Edgar Filing: BIOPHAN TECHNOLOGIES INC

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------------
FORM 10-KSB
-----------------------
(Mark One)

[X] Annual Report Under Section 13 or 15(d) of The Securities Exchange
Act of 1934
For the fiscal year ended February 28, 2002.
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934

Commission File Number 0-26057

BIOPHAN TECHNOLOGIES, INC.
--------------------------------------------
(Name of small business issuer in its charter)

Nevada 82-0507874
----------------------------- ------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)

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

(716) 214-2441
-------------------------
Issuer's telephone number

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common
Stock, $.005 par value

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 [ ]

Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [ ]

The issuer had $-0- revenues for its most recent fiscal year ended
February 28, 2002.

The aggregate market value of the voting equity held by non-affiliates
computed by reference to the average bid and asked prices of such common
equity as of May 1, 2002 was $19,467,240.

The number of shares outstanding of the issuer's Common Stock, $.005 par
value, as of May 1, 2002 was 29,549,439 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Certain exhibits hereto are incorporated by reference to the Registrant's
Form 10-KSB for the year ended February 28, 2001.

Transitional Small Business Disclosure Format: Yes [ ] No [X]

TABLE OF CONTENTS

Page
PART I

Item 1. Business 3

Item 2. Properties 16

Item 3. Legal Proceedings 16

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

PART II

Item 5. Market for Common Equity and Related Stockholder Matters 18

Item 6. Plan of Operation 19

Item 7. Financial Statements 21

Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 22

PART III

Item 9. Directors, Executive Officers, Promoters and Control
persons; Compliance with Section 16(a) of the Exchange
Act 22
Item 10. Executive Compensation 26

Item 11. Security Ownership of Certain Beneficial Owners and
Management 26

Item 12. Certain Relationships and Related Transactions 28

PART IV

Item 13. Exhibits and Reports on Form 8-K 28

SIGNATURES 29

PART I

Item 1. Description of Business

Company History

The Company was incorporated under the laws of the State of Idaho on
August 1, 1968. On January 12, 2000, the Company changed its domicile to
Nevada by merging into a Nevada corporation, and on July 19, 2001, changed
its name to Biophan Technologies, Inc. The Company's stock currently trades
over the counter under the symbol BIPH.OB. Our corporate headquarters are
located at 150 Lucius Gordon Drive, Suite 215, West Henrietta, New York
14586; Tel. (585) 214-2441; website: www.biophan.com.

On December 1, 2000, the Company acquired LTR Antisense Technology,
Inc., a New York corporation ("LTR"), from Biomed Solutions, LLC (formerly
Biophan, LLC), a New York limited liability company ("Biomed"), in a share
for share exchange. As a result of the exchange, LTR became a wholly owned
subsidiary of the Company. The exchange was consummated pursuant to and in
accordance with an Exchange Agreement, dated December 1, 2000 and amended as
of June 8, 2001, by and among the Company, LTR and Biomed. LTR owns multiple
patents for proprietary HIV antisense gene therapy technology.

In connection with the exchange, the Company (i) issued an aggregate of
10,759,101 shares of common stock to Biomed in exchange for all the issued
shares of LTR and (ii) issued an aggregate of 10,759,101 shares of common
stock to a group of investors for $175,000.

Also on December 1, 2000, the Company acquired intellectual property
rights, including a pending patent to the MRI-compatible pacemaker technology
from Biomed (the "Assignment"), for future consideration of $500,000. The
Assignment was consummated pursuant to, and in accordance with, an Assignment
and Security Agreement, dated December 1, 2000 and amended as of June 8,
2001 by and between the Company and Biomed.

Both the Exchange Agreement and the Assignment and Security Agreement
contain provisions for the reversion of the technology to Biomed if the
Company fails to raise funds for development of the technology and in certain
other circumstances. In that event, the Company would require additional
financing to meet its obligations or risk losing its rights in its
technology.

During 2001 the Company entered into a Commercial Research and
Development Agreement (CRADA) with the National Institutes of Health and the
University of Rochester Cancer Center, wherein these agencies conduct R & D
associated with the antisense technology. This allowed the Company to put its
full resources into the development of the MRI safety improvements to
biomedical products.

Company Business

The Company's business is enabling implantable and interventional medical
devices to operate safely and compatibly with MRI (Magnetic Resonance Imaging)
diagnostic equipment. Many biomedical products, including pacemakers,
implantable cardio-defibrillators (ICD's), neurostimulators, insulin pumps,
and others are contraindicated for use with MRI machines. This is primarily
because the powerful radio waves that MRI machines emit can damage medical
devices and cause patient injury and occasionally deaths.

Problems associated with pacemakers and other devices, which use metal
wire leads to connect sensors and stimulate tissue, include:

* heating of electrodes which can scar the tissue such as at the
point where the electrode tip connects to heart tissue and
allows the pacemaker to sense and stimulate the heart.
* scarring can subsequently interfere with the sensing signal
and the ability to pace the heart, and this can render a
pacemaker and/or an implantable cardio-defibrillator (ICD)
inoperable.
* interference from the RF energy can cause the diagnostic
device to malfunction, such as in a pacemaker, where the
device misreading the heart signal causing inappropriate
pacing response.
* device failure including battery depletion.

The Company has developed several technologies that improve the safety of
medical devices in the presence of an MRI machine. The Company's pacemaker
solution replaces the metal wire lead, which connects the pacemaker to the
heart with a fiber optic lead, performing the identical functions of sensing
and electrostimulation.

The Company's goal is to provide the worldwide pacemaker and medical
device community with turnkey solutions they can use to redesign their
products to be MRI safe and compatible. The Company will provide certain
critical components, licenses, and R&D assistance to these manufacturers.

The fiber optic and ICD solutions were developed by Company employees
working in conjunction with Wilson Greatbatch, the inventor of the first
successful implanted pacemaker, and his engineering firm, Greatbatch
Enterprises. Greatbatch Enterprises and Wilson Greatbatch have assigned their
patents in MRI safety and compatibility to the Company, and they are assisting
the Company in developing prototypes and early product.

A patent-pending "Photonic Catheter", based on fiber optic and laser
diode technology, completely eliminates the traditional wire lead from the
pacemaker case to the heart. This new pacemaker lead can sense the heart
rhythm, and electrically stimulate the heart using a fiber optic lead, which
is completely impervious to the MRI energy.

The Company has demonstrated a working prototype of the temporary version
of the photonic catheter providing electrical energy via a fiber optic lead,
and an independent third party has tested the device operating for 20 minutes
in an MRI field, without any heating or disruption of operation.

The Company has developed a proprietary approach for using its fiber
optic lead to connect the pacemaker to the heart in a manner that is
compatible with MRI energy, and is battery efficient.

The Company has entered into agreement with:

Greatbatch Enterprises, Inc., an entity owned by Wilson Greatbatch.
Pursuant to this agreement between Greatbatch Enterprises and the Company,
Mr. Greatbatch will, in conjunction with the Company, leading cardiologists,
radiologists, MRI experts and others, guide the creation of an MRI-compatible
implantable cardiac pacemaker. Mr. Greatbatch's efforts in this area are
exclusive to the Company. Greatbatch Enterprises employs several engineers who
have worked with Mr. Greatbatch for many years, and has affiliations with
third party organizations with extensive experience. Greatbatch Enterprises
has developed the Company's working prototype.

The Company is also exploring other approaches to MRI safety with research
institutes including shielding. While these are not anticipated to be as
effective in resolving the MRI safety issue, they represent an important
potential bridge to assisting the pacing industry in reducing MRI associated
dangers while the photonic solution is in development.

MRI Safety / Compatibility Background

The Company views its MRI-compatible cardiac pacemaker technology as a
platform technology, which will have broad application to a variety of
medical products.

The power emitted by an MRI imaging device is significantly greater
than most other diagnostic devices used on human beings or animals.

An MRI procedure is crucial to diagnose colon cancer, a brain tumor, or a
host of other serious, life threatening problems. The existence of a medical
device that is not MRI compatible requires physicians and patients to make a
very difficult decision to either forego the MRI, or risk serious injury and
potential death from undergoing MRI with a pacemaker, neurostimulators, or
other implantable device installed.

Improved MRI safety will have a major impact on healthcare. MRI safety
in association with pacemakers and other implantable devices is a serious
issue in the medical industry. It was the subject, for example, of a panel
discussion at the Radiological Society of North America (RSNA) conference held
in Chicago in November 2001. Panelists indicated that our solution will make a
difference. Decisions taken by radiologists and other physicians regarding use
of MRI in the presence of traditional pacemaker implants are rife with patient
hazard and professional liability. Our solution would make a difference in
this life saving arena, and as such, it could impact the market share fortunes
of the major pacemaker manufacturers.

A major problem in MRI imaging involves the pacemaker lead, a wire
approximately 14 inches in length, which goes from the pacemaker to the heart
through the blood vessels. In the presence of MRI energy this wire heats up,
enough to cause scarring and ablation of heart tissue, which can render a
pacemaker inoperable.

Modern neurostimulators which are proving very successful for treating
epilepsy, Parkinson's Disease and other ailments, are subject to the same
inductive heating as are cardiac leads. This problem is not that well known,
and some neurosurgeons casually have used MRI imaging to check a newly
implanted brain probe, which in addition to the long wire, has a 3" metal
probe placed in the brain. Studies have shown that pacemaker leads can heat
up as much as 63 degrees C in ninety seconds in the presence of MRI energy,
causing scarring and ablation problems in the heart. The effects of this
heating on the brain are not yet known, but one might assume it is not
optimal for good health.

Cardiologists, radiologists and other physicians, as well as the medical
device industry, are well aware of the effect of MRI interference on medical
devices. The websites of the American Heart Association, each of the major
implantable pacemaker companies, the ICD companies, insulin pump
manufacturers, and many others have warned patients/users to be cautious and
aware of their surroundings when wearing or using these devices. These
warnings address:

* Double-checking units before and after exposure.
* Serious and permanent damage to devices.
* The need to recalibrate units.
* The disruption of programming and memory functions.
* Various other effects.

The initial prototype of an externally powered pacemaker being developed
by the Company as its initial prototype was recently tested in an MRI system
using industry-accepted methods. The test used a "phantom" or plastic and
liquid model of a human torso to permit tests for displacement due to the
magnetic field, and for heating due to the RF energy. The results concluded
that "the lead of the Photonic Temporary Pacemaker will not present an
additional hazard or risk to a patient undergoing an MRI procedure using an MR
system operating with a static magnetic field of 1.5 Tesla or less. As such
the lead of the Photonic Temporary Pacemaker that underwent evaluation should
be considered "MR safe" according to the specific conditions used for testing."
Tests are planned in a 3.0 Tesla MRI machine.

Markets

The global market potential for technology that will enable medical
devices to operate successfully in the presence of electromagnetic and other
interference was approximately $6.4 billion in the year 2000. The total
global market for these devices is projected to grow to approximately $14.3
billion by 2005.

Competition

There are a number of major companies engaged in the development of
medical devices. However, management believes that none of these companies
has successfully developed technology enabling implantable medical devices
capable of operating in the presence of MRI equipment.

The Company is currently assessing how to best commercialize its
technology with a broad range of medical device companies, which may also
compete with the Company. These companies include, but are not limited to,
the following:

Medtronic Incorporated is a leading manufacturer of cardiac rhythm
management, cardiovascular and other medical devices. The Company has
a dominant position in cardiac pacemakers, is the leading manufacturer
of implantable cardiac defibrillators, and is a major player in most
other device markets in which it competes.

Guidant Corporation is also a leading manufacturer of cardiac rhythm
management devices such as cardiac pacemakers, implantable cardiac
defibrillators, interventional cardiology devices (including coronary
stents), and other cardiac and vascular surgery devices and
instruments.

St. Jude Medical, Inc. is a global developer, manufacturer, and
distributor of medical device products for cardiac rhythm management,
cardiology and vascular access. Other products include mechanical and
tissue heart valves and vascular closure devices.

MiniMed, Inc. (recently acquired by Medtronic Incorporated for $3.6
billion), is the insulin pump market leader. The company designs,
develops, manufactures, markets and sells advanced microinfusion
systems and continuous glucose monitoring systems for the intensive
treatment of diabetes. MiniMed is also using its drug delivery
expertise to develop infusion devices for the treatment of other
chronic medical conditions. The company has an implantable insulin
pump undergoing clinical trials.

Wilson Greatbatch Technologies, Inc. (NYSE: GB) is the primary supplier
of batteries and components to the pacemaker market, founded by Wilson
Greatbatch.

Strategy

Pacemaker Industry

The Company's strategy is to provide working prototypes that demonstrate
efficacy for its MRI safe and compatible solutions. The Company has developed
a working prototype of a "temporary pacemaker" that can pace the heart from
outside the body using a temporary optical fiber. This device will be used in
animal and human clinical trials to demonstrate that the Company's technology
is safe, and otherwise as effective as today's pacing technologies.

The Company sees a market for this MRI compatible temporary pacemaker,
that can be used to reduce the risk of having a pacemaker recipient undergo
an MRI procedure with the existing, metal wire pacemaker. As the Company
demonstrates efficacy of its solution and the medical community publishes the
results of early testing, the Company anticipates that one or more pacemaker
manufacturers will enter into licenses and R&D agreements with the Company to
pursue MRI safe products of their own.

The Company is working with the pacemaker industry, which has a very
large installed base and high volume annual unit sales, as its entry point for
solving the MRI safety challenges of biomedical products. The success of Mr.
Greatbatch in developing the world's first successful implantable pacemaker
and the lithium iodine batteries used in 90% of implantable devices provides
the Company with a unique knowledge and experience base with which to help
the pacemaker industry develop MRI compatibility.

Mr. Greatbatch has also developed an early prototype of an MRI safe ICD
lead, which augments the fiber optic solution and can provide the 800-volt
charge needed to defibrillate the heart when needed.

Other Market Segments

The Company has identified other markets where its core technologies can
provide improvements in MRI safety and compatibility. Included are
neurostimulators for treating Parkinson's, epilepsy, and pain; implantable
insulin pumps, which connect a sensor in the thoracic region to a pump located
in the stomach; and intraluminal coils, which are placed in body cavities
during MRI scans to improve the image resolution. Replacing the metal wire
with fiber optic leads can improve the safety and image quality of
intraluminal imaging.

Many procedures that might be done under MRI have to have special
equipment that avoids the problems of MRI safety and image compatibility. The
Company's technologies can be applied to these other products and market
segments. The Company may develop strategic alliances and partnerships to
pursue these additional market segments.

Manufacturing and Component Strategy

The Company is developing turnkey solutions for MRI safe components,
which can be acquired by pacemaker and ICD manufacturers. These include the
Company's proprietary electrode tip for sensing and stimulating the heart.
Today's pacemaker manufacturers use wire electrodes for sensing and
electrostimulation, and these are contraindicated in the presence of MRI. The
Company's electrodes use proprietary photonic components, fiber optic lead and
photodiodes in the electrode, and a miniature semiconductor laser in the
pacemaker device. The Company has developed the expertise to design and
manufacture these components. Pacemaker manufacturers generally do not have
photonic expertise in house.

The Company believes its value is in providing turnkey solutions for
devices, access to its engineering team, and access to its broad patent
portfolio to manufacturers. The Company intends to manufacture, working with
manufacturing partners, the critical components and provide them to the
pacemaker and implanatable medical device industry with an associated license
to its patent suite. This will provide the fastest time to market opportunity
to the pacemaker manufacturers we are targeting as our initial customers.

In parallel, the Company is exploring the use of its core technology for
making other medical devices MRI compatible. These include insulin pumps,
neurostimulators for treating Parkinson's, Vegal nerve stimulators,
gastrointestinal pacing, urinary tract control, and others.

Regulatory Approval

The Company believes that its technology will be incorporated into
various medical device products by major manufacturers and that these
manufacturers will be responsible for obtaining FDA approval prior to clinical
studies and to the marketing of their products.

The Company will submit an application to the FDA for its temporary
pacing lead and generator, and will turn this file over to its manufacturing
partners as they come on line. The temporary pacing lead will establish the
first proof of efficacy and safety, under FDA guidelines, to open the path for
implantable systems, which the Company will work on with pacemaker
manufacturers.

Approval to market will take the form of a Premarket Approval (PMA) or
a Premarket Notification (510 k). A PMA is the most stringent type of device
marketing application required by the FDA and is an application submitted to
the FDA to request clearance to market a Class III medical device. A 510(k)
is a premarketing submission made to the FDA to demonstrate that a device to
be marketed is safe and effective and is substantially equivalent to a
currently marketed device that is not subject to premarket approval. The
Company will pursue the appropriate approval level for each product it
develops, working in conjunction with its customers.

Patents and Intellectual Property

In April 2000, Wilson Greatbatch, Michael L. Weiner and Patrick R.
Connelly, the co-inventors, filed a provisional patent application on the
initial design of an MRI-compatible cardiac pacemaker, entitled "MRI-Resistant
Cardiac Pacemakers, File No. 60/198631. This patent application was assigned
to Biomed and subsequently to the Company. Since that time, further pacemaker-
related and MRI-related patent applications have been prepared based on
evolving Company technology, and more will be filed in the future.

* As of May 1, 2002, the Company has filed thirty-nine (39) applications
with the USPTO. Two PCTs have been filed.
* The patent strategy being pursued by the Company is based on both
broad coverage at the system level and focused coverage at the
component level.
* This strategy is being applied to cardiac assist devices and to other
medical devices that need to be made safe and effective in an MRI
environment.

The Company's subsidiary, LTR, owns the following two patents pertaining
to the antisense technology, which it acquired from Greatbatch Gen-Aid:

1. U.S. Patent Application Serial No. 5,324,643 issued June 28, 1994
entitled METHOD OF CONFERRING RESISTANCE TO RETROVIRAL INFECTION;
and

2. U.S. Patent Application Serial No. 5,580,761 issued December 3, 1996
entitled METHOD OF CONFERRING RESISTANCE TO IMMUNODEFICIENCY VIRAL
INFECTION. This patent has issued in the United Kingdom and is
pending in Canada. In addition the Company has filed an additional
patent application which is an extension of the technology described
in the 761 patent.

Employees

As of May 1, 2002, the Company had eleven employees.

The Company also has outside contractors including Greatbatch Enterprises,
a six-person firm.

Item 2. Description of Property

The Company's headquarters are located at 150 Lucius Gordon Drive, Suite
215, West Henrietta, NY 14586, in 4,000 square feet of office space leased
from an unrelated party. In addition, the Company subleased approximately
650 square feet of office space, on a month-to-month basis, ending May 31,
2002, at 6 East 45th Street in New York City, from another unrelated party.

Item 3. Legal Proceedings

The Company is not a party to any material pending legal proceedings and
no such action by, or to the best of its knowledge, against the Company has
been threatened.

Item 4. Submission of Matters to a Vote of Security Holders

Not Applicable.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Recent Sales of Unregistered Securities

In accordance with a Private Placement Memorandum dated July 2, 2001,
the Company offered to sell 3,000,000 shares of common stock, par value $.005
per share, at $1.00 per share. The offering was concluded in January 2002.
Gross proceeds of $2,399,750 were received adding $11,999 to the common stock
account and $2,387,751, less offering costs of $254,467, to additional paid-
in capital. In addition, the conversion of bridge loans in the principal
amount of $986,500 and the payment of applicable interest in the form of
stock during the year resulted in adding $8,920 to the common stock account
and $1,446,403 to additional paid-in capital. The private offerings were
made pursuant to Regulation D under the Securities Act.

Market Information

The Company elected to register under the Securities Exchange Act of
1934, as amended, by filing Form 10 thereunder, and complies with the
periodic reporting requirements of that Act. The Company's common stock is
listed on the NASDAQ OTC Bulletin Board under the symbol BIPH.OB. As of May
1, 2002, 29,549,439 of $.005 par value common shares were outstanding and
held of record by 175 shareholders. The stock was not actively traded until
October 2001 and the following table sets forth, for the fiscal quarters
indicated, the high and low bid prices:

Quarter Ended High Low
November 30, 2001 $6.50 $5.50
February 28, 2002 $7.25 $2.37

Dividend Policy

The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that it will
pay cash dividends or make distributions in the foreseeable future. The
Company currently intends to retain and reinvest future earnings to finance
its operations.

Item 6. Plan of Operation

The following information should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in
this Form 10-KSB. This Annual Report on Form 10-KSB contains certain forward-
looking statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Actual events or
results may differ materially from those projected in the forward-looking
statements as a result of the factors described in Item 1 of this report.

Overview

The Company is currently in the development stage of its operations and
is expected to be in that mode for the foreseeable future. The Company's
primary mission is to develop and commercially exploit new proprietary
technology to prevent implantable cardiac pacemakers and other critical and
life sustaining medical devices from being affected by magnetic resonance
imaging (MRI) and other equipment that uses magnetic fields, radio waves and
similar forms of electromagnetic interference. Management's strategy is to
pursue development of its technology in this area, obtain FDA approval for a
Temporary Pacemaker, identify new opportunities for the MRI-compatible
platform, and entertain the possibility of development partners while
vigorously protecting current technologies by aggressively patenting in the
U.S. and abroad.

Results of Operations

During the year ended February 29, 2000, the Company was inactive,
earning no revenues and incurring only a minimum of expenses in connection
with filing all required periodic reports under the Securities Exchange Act of
1934 as well as consulting expense for assistance in targeting potential
acquisition or merger candidates. Such expenses totaled $5,001 in fiscal 2000.
On December 1, 2000, the Company entered into agreements for the acquisition
of its currently owned technology and a subsidiary corporation and embarked on
a new program for development and eventual commercial exploitation of such
technology. The Company remained in the development stage during the years
ended February 28, 2001 and 2002.

In fiscal 2001, the Company earned no revenues except interest income and
incurred research and development expenses of $113,144 and other general and
administrative expenses of $114,605 plus interest expense of $13,000. The net
loss for the year amounted to $729,130, including a charge of $490,000 to
write-down intellectual property rights to fair market value.

In fiscal 2002, again the Company earned no revenues. However, the
receipt of net proceeds of $3,187,610 from bridge loans and a private
placement of common stock enabled the Company to step up its technology
development by hiring new employees and contracting with a number of outside
consultants. As a result, $949,124 was expended for research and development
during the year and $2,248,065 for general and administrative expenses. The
net loss for the year of $3,705,917 included non-cash charges of $1,284,666,
principally pertaining to the grant of stock options to other than employees
and directors of the Company valued at $702,800 and the payment of interest on
bridge loans by issuing stock valued at $468,823.

Liquidity and Capital Resources

On June 4, 2002, the Company entered into a Line of Credit Agreement with
Biomed Solutions, LLC that provides for new borrowing up to $250,000 at 8% per
annum, and, among other things, extends the due date of the $500,000 transfer
liability to September 1, 2002 and grants 325,000 warrants to purchase common
shares at $1.00 per share.

In addition, on June 6, 2002, the Company signed agreements providing for
up to $2.4 million of equity financing from an institutional investor. The
net proceeds, after offering costs, will be applied to outstanding debt and
the furtherance of the Company's research and development program with
particular emphasis on the primary mission of commercially exploiting its
current MRI compatible device technology and seeking new related opportunities
for development. This financing is expected to provide sufficient working
capital for the next twelve months of operations and beyond.

The Company's current strategic plan does not indicate a need for
material capital expenditures in the conduct of its research and development
activities. Nor does the plan contemplate any significant change in the
number of employees. The Company currently employs eleven individuals.

Item 7. Financial Statements

BIOPHAN TECHNOLOGIES, INC.
(FORMERLY GREATBIO TECHNOLOGIES, INC.)
AND SUBSIDIARIES
(a development stage company)

CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 28, 2002

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

CONTENTS
February 28, 2002
-------------------------------------------------------------------------------

Independent Auditor's Report 1

Consolidated Financial Statements:

Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Equity 4 - 5
Statement of Cash Flows 6
Notes to Consolidated Financial Statements 7 - 13

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Biophan Technologies, Inc. (formerly GreatBio Technologies, Inc.)

We have audited the accompanying consolidated balance sheet of Biophan
Technologies, Inc. (formerly GreatBio Technologies, Inc.) and Subsidiaries (a
development stage company) as of February 28, 2002 and the related
consolidated statements of operations, stockholders' equity, and cash flows
for each of the two years in the period then ended, and the amounts included
in the cumulative column in the consolidated statements of operations,
stockholders' equity, and cash flows for the period from March 1, 2000 to
February 28, 2002. The amounts in the cumulative column in the consolidated
statements of operations, stockholders' equity, and cash flows for the period
from August 1, 1968 (date of inception) to February 29, 2000 were audited by
other auditors whose report, dated June 2, 2000, included an emphasis relating
to the Company's ability to continue as a going concern. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Biophan
Technologies, Inc. (formerly GreatBio Technologies, Inc.) and Subsidiaries as
of February 28, 2002 and the results of their operations and their cash flows
for each of the two years in the period then ended and the amounts included in
the cumulative column in the consolidated statements of operations and cash
flows for the period from March 1, 2000 to February 28, 2002 in conformity
with accounting principles generally accepted in the United States of America.

GOLDSTEIN GOLUB KESSLER LLP
New York, New York
April 5, 2002, except for Note 10,
as to which the date is June 7, 2002

Pg. F-1

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

CONSOLIDATED BALANCE SHEET
------------------------------------------------------------------------------
February 28, 2002
------------------------------------------------------------------------------

ASSETS

Current assets:
Cash $ 12,199
Investments in marketable securities 568,805
Prepaid expenses and other current assets 91,819
------------------------------------------------------------------------------
Total current assets $ 672,823

Fixed assets - at cost, net 80,882

Other assets:
Intellectual property rights 110,000
Security deposit 2,933
Deferred tax asset, net of valuation allowance of $1,305,000 -
------------------------------------------------------------------------------
Total Assets $ 866,638
==============================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses $ 129,040
Payable to related party 500,000
Due to related parties 16,349
------------------------------------------------------------------------------
Total current liabilities 645,389
------------------------------------------------------------------------------

Stockholders' equity:
Common stock - $.005 par value; authorized 60,000,000 shares,
issued and outstanding 29,549,439 shares 147,747
Additional paid-in capital 4,608,407
Deficit accumulated during the development stage (4,534,905)
------------------------------------------------------------------------------
Stockholders' equity 221,249
------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 866,638
==============================================================================

The accompanying notes and independent auditor's report should be
read in conjunction with the consolidated financial statements

Pg. F-2

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

CONSOLIDATED STATEMENT OF OPERATIONS
----------------------------------------------------------------------------------------

Period from
August 1,
1968 (date of
Year ended Year ended inception) to
February 28, February 28, February 28,
2002 2001 2002
----------------------------------------------------------------------------------------

Operating expenses:
Salaries and related $ 461,629 $ 59,861 $ 521,490
Research and development 949,124 113,144 1,062,268
Professional fees 1,310,916 38,685 1,349,601
Write-down of intellectual property rights 490,000 490,000
General and administrative 475,520 16,059 502,080
----------------------------------------------------------------------------------------

Operating loss (3,197,189) (717,749) (3,925,439)
----------------------------------------------------------------------------------------

Other (income) expense:
Interest expense (540,543) (13,000) (553,543)
Interest income 26,061 1,619 27,680
Other income 42,035 42,035
Other expense (36,281) (36,281)
----------------------------------------------------------------------------------------

Total other expenses, net (508,728) (11,381) (520,109)
----------------------------------------------------------------------------------------

Loss from continuing operations (3,705,917) (729,130) (4,445,548)

Loss from discontinued operations (89,357)
----------------------------------------------------------------------------------------

Net loss $ (3,705,917) $ (729,130) $ (4,534,905)
========================================================================================
Loss per common share - basic and diluted $ (0.14) $ (0.08)
========================================================================================
Weighted-average shares outstanding 27,000,962 9,166,887
========================================================================================

The accompanying notes and independent auditor's report should be
read in conjunction with the consolidated financial statements

Pg. F-3

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
-------------------------------------------------------------------------------------------------
Period from August 1, 1968 (date of inception) to February 28, 2002
-------------------------------------------------------------------------------------------------

Deficit
Accumulated
Additional During the
Number Common Paid-in Development Stockholders'
of Shares Stock Capital Stage Equity
-------------------------------------------------------------------------------------------------

1969 - 14,130 shares issued for services
for $.05 per share 14,130 $ 70 $ 637 $ 707

1970 - 1,405,000 shares issued for mining
rights for $.05 per share 1,405,000 7,025 63,225 70,250

1970 - 55,500 shares issued for services
for $.05 per share 55,500 278 2,497 2,775

1973 - 10,000 shares issued for services
for $.05 per share
10,000 50 450 500

1976 - 500 shares issued for services
for $.05 per share
500 3 22 25

1978 - 12,000 shares issued for services
for $.05 per share
12,000 60 540 600

1980 - 225,000 shares issued for services
for $.05 per share
225,000 1,125 10,125 11,250

1984 - 20,000 shares issued for services
for $.05 per share
20,000 100 900 1,000

1986 - 10,000 shares issued for services
for $.05 per share
10,000 50 450 500

1990 - 10,000 shares issued for services
for $.05 per share 10,000 50 450 500

1993 - 25,000 shares issued for services
for $.05 per share
25,000 125 1,125 1,250

Net loss from inception through
February 28, 1998

$ (89,357) (89,357)
-------------------------------------------------------------------------------------------------

Balance at February 28, 1998
1,787,130 8,936 80,421 (89,357) -

1999 - 10,000 shares issued for services
for $.05 per share 10,000 50 450 $ 500

1999 - 1,000,000 shares issued for services
for $.005 per share
1,000,000 5,000 5,000

Net loss for the year ended
February 28, 1999 (5,500) (5,500)
-------------------------------------------------------------------------------------------------

Balance at February 28, 1999
2,797,130 13,986 80,871 (94,857) -

2000 - 1,000,200 shares issued
for services for $.005 per share
1,000,200 5,001 5,001

The accompanying notes and independent auditor's report should be
read in conjunction with the consolidated financial statements

Pg. F-4

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

Net loss for the year ended
February 29, 2000 (5,001) (5,001)
-------------------------------------------------------------------------------------------------

Balance at February 29, 2000 3,797,330 18,987 80,871 (99,858) -

2000 - 250,000 shares issued for services
for $.005 per share
250,000 1,250 1,250

2000 - Expenses paid by stockholder 2,640 2,640

2000 - 10,759,101 shares issued for
acquisition of Antisense Technology,
Inc. 10,759,101 53,795 121,205 175,000

2000 - 10,759,101 shares issued for cash
for $.005 per share 10,759,101 53,796 121,204 175,000

Net loss for the year ended
February 28, 2001 (729,130) (729,130)
-------------------------------------------------------------------------------------------------

Balance at February 28, 2001 25,565,532 127,828 325,920 (828,988) (375,240)

2001 - 2,399,750 shares issued for cash
for $1.00 per share 2,399,750 11,999 2,387,751 2,399,750

2001 - 468,823 shares issued for interest 468,823 2,344 466,479 468,823

2001 - Redemption of 200,000 shares (200,000) (1,000) (1,000)

2001 - 1,315,334 shares issued upon
conversion of bridge loans at $.75
per share 1,315,334 6,576 979,924 986,500

2001 - Offering costs associated with
share issuances for cash (254,467) (254,467)

2002 - Grant of stock options for services 702,800 702,800

Net loss for the year ended
February 28, 2002 (3,705,917)(3,705,917)
-------------------------------------------------------------------------------------------------
Balance at February 28, 2002 29,549,439 $ 147,747 $4,608,407 $(4,534,905) $ 221,249
=================================================================================================

The accompanying notes and independent auditor's report should be
read in conjunction with the consolidated financial statements

Pg. F-5

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------------------------------------------------

Cash flows from operating activities:
Net loss $(3,705,917) $ (729,130) $(4,534,905)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation 14,762 167 14,929
Realized and unrealized losses on marketable securities 38,143 38,143
Write-down of intellectual property rights 490,000 490,000
Amortization of discount on payable to related party 62,000 13,000 75,000
Issuance of common stock for services 1,250 101,108
Issuance of common stock for interest 468,823 468,823
Grant of stock options for services 702,800 702,800
Expenses paid by stockholder 2,640 2,640
Changes in operating assets and liabilities:
Increase in prepaid expenses and other current assets (91,819) (91,819)
Increase in security deposits (2,933) (2,933)
Increase in accounts payable and accrued expenses 18,184 97,525 115,709
Increase (decrease) in due to related parties (153,787) 126,640 (27,147)
-------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities (2,649,744) 2,092 (2,647,652)
-------------------------------------------------------------------------------------------------

Cash flows from investing activities:
Purchases of fixed assets (90,811) (5,000) (95,811)
Sales of marketable securities 377,270 377,270
Purchases of marketable securities (984,218) (984,218)
-------------------------------------------------------------------------------------------------
Net cash used in investing activities (697,759) (5,000) (702,759)
-------------------------------------------------------------------------------------------------

Cash flow from financing activities:
Proceeds of bridge loans 986,500 986,500
Net proceeds from sales of capital stock 2,201,110 175,000 2,376,110
-------------------------------------------------------------------------------------------------
Net cash provided by financing activities 3,187,610 175,000 3,362,610
-------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents (159,893) 172,092 12,199

Cash and cash equivalents at beginning of period 172,092
-------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 12,199 $ 172,092 $ 12,199
=================================================================================================

Supplemental schedule of noncash investing and
financing activities:

Intellectual property acquired through issuance of common
stock and assumption of related party payable $ 175,000 $ 175,000
=================================================================================================

Acquisition of intellectual property rights $ 425,000 $ 425,000
=================================================================================================

Issuance of common stock upon conversion of bridge loans $ 986,500
=================================================================================================

The accompanying notes and independent auditor's report should be
read in conjunction with the consolidated financial statements

Pg. F-6

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2002
-------------------------------------------------------------------------------

1. PRINCIPAL The consolidated financial statements include the accounts
BUSINESS of Biophan Technologies, Inc. ("Biophan") (formerly
ACTIVITY AND GreatBio Technologies, Inc.) and its wholly owned
SUMMARY OF subsidiaries, LTR Antisense Technology, Inc. ("Antisense")
SIGNIFICANT and MRIC Drug Delivery Systems, LLC ("MRIC") (collectively
ACCOUNTING referred to as the "Company"). All significant
POLICIES: intercompany accounts and transactions have been
eliminated in consolidation.

The Company is in the development stage and is expected to
remain so for at least the next 12 months. The Company was
formed in 1968 and obtained certain mining claims and
related rights, which were subsequently abandoned. As of
December 1, 2000, the principal business activity of the
Company is research and development of patent rights in two
areas: (1) MRI-compatible implantable cardiac pacemaker and
other implantable medical devices and (2) the use of
Antisense technology to block the HIV virus.

The Company has not generated any revenue throughout its
history. The Company's ability to continue in business is
dependent upon obtaining sufficient financing or attaining
future profitable operations.

On December 1, 2000, the Company amended its Articles of
Incorporation to change its name from Idaho Technical, Inc.
to GreatBio Technologies, Inc. and entered into an Exchange
Agreement with Biomed Solutions, LLC ("Biomed") (formerly
Biophan, LLC) and Antisense as more fully described below.
At the Annual Meeting on July 19, 2001, the shareholders
approved amending the Articles of Incorporation to change
the name of the Company to Biophan Technologies, Inc. The
change was effective as of that date.

In accordance with the terms of the Exchange Agreement (the
"Agreement") dated December 1, 2000, the Company acquired
from Biomed all of the issued and outstanding common stock
of its wholly owned subsidiary, Antisense, in exchange for
10,759,101 shares of authorized but previously unissued
common stock, par value $.005. The operations of Antisense
are included since the date of acquisition. Had Antisense
been acquired as of March 1, 2000, there would have been no
effect on the Company's operations. Antisense's only
assets at December 1, 2000 were the HIV patents.

Also on December 1, 2000, the Company acquired certain
intellectual property rights relating to the magnetic
resonance imaging ("MRI") technology from Biomed for the
future consideration of $500,000. The transfer was
consummated pursuant to and in accordance with the Transfer
Agreement (as amended), dated December 1, 2000, between the
Company and Biomed.

For purposes of the statement of cash flows, the Company
considers all highly liquid instruments with an original
maturity of three months or less to be cash equivalents.

The Company maintains cash in bank deposit accounts which,
at times, exceed federally insured limits. The Company has
not experienced any losses on these accounts.

Pg. F-7

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2002
-------------------------------------------------------------------------------

Marketable securities that are bought and held principally
for the purpose of selling them in the near term are
classified as trading securities. Trading securities are
recorded at fair value, with the change in fair value
during the period included in operations.

Depreciation of fixed assets is provided by the straight-
line method over the estimated useful lives of the related
assets. Amortization of acquired intellectual property
rights is provided by the straight-line method over 17
years. Costs for internally developed intellectual
property rights with indeterminate lives are expensed as
incurred.

At each balance sheet date, the Company evaluates the
period of amortization of intangible assets. The factors
used in evaluating the period of amortization include: (i)
current operating results, (ii) projected future operating
results, and (iii) any other material factors that affect
continuity of the business.

Basic loss per common share is computed by dividing net
loss by the weighted-average number of shares of common
stock outstanding during the period. Diluted earnings per
share gives effect to dilutive options, warrants and other
potential common stock outstanding during the period.
Potential common stock has not been included in the
computation of diluted loss per share, as the effect would
be antidilutive.

Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted rates
expected to apply when the differences are expected to be
realized. A valuation allowance is recognized if it is
anticipated that some or all of the deferred tax asset may
not be realized.

The preparation of financial statements in conformity with
generally accepted accounting principles requires the use
of estimates by management. Actual results could differ
from these estimates.

In July 2001, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 142, "Goodwill and Other Intangible Assets"
("SFAS No. 142").

SFAS No. 142 addresses how intangible assets that are
acquired individually or with a group of other assets
should be accounted for in financial statements upon their
acquisition. This statement requires goodwill to be
periodically reviewed for impairment rather than amortized.
SFAS No. 142 supersedes Accounting Principles Board ("APB")
Opinion No. 17, "Intangible Assets".

In August 2001, the FASB issued SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" ("SFAS
No. 144"). This Statement addresses financial accounting
and reporting for the impairment or disposal of long-lived
assets. This Statement supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of", and amends the
accounting and reporting provisions of APB Opinion No. 30,
"Reporting the Results of Operations Reporting the Effect
of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and
Transactions", for the disposal of a segment of a business.

The provisions of SFAS Nos. 142 and 144 will be effective

Pg. F-8

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2002
-------------------------------------------------------------------------------

for fiscal years beginning after December 15, 2001. The
Company is currently evaluating the implications of
adoption of SFAS Nos. 142 and 144 and anticipates adopting
the provisions for its fiscal year beginning March 1, 2002.
The impact of these standards on the Company's financial
statements has not yet been determined.

Management does not believe that these recently issued, but
not yet effective, accounting standards if currently
adopted would have a material effect on the accompanying
consolidated financial statements.

2. INVESTMENTS IN Investments in trading securities are summarized as follows
MARKETABLE at February 28, 2002:
SECURITIES:
Gross
Unrealized Fair
Cost Loss Value
-----------------------------------------------------------

Corporate debt securities $605,086 $ 36,281 $ 568,805
============================================================

Unrealized holding losses on trading securities amounted
to $36,281 for the year ended February 28, 2002.

Pg. F-9

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2002
-------------------------------------------------------------------------------

3. FIXED ASSETS: Fixed assets, at cost, consist of the following:

Depreciation/
Amortization
Period
-----------------------------------------------------------
Furniture & Equipment $33,949 5-7 years
Computers 7,703 5 years
Internet Web site 54,159 7 years
-----------------------------------------------------------
95,811
Less accumulated depreciation (14,929)
-----------------------------------------------------------
$80,882
===========================================================

Depreciation expense for the years ended February 28, 2002
and 2001 amounted to $14,762 and $167, respectively.
Depreciation expense for the period from August 1, 1968
(Date of Inception) to February 28, 2002 was $14,929.

4. INTELLECTUAL Intellectual property rights were acquired on December 1,
PROPERTY 2000 and encompass two areas: (1) The utilization of new
RIGHTS: proprietary technology to prevent implantable cardiac
pacemakers and other critical and life-sustaining medical
devices from being affected by MRI and other equipment
using magnetic fields, radio waves and similar forms of
electromagnetic interference ("EMI"), and (2) the use of
proprietary Antisense gene therapy technology to inhibit
the spread of human immunodeficiency virus (HIV-1)
infection in conjunction with the use of lentiviral
vectors.

In accordance with Statement of Financial Accounting
Standards ("SFAS") No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of, at February 28, 2001, the Company recognized
a loss of $490,000 through a write-down of the intellectual
property rights to their fair market value, in accordance
with an independent, third-party valuation. As discussed
in Note 1, the Company has not yet recorded revenue and
the continuation of business is dependent on the Company's
ability to obtain sufficient financing or attain future
profitable operations.

5. STOCKHOLDERS' During the months of July, August, October and December
EQUITY: 2001 and January 2002, the Company issued 2,399,750 shares
of common stock for cash of $1.00 per share, in connection
with a private placement of up to 3,000,000 shares of
common stock. The Company incurred offering costs of
$254,467 in conjunction with this private placement.

During December 2001, the Company issued 1,315,334 shares
of common stock at $.75 per share, in connection with a
conversion of bridge loans for which the Company received
cash proceeds of $986,500. Additionally, the Company
issued 468,823 shares of common stock valued at $1.00 per
share, for interest in connection with these bridge loan
agreements.

During September 2001, the Company redeemed 200,000 shares
of common stock, initially issued in connection with an
issuance of 250,000 shares of common stock for services.

Pg. F-10

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2002
-------------------------------------------------------------------------------

6. COMMITMENTS: The Company is obligated under an operating lease for
office space expiring September 30, 2004. The Company may
terminate the lease after September 30, 2002 upon ninety
days prior written notice to the landlord. The aggregate
minimum future payments under this lease are payable as
follows:

Year ending February 28,
2003 $ 36,867
2004 46,783
2005 25,083
-----------------------------------------------------------
$108,733
===========================================================

Rent expense charged to operations under this operating
lease aggregated $14,667 and $ -0- for the years ended
February 28, 2002 and 2001, respectively. Rent expense
charged to operations for the period from August 1, 1968
(Date of Inception) to February 28,2002 was $14,667.

7. RELATED-PARTY Under the Transfer Agreement dated December 1, 2000, the
TRANSACTIONS: Company incurred a liability of $500,000 (including
interest of $75,000) to Biomed in connection with the
acquisition of the MRI intellectual property rights
described in Note 4. Biomed maintains a security interest
in the underlying patents until the liability is satisfied.
The intellectual property rights will revert to Biomed if
the Company does not satisfy the liability by December 1,
2002. The stated liability bears interest at an imputed
rate of 12.48%, and the balance payable at February 28,
2002 is $500,000.

At February 28, 2002, the carrying value of the Company's
obligation approximated its estimated fair value based
upon current borrowing rates for similar issues.

Biomed and another related party paid expenses on behalf
of the Company aggregating $253,014 and $170,136 during the
years ended February 28, 2002 and 2001, respectively. The
amounts due to the related parties do not bear interest,
and the Company expects to repay these liabilities during
the next 12 months.

8. STOCK-BASED The Company has a stock option plan (the "Plan") which
COMPENSATION provides for the granting of nonqualified or incentive
PLAN: stock options ("ISO") to officers, key employees, non-
employee directors and consultants. The Plan authorizes
the granting of options to acquire up to 2,500,000 common
shares. ISO grants under the Plan are exercisable at the
market value of the Company's stock on the date of such
grant. Nonqualified option grants under the Plan are
exercisable at amounts determined by the board of
directors. All options under the Plan are exercisable at
times as determined by the board of directors, not to
exceed 10 years from the date of grant. Additionally, the
Plan provides for the granting of restricted stock to
officers and key employees.

Pg. F-11

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2002
-------------------------------------------------------------------------------
The following table summarizes activity in stock options:

Year Ended February 28, 2002
-----------------------------------------------------------
Weighted-
average
Exercise
Options Price
-----------------------------------------------------------
Outstanding at beginning
of year - -

Granted 1,779,997 $ .51

Forfeited - -

Exercised - -
-----------------------------------------------------------
Outstanding at end of year 1,779,997 $ .51
===========================================================

The following table summarizes information about stock
options outstanding and exercisable at February 28, 2002:

Average Weighted-
Remaining average
Range of Number Number Contractual Exercise
Exercise Price Outstanding Exercisable Life Price
---------------------------------------------------------------

$.50 1,779,997 675,000 9 years $.50
===============================================================

The Company has elected to apply APB Opinion No. 25 and
related interpretations in accounting for its stock
options and has adopted the disclosure-only provisions of
SFAS No. 123. Had the Company elected to recognize
compensation cost based on the fair value of the options
granted at the grant date as prescribed by SFAS No. 123,
the Company's net loss and loss per common share would
have been as follows:

February 28, 2002
-----------------------------------------------------------
Net loss - as reported $(3,705,917)
===========================================================
Net loss - pro forma (3,714,917)
===========================================================
Basic and diluted loss per common
share - as reported $ (.14)
===========================================================
Basic and diluted loss per common
share - pro forma $ (.14)
===========================================================

The fair value for these options was estimated at the
date of grant using the Black-Scholes option pricing model
with the following weighted-average assumptions for the
year ended February 28, 2002: risk-free interest rates of
4.27% to 4.87%; no dividend yield; volatility factors of
the expected market price of the Company's common stock of
90%, and a weighted-average expected life of the options
of 9 years.

At February 28, 2002, 720,003 shares of common stock were
reserved for future issuance of stock options.

Pg. F-12

BIOPHAN TECHNOLOGIES, INC. (FORMERLY GREATBIO
TECHNOLOGIES, INC.) AND SUBSIDIARIES
(a development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2002
-------------------------------------------------------------------------------

9. INCOME TAXES: As of February 28, 2002, the Company had net operating loss
carryforwards of approximately $3,348,000 for federal
income tax purposes, which expire through 2022

The reconciliation of income tax computed at the U.S.
federal statutory tax rates to income tax expense is as
follows:

Year Ended February 28, 2002 2001
-----------------------------------------------------------

Tax benefit at U.S. statutory rates 34 % 34 %
Increase in valuation allowance (34)% (34)%
-----------------------------------------------------------
-0-% -0-%
===========================================================

Deferred tax asset is comprised of the following:

February 28, 2002
-----------------------------------------------------------

Net operating loss carryforwards $1,138,000
Write-down of intellectual property rights 167,000
-----------------------------------------------------------

Total deferred tax asset 1,305,000
Valuation allowance (1,305,000)
-----------------------------------------------------------

Net deferred tax asset $ -0-
==========================================================

1. SUBSEQUENT During June 2002, the Company entered into a Stock Purchase
EVENT Agreement(the "Agreement") whereby the Company agreed to
sell up to $2,400,000 of the Company's common stock. The
minimum monthly sale of common stock under the Agreement
shall be $250,000. The Company has agreed to file with the
Securities and Exchange Commission ("SEC") a Registration
Statement covering the shares issuable under this agreement.
The Company can begin selling shares to the purchaser 20
days after the SEC declares the above-mentioned Registration
Statement effective.

Pg. F-13

Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

On April 25, 2001, the Company dismissed Arthur Andersen LLP as its
independent accountants. The Board of Directors approved the decision to
change independent accountants. Arthur Andersen LLP issued no reports on the
financial statements. Arthur Andersen LLP was engaged from January 15, 2001
through April 24, 2001 and during such period there were no disagreements with
Arthur Andersen LLP on any matter of accounting principles or practices,
financial statement disclosure, auditing scope or procedure, which
disagreements if not resolved to the satisfaction of Arthur Andersen LLP would
have caused them to make reference thereto in their report to be issued on the
financial statements.

The Company engaged Goldstein Golub Kessler LLP as its new independent
accountants as of April 25, 2001. During the two most recent fiscal years and
through April 25, 2001, the Company had not consulted with Goldstein Golub
Kessler LLP regarding either (i) the application of accounting principles to a
specified transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Company's financial statements, and
neither a written report nor oral advice was provided to the Company that was
an important factor considered by the Company in reaching a decision as to the
accounting, auditing or financial reporting issue; or (ii) any matter that was
either the subject of a disagreement, as that term is defined in Item 304(a)(1)
(iv) of Regulation S-B and the related instructions to Item 304 of Regulation
S-B, or a reportable event, as that term is defined in Item 304(a)(1)(iv)(B)
of Regulation S-K.

The disclosure called for by this item has been previously reported by the
Company in a Form 8-K filed with the Securities and Exchange Commission on May
7, 2001.

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons

The executive officers and directors of the Company are as follows:

Name Age Position
----- ---- ---------
Guenter H. Jaensch 63 Chairman of the Board

Michael L. Weiner 54 Chief Executive Officer, President and
Director
Robert J. Wood 63 Chief Financial Officer, Vice-President and
Treasurer
David A. Miller 46 Secretary

Stuart G. MacDonald 53 Vice-President of Research and Development

Jeffrey L. Helfer 49 Vice-President of Engineering

Wilson Greatbatch 82 Director

Steven Katz 54 Director

Ross B. Kenzie 69 Director

Robert S. Bramson 63 Director

The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, or disqualification, or until their successors have been duly
elected and qualified. Vacancies in the existing Board of Directors are
filled by majority vote of the remaining Directors. Officers of the Company
serve at the will of the Board of Directors.

Effective May 28, 2002, Wilson Greatbatch resigned from the Board. He
remains as the Chairman of the Company's Scientific Advisory Board and,
through a contract with his privately held engineering company, a paid
consultant assisting the Company with engineering, prototyping and patent
matters.

The business experience of each of the persons listed above during the
past five years is as follows:

Guenter H. Jaensch, Ph.D is the former Chairman and CEO of Siemens
Pacesetter, Inc., a leading manufacturer of pacemakers. During his tenure,
he negotiated a major cross-licensing agreement with Medtronic, Inc. and was
instrumental in the sale of the Siemens Pacesetter business to St. Jude
Medical, guiding the transition to St. Jude. During his more than twenty-five
years at Siemens, Dr. Jaensch held various senior executive positions prior
to running Siemens Pacesetter, including President of Siemens Communications
Systems, Inc., Chairman and President of Siemens Corporate Research and
Support, Inc., and Head of the Cardiac Systems Division of Siemens AG Medical
Engineering Group. Dr.Jaensch holds a Masters Degree in Business
Administration and a Ph.D. in Business and Finance from the University of
Frankfurt and taught business and statistics at the University prior to
joining Siemens in 1969. Positions at Siemens included Controller of the
worldwide Data Systems Group, 1976 to 1979, Senior Vice-President-Business
Administration of Siemens Corporation, 1979 to 1982, President of Siemens
Corporate Research and Support, 1982 to 1986, President of Siemens
Communications Systems, Inc., 1983 to 1985, Head of worldwide Budgeting and
Reporting of Siemens AG, 1988 to 1991, Senior Vice-President of Siemens
Medical Systems, Inc., 1991 to 1992, Chairman of Siemens Pacesetter, Inc.,
1991to 1994, and CEO of Siemens Pacesetter, Inc., 1992 to 1994. He joined
St. Jude Medical as Chairman and CEO of Pacesetter, Inc., a St. Jude Medical
Company, 1994 to 1995 and retired in 1995 to manage his personal investments.
Dr. Jaensch held numerous Board positions in Europe and the United States for
various organizations, including several Siemens companies. He is currently
director of MRV Communications, a leading company in the fiber optic
technology business.

Michael L. Weiner is an entrepreneur who has started six companies. Mr.
Weiner has extensive experience in licensing, having negotiated over 200
licenses producing tens of millions of dollars in licensing revenue from
products with gross sales of several hundred million dollars. Mr. Weiner
began his career at Xerox Corp., where he served in a variety of capacities
in sales and marketing, including manager of software market expansion and
manager of sales compensation planning. In 1985, after a ten year career at
Xerox, Mr. Weiner founded Microlytics, a Xerox spin-off company which
developed technology from the Xerox Palo Alto Research Center (PARC) into a
suite of products with licenses to companies including Microsoft, Symantec,
Casio, Canon, Sharp, Seiko, Smith Corona, SEC, Apple, WordPerfect, and Fuji
Xerox. Microlytics merged with Selectronics, a public company, in 1990.
Weiner is also co-founder and former CEO of Manning & Napier Information
Services (MNIS), a Rochester-based information and consulting service with
over 100 employees. TextWise, a company Weiner co-founded in 1994, has
received over $12 million in government research grants. Weiner holds five
issued patents and has numerous patents pending, including as co-inventor
with Wilson Greatbatch and Patrick R. Connelly pertaining to the MRI-
compatible pacemaker.

Robert J. Wood is a Certified Public Accountant with extensive
experience in public accounting and business consulting, having been an
owner/partner of Wood & Company, CPAs, P.C., Mengel, Metzger, Barr & Co.,
LLP, and Metzger, Wood & Sokolski, CPAs, all in Rochester, New York, from
1973 through 2000. He began his career at Price Waterhouse & Co. in 1962
after graduating from St. John Fisher College with a B.B.A. in Accounting.
He is a member of the New York State Society of Certified Public Accountants
(NYSSCPA).

David A. Miller was in charge of the administrative duties of GreatBio
Technologies, Inc., formerly Idaho Technical, Inc., from 1996 until December
1, 2000 (the date of the Exchange Agreement). He is a former member of the
Board of Directors and has held the offices of Vice-President, Secretary and
Treasurer.

Stuart G. MacDonald is an experienced Research and Development leader
with a broad engineering and science background, emphasizing a systems
approach to developing complex technology. MacDonald was previously employed
at Ortho-Clinical Diagnostics, a division of Johnson & Johnson, in Rochester,
New York since 1995, most recently as Vice-president, Clinical Lab
Instrumentation R & D. Prior to this he worked at Eastman Kodak Company from
1971 to 1995, rising to the position of Assistant Director, Clinical
Diagnostic Research Labs. MacDonald has a B.S. in Mechanical Engineering and
Masters of Engineering degree from Cornell University; he is also licensed as
a professional engineer by the State of New York.

Jeffrey L. Helfer has a solid background in product and technology
development and systems management having served in a number of positions at
Ortho-Clinical Diagnostics in Rochester, New York, a division of Johnson &
Johnson. Most recently, he was program director within OCD's Product
Development and Program Management Center of Excellence. He was primarily
responsible for systems management of the company's next-generation clinical
chemistry platform and implementation of the Design for Six Sigma
capabilities into the company's broader research and development
organization. Prior to Ortho-Clinical Diagnostics, Helfer worked at Eastman
Kodak Company for 19 years, most recently as the manager of the clinical
diagnostics systems laboratory. He holds a B.S. from Rochester Institute of
Technology and an M.S. from the University of Rochester, both in Mechanical
Engineering. Helfer is a Johnson & Johnson certified Design for Six Sigma
Black Belt and a New York State Professional Engineer.

Wilson Greatbatch began working in medical research after earning a B.S.
degree from Cornell University, an M.S.E.E. degree from the University of
Buffalo, and serving in the Navy during World War II. While experimenting
with oscillation, the recording of heart sounds and resulting electrical
pulses, he discovered way to regulate the human heart. After two years of
refinements, he handcrafted the world's first successful implantable
pacemaker. Greatbatch licensed the implantable pacemaker technology to
Medtronic Incorporated in 1961 and joined their board of directors.
Medtronic is the world's largest manufacturer of pacemakers. Mr. Greatbatch
also invented a corrosion-free lithium battery to power pacemakers. He then
founded what is today Wilson Greatbatch Technologies, Inc., the leading
developer and manufacturer of batteries, power sources and other components
used in implantable medical devices. In excess of 90% of the pacemakers and
implantable cardioverter defibrillators manufactured worldwide use power
sources manufactured or produced under license using technology owned by
Wilson Greatbatch Technologies, Inc. Mr. Greatbatch recently retired from
Wilson Greatbatch Technologies, Inc. In recognition of his inventions, and
numerous contributions to medical science and other disciplines, as evidenced
by a portfolio of more than 230 patents, Mr. Greatbatch was chosen as the
recipient of the Lifetime Achievement Award for 1996 by the Lemelson-MIT
Prize Program and currently serves as one of its invention ambassadors. In
1990 he was awarded the National Medal of Technology for his contribution to
medicine by then President George Bush. Greatbatch was also inducted into
the National Inventors Hall of Fame and is a member of nine professional
organizations including the IEEE, the National Academy of Engineering, and
the American College of Cardiologists. On February 20, 2001, in further
recognition of his accomplishments, Mr. Greatbatch was honored by the
National Academy of Engineering for his invention of the implantable
pacemaker with the award of the Fritz J. and Dolores H. Russ Prize, the
engineering profession's highest honor for 2001. Greatbatch shares the award
with Mr. Earl Bakken, a co-founder of Medtronic.

Steven Katz is President of Steven Katz & Associates, Inc., a
technology-based management consulting firm specializing in strategic
planning, corporate development, new product planning, technology licensing,
and structuring and securing various forms of financing since 1982. Since
January 2000, Mr. Katz has also been President and Chief Operating Officer of
Senesco Technologies, Inc., a public company engaged in the development of
proprietary genes with application to agro-biotechnology. From 1983 to 1984
he was the co-founder and Executive Vice President of S.K.Y. Polymers, Inc.,
a biomaterials company. Prior to S.K.Y. Polymers, Inc., Mr. Katz was Vice
President and General Manager of a non-banking division of Citicorp. From
1976 to 1980 he held various senior management positions at National Patent
Development Corporation, including President of three subsidiaries. Prior
positions were with Revlon, Inc. (1975) and Price Waterhouse & Co. (1969 to
1974). Mr. Katz received Bachelors of Business Administration degree in
Accounting from the City College of New York in 1969. He is presently a
member of the Board of Directors of Senesco Technologies, Inc. and USA
Technologies, Inc., both publicly held corporations, and several other
private companies.

Ross B. Kenzie is a former Chairman and Chief Executive Officer of
Goldome Bank, from which he retired in June 1989. He is a former Director of
the Federal Home Loan Bank of New York and served on the boards of the
National Council of Savings Institutions, the Federal Reserve Bank of New
York, Buffalo Branch, and the Savings Banks Association of New York State.
Mr. Kenzie is a Director of Millard Fillmore Hospitals and Past Chairman
Emeritus. He serves on the Board of the Kaleida Health, Education and
Research Foundation and its Investment Committee. He is a Director of the
Health Systems Agency of Western New York, and is a member of the Western New
York Commission on Health Care Reform. Mr. Kenzie is a member of the College
Council of the State University College at Buffalo and has served as
Chairman. He is a Director of the College's Foundation and a member of its
Finance Committee and its Investment Committee. He serves on the Council of
the Burchfield-Penney Art Center, and on its Executive Committee. He is also
a member of the Board, and the Chairman of the Investment Committee of the
State University at Buffalo Foundation. Mr. Kenzie currently serves on the
boards of several companies including many entrepreneurial ventures that are
privately held.

Robert S. Bramson is an engineer and patent attorney and is presently a
partner in Bramson & Pressman, a law firm that focuses on patent and
technology licensing matters, and is President of VAI Management Corp., a
consulting firm that specializes in patent and technology licensing; former
head of the Computer and Technology law group of Schnader, Harrison, Segal &
Lewis, a major law firm; former Vice President and General Patent and
Technology Counsel for Unisys; founder and former CEO of InterDigital Patents
Corporation, a patent licensing company; former Licensing Counsel for Abbott
Laboratories; and Adjunct Professor of Patent Law, Computer Law and
(presently) Licensing Law at Temple Law School, Rutgers Law School and
Villanova Law School at different times for over twenty years.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and persons
beneficially holding more than 10% of the Company's common stock (collectively,
"Reporting Persons") to report their initial ownership of the common stock and
subsequent changes in that ownership to the Securities and Exchange Commission
(the "SEC"). Directors, executive officers and greater than 10% beneficial
stockholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on the review of
copies of Forms 3,4 and 5 and amendments thereto received, or written
representations from certain Reporting Persons, the Company believes that the
Reporting Persons complied with all applicable reporting requirements except
as follows: Steven Katz, Robert S. Bramson and Robert J. Wood have not filed
an initial report on Form 3; Dale F. Miller, David A. Miller, Geoff Williams,
Wilson Greatbatch and Ross B. Kenzie each failed to file a report on Form 4
involving one transaction each; and Edward Cowle, Biomed Solutions, LLC
(formerly Biophan, LLC) and Michael L. Weiner each failed to file a report on
Form 4 involving two transactions each. The Company is in the process of
preparing all delinquent reports for the individuals above and is instituting
internal procedures to insure the timely filing of such reports in the future.

Item 10. Executive Compensation

The following table summarizes the annual compensation paid to the
Company's executive officers during the year ended February 28, 2002:

Michael L. Weiner
CEO, President and Director $150,600

Robert J. Wood
CFO, Vice-President and Treasurer $ 67,414

David A.Miller
Secretary $ 29,000

Stuart G. MacDonald
Vice-President of Research and
Development $ 74,999

Jeffrey L. Helfer
Vice-President of Engineering $ 38,461

(1) The above amounts represent base salaries. The Company paid no bonuses
to executive officers during the year.
(2) The Company has no Long-term Incentive Plans for executive officers.
(3) The Company provides no pension plan for executive officers.

Stock Options

On July 19, 2001, shareholders adopted the Company's 2001 Stock Option
Plan. The Plan provides for the grant of non-statutory options and incentive
stock options to key employees, officers, directors and consultants. Under
the Plan, 2,500,000 shares of the Company's authorized but unissued common
stock have been reserved for issuance.

The following table contains information concerning stock option grants
to the named executives during the fiscal year ended February 28, 2002. No
stock appreciation rights (SARs) were granted to any of the named executives
in that year.

Number of % of Total Exercise
Securities Options or Base
Name Underlying Granted in Price Expiration
Options Granted Fiscal Year ($/Sh) Date
-------------------------------------------------------------------------------
Michael L. Weiner 250,000 14.04% $.50 1/1/11

Robert J. Wood 100,000 5.62% $.50 1/1/11

David A. Miller - 0- N/A N/A N/A

Stuart G. MacDonald 100,000 5.62% $.50 1/1/11

Jeffrey L. Helfer 100,000 5.62% $.50 10/15/11
-------------------------------------------------------------------------------

Item 11. Security Ownership of Certain Beneficial Owners and Management

The table below lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as the securities of the Company
beneficially owned by all directors and officers of the Company. Unless
otherwise indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.

Title of Class: Common

Shares
Name and Address of Beneficially
Beneficial Owner Owned(1)(2) Percent of Class
--------------------- ------------ ----------------

*Guenter H. Jaensch(8) 100,000 .33%

*Michael L. Weiner (3) 2,438,362 8.16%

Edward F. Cowle 4,075,600 13.79%

Geoffrey Williams 2,689,701 9.10%

*Wilson Greatbatch (4) 5,647,876 19.01%

*Robert S. Bramson 0 0%

*Ross B. Kenzie (5) 251,932 .82%

*Steven Katz 50,000 .17%

Robert J. Wood (6) 20,000 .07%

Stuart G. MacDonald (7) 20,000 .07%

Jeffrey H. Helfer 0 0%

David A. Miller 100,500 .34%

All Officer and Directors as a
group (10 persons) 8,6218,670 28.63%

* Member of the Board of Directors

(1) The persons named in the table have sole voting and investment power
with respect to all shares shown as beneficially owned by them.

(2) Applicable percentage of ownership is based on 29,549,439 shares
outstanding as of May 1, 2002, together with applicable options for
such shareholder. Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission and includes
voting and investment power with respect to shares. Shares subject
to options or warrants currently exercisable or exercisable within 60
days after February 28, 2002 are deemed outstanding for purposes of
computing the percentage ownership of the person holding such options
or warrants, but are not deemed outstanding for computing the
percentage of any other shareholder.

(3) Michael L. Weiner is a member and the manager of Technology
Innovations, LLC (TILLC), which is the majority owner of Biomed
Solutions, LLC (Biomed)(formerly Biophan, LLC) . Mr. Weiner is also
the Manager of Biomed. Mr. Weiner's calculation includes 662,857
shares owned beneficially and of record by Biomed and 300,644 shares
owned beneficially and of record by Technologies Innovations, LLC.
Includes 200,000 shares issuable to Biomed upon exercise of warrants
pursuant to the Loan Agreement between the Company and Biomed It
also includes 150,000 shares issuable upon exercise of options
granted to Mr. Weiner, which shares Mr. Weiner has the rights to
acquire within 60 days.

(4) Includes 5,379,550 shares owned of record and beneficially by
Greatbatch Gen-Aid, Ltd., an entity owned by Wilson Greatbatch, and
109,993 shares owned by a private foundation of which Mr. Greatbatch
is co-trustee. Also includes 158,333 shares issuable upon exercise
of options granted to Mr. Greatbatch, which shares Mr. Greatbatch has
the rights to acquire within 60 days.

(5) Includes 171,932 shares owned of record and beneficially by RBK, LLC
and 70,000 shares issuable upon exercise of options granted to RBK,
LLC, which shares RBK, LLC has the right to acquire within 60 days.
Does not include shares owned beneficially or of record by Biomed or
by TI,LLC. Mr. Kenzie is the Manager and an equity member of Biophan
Ventures, LLC, which is the 43% equity member in Biomed; he is also
the Manager and a beneficial owner of Patent Ventures LLC, which is
the Class A Member of TI, LLC. Mr. Kenzie and Mr. Weiner comprise
the Board of Members of Biomed; Mr. Kenzie serves on the Board of
Members of TI,LLC.

(6) Includes 20,000 shares issuable upon exercise of options granted to
Mr. Wood, which shares he has the rights to acquire within 60 days.

(7) Includes 20,000 shares issuable upon exercise of options granted to
Mr. MacDonald, which shares he has the rights to acquire within 60
days.

(8) Includes 100,000 shares issuable upon exercise of options granted to
Dr. Jaensch which shares he has the rights to acquire within 60 days.

Item 12. Certain Relationships and Related Transactions.

(1) Michael L. Weiner, President and Chief Executive Officer of the
Company, is the Manager and a 42.3% equity member of Technology
Innovations, LLC, (TI,LLC). TI,LLC is the 57% equity member of
Biomed Solutions, LLC (Biomed) (formerly Biophan, LLC). Mr. Weiner
is also the Manager of Biomed; he and Ross Kenzie make up the Board
of Members of Biomed. Biomed is the record owner of 662,857 shares
of common stock of the Company; TI,LLC is the record owner of 300,644
shares of common stock of the Company. As Manager of TI,LLC and
Biomed, Mr. Weiner has control over these entities.

(2) Biomed received 10,759,101 shares of the Company's common stock in
exchange for its shares of LTR Antisense Technology, Inc. Most of
those shares have been distributed to the members of Biomed and their
members. It is also entitled to be paid $500,000 for the transfer of
its MRI-compatible pacemaker patent pending. On June 4, 2002, the
Company executed a Line of Credit Agreement with Biomed providing for
borrowings up to $250,000. This agreement also extended the due date
of the aforementioned transfer liability from June 1, 2002 to
September 1, 2002 and granted warrants for 325,000 shares of common
stock to Biomed.

(3) Wilson Greatbatch has been granted 250,000 options for his consulting
services to the Company, 30,000 options for service on the Board of
Directors and 8,333 options as Chairman of the Scientific Advisory
Board. Through his ownership of Greatbatch Gen-Aid, Ltd. and his co-
trusteeship of a private foundation , is the beneficial owner of
5,489,543 common shares of the Company. He is also entitled to
receive 60% of the consideration payable to Biomed ($500,000) for
transfer of the MRI-compatible pacemaker technology to the Company.

Greatbatch Gen-Aid holds a 3.5% membership interest (11 Units) in
TI,LLC.

The Company has an agreement with Greatbatch Enterprises Corporation
and Wilson Greatbatch to provide research and development services
relating to the MRI-compatible technology.

PART IV

Item 13. Exhibits and Reports on Form 8-K

(a) Exhibit Index

No. Page No

21 Subsidiaries (Filed herewith) 30

3.(ii) Bylaws (Nevada) (Filed herewith) 30

(b) Bylaws (Idaho) filed as Exhibit to Form 10-SB.

(b) DEFN14A filed January 10, 2000

(b) Certificate of Incorporation (Nevada) filed as Exhibit to
Form 10-KSB for the year ended February 29, 2000.

(b) Articles of Merger filed as Exhibit to Form 10-KSB for the
year ended February 29, 2000.

(b) Articles of Dissolution filed as Exhibit to Form 10-KSB for
the year ended February 29, 2000.

(b) Exchange Agreement, dated as of December 1, 2000, by and
among the Registrant, Biophan and LTR filed as part of
Form 8-K, filed December 15, 2000.

(b) Amendment to the Articles of Incorporation filed as part of
Form 8-K, filed December 15, 2000.

(b) Assignment, dated as of December 1, 2000, by and between the
Registrant and Biophan filed as part of Form 8-K, filed
December 15, 2000.

(b) Security Agreement, dated as of December 1, 2000, by and
between the Registrant and Biophan filed as part of Form
8-K, filed December 15, 2000.

(b) Amendment to Exchange Agreement filed as Exhibit to Form 10-KSB for
the year ended February 28, 2001.

(b) Subsidiaries filed as Exhibit to Form 10-KSB for the year ended
February 28, 2001.

(b) Letter on change of accountants filed as Exhibit to Form 10-KSB for
the year ended February 28, 2001.

(b) Transfer Agreement filed as Exhibit to Form 10-KSB for
the year ended February 28, 2001.

(b) Amendment to Transfer Agreement filed as Exhibit to Form 10-KSB for
the year ended February 28, 2001.

(b) Appointment of independent public accountants filed as exhibit to
Form 8-K on May 7, 2001.

(b) Definitive Proxy Statement filed with the Securities and Exchange
Commission on June 3, 2001.

(b) Certificate of Amendment to Articles of Incorporation filed as
exhibit to Form 8-K on August 27, 2001.

(b) 2001 Stock Option Plan filed as exhibit to Form 8-K on August 27,
2001.

(b) Exhibits so marked have heretofore been filed with the Securities
and Exchange Commission as part of the filing indicated and are
incorporated herein by reference.

(b) Reports on Form 8-K

Registrant filed a Form 8-K on May 7, 2001 listing Item 4 (change in
registrant's certifying accountant).

Registrant filed a Form 8-K on August 27, 2001 listing Item 5 (Annual
Meeting of the Shareholders)

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

BIOPHAN TECHNOLOGIES, INC.

By: \s\ Michael L. Weiner
-----------------------
Name: Michael L. Weiner
Title: President, CEO and Director

Dated: June 11, 2002

In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

Signature Title Date
--------- ----- -------------
\s\ Michael L. Weiner President, CEO and Director June 11, 2002
---------------------
Michael L. Weiner (Principal Executive Officer)

\s\ Robert J. Wood Vice President, Treasurer and CFO June 11, 2002
---------------------
Robert J. Wood (Principal Financial and Accounting
Officer)

\s\ David A. Miller Secretary June 11, 2002
---------------------
David A. Miller

\s\ Ross B. Kenzie Director June 11, 2002
---------------------
Ross B. Kenzie

\s\ Steven Katz Director June 11, 2002
---------------------
Steven Katz

\s\ Robert S. Bramson Director June 11, 2002
---------------------
Robert S. Bramson

EX-21 Subsidiaries of the Registrant

As of February 28, 2002, the Company had the following wholly owned
subsidiaries:

LTR Antisense Technology, Inc.
MRIC Drug Delivery Systems, LLC

EX-3.(ii) By-Laws

BYLAWS
OF
IDAHO TECHNICAL, INC.

ARTICLE I
OFFICES

Section 1.01 Location of Offices. The corporation may maintain such
offices within or without the State of Nevada as the Board of Directors may
from time to time designate or require.

Section 1.02 Principal Office. The address of the principal office of
the corporation shall be at the address of the registered office of the
corporation as so designated in the office of the Lieutenant
Governor/Secretary of State of the state of incorporation, or at such other
address as the Board of Directors shall from time to time determine.

ARTICLE II
SHAREHOLDERS

Section 2.01 Annual Meeting. The annual meeting of the shareholders
shall be held in January of each year or at such other time designated by the
Board of Directors and as is provided for in the notice of the meeting, for
the purpose of electing directors and for the transaction of such other
business as may come before the meeting. If the election of directors shall
not be held on the day designated for the annual meeting of the shareholders,
or at any adjournment thereof, the Board or Directors shall cause the election
to be held at a special meeting of the shareholders as soon thereafter as may
be convenient.

Section 2.02 Special Meetings. Special meetings of the shareholders may
be called at any time by the chairman of the board, the president, or by the
Board of Directors, or in their absence or disability, by any vice president,
and shall be called by the president or, in his or her absence or disability,
by a vice president or by the secretary on the written request of the holders
of not less than one-tenth of all the shares entitled to vote at the meeting,
such written request to state the purpose or purposes of the meeting and to be
delivered to the president, each vice president, or secretary. In case of
failure to call such meeting within 60 days after such request, such
shareholder or shareholders may call the same.

Section 2.03 Place of Meetings. The Board of Directors may designate any
place, either within or without the state of incorporation, as the place of
meeting for any annual meeting or for any special meeting called by the Board
of Directors. A waiver of notice signed by all shareholders entitled to vote
at a meeting may designate any place, either within or without the state of
incorporation, as the place for the holding of such meeting. If no
designation is made, or if the special meeting be otherwise called, the place
of meeting shall be at the principal office of the corporation.

Section 2.04 Notice of Meetings. The secretary or assistant
secretary, if any, shall cause notice of the time, place, and purpose or
purposes of all meetings of the shareholders (whether annual or special), to
be mailed at least ten days, but not more than 50 days, prior to the meeting,
to each shareholder of record entitled to vote.

Section 2.05 Waiver of Notice. Any shareholder may waive notice of any
meeting of shareholders (however called or noticed, whether or not called or
noticed and whether before, during, or after the meeting), by signing a
written waiver of notice or a consent to the holding of such meeting, or an
approval of the minutes thereof. Attendance at a meeting, in person or by
proxy, shall constitute waiver of all defects of call or notice regardless of
whether waiver, consent, or approval is signed or any objections are made.
All such waivers, consents, or approvals shall be made a part of the minutes
of the meeting.

Section 2.06 Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any annual meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of any dividend or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors of the corporation may
provide that the share transfer books shall be closed, for the purpose of
determining shareholders entitled to notice of or to vote at such meeting, but
not for a period exceeding fifty (50) days. If the share transfer books are
closed for the purpose of determining shareholders entitled to notice of or to
vote at such meeting, such books shall be closed for at least ten (10) days
immediately preceding such meeting.

In lieu of closing the share transfer books, the Board of Directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than fifty (50) and, in
case of a meeting of shareholders, not less than ten (10) days prior to the
date on which the particular action requiring such determination of
shareholders is to be taken. If the share transfer books are not closed and
no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting or to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this Section, such
determination shall apply to any adjournment thereof. Failure to comply with
this Section shall not affect the validity of any action taken at a meeting of
shareholders.

Section 2.07 Voting Lists. The officer or agent of the corporation
having charge of the share transfer books for shares of the corporation shall
make, at least ten (10) days before each meeting of shareholders, a complete
list of the shareholders entitled to vote at such meeting or any adjournment
thereof, arranged in alphabetical order, with the address of, and the number
of shares held by each, which list, for a period of ten (10) days prior to
such meeting, shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder during the
whole time of the meeting. The original share transfer book shall be prima
facie evidence as to the shareholders who are entitled to examine such list or
transfer books, or to vote at any meeting of shareholders.

Section 2.08 Quorum. One-half of the total voting power of the
outstanding shares of the corporation entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of the shareholders. If a
quorum is present, the affirmative vote of the majority of the voting power
represented by shares at the meeting and entitled to vote on the subject shall
constitute action by the shareholders, unless the vote of a greater number or
voting by classes is required by the laws of the state of incorporation of the
corporation or the Articles of Incorporation. If less than one-half of the
outstanding voting power is represented at a meeting, a majority of the voting
power represented by shares so present may adjourn the meeting from time to
time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might
have been transacted at the meeting as originally noticed.

Section 2.09 Voting of Shares. Each outstanding share of the corporation
entitled to vote shall be entitled to one vote on each matter submitted to
vote at a meeting of shareholders, except to the extent that the voting rights
of the shares of any class or series of stock are determined and specified as
greater or lesser than one vote per share in the manner provided by the
Articles of Incorporation.

Section 2.10 Proxies. At each meeting of the shareholders, each
shareholder entitled to vote shall be entitled to vote in person or by proxy;
provided, however, that the right to vote by proxy shall exist only in case
the instrument authorizing such proxy to act shall have been executed in
writing by the registered holder or holders of such shares, as the case may
be, as shown on the share transfer of the corporation or by his or her or her
attorney thereunto duly authorized in writing. Such instrument authorizing a
proxy to act shall be delivered at the beginning of such meeting to the
secretary of the corporation or to such other officer or person who may, in
the absence of the secretary, be acting as secretary of the meeting. In the
event that any such instrument shall designate two or more persons to act as
proxies, a majority of such persons present at the meeting, or if only one be
present, that one shall (unless the instrument shall otherwise provide) have
all of the powers conferred by the instrument on all persons so designated.
Persons holding stock in a fiduciary capacity shall be entitled to vote the
shares so held and the persons whose shares are pledged shall be entitled to
vote, unless in the transfer by the pledge or on the books of the corporation
he or she shall have expressly empowered the pledgee to vote thereon, in which
case the pledgee, or his or her or her proxy, may represent such shares and
vote thereon.

Section 2.11 Written Consent to Action by Shareholders. Any action
required to be taken at a meeting of the shareholders, or any other action
which may be taken at a meeting of the shareholders, may be taken without a
meeting, if a consent in writing, setting forth the action so taken, shall be
signed by a majority of the shareholders entitled to vote with respect to the
subject matter thereof.

ARTICLE III
DIRECTORS

Section 3.01 General Powers. The property, affairs, and business of the
corporation shall be managed by its Board of Directors. The Board of
Directors may exercise all the powers of the corporation whether derived from
law or the Articles of Incorporation, except such powers as are by statute, by
the Articles of Incorporation or by these Bylaws, vested solely in the
shareholders of the corporation.

Section 3.02 Number, Term, and Qualifications. The Board of Directors
shall consist of three to nine persons. Increases or decreases to said number
may be made, within the numbers authorized by the Articles of Incorporation,
as the Board of Directors shall from time to time determine by amendment to
these Bylaws. An increase or a decrease in the number of the members of the
Board of Directors may also be had upon amendment to these Bylaws by a
majority vote of all of the shareholders, and the number of directors to be so
increased or decreased shall be fixed upon a majority vote of all of the
shareholders of the corporation. Each director shall hold office until the
next annual meeting of shareholders of the corporation and until his or her
successor shall have been elected and shall have qualified. Directors need
not be residents of the state of incorporation or shareholders of the
corporation.

Section 3.03 Classification of Directors. In lieu of electing the entire
number of directors annually, the Board of Directors may provide that the
directors be divided into either two or three classes, each class to be as
nearly equal in number as possible, the term of office of the directors of the
first class to expire at the first annual meeting of shareholders after their
election, that of the second class to expire at the second annual meeting
after their election, and that of the third class, if any, to expire at the
third annual meeting after their election. At each annual meeting after such
classification, the number of directors equal to the number of the class whose
term expires at the time of such meeting shall be elected to hold office until
the second succeeding annual meeting, if there be two classes, or until the
third succeeding annual meeting, if there be three classes.

Section 3.04 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately
following, and at the same place as, the annual meeting of shareholders. The
Board of Directors may provide by resolution the time and place, either within
or without the state of incorporation, for the holding of additional regular
meetings without other notice than such resolution.

Section 3.05 Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the president, Vice president, or any
two directors. The person or persons authorized to call special meetings of
the Board of Directors may fix any place, either within or without the state
of incorporation, as the place for holding any special meeting of the Board of
Directors called by them.

Section 3.06 Meetings by Telephone Conference Call. Members of the Board
of Directors may participate in a meeting of the Board of Directors or a
committee of the Board of Directors by means of conference telephone or
similar communication equipment by means of which all persons participating in
the meeting can bear each other, and participation in a meeting pursuant to
this Section shall constitute presence in person at such meeting.

Section 3.07 Notice. Notice of any special meeting shall be given at
least ten (10) days prior thereto by written notice delivered personally or
mailed to each director at his or her regular business address or residence,
or by telegram. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon
prepaid. If notice be given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph company. Any
director may waive notice of any meeting. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting solely for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.

Section 3.08 Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than a majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.

Section 3.09 Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board of Directors, and the individual directors shall have no power as such.

Section 3.10 Vacancies and Newly Created Directorship. If any vacancies
shall occur in the Board of Directors by reason of death, resignation or
otherwise, or if the number of directors shall be increased, the directors
then in office shall continue to act and such vacancies or newly created
directorships shall be filled by a vote of the directors then in office,
though less than a quorum, in any way approved by the meeting. Any
directorship to be filled by reason of removal of one or more directors by the
shareholders may be filled by election by the shareholders at the meeting at
which the director or directors are removed.

Section 3.11 Compensation. By resolution of the Board of Directors, the
directors may be paid their expenses, if any of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.

Section 3.12 Presumption of Assent. A director of the corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his or her or her dissent shall be entered in the minutes of the
meeting, unless be or she shall file his or her or her written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof, or shall forward such dissent by registered or certified
mail to the secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director who voted in
favor of such action.

Section 3.13 Resignations. A director may resign at any time by
delivering a written resignation to either the president, a vice president,
the secretary, or assistant secretary, if any. The resignation shall become
effective on its acceptance by the Board of Directors; provided, that if the
board has not acted thereon within ten days from the date presented, the
resignation shall be deemed accepted.

Section 3.14 Written Consent to Action by Directors. Any action required
to be taken at a meeting of the directors of the corporation or any other
action which may be taken at a meeting of the directors or of a committee, may
be taken without a meeting, if a consent in writing, setting forth the action
so taken, shall be signed by all of the directors, or all of the members of
the committee, as the case may be. Such consent shall have the same legal
effect as a unanimous vote of all the directors or members of the committee.

Section 3.15 Removal. At a meeting expressly called for that purpose,
one or more directors may be removed by a vote of a majority of the shares of
outstanding stock of the corporation entitled to vote at an election of
directors.

ARTICLE IV
OFFICERS

Section 4.01 Number. The officers of the corporation shall be a
president. one or more vice-presidents, as shall be determined by resolution
of the Board of Directors, a secretary, a treasurer, and such other officers
as may be appointed by the Board of Directors. The Board of Directors may
elect, but shall not be required to elect, a chairman of the board and the
Board of Directors may appoint a general manager.

Section 4.02 Election, Term of Office, and Qualifications. The officers
shall be chosen by the Board of Directors annually at its annual meeting. In
the event of failure to choose officers at an annual meeting of the Board of
Directors, officers may be chosen at any regular or special an annual meeting
of the Board of Directors. Each such officer (whether chosen at an annual
meeting of the Board of Directors to fill a vacancy or otherwise) shall hold
his or her office until the next ensuing annual meeting of the Board of
Directors and until his or her successor shall have been chosen and qualified,
or until his or her death, or until his or her resignation or removal in the
manner provided in these Bylaws. Any one person may hold any two or more of
such offices, except that the president shall not also be the secretary. The
chairman of the board, if any, shall remain a director of the corporation
during the term of his or her office. No other officer need be a director.

Section 4.03 Subordinate Officers, Etc. The Board of Directors from time
to time may appoint such other officers or agents as it may deem advisable,
each of whom shall have such title, old office for such period, have such
authority, and perform such duties as the Board of Directors from time to time
may determine. The Board of Directors from time to time may delegate to any
officer or agent the power to appoint any such subordinate officer or agents
and to prescribe their respective titles, terms of office, authorities, and
duties. Subordinate officers need not be shareholders or directors.

Section 4.04 Resignations. Any officer may resign at any time by
delivering a written resignation to the Board of Directors, the president, or
the secretary. Unless otherwise specified therein, such resignation shall
take effect on delivery.

Section 4.05 Removal. Any officer may be removed from office at any
special meeting of the Board of Directors called for that purpose or at a
regular meeting, by vote of a majority of the directors, with or without
cause. Any officer or agent appointed in accordance with the provisions of
Section 4.03 hereof may also be removed, either with or without cause, by any
officer on whom, such power of removal shall have been conferred by the Board
of Directors.

Section 4.06 Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal,
disqualification, or any other cause, or if a new office shall be created,
then such vacancies or new created offices may be filled by the Board of
Directors at any regular or special meeting.

Section 4.07 The Chairman of the Board. The Chairman of the Board, if
there be such an officer, shall have the following powers and duties.

(a) He or she shall preside at all shareholders' meetings;

(b) He or she shall preside at all meetings of the Board of
Directors; and

Section 4.08 The President. The president shall have the following
powers and duties:

(a) If no general manager has been appointed, he or she shall be the
chief executive officer of the corporation, and, subject to the direction
of the Board of Directors, shall have general charge of the business, affairs,
and property of the corporation and general supervision over its officers,
employees, and agents;

(b) If no chairman of the board has been chosen, or if such officer is
absent or disabled, he or she shall preside at meetings of the shareholders
and Board of Directors;

(d) He or she shall be empowered to sign certificates representing shares
of the corporation, the issuance of which shall have been authorized by the
Board of Directors; and

(e) He or she shall have all power and shall perform all duties normally
incident to the office of a president of a corporation, and shall exercise
such other powers and perform such other duties as from time to time may be
assigned to him or her by the Board of Directors.

Section 4.09 The Vice-Presidents. The Board of Directors may, from time
to time, designate and elect one or more vice presidents, one of whom may be
designated to serve as executive vice president. Each vice president shall
have such powers and perform such duties as from time to time may be assigned
to him or her by the Board of Directors or the president. At the request or
in the absence or disability of the president, the executive vice president
or, in the absence or disability of the executive vice president, the vice
president designated by the Board of Directors or (in the absence of such
designation by the Board of Directors) by the president, the senior vice
president, may perform all the duties of the president, and when so acting,
shall have all the powers of, and be subject to all the restrictions upon, the
president.

Section 4.10 The Secretary. The secretary shall have the following
powers and duties:

(a) He or she shall keep or cause to be kept a record of all of the
proceedings of the meetings of the shareholders and of the board or directors
in books provided for that purpose;

(b) He or she shall cause all notices to be duly given in accordance with
the provisions of these Bylaws and as required by statute;

(c) He or she shall be the custodian I of the records and of the seal of
the corporation, and shall cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the corporation prior to
the issuance thereof and to all instruments, the execution of which on behalf
of the corporation under its seal shall have been duly authorized in
accordance with these Bylaws, and when so affixed, he or she may attest the
same;

(d) He or she shall assume that the books, reports, statements,
certificates, and other documents and records required by statute are properly
kept and filed;

(e) He or she shall have charge of the share books of the corporation and
cause the share transfer books to be kept in such manner as to show at any
time the amount of the shares of the corporation of each class issued and
outstanding, the manner in which and the time when such stock was paid for,
the names alphabetically arranged and the addresses of the holders of record
thereof, the number of shares held by each holder and time when each became
such holder or record; and he or she shall exhibit at all reasonable times to
any director, upon application, the original or duplicate. share register. He
or she shall cause the share book referred to in Section 6.04 hereof to be
kept and exhibited at the principal office of the corporation, or at such
other place as the Board of Directors shall determine, in the manner and for
the purposes provided in such Section;

(f) He or she shall be empowered to sign certificates representing shares
of the corporation, the issuance of which shall have been authorized by the
Board of Directors; and

(g) He or she shall perform in general all duties incident to the office
of secretary and such other duties as are given to him or her by these Bylaws
or as from time to time may be assigned to him or her by the Board of
Directors or the president.

Section 4.11 The Treasurer. The treasurer shall have the following
powers and duties:

(a) He or she shall have charge and supervision over and be responsible
for the monies, securities, receipts, and disbursements of the corporation;

(b) He or she shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the corporation
in such banks or trust companies or with such banks or other depositories as
shall be selected in accordance with Section 5.03 hereof;

(c) He or she shall cause the monies of the corporation to be disbursed
by checks or drafts (signed as provided in Section 5.04 hereof) drawn on the
authorized depositories of the corporation, and cause to be taken and
preserved property vouchers for all monies disbursed;

(d) He or she shall render to the Board of Directors or the president,
whenever requested, a statement of the financial condition of the corporation
and of all of this transactions as treasurer, and render a full financial
report at the annual meeting of the shareholders', if called- upon to do so;

(e) He or she shall cause to be kept correct books of account of all the
business and transactions of the corporation and exhibit such books to any
director on request during business
hours;

(f) He or she shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements given such
information as he or she may desire with respect to any and all financial
transactions of the corporation; and

(g) He or she shall perform in general all duties incident to the office
of treasurer and such other duties as are given to him or her by these Bylaws
or as from time to time may be assigned to him or her by the Board of
Directors or the president.

Section 4.12 General Manager. The Board of Directors may employ and
appoint a general manager who may, or may not, be one of the officers or
directors of the corporation. The general manager, if any shall have the
following powers and duties:

(a) He or she shall be the chief executive officer of the corporation
and, subject to the directions of the Board of Directors, shall have general
charge of the business affairs and property of the corporation and general
supervision over its officers, employees, and agents:

(b) He or she shall be charged with the exclusive management of the
business of the corporation and of all of its dealings, but at all times
subject to the control of the Board of Directors;

(c) Subject to the approval of the Board of Directors or the executive
committee, if any or she shall employ all employees of the corporation, or
delegate such employment to subordinate officers, and shall have authority to
discharge any person so employed; and

(d) He or she shall make a report to the president and directors as often
as required, setting forth the results of the operations under his or her
charge, together with suggestions looking toward improvement and betterment of
the condition of the corporation, and shall perform such other duties as the
Board of Directors may require.

Section 4.13 Salaries. The salaries and other compensation of the
officers of the corporation shall be fixed from time to time by the Board of
Directors, except that the Board of Directors may delegate to any person or
group of persons the power to fix the salaries or other compensation of any
subordinate officers or agents appointed in accordance with the provisions of
Section 4.03 hereof. No officer shall be prevented from receiving any such
salary or compensation by reason of the fact that he or she is also a director
of the corporation.

Section 4.14 Surety Bond. In case the Board of Directors shall so
require, any officer or agent of the corporation shall execute to the
corporation a bond in such sums and with such surety or sureties as the Board
of Directors may direct, conditioned upon the faithful performance of his or
her duties to the corporation, including responsibility for negligence and for
the accounting of all property, monies, or securities of the corporation which
may come into his or her hands.

ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS

Section 5.01 Execution of Instruments. Subject to any limitation
contained in the Articles of Incorporation or these Bylaws, the president or
any vice president or the general manager, if any, may, in the name and on
behalf of the corporation, execute and deliver any contract or other
instrument authorized in writing by the Board of Directors. The Board of
Directors may, subject to any limitation contained in the in the Articles of
Incorporation or in these Bylaws, authorize in writing any officer or agent to
execute and delivery any contract or other instrument in the name an behalf of
the corporation; any such authorization may be general or confined to specific
instances.

Section 5.02 Loans. No loans or advances shall be contracted on behalf
of the corporation, no negotiable Paper or other evidence of its obligation
under any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred, or
conveyed as security for the payment of any loan, advance, indebtedness, or
liability of the corporation, unless and except as authorized by the Board of
Directors. Any such authorization may be general or confined to specific
instances.

Section 5.03 Deposits. All monies of the corporation not otherwise
employed shall be deposited from time to time to its credit in such banks
and/or trust companies or with such bankers or other depositories as the Board
of Directors may select, or as from time to time may be selected by any
officer or agent authorized to do so by the Board of Directors.

Section 5.04 Checks, Drafts, Etc. All notes, drafts, acceptances,
checks, endorsements, and, subject to the provisions of these Bylaws,
evidences of indebtedness of the corporation, shall be signed by such officer
or officers or such agent or agents of the corporation and in such manner as
the Board of Directors from time to time may determine. Endorsements for
deposit to the credit of the corporation in any of its duly authorized
depositories shall be in such manner as the Board of Directors from time to
time may determine.

Section 5.05 Bond and Debentures. Every bond or debenture issued by
the corporation shall be evidenced by an appropriate instrument which shall be
signed by the president or a vice president and by the secretary and sealed
with the seal of the corporation. The seal may be a facsimile, engraved or
printed. Where such bond or debenture is authenticated with the manual
signature of an authorized officer of the corporation or other trustee
designated by the indenture of trust or other agreement under which such
security is issued, the signature of any of the corporation's officers named
thereon may be a facsimile. In case any officer who signed, or whose
facsimile signature has been used on any such bond or debenture, should cease
to be an officer of the corporation for any reason before the same has been
delivered by the corporation, such bond or debenture may nevertheless be
adopted by the corporation and issued and delivered as through the person
who signed it or whose facsimile signature has been used thereon had not
ceased to be such officer.

Section 5.06 Sale, Transfer, Etc. of Securities. Sales transfers,
endorsements, and assignments of stocks, bonds, and other securities owned by
or standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to
any such sale, transfer, endorsement, or assignment, shall be effected by the
president, or by any vice president, together with the secretary, or by any
officer or agent thereunto authorized by the Board of Directors.

Section 5.07 Proxies. Proxies to vote with respect to shares of other
corporations owned by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the president or any
vice president and the secretary or assistant secretary of the corporation, or
by any officer or agent thereunder authorized by the Board of Directors.

ARTICLE VI
CAPITAL SHARES

Section 6.01 Share Certificates. Every holder of shares in the
corporation shall be entitled to have a certificate, signed by the president
or any vice president and the secretary or assistant secretary, and sealed
with the seal (which May be a facsimile, engraved printed) of the corporation,
certifying the number and kind, class or series of shares owned by him or her
in the corporation; provided, however, that where such a certificate is
countersigned by (a) a transfer agent or an assistant transfer agent, or (b)
registered by a registrar, the signature of any such president, vice
president, secretary, or assistant secretary may be a facsimile. In case any
officer who shall have signed, or whose facsimile signature or signatures
shall have been used on any such certificate, shall cease to be such officer
of the corporation, for any reason, before the delivery of such certificate by
the corporation, such certificate may nevertheless be adopted by the
corporation and be issued and delivered as though the person who signed it, or
whose facsimile signature or signatures shall have been used thereon, has not
ceased to be such officers. Certificates representing shares of the
corporation shall be in such form as provided by the statutes of the state of
incorporation. There shall be entered on the share books of the corporation at
the time of issuance of each share, the number of the certificate issued, the
name and address of the person owning the shares represented thereby, the
number and kind, class or series of such shares, and the date of issuance
thereof. Every certificate exchanged or returned to the corporation shall be
marked "Canceled" with the date of cancellation.

Section 6.02 Transfer of Shares. Transfers of shares of the corporation
shall be made on the books of the corporation by the holder of record thereof,
or by his or her attorney thereunto duly authorized by a power of attorney
duly executed in writing and filed with the secretary of the corporation or
any of its transfer agents, and on surrender of the certificate or
certificates, properly endorsed or accompanied by proper instruments of
transfer, representing such shares. Except as provided by law, the
corporation and transfer agents and registrars, if any, shall be entitled to
treat the holder of record of any such stock as the absolute owner thereof for
all purposes, and accordingly, shall not be bound to recognize any legal,
equitable, or other claim to or interest in such shares on the part of any
other person whether or not it or they shall have express or other notice
thereof.

Section 6.03 Regulations. Subject to the provisions of this Article VI
and of the Articles of Incorporation, the Board of Directors may make such
rules and regulations as they deem expedient concerning the issuance,
transfer, redemption, and registration of certificates for shares of the
corporation.

Section 6.04 Maintenance of Stock Ledger at Principal Place of
Business. A share book (or books where more than one kind, class, or series
of stock is outstanding) shall be kept at the principal place of business of
the corporation, or at such other place as the Board of Directors shall
determine, containing the names, alphabetically arranged, of original
shareholders of the corporation, their addresses, their interest, the amount
paid on their shares, and all transfers thereof and the number and class of
shares held by each. Such share books shall at all reasonable hours be
subject to inspection by persons entitled by law to inspect the same.

Section 6.05 Transfer Agents and Registrars. The Board of Directors may
appoint one or more transfer agents and one or more registrars with respect to
the certificates representing shares of the corporation, and may require all
such certificates to bear the signature of either or both. The Board of
Directors may from time to time define the respective duties of such transfer
agents and registrars. No certificate for shares shall be valid until
countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such shares, and until registered by a
registrar, if at such date the corporation had a registrar for such shares.

Section 6.06 Closing of Transfer Books and Fixing of Record Date.

(a) The Board of Directors shall have power to close the share books of
the corporation for a period of not to exceed 50 days preceding the date of
any meeting of shareholders, or the date for payment of any dividend, or the
date the allotment of rights, or capital shares shall go into effect, or a
date in connection with obtaining the consent of shareholders for any purpose.

(b) In lieu of closing the share transfer books as aforesaid, the Board
of Directors may fix in advance a date, not exceeding 50 days preceding the
date of any meeting of shareholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital shares shall go into effect, or a date in
connection with obtaining any such consent, as a record date for the
determination of the shareholders entitled to a notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of
any such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital stock,
or to give such consent.

(c) If the share transfer books shall be closed or a record date set for
the purpose of shareholders entitled to notice of or to vote at a meeting of
shareholders. such books shall be closed for, or such record date shall be, at
least ten (10) days immediately preceding such meeting.

Section 6.07 Lost or Destroyed Certificates. The corporation may issue a
new certificate for shares of the corporation of any certificate theretofore
issued by it, alleged to have been lost or destroyed, and the Board of
Directors may, in its discretion, require the owner of the lost or destroyed
certificate or his or her legal representatives, to give the corporation a
bond in such form and amount as the Board of Directors may direct, and with
such surety or sureties as may be satisfactory to the board, to indemnify the
corporation and its transfer agents and registrars, if any, against any claims
that may be made against it or any such transfer agent or registrar on account
of the issuance of such new certificate. A new certificate may be issued
without requiring any bond when, in the judgment of the Board of Directors, it
is proper to do so.

Section 6.08 No Limitation on Voting Rights; Limitation on Dissenter's
Rights. To the extent permissible under the applicable law of any
jurisdiction to which the corporation may become subject by reason of the
conduct of business, the ownership of assets, the residence of shareholders,
the location of offices or facilities, or any other item, the corporation
elects not to be governed by the provisions of any statute that (i) limits,
restricts, modified, suspends, terminates, or otherwise affects the rights of
any shareholder to cast one vote for each share of common stock registered in
the name of such shareholder on the books of the corporation, without regard
to whether such shares were acquired directly from the corporation or from any
other person and without regard to whether such shareholder has the power to
exercise or direct the exercise of voting power over any specific fraction of
the shares of common stock of the corporation issued and outstanding or (ii)
grants to any shareholder the right to have his or her stock redeemed or
purchased by the corporation or any other shareholder on the acquisition by
any person or group of persons of shares of the corporation. In particular,
to the extent permitted under the laws of the state of incorporation, the
corporation elects not to be governed by any such provision, including the
provisions of the Nevada Control Share Acquisitions Act, Sections 78.378 to
78.3793, inclusive, of the Nevada Revised Statutes, or any statute of similar
effect or tenor.

ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES

Section 7.01 How Constituted. The Board of Directors may designate and
executive committee and such other committees as the Board of Directors may
deem appropriate, each of which committees shall consist of two or more
directors. Members of the executive committee and of any such other
committees shall be designated annually at the annual meeting of the Board of
Directors; provided, however, that at any time the Board of Directors may
abolish or reconstitute the executive committee or any other committee. Each
member of the executive committee and of any other committee shall hold office
until his or her resignation or removal in the manner provided in these
Bylaws.

Section 7.02 Powers. During the intervals between meetings of the
Board of Directors, the executive committee shall have and may exercise all
powers of the Board of Directors in the management of the business and
affairs of the corporation, except for such powers as by law may not be
delegated by the Board of Directors to an executive committee.

Section 7.03 Proceedings. The executive committee, and such other
committees as may be designated hereunder by the Board of Directors, may fix
its own presiding and recording officer or officers, and may meet at such
place or places, at such time or times and on such notice (or without notice)
as it shall determine from time to time. It will keep a record of its
proceedings and shall report such proceedings to the Board of Directors at the
meeting of the Board of Directors next following.

Section 7.04 Quorum and Manner of Acting. At all meetings of the
executive committee, and of such other committees as may be determined
hereunder by the Board of Directors, the presence of members constituting a
majority of the total authorized membership of the committee shall be
necessary and sufficient to constitute a quorum for the transaction of
business, and the act of a majority of the members present at any meeting at
which a quorum is present shall be the act of such committee. The members of
the executive committee, and of such other committees as may be designated
hereunder by the Board of Directors, shall act only as a committee and the
individual members thereof shall have no powers as such.

Section 7.05 Resignations. Any member of the executive committee, and
of such other committees as may be designated hereunder by the Board of
Directors, may resign at any time by delivering a written resignation to
either the president, the secretary, or assistant secretary, or to the
presiding officer of the committee of which he or she is a member, if any
shall have been appointed and shall be in office. Unless otherwise specified
herein, such resignation shall take effect on delivery.

Section 7.06 Removal. The Board of Directors may at any time remove any
member of the executive committee or of any other committee designated by it
hereunder either for or without cause.

Section 7.07 Vacancies. If any vacancies shall occur in the executive
committee or of any other committee designated by the Board of Directors
hereunder, by reason of disqualification, death, resignation, removal, or
otherwise, the remaining members shall, until the filling of such vacancy,
constitute the then total authorized membership of the committee and, provided
that two or more members are remaining, continue to act. Such vacancy may be
filled at any meeting of the Board of Directors.

Section 7.08 Compensation. The Board of Directors may allow a fixed sum
and expenses of attendance to any member of the executive committee, or of any
other committee designated by it hereunder, who is not an active salaried
employee of the corporation for attendance at each meeting of said committee.

ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND
OFFICER AND DIRECTOR CONTRACTS

Section 8.01 Indemnification: Third Party Actions. The corporation shall
have the power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action, or suit by
or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he or she is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation.
partnership, joint venture, trust, or other enterprise, against expenses
(including attorneys' fees) judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him or her in connection with any such
action, suit or proceeding, if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his or her conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in
a manner which he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and with respect to any criminal action or
proceeding, he or she had reasonable cause to believe that his or her conduct
was unlawful.

Section 8.02 Indemnification: Corporate Actions. The corporation shall
have the power to indemnify any person who was or is is a party or is
threatened to be made a party to any threatened, pending, or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership joint venture, trust, or other enterprise, against
expenses (including attorney's fees) actually and reasonably incurred by him
or her in connection with the defense or settlement of such action or suit, if
be or she acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such a person shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the corporation, unless
and only to the extent that the court in which the action or suit was brought
shall determine on application that, despite the adjudication of liability but
in view of all circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.

Section 8.03 Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
other-wise in defense of any action, suit, or proceeding referred to in
Sections 8.01 and 8.02 hereof, or in defense of any claim, issue, or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection therewith.
Any other indemnification under Sections 8.01 and 8.02 hereof, shall be made
by the corporation upon a determination that indemnification of the officer,
director, employee, or assent is proper in the circumstances because be or she
has met the applicable standard of conduct set forth in Sections 8.01 and 8.02
hereof. Such determination shall be made either (i) by the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit, or proceeding; or (ii) by independent legal counsel on a
written opinion; or (iii) by the shareholders by a majority vote of a quorum
at any meeting duly called for such purpose.

Section 8.04 General Indemnification. The indemnification provided by
this Section shall not be deemed exclusive of any other indemnification
granted under any provision of any statute, in the corporation's Articles of
Incorporation, these Bylaws, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee, or agent,
and shall inure to the benefit of the heirs and legal representatives of such
a person.

Section 8.05 Advances. Expenses incurred in defending a civil or
criminal action, suit, or proceeding as contemplated in this Section may be
paid by the corporation in advance of the final disposition of such action,
suit, or proceeding upon a majority vote of a quorum of the Board of Directors
and upon receipt of an undertaking by or on behalf of the director, officers,
employee, or agent to repay such amount or amounts unless if it is ultimately
determined that he or she is to agent to indemnified by the corporation as
authorized by this Section.

Section 8.06 Scope of Indemnification. The indemnification authorized by
this Section shall apply to all present and future directors, officers,
employees, and agents of the corporation and shall continue as to such persons
who ceases to be directors, officers, employees, or agents of the corporation,
and shall inure to the benefit of the heirs, executors, and administrators of
all such persons and shall be in addition to all other indemnification
permitted by law.

8.07. Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability asserted
against him or her and incurred by him or her in any such capacity, or arising
out of his or her status as such, whether or not the corporation would have
the power to indemnify him or her against any such liability and under the
laws of the state of incorporation, as the same may hereafter be amended or
modified.

ARTICLE IX
FISCAL YEAR

The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.

ARTICLE X
DIVIDENDS

The Board of Directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and on the terms
and conditions provided by the Articles of Incorporation and these Bylaws.

ARTICLE XI
AMENDMENTS

All Bylaws of the corporation, whether adopted by the Board of Directors
or the shareholders, shall be subject to amendment, alteration, or repeal, and
new Bylaws may be made, except that:

(a) No Bylaws adopted or amended by the shareholders shall be altered or
repealed by the Board of Directors.

(b) No Bylaws shall be adopted by the Board of Directors which shall
require more than a majority of the voting shares for a quorum at a meeting of
shareholders, or more than a majority of the votes cast to constitute action,
by the shareholders, except where higher percentages are required by law;
provided, however, that (i) if any Bylaw regulating an impending election of
directors is adopted or amended repealed by the Board of Directors, there
shall be set forth in the notice of the next meeting of shareholders for the
election of directors, the Bylaws so adopted or amended or repealed, together
with a concise statement of the changes made; and (ii) no amendment,
alteration or repeal of this Article XI shall be made except by the
shareholders.

CERTIFICATE OF SECRETARY

The undersigned does hereby certify that he or she is the secretary of
Idaho Technical, Inc., a corporation duly organized and existing under and by
virtue of the laws of the State of Nevada; that the above and foregoing Bylaws
of said corporation were duly and regularly adopted as such by the Board of
Directors of the Corporation at a meeting of the Board of Directors, which was
duly regularly held on the 7th day of September, 2000, and that the above and
foregoing Bylaws are now in full force and effect.

DATED THIS 7th day of September, 2000.

/s/ David A. Miller
--------------------------
David A. Miller, Secretary