SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549  FORM 10-QSB  (Mark One)  X       QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For quarterly period ended September 30, 2007  ____       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from _____ to _____  PHYTOMEDICAL TECHNOLOGIES, INC.  
AND SUBSIDIARIES (Exact name of registrant as specified in its charter)  Nevada (State or other jurisdiction of incorporation)  000-28790 (Commission File Number)  87-0429962 (I.R.S Employer Identification No.)  100 Overlook Drive, Princeton, New Jersey  08540 (Address of principal executive offices)  (604) 659-5004 (Registrants telephone number, including area code)   Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesxNoo  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YesoNox  State the number of shares outstanding of each of the Issuers classes of common equity as of the latest practicable date.  As of November 7, 2007, there were 200,398,288 shares of the Issuers Common Stock, $0.00001 par value per share outstanding.  Transitional Small Business Disclosure Format (Check One): Yes [ ]  No [X]     TABLE OF CONTENTS   PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES FORM 10-QSB, QUARTER ENDED SEPTEMBER 30, 2007    PART I    FINANCIAL INFORMATION  Interim Unaudited Consolidated Balance Sheet 3  Interim Unaudited Consolidated Statements of Operations 4  Interim Unaudited Consolidated Statement of Stockholders Equity (Deficiency) 5  Interim Unaudited Consolidated Statements of Cash Flows 6  Notes to Interim Unaudited Consolidated Financial Statements 7  Item 2.  Management's Discussion and Analysis or Plan of Operation 14  Item 3.  Controls and Procedures 24   PART II   OTHER INFORMATION  Item 1. Legal Proceedings 26  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 26  Item 3. Defaults Upon Senior Securities 26  Item 4. Submission of Matters to a Vote of Security Holders 26  Item 5. Other Information 26  Item 6. Exhibits and Reports on Form 8-K 26  Signatures 27


Item 1. Financial Statements    PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES(Formerly Enterprises Technologies, Inc.)CONSOLIDATED BALANCE SHEETSEPTEMBER 30, 2007(Unaudited)September 30,(Expressed in U.S. Dollars)2007ASSETSCurrent assetsCash$3,117,029Prepaid expenses641Total current assets3,117,670Property and Equipment, Net(Note 4)2,650Intangible asset - License fee(Note 7)20,000Total assets$3,140,320LIABILITIESCurrentAccounts payable and accrued liabilities$54,320Interest payable - related parties (Note 5)270,539Promissory notes - related party (Note 5)1,338,776Total liabilities1,663,635STOCKHOLDERS' EQUITYStockholders' DeficiencyPreferred stock: $0.25 par value; Authorized: 1,000,000Issued and outstanding: nil-Common stock: $0.00001 par value; Authorized: 300,000,000Issued and outstanding: 200,398,2882,004Additional paid-in capital26,231,404Accumulated other comprehensive income1Accumulated deficit(24,756,724)Total stockholders' equity1,476,685Total liabilities and stockholders' equity$3,140,320(The accompanying notes are an integral part of these interim unaudited consolidated financial statements)    3    CONSOLIDATED STATEMENTS OF OPERATIONSfor the three months and nine months ended September 30, 2007 and 2006(Unaudited)Three months ended September 30,Nine months ended September 30,(Expressed in U.S. Dollars)2007200620072006Revenue$-$-$-$-ExpensesDirectors fees - related party (Note 5)-4,9003,40011,200Investor relations-9,42137,215849,545Interest expense - related party29,65125,91781,37186,487Other operating expenses108,480210,679448,749516,581Research and development costs (Notes 6, 7, 8 and 9)30,363190,672120,325484,978Stock based compensation190,455556,5321,169,6971,026,987358,949998,1211,860,7572,975,778Operating loss(358,949)(998,121)(1,860,757)(2,975,778)Other incomeInterest income5,8554,1989,02812,892Net loss available to common shareholders$(353,094)$(993,923)$(1,851,729)$(2,962,886)Loss per common share -basic and diluted$(0.00)$(0.01)$(0.01)$(0.02)Weighted average number of common sharesoutstanding- basic and diluted190,411,696187,888,012189,860,919187,140,867(The accompanying notes are an integral part of these interim unaudited consolidated financial statements)   4    PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES(Formerly Enterprise Technologies, Inc.)CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)for the nine months ended September 30, 2007 and year ended December 31, 2006(Unaudited)Accumulated otherTotalCommon StockAdditionalAccumulatedComprehensivecomprehensiveStockholders'(Expressed in U.S. Dollars)SharesAmountpaid-in capitaldeficitlossincomeDeficiencyBalance, December 31, 2005185,137,412$1,851$17,113,055$(19,052,426)--$(1,937,520)Common stock issued for cash4,044,454413,165,956---3,165,997Stock based compensation expenses--1,443,308---1,443,308Loss, year ended December 31, 2006---(3,852,569)(3,852,569)-(3,852,569)(3,852,569)Balance, December 31, 2006189,181,8661,89221,722,319(22,904,995)-(1,180,784)Common stock issued for cash533,0915229,995---230,000Common stock issued for cash10,683,3311071,910,713---1,910,820Issuance of warrants on private placement--1,175,167---1,175,167Issuance of warrants to broker as commission--23,51323,513Stock based compensation expenses--1,169,697---1,169,697Foreign currency translation adjustment111Loss, nine months ended September 30, 2007---(1,851,729)(1,851,729)-(1,851,729)$(1,851,728)Balance, September 30, 2007200,398,288$2,004$26,231,404$(24,756,724)$1$1,476,685   5    PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES(Formerly Enterprise Technologies, Inc.)CONSOLIDATED STATEMENTS OF CASH FLOWSfor the nine months ended September 30, 2007 and 2006(Unaudited)(Expressed in U.S. Dollars)20072006Cash flows from (used in) operating activitiesNet loss$(1,851,729)$(2,962,886)Adjustments for items not involving cash:Amortization and depreciation6,9717,893Stock based compensation1,169,6971,026,987Change in non-cash working capital items:Decrease (Increase) in prepaid expenses4,147(6,025)Increase (Decrease) in accounts payable(139,707)7,181Increase in interest payable - related party76,692-Net cash used in operating activities(733,929)(1,926,850)Cash flows used in investing activitiesAdditions to property and equipment-(1,367)Additions to intangible assets-(20,000)Net cash used in investing activities-(21,367)Cash flows from (used in) financing activitiesNet proceeds from issuance of common stock and warrants3,339,5002,630,998Repayment of loan to stockholder-(490,000)Proceeds from promissory notes125,000-Net cash provided by financing activities3,464,5002,140,998Effect on foreign exchange rate1-Increase in cash2,730,572192,781Cash, beginning of period386,45763,770Cash, end of period$3,117,029$256,551Supplemental disclosure of cash flow information:Interest paid in cash$4,705$52,564Income tax paid in cash$-$-(The accompanying notes are an integral part of these interim unaudited consolidated financial statements)   6   PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2007 (Expressed in US Dollars)  Note 1 - Organization and Nature of Operations  PhytoMedical Technologies, Inc. (formerly Enterprise Technologies, Inc.) (the Company), a Nevada Corporation, has an authorized capital of 301,000,000 shares of which 300,000,000 shares are $0.00001 par value common stock and 1,000,000 shares are $0.25 par value preferred stock.  On September 7, 2004, the Company changed its name to PhytoMedical Technologies, Inc.  The Company, together with its subsidiaries, is an early stage research based pharmaceutical company focused on the identification, acquisition, development and eventual commercialization of pharmaceutical and nutraceutical compounds and formulations.  The Company has incurred net operating losses since inception. The Company faces all the risks common to companies that are relatively new, including under capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. The Companys recurring losses raise substantial doubt about its ability to continue as a going concern.  The Companys financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. The Company expects to incur losses from its business operations and will require additional funding during 2007. The future of the Company hereafter will depend in large part on the Companys ability to successfully raise capital from external sources to pay for planned expenditures and to fund operations.  To meet these objectives, the Company has arranged with Mr. Harmel S. Rayat, Chief Financial Officer, Director and majority shareholder of the Company a loan amount up to $2,500,000. Proceeds from the loan, which will be drawn down on an as needed basis at a rate of prime plus 3%, will fund the Companys research and development plans, ongoing expenses for salaries, legal and accounting fees and a comprehensive investor relations and branding program, as well as for working capital and other contingencies. On September 25, 2007, the Company also completed a private placement of the sale of 10,683,331 units at a price of $0.30 per Unit or $3,205,000 in the aggregate.  Management believes that its current and future plans enable it to continue as a going concern. The Company's ability to achieve these objectives cannot be determined at this time. These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.  Principles of Consolidation  The accompanying consolidated financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States, and include the accounts of PhytoMedical Technologies, Inc., its subsidiaries, PhytoMedical Technologies Corp. and PolyPhenol Technologies Corp., both of which were incorporated under the laws of the State of Nevada and PhytoMedical Technologies Ltd., which was incorporated in British Columbia, Canada on April 11, 2007.  All significant intercompany transactions and accounts have been eliminated in consolidation.  Note 2  Presentation of Interim Information  The accompanying unaudited interim consolidated financial statements have been prepared in accordance with Form 10-QSB instructions and in the opinion of management of PhytoMedical Technologies, Inc. and Subsidiaries, include all adjustments (of a normal recurring nature) considered necessary to present fairly the consolidated financial position as of September 30, 2007 and the consolidated results of operations for the three and nine months ended September 30, 2007 and 2006 and cash flows for the nine months ended September 30, 2007 and 2006. These results have been determined on the basis of generally accepted accounting principles and practices in the United States and applied consistently with those used in the preparation of the Companys 2006 Annual Report on Form 10-KSB.  Certain information and footnote disclosures normally included in the annual financial statements presented in accordance with generally accepted accounting principles in the United States have been condensed or omitted. It is suggested that the accompanying unaudited interim consolidated financial statements be read in conjunction with the financial statements and notes thereto incorporated by reference in the Companys 2006 Annual Report on Form 10-KSB.   7   In June 2007, the Emerging Issues Task Force of the FASB issued EITF Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research and Development Activities, (EITF 07-3) which is effective for fiscal years beginning after December 15, 2007.  EITF 07-3 requires that nonrefundable advance payments for future research and development activities be deferred and capitalized. Such amounts will be recognized as an expense as the goods are delivered or the related services are performed.  The Company does not expect the adoption of EITF 07-3 to have a material impact on the financial results of the Company.  There have been no pronouncements issued that are not yet effective that would have a material effect on these financial statements.  Note 3  Earnings (Loss) Per Share  Basic earnings or loss per share is based on the weighted average number of shares outstanding during the period of the financial statements. Diluted earnings or loss per share are based on the weighted average number of common shares outstanding and dilutive common stock equivalents. All per share and per share information are adjusted retroactively to reflect stock splits and changes in par value, when applicable. All loss per share amounts in the financial statements are basic loss per share because the inclusion of stock options and warrants outstanding would be antidilutive. The computation of basic and diluted loss per share is as follows at September 30, 2007:  Three months endedNine months endedSeptember 30,September 30,2007200620072006Numerator - net loss available tocommon stockholders$(353,094)$(993,923)$(1,851,729)$(2,962,886)Denominator - weighted average numberof common shares outstanding190,411,696187,888,012189,860,919187,140,867Basic and diluted loss per common share$(0.00)$(0.01)$(0.01)$(0.02)  Note 4  Equipment  2007Computer equipment$2,293Office equipment19,61321,906Less: accumulated depreciation(19,256)$2,650   Depreciation expenses charged to operations for the three-month and nine-month periods ended September 30, 2007 were $2,324 (2006: $2,686) and $6,971 (2006: $7,893), respectively.   Note 5 - Related Party Transactions      Directors Fees:  During the three-month and nine-month periods ended September 30, 2007, the Company charged $nil (2006: $4,900) and $3,400 (2006: $11,200) to operations for director fees incurred for services rendered.  Notes Payable and Accrued Interest:  Notes Payable totaled $1,338,776 as at September 30, 2007, representing unsecured loans of $115,000 (8.25%), $323,776 (8.50%), $750,000 (8.50%) and $150,000 (11.25%) due to Mr. Harmel S. Rayat, a director and majority shareholder of the Company. During the nine months ended September 30, 2007, the Company repaid $25,000 to the director and majority shareholder with the accrued interest of $4,679 and received cash proceed of $150,000 from a promissory note dated May 31, 2007 bearing an interest rate of 11.25% per annum. The entire principal and accrued interest is due and payable on demand. Accrued and unpaid interest on these notes as of September 30, 2007, amounted to $270,539 and is included in interest payable - related parties.  8    Rent: The Companys administrative office is located at 1628 West 1st Avenue, Suite 216, Vancouver, British Columbia, Canada, V6J 1G1. These premises are owned by a private corporation controlled by a director and majority shareholder. The Company pays a monthly rent of C$3,200 effective from April 1, 2006. The Company paid rent of $9,281 (2006: $8,590) and $26,136 (2006: $17,103) for the three-month and nine-month periods ended September 30, 2007 respectively.  Mr. Harmel S. Rayat is an officer, director and majority stockholder of the Company.  He is also an officer, director and majority shareholder of each of HepaLife Technologies, Inc., Entheos Technologies, Inc., Octillion Corp. MicroChannel Technologies Corporation and International Energy, Inc.  All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business.  Note 6  Cooperative Agreements  New York University (NYU)  On July 29, 2004, PhytoMedical Technologies Corporation (PTC), a wholly owned subsidiary of the Company, Inc., entered into an exclusive worldwide licensing agreement with New York University (NYU) for certain patented inventions (NYU Patents) related to pharmacologically active elements of a muira puama plant extract and ion channel modulators from natural sources.  In consideration for the grant of the License, PTC agreed to:  (a) reimburse NYU for its patent costs incurred to date; (b) pay to NYU a royalty of 4% of the net sales of all licensed products related to medical, pharmacological, therapeutic, prophylactic, nutritional and research applications of the muira puama extract; (c) pay NYU 20% of the net sales for all other licensed products; (d) pay NYU 10% of all sublicense fees.  In connection with the licensing agreement, PTC granted to each of NYU and Dr. Bruce Cherksey, a NYU scientist and inventor of the NYU Patents, an option to acquire, for a period of two years from July 29, 2004, a number of shares equal to 12.5% of the outstanding common stock of PTC on a fully diluted basis. The option was exercised by Dr. Cherksey on May 30, 2006. On June 30, 2006, NYU and PhytoMedical Technologies Corporation agreed to extend the option to July 20, 2008.  All other terms and conditions of the option agreement will remain in full force and effect.  This combined 25% equity position may not be diluted until a total of $1,825,000, after deduction of all related financing costs, has been invested to further develop the technology. Thereafter, NYU and Dr. Cherksey will be diluted pari passu with other equity holders of PTC.  USDA's Agricultural Research Service (ARS) and Iowa State University (ISU)  On December 1, 2004, PolyPhenol Technologies Corporation (PolyPhenol), a wholly owned subsidiary of the Company, entered into a three year, three-way Cooperative Research and Development Agreement (CRADA) with the USDA's Agricultural Research Service (ARS) and Iowa State University (ISU). PolyPhenol committed to providing $666,366 in research funding to the ARS and $186,865 to ISU.  On March 6, 2006, PolyPhenol agreed to extend its CRADA with the USDAs ARS and ISU for an additional two years through October 31, 2009.  Effective February 1, 2007, the Company terminated its CRADA agreement with the USDAs Agricultural Research Service (ARS) and Iowa State University (ISU) in favor of moving all development to a true pharmaceutical contract research organization to expedite and prepare for a future Investigational New Drug (IND) filing.  Iowa State University (ISU)  Effective February 1, 2007, the Company, through its wholly owned subsidiary, PolyPhenol Technologies Corporation, entered into an expanded sponsored research agreement with Iowa State University (ISU). Under terms of the agreement,  9   PhytoMedical will continue to undertake its research at ISURF for development of the Companys novel, synthesized type A-1 polyphenolic compounds.  Contractual Obligations to ISU:  Year 1: $62,251 to ISU in 4 quarterly installments, the first of which is due within 30 days of signing of the sponsored research agreement, the second of which is due to ISU 3 months from the previous payment;  Year 2: $70,295 to ISU in 4 quarterly installments, the first of which is due to ISU 3 months from the previous payment; and  Year 3: $72,140 to ISU in 4 quarterly installments, the first of which is due to ISU 3 months from the previous payment.  All rights, title, and interest in any subject invention made solely by the Company are owned by the Company, solely by ISU are owned by ISU, owned jointly by the two parties if made by any of the parties.  The Agreement or parts thereof, is subject to termination at any time by mutual consent.  Any party may unilaterally terminate the entire agreement at any time by giving the other parties written notice not less than sixty calendar days prior to the desired termination date.  As at September 30, 2007, the Company paid and accrued in total of $208,195 as per agreement with ISU.  Note 7  License Agreement  On June 12, 2006, the Company, through its wholly owned subsidiary, PolyPhenol Technologies Corporation, entered into an exclusive license agreement with Iowa State University Research Foundation Inc. (ISURF) to develop, market and distribute novel synthesized compounds derived from type A-1 polyphenols, which have been linked to insulin sensitivity by lead researcher, Dr. Richard Anderson of the USDA's Agricultural Research Service.  Under terms of the agreement, the Company has to pay to ISURF license fees of $320,000, of which $20,000 is payable (paid) within 30 days of execution of the agreement, $50,000 is payable upon completion of the first successful Phase 2 clinical trial and the remaining $250,000 is payable upon first approval by the regulatory authority on new drug application. In addition, ISURF will receive royalty payments equal to 5% on the net sales of products, except that 3% will apply on the net sales of pharmaceutical products. The Company will pay a minimum annual royalty of $20,000, $50,000 and $100,000 in calendar year 2010, 2011, 2012 and onwards, respectively. The Company also has to reimburse ISURF the cost incurred for filing, prosecuting and maintaining the licensed patents together with 15% of the said costs, not exceeding $10,000, as the administration fee. The Company will administrate the development, regulatory approval and commercialization of the compounds and pursue future collaborative arrangements.  As of September 30, 2007, the Company paid in total of $20,000 for the license fee and $31,223 for reimbursement of the patent costs and research expenses as per agreement with ISURF.  Note 8  Development Agreements  The Company entered into two development agreements with Ricerca BioSciences (Ricerca), a world class pharmaceutical development laboratory, to begin developmental work on the Companys BDC-03 compound for cachexia, a devastating muscle wasting condition that afflicts 25% of all AIDS patients and upwards of 90% of all advanced cancer patients. BDC-03 has pharmacologically active elements that have been successful in reducing body fat percentage, increasing lean muscle mass and lowering cholesterol in a study of growing animals. Ricercas responsibilities will eventually expand to include the Companys other compounds.  As at September 30, 2007, the Company paid and accrued in total of $69,958 as per the two agreements with Ricerca.  Note 9  Research Agreement  On May 25, 2007, the Company entered into a Research Agreement with Dartmouth College (Dartmouth), located at Hanover, New Hampshire, in the area of cancer research, specifically furthering research and development of anti-tumor bis-acridines. Dartmouth grants the Company the option of a world-wide, royalty-bearing exclusive license under Dartmouth Pre-existing Patent Rights and Know-How to make, have made, use and sell in the field of oncology, the products embodying or produced through the use of Dartmouths Patent Rights, at reasonable terms and condition as the parties may agree. The  10   Company will reimburse Dartmouth for all costs associated with obtaining and maintaining Dartmouth Pre-existing Patent Rights. Dartmouth also grants the Company the option of a world-wide, royalty-bearing exclusive license under Dartmouth Patent Rights and  Know-How, and Joint Patent Rights, to make, have made, use and sell in the field of oncology, the products embodying or produced through the use of Dartmouth's or joint inventions, at reasonable terms and conditions as the parties may agree.  As of September 30, 2007, the Company paid in total of $16,375 for research expenses as per agreement with Dartmouth.  Note 10  Common Stock  On July 8, 2005, the Company entered into a Common Stock Purchase Agreement (Purchase Agreement) and a Registration Rights Agreement (Registration Agreement) with Fusion Capital Fund II, LLC (Fusion Capital). Pursuant to the terms of the Purchase Agreement, the Company had to issue to Fusion Capital 863,724 shares (issued) of its common stock, which Fusion has agreed to hold for twenty-five months. Fusion Capital has agreed to purchase from the Company up to $10,000,000 of the Companys common stock over a twenty-five month period. Pursuant to the terms of the Registration Agreement, the Company has filed a registration statement (the Registration Statement) with the Securities and Exchange Commission covering shares which may be purchased by Fusion Capital under the Purchase Agreement.  On May 29, 2007, the Company and Fusion Capital mutually terminated the Common Stock Purchase Agreement. The Company did not incur any termination costs as a result of mutually terminating this Agreement.  During the three-month and nine-month periods ended September 30, 2007, Fusion Capital has purchased nil (2006: 386,478) and 533,091 (2006: 2,855,342) shares of the Company for total proceeds of $nil (2006: $210,002) and $230,000 (2006: $2,630,998) respectively.  On September 25, 2007, the Company completed a private placement of the sale of 10,683,331 units (the "Units") at a price of $0.30 per Unit (the "Unit Issue Price") or $3,205,000 in the aggregate. The Units were offered and sold to accredited investors (the Investors) as defined in Regulation D as promulgated under the Securities Act of 1933, as amended.  EachUnit consisted of one share (collectively, the Unit Shares) ofthe Companys common stock and one Class A Callable Warrant to purchase a share of common stock at $0.40 per share for a period of three years from the date of issuance (the Warrants).  The Company agreed to file a registration statement for the purpose of registering the Unit Shares and the shares issuable upon the exercise of the Warrants, for resale by the Investors.  The Warrants are callable if the Companys common stock trades at a price of $0.70 or higher for 10 consecutive trading days on the OTCBB. If the Company has not filed and caused to be declared effective a Registration Statement within one year of the original issuance date of this Warrant, covering the resale of the Warrant Shares issuable upon the exercise of this Warrant, the warrant holder, at its option, may exercise this Warrant in a cashless exercise transaction.  The Company paid the agent the following:  (a) $10,000 as a non-accountable expense fee; (b) $85,500 as cash commissions related to the sale of the Units; and (c) a warrant to purchase up to 213,750 shares at a price of $0.40 having the same terms and conditions as the Warrants.  Note 11 - Stock Options  As of September 30, 2007, the Company had an active stock option plan that provides shares available for options granted to employees, directors and others. Options granted to employees under the Companys option plans generally vest over two to five years or as otherwise determined by the plan administrator. Options to purchase shares expire no later than ten years after the date of grant.  The movement of stock options can be summarized as follows:  11    RemainingAggregateWeighted averagecontractualintrinsicNumber of optionsexercise pricetermvalueOutstanding, December 31, 20059,275,000$0.68Granted4,250,0000.89Cancelled(2,250,000)1.22Outstanding, December 31, 200611,275,0000.65Cancelled(9,275,000)0.68Outstanding, September 30, 20072,000,0000.528.84 years$-Exercisable at September 30, 2007-Available for grant at September 30, 200720,275,000  The aggregate intrinsic value in the table above represents the total pretax intrinsic value for all in-the-money options (i.e. the difference between the Companys closing stock price on the last trading day of the period and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on September 30, 2007. The changes of the amount is based on the fair market value of the Companys stock.  A summary of the Companys unvested stock options and changes during the periods ended September 30 is as follows:  Fair valueSharesper shareOutstanding at December 31, 2005--Granted during 20064,250,0000.83Cancelled during 2006(2,250,000)1.15Outstanding at December 31, 2006 and September 30, 20072,000,0000.48   During the three-month and nine-month periods ended September 30, 2007, compensation expenses of $190,455 (2006: $556,532) and $1,169,697 (2006: $1,026,987) respectively were recognized for options previously granted. As of September 30, 2007, the Company had $244,950 of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a period of one year.  The options outstanding and exercisable as of September 30, 2007 can be summarized as follows:  OutstandingExercisableWeightedNumberAverageWeightedNumberWeightedRange ofOutstanding atRemainingAverageExercisable atAverageExerciseSeptember 30,ContractualExerciseSeptember 30,ExercisePrices2007Life (Years)Price2007Price$0.522,000,0008.84$0.52--   The Company does not repurchase shares to fulfill the requirements of options that are exercised. Further, the Company issues new shares when options are exercised.  12    Note 12 - Warrants  As of September 30, 2007, there were 10,897,081 warrants outstanding (Note 10). Each warrant entitles the holder to purchase one share of the common stock of the Company at an exercise price of $0.40 per share until September 25, 2010. The fair value of the 10,897,081 warrants issued on September 25, 2007 was $1,198,680 and was estimated using the Black-Scholes option pricing model with assumptions as follows:  Risk free interest rate4.09%Expected life of the conversion feature in years3.0 yearsExpected volatility86.45%Dividend per share$0.00   The Warrants are callable if the Companys common stock trades at a price of $0.70 or higher for 10 consecutive trading days on the OTCBB. If the Company has not filed and caused to be declared effective a Registration Statement within one year of the original issuance date of this Warrant, covering the resale of the Warrant Shares issuable upon the exercise of this Warrant, the warrant holder, at its option, may exercise this Warrant in a cashless exercise transaction.  13   Item 2. Management's Discussion and Analysis or Plan of Operations  Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995:  Except for the historical information presented in this document, the matters discussed in this Form 10-QSB for the three and nine months ending September 30, 2007, and specifically in the items entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations", or otherwise incorporated by reference into this document, contain "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are identified by the use of forward-looking terminology such as "believes", "plans", "intend", "scheduled", "potential", "continue", "estimates", "hopes", "goal", "objective", expects", "may", "will", "should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by the Company.  The reader is cautioned that no statements contained in this Form 10-QSB should be construed as a guarantee or assurance of future performance or results. These forward-looking statements involve risks and uncertainties, including those identified within this Form 10-QSB. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. These forward-looking statements are based on current expectations, and the Company assumes no obligation to update this information. Readers are urged to carefully review and consider the various disclosures made by the Company in this Form 10-QSB and in the Company's other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect the Company's business.  Overview  We are an early stage research based pharmaceutical company focused on the identification, acquisition, development and eventual commercialization of pharmaceutical and nutraceutical compounds and formulations.  Along with our wholly-owned subsidiary, PolyPhenol Technologies Corporation, we are undertaking research efforts targeting diabetes and cancer.  Diabetes Research  Through a sponsored research agreement with Iowa State University (ISU), we are working to synthesize certain insulin enhancing (or mimetic) compounds isolated and characterized from cinnamon bark over a ten year period by a team of USDA Agricultural Research Service scientists.  These compounds increase insulin sensitivity by activating key enzymes that stimulate insulin receptors while inhibiting the enzymes that deactivate them.  The primary objectives of our research are to synthesize the active compounds found in cinnamon and characterize their beneficial health effects in cell cultures systems, animals, and ultimately humans. Once active compounds have been synthesized, characterized and tested, we intend to apply for patents for the synthesis and use of such synthetic compounds. Our goal is to develop a pharmacologically approved product that could be ingested orally.  Cancer Research  Pursuant to PhytoMedicals sponsored research agreement with Dartmouth College (Dartmouth), we are working to synthesize a novel class of anti-cancer agents which have a cytotoxic or poisonous affinity for cancer cells, and are designed to bind tightly to cancer cell DNA (deoxyribonucleic acid), the blueprint of life for the cancer cell. Previous studies conducted by Dartmouth using a mouse cell line, have demonstrated that such binding (or intercalation) should stop the replication of the DNA, and, ultimately, lead to the death of the cancer cell.  Following the preparation of starting materials, researchers will work towards designing and synthesizing new examples of compounds known to bind to DNA, called bis-acridines; these bis-acridines will be tethered to the DNA with both flexible and semi-rigid linking chains.  If successfully synthesized, the compounds will be submitted for evaluation in human cancer cell lines.  Depending on research outcomes, our plans are to fund various in vitro (test tube) and in vivo (animal) experiments that will involve the use of several commercially available human cancer cell lines covering key areas of concern such as glioblastoma (tumors related to the central nervous system, including but not limited to the brain, spinal cord and optic nerve), small cell lung, breast, kidney, pancreatic, and liver cancers.  Our goal, based on the results of both the in vitro and in vivo tests, will involve identification of the key compound(s) that demonstrated the greatest anti-cancer activity per human cancer cell line.   14   Cachexia and Obesity Research  On August 7, 2007, our subsidiary, PhytoMedical Technologies Corporation, provided 60-days notice of termination of its exclusive worldwide licensing agreement with New York University for certain patented inventions related to pharmacologically active elements of a muira puama plant extract and ion channel modulators from natural sources, thereby discontinuing our previous obesity and cachexia research efforts.  The statements contained in this Form 10-QSB regarding our ongoing research and development and the results attained by us to-date have not been evaluated by the Food and Drug Administration. There can be no assurance that further research and development, and /or whether clinical trial results, if any, will validate and support the results of our preliminary research and studies.  Cooperative Research and License Agreements  Iowa State University (ISU)  On February 1, 2007, through our wholly owned subsidiary, PolyPhenol Technologies Corporation, we entered into an expanded sponsored research agreement with ISU. Under terms of the agreement, PhytoMedical will continue to undertake its research at ISU for development of the Companys novel, synthesized type A-1 polyphenolic compounds.  Contractual Obligations to ISU:  Year 1: $62,251 to ISU in four equal quarterly installments, the first of which is due within 30 days of signing of the sponsored research agreement, the second of which is due to ISU 3 months from the previous payment;  Year 2: $70,295 to ISU in four equal quarterly installments, the first of which is due to ISU 3 months from the previous payment; and  Year 3: $72,140 to ISU in four equal quarterly installments, the first of which is due to ISU 3 months from the previous payment.  All rights, title, and interest in any subject invention made solely by us are owned by us, solely by ISU are owned by ISU, owned jointly by the two parties if made by any of the parties. The agreement or parts thereof, is subject to termination at any time by mutual consent.  Any party may unilaterally terminate the entire agreement at any time by giving the other party written notice not less than sixty calendar days prior to the desired termination date.  As at September 30, 2007, the Company paid and accrued in total of $208,195 as per agreement with ISU.  License Agreement  On June 12, 2006, through our wholly owned subsidiary, PolyPhenol Technologies Corporation, we entered into an exclusive license agreement with Iowa State University Research Foundation (ISURF) to develop, market and distribute novel synthesized compounds derived from type A-1 polyphenols, which have been linked to insulin sensitivity by the USDA's Agricultural Research Service.  Under terms of the agreement, we have to pay to ISURF license fees of $320,000, of which $20,000 is payable (paid) within 30 days of execution of the agreement, $50,000 is payable upon completion of the first successful Phase 2 clinical trial and the remaining $250,000 is payable upon first approval by the regulatory authority on new drug application. In addition, ISURF will receive royalty payments equal to 5% on the net sales of products, except that 3% will apply on the net sales of pharmaceutical products. We will pay a minimum annual royalty of $20,000, $50,000 and $100,000 in calendar years 2010, 2011, 2012 and onwards, respectively. We also have to reimburse ISURF the costs incurred for filing, prosecuting and maintaining the licensed patents together with 15% of the said costs, not exceeding $10,000, as the administration fee. We will administrate the development, regulatory approval and commercialization of the compounds and pursue future collaborative arrangements.  As of September 30, 2007, we paid an aggregate of $20,000 for the license fee and $31,223 for reimbursement of the patent costs and research expenses as per our agreement with ISURF.   15   Dartmouth Agreement  Pursuant to PhytoMedicals sponsored research agreement with Dartmouth, we are working to synthesize a novel class of anti-cancer agents which have a cytotoxic or poisonous affinity for cancer cells, and are designed to bind tightly to cancer cell DNA (deoxyribonucleic acid), the blueprint of life for the cancer cell.  Previous studies conducted by Dartmouth using a mouse cell line, have demonstrated that such binding (or intercalation) should stop the replication of the DNA, and, ultimately, lead to the death of the cancer cell.  Following the preparation of starting materials, researchers will work towards designing and synthesizing new examples of compounds known to bind to DNA, called bis-acridines; these bis-acridines are tethered with both flexible and semi-rigid linking chains to the DNA.  The compounds will be submitted for evaluation in human cancer cell lines.  Depending on research outcomes, our plans are to fund various in vitro (test tube) and in vivo (animal) experiments that will involve the use of several commercially available human cancer cell lines covering key areas of concern such as glioblastoma (tumors related to the central nervous system, including but not limited to the brain, spinal cord and optic nerve), small cell lung, breast, kidney, pancreatic, and liver cancers.  Our goal, based on the results of both the in vitro and in vivo tests, will involve identification of the key compound(s) that demonstrated the greatest anti-cancer activity per human cancer cell line.  Dartmouth granted us the option of a world-wide, royalty-bearing exclusive license to make, have made, use and sell in the field of oncology, the products embodying or produced through Dartmouths previous and future patents and through any joint-inventions related to the agreement, at reasonable terms and conditions as the parties may agree. We will reimburse Dartmouth for all costs associated with obtaining and maintaining Dartmouths pre-existing patents related to the subject technology.  As of September 30, 2007, the Company paid in total of $16,375 for research expenses as per agreement with Dartmouth.  Plan of Operation  Presently, through an expanded sponsored research agreement with ISU, the Company is working towards synthesizing the active components of several polyphenolic compounds found in cinnamon bark and characterizing their beneficial health effects in cell cultures systems, animals and ultimately humans.  Also, through a research agreement with Dartmouth, the Company is synthesizing and testing a novel class of antitumour agents with a cytotoxic affinity for cancer cells that are designed to bind more tightly to cancer cell DNA than many conventional anticancer drugs by a process called bis-intercalation or double binding.  The Company anticipates that its major shareholder and third parties will contribute sufficient funds to satisfy the cash needs of the Company through calendar year ending December 31, 2007, however, if necessary, additional funds may be provided by debt or equity financings.  Due to the "start up" nature of the Company's business, the Company expects to incur losses as the Company conducts its ongoing research and product development programs. We will require additional funding to continue our research and product development programs, to conduct preclinical studies and clinical trials, for operating expenses, to pursue regulatory approvals for our product candidates, for the costs involved in filing and prosecuting patent applications and enforcing or defending patent claims, if any, for any possible acquisitions or new technologies, and we may require additional funding to establish manufacturing and marketing capabilities in the future. We may seek to access the public or private equity markets whenever conditions are favorable. We may also seek additional funding through strategic alliances and other financing mechanisms. We cannot assure you that adequate funding will be available on terms acceptable to us, if at all. If adequate funds are not available, we may be required to curtail significantly one or more of our research or development programs or obtain funds through arrangements with collaborators or others. This may require us to relinquish rights to certain of our technologies or product candidates. To the extent that we are unable to obtain third-party funding for such expenses, we expect that increased expenses will result in increased losses from operations. We cannot assure you that we will successfully develop our products under development or that our products, if successfully developed, will generate revenues sufficient to enable us to earn a profit.   16   Liquidity and Capital Resources  As at September 30, 2007, the Company had a cash balance of $3,117,029. The Company has financed its operations primarily through cash on hand, through loans from shareholders, through a private placement and through the common stock purchase agreement with Fusion Capital during the nine month period ending September 30, 2007.  Net cash flows used in by operating activities was $733,929 for the nine month period ending September 30, 2007, compared to net cash flows used of $1,926,850 for the same period in 2006, primarily due to a decrease in operating expenses and investor relations expenses.  The Company intends to seek additional funds from shareholders and third parties to finance the Companys operations.  Net cash provided by financing activities was $3,464,500 for the nine months period ending September 30, 2007 compared to $2,140,998 for the same period in 2006. The Company has financed its operations primarily from cash on hand, through loans from shareholders, through a private placement and through the common stock purchase agreement with Fusion Capital.  During the nine months ended September 30, 2007, Fusion Capital has purchased 533,091 shares of the Company for total proceeds of $230,000.  Related Party Transactions  Directors Fees:  During the three-month and nine-month periods ended September 30, 2007, the Company charged $nil (2006: $4,900) and $3,400 (2006: $11,200) to operations for director fees incurred for services rendered.  Notes Payable and Accrued Interest:  Notes Payable totaled $1,338,776 as at September 30, 2007, representing unsecured loans of $115,000 (8.25%), $323,776 (8.50%), $750,000 (8.50%) and $150,000 (11.25%) due to Mr. Harmel S. Rayat, a director and majority shareholder of the Company. During the nine months ended September 30, 2007, the Company repaid $25,000 to the director and majority shareholder with the accrued interest of $4,679 and received cash proceed of $150,000 from a promissory note dated May 31, 2007 bearing an interest rate of 11.25% per annum. The entire principal and accrued interest is due and payable on demand. Accrued and unpaid interest on these notes as of September 30, 2007, amounted to $270,539 and is included in interest payable - related parties.  Rent: The Companys administrative office is located at 1628 West 1st Avenue, Suite 216, Vancouver, British Columbia, Canada, V6J 1G1. These premises are owned by a private corporation controlled by a director and majority shareholder. The Company pays a monthly rent of C$3,200 effective from April 1, 2006. The Company paid rent of $9,281 (2006: $8,590) and $26,136 (2006: $17,103) for the three-month and nine-month periods ended September 30, 2007 respectively.  Mr. Harmel S. Rayat is an officer, director and majority stockholder of the Company.  He is also an officer, director and majority shareholder of each of HepaLife Technologies, Inc., Entheos Technologies, Inc., Octillion Corp. MicroChannel Technologies Corporation and International Energy, Inc.  All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business.  Off-Balance Sheet Items  None.  Critical Accounting Policies  Our discussion and analysis or plan of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an on-going basis, we evaluate our estimates, including those related to income taxes and contingencies.  We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.   17   Management believes the following critical accounting policies reflect its more significant estimates and assumptions used in the preparation of its financial statements.  Income Taxes - We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We have considered future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies in determining the need for a valuation allowance. We currently have recorded a full valuation allowance against net deferred tax assets as we currently believe it is more likely than not that the deferred tax assets will not be realized  Contingencies - We may be subject to certain asserted and unasserted claims encountered in the normal course of business. It is our belief that the resolution of these matters will not have a material adverse effect on our financial position or results of operations, however, we cannot provide assurance that damages that result in a material adverse effect on our financial position or results of operations will not be imposed in these matters.  We account for contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.  Risk Factors  We have sought to identify what we believe to be the most significant risks to our business.  However, we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our Common Stock. We provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here could adversely affect us.  We Have Experienced Significant Losses And Expect Losses To Continue For The Foreseeable Future.  We have yet to establish any history of profitable operations.  We have incurred annual operating losses of $3,869,499 and $4,261,079, respectively, during the past two fiscal years of operation.  As a result, at September 30, 2007, we had an accumulated deficit of $24,756,724.  We had no revenues during the last three fiscal years and we do not expect to generate revenues from our operations for the foreseeable future. Our profitability will require the successful commercialization of products, if any, derived from our ongoing research and development efforts.  No assurances can be given when this will occur or that we will ever be profitable.  We Currently Do Not Have, And May Never Develop, Any Commercialized Products.  We currently do not have any commercialized products or any significant source of revenue. We have invested substantially all of our time and resources over the last three years in the identification, research and development of pharmaceutical and nutraceutical technologies. The technologies, which are the subject of our ongoing research programs, will require additional research, development, clinical evaluation, regulatory approval, significant marketing efforts and substantial additional investment before they can provide us with any revenue. Our efforts may not lead to commercially successful products for a number of reasons, including:  · we may not be able to obtain regulatory approvals or the approved indication may be narrower than we seek; · our technologies or products, if any, derived from our research and development efforts may not prove to be safe and effective in clinical trials; · physicians may not receive any reimbursement from third-party payors, or the level of reimbursement may be insufficient to support widespread adoption of any products derived from our research and development efforts; · any products that may be approved may not be accepted in the marketplace by physicians or patients; · we may not have adequate financial or other resources to complete the development and commercialization of products derived from our research and development efforts; · we may not be able to manufacture our products in commercial quantities or at an acceptable cost; and · rapid technological change may make our technologies and products derived from those technologies obsolete.    18   We Will Require Additional Financing To Sustain Our Operations And Without It We Will Not Be Able To Continue Operations.  Our independent auditors have added an explanatory paragraph to their audit opinion issued in connection with the financial statements for the year ended December 31, 2006, relative to our ability to continue as a going concern. Our ability to obtain additional funding will determine our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.  At September 30, 2007, we had a working capital of $1,454,035. We have an operating cash flow deficit of $733,929 for the nine months ended September 30, 2007, and have sustained operating cash flow deficits of $2,331,943 in 2006 and $2,117,231 in 2005. In September 2007, we received net proceeds of $3,109,500 from the Private Placement. Although we believe that we have sufficient financial resources and commitments to sustain our current level of research and development activities through the end of 2008, any expansion, acceleration or continuation of such activities (beyond 2008) will require additional capital which may not be available to us, if at all, on terms and conditions that we find acceptable.  The Success Of Our Research And Development Program Is Uncertain And We Expect To Be Engaged In Research And Development Efforts For A Considerable Period Of Time Before We Will Be In A Position, If Ever, To Develop And Commercialize Products Derived From Our Research Program.  We intend to continue with our research and development programs through at least 2008.  There is no assurance that such activities will ultimately lead to development of commercially viable technologies or potential products derived from such technologies. Research and development activities, by their nature, preclude definitive statements as to the time required and costs involved in reaching certain objectives. Actual costs may exceed the amounts we have budgeted and actual time may exceed our expectations.  If our research and development requires more funding than we anticipate, then we may have to reduce technological development efforts or seek additional financing. There can be no assurance that we will be able to secure any necessary additional financing or that such financing would be available to us on favorable terms. Additional financings could result in substantial dilution to existing stockholders. There is no assurance that, even upon completion of our research program, we will ever be able to commercialize products, if any, derived from our research efforts or that we will be able to generate any revenues from operations.  Our Research And Development Program Is In The Preliminary Development Stage And The Results We Attain May Not Prove To Be Adequate For Purposes of Developing and Commercializing Any Products Or Otherwise To Support A Profitable Business Venture.  Our research program is targeting a new technology for diabetes that may improve the efficiency of insulin and an early stage technology for cancer which could have a cytotoxic or poisonous effect on cancer cells.  This program is still in its early phases and we will require significant further research, development, testing and regulatory approvals and significant additional investment before we will be in a position to attempt to commercialize products derived from our research and development program.  There can be no assurances that our early stage research will be successful. The ultimate results of our ongoing research program may demonstrate that the technologies being researched by us, both with respect to a compound targeting diabetes and a compound targeting cancer, may be ineffective, unsafe or unlikely to receive necessary regulatory approvals. If such results are obtained, we will be unable to create marketable products or generate revenues and we may have to cease operations.  We have not submitted any products or any technologies that are the subject of, or result from, our research and development activities for regulatory approval or clearances. Even if our research is successful, the process of obtaining necessary U.S. Food and Drug Administration (FDA) approvals or clearances can take years and is expensive and full of uncertainties. Additionally, approved products are subject to continuing FDA requirements relating to quality control and quality assurance, maintenance of records, reporting of adverse events and product recalls, documentation, labeling and promotion of medical products.  Compliance with such regulations may prove to be costly and may limit our ability to attain profitable operations.  We Will Not Directly Conduct Any Of Our Research And Development Activities And Therefore We Will Have Minimal Control Over Such Research.  We will rely primarily on ISU, Dartmouth, and third party contract research organizations, to conduct, monitor and assess our research.  We will have no control over the specifics of, and possible direction that the research may take.  Accordingly, there  19   can be no assurance that such organizations will conduct our research in a manner that will lead to the commercialization of any products.  We are also dependent upon the services of certain key collaborating scientific personnel who are not employed by us, including the principal investigator with respect to our ongoing research related to cancer. The loss of this investigators services could have a materially adverse effect on us, unless a qualified replacement could be found. We have no control over whether our principal investigators or other scientific personnel will choose to remain involved with our projects. Since these individuals are not bound by contract to us nor employed by us directly, they might move on to other research.  We Are Subject To Substantial Government Regulation Which Could Materially Adversely Affect Our Business.  We have yet to develop any products for submission for regulatory approval. Any such products submitted for approval must undergo rigorous preclinical and clinical testing and an extensive regulatory approval process before they can be marketed. This process makes it longer, harder and more costly to bring any products to market; and, we cannot guarantee that approval will be granted. The pre-marketing approval process can be particularly expensive, uncertain and lengthy. A number of products for which FDA approval has been sought by other companies have never been approved for marketing. In addition to testing and approval procedures, extensive regulations also govern marketing, manufacturing, distribution, labeling and record-keeping procedures. If we do not comply with applicable regulatory requirements, such violations could result in warning letters, non-approval, suspensions of regulatory approvals, civil penalties and criminal fines, product seizures and recalls, operating restrictions, injunctions and criminal prosecution.  Delays in obtaining, or the rejection of necessary approvals by the FDA or other government entity may also adversely affect our business. Such delays or rejection may be encountered due to, among other reasons, government or regulatory delays, lack of efficacy during clinical trials, unforeseen safety issues, slower than expected rate of patient recruitment for clinical trials, inability to follow patients after treatment in clinical trials, inconsistencies between early clinical trial results and results obtained in later clinical trials, varying interpretations of data generated by clinical trials, or changes in regulatory policy during the period of product development in the United States. In the United States more stringent FDA oversight in product clearance and enforcement activities could result in our experiencing longer approval cycles, more uncertainty, greater risk and significantly higher expenses. Even if regulatory approval is granted, this approval may entail limitations on uses for which any such product may be labeled and promoted. It is possible, for example, that we may not receive FDA approval to market any products, based on our research and development program for broader or different applications or to market updated products that represent extensions of any such products.  In addition, we may not receive FDA approval to export products in the future, and countries to which products are to be exported may not approve them for import.  Any manufacturing facilities would also be subject to continual review and inspection. The FDA has stated publicly that compliance with manufacturing regulations will be scrutinized more strictly. A governmental authority may challenge our compliance with applicable federal, state and foreign regulations. In addition, any discovery of previously unknown problems with any of our research and development efforts or products, if any, derived from such research and development, or facilities may result in marketing, sales and manufacturing restrictions, being imposed, as well as possible enforcement actions.  From time to time, legislative or regulatory proposals are introduced that could alter the review and approval process relating to our research and development programs and products, if any, derived from such research.  It is possible that the FDA will issue additional regulations further restricting the sale of products based on our underlying research and development activities. Any change in legislation or regulations that govern the review and approval process relating to our future products, if any, could make it more difficult and costly to obtain approval, or to produce, market, and distribute such products even if approved.  We May Be Required To Comply With Rules Regarding Animal Testing Which May Limit the Success of Our Research And Development Program.  Our research and development efforts involve laboratory animals. We may be adversely affected by changes in laws, regulations or accepted procedures applicable to animal testing or by social pressures that would restrict the use of animals in testing or by actions against our collaborators or us by groups or individuals opposed to such testing.  20    We May Be Liable For Contamination Or Other Harm Caused By Materials That We Handle And Changes In Environmental Regulations Could Cause Us To Incur Additional Expense.  Our research and development programs do not generally involve the handling of potentially harmful biological materials or hazardous materials, but they may occasionally do so. We, ISU, Dartmouth and our contract research organizations are subject to federal, state and local laws and regulations governing the use, handling, storage and disposal of hazardous and biological materials. If violations of environmental, health and safety laws occur, we could be held liable for damages, penalties and costs of remedial actions. These expenses or this liability could have a significant negative impact on our business, financial condition and results of operations. We may violate environmental, health and safety laws in the future as a result of human error, equipment failure or other causes. Environmental laws could become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with violations. We may be subject to potentially conflicting and changing regulatory agendas of political, business and environmental groups. Changes to or restrictions on permitting requirements or processes, hazardous or biological material storage or handling might require an unplanned capital investment or relocation. Failure to comply with new or existing laws or regulations could harm our business, financial condition and results of operations.  Even If We Were To Obtain Regulatory Approval In The Future For Any Products Derived From Our Ongoing Research Efforts, We Currently Lack Sales and Marketing Experience and Will Need To Rely On Third Parties For Such Services.  Our ability to achieve profitability is dependent in part on ultimately obtaining regulatory approvals for products, if any, that are derived from our research and development efforts and then entering into agreements for the commercialization of any such products. There can be no assurance that such regulatory approvals will be obtained or such agreements will be entered into. The failure to obtain any such necessary regulatory approvals or to enter into any such necessary agreements could delay or prevent us from achieving profitability and would have a material adverse effect on the business, financial position and results of our operations. Further, there can be no assurance that our operations will become profitable even if products, if any, that are derived from our research and development efforts, are commercialized.  If FDA and other approvals are eventually obtained with respect to any products derived from our research and development efforts and submitted for approval, we expect to market and sell such products through distribution, co-marketing, co-promotion or sublicensing arrangements with third parties.  We have no experience in sales, marketing or distribution of pharmaceutical or nutraceutical products and our current management and staff is not trained in these areas.  To the extent that we enter into distribution, co-marketing, co-promotion or sublicensing arrangements for the marketing and sale of any such products, any revenues received by us will be dependent on the efforts of third parties.  If any of such parties were to breach or terminate their agreement with us or otherwise fail to conduct marketing activities successfully and in a timely manner, the commercialization of any products derived from our research and development efforts would be delayed or terminated.  We May Not Be Able To Attract And Retain Qualified Personnel Either As Employees Or As Consultants And, Without Such Personnel We May Not Be Successful In The Commercialization Of The Results Of Our Ongoing Research And Development Efforts.  Competition for qualified employees among companies in the pharmaceutical and nutraceutical industries is intense. Our future success depends upon our ability to attract, retain and motivate highly skilled employees. Our present management has no clinical or other experience in the development of pharmaceutical and nutraceutical products. Attracting desirable employees will require us to offer competitive compensation packages, including stock options. In order to successfully complete our research and development efforts and to commercialize the results of such efforts or the products, if any, derived from our research and development program, we must substantially expand our personnel, particularly in the areas of clinical trial management, regulatory affairs, business development and marketing. There can be no assurance that we will be successful in hiring or retaining qualified personnel. Managing the integration of new personnel and our growth generally could pose significant risks to our development and progress. The addition of such personnel may result in significant changes in our utilization of cash resources and our development schedule.  We Expect To Operate In A Highly Competitive Market; We May Face Competition From Large, Well-Established Companies With Significant Resources, And Against Which We May Not Be Able To Compete Effectively.  Our commercial success will depend on our ability and the ability of our sublicensees, if any, to compete effectively in product development areas such as, but not limited to, safety, efficacy, ease of use, patient or customer compliance, price, marketing and distribution. There can be no assurance that competitors will not succeed in developing products that are more  21   effective than any products derived from our research and development efforts or that would render such products obsolete and non-competitive.  The pharmaceutical and nutraceutical industries are characterized by intense competition, rapid product development and technological change. Most of the competition that we encounter will come from companies, research institutions and universities who are researching and developing technologies and products similar to or competitive with any we may develop.  These companies may enjoy numerous competitive advantages, including:  · significantly greater name recognition;  · established relations with healthcare professionals, customers and third-party payors; · established distribution networks; · additional lines of products, and the ability to offer rebates, higher discounts or incentives to gain a competitive advantage; · greater experience in conducting research and development, manufacturing, clinical trials, obtaining regulatory approval for products, and marketing approved products; and · greater financial and human resources for product development, sales and marketing, and patent litigation.  As a result, we may not be able to compete effectively against these companies or their products.  We May Become Subject To Claims Of Infringement Or Misappropriation Of The Intellectual Property Rights Of Others, Which Could Prohibit Us From Commercializing Products Based On Our Research And Development Program, Require Us To Obtain Licenses From Third Parties Or To Develop Non-Infringing Alternatives, And Subject Us To Substantial Monetary Damages And Injunctive Relief.  We do not have any patents regarding any of our research and development activities. We may not be able to assert any rights, under our sponsored research agreements, to any patents held by ISURF or Dartmouth. Third parties could, in the future, assert infringement or misappropriation claims against us with respect to our current research and development program or future products, if any, derived from our research and development program. Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often uncertain. Therefore, we cannot be certain that we have not infringed the intellectual property rights of such third parties.  Any infringement or misappropriation claim could cause us to incur significant costs, could place significant strain on our financial resources, divert managements attention from our business and harm our reputation. If the relevant patents were upheld as valid and enforceable and we were found to infringe, we could be prohibited from continuing our research and development activities and from marketing or selling products, if any, derived from our research efforts unless we could obtain licenses to use the technology covered by the patent or are able to design around the patent. We may be unable to obtain a license on terms acceptable to us, if at all, and we may not be able to commercialize any products. A court could also order us to pay compensatory damages for such infringement, plus prejudgment interest and could, in addition, treble the compensatory damages and award attorney fees. These damages could be substantial and could harm our reputation, business, financial condition and operating results. Depending on the nature of the relief ordered by the court, we could become liable for additional damages to third parties.  Failure To Obtain Third Party Reimbursement For Products, If Any, Derived From Our Research And Development Efforts Could Limit Our Potential Revenue.  In the United States, success in obtaining payment for a new product from third parties, such as insurers, depends greatly on the ability to present data which demonstrates positive outcomes and reduced utilization of other products or services, as well as cost data which shows that treatment costs using the new product are equal to or less than what is currently covered for other products. If we are unable to obtain favorable third party reimbursement and patients are unwilling or unable to pay for such products or services out-of-pocket, it could limit our revenue and harm our business.   22   Mr. Harmel S. Rayat, Our Secretary, Treasurer, Chief Financial Officer, Principal Accounting Officer, And  Director, Is Able To Substantially Influence All Matters Requiring Approval By Our Stockholders, Including The Election Of Directors.  As of November 7, 2007, Mr. Harmel S. Rayat, beneficially owned approximately 59% of our outstanding common stock. Even if all of the warrants are exercised, Mr. Rayat would still own approximately 56% of our then issued and outstanding shares of our common stock. Accordingly, he will be able to substantially influence all matters requiring approval by our stockholders, including the election of directors. Our Articles of Incorporation do not provide for cumulative voting in the election of directors and, therefore, although they are able to vote, our other stockholders should not expect to be able to elect any directors to our Board of Directors.  We Rely On Management, The Loss Of Whose Services Could Have A Material Adverse Effect On Our Business.  We rely upon the services of our Board of Directors and management, in particular those of our President and Chief Executive Officer, Mr. Greg Wujek, and those of our Chief Financial Officer, Mr. Harmel Rayat; the loss of the services of either Mr. Wujek or Mr. Rayat, could have a material adverse affect on our business and prospects.  Competition for qualified personnel to serve in a senior management position is intense.  If we are not able to retain our directors and management, or attract other qualified personnel, we may not be able to fully implement our business strategy; failure to do so would have a materially adverse impact on our future prospects.  Other than our employment agreement with our President, Mr. Greg Wujek, we currently have no employment agreements with any of our officers and directors imposing any specific condition on our officers and directors regarding their continued employment by us. Our officers and directors are also officers, directors and employees of other companies, and we may have to compete with such other companies for their time, attention and efforts.  Except for Mr. Wujek, who is employed on a full time basis by us, none of our officers and directors is expected to spend more than approximately five (5%) of their time on our business affairs.  We do not maintain key man insurance on any of our directors or officers.  Our Stock Price Historically Has Been And May Continue To Be Highly Volatile.  The market price of our common stock has been and is expected to continue to be highly volatile. Factors, many of which are beyond our control, include, in addition to other risk factors described in this section, the announcements of technological innovations by us or other companies, regulatory matters, new or existing products or procedures, concerns about our financial position, operating results, litigation, government regulation, developments or disputes relating to agreements, patents or proprietary rights, and general economic, industry and market conditions may have a significant impact on the market price of our stock. In addition, potential dilutive effects of future sales of shares of common stock by our stockholders  (including the Selling Stockholders pursuant to this prospectus) and by us, and subsequent sale of common stock by the holders of warrants and options, could have an adverse effect on the market price of our shares.  Volatility in the market price for particular companies has often been unrelated or disproportionate to the operating performance of those companies. Broad market factors may seriously harm the market price of our common stock, regardless of our operating performance. In addition, securities class action litigation has often been initiated following periods of volatility in the market price of a companys securities. A securities class action suit against us could result in substantial costs, potential liabilities, and the diversion of managements attention and resources. To the extent our stock price fluctuates and/or remains low, it could cause you to lose some or all of your investment and impair our ability to raise capital through the offering of additional equity securities.  Our Common Shares Are Thinly Traded, So You May Be Unable To Sell At Or Near Ask Prices Or At All If You Need To Sell Your Shares To Raise Money Or Otherwise Desire To Liquidate Your Shares.  Our common shares have historically been sporadically or thinly-traded on the OTCBB, meaning that the number of persons interested in purchasing our common shares at or near ask prices at any given time may be relatively small or non-existent. As of September 30, 2007, our average trading volume per day for the past three months was 43,863 shares a day with a high volume of 192,800 shares traded (September 4, 2007) and a low of volume of 2,000 shares traded (July 5, 2007). This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time  23   as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained.  The Trading Price Of Our Common Stock May Not Reflect Its Value.  The trading price of our common stock has, from time to time, fluctuated widely and in the future may be subject to similar fluctuations. The trading price may be affected by a number of factors including the risk factors set forth herein, as well as our operating results, financial condition, general conditions in the biopharmaceutical industry, market demand for our common stock, various other events or factors both in and out of our control. In addition, the sale of our common stock into the public market upon the effectiveness of this registration statement could put downward pressure on the trading price of our common stock. In recent years, broad stock market indices, in general, and smaller capitalization companies, in particular, have experienced substantial price fluctuations. In a volatile market, we may experience wide fluctuations in the market price of our common stock. These fluctuations may have a negative effect on the market price of our common stock.  Our Common Stock Is A Penny Stock And Because Penny Stock Rules Will Apply, You May Find It Difficult To Sell The Shares Of Our Common Stock You Acquired In This Offering.  Our common stock is a penny stock as that term is defined under Rule 3a51-1 of the Securities Exchange Act of 1934. Generally, a penny stock is a common stock that is not listed on a national securities exchange and trades for less than $5.00 a share. Prices often are not available to buyers and sellers and the market may be very limited. Penny stocks in start-up companies are among the riskiest equity investments. Broker-dealers who sell penny stocks must provide purchasers of these stocks with a standardized risk-disclosure document prepared by the U.S. Securities & Exchange Commission. The document provides information about penny stocks and the nature and level of risks involved in investing in the penny stock market. A broker must also give a purchaser, orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation, make a written determination that the penny stock is a suitable investment for the purchaser, and obtain the purchasers written agreement to the purchase. Many brokers choose not to participate in penny stock transactions. Because of the penny stock rules, there is less trading activity in penny stock and you are likely to have difficulty selling your shares.  We Do Not Intend To Pay Dividends For The Foreseeable Future.  We currently intend to retain future earnings, if any, to support the development and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our Board of Directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize their investment. Investors seeking cash dividends should not purchase the shares offered by us pursuant to this prospectus.  ITEM 3.   Controls and Procedures  Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. A companys internal control over financial reporting is a process designed 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. A companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition 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 generally accepted accounting principles, and that receipts and expenditures of the company 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.  An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined in Securities Exchange Act of 1934 (the Exchange Act) Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial  24   Officer, concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.  Notwithstanding the foregoing, there can be no assurance that our disclosure controls and procedures will detect or uncover all failures of persons associated with us to disclose material information otherwise required to be set forth in our periodic reports. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives.  There have been no significant changes in internal controls, or in factors that could significantly affect internal controls, subsequent to the date that management, including the Chief Executive Officer and the Chief Financial Officer, completed their evaluation  25   PART II  Other Information  Item 1.   Legal Proceedings  None  Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds  None  Item 3.   Defaults Upon Senior Securities  None  Item 4.   Submission of Matters to a Vote of Security Holders  None  Item 5.   Other Information  None  Item 6.   Exhibits and Reports on Form 8-K  (a) Exhibits  31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)  31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)  32.1 Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  32.2 Certification by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  (b) Reports on Form 8-K  September 18, 2007: On September 12, 2007, Mr. Rick A. Henson resigned from the Company's Board of Directors for personal and professional reasons.  September 25, 2007: On September 25, 2007, PhytoMedical Technologies, Inc. completed a $3,205,000 private placement for which Palladium Capital, LLC acted as the exclusive placement agent.  26   SIGNATURES  Pursuant to the requirements of Sections 13 or 15 (d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,  thereunto duly  authorized on this 7th day of November, 2007.    PhytoMedical Technologies, Inc. (Registrant)   Date Signature Title  November 7, 2007 /s/ Greg Wujek Director,  President, CEO Greg Wujek   November 7, 2007 /s/ Harmel S. Rayat Director, Secretary, Treasurer Harmel S. Rayat Chief Financial Officer Principal Accounting Officer  27