**U.
      S. SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**







**FORM
      10-QSB**










QUARTERLY
      REPORT UNDER SECTION 13 OR 15 (d) OF THE


**SECURITIES
      EXCHANGE ACT OF 1934**





**For
      the quarterly period ended: September 30, 2007**




**Commission
      file No.333-90738**









**Biomoda,
      Inc.**


(Name
      of
      small business issuer as specified in its charter)





**New
                Mexico**
            **85-0392345**(State
                of incorporation)
            (IRS
                Employer Identification No.)







**8301
      Washington NE, Suite 6, Albuquerque, New Mexico 87113**


(Address
      of principal executive offices including zip code)





Issuer's
      telephone
      number:        **(505)
      821-0875**





Check
      whether the issuer (1) 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.


Yes
x     No
      o





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





The
      number of issuer’s shares of Common Stock outstanding as of November 17, 2007
      was 24,675,510.





Transitional
      Small Business Disclosure Format (check one): Yes o No x











i
 Table
          of Contents








**TABLEOF
      CONTENTS**





**Page****PART
                  I.**
              **Financial
                  Information**Item
                  1.
              Consolidated
                  Financial Statements
                  (unaudited)
              1Item
                  2.
              Management's
                  Discussion and Analysis or Plan of
                  Operation
              7Item
                  3.
              Controls
                  and Procedures
              10**PART
                  II.**
              **Other
                  Information**Item
                  1.
              Legal
                  Proceedings
              11Item
                  2.
              Changes
                  in Securities
              11Item
                  3.
              Defaults
                  Upon Senior Securities
              11Item
                  4.
              Submission
                  of Matters to a Vote of Security
                  Holders
              11Item
                  5.
              Other
                  Information
              11Item
                  6.
              Exhibits
              11Signatures
              
              12


ii
 Table
          of Contents




**PART
        I: FINANCIAL INFORMATION**
 
 Forward
        - Looking Statements
 
 This
        Form
        10-QSB contains forward-looking statements about the business, financial
        condition and prospects of the Company that reflect assumptions made by
        management and management's beliefs based on information currently available
        to
        it. The Company can give no assurance that the expectations indicated by
        such
        forward-looking statements will be realized. If any of management's assumptions
        should prove incorrect, or if any of the risks and uncertainties underlying
        such
        expectations should materialize, the Company’s actual results may differ
        materially from those indicated by the forward-looking statements.
 
 The
        key
        factors that are not within the Company's control and that may have a direct
        bearing on operating results include, but are not limited to, the acceptance
        by
        customers of the Company's products, the Company's ability to develop new
        products cost-effectively, the ability of the Company to raise capital in
        the
        future, the development by competitors of products using improved or alternative
        technology, the retention of key employees and general economic
        conditions.
 
 There
        may
        be other risks and circumstances that management is unable to predict. When
        used
        in this Form 10-QSB, words such as, "believes," "expects," "intends," "plans,"
        "anticipates" "estimates" and similar expressions are intended to identify
        forward-looking statements, although there may be certain forward-looking
        statements not accompanied by such expressions. All forward-looking statements
        are intended to be covered by the safe harbor created by Section 21E of the
        Securities Exchange Act of 1934.
 
  
 1
 Table
            of Contents
 
 
 ITEM1:  CONSOLIDATED
        FINANCIAL STATEMENTS
  **BIOMODA,
          INC. AND SUBSIDIARY**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
          BALANCE SHEETS**
 **(UNAUDITED)**
 
 
 **September
                    30, 2007**
                
                
                **December
                    31, 2006****ASSETS**Current
                    AssetsCash
                
                $
                2,285
                
                
                $
                116Prepaid
                    expenses
                
                
                3,241
                
                
                
                3,241Total
                    Current Assets
                
                
                5,526
                
                
                
                3,357Patents,
                    net of accumulated amortization of $102,069 and $88,717
                
                
                205,589
                
                
                
                234,140Property
                    and Equipment, net of accumulated depreciation of $12,393 and
                    $9,621
                
                
                4,498
                
                
                
                6,424$
                215,613
                
                
                $
                243,921**LIABILITIES
                    AND STOCKHOLDERS' DEFICIT**Current
                    LiabilitiesAccounts
                    payable and accrued liabilities
                
                $
                421,031
                
                
                $
                580,050Common
                    stock payable
                
                
                23,051
                
                
                
                45,750Advances
                    from stockholders
                
                
                180,477
                
                
                
                164,842Line
                    of credit from an affiliated entity
                
                
                1,810,272
                
                
                
                1,318,623Notes
                    payable - related parties
                
                
                78,086
                
                
                
                -Total
                    Current Liabilities
                
                
                2,512,917
                
                
                
                2,109,265Commitments
                    and ContingenciesStockholders'
                    DeficitClass
                    A redeemable preferred stock; no par value
                  2,000,000
                    shares authorized; cumulative and
                  convertible;
                    liquidation and redemption values
                  of
                    $1.50 and $1.80 per share; no shares issued
                  and
                    outstanding
                
                
                -
                
                
                
                -Undesignated
                    preferred stock; 2,000,000 shares
                  authorized;
                    no shares issued and outstanding
                
                
                -
                
                
                
                -Common
                    stock, no par value, 100,000,000 sharesauthorized;
                    18,238,150 and 9,086,253 issued and outstanding
                
                
                5,349,899
                
                
                
                3,052,213Treasury
                    stock
                
                
                (9,000
                )
                
                
                (9,000
                )Deficit
                    accumulated during development stage
                
                
                (7,638,203
                )
                
                
                (4,908,557
                )Total
                    Stockholders' Deficit
                
                
                (2,297,304
                )
                
                
                (1,865,344
                )$
                215,613
                
                
                $
                243,921
 
 See
          accompanying notes to these consolidated financial
          statements.
   2
 Table
            of Contents
  **BIOMODA,
          INC. AND SUBSIDIARY**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
          STATEMENTS OF OPERATIONS**
 **(UNAUDITED)**
 
 **Three
                    Months Ended September 30,****2007**
                
                
                **2006**Revenue
                
                $
                -
                
                
                $
                -Operating
                    expensesProfessional
                    fees
                
                
                50,993
                
                
                
                79,392General
                    and administrative
                
                
                55,242
                
                
                
                28,737Licensing
                    fees
                
                
                27,385
                
                
                
                125Research
                    and development
                
                
                15,492
                
                
                
                110,877Depreciation
                    and amortization
                
                
                5,255
                
                
                
                4,911Total
                    Operating Expenses
                
                
                154,367
                
                
                
                224,042Loss
                    from continuing operations
                
                
                (154,367
                )
                
                
                (224,042
                )Other
                    income (expense)Impairment
                    expense
                
                
                (17,000
                )
                
                
                -Other
                    Income
                
                
                33,919
                
                
                
                -Interest
                    expense
                
                
                (25,118
                )
                
                
                (27,317
                )Total
                    Other Expenses
                
                
                (8,199
                )
                
                
                (27,317
                )Net
                    loss
                
                $
                (162,566
                )
                
                $
                (251,359
                )Basic
                    and diluted weighted average number of
                  shares
                    outstanding
                
                
                15,296,882
                
                
                
                7,187,282Basic
                    and diluted loss per common share
                
                $
                (0.01
                )
                
                $
                (0.03
                )
 See
            accompanying notes to these consolidated financial statements.
  3
 Table
                of Contents
  **BIOMODA,
              INC. AND SUBSIDIARY**
 **(A
              DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
              STATEMENTS OF OPERATIONS**
 **(UNAUDITED)**
 
 **Nine
                        Months Ended September 30,****2007**
                    
                    
                    **2006**
                    
                    
                    **January
                        3, 1990 (Inception) to September 30,
                        2007**Revenue
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    23Operating
                        expensesProfessional
                        fees
                    
                    
                    157,043
                    
                    
                    
                    101,035
                    
                    
                    
                    908,537General
                        and administrative
                    
                    
                    1,656,427
                    
                    
                    
                    166,581
                    
                    
                    
                    3,068,837Licensing
                        fees
                    
                    
                    32,885
                    
                    
                    
                    15,125
                    
                    
                    
                    167,678Research
                        and development
                    
                    
                    807,308
                    
                    
                    
                    369,602
                    
                    
                    
                    2,993,951Depreciation
                        and amortization
                    
                    
                    16,124
                    
                    
                    
                    14,604
                    
                    
                    
                    117,575Total
                        Operating Expenses
                    
                    
                    2,669,787
                    
                    
                    
                    666,947
                    
                    
                    
                    7,256,578Loss
                        from continuing operations
                    
                    
                    (2,669,787
                    )
                    
                    
                    (666,947
                    )
                    
                    
                    (7,256,555
                    )Other
                        income (expense)Gain
                        on forgiveness of debt
                    
                    
                    -
                    
                    
                    
                    16,064
                    
                    
                    
                    53,035Impairment
                        expense
                    
                    
                    (17,000
                    )
                    
                    
                    -
                    
                    
                    
                    (17,000
                    )Other
                        Income
                    
                    
                    33,919
                    
                    
                    
                    -
                    
                    
                    
                    33,919Interest
                        income
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    3,870Interest
                        expense
                    
                    
                    (76,778
                    )
                    
                    
                    (76,459
                    )
                    
                    
                    (455,472
                    )Total
                        Other Expenses
                    
                    
                    (59,859
                    )
                    
                    
                    (60,395
                    )
                    
                    
                    (381,648
                    )Net
                        loss
                    
                    $
                    (2,729,646
                    )
                    
                    $
                    (727,342
                    )
                    
                    $
                    (7,638,203
                    )Basic
                        and diluted weighted average number of
                      shares
                        outstanding
                    
                    
                    12,053,910
                    
                    
                    
                    7,187,282Basic
                        and diluted loss per common share
                    
                    $
                    (0.23
                    )
                    
                    $
                    (0.10
                    )
 See
                accompanying notes to these consolidated financial
                statements.
    4
 Table
                of Contents
  **BIOMODA,
              INC. AND SUBSIDIARY**
 **(A
              DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
              STATEMENTS OF CASH FLOWS**
 **(UNAUDITED)**
 
 
 **Nine
                        Months Ended September 30,****2007**
                    
                    
                    **2006**
                    
                    
                    **January
                        3, 1990 (Inception) to**
                      **September
                        30, 2007**NET
                        CASH FLOWS FROM OPERATING ACTIVITIESNet
                        loss
                    
                    $
                    (2,729,646
                    )
                    
                    $
                    (727,342
                    )
                    
                    $
                    (7,638,203
                    )Adjustments
                        to reconcile net loss tonet
                        cash used in operating activities:Stock
                        options expense
                    
                    
                    4,473
                    
                    
                    
                    5,033
                    
                    
                    
                    186,515Issuance
                        of common stock for services
                    
                    
                    1,482,102
                    
                    
                    
                    -
                    
                    
                    
                    2,226,073Issuance
                        of common stock for bonuses to employees
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    17,250Impairment
                        of intangible assets
                    
                    
                    17,000
                    
                    
                    
                    -
                    
                    
                    
                    17,000Imputed
                        interest on related party note payable
                    
                    
                    1,053
                    
                    
                    
                    -
                    
                    
                    
                    1,053Loss
                        on sale of assets
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    358Foreign
                        currency transactions
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    3,247Non-cash
                        gain on debt settlement
                    
                    
                    -
                    
                    
                    
                    (16,064
                    )
                    
                    
                    (11,171
                    )Depreciation
                        and amortization
                    
                    
                    16,124
                    
                    
                    
                    14,604
                    
                    
                    
                    117,575Changes
                        in operating assets and liabilities:Accounts
                        receivable
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (7,620
                    )Other
                        assets
                    
                    
                    -
                    
                    
                    
                    3,195
                    
                    
                    
                    4,379Accounts
                        payable and accrued liabilities
                    
                    
                    82,386
                    
                    
                    
                    148,827
                    
                    
                    
                    784,458Net
                        cash flows used in operating activities
                    
                    
                    (1,126,508
                    )
                    
                    
                    (571,747
                    )
                    
                    
                    (4,299,086
                    )CASH
                        FLOWS FROM INVESTING ACTIVITIESPurchase
                        of property and equipment
                    
                    
                    (845
                    )
                    
                    
                    (3,733
                    )
                    
                    
                    (25,024
                    )Sale
                        of property and equipment
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,139Investment
                        in restricted cash
                    
                    
                    -
                    
                    
                    
                    (100
                    )
                    
                    
                    -Organizational
                        costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (560
                    )Patent,
                        trademark and license fee
                    
                    
                    (1,802
                    )
                    
                    
                    -
                    
                    
                    
                    (324,659
                    )Net
                        cash flows used in investing activities
                    
                    
                    (2,647
                    )
                    
                    
                    (3,833
                    )
                    
                    
                    (349,104
                    )CASH
                        FLOWS FROM FINANCING ACTIVITIESProceeds
                        from stockholders' advances
                    
                    
                    15,635
                    
                    
                    
                    11,688
                    
                    
                    
                    141,067Proceeds
                        from line of credit from an affiliated entity
                    
                    
                    1,073,040
                    
                    
                    
                    542,903
                    
                    
                    
                    3,454,564Repayments
                        on line of credit from an affiliated entity
                    
                    
                    (192,623
                    )
                    
                    
                    -
                    
                    
                    
                    (255,524
                    )Repayments
                        on related party note payable
                    
                    
                    (8,174
                    )
                    
                    
                    -
                    
                    
                    
                    (8,174
                    )Common
                        Stock Subscriptions
                    
                    
                    7,301
                    
                    
                    
                    30,000
                    
                    
                    
                    7,301Purchase
                        of treasury stock
                    
                    
                    -
                    
                    
                    
                    (9,000
                    )
                    
                    
                    (9,000
                    )Issuance
                        of common stock for cash
                    
                    
                    532,939
                    
                    
                    
                    -
                    
                    
                    
                    1,617,035Offering
                        Costs
                    
                    
                    (296,794
                    )
                    
                    
                    -
                    
                    
                    
                    (296,794
                    )Net
                        cash flows provided by financing activities
                    
                    
                    1,131,324
                    
                    
                    
                    575,591
                    
                    
                    
                    4,650,475Net
                        (decrease) increase in cash
                    
                    
                    2,169
                    
                    
                    
                    11
                    
                    
                    
                    2,285Cash,
                        beginning of period
                    
                    
                    116
                    
                    
                    
                    24
                    
                    
                    
                    -Cash,
                        end of period
                    
                    $
                    2,285
                    
                    
                    $
                    35
                    
                    
                    $
                    2,285Supplemental
                        cash flow information:Cash
                        paid for:Interest
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Income
                        taxes
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Non-cash
                        investing and financing activities:Stock
                        issued for stock payable
                    
                    $
                    30,000
                    
                    
                    $
                    -Stock
                        issued for debt
                    
                    
                    388,768
                    
                    
                    
                    -Gain
                        on Settlement with related party
                    
                    
                    155,145
                    
                    
                    
                    -Note
                        payable for payroll liabilities
                    
                    
                    86,260
                    
                    
                    
                    -
 See
              accompanying notes to these consolidated financial
              statements.
  5
 Table
            of Contents
  _____________________________________________________
 
 **BIOMODA,
        INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 _____________________________________________________
 
 
 1.  BASIS
        OF PRESENTATION
 
 The
        accompanying unaudited interim financial statements of Biomoda, Inc. have
        been
        prepared in accordance with accounting principles generally accepted in the
        United States of America for interim financial information and with the
        instructions to Form 10-QSB. Accordingly, they do not include all of the
        information and notes required by generally accepted accounting principles
        for
        complete financial statements and should be read in conjunction with the
        Management's Discussion and Analysis and the audited financial statements
        and
        notes thereto contained in Biomoda's 2006 Annual Report filed with the
        Securities and Exchange Commission on Form 10-KSB. In the opinion of management,
        all adjustments, consisting of normal recurring adjustments, necessary for
        a
        fair presentation of financial position and the results of operations for
        the
        interim periods presented have been reflected herein. The results of operations
        for the interim periods are not necessarily indicative of the results to
        be
        expected for the full year. Notes to the financial statements which would
        substantially duplicate the disclosure contained in the audited financial
        statements for 2006 as reported in the 10-KSB have been omitted.
 
 2.  DEVELOPMENT
        STAGE AND GOING CONCERN
 
 Biomoda
        has been in the development stage since it began operations on January 3,
        1990
        and has not generated any revenues from operations and there is no assurance
        of
        any future revenues. As of September 30, 2007, Biomoda had an accumulated
        deficit of $7,638,203 and a working capital deficit of $2,507,391.
 
 In
        addition, Biomoda did not generate any cash from operations and had no cash
        reserve dedicated to fund expenditures. These factors create a substantial
        doubt
        as to Biomoda's ability to continue as a going concern.
 
 Biomoda
        will require substantial additional funding for continuing research and
        development and obtaining regulatory approval and for the commercialization
        of
        its products. Management expects to be able to raise enough funds to meet
        its
        working capital requirements through the sale of Biomoda's common
        stock.
 
 There
        is
        no assurance that Biomoda will be able to obtain sufficient additional funds
        when needed, or that such funds, if available, will be obtainable on terms
        satisfactory to Biomoda. The consolidated financial statements do not include
        any adjustments that might be necessary should Biomoda be unable to continue
        as
        a going concern.
 
 3.  LINE
        OF CREDIT FROM AN AFFILIATED ENTITY
 
 During
        the nine months ended September 30, 2007, an affiliate of the Company exchanged
        its Biomoda common shares, valued at $707,150, for various services provided
        to
        Biomoda.  In connection with this transaction, Biomoda recorded an
        increase to the line of credit from an affiliated entity of
        $707,150.  As of September 30, 2007, the line of credit from an
        affiliated entity balance was $1,810,272.  To date Biomoda has paid
        back a total of approximately $644,292 on the line of credit to Advanced
        Optics
        Electronics, $388,768 of which was in stock issuances.
 
 4.  COMMON
        STOCK
 
 During
        the first quarter of 2007, Biomoda issued 726,000 common shares  for
        services valued at $792,500, 2,000 common shares for cash of $1,000, 30,000
        common shares issued for stock payable, and 86,786 common shares in exchange
        for
        discharge of debt of $73,768 to a related party.
 
 During
        the second quarter of 2007, Biomoda issued 1,644,062 common shares for services
        valued at $661,102 and 343,000 common shares for cash of
        $41,712.  Biomoda also issued 500,000 common shares in exchange for
        discharge of debt of $315,000 to Advanced Optics Electronics to pay down
        the
        Line of Credit.
 
 During
        the third quarter of 2007, Biomoda issued 301,000 common shares for services
        valued at $28,500 and 555,000 common shares for cash of $35,000. Biomoda
        also
        sold 4,964,049 common shares for $455,227,.incurring $296,794 in costs related
        to the offering.
  6
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            of Contents
  _____________________________________________________
 
 **BIOMODA,
          INC.**
 **(A
          Development Stage Company)**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 _____________________________________________________
 5.  SUBSEQUENT
        EVENTS
 
 During
        October, we issued 165,000 shares valued at $14,850 to Los Alamos National
        Security, LLC for the payment of a license fee.
 
 During
        October, we sold 1,241,285 common shares for $103,985,.incurring $74,829
        in
        costs related to the offering.
 
 During
        November, we issued 935,000 shares valued at $145,750 for various
        services.
 
 During
        November, we sold 4,096,075 common shares for $436,142, incurring $395,863
        in
        costs related to the offering.
   
 
 ITEM2:
        MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
        OPERATION
 
 COMPANY
        OVERVIEW
 
 Biomoda,
        Inc. (the "Company") is a development stage company incorporated in the state
        of
        New Mexico on January 3, 1990. The Company's general focus is on discovery,
        development, manufacture and marketing of proprietary medical diagnostic
        and
        treatment products used to treat life threatening and other serious
        diseases.  Our primary focus is creating diagnostic solutions for
        early detection and clinical management of cancer.
 
 On
        July
        19, 2006, the Company closed its offering of up to 6,000,000 shares of its
        common stock pursuant to a registration statement on Form SB-2 (the
        "Registration Statement") under the Securities Act of 1933, as amended, declared
        effective on February 11, 2005. The Company’s market maker filed Form 211 with
        NASD Regulation to initiate quotations in its common stock on the OTC Bulletin
        Board. The request was cleared on October 19, 2006.
 
 PLAN
        OF
        OPERATION
 
 Our
        plan
        of operation for the next twelve months is to complete the validation studies
        for our lung cancer assay, design our diagnostic product, choose our contract
        manufacturing partner, manufacture our initial batches, register our product
        with the FDA and then with European authorities for our CE mark, and begin
        marketing to reference labs in the US and Europe.  To that end, we
        have contracted with Quintiles Consulting for regulatory consulting, TriCore
        Reference Laboratories for assay preparation, Averion International Corporation
        for clinical services, and Clinical Research Center of Cape Cod. to provide
        lung
        sputum samples.  We intend to have initial revenues in the last
        quarter of 2008.  The Company is raising   funds from
        the sale of restricted common stock through a Regulation S Offering and is
        assessing various offering scenarios.
 
 Our
        initial product is a diagnostic test for lung cancer that will be performed
        out
        of body by using a sputum sample from the patient.  Our test does not
        require any invasive sample taking.  The sample will be sent to a
        clinical lab where the procedure will be performed to determine the presence,
        or
        not, of lung cancer or precancerous cells.  Our diagnostic test can be
        used for other cell samples and we intend to
        create  and  market  products  to  diagnose  and  screen  for
        other prevalent cancers such as
        breast,  cervical,  bladder,  and
        colorectal.  We have determined that our initial markets will be the
        developed nations of Europe, North America and Japan.  This has been
        determined on the basis of available healthcare delivery and payer
        infrastructure.  Japan is leading the world, and has instituted a
        nationwide lung cancer-screening program.  We also intend to sell our
        product in additional markets throughout the world such as India, Brazil
        and
        South America, Asia and Russia.  We will market different product
        formats based on the region of the world.
   7
 Table
            of Contents
    In
        addition to augmenting laboratory research and development, management plans
        to
        further strengthen the corporate infrastructure of the Company to adequately
        manage the future growth and success of our operations.  Management
        expects to hire additional personnel and enter into consulting and collaborative
        arrangements over the next twelve months as needed to continue to strengthen
        and
        enhance the effectiveness of implementing our plan as we grow.
 
 The
        Company’s Research and Development facilities are located on Kirtland Air Force
        Base in Albuquerque, New Mexico.  R&D is housed in approximately
        2500 square feet that includes two state-of-the-art laboratories where primary
        research, assay validation and commercialization work is being
        conducted.
 
 Over
        the
        next twelve months  management
        will  continuously  evaluate and develop our business plan
        which  includes  assessing  the  technology
        we utilize and the markets  we  intend to serve
        and  evaluating  the  prospect  of  expanding  into
        additional  products and markets as
        business  conditions  warrant. In connection with this
        continual evaluation, management will also look at taking actions designed
        to
        mitigate any and all risks associated with our business plan.
 
 In
        January 2005, the U.S. Patent Office awarded a Patent to Biomoda researchers
        entitled   "Compositions and Methods for Detecting Precancerous
        Conditions in Cells and Tissue Samples using 5, 10, 15, 20 Tetrakis
        (Carboxyphenyl) Porphine". This Patent brings a significant addition to
        Biomoda's Patent portfolio and expands the Company's intellectual property
        to
        include cancer screening as a compliment to Biomoda's existing technology.
        Biomoda is completing the formal filing for a continuation for this Patent
        based
        on research currently underway by researchers at Biomoda.  The Company
        believes its goal to further strengthen and expand its intellectual property
        portfolio will be significantly enhanced by these developments.
        Biomoda,  Inc.'s R&D  Division
        has  successfully  completed  the
        first  clinical validation  of  the
        company's  development  stage assay for lung
        cancer.  These results indicate its ability to differentiate lung
        cancer patients, heavy smokers, and normal individuals.
 
 RESULTS
        OF OPERATIONS
 
 Due
        to
        our limited operating history, we believe that period-to-period comparisons
        of
        our results of operations are not fully meaningful and should not be relied
        upon
        as an indication of future performance.
 
 Comparison
        of the three months ended September 30, 2007 and 2006
 
 REVENUE.  As
        of September 30, 2007, there have been no significant revenues since
        inception.
 
 PRODUCT
        DEVELOPMENT. Product development expenses consist primarily of personnel
        expenses and consulting fees. Research and development, including payroll
        costs
        and other technical costs decreased to $15,492 in the three months ended
        September 30, 2007 from $110,877 in the three months ended September 30,
        2006.
        The Company believes that continued investment in product development is
        critical to attaining our strategic objectives and, as a result, we expect
        expenses such as clinical studies and collaborations to increase significantly
        in the next year. We expense product development costs as they are
        incurred.
 
 GENERAL  AND  ADMINISTRATIVE  General  and  administrative  expenses  consist
        of expenses for executive and
        administrative  personnel,  facilities,  professional
        services,  travel and general
        corporate  activities.  General and administrative costs,
        taken together with professional fees, increased to $55,242 in the three
        months
        ended September 30, 2007 from $28,737 in the three months ended September
        30,
        2006.  We expect general and administrative costs to increase in the
        future as our business prospects develop and we will require more staff.
        The
        costs associated with being a publicly traded company and future strategic
        acquisitions will also be a contributing factor to increases in this
        expense.
 
 OTHER
        INCOME (EXPENSE) Other income (expense) in these periods consists of interest
        expense, which decreased to $25,118 in the three months ended September 30,
        2007
        from $27,317 in the three months ended September 30, 2006 due to lower balance
        in related party debt.
 
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   Comparison
        of the nine months ended September 30, 2007 and 2006
 
 PRODUCT
        DEVELOPMENT.  Product development expenses consist primarily of
        personnel expenses and consulting fees. Research and development, including
        payroll costs and other technical costs increased to $807,308 in the nine
        months
        ended September 30, 2007 from $369,602 in the nine months ended September
        30,
        2006 due to significant stock issuance for services. The Company believes that
        continued investment in product development is critical to attaining our
        strategic objectives and, as a result, we expect expenses such as clinical
        studies and collaborations to increase significantly in the next year. We
        expense product development costs as they are incurred.
 
 GENERAL
        AND ADMINISTRATIVE.  General and administrative expenses consist of
        expenses for executive and administrative personnel, facilities, professional
        services, travel and general corporate activities. General and administrative
        costs, taken together with professional fees, increased to $1,656,427 in
        the
        nine months ended September 30, 2007 from $166,581 in the nine months ended
        September 30, 2006. This increase was due primarily to $1,482,102 of stock
        issued for services, which is divided between this classification and research
        expenses, above, and increased legal fees. We expect general and administrative
        costs to increase in the future as our business prospects develop and we
        will
        require more staff. The costs associated with being a publicly traded company
        and future strategic acquisitions will also be a contributing factor to
        increases in this expense.
 
 OTHER
        INCOME (EXPENSE).  Other income (expense) in these periods consists of
        interest expense, which increased to $76,778 in the nine months ended September
        30, 2007 from $76,459 in the nine months ended September 30,
        2006.  Additionally, we recorded $16,064 gain on forgiveness of debt
        in 2006.
 
 LIQUIDITY
        AND CAPITAL RESOURCES
 
 Since
            inception, we have funded our operations through private placement of
            equity
            securities and loans from Advanced Optics Electronics, Inc
            ("ADOT").  As of September 30, 2007, we have raised net proceeds of
            approximately $4,915,000 from these sources.
  Product
            development expenditures, including personnel expense, and general and
            administrative expense approximated $2,463,735 for the nine months ended
            September 30,
            2007.  Funds  for  operations,   product   development  and  capital
            expenditures  were  provided  from a line of
            credit  agreement  with  ADOT and the sale of
            restricted company stock.  The Company will require substantial
            additional funding for continuing research and development, obtaining
            regulatory
            approval and for the commercialization of its products.
  Management
            believes that sales of securities will provide adequate liquidity and
            capital
            resources to meet the anticipated development stage requirements through
            the end
            of 2007.  In addition, At that time it is anticipated
            that  sales of
            our  initial  screening  product  will  begin
            and  contribute  to
            operating  revenues.  It
            is  anticipated  that  these  sales  will  provide  the
            additional capital resources to fund the proportionately  higher
            working capital
            requirements  of  production  and  sales   initiatives  and  continued   product
            development for second-generation diagnostic and therapeutic
            products.
  There  is
            no  assurance  that  the  Company  will
            be able to  obtain  sufficient
            additional  funds  when  needed,  or
            that  such  funds,  if  available,  will
            be obtainable on terms  satisfactory  to the
            Company.  The consolidated financial statements do not include any
            adjustments that might be necessary should the Company be unable to continue
            as
            a going concern.
 
 INFLATION
 
 Management
        believes that inflation has not had a material effect on the Company's results
        of operations.
 
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 ITEM3:
        CONTROLS AND PROCEDURES
 
 Under
        the
        supervision and with the participation of our management, we evaluated the
        effectiveness of the design and operation of our disclosure controls and
        procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act
        as of
        the end of the period covered by this report, September 30,
        2007).  Based upon that evaluation, the company concluded that the
        Company’s disclosure controls and procedures were effective.
 
 The
        Company was in the infancy stages of its business operations and had limited
        resources  available to plan,  develop,  and
        implement  disclosure and procedure controls  and
        other  procedures  that are  designed to
        ensure  that  information required to be disclosed in
        the  Company's  periodic  reports filed or
        submitted under the Exchange Act is
        recorded,  processed,  summarized and reported, within the
        time periods specified in the Securities and Exchange Commission's rules
        and
        forms. Disclosure controls and procedures include, without limitation, controls
        and procedures designed to ensure that information required to be disclosed
        in
        the Company’s periodic reports filed under the Exchange Act is accumulated and
        communicated to management to allow timely decisions regarding required
        disclosure.  Further, as reported in the Company’s Current Report on
        Form 8-K filed on August 14, 2007, the Company is currently investigating
        (i)
        what appears to be the unauthorized issuance of shares of its common stock
        in
        violation of the Securities Act of 1933, and (ii) the improper diversion
        of cash
        from the Company to a former officer and director and/or his
        affiliates.
 
 The
        Company is  re-evaluating and revising its existing control policies
        and procedures. As part of such plan and implementation, the Company is
        re-evaluating, re-designing and documenting policies and procedures, putting
        such procedures in operation, and monitoring the effectiveness of the
        procedures.
 
 CHANGES
        IN CONTROLS AND PROCEDURES
 
 Significant
        changes have been made to improve our internal controls over financial reporting
        during the three months ended September 30, 2007.
 
 LIMITATIONS
        ON THE EFFECTIVENESS OF INTERNAL CONTROL
 
 The
        Company's management, including the CEO, does not expect that our disclosure
        controls and procedures or our internal control over financial reporting
        will
        necessarily prevent all fraud and material errors.  An internal
        control system, no matter how well conceived and operated, can provide only
        reasonable, not absolute, assurance that the objectives of the control system
        are met. Further, the design of a control system must reflect the fact that
        there are resource constraints, and the benefits of controls must be considered
        relative to their costs.  Because of the inherent limitations on all
        internal control systems, no evaluation of controls can provide absolute
        assurance that all control issues and instances of fraud, if any, within
        the
        Company have been detected.  These inherent limitations include the
        realities that judgments in decision-making can be faulty, and that breakdowns
        can occur because of simple error or mistake. Additionally, controls can
        be
        circumvented by the individual acts of some persons, by collusion of two
        or more
        people, and/or by management's override of the controls. The design of any
        system of internal control is also based in part upon certain assumptions
        about
        the likelihood of future events, and there can be no assurance that any design
        will succeed in achieving its stated goals under all potential future
        conditions.  Over time, controls may become inadequate because of
        changes in circumstances, and/or the degree of compliance with the policies
        and
        procedures may deteriorate.  Because of the inherent limitations in a
        cost-effective internal control system,  financial reporting
        misstatements due to error or fraud may occur and not be detected on a timely
        basis.
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 **PART
        II. OTHER INFORMATION**
 
 Item
        1.  LEGALPROCEEDINGS
 
 On
        August
        29, 2007, Biomoda, Inc and Advanced Optics Electronics, Inc. jointly filed
        a
        Complaint in Federal Court, case number 1:07-cv-00855 against Leslie Robins,
        Alvin Robins and John Kearns for Common Law Fraud, Violation of Federal and
        New
        Mexico Securities Laws, Conversion, Breach of Fiduciary Duty and
        Racketeering.
 
 Biomoda
          previously conducted an offering of up to 6,000,000 shares of its common
          stock
          pursuant to a registration statement on Form SB-2.  This registration
          statement expired on November 4, 2005, prior to selling any shares under
          this
          registered offering.  The Board is currently investigating the
          issuance of the following shares of common stock purportedly under the
          SB-2
          registration statement pursuant to Mr. Robins’ sole and unauthorized direction:
          343,000 shares on or about June 5, 2007, 230,000 shares on or about June
          8,
          2007, 500,000 shares on or about June 25, 2007, 90,000 shares on or about
          July
          11, 2007, 50,000 shares on or about July 11, 2007, and 555,000 shares on
          or
          about July 13, 2007.  Based upon the Board’s initial investigation,
          all of such shares were issued without registration under the Securities
          Act of
          1933, as amended, or any exemption therefrom.  As a result, such
          shares were issued in violation of the Securities Act of 1933, as
          amended.  Such violations may subject Biomoda to enforcement action by
          the Securities and Exchange Commission.
 Item
        2.  CHANGES IN SECURITIES -  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 Forms 8-K
 
 (a)      Exhibits
 
 31.1  Certification  of  Principal  Executive  Officer  pursuant  to  Securities
        Exchange Act rules 13a-15 and 15d-15(c) as adopted pursuant to section 302
        of
        the Sarbanes-Oxley act of 2002.
 
 31.2  Certification  of  Principal  Financial  Officer  pursuant  to  Securities
        Exchange Act rules 13a-15 and 15d-15(c) as adopted pursuant to section 302
        of
        the Sarbanes-Oxley act of 2002.
 
 32.1   Certification
        of Principal Executive and Accounting Officer pursuant to 18
        U.S.C.  section  1350,  as  adopted  pursuant  to  section  906
        of the  Sarbanes-Oxley act of 2002.
 
 Reports
        on Form 8-K
 
 On
        August
        15, 2007, we reported to removal for cause of Leslie S. Robins as officer
        and
        director of Biomoda, Inc.  We also reported the resignation of Dr.
        Albert Goodman as director.
 
 
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 **SIGNATURES**
 
 
 In
        accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
        this report on Form 10QSB to be signed on its behalf by the undersigned,
        thereunto duly authorized.
 
 
 Dated:
        November  19, 2007
 
 **BIOMODA,
        INC. and Subsidiary**
 
 BY:
        /s/John J.
        Cousins
 John
        J. Cousins
 President
 (Principal
        Executive and Accounting Officer)
 
 
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