
        2001
        Plan, 7,500,000 shares under the 2006 Plan and 10,000,000 shares under the
        2008
        Plan. The Compensation Committee determines which eligible individuals are
        to
        receive options or other awards under the Plans, 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 Plans. The Company tends to fund exercised
        options with previously unissued shares. Non-employee directors also receive
        periodic restricted stock grants pursuant to the automatic grant program
        in
        effect for them under the 2008 Plan. Some of the Company's outstanding option
        agreements contain performance milestones as a condition for vesting. In
        accordance with Statement of Accounting Standard No. 123(R), "Share Based
        Payments," the Compensation Committee periodically evaluates the probability
        these milestones will be met and records compensation expense when it is
        determined that the condition is probable of being satisfied. During the
        quarter
        ended May 31, 2008, none of the criteria for vesting of outstanding performance
        options were met.
 
 The
        fair
        value of each option award is estimated on the date of grant using the
        Black-Scholes option valuation model that uses the assumptions noted in the
        following table. Expected volatilities are based on historical volatility
        of the
        Company's stock, management's estimate of implied volatility of the Company's
        stock, and other factors. The expected term of options granted is derived
        from
        the vesting period of the award, as well as historical exercise behavior,
        and
        represents the period of time that options granted are expected to be
        outstanding. The risk-free rate is calculated using the U.S. Treasury yield
        curve, and is based on the expected term of the option. The Company uses
        historical data to estimate forfeitures.
  11
 **BIOPHAN
          TECHNOLOGIES, INC. AND SUBSIDIARIES**
 (A
          DEVELOPMENT STAGE COMPANY)
  **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 MAY
          31,
          2008
  There
        were no options granted during the quarter ended May 31, 2008. The Black-Scholes
        option pricing model was used with the following weighted-average assumptions
        for options granted during the quarter ended May 31, 2007:
 
 Risk-free
                  interest rates
              
              
              4.55%
                  - 4.67%Expected
                  option lives
              
              
              8
                  yearsExpected
                  volatilities
              
              
              75.2.%
                  - 81.4%Expected
                  dividend yields
              
              
              0.0%
  Further
        information relating to stock options is as follows:
  WeightedWeighted
              
              AverageNumber
              
              Average
              
              Remainingof
              
              Exercise
              
              ContractShares
              
              Price
              
              Life
                  (years)Outstanding
                  options at 2/29/08
              
              
              15,503,891
              
              $
              0.63Granted
              
              
              -Exercised
              
              
              -Forfeited/expired
              
              
              -Outstanding
                  options at 5/31/08
              
              
              15,503,891
              
              $
              0.63
              
              
              7.12Exercisable
                  on May 31, 2008
              
              
              13,302,224
              
              $
              0.58
              
              
              7.14
  The
        following table summarizes our non-vested stock option activity for the quarter
        ended May 31, 2008
  Non-vested
                  stock option activityWt'd Avg Grant-DateNo
                  of Shares
              
              Fair ValueNon-vested
                  stock options at 2/29/08
              
              
              1,941,667
              
              $
              0.73Granted
              
              
              -Vested
              
              
              (740,000
              )
              $
              0.21Forfeited/expired
              
              
              -Non-vested
                  stock options at 5/31/08
              
              
              1,201,667
              
              $
              1.09
  As
        of May
        31, 2008 there was approximately $122,000 of total unrecognized compensation
        cost related to unvested options. The cost is expected to be recognized over
        a
        weighted-average period of .08 years.
 
 The
        options have contractual terms ranging from five to ten years. The aggregate
        intrinsic value of shares outstanding and exercisable was $0 at May 31, 2008
        as
        the market price of the Company's common stock was below the weighted-average
        exercise price of options. Total intrinsic value of options exercised was
        $0 for
        the quarter ended May 31, 2008 as there were no options exercised.
  At
        May
        31, 2008, shares available for future stock option grants to employees and
        others under our 2001 Stock Option Plan, our 2006 Incentive Stock Plan and
        2008
        Incentive Stock Plan were 44,480 and 26,566 and 8,452,496, respectively.
  EARNINGS
        PER SHARE:
 
 If
        the
        Company had generated earnings during the three-month period ended May 31,
        2008, no common stock equivalent shares would have been added to the weighted
        average shares outstanding as no options have exercise prices below the average
        fair value of the Company’s stock during the period.
 
 12
 **BIOPHAN
          TECHNOLOGIES, INC. AND SUBSIDIARIES**
 (A
          DEVELOPMENT STAGE COMPANY)
  **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 MAY
          31,
          2008
  **CONTINGENCIES:**
 
 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.
 
 On
        April
        17, 2008, the Company reached an agreement to terminate the Company’s forward
        funding commitments with Biophan Europe GmbH. As a result, it's likely the
        Company's ownership percentage in Biophan Europe will be reduced and the
        Company
        will no longer be required to consolidate this entity. Management believes
        this
        will not have a material effect on the Company's condensed consolidated
        financial statements in future periods. In addition, on May 5, 2008 Biophan
        Europe settled a dispute with a minority shareholder whereby Biophan Europe
        paid
        the shareholder $80,000 and agreed to issue 150,000 shares of the Company’s
        stock. valued at approximately $2,250. The settlement will allow Biophan
        Europe
        to pursue future funding of its operations without
        restrictions.




13




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





**Forward
      Looking Statements**




This
      report on Form 10-Q/A contains statements that are considered forward-looking
      statements. Forward-looking statements give the Company's current expectations
      and forecasts of future events. All statements other than statements of current
      or historical fact contained in this annual report, including statements
      regarding the Company's future financial position, business strategy, budgets,
      projected costs and plans and objectives of management for future operations,
      are forward-looking statements. The words "anticipate," "believe," "continue,"
      "estimate," "expect," "intend," "may," "plan," and similar expressions, as
      they
      relate to the Company, are intended to identify forward-looking statements.
      These statements are based on the Company's current plans, and the Company's
      actual future activities and results of operations may be materially different
      from those set forth in the forward-looking statements. These forward-looking
      statements are subject to risks and uncertainties that could cause actual
      results to differ materially from the statements made. Any or all of the
      forward-looking statements in this report may turn out to be inaccurate. The
      Company has based these forward-looking statements largely on its current
      expectations and projections about future events and financial trends that
      it
      believes may affect its financial condition, results of operations, business
      strategy and financial needs. The forward-looking statements can be affected
      by
      inaccurate assumptions or by known or unknown risks, uncertainties and
      assumptions. The Company undertakes no obligation to publicly revise these
      forward-looking statements to reflect events occurring after the date hereof.
      All subsequent written and oral forward-looking statements attributable to
      the
      Company or persons acting on its behalf are expressly qualified in their
      entirety by the cautionary statements contained in this report.





**GENERAL**




Our
      primary mission is to develop and commercially exploit novel medical device
      technologies to improve the delivery of healthcare. 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**




During
      the three-month period ended May 31, 2008, we accomplished the
      following:




· We
      have continued collaboration with Myotech, LLC on development of the Myotech
      Circulatory Support System (CSS), a life-saving device that provides benefits
      and competitive advantages not possible with other circulatory support devices.
      In the past, first generation prototype versions of this technology (Direct
      Mechanical Ventricular Actuation) have saved human lives and hold tremendous
      promise of the treatment of acute heart failure. On April 23, 2008, we announced
      approval to move to the next stage of development of the Myotech CSS, allowing
      investment of an additional $2 million in Myotech for implementation of a plan
      to be on the market as soon as 24 to 30 months.




· We
      recognized approximately $222,000 in revenue from licensing, grants, development
      payments, MRI testing, and consulting fees.




· Our
      subsidiary Biophan Europe has continued development of an MRI image compatible
      stent, capable of being imaged with MRI to detect the presence of restenosis
      (blood vessel narrowing) and blood clots after implantation. Biophan Europe
      is
      also developing an MRI visible heart valve, including the ability to place
      the
      valve under MRI guidance, which provides significant advantages over existing
      imaging procedures. Our technologies to enable stent and heart valve visibility
      are licensed exclusively to Boston Scientific (NYSE:BSX). Biophan Europe is
      also
      continuing development of an MRI image compatible vena cava filter, which allows
      MR imaging of blood clots that may be present in the filter to help ensure
      the
      safe removal of the device, in addition to an occluder device that can also
      be
      imaged and implanted under MRI guidance to treat conditions such as PFO (patent
      foramen ovale) and atrial septal defects.




· We
      have continued working under a Cooperative Research and Development Agreement
      (CRADA) with the FDA's Office of Science and Engineering Laboratories (OSEL)
      to
      research and define methods for measuring MRI safety of medical implants by
      examining the leads of cardiac rhythm management and neurostimulation
      devices.




We
      have
      determined that the technology that we control which is the most proven and
      most
      likely to produce revenues within the near term is the Myotech CSS. This
      technology is our primary areas of focus. Work on MRI visibility is centered
      in
      Europe in our Biophan Europe subsidiary.




Biophan's
      Board approved the purchase of the patent assets of Nanoset LLC that had
      previously been exclusively licensed for medical applications.  The
      purchase allows Biophan to exploit the technology disclosed in these patents
      and
      applications in non-medical markets and eliminates the annual royalty minimum
      payments.  The Nanoset patents cover the compositions of matter,
      manufacturing methods, and device designs that employ nanomagnetic
      materials that can potentially be used to shield against unwanted
      electromagnetic energy, enhance the quality of magnetic resonance images of
      implanted devices such as stents, or be used as contrast media for MRI
      procedures.




14




Other
      programs, such as the biothermal power supply that we have been developing
      with
      NASA, will take longer to develop, and we have decided to fund these projects
      through either government grants, strategic partners, or other structures that
      do not divert focus and resources from our short-term goals of capitalizing
      on
      our core business. We have aggressively filed grant applications to help fund
      the development of our early stage technologies.





The
      work
      done to date at NASA on the biothermal power supply has indicated that it may
      require an additional 18 months to determine if we can develop a significant
      improvement in performance of thermoelectric materials over the current state
      of
      the art adequate to generate power from the available heat in the human body.
      We
      have secured one SBIR Phase 1 grant from the Department of Homeland Security,
      and another from the Department of Energy, for the development of the biothermal
      power supply, and we are pursuing additional grant and matching fund
      opportunities with other Federal agencies.





On
      April
      17, 2008, the Company reached an agreement to terminate the Company’s forward
      funding commitments with Biophan Europe GmbH. As a result, it's likely the
      Company's ownership percentage in Biophan Europe will be reduced and the Company
      will no longer be required to consolidate this entity. Management believes
      this
      will not have a material effect on the Company's condensed consolidated
      financial statements in future periods.




**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, 2008 as compared to the three months
      ended May 31, 2007.




**COMPARISON
      OF THE THREE MONTHS ENDED MAY 31, 2008 AND 2007**




**Revenue**




Revenues
      were approximately $222,000 for the three months ended May 31, 2008 as compared
      to $172,000 for the three months ended May 31, 2007. The increase is due to
      a
      transitional services agreement the Company has with Medtronics, Inc. in
      connection with the sale of intellectual property to Medtronics for $11,000,000
      during fiscal 2008. Pursuant to the agreement the Company receives $15,000
      per
      month for technical support through September 2008 .




**Research
      and Development** .




Research
      and development expenses decreased by 22%, to approximately $1,028,000 for
      the
      three months ended May 31, 2008 from approximately $1,320,000 for the three
      months ended May 31, 2007. This decrease is primarily attributable to decreased
      salaries of $153,000, reduced spending on several research and development
      projects of $96,000, and reduced non-cash stock option expense of $68,000.
      Trends going forward, (i.e. The company anticipates that research and
      development expenditures will gradually begin to trend upward as the company
      gets closer to commercialization of its CSS technology. These expenditures
      will
      be dependent on the Company’s ability to continue to funds these expenses
      through existing working capital and future capital raises.




**General
      and Administrative**




General
      and administrative expenses decreased by 30% to approximately $1,033,000 for
      the
      three months ended May 31, 2008 from approximately $1,488,000 for the three
      months ended May 31, 2007. This decrease is primarily attributable to decreased
      salaries of $141,000, decreased spending for travel of $46,000, professional
      services of $38,000, and reduced non-cash stock option expense of $222,000.
      These amounts are in addition to general reductions in spending for almost
      all
      other categories. The
      Company continues to monitor and reduce its general and administrative expenses
      to provide maximum working capital to fund its research and development
      efforts.




**Other
      Income and Expense**




Interest
      Expense. We incurred interest expense amounting to approximately $762,000 for
      the three months ended May 31, 2008 compared to $1,385,000 for the three months
      ended May 31, 2007. The reduction pertained primarily to the conversion or
      repricing of the senior secured convertible notes which will continue until
      their maturity in October 2009.




Change
      in
      Fair Value of Warrant Liability. We have not been required to recognize a fair
      value derivative liability for the three months ended May 31, 2008. See
      discussion above regarding “Fair Value of Warrant Liability”.




Minority
        Interest in Subsidiaries. The decrease in this line-item is a direct effect
        of
        allocating the decreased losses incurred by Myotech to the interest of the
        owners of Myotech other than Biophan. This minority interest in the losses
        of
        Myotech will continue to decrease as the Company increases its planned equity
        ownership in Myotech to 75%.
  15


**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


MAY
      31,
      2008




**LIQUIDITY**





On
      October 3, 2007, we entered into Amendment No. 1 to the Securities Purchase
      Agreement, Senior Secured Convertible Notes, Warrants and Security Agreement
      with 10 independent private investors led by Iroquois Master Fund Ltd
      (“Iroquois”). Pursuant to the Amendment and related agreements, certain events
      of default were cured and the investors released certain intellectual property
      for the Security Agreement, allowing
      the Company to transfer and sell certain intellectual property to Medtronic,
      Inc. Further, in the Amendment, we agreed to certain spending covenants in
      connection with the proceeds we received from the sale of the intellectual
      property under the Intellectual Property Assignment Agreement dated as of August
      6, 2007 by and between Biophan and Medtronic. On October 5, 2007, we closed
      the
      transaction contemplated by the Intellectual Property Assignment Agreement,
      sold
      the foregoing intellectual property to Medtronic and received an aggregate
      of
      $11,000,000 as the sale price. At May 31, 2008, we have a cash balance
      $5,700,000 and a working capital position of approximately
      $2,200,000.




Since
      October 2007, Biophan instituted a cost reduction program that includes a
      significant reduction in quarterly recurring operating expenses to a cap of
      $600,000 per quarter currently. In addition, Biophan has reduced its investments
      in several product lines and pursued alternative funding vehicles in support
      of
      other projects.





We
      have
      also reorganized our efforts on funding the development of the Myotech Cardiac
      Support System device. On October 2, 2007, we entered into a revised Securities
      Purchase Agreement with Myotech, LLC in which we hold a 68.9% interest as of
      May
      31, 2008. Pursuant to the Agreement, we agreed to purchase from Myotech an
      aggregate of 15,496,547 membership units for an aggregate purchase price of
      $3,200,000. In accordance with the Agreement, we received an additional
      5,000,000 Class A Membership Units and an additional 4,316,547 Class A
      Membership Units upon the payment of an aggregate initial purchase price of
      $1,200,000. Thereafter, upon the satisfaction of certain conditions, Biophan
      will purchase an additional 6,180,000 Class A Membership Units of Myotech for
      a
      purchase price of $2,000,000. As a result of these investments, our ownership
      percentage in Myotech will increase to approximately 75%.





We
      believe the Company has adequate working capital resources for the upcoming
      twelve to eighteen months of operations.




**CAPITAL
      RESOURCES**




Our
      current strategic plan does not indicate a need for material capital
      expenditures to conduct planned research and development
      activities.




We
      currently employ thirteen full-time individuals, twelve in the U.S. and one
      in
      Europe.




**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





Not
      Applicable




**ITEM
      4. CONTROLS AND PROCEDURES**





Evaluation
      of Disclosure Controls and Procedures .





Management
      is responsible for establishing and maintaining effective disclosure controls
      and procedures. As of May 31, 2008, our Chief Executive Officer and Chief
      Financial Officer participated with our management in evaluating the
      effectiveness of our disclosure controls and procedures (as defined in
      Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
      amended (the “Exchange Act”)). Our disclosure controls and procedures are
      designed to ensure that information required to be disclosed in the Securities
      and Exchange Commission (“SEC”) reports we file or submit under the Exchange Act
      is recorded, processed, summarized and reported within the time period specified
      by the SEC’s rules and forms and that such information is accumulated and
      communicated to management, including our Chief Executive Officer and Chief
      Financial Officer, to allow timely decisions regarding required disclosure.
      In
      light of the discussion of the material weakness set forth below, these officers
      have concluded that our disclosure controls and procedures were not effective.
      To address the material weakness described below, we performed additional
      analyses and other post-closing procedures to ensure our consolidated financial
      statements were prepared in accordance with accounting principles generally
      accepted in the United States of America (U.S. GAAP). Accordingly, management
      believes that the financial statements included in this Quarterly Report on
      Form
      10-Q/A fairly present, in all material respects, our financial condition, result
      of operations and cash flows for the periods presented.




16




Management’s
      Report on Internal Control Over Financial Reporting





A
      company’s internal control over financial reporting is a process designed by, or
      under the supervision of, a public company’s principal executive and principal
      financial officers, or persons performing similar functions, and effected by
      the
      board of directors, management and other personnel, to provide reasonable
      assurance regarding the reliability of financial reporting and the preparation
      of financial statements for external purposes in accordance with generally
      accepted accounting principles (“GAAP”) including those policies and procedures
      that: (i) pertain to the maintenance of records that in reasonable detail
      accurately and fairly reflect the transactions and dispositions of the assets
      of
      the company, (ii) provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with GAAP, and that receipts and expenditures are being made only
      in
      accordance with authorizations of management and directors of the company,
      and
      (iii) provide reasonable assurance regarding prevention or timely detection
      of unauthorized acquisition, use or disposition of the company’s assets that
      could have a material effect on the financial statements.





Management
      is responsible for establishing and maintaining adequate internal control over
      financial reporting. Our management, with the participation of our Chief
      Executive Officer and Chief Financial Officer, has assessed the effectiveness
      of
      our internal control over financial reporting as of February 29, 2008 (the
      last
      annual Management’s Assessment of Internal Control over Financial Reporting) .
      In making this assessment, our management used the criteria established in *Internal
      Control — Integrated Framework* issued
      by
      the Committee of Sponsoring Organizations of the Treadway Commission (COSO).





A
      material weakness is a control deficiency, or combination of control
      deficiencies, such that there is a reasonable possibility that a material
      misstatement of the annual or interim financial statements will not be prevented
      or detected on a timely basis. In connection with management’s assessment of our
      internal control over financial reporting described above, management has
      identified the following material weakness in the Company’s internal control
      over financial reporting as of February 29, 2008:





The
                Company did not maintain effective controls over accounting for income
                taxes, specifically the application of Statement of Financial Accounting
                Standards No. 109, “Accounting for Income Taxes “ (as Amended), which
                requires management to 1.) identify and evaluate the tax implications
                of
                non-routine transactions, including those related to the acquisition
                of
                interest in subsidiaries and the senior secured convertible debt,
                among
                others, 2.) evaluate net operating loss carryforwards, 3.) prepare
                the
                provision for income taxes and income taxes payable (where applicable)
                including tax reserves, return to provision adjustments, and 4.)
                reconcile
                all differences between tax and financial reporting basis of its
                assets
                and liabilities, with its deferred income tax assets and liabilities.
                Company management does not possess the requisite knowledge or experience
                to adequately address the financial statement risks associated with
                certain complex transactions and as a consequence relied on the help
                of
                outside advisors (other than their independent auditors) to properly
                state
                the Company’s financial statements.





As
      a
      result of the material weaknesses described above, our management concluded
      that
      as of February 29, 2008, we did not maintain effective internal control over
      financial reporting based on the criteria established in *Internal
      Control — Integrated Framework* issued
      by
      the COSO.





The
      annual report included on Form 10-K referred to above did not include an
      attestation report of the Company’s registered public accounting firm regarding
      internal control over financial reporting. Management’s report was not subject
      to attestation by the Company’s registered public accounting firm pursuant to
      the temporary rules of the SEC that permit the Company to provide only
      management’s report in the aforementioned annual report on the Company’s
      Form 10-K filed with the SEC on June 13, 2008.





Plan
      for Remediation of Material Weaknesses .





In
      response to the identified material weakness, management, with oversight from
      the Company’s audit committee, plans to improve internal controls over
      accounting for income taxes by formalizing a periodic tax review process that
      includes the development of formalized policies and procedures, required
      periodic consultation with qualified outside advisors, documentation standards
      and workpaper review and approval guidelines. In addition, the Company intends
      to provide tax training and educational opportunities to Company employess
      to
      enhance internal awareness of tax-specific matters.





Notwithstanding
      the material weaknesses discussed above, management believes that the financial
      statements included in this report present fairly, in all material respects,
      our
      financial position, results of operations, and cash flows for the periods
      presented in accordance with U.S. generally accepted accounting principles.





Changes
      in Internal Control Over Financial Reporting .





There
      were no changes in our internal controls over financial reporting identified
      in
      connection with the evaluation required by paragraph (d) of
      Rule 13a-15 or Rule 15d-15 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.





17


**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.




**ITEM
      1A. RISK FACTORS**




There
      are
      no material changes from risk factors as previously disclosed in the Company's
      Form 10-K for the fiscal year ended February 29, 2008.




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




Not
      applicable.




**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**




Not
      applicable.




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




Not
      applicable.




**ITEM
      5. OTHER INFORMATION**





On
      July
      14, 2008, the Company issued a press release announcing the retirement of Robert
      J. Wood as the Company’s Chief Financial Officer effective July 15, 2008, and
      the appointment of Margaret V. Russell as the Company’s new Chief Financial
      Officer.  Ms. Russell also was elected by the Board of Directors as a Vice
      President and Treasurer of the Company effective July 15, 2008.  A copy of
      the press release is filed herewith as Exhibit 99.1.




**ITEM
      6. EXHIBITS**





Exhibit
                No.
            
            Exhibit
                Description
            
            Location31.1
            
            Certification
                of principal executive officer
            
            Filed
                herewithpursuant
                to Rule 13a-14(a)31.2
            
            Certification
                of principal financial officer
            
            Filed
                herewithpursuant
                to Rule 13a-14(a)32.1
            
            Certification
                of principal executive officer
            
            Filed
                herewithpursuant
                to Rule 13a-14(b) and 18 U.S.C.Section
                135032.2
            
            Certification
                of principal financial officer
            
            Filed
                herewithpursuant
                to Rule 13a-14(b) and 18 U.S.C.Section
                135099.1
            
            Press
                Release, dated July 14, 2008, issuedby
                Biophan Technologies, Inc
            
            Filed
                herewith




18


**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)Date:
                July 14, 2008By:
            /s/   
                John F. LanzafameName:
            John
                F. Lanzafame,Title:
            Chief
                Executive OfficerBy:
            /s/   
                Robert J. WoodName:
            Robert
                J. WoodTitle:
            Chief
                Financial Officer,Treasurer
                and Secretary




19