Edgar Filing: BIOPHAN TECHNOLOGIES INC

As filed with the Securities and Exchange Commission on January 15, 2002.
Registration No. 333-__________.

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM SB-2

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

Nevada 8700 82-0507874
(State or other jurisdiction (Primary Standard Industrial (IRS Employer
of incorporation or Classification Identification
organization) Code Number) Number)

150 Lucius Gordon Drive, Suite 215
West Henrietta, New York 14586
(585) 214-2441
(Address and telephone number of registrant's principal executive offices)

Michael L. Weiner
Chief Executive Officer
150 Lucius Gordon Drive, Suite 215
West Henrietta, New York 14586
Ph. (585) 214-2441
Fax:(585) 427-9049
(Name, address and telephone number of agent for service)

Copy of all communications to:

Alan S. Lockwood, Esq.
Boylan, Brown, Code, Vigdor & Wilson, LLP
2400 Chase Square
Rochester, New York 14604
Ph. (585) 232-5300
Fax: (585) 232-3528

Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box: [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462 (b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box: [ ]

CALCULATION OF REGISTRATION FEE

Title of Each Amount to Be Proposed Maximum Proposed Maximum Amount of
Class of Registered Offering Price Aggregate Registration
Securities to Per Share (1) Offering Price Fee
Be Registered (1)
-------------------------------------------------------------------------------------

Common Stock Up to $.655 $7,860,000 $723
12,000,000

Common Stock Up to $.655 $393,000 $36
Issuable upon 600,000
Exercise of
Carolina
Financial
Warrants(2)

Common Stock 5,541,100 $.655 $3,629,420.50 $334

Common Stock 2,770,550 $.655 $1,814,710.25 $167
Issuable upon
Exercise of
Warrants(2)

Common Stock 258,006 $.655 $168,993.93 $16
Issued as
Commission

Common Stock 121,572 $.655 $79,629.66 $7
Issuable upon
Exercise of CFS
Warrants(2)

Common Stock 1,180,000 $.655 $772,900 $71
Issuable upon
Exercise of
Warrants of
Biomed(2)

Common Stock 3,000,000 $.655 $1,965,000 $181
Issuable upon
Exercise of
Warrants of
SBI(2)

(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended
(the "Act"), based on the average of the closing bid and asked prices for the
Registrant's Common Stock (the "Common Stock") as reported on the Nasdaq OTC
Bulletin Board on January 8, 2003.

(2) The number of shares of Common Stock specified above is the number which
may be acquired upon exercise of certain of the Company's warrants described
in the Prospectus forming a part of this Registration Statement (the
"Warrants"). This Registration Statement covers, pursuant to Rule 416, in
addition, such indeterminable number of shares of Common Stock as may be
issued on exercise of the Warrants by reason of adjustments in the number of
shares of Common Stock issuable pursuant to antidilution provisions contained
in the Warrants. Since such additional Common Stock will, if issued, be
issued for no additional consideration, no registration fee is required.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.

Subject to completion dated January 15, 2003

PROSPECTUS
BIOPHAN TECHNOLOGIES, INC.

25,471,228 SHARES OF COMMON STOCK

There are hereby offered up to 25,471,228 shares of the common stock, of
Biophan Technologies, Inc. All of these shares are being offered by selling
shareholders. Biophan will not receive any of the proceeds from the sale of
shares by the selling shareholders.

This prospectus relates primarily to the resale by Spectrum Advisors, Ltd., of
up to 12,000,000 shares of our common stock that may be issued through a
common stock purchase agreement between us and Spectrum, as further described
in this prospectus.

Spectrum is an "underwriter" within the meaning of the Securities Act of 1933
in connection with its sales.

This prospectus also relates to the resale of the following shares:

* up to 600,000 shares of our common stock underlying up to 600,000
warrants to be issued to Carolina Financial Services, LLC for services
rendered in relation to the common stock purchase agreement

* 5,541,100 shares of common stock, and 2,770,550 shares of common stock
underlying warrants, issued to certain purchasers in a private placement
of our securities, pursuant to which the purchasers were granted the
right to have their common stock registered in a subsequent
registration statement, together with 258,006 shares issued as
commissions to broker/dealers in connection with that offering;;

* 121,572 common shares underlying warrants granted to principals of CFS
for financial advisory and investment banking services;

* 1,180,000 shares issuable upon exercise of warrants issued to Biomed
Solutions, LLC; and

* 3,000,000 shares issuable upon exercise of warrants issued to SBI E2-
Capital (USA), Inc.

Our common stock trades on the over-the-counter market under the symbol
"BIPH." The last reported sales price for our common stock on January 10, 2003
was $.63 per share.

The Securities Offered Hereby Involve A High Degree Of Risk.

Investing In Our Common Stock Involves Risks Which Are Described Under "Risk
Factors" Beginning On Page 3.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospects is accurate or complete. It is illegal for anyone to tell
you otherwise.

The date of this prospectus is January 15, 2003.

TABLE OF CONTENTS
PART I Page

Prospectus Summary 5

Summary Historical Financial Information 6

Risk Factors 7

Use of Proceeds 12

Nature of Trading Market 13

Dividend Policy 14

Capitalization. 14

Plan of Operation 14

Business 18

Legal Proceedings 24

Management 24

Executive Compensation 28

Security Ownership of Certain Beneficial Owners and Management 29

Certain Transactions 31

Description of Securities 32

Shares Eligible for Resale 34

Common Stock Purchase Agreement 34

Selling Stockholders 36

Plan of Distribution 41

Legal Matters 43

Experts 43

Where you can find Additional Information 43

Financial Statements F-1

PART II

Information not required in prospectus 44

Signatures 49

You should rely only on the information contained in this prospectus. We have
not, and the underwriters have not, authorized anyone to provide you with
different information. If anyone provides you with different information, you
should not rely on it. We are not, and the underwriters are not, making an
offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information contained in this
prospectus is accurate only as of the date on the front cover of this
prospectus. Our business, financial condition, results of operations and
prospects may have changed since that date.

PROSPECTUS SUMMARY

This summary is not complete and does not contain all of the information that
you should consider before investing in our common stock. You should read the
entire prospectus carefully, including the more detailed information regarding
our company, the risks of purchasing our common stock discussed under "risk
factors," and our financial statements and the accompanying notes.

Biophan Technologies, Inc.

Biophan Technologies, Inc. is an early-stage research and development company
focusing on technology that will enable certain medical procedures and
biomedical devices, including cardiac pacemakers, to become safe and
compatible with magnetic resonance imagining (MRI) diagnostics. We believe we
are developing patented and patentable solutions that will allow devices to be
operated safely and effectively while being analyzed under MRI. Our initial
focus in this area is the production and commercialization of a temporary
pacemaker and permanent pacemaker leads that are MRI safe.

Common Stock Purchase Agreement Relating To Equity Line

Effective November 22, 2002, we entered into a restated common stock purchase
agreement with Spectrum Advisors, Ltd. for the potential future issuance and
sale of up to $3,000,000 of our common stock. This agreement restated and
superceded a common stock purchase agreement entered into with Bonanza Capital
as of June 6, 2002, on essentially the same terms and conditions. Pursuant to
the common stock purchase agreement we, at our sole discretion and from time
to time over a period of 24 months, may draw down on this facility, sometimes
termed an equity line, and Spectrum is obligated to purchase shares of our
common stock. The purchase price of the common stock purchased as to any draw
down will be equal to 80% of the average daily volume weighted average price
of our common stock for the five trading days preceding the applicable date.
The minimum draw down which Spectrum is obligated to honor for any trading day
is $12,500. Under certain circumstances, we may increase Spectrum's obligation
under the equity line to $10,000,000.
5
The Offering

Securities offered by selling
shareholders........................ Up to 25,471,228 shares of common stock,
representing:

* up to 12,000,000 shares issuable
pursuant to the equity line

* up to 600,000 shares issuable upon
exercise of warrants to be issued in
connection with the equity line

* 8,311,650 shares issued to investors
in our recent private placement or upon
exercise of warrants issued in connection
with that offering, plus 258,006 shares
issued to broker-dealers in connection
with that offering;

*121,572 shares issuable upon exercise
of warrants issued to our financial
advisors;

* 1,180,000 shares issuable upon
exercise of warrants issued to Biomed
Solutions, LLC.

* 3,000,000 shares issuable upon exercise
of warrants issued to SBI E2-Capital
(USA), Inc.

Use of Proceeds..................... We will not receive any proceeds of the
sale of shares by selling shareholders.
We will receive proceeds of the equity
line to the extent that we exercise our
rights to do so. Those proceeds, if any,
will be used to repay loans, to undertake
research, to defray offering costs, and
for working capital. See Use of
Proceeds.

Risk Factors........................ An investment in our common stock
involves a high degree of risk and could
result in a loss of your entire
investment.

OTC symbol.......................... BIPH

Executive Offices

Our executive offices are located at 150 Lucius Gordon Drive, Suite 215,
West Henrietta, New York 14586. Our telephone number is (585) 214-2441 and
our website is: www.biophan.com.

SUMMARY HISTORICAL FINANCIAL INFORMATION

The following table presents summarized financial information as of November
30, 2002 and the nine months then ended, and as of February 28, 2002 and 2001
and the years then ended. The information is extracted from the consolidated
financial statements presented elsewhere in this prospectus and should be read
in conjunction therewith.

Nine months ended Year ended Year ended
Operating Data: November 30,2002 February 28,2002 February 28,2001
----------------------------------------------------------------------------

Revenue -0- -0- -0-

Salaries and related $ 493,589 $ 461,629 $ 59,861

General & 398,930 475,520 16,059
administrative
expenses

Total expenses 2,313,726 3,705,917 729,130

Net (loss) (2,313,726) (3,705,917) (729,130)

Net loss per share (0.08) (0.14) (0.08)

Weighted average 30,359,831 27,000,962 9,166,887
shares outstanding
----------------------------------------------------------------------------

Balance Sheet Data: November 30,2002 February 28,2002 February 28,2001

Current assets $ 175,300 $ 672,823 $ 172,092

Total assets 377,875 866,638 343,752

Current liabilities 775,140 645,389 280,992

Long-term
liabilities 500,000 -0- 438,000

Stockholders' equity
(deficiency) (897,265) 221,249 (375,240)

Working capital (599,840) 27,434 (108,900)
----------------------------------------------------------------------------

RISK FACTORS

Please consider the following risk facts together with the other
information presented in this prospectus including the financial statements
and the notes thereto before investing in our common stock. The trading price
of our common stock could decline due to any of the following risks, and you
might lose all or part of your investment.

We Have Only Limited Operating History That Makes it Difficult To Evaluate
Our Business and Prospects.

We are a development stage company. We face all the inherent risks which
exist in any new business venture. We have a very limited history of
operations, limited assets and no earnings from operations to date. We are
in the initial stages of developing our technologies, and our success will
depend on our ability to design, develop and market our intellectual property
and resulting products.

We Have Generated No Revenues.

We are still in our formative and development stage. As an investor, you
should be aware of the difficulties, delays and expenses normally encountered
by an enterprise in its development stage, many of which are beyond our
control, including unanticipated research and developmental expenses,
employment costs, and administrative expenses. We cannot assure our
investors that our proposed business plans as described in this prospectus
will materialize or prove successful, or that we will ever be able to operate
profitably. If we cannot operate profitably, you could lose your entire
investment. As a result of the start-up nature of our business we expect to
sustain substantial operating expenses without generating significant
revenues.

We Have a History of Losses and a Large Accumulated Deficit and We Expect
Future Losses.

For the nine months ended November 30, 2003 and fiscal years ended
February 28, 2002 and 2001, we incurred net losses of $2,313,726, $3,705,917
and $729,130, respectively. We expect to lose more money as we spend
additional capital to develop and market our products and establish our
infrastructure and organization to support anticipated operations. We cannot
be certain whether we will ever earn a significant amount of revenues or
profit, or, if we do, that we will be able to continue earning such revenues
or profit.

Our Inability To Attract Or Retain Key Personnel Could Adversely Affect Our
Business And Negatively Affect Your Investment.

We depend on the continued employment of our senior management team and
key research and technical personnel for our future success. If one or more
members of our senior management team leave our company, our business,
financial condition and operating results could be materially and adversely
affected. We also depend on our ability to attract additional qualified
employees, researchers and consultants. We will need to hire additional,
highly skilled researchers, marketing and sales people as our business grows.
The competition for such skilled personnel is intense. If we are unable to
hire such personnel, we may be unable to achieve our business objectives.

Our Research and Development Efforts May Not Result in Commercially Viable
Products.

Our technologies are in the development stage. Further research and
development efforts will be required to develop these technologies to the
point where they can be incorporated into commercially viable or salable
products. We have set forth in this prospectus our proposed research and
development program as it is currently conceived. We cannot assure you,
however, that this program will be accomplished in the order or in the time
frame set forth. We reserve the right to modify the research and development
program. We may not succeed in developing commercially viable products from
our technologies. If not, our ability to generate revenues from our
technologies will be severely limited. This would result in the loss of all
or part of your investment.

We May Not Have Opportunities To Enter Into Strategic Partnerships for the
Commercialization of our Technologies.

We intend to enter into strategic partnerships or other relationships
with established biomedical, pharmaceutical and bio-pharmaceutical companies
to obtain the necessary regulatory approvals and to undertake the
manufacturing and marketing efforts required to commercialize most of our
products. However, we do not have commitments at this time from any
potential partners. If we are unable to enter into any new partnerships,
then we may be unable to commence the commercialization of our products.

We May Not Be Able To Develop A Market For Our Technology.

The demand and price for our technology and related products will be
based upon the existence of markets for the technology and products and the
markets for products of others, which may utilize our technology. The extent
to which we may gain a share of our intended markets will depend, in part,
upon the cost effectiveness and performance of our technology and products
when compared to alternative technologies, which may be conventional or
heretofore unknown. If the technology or products of other companies provide
more cost-effective alternatives or otherwise outperform our technology or
products, the demand for our technology or products maybe adversely affected.
Our success will be dependent upon market acceptance of our technology and
related products.

If We Are Unable To Compete Successfully Against Our Competitors, Our
Business, Financial Condition And Operating Results Will Be Adversely
Affected.

We may be competing with many businesses for a share of the market for
MRI-compatible products. We cannot assure you that our technology and
products will compete successfully with the products and technology of other
companies. Additionally, most of our potential competitors will have more
financial resources and experience, which enable them to better withstand the
impact of certain industry risks.

We May Not Be Able To Obtain Necessary Government Approval To Market Our
Technology.

We, or our marketing partners, must obtain the approval of the U.S. Food
and Drug Administration in order to market our MRI-safe technology. If
these approvals are not obtained, or are significantly delayed, our ability
to generate revenues may be adversely affected and our development and
marketing efforts inhibited. This would most likely cause our stock price to
decline and result in the loss of all or part of your investment.

We May Not Be Able To Protect Our Proprietary Rights and We May Infringe the
Proprietary Rights of Others. Our Inability to Protect Our Rights Could
Impair Our Business and Cause us to Incur Substantial Expense to Enforce our
Rights.

Proprietary rights are critically important to us. While we have three
issued patents under exclusive license, and we intend to aggressively pursue
patent protection for our technologies, we cannot assure you that any
additional patents will be issued. Although we will seek to defend our
patents and to protect our other proprietary rights, our actions may be
inadequate to protect our patents and other proprietary rights from
infringement by others, or to prevent others from claiming infringement of
their patents and other proprietary rights.

Policing unauthorized use of our technology is difficult and some foreign
laws do not provide the same level of protection as U.S. laws. Litigation
may be necessary in the future to enforce our intellectual property rights,
to protect our trade secrets or patents that we may obtain, or to determine
the validity and scope of the proprietary rights of others. Such litigation
could result in substantial costs and diversion of resources and have a
material adverse effect on our future operating results.

The So Called "Penny Stock Rule" Could Make It Cumbersome For Brokers and
Dealers to Trade in the Common Stock, Making the Market For the Common Stock
Less Liquid Which Could Cause the Price of Our Stock to Decline.

Trading of our common stock on the OTC Bulletin Board may be subject to
certain provisions of the Securities Exchange Act of 1934, commonly referred
to as the "penny stock" rule. A penny stock is generally defined to be any
equity security that has a market price less than $5.00 per share, subject
to certain exceptions. If our stock is deemed to be a penny stock, trading
in our stock will be subject to additional sales practice requirements on
broker-dealers. These may require a broker dealer to:

* make a special suitability determination for purchasers of our shares;

* receive the purchaser's written consent to the transaction prior to
the purchase; and

* deliver to a prospective purchaser of our stock, prior to the first
transaction, a risk disclosure document relating to the penny stock
market.

Consequently, penny stock rules may restrict the ability of broker-
dealers to trade and/or maintain a market in our common stock. Also,
prospective investors may not want to get involved with the additional
administrative requirements, which may have a material adverse effect on the
trading of our shares.

Risks Related To The Equity Line

The Equity Line May Not Generate Sufficient Funds For Our Needs.

The funds that we raise by drawing upon the equity line may not be
sufficient to carry out all of the plans described in this prospectus or to
achieve financial success. We do not have commitments for additional
financing. To secure additional financing, we may have to borrow money or
sell more securities, which may reduce the value of the securities to be
issued as a result of this offering. We may be unable to secure additional
financing on favorable terms.

Selling additional stock, either privately or publicly, could dilute the
equity interests of our stockholders. If we borrow more money, we will have
to pay interest and may also have to agree to restrictions that limit our
operating flexibility. If we are unable to obtain adequate financing, we may
have to curtail business operations which would have a material negative
effect on operating results and most likely result in a lower stock price.

Our Common Stock Purchase Agreement With Spectrum And The Issuance Of Shares
To Spectrum Thereunder May Cause Significant Dilution To Our Stockholders And
May Have An Adverse Impact On The Market Price Of Our Common Stock.

The resale by Spectrum of the common stock that it purchases from us will
increase the number of our publicly traded shares, which could depress the
market price of our common stock. Moreover, as all the shares we sell to
Spectrum will be available for immediate resale, the mere prospect of our
sales to it could depress the market price for our common stock. If we were
to require Spectrum to purchase our common stock at a time when our stock
price is low, our existing common stockholders will experience substantial
dilution. The issuance of shares to Spectrum will therefore dilute the equity
interest of existing stockholders and could have an adverse effect on the
market price of our common stock.

The perceived risk of dilution may cause our stockholders to sell their
shares, which would contribute to a decline in the price of our common stock.
Moreover, the perceived risk of dilution and the resulting downward pressure
on our stock price could encourage investors to engage in short sales of our
common stock. By increasing the number of shares offered for sale, material
amounts of short selling could further contribute to progressive price
declines in our common stock.

Our Common Stock Has Experienced In The Past, And Is Expected To Experience
In The Future, Significant Price And Volume Volatility, Which Substantially
Increases The Risk Of Loss To Persons Owning Our Common Stock.

Because of the limited trading market for our common stock, and because
of the possible price volatility, you may not be able to sell your shares of
common stock when you desire to do so. During 2002, the price of our common
stock ranged from a high of $6.45 to a low of $0.18 per share. The inability
to sell your shares in a rapidly declining market may substantially increase
your risk of loss because of such illiquidity and because the price for our
common stock may suffer greater declines because of its price volatility.

The price of our common stock that will prevail in the market after this
offering may be higher or lower than the price you pay. Certain factors,
some of which are beyond our control, that may cause our share price to
fluctuate significantly include, but are not limited to, the following:

* variations in our quarterly operating results;

* our ability to complete the research and development of our
technologies;

* the development of a market in general for our products;

* changes in market valuations of similar companies;

* announcement by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;

* loss of a major customer or failure to complete significant
transactions;

* additions or departures of key personnel; and

* fluctuations in stock market price and volume.

Additionally, in recent years the stock market in general, and the OTC-BB
and technology stocks in particular, have experienced extreme price and
volume fluctuations. In some cases, these fluctuations are unrelated or
disproportionate to the operating performance of the underlying company.
These market and industry factors may materially and adversely affect our
stock price, regardless of our operating performance.

In the past, class action litigation often has been brought against
companies following periods of volatility in the market price of those
companies' common stock. If we become involved in this type of litigation in
the future, it could result in substantial costs and diversion of management
attention and resources, which could have a further negative effect on your
investment in our stock.

Because Spectrum Is A Resident Of A Foreign Country, It May Be Difficult Or
Impossible To Obtain Or Enforce Judgments Against Spectrum.

Spectrum is a Nevis corporation with offices in London, England, and a
substantial portion of its assets are located outside of the United States.
As a result, it may be difficult or impossible to effect service of process
on Spectrum within the United States. It may also be difficult or impossible
to enforce judgments entered against Spectrum in courts in the United States
based on civil liability provisions of the securities laws of the United
States. In addition, judgments obtained in the United States, especially
those awarding punitive damages, may not be enforceable in foreign countries.

Special Note Regarding Forward-Looking Statements

This prospectus contains forward-looking statements that involve risks and
uncertainties. These include statements about our expectations, plans,
objectives, assumptions or future events. In some cases, you can identify
forward-looking statements by terminology such as "anticipate," "estimate,"
"plans," "potential," "projects," "continuing," "ongoing," "expects,"
"management believes," "we believe," "we intend" and similar expressions.
These statements involve estimates, assumptions and uncertainties that could
cause actual results to differ materially from those expressed for the
reasons described in this prospectus. You should not place undue reliance on
these forward-looking statements.

You should be aware that our actual results could differ materially from
those contained in the forward-looking statements due to a number of factors:

* continued development of our technology

* dependence on key personnel

* competitive factors

* the operation of our business

* general economic conditions

The forward-looking statements speak only as of the date on which they are
made, and, except to the extent required by federal securities laws, we
undertake no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events. In addition, we cannot assess
the impact of each factor on our business or the extent to which any factor,
or combination of factors, may cause actual results to differ materially from
those contained in any forward-looking statements.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of shares by any
selling shareholder.

The estimated expenses to be incurred by us in connection with this offering
include:

* $5,000 for printing and engraving expenses;

* $50,000 for legal and accounting fees and expenses; and

* $1,535 for SEC registration fees.

Because we are not obligated to, and may decide not to, exercise any draw
downs under the equity line of credit agreement, we may not receive any
proceeds under the equity line of credit agreement. Further, no warrant
holder is compelled to exercise its warrants, so we may not receive any
proceeds from warrant exercise.

Subject to the foregoing, the anticipated use of proceeds from our exercise
of draw downs under the equity line is as follows:

Repay related party loans plus
Interest $ 475,000

MRI-safe research and
Development 1,500,000

Offering costs 296,000

Working capital 729,000
-----------
Total $3,000,000
===========

The related party loans include bridge loans made to Biophan by Biomed
Solutions, LLC, which is a shareholder of Biophan and of which Michael L.
Weiner, CEO of Biophan is a manager and equity owner. As of November 30,
2003, $300,000 was outstanding on this loan. The loan bears interest at the
rate of 8% per annum, and matures upon the effectiveness of this registration
statement.

The related party loans also include a loan of $143,570 from H. DeWorth
Williams, a greater than 5% stockholder of the Company. This loan bears
interest at the rate of 8% per annum and is due on December 31, 2003.

Management will have significant flexibility and discretion in applying
the net proceeds. Pending their use, we may invest the net proceeds from the
equity line in short-term, investment grade, interest-bearing securities.

NATURE OF TRADING MARKET

Our common stock is listed on the OTC Bulletin Board under the symbol BIPH.
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.
These quotations reflect inter-dealer prices, without mark-up, mark-down or
commission, and may not represent actual transactions.

Quarter Ended High Low

November 30, 2001 $6.50 $5.50

February 28, 2002 $7.25 $2.37

May 31, 2002 $2.65 $ .75

August 31, 2002 $1.13 $ .30

November 30, 2002 $ .38 $ .18

We currently have outstanding 37,634,693 shares held by approximately 400
shareholders.

DIVIDEND POLICY

We have never paid cash dividends and have no plans to do so in the
foreseeable future. Our future dividend policy will be determined by our
Board of Directors and will depend upon a number of factors, including our
financial condition and performance, our cash needs and expansion plans,
income tax consequences, and the restrictions that applicable laws and our
credit arrangements then impose.

CAPITALIZATION

The following table sets forth our capitalization as of November 30, 2002.

You should read this information in conjunction with our financial statements
and the accompanying notes, and the other financial information appearing
elsewhere in this prospectus. All data in the following table is unaudited.

Long-term debt: $ 500,000
==========
Stockholders'equity(deficiency):
Common stock,$.005 par value
Authorized,60,000,000 shares
Issued and outstanding:
32,987,759 shares $ 164,939
Additional paid-in capital 5,786,427
Accumulated deficit (6,848,631)
----------
$ (897,265)
==========

PLAN OF OPERATION

The following discussion and analysis should be read in conjunction with the
consolidated financial statements appearing elsewhere in this prospectus.

Overview

We are currently in the development stage of operations and expect to be
in that mode for the foreseeable future. Our primary mission is to develop
and commercially exploit potentially significant technologies for enabling
cardiac pacemakers and other life sustaining medical devices to be safe and
compatible with magnetic resonance imaging (MRI) and other equipment that
generates powerful magnetic and radio frequency signals.

Results of Operations

During the year ended February 29, 2000, we were inactive, earning no
revenues and incurring only a minimum of expenses in connection with filing
all required periodic reports with the SEC 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, we entered into
agreements for the acquisition of our currently owned technology and a
subsidiary corporation and embarked on a new program for development and
eventual commercial exploitation of such technology. We remained in the
development stage during the years ended February 28, 2001 and 2002, and
through the present.

In fiscal 2001, we 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 we earned no revenues. However, the receipt of net
proceeds of $3,187,610 from bridge loans (which converted to common shares)
and a private placement of common stock enabled us to step up our 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 $1,286,528,
principally pertaining to the grant of stock options to other than our
employees and directors valued at $702,800 and the payment of interest on
bridge loans by issuing stock valued at $468,823.

During the nine months ended November 30, 2002, we incurred a net loss
of $2,313,726 as compared with a net loss of $2,045,981 for the nine months
ended November 30, 2001. Research and development expenses were $837,123 and
other operating expenses were $1,267,323 for the nine months ended November
30, 2002 as compared with $570,790 and $963,448 respectively, for the nine
months ended November 30, 2001. The net loss for the nine months ended
November 30, 2002 included $438,000 of non-cash interest and options charges
and the net loss for the nine months ended November 30, 2001 included $469,759
of non-cash interest charges.

Research and Product Development Activities

We are developing technology to allow patients with biomedical devices
to safely undergo MRI diagnostics. This includes a temporary pacemaker which
will allow a patient with an implanted pacemaker to safely undergo an MRI
scan without the current risks that resulted in the 1997 FDA contraindication
for pacemakers and other devices.

We have contracted for animal testing of our prototype fiber-optic temporary
pacemaker. Greatbatch Enterprises is conducting the animal tests in
conjunction with a leading research university. After the animal tests are
completed, we plan to file an FDA application for human clinical trials.

The fiber-optic lead has been tested in an MRI machine and does not heat up
as do existing catheters that contain metal wires. We are exploring the use
of this technology with third parties, under license, for use in deep brain
stimulation applications, such as treating Parkinson's and epilepsy. We have
also received OEM licensing interest from several companies wishing to use the
fiber-optic lead to power miniature MRI receiving coils known as
"intraluminal coils." These coils are placed in body cavities, close to
tissue, to improve MRI image resolution, reduce scan time, and enable quality
images to be obtained with lower strength and lower cost MRI machines. We are
anticipating one or more R&D contracts to help finance the development of this
technology platform.

We have developed an MRI-safe solution for defibrillation by using a
discontinuous wire lead. This enables the high voltage cardioversion-
defibrillation pulse to bridge the gaps in the lead while preventing lower
voltage MRI induced currents from bridging the gap and heating the lead.

We have licensed, on an exclusive basis, shielding and filtering
technologies which include the use of carbon composite and nanomagnetic
particle technologies. These technologies have the potential to shield
medical devices from MRI interference. This specialized area of
nanotechnology uses nanoparticles that allow precision altering of the
magnetic field in a non-conductive material that exhibits unique properties
due to the nano-scale size and formulation of the coating.

The nonmagnetic nanoparticles used in our proprietary process appear to have
properties which can be used to shield metal wires inside the shielding. As
a result of promising early indications, we have significantly stepped up our
R&D efforts with these nanomaterials, carbon composites, and RF filtering.

We have entered into exclusive licenses to the patented technologies
described above, and have contracted with consultants in private industry and
at the University of Buffalo and Alfred University to conduct research to
perfect these solutions. Recently, successful testing of these solutions in
an MRI machine was accomplished.

We have obtained a license from Johns Hopkins University for an issued patent
for an MRI-Safe ECG and Pacemaker Lead. The license is exclusive for
implantable devices and also covers other market segments. This is the only
issued patent for MRI-safe pacing. This technology provides a low-pass RF
filter at the electrode tip in the heart, and at the pacemaker device in the
chest. This low-pass filter stops much of the potentially damaging energy
traveling to the electrode tip in the heart. Used in conjunction with our
proprietary shielding technologies, the problem of MRI safety can be
significantly mitigated.

To further improve the chances for this approach to work, we have also
filed patents for reducing the energy output of an MRI machine, to minimize
the energy that causes lead heating. The combination of shielding,
filtering, and MRI output reduction could possibly result in solving the MRI
heating problem in pacemakers, defibrillators, and other medical devices.

We conduct much of our R&D and prototype development through sub-contract
arrangements with third parties. Greatbatch Enterprises has developed the
fiber-optic prototype temporary pacemaker for us under contract, and has
assigned the related patent applications to Biophan. We are exploring
manufacturing arrangements with FDA registered biomedical device manufacturing
companies with expertise in the field. Wherever possible, we use the plant and
staff infrastructure of other companies, reducing our overhead and taking
advantage of third-party experience and know-how.

Liquidity and Capital Resources

In June 2002, we executed a line-of-credit agreement with Biomed that
provided for borrowings up to $250,000 with interest payable at 8% per
annum. Biomed received warrants to purchase 75,000 shares of common stock at
$1.00 per share. On August 19, 2002, the line was increased by $100,000 and
the expiration date of that additional amount was set as August 19, 2003. In
consideration, Biomed received additional warrants and all warrants then held
by Biomed were priced or repriced to be exercisable at the lowest of (i) the
closing bid price on June 4, 2002; (ii) the closing bid price on the date of
exercise; or (iii) the lowest per share purchase price paid by any third
party between June 4, 2002 and the exercise date. Biomed has the option of
converting the principal and interest of the loan on the same basis. On
November 7, 2002, our Board of Directors approved further modifications to
the line. The portion of the line of credit due on December 1, 2002 was
extended to such time as the registration statement of which this prospectus
is a part becomes effective. As consideration, we agreed to pay to Biomed an
additional 10% royalty (up to $175,000) of proceeds from the sale or leasing
of our technologies. Currently, $300,000 has been borrowed under the line of
credit.

In June 2002, we extended the due date of the $500,000 payment due to Biomed
under the Transfer Agreement for the MRI-compatible technology transferred to
us, to September 1, 2002 which date was further extended to December 1, 2002.
For these extensions, Biomed received warrants to purchase a total of 375,000
shares. Biomed also received the right to receive 33% of proceeds (up to
$300,000) from the sale or licensing of our shielding or filtering
technologies. On November 7, 2002 this obligation was further extended to
June 1, 2004, bearing interest at 8% from February 28, 2002. After June 1,
2004, the obligation will be repaid in 12 equal monthly installments. In
consideration of this extension, Biomed was granted warrants to purchase
500,000 shares at an exercise price of $.50 per share. The number of warrants
will be reduced by 16,667 for each month that the obligation is pre-paid.

Also in June 2002, we signed a Loan Agreement with a shareholder providing for
borrowings of up to $400,000 with interest payable at 8% per annum. Principal
and accrued interest become due and payable on December 31, 2003. To date, we
have borrowed $143,570 under this Agreement.

Pursuant to offerings exempt from registration under Regulation S of the
Securities Act, we raised net proceeds of $503,412 during August and
September 2002.

Effective August 22, 2002, we entered into a finder's agreement with Westbay
Consulting, Inc. providing for the sale of restricted shares of common stock
to accredited investors pursuant to Rule 506 of Regulation D under the
Securities Act. The finder receives a cash fee of 10% plus stock. From
September 27 through January 6, 2003, net cash proceeds of $1,277,772 were
received under this agreement.

On November 22, 2002, we entered into a Stock Purchase Agreement with
Spectrum Advisors, in the nature of an equity line, whereby we have the
option to sell up to $3,000,000 of our common stock to Spectrum. This
Agreement restated and superseded a Stock Purchase Agreement entered into
June 6, 2002 with Bonanza Capital, on essentially the same terms and
conditions. The minimum daily sale of common stock under the Agreement is
$12,500. The agreement requires us to file with the SEC a registration
statement covering the shares issuable under this agreement. We can begin
selling shares to the purchaser after the SEC declares our registration
statement effective.

Management believes that the above-described financing arrangements will be
sufficient to fund the next twelve months of operations and beyond. The
proceeds will be applied to the ongoing R&D program for achieving MRI-safe
implantable cardiac pacemakers and other devices as well as to administrative
expenses.

Our current strategic plan does not indicate a need for material capital
expenditures in the conduct of research and development activities. Nor does
the plan contemplate any significant change in the number of employees. The
Company currently employs ten full-time individuals.

New Accounting Standards

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement No. 143 "Accounting for Asset Retirement Obligations" (SFAS 143).
SFAS 143 addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. It applies to legal obligations associated
with the retirement of long-lived assets that result from the acquisition,
construction, development and/or the normal operation of a long-lived asset,
except for certain obligations of lessees. SFAS 143 is effective for
financial statements issued for fiscal years beginning after June 15, 2002.
We currently are reviewing SFAS 143 and intend to implement it, if applicable,
as of March 1, 2003.

In August 2001, the FASB issued Statement No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets" (SFAS 144). SFAS 144 supersedes
FASB Statement No. 121 "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of" (SFAS 121); however it retains the
fundamental provisions of that statement related to the recognition and
measurement of the impairment of long-lived assets to be "held and used". In
addition, SFAS 144 provides more guidance on estimating cash flows when
performing a recoverability test, requires that a long-lived asset (group) to
be disposed of other than by sale (e.g., abandoned) be classified as "held and
used" until it is disposed of, and establishes more restrictive criteria to
classify an asset (group) as "held for sale". SFAS 144 is effective for
fiscal years beginning After December 15, 2001. The adoption of SFAS 144 did
not have a material impact on our consolidated financial condition or results
of operations.

In April 2002, the FASB issued Statement No. 145 "Rescission of FASB
Statements No. 4, 44 and 62, Amendment of FASB Statement No. 13, and Technical
Corrections" (SFAS 145). SFAS 145 will require gains and losses on
extinguishments of debt to be classified as income or loss from continuing
operations rather than as extraordinary items as previously required under
Statement of Financial Accounting Standards No. 4 (SFAS 4). Extraordinary
treatment will be required for certain extinguishments as provided in APB
Opinion No. 30. SFAS 145 also amends Statement of Financial Accounting
Standards No. 13 and requires that certain modifications to capital leases be
treated in the same manner as sale-leaseback transactions. SFAS 145 is
effective for financial statements issued after May 15, 2002, and with respect
to the impact of the reporting requirements of changes made to SFAS 4 for
fiscal years beginning after May 15, 2002. The adoption of the applicable
provisions of SFAS 145 did not have an effect on our financial statements.

In June 2002, the FASB issued Statement No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" (SFAS 146). SFAS 146 nullifies
Emerging Issues Task Force Issue No. 94-3 "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in Restructuring)". SFAS 146 applies to costs
associated with an exit activity that does not involve an entity newly
acquired in a business combination or with a disposal activity covered by SFAS
144. SFAS 146 is effective for exit or disposal activities that are initiated
after December 31, 2002, with earlier application encouraged. We will
implement SFAS 146 as of March 1, 2003.

BUSINESS

Company History

We incorporated under the laws of the State of Idaho on August 1, 1968.
On January 12, 2000, we changed our domicile to Nevada by merging into a
Nevada corporation, and on July 19, 2001, we changed our name to Biophan
Technologies, Inc.

In connection with the exchange, we:

* issued an aggregate of 10,759,101 shares of common stock to Biomed in
exchange for all the issued shares of LTR and

* issued an aggregate of 10,759,101 shares of common
stock to a group of investors for $175,000.

Also on December 1, 2000, we acquired intellectual property rights,
including a pending patent to the MRI-compatible pacemaker technology from
Biomed, 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 us and
Biomed. The due date of this payment has been extended to June 1, 2004. The
obligation bears interest at 8% per annum from February 28, 2002.

Both the Exchange Agreement and the Assignment and Security Agreement
contain provisions for the reversion of the technology to Biomed if we fail
to raise funds for development of the technology and in certain other
circumstances.

Company Business

Our core business is providing technology that will enable both
implantable and interventional medical devices to undergo safe and effective
magnetic resonance imaging (MRI) diagnosis, and will enable surgical
procedures to be performed utilizing real-time MRI.

Background Terms, Facts, and Assumptions:

* MRI uses massive magnetic fields and intense radio frequency (RF)
fields to create a 3-D map of soft tissues within the body. These
fields are needed to cause hydrogen nuclei to resonate in the magnetic
field. Complex math is used to create an image.

* The magnetic and RF fields at levels currently used in medical
practice are safe for the patient, as long as there are no long metal
objects, electronic devices, or magnetic objects within their body.

* Continuing advances in MRI technology are creating ever-increasing
demand for it as an extremely valuable diagnostic tool. At the same
time it is being adapted for real-time use during surgical procedures.

* We estimate that over 300,000 of the 5,000,000 pacemaker wearers
worldwide are denied MRI annually due to the existing regulatory and
manufacturer contraindication. Other devices are also
contraindicated, as are many surgical procedures that could greatly
benefit from real-time MR image information.

* This pacemaker contraindication is based on evidence that induced
electrical currents in the pacemaker lead can falsely pace the heart
rapidly, can damage the device itself, and can create localized heating
that causes tissue damage that may degrade the effectiveness of the
pacing system.

* The term 'MRI safe' refers to a situation in which MRI testing will
cause no harm to the patient or to any implantable or interventional
device within them.

* The term 'MRI compatible' refers to a situation in which image
interference is minor, and the resulting MRI image is useful in
diagnosing the patient's state of health.

* The term 'active' refers to an implantable device or surgical
implement that uses optical, electrical, and/or other energy to sense
or transmit information, and/or modify or treat diseased tissue.
Examples include pacemakers, catheter imaging devices, and drug pumps,
all of which may be affected during MRI.

* The term 'passive' refers to an implantable device or surgical
implement that serves to move, secure or modify tissue or another
device, but does so via its mechanical action or presence only.

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 safe and 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,
neurostimulator, or other implantable device installed.

Technology

We are developing technologies that enable both safe and effective MRI
diagnosis for patients. These include:

* Shielding technology that uses carbon composite shield materials,
and/or novel nanomagnetic materials that make use of phenomena that
exist only when particles reach sizes between one micron (0.00004
inches) and one nanometer (1000 times smaller).

* Filtering technology that provides for electronic filtering that
essentially blocks unwanted induced currents at both ends of a
catheter or other device.

* Photonic technology that uses miniature diode lasers and photocells at
each end of a catheter or pacemaker lead or surgical device to
transmit energy and information without any electrical conductors.
This completely eliminates the safety issues related to induced
currents and heating, and eliminates most of the image disruptions.
The miniature electronics at both ends of the optical fiber are too
small and too well shielded to be affected.

We have been aggressive in filing patent applications on these
technologies. We have worked with the inventors of the nanomagnetic particle
shielding technology in filing additional patent applications beyond their
original ones, and we have exclusive license to these pending patents (and
for the filtering patent from Johns Hopkins University) for all medical
applications. To date we have filed 45 US patent applications, and have
exclusive licenses to 2 issued, one allowed, and 5 additional patents of
third parties which cover the technologies described above.

Products and Markets

We are addressing five basic areas of technology and product development
that apply across several market segments:

* MRI shielding for active medical devices.

* MRI shielding for passive medical devices, such as guidewires and
biopsy needles.

* Photonic technology applied to a temporary pacemaker (and applicable
to implanted devices).

* Photonic technology for intraluminal MR imaging.

* Photonic technology for deep brain stimulation.

MRI shielding for active medical devices

We have licensed, developed, and patented technology in both carbon
composite shielding and nanomagnetic shielding. This approach has the
potential to provide a more cost-effective path to MRI safety and
compatibility than the photonic approach. Results of direct testing in an
MRI device to date have been quite promising, and further work is under way
to refine the designs of materials and coating methods. This MRI shielding
technology may be applied to active medical devices such as pacemakers, ICDs,
drug pumps, and the like. We are currently having discussions with
manufacturers of primary device components such as pacemaker leads, as well
as manufacturers of complete systems, concerning their use of this
technology.

MRI shielding for passive medical devices

The same MRI shielding technology may be applied to a wide variety of
passive devices that are used in implantable medical devices and in surgery,
such as biopsy needles, guidewires, endoscopes, etc. We believe that our MRI
shielding will eliminate the problems of patient risks and image degradation
for passive devices and surgical implements which incorporate the technology.
We are currently having discussions with a variety of manufacturers of passive
devices, and involving them in test procedures we are conducting.

Photonic technology applied to a temporary pacemaker

We have subcontracted the development and testing of a photonic temporary
pacemaker device to Greatbatch Enterprises Corporation, a company in Clarence,
New York founded and managed by Wilson Greatbatch. Mr. Greatbatch is the
inventor of the original implantable pacemaker and of the lithium iodide
battery that is used in most implantable electronic devices sold worldwide.
The photonic temporary pacemaker is intended as a backup for patients who need
MRI diagnosis but who already have an implanted pacemaker or implantable
cardioverter defibrillator (ICD). This device consists of:

* An external handheld controller that is MRI safe.

* A fiber optic lead that is biocompatible and physically similar to
typical electrical pacemaker leads. This lead is temporarily run
through blood vessels to the heart.

* The photonic electrodes at the end of the lead reconvert light to
electrical signals that pace the heart in the same manner as
traditional pacemakers.

* The controller is designed to be reusable, and the lead/electrode are
single use. The temporary pacemaker is available if the implanted
device encounters any type of malfunction during or after the MRI
procedure.

The initial prototype of an externally powered pacemaker being developed
by us was recently tested in an MRI system. 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."

Multiple prototype devices have been produced, and animal studies are
scheduled to be completed before the end of this fiscal year. Application to
the FDA for human clinical trials will follow.

Photonic technology for intraluminal MR imaging

Our patent coverage includes the use of photonics in medical devices
unrelated to implants or to cardiac pacing. One example is in a relatively
new branch of MRI referred to as intraluminal MRI. Image quality and
resolution are directly related to proximity of the receiver coil to tissue
being diagnosed. Traditional full-body receiver coils are large enough for
the patient and support device to pass through. Smaller coils placed on the
patient, near the area of interest, can provide improved images. Intraluminal
(within a body opening or vessel) and intraparenchymal (within tissue e.g.
brain) MRI microcoils give superb images. However, current MRI microcoil
techniques are limited by the same problems that exist for pacemakers. A
photonic coil interface and use of optical fiber transmission eliminate these
problems, provide for other optical tissue measurements, and provide the
ability to handle huge amounts of data easily. One very exciting opportunity
is in the area of 'vulnerable plaque'. It is believed that up to 85% of heart
attacks and strokes may be caused by rapid formation of clots at places in the
artery walls that are missed by other diagnostic methods. We plan to develop
an effective photonic MRI microcoil product to enable diagnosis of vulnerable
plaque. We are currently negotiating a license with a company that is in the
MRI and microcoil markets.

Photonic technology for deep brain stimulation

Deep brain stimulation (DBS) is a recently approved procedure that uses
an implantable pulse generator that is almost identical to a pacemaker, a
lead that is run under the skin, and a fine metal needle with electrical
contacts that stimulate sites deep in the brain. With further development,
we believe photonic technology would enable DBS patients to safely undergo
MRI, which is increasingly in demand for diagnosing and treating diseases
such as Parkinson's and epilepsy, and also for some behavioral disorders. We
are seeking a licensee willing to fund development of these other
applications. We have applied for patent protection for this application of
our photonic technology.

The research and development expenses incurred by us were $113,144 for
the fiscal year ended February 28, 2001, $949,124 for the fiscal year ended
February 28, 2002, and $837,123 for the nine months ended November 30, 2002.

Markets

The global market for medical devices that could benefit from technology
that will enable those devices to operate safely and effectively in an MRI
environment was approximately $6.4 billion in the year 2000. The total
global market for those 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, we believe that none of these companies has
successfully developed technology enabling implantable medical devices
capable of operating in the presence of MRI equipment.

The major providers of active medical devices companies include 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.

Wilson Greatbatch Technologies, Inc. is the primary supplier of batteries
and components to the pacemaker market, founded by Wilson Greatbatch.

Various first and second tier suppliers to the above companies may be
directly affected by either the photonic or shielding technologies we plan
to commercialize; they are potential additional or alternative prospects
for commercializing our technology.

Manufacturing and Component Strategy

We are is developing technology for MRI safety which will be licensed
to leading biomedical device manufacturers. We will also supply materials
and components.

We believe our value is in providing our technology, access to our
engineering and scientific team, and access to our broad patent portfolio
to manufacturers. We intend to manufacture, working with manufacturing
partners, the critical components and provide them to our licensees by market
segment.

Regulatory Approval

We believe that our technology will be incorporated into various medical
devices 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.

We intend to submit an application to the FDA for our temporary pacing
lead and generator, and turn this file over to our 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 we will work on with pacemaker manufacturers.

Patents and Intellectual Property

* We have filed forty-five (45) applications with the USPTO, and
corresponding international protection.

* The patent strategy being pursued by us 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 (pacemakers
and defibrillators), neurostimulators, drug pumps,endoscopes, biopsy
needles, intraluminal imaging coils, guidewires, instrumentation, and
to other medical devices that need to be made safe and effective in an
MRI environment.

Licenses

We have entered into licenses for issued, allowed and pending patents with
numerous technology providers and consultants, including Johns Hopkins
University for an invention of an MRI safe ECG lead. We also have licenses
with several university professors for various shielding technologies. These
licenses require annual minimum royalties up to $10,000 each, and provide for
ongoing royalties of 4-5% of product sales, if any. They are exclusive for the
medical market or segments thereof, and permit sub-licensing.

Employees

As of November 30, 2002, we had ten employees.

Description of Property

Our 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. Current rentals are $4,475 per month and the lease
expires in September 2004.

LEGAL PROCEEDINGS

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

MANAGEMENT

The officers and directors of Biophan are as follows:

Name Age Title

Guenter H. Jaensch 64 Chairman of the Board
Michael L. Weiner 55 Director, Chief Executive Officer, President
Robert J. Wood 63 Vice-President, Treasurer, Chief Financial
Officer
David A. Miller 48 Secretary
Stuart G. MacDonald 53 Vice-President-Research and Development
Jeffrey L. Helfer 50 Vice-President-Engineering
Robert S. Bramson 64 Director
Steven Katz 54 Director
Ross B. Kenzie 71 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 may be
filled by majority vote of the remaining Directors. Officers serve at the
will of the Board of Directors.

Guenter H. Jaensch, Ph.D is the former Chairman and CEO of Siemens
Pacesetter, Inc., a manufacturer of pacemakers. 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. In 1994, he joined St. Jude Medical as
Chairman and CEO of Pacesetter, Inc., a St. Jude Medical Company, and retired
in 1995 to manage his personal investments. He is currently director of MRV
Communications, a publicly traded company which is a leading company in the
fiber optic technology business. Dr. Jaensch has been a director of Biophan
since March 2002.

Michael L. Weiner has extensive experience in licensing, Mr. Weiner began
his career at Xerox Corp. in 1975, 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 into a suite of
products with licenses to many companies. Weiner is also co-founder of
TextWise and former CEO of Manning & Napier Information Services, a Rochester-
based information and consulting service with over 100 employees. Mr. Weiner
serves on the Boards of Biomed Solutions, LLC, Technology Innovations, LLC,
Nanoset, LLC, Nanocomp, LLC and Speech Compression Technologies, L.P. Mr.
Weiner holds six issued patents and has numerous patents pending. Mr. Weiner
has been a director of Biophan since December 2000.

Robert J. Wood is a Certified Public Accountant with extensive experience
in public accounting and business consulting. From 1973 to 2000, he was owner/
partner of Wood & Company, CPAs, P.C., Mengel, Metzger, Barr & Co., LLP, and
Metzger, Wood & Sokolski, CPAs, all in Rochester, New York. 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

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

Stuart G. MacDonald is experienced in research and development with a
broad engineering and science background, emphasizing a systems approach to
developing complex technology. Mr. MacDonald was previously employed at Ortho-
Clinical Diagnostics, a division of Johnson & Johnson, in Rochester, New York
from 1995 to 2000, 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. Mr. 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's background includes 28 years in product and
technology development, systems management, new business development, and
regulatory affairs, 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, where he was primarily responsible
for systems management of OCD's next-generation clinical chemistry platform.
He also held positions as Director of Regulatory Affairs, Director of New
Business Development, and headed up multiple international and corporate
initiatives to improve product performance and business processes. 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. Mr.
Helfer is a Johnson & Johnson certified Design for Six Sigma Black Belt and a
New York State Professional Engineer.

Robert S. Bramson is an engineer and patent attorney and since 1996 has
been a partner in Bramson & Pressman, a law firm that focuses on patent and
technology licensing matters. Since 1996 he has been President of VAI
Management Corp., a consulting firm that specializes in patent and technology
licensing. He is former head of the Computer and Technology law group of
Schnader, Harrison, Segal & Lewis; 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 has been 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. Mr. Bramson
has been a director of Biophan since July 2001.

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. From January 2000 until
October 2001, Mr. Katz was 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 a Bachelor 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 USA Technologies, Inc., a publicly held
corporation, and several other private companies. Mr. Katz has been a
director of Biophan since July 2001.

Ross B. Kenzie is a former Chairman and Chief Executive Officer of
Goldome Bank, from which he retired in June 1989. Mr. Kenzie is a former
Executive Vice President of Merrill Lynch and served on its board of
directors. 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 was a Director of Millard Fillmore
Hospitals and Past Chairman Emeritus. He served on the Board of the Kaleida
Health, Education and Research Foundation and its Investment Committee. He
was a Director of the Health Systems Agency of Western New York, and was a
member of the Western New York Commission on Health Care Reform. Mr. Kenzie
was a member of the College Council of the State University College at Buffalo
and has served as Chairman for 18 years. He was a Director of the College's
Foundation and a member of its Finance Committee and its Investment
Committee. He served on the Council of the Burchfield-Penney Art Center, and
the Albright Knox Art Gallery and on their Executive Committees. 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 the publicly held Rand Capital Corporation and
many entrepreneurial ventures that are privately held, including Biomed
Solutions LLC and Technology Innovations, LLC. Mr. Kenzie has been a
director of Biophan since December 2000.

Committees

The Board of Directors has an Audit Committee consisting of Mssrs. Bramson,
Katz and Kenzie and a Compensation Committee consisting of Mssrs. Bramson,
Katz and Kenzie. The Audit Committee makes recommendations concerning the
engagement of independent public accountants, reviews with the independent
accountants the results of the audit engagement, approves professional
services provided by the accountants including the scope of non-audit
services, if any, and reviews the adequacy of our internal accounting
controls. The Compensation Committee makes recommendations to the Board
regarding executive and employee compensation and benefits.

Compensation of the Board of Directors

Non-management directors are paid an annual cash fee of $3,500 and a per-
meeting fee of $1,000. In addition, non-management directors receive options
under our Stock Option Plan described below. All directors are reimbursed
reasonable expenses incurred in attending Board meetings. The Company
maintains directors and officers liability insurance.

Conflicts of Interest

Some members of the management of Biophan have other financial and business
interests to which a portion of their time is devoted that may pose inherent
conflicts of interest. There can be no assurance that these officers will
resolve all conflicts of interest in favor of Biophan. Failure of any
executive to conduct Biophan's business in its best interest may result in
liability of that executive to Biophan. Biophan is reimbursed by Biomed
Solutions for the time its management spends on the business of Biomed.

Limitation on Liability of Directors

Under Nevada Revised Statutes Section 78.138, a director or officer is
generally not individually liable to the corporation or its shareholders for
any damages as a result of any act or failure to act in his capacity as a
director or officer, unless it is proven that:

* his act or failure to act constituted a breach of his fiduciary duties
as a director or officer; and

* his breach of those duties involved intentional misconduct, fraud or a
knowing violation of law.

This provision is intended to afford directors protection against and to limit
their potential liability for monetary damages resulting from suits alleging a
breach of the duty of care by a director. As a consequence of this provision,
stockholders of Biophan will be unable to recover monetary damages against
directors for action taken by them that may constitute negligence or gross
negligence in performance of their duties unless such conduct falls within one
of the foregoing exceptions. The provision, however, does not alter the
applicable standards governing a director's fiduciary duty and does not
eliminate or limit the right of Biophan or any stockholder to obtain an
injunction or any other type of non-monetary relief in the event of a breach
of fiduciary duty.

As permitted by Nevada law, Biophan's By-Laws include a provision which
provides for indemnification of a director or officer by the Company against
expenses, judgments, fines and amounts paid in settlement of claims against
the director or officer arising from the fact that he was an officer or
director, provided that the director or officer acted in good faith and in a
manner he or she believed to be in or not opposed to the best interests of the
Company.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.

EXECUTIVE COMPENSATION

The following table summarizes the annual compensation paid to our Chief
Executive Officer during the three years ended February 28, 2002:

Name
and Year Salary Securities
principal underlying
position options/SARs
(a) (b) (c) (g)
------------------------------------------------------------
Michael L. Weiner, 2/29/00 $ -0- -0-
CEO
Michael L. Weiner, 2/28/01 $ 32,812 250,000
CEO
Michael L. Weiner, 2/28/02 $150,600 -0-
CEO

Columnar information required by Item 402(a)(2) has been omitted for
categories where there has been no compensation awarded to, earned by, or
paid to, the named Executive required to be reported in the table during
fiscal 2000, 2001 and 2002.

Stock Options

As of June 22, 2001, the Board of Directors adopted the Biophan
Technologies, Inc. 2001 Stock Option Plan. The Option Plan provides for the
grant of incentive and non-qualified stock options to selected employees, the
grant of non-qualified options to selected consultants and to directors and
advisory board members. The Option Plan is administered by the Compensation
Committee of the Board of Directors and authorizes the grant of options for
2,500,000 shares. The Compensation Committee determines the individual
employees and consultants who participate under the Plan, the terms and
conditions of options, the option price, the vesting schedule of options and
other terms and conditions of the options granted pursuant thereto. Non-
employee directors participate pursuant to the formula set forth in the
Option Plan. Each Director receives an initial grant of 30,000 options,
vesting equally on the first, second and third anniversaries of grant and
annual grants of 10,000 options thereafter. As of November 30, 2002, we had
commitments to issue options to purchase 2,439,997 shares of Common Stock
under the Option Plan. No options were granted to named executives during the
last fiscal year.

Employment Agreements

We have Employment Agreements with all our executive officers.

Mr. Weiner's Agreement provides, among other things, for an annual salary not
less than $175,000. He may be terminated by us for cause, without cause with
ninety days' written notice, upon his death or disability or upon a change in
control of the Corporation. In the event of involuntary termination,
disability or change in control, we will pay (i) the unpaid amount of the base
salary earned through the date of termination (ii) any bonus compensation
earned but not yet paid; and (iii) a severance payment equal to one (1) year
of his then current salary. In addition, the Executive will be immediately
vested in any options, warrants, retirement plan or agreements then in effect.

In the event of termination for cause, all unexercised warrants and
options, whether or not vested, shall be canceled and he will not be eligible
for severance payments.

In the event of voluntary termination, all unvested warrants and options
shall be canceled and he shall have three (3) months from the date of
termination to exercise his rights with respect to any unexercised but vested
options. He will not be eligible for severance payments.

As used in the Employment Agreement, "change in control" means the
occurrence of any one of the following events:

(1) on the date of the merger or consolidation of Biophan with
another entity where the members of the Board, immediately prior
to the merger or consolidation, would not immediately after the
merger or consolidation, constitute a majority of the Board of
Directors of the entity issuing cash or securities in the merger or
consolidation, or (2) on the date of the sale or other disposition of
all or substantially all of the assets of Biophan.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below lists the beneficial ownership of our common stock by
each person known by us to be the beneficial owner of more than 5% of such
securities, as well as the shares of Biophan beneficially owned by each
director and officer and by all directors and officers as a group.

Title of Class: Common

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

*Guenter H. Jaensch(8)
964 Allamanda Drive
Delray Beach, FL 33483 733,334 1.93%

*Michael L. Weiner (3)
693 Summit Drive
Webster, NY 14580 3,535,030 9.05%

Edward F. Cowle
99 Park Avenue
Suite 2230
New York, NY 10016 2,898,600 7.70%

Geoffrey Williams
56 West 400 Street
Suite 200
Salt Lake City, UT 84101 2,389,701 6.35%

Wilson Greatbatch (4)
5935 Davison Road
Akron, NY 14001 5,831,210 15.35%

*Robert S. Bramson (10)
1100 East Hector Street
Suite 410
Consohocken, PA 19428 20,000 .05%

*Ross B. Kenzie (5)
Cyclorama Bldg. Suite 100
369 Franklin Street
Buffalo, NY 14202 20,000 .05%

*Steven Katz (9)
20 Rebel Run Drive
East Brunswick 70,000 .19%

Robert J. Wood (6)
12 Peachtree Lane
Pittsford, NY 14534 146,667 .39%

Stuart G. MacDonald (7)
4663 East Lake Road
Pultneyville, NY 14538 163,334 .43%

Jeffrey H. Helfer (11)
1153 Hidden Valley Trail
Webster, NY 14580 203,334 .54%

David A. Miller
4004 Sunnyside Road
Sandpoint, ID 83864 100,500 .27%

All Officer and Directors as a 4,992,199 12.52%
group (9 persons)

* Member of the Board of Directors

(1) Except as may be set forth below, 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 37,634,693 shares
outstanding as of January 6, 2003, together with applicable options
for such shareholder. Beneficial ownership is determined in
accordance with the rules of the SEC and includes voting and
investment power with respect to shares. Shares subject to options
or warrants currently exercisable or exercisable within 60 days after
January 6, 2003 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, which is the majority owner of Biomed Solutions,
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 1,180,000 shares issuable to
Biomed upon exercise of warrants issued to Biomed. It also includes
283,334 shares issuable upon exercise of options granted to Mr.
Weiner, which shares Mr. Weiner has the right 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 191,667 shares issuable upon exercise
of options granted to Mr. Greatbatch, which shares Mr. Greatbatch has
the right to acquire within 60 days, and includes 150,000 warrants
issued in connection with the Transfer Agreement with Biomed.

(5) Includes 20,000 shares issuable upon exercise of options granted to
Mr. Kenzie, which shares he 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 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 86,667 shares issuable upon exercise of options and warrants
granted to Mr. Wood, which shares he has the right to acquire within
60 days.

(7) Includes 103,334 shares issuable upon exercise of options and
warrants granted to Mr. MacDonald, which shares he has the right to
acquire within 60 days.

(8) Includes 433,334 shares issuable upon exercise of options and
warrants granted to Dr. Jaensch which shares he has the right to
acquire within 60 days.

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

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

(11) Includes 103,334 shares issuable upon exercise of options and
warrants granted to Mr. Helfer, which shares he has the right to
acquire within 60 days.

CERTAIN TRANSACTIONS

(1) Michael L. Weiner, President and Chief Executive Officer of Biophan,
is the Manager and a 42.3% equity member of Technology Innovations,
LLC. TI,LLC is the 57% equity member of Biomed Solutions, LLC
(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 Biophan; TI,LLC
is the record owner of 300,644 shares of common stock of Biophan. As
Manager of TI,LLC and Biomed, Mr. Weiner has control over these
entities. Mr. Weiner is also on the board of Nanoset, LLC, an entity
owned in part by Biomed Solutions, and with which the we have entered
into a technology licensing agreement.

(2) Biomed received 10,759,101 shares of Biophan'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. This payment has been
extended to June 1, 2004, bearing interest at 8% per annum from
February 28, 2002. After June 1, 2004, principal and interest are
payable in 12 equal monthly installments. For several earlier
extensions, Biomed received a total of 375,000 warrants, which
warrants are currently priced as described in footnote 3 below. For
the latest extension, we granted to Biomed warrants to purchase
500,000 common shares at $.50 per share; the number of warrants will
be reduced by 16,667 for each month prior to June 1, 2005 that the
obligation is paid in full.

(3) On June 4, 2002, we executed a line of credit agreement with Biomed
providing for borrowings up to $250,000, and granting warrants for
75,000 shares of common stock to Biomed. On August 19, 2002, the
line was increased $100,000 and the expiration date thereof for that
portion of the line was set at August 19, 2003. The payment date of
amounts borrowed under the original Line was extended to December 1,
2002. In consideration for the increase in the Line, Biomed received
30,000 additional warrants. On November 7, 2002, the maturity date
of the Line was extended until such time as the financing
contemplated by the common stock purchase agreement commences. The
exercise price for all 680,000 warrants then outstanding to Biomed
was set at the lowest of (i) the closing bid price on June 4, 2002;
(ii) the closing bid price on the date of exercise; or (iii) the
lowest per share purchase price paid by any third party between June
4, 2002 and the exercise date.

(4) Wilson Greatbatch has been granted 250,000 options for his consulting
services to us, and 8,333 options as former Chairman of the
Scientific Advisory Board. Through his ownership of Greatbatch Gen-
Aid, Ltd. and his co-trusteeship of a private foundation, he is the
beneficial owner of 5,489,543 common shares of Biophan. He is also
entitled to receive 60% of the consideration payable to Biomed
($500,000) for transfer of the MRI-compatible pacemaker technology to
Biophan. Greatbatch Gen-Aid holds a 3.5% membership interest
(11 Units) in TI,LLC.

(5) Dr. Guenter H. Jaensch has been granted options to purchase 320,000
shares for his consulting services to us.

DESCRIPTION OF SECURITIES

The following summary is a description of the common stock of Biophan and
Biophan's Certificate of Incorporation and Bylaws.

General

Biophan's authorized capital consists of 60,000,000 shares of common
stock, par value $.005 per share.

Common Stock

As of January 6, 2003, Biophan had outstanding 37,634,693 shares of common
stock. Each share of common stock is entitled to one vote at all meetings of
shareholders. Shareholders are not permitted to cumulate votes in the
election of directors. All shares of common stock are equal to each other
with respect to liquidation rights and dividend rights. There are no
preemptive rights to purchase any additional shares of common stock. In the
event of liquidation, dissolution or winding up Biophan, holders of the
common stock will be entitled to receive, on a pro rata basis, all assets of
Biophan remaining after satisfaction of all liabilities and preferences of
outstanding preferred stock, if any. Neither the certificate of
incorporation nor the by-laws of Biophan contain any provisions which limit
or restrict the ability to take over the Company.

CERTAIN STATUTORY PROVISIONS OF THE NEVADA REVISED STATUTES

Sections 78.411 through 78.444 of the Nevada Revised Statutes provides,
in general, that a stockholder acquiring more than 10% of the outstanding
voting shares of a publicly-held Nevada corporation subject to the statutes
(an "Interested Stockholder") may not engage in certain "Combinations" with
the corporation for a period of three years subsequent to the date on which
the stockholder became an Interested Stockholder.

Section 78.416 defines the term "Combination" to encompass a wide variety
of transactions with or caused by an Interested Stockholder in which the
Interested Stockholder receives or could receive a benefit on other than a pro
rata basis with other stockholders, including mergers, certain asset sales,
certain issuances of additional shares to the Interested Stockholder or
transactions in which the Interested Stockholder receives certain other
benefits.

These provisions could have the effect of delaying, deferring or
preventing a change of control of the Company. The Company's stockholders,,
by adopting an amendment to the Certificate of Incorporation or Bylaws of the
Company, may elect not to be governed by these provisions. Neither the
Certificate of Incorporation nor the Bylaws of the Company currently excludes
the Company from these restrictions.

The Nevada Revised Statutes permit a corporation to indemnify its
directors and officers against expenses, judgments, fines and amounts paid in
settlement in cases brought against the officer or director in his capacity
as such, provided the director or officer acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation. The exceptions include a breach of the director's duty of
loyalty, acts or omissions not in good faith or which involve intentional
misconduct or knowing a violation of law, and improper personal benefit. The
Company's By-Laws contain a provision implementing this statute.

Transfer Agent

Biophan's transfer agent for the common stock is Continental Stock Transfer &
Trust Company, 17 Battery Place, New York, NY 10004-1123.

SHARES ELIGIBLE FOR RESALE

Future sales of substantial amounts of common stock in the public market
could adversely affect market prices prevailing from time to time. Under the
terms of this offering, the shares of common stock offered, or the common
shares underlying the warrants, may be resold without restrictions or further
registration under the Securities Act of 1933, except that any shares
purchased by our "affiliates," as that term is defined under the Securities
Act, may generally only be sold in compliance with Rule 144 under the Act.

Certain shares of outstanding common stock were issued and sold by
Biophan in private transactions in reliance upon exemptions from registration
under the Act. Such shares may be sold only pursuant to an effective
registration statement filed by Biophan or an applicable exemption, including
the exemption contained in Rule 144 promulgated under the Act.

In general, under Rule 144 as currently in effect, a shareholder,
including an affiliate of Biophan may sell shares of common stock after at
least one year has elapsed since such shares were acquired from Biophan or an
affiliate of Biophan. The number of shares of common stock which may be sold
within any three-month period is limited to the greater of: (i) one percent
of the then outstanding common stock or (ii) the average weekly trading
volume in the common stock during the four calendar weeks preceding the date
on which notice of such sale was filed under Rule 144. Certain other
requirements of Rule 144 concerning availability of public information,
manner of sale and notice of sale must also be satisfied. In addition, a
shareholder who is not an affiliate of Biophan and who has not been an
affiliate of Biophan for 90 days prior to the sale and who has beneficially
owned shares acquired from Biophan or an affiliate of Biophan for over two
years may resell the shares of common stock without compliance with the
foregoing requirements under Rule 144.

COMMON STOCK PURCHASE AGREEMENT

Effective November 22, 2002, we entered into a restated common stock purchase
agreement with Spectrum Advisors, Ltd., for the future issuance and purchase
of shares of our common stock. This agreement restates and supersedes the
common stock purchase agreement entered into June 6, 2002 with Bonanza
Capital, upon essentially the same terms and conditions. This common stock
purchase agreement establishes what is sometimes termed an equity line of
credit or an equity draw down facility.

Draw Downs

In general, the draw down facility operates as follows. At our sole
discretion and from time to time over the course of 24 months, we may make
unlimited draw down requests, pursuant to which the investor, Spectrum, is
obligated to purchase up to an aggregate of $3.0 million of our common stock.
Spectrum's minimum commitment for each draw request is $37,500. The maximum
amount we can actually draw for each request is limited to 30% of the volume
weighted average price of our common stock multiplied by the average daily
trading volume multiplied by the number of trading days in the applicable
draw down period. We are under no obligation to request a draw down during
any period or, in the absence of such a request, to issue any shares to
Spectrum. If, on any day during the draw down period, the average volume
weighted price of our common stock drops below the minimum threshold price of
$.18, then that day will be excluded from the relevant settlement and the
aggregate amount of our draw down request will be reduced accordingly.

The draw down period will be 3 consecutive trading days. After each 3-
trading-day settlement period, the final draw down amount for that settlement
period is determined. We are entitled to receive funds on the 5th, 8th, 11th,
14th, 17th, 20th and 23rd trading day of each month. The final draw down
amount will be reduced by 1/3rd for each trading day during the draw down
period that the volume weighted average stock price falls below the threshold
price. We then use the formulas in the common stock purchase agreement to
determine the number of shares that we will issue to Spectrum in return for
the final draw down amount. The aggregate total of all draw downs under the
equity draw down facility cannot exceed $3.0 million. However, the Company at
its option may increase Spectrum's commitment up to 50% of the Company's
market capitalization at the time of exercise of the option, not to exceed
$10.0 million. Using its current market capitalization, and subject to the
limits on daily draw-down amount, the Company could increase Spectrum's
commitment to approximately $6,000,000.

The per share price that Spectrum pays for our common stock for each draw
down includes a 20% discount to the average daily market price of our common
stock for each day during the draw down period, weighted by trading volume
during each such trading day. The price per share that Spectrum ultimately
pays is determined by dividing the final draw down amount by the number of
shares that we issue to Spectrum.

The Draw Down Procedure And The Stock Purchases

We may request a draw down by faxing to Spectrum a draw down notice, stating
the amount of the draw down that we wish to exercise and calculating the
number of shares to be issued thereunder.

Amount Of The Draw Downs

No draw down can be less than $37,500. The amount may be increased to 30% of
the weighted average price of our common stock for the 3 days in the draw
down period, ending on the day prior to the date of our request, multiplied
by the average daily trading volume for the 3 days in the draw down period
ending on the day prior to the date of our request, multiplied by the number
of trading days in the draw down period. Additionally, if any of the
following events occur during the draw down period, the investment amount for
that draw down period will be reduced by 1/3 and the volume weighted average
price of any trading day on which the event occurred will have no effect on
the pricing of the shares purchased during that draw down period:

* the volume weighted average price is less than the minimum threshold
price of $.18; or
* trading in our common stock is suspended for more than three hours, in
the aggregate, on any trading day or if any trading day is shortened
because of a public holiday.

Number Of Shares Purchased During A Draw Down

The 3 trading days immediately preceding the draw down notice are used to
determine the number of shares that we will issue in return for the money
provided by Spectrum, which then allows us to calculate the price per share
that Spectrum will pay for our shares.

To determine the number of shares of common stock that we can issue in
connection with a draw down, calculate 1/3 of the draw down amount (i.e.,
$12,500). This amount will be referred to as the "per-day draw down amount."
Then, for each of the 3 trading days immediately preceding the date on which
we give notice of the draw down, divide the per-day draw down amount by 80%
of the volume weighted average daily trading price of our common stock for
that day. This 80% accounts for Spectrum's discount. The sum of these 3 daily
calculations produces the number of common shares that we will issue, unless,
as described above, the volume weighted average daily price for any given
trading day is below the threshold amount, or trading is suspended for any
given trading day, in which case that day is ignored in the calculation.

Sample Calculation Of Stock Purchases

The following is an example of the calculation of the number of shares we
would issue to Spectrum in connection with a draw down based on the assumed
daily prices set forth.

Day VWAP Minimum Commitment Number of Shares
1 .565 $12,500 22,124
2 .607 $12,500 20,593
3 .583 $12,500 21,441

Closing The Transaction

The delivery of the requisite number of shares and payment of the draw down
will take place through our attorneys, Boylan, Brown, Code, Vigdor & Wilson,
LLP, acting as escrow agent. The escrow agent pays the net proceeds to us,
after subtracting its escrow fee and Carolina's placement agent fees. We
would receive the amount of our draw down of $37,500 less a 10% cash fee paid
to Carolina of $3,750 less a $250 escrow fee, for net proceeds to us of
approximately $33,500.

Upon the initial execution of the stock purchase agreement with Bonanza on
June 6, 2002, we paid $10,000 to cover the fees and expenses of purchaser's
counsel, and will pay an additional $15,000 on the first settlement date.
Carolina will receive warrants to purchase 5% of the shares sold to Spectrum
(up to 600,000 shares of our common stock) at a price equal to 110% of the
selling price to Spectrum. Carolina is not obligated to purchase any of our
shares pursuant to the common stock purchase agreement.

Indemnification Of Spectrum

Spectrum is entitled to customary indemnification from us for any losses or
liabilities suffered by it based upon material misstatements or omissions
from the common stock purchase agreement, registration statement and the
prospectus, except as they relate to information supplied by Spectrum to us
for inclusion in the registration statement and prospectus.

SELLING STOCKHOLDERS

All of the securities being offered hereunder are being offered by the
selling shareholders. These holders fall into four categories:

* those who will obtain their shares pursuant to or in connection with
the stock purchase agreement;

* those who obtained their shares (or warrants with underlying common
shares) in a private placement of securities recently conducted by the
Company;

* SBI, who can obtain their shares upon exercise of warrants granted for
financial advisory services to the Company; and

* Biomed Solutions, Inc., which can obtain its shares upon exercise of
warrants granted in consideration of loans to, or forebearance upon
amounts due from, the Company.

The Stock Purchase Agreement

The 12,000,000 common shares registered for resale by Spectrum under this
prospectus would constitute 24% of our issued and outstanding common shares
after such resale. The number of shares we are registering is based in part
on our good faith estimate of the maximum number of shares we may issue to
Spectrum under the common stock purchase agreement. If we do not issue a
draw down request, we are under no obligation to issue any shares to Spectrum
under the common stock purchase agreement. Accordingly, the number of shares
we are registering for issuance under the common stock purchase agreement may
be higher than the number we actually issue under the common stock purchase
agreement. On the other hand, if our estimate is too low, we may need to file
a new registration statement with the SEC, which will need to become
effective before we can request additional draw downs under the common stock
purchase agreement.

Spectrum

Spectrum is engaged in the business of investing in publicly traded equity
securities for its own account. Spectrum's principal offices are located at
38 Hertford Street, London, England. Investment decisions for Spectrum are
made by its board of directors. Spectrum does not currently own any of our
securities as of the date of this prospectus. Other than Spectrum's
obligation to purchase common shares under the common stock purchase
agreement, it has no other commitments or arrangements to purchase or sell
any of our securities. There are no business relationships between Spectrum
and us other than as contemplated by the common stock purchase agreement.

Carolina Financial

Carolina has acted as placement agent in connection with the common stock
purchase agreement. Carolina introduced us to Spectrum and assisted us with
structuring the equity line of credit with Spectrum. Carolina's duties as
placement agent were undertaken on a reasonable best efforts basis only.
Carolina will receive warrants for 5% of the shares purchase by Spectrum, at
an exercise price of 110% of the selling price to Spectrum. It made no
commitment to purchase shares from us and did not ensure us of the successful
placement of any securities. Other than the shares underlying its warrants
which are registered for resale hereunder, Carolina does not own any of our
shares.

Four principals of Carolina, William Prather, Robert Cascella, Michael
Niedswiecki, and Michael Mascia, have also been issued warrants to purchase a
total of 121,572 warrants, consisting of 50,000 warrants at an exercise price
of $.39 per share, 17,520 shares at an exercise price of $.41 per share, and
54,052 shares at an exercise price of $.16 per share. These warrants were
granted for their efforts as placement agent in other private placements
undertaken by the Company and for financial advisory services, and the
underlying common shares have also been registered for resale hereunder.
None of these individuals held any position or office or had any other
material relationship with us or any of our affiliates within the past three
years. To our knowledge, after this offering, none of them will own shares of
our common stock.

Spectrum and Carolina or any of their affiliates have not held any positions
or offices or had material relationships with us or any of our affiliates
within the past three years other than as a result of the ownership of our
common stock. If, in the future, Spectrum's or Carolina's relationship with us
changes, we will amend or supplement this prospectus to update this
disclosure.

The Private Placement

From September 2002 through January 6, 2003, we raised gross proceeds of
$1,385,275 by selling 5,541,100 shares at a per share price of $.25 to 120
investors. Those investors also received warrants to purchase an additional
2,770,550 shares, half at an exercise price of $.25 per share and half at $.50
per share. These shareholders were granted registration rights, and their
shares (including the shares underlying the warrants)are registered for resale
hereunder. The names of these selling shareholders, and the number of shares
offered hereunder are set forth below. None of these shareholders held an
office or directorship or had any other material relationship with us during
the past 3 years, except that Guenter Jaensch, Jeffrey L. Helfer, Stuart
McDonald and Robert J. Wood are officers and/or directors of the Company and
own the number of shares set forth in Security Ownership of Certain Beneficial
Owners and Management. Except as to these named shareholders, to the best of
our knowledge, each of these shareholders will own less than 1% of our
outstanding shares following completion of this offering and the sale of the
shares registered hereunder.

Shares Offered Hereunder

Shareholder Common Shares Warrant shares

Bryan, Jennifer 25,000 12,500
Buchholz, Rick 50,000 25,000
Erhart, Joseph 20,000 10,000
Kahle, Ronald, Jr. 100,000 50,000
Kahle, Terry 20,000 10,000
Knueve, Michael 20,000 10,000
Knueve, Ronald 20,000 10,000
Nienberg, Stephen 40,000 20,000
Recker, Greg 20,000 10,000
Unverferth, Brad 285,000 142,500
Askins, Randall 20,000 10,000
Averesch, Michael 100,000 50,000
Erhart, Brian 30,000 15,000
Gerding, William and Debra 40,000 20,000
Hortstman, Dennis 40,000 20,000
Unverferth, Jason 60,000 30,000
Unverferth, Mel and Beverly 40,000 20,000
Bilski, Dianna 35,800 17,900
Cleary, Brian 20,000 10,000
Fortman, Gary J. and
Deters, Jeffrey R. 20,000 10,000
Fortman, Gary J. 40,000 20,000
Hoellrich, Anthony J. 20,000 10,000
Hoellrich, Daniel L. 20,000 10,000
Hoellrich, Douglas D. 20,000 10,000
Kahle, Terry L. 18,000 9,000
Kahle, Scott L. 20,000 10,000
Klass, Terry 32,000 16,000
Krontz, Gerald E.
and Cherylanne 20,000 10,000
Maag, Phillip D. 40,000 20,000
Sarka, Robert J. 50,000 25,000
Asad, Susan Sutherland 14,000 7,000
Berger, Charles W., Jr. 20,000 10,000
Brown, Meagan 20,000 10,000
Brown, Grayling 16,000 8,000
Bruskotter, Dennis 20,000 10,000
Deters, Jeffrey 40,000 20,000
Donnelly, Michael 20,000 10,000
Fortman, Christopher &
Fortman, Craig 20,000 10,000
Fortman, Karl & Judy 20,000 10,000
Gabor, Constance 80,000 40,000

Gudewicz, Patrice 10,000 5,000
Gudewicz, Richard 20,000 10,000
Hohlbein, Michael 50,000 25,000
Knueve, Ronald & Bonnie 10,000 5,000
Kreinbrink, John 20,000 10,000
Otto, Jon & Karen 20,000 10,000
Rosengarten, Kurt 20,000 10,000
Schimmoeller, Craig &
Brenda 100,000 50,000
Schroeder, Randal & Pamela 20,000 10,000
Scodellaro, James 10,000 5,000
Siefker, Greg 20,000 10,000
Steffey, Billie & Rita 10,000 5,000
Strauer, Robert 10,000 5,000
Utrup, Kurt 10,000 5,000
Vorst, Steven 150,000 75,000
Warnecke, Rick 100,000 50,000
Winkle, Roger 40,000 20,000
Wittlinger, Mona 6,000 3,000
Anstadt, George & Nancy 100,000 50,000
Averesch, Michael 120,000 60,000
Bachmann, Roberta 20,000 10,000
Barnes, Alvin 40,000 20,000
Brashear, Robert 17,000 8,500
Bowman, Donald 10,000 5,000
Glendale Investments, Ltd. 120,000 60,000
Butler, Daniel & Sue 20,000 10,000
Cleary, Michael 10,000 5,000
Conditioning Concepts 20,000 10,000
DeKalb, Daryl 118,500 59,250
Dirty Dozen Investing 45,000 22,500
Eisler, Craig 16,000 8,000
Ellerbrock, Daniel & Carol 20,000 10,000
Estlack, Fred 16,000 8,000
Fortman, Douglas 30,000 15,000
Garman, Richard 80,000 40,000
General Medina Development 11,400 5,700
Grenot, Michael 50,400 25,200
Helfer, Jeffrey L. 100,000 50,000
Jaensch, Guenter & Terri 300,000 150,000
Jeary, Richard 10,000 5,000
Kahle, Carl 20,000 10,000
Kahle, Gary 40,000 20,000
Kahle, Ronald 50,000 25,000
Kahle, Timothy M. 10,000 5,000
Kahle, Timothy R. 20,000 10,000
Kenzie, Allan & Bette 100,000 50,000
Knueve, Dan 20,000 10,000
Knueve, Ed 20,000 10,000
Knueve, Ronald & Bonnie 10,000 5,000
Lippco Capital LLC 50,000 25,000
MacDonald, Stuart 60,000 30,000
Mahley, Mary 100,000 50,000
Mahley, Stephen 100,000 50,000
Masters, Vernon 40,000 20,000
Moore, Dennis 12,000 6,000
Nelson, Laura M. 20,000 10,000
Neu, Julie 10,000 5,000
Newman, Reginald 50,000 25,000
Nowak, Ronald 16,000 8,000
Pierce, Frederick 40,000 20,000

Sarka, Robert 32,000 16,000
Sarka, Robert & Karen 50,000 25,000
Schimmoeller Family Rev.
Living Trust 20,000 10,000
Siefker, Joseph & Doris 20,000 10,000
Siefker, Thomas 20,000 10,000
Slawson, Kenneth 51,000 25,500
Smith, Steven & Mary 20,000 10,000
Terens, Frederick 16,000 8,000
Unverferth, Jeffrey 46,000 23,000
von der Embse, Barry 60,000 30,000
Warnecke, Kevin & Miche 20,000 10,000
Westbay Consulting, In 20,000 10,000
Western Harbor Associa 40,000 20,000
Wittlinger, David 664,000 332,000
Wittlinger, Donna 12,000 6,000
Wittlinger, Mona 26,000 13,000
Wittlinger, Viola 80,000 40,000
Wittlinger, Walter 40,000 20,000
Wood, Robert J. 60,000 30,000

Westbay

Westbay Consulting, Inc., a Nevada corporation, acted as broker-dealer and
financial advisor to the Company in connection with the recently-completed
private placement. For its services, Westbay received 258,006 shares of
common stock, which are registered for sale hereunder. Except in its capacity
as financial advisor, neither Westbay or any principal of Westbay, has had any
office or directorship, or any other material relationship with the Company
during the past three years. To the best of our knowledge, following the
completion of this offering, Westbay will own less than 1% of the outstanding
shares of the Company.

Biomed

Biomed Solutions, LLC is the New York limited liability company which
transferred the MRI technology and the shares of LTR Anti-sense Technology,
Inc. to us on December 1, 2000. It is a shareholder of Biophan and its
Manager is Michael L. Weiner, who is the President and Chief Executive Officer
and a Director of Biophan. Biomed has received warrants to purchase a total
of 1,180,000 common shares, partially as consideration for making available a
line of credit to us and for forbearance of payments relating to the MRI
technology transfer. The Company is registering herewith the shares
underlying those warrants, for resale by Biomed. Following this offering,
Biomed will own 662,857 shares of the Company.

SBI

SBI E2-Capital (USA), Inc. is the U.S. investment banking arm of Softbank
Investment Group Japan. SBI received warrants in consideration of financial
advisory services to be provided to us. Neither SBI nor any principal of SBI
has had any office or directorship or any other material relationship, other
than its investment banking arrangement, with the Company during the past
three years. To the best of our knowledge, following the completion of this
offering SBI will own less than 1% of the outstanding shares of the Company.

PLAN OF DISTRIBUTION

General

Spectrum is offering the common shares for its account as statutory
underwriter, and not for our account. We will not receive any proceeds from
the sale of common shares by Spectrum. Spectrum may offer for sale up to
12,000,000 common shares which it may acquire pursuant to the terms of the
common stock purchase agreement. Spectrum is a statutory underwriter within
the meaning of the Securities Act of 1933 in connection with such sales of
common shares and will be acting as an underwriter in its resales of the
common shares under this prospectus. Spectrum has, prior to any sales, agreed
that its trading activities in our securities will comply with applicable
state and federal securities laws, rules and regulations and the rules and
regulations. We will pay the costs of registering the shares under this
prospectus, including legal fees.

To permit Spectrum to resell the common shares issued to it under the common
stock purchase agreement, we agreed to register those shares and to maintain
that registration. To that end, we have agreed with Spectrum that we will
prepare and file such amendments and supplements to the registration
statement and the prospectus as may be necessary in accordance with the
Securities Act of 1933 and the rules and regulations promulgated thereunder,
to keep it effective until the earliest of any of the following dates:

* the date after which all of the common shares held by Spectrum or its
transferees that are covered by the registration statement have been
sold by Spectrum or its transferees pursuant to such registration
statement;

* the date after which all of the common shares held by Spectrum or its
transferees that are covered by the registration statement may be sold,
in the opinion of our counsel, without restriction under the Securities
Act of 1933; or

* the date after which all of the common shares held by Spectrum or its
transferees that are covered by the registration statement may be sold
pursuant to Rule 144(k) under the Securities Act of 1933, without
limitation as to time, manner of sale or volume.

Shares of common stock offered through this prospectus may be sold from time
to time by Spectrum or the other selling shareholders, or by pledgees,
donees, transferees or other successors in interest to Spectrum or such other
selling shareholders. We will supplement this prospectus to disclose the
names of any pledgees, donees, transferees, or other successors in interest
that intend to offer common stock through this prospectus.

Sales may be made on the OTC.BB or otherwise at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated private transactions, or in a combination of these methods. Each
selling shareholder will act independently of us in making decisions with
respect to the form, timing, manner and size of each sale. We have been
informed by Spectrum and Carolina that there are no existing arrangements
between it and any other stockholder, broker, dealer, underwriter or agent
relating to the distribution of this prospectus. Spectrum is an underwriter
in connection with resales of its shares.

The common shares may be sold in one or more of the following manners:

* a block trade in which the broker or dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;

* purchases by a broker or dealer for its account under this prospectus;

* ordinary brokerage transactions and transactions in which the broker
solicits purchases; or

* privately negotiated transactions as permitted by Rule 15a-6 under the
Exchange Act of 1934.

In effecting sales hereunder, Spectrum or other selling shareholders may
arrange for other brokers or dealers to participate. Except as disclosed in a
supplement to this prospectus, no broker-dealer will be paid more than a
customary brokerage commission in connection with any sale of the common
shares by Spectrum. Brokers or dealers may receive commissions, discounts or
other concessions from the selling stockholders in amounts to be negotiated
immediately prior to the sale. The compensation to a particular broker-dealer
may be in excess of customary commissions. Profits on any resale of the
common shares as a principal by such broker-dealers and any commissions
received by such broker-dealers may be deemed to be underwriting discounts
and commissions under the Securities Act. Any broker-dealer participating in
such transactions as agent may receive commissions from the selling
shareholder, and, if they act as agent for the purchaser of such common
shares, from such purchaser.

Broker-dealers who acquire common shares as principal may thereafter resell
such common shares from time to time in transactions, which may involve
crosses and block transactions and which may involve sales to and through
other broker-dealers. These may include transactions in the over-the-counter
market, in negotiated transactions or otherwise at market prices prevailing at
the time of sale or at negotiated prices. In connection with such resales a
broker-dealer may pay to or receive from the purchasers of such common shares
commissions computed as described above. Brokers or dealers who acquire common
shares as principal and any other participating brokers or dealers may be
deemed to be underwriters in connection with resales of the common shares.

In addition, any common shares covered by this prospectus which qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this prospectus.

However, since Spectrum is an underwriter, Rule 144 of the Securities Act of
1933 is not available to Spectrum to sell its shares.

We will not receive any of the proceeds from the sale of these common shares,
although we have paid the expenses of preparing this prospectus and the
related registration statement of which it is a part.

Spectrum is subject to the applicable provisions of the Exchange Act of 1934,
including without limitation, Rule 10b-5 and Regulation M thereunder. Under
applicable rules and regulations under the Exchange Act of 1934, any person
engaged in a distribution of the common shares may not simultaneously
purchase such securities for a period beginning when such person becomes a
distribution participant and ending upon such person's completion of
participation in a distribution. In addition, in connection with the
transactions in the common shares, Spectrum will be subject to applicable
provisions of the Exchange Act of 1934 and the rules and regulations under
that Act, including, without limitation, the rules set forth above. These
restrictions may affect the marketability of the common shares.

Each selling shareholder will pay all commissions and their own expenses, if
any, associated with the sale of the common shares, other than the expenses
associated with preparing this prospectus and the registration statement of
which it is a part.

Underwriting Compensation and Expenses

The underwriting compensation for Spectrum will depend on the amount of
financing that we are able to obtain under the common stock purchase
agreement, up to a maximum of approximately $ 600,000 if we are able to
obtain the entire $3,000,000 in financing. Spectrum will purchase shares
under the common stock purchase agreement at a price equal to 80% of the
volume weighted average daily price of our common stock on the OTC.BB, as
reported by Bloomberg Financial L.P. for each day in the pricing period with
respect to each draw down request.

In addition, we are obligated to pay Carolina, as compensation for its
services as placement agent, a cash fee equal to 10% of the gross proceeds
received from Spectrum under the common stock purchase agreement for draw
downs under the equity line. The placement agent compensation to Carolina
will depend on the amount of financing that we are able to obtain under the
common stock purchase agreement, up to a maximum of $300,000 if we are able
to obtain the entire $3,000,000 in financing. We also agreed to issue to
Carolina warrants to purchase up to 600,000 shares of our common stock at an
exercise price equal to 110% of the per share purchase price, as calculated
under the Stock Purchase Agreement, on the date of issuance. The warrant will
expire five years from the date of issuance.

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for
Biophan by Boylan, Brown, Code, Vigdor & Wilson, LLP, Rochester, New York.
The firm has been granted options to purchase 40,000 shares of Biophan's
common stock at $.50 per share in connection with services rendered prior to
the commencement of this offering, and an additional 161,290 shares at $.31
per share as partial consideration for its work in connection with this
offering.

EXPERTS

The financial statements of Biophan as of and for the years ended
February 28, 2002 and 2001, appearing in this prospectus have been audited by
Goldstein Golub Kessler LLP, Certified Public Accountants, as set forth in
their report thereon appearing elsewhere herein, and are included in reliance
upon such reports given upon the authority of such firm as experts in
accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

Biophan files current, quarterly and annual reports with the SEC on forms 8-
KSB, 10QSB and 10KSB. Biophan has filed with the SEC a registration
statement on Form SB-2 (together with all amendments and exhibits thereto,
under the Securities Act, with respect to the shares being offered in this
offering. This prospectus does not contain all of the information set forth
in the registration statement, certain items of which are omitted in
accordance with the rules and regulations of the SEC. The omitted information
may be inspected and copied at the Public Reference Room maintained by the
SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You
can obtain information about operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site
that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC at
http://www.sec.gov. Copies of such material can be obtained from the public
reference section of the SEC prescribed rates. Statements contained in this
prospectus as to the contents of any contract or other document field as an
exhibit to the registration statement are not necessarily complete and in
each instance reference is made to the copy of the document filed as an
exhibit to the registration statement, each statement made in this prospectus
relating to such documents being qualified in all respect by such reference.
For further information with respect to Biophan and the securities being
offered hereby, reference is hereby made to such registration statement,
including the exhibits thereto and the financial statements, notes, and
schedules filed as a part thereof.

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 F-1

Consolidated Financial Statements:

Balance Sheet F-2
Statement of Operations F-3
Statement of Stockholders' Equity F-4-F-5
Statement of Cash Flows F-6
Notes to Consolidated Financial Statements F-7-F-14

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 for the period from
August 1, 1968 (date of inception) to February 28, 2002. 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 audits.

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 for the period from
August 1, 1968 (date of inception) 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
-------------------------------------------------------------------------------------------------

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

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.

We are 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.

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
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.

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.

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.

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.

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-
==========================================================

10. 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.

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

CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2002

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

CONTENTS
November 30, 2002
-------------------------------------------------------------------------------

Independent Auditor's Report F-1

Consolidated Financial Statements:

Balance Sheet F-2
Statement of Operations F-3
Statement of Cash Flows F-4
Notes to Consolidated Financial Statements F-5 - F-7

INDEPENDENT ACCOUNTANT'S REPORT
--------------------------------

To the Board of Directors
Biophan Technologies, Inc.

We have reviewed the accompanying condensed consolidated balance sheet of
Biophan Technologies, Inc. and Subsidiaries as of November 30, 2002, and
the related condensed consolidated statements of operations for the nine-month
and three-month periods ended November 30, 2002 and 2001 and the consolidated
statements of cash flows for the nine-month periods ended November 30, 2002
and 2001 and the amount included in the cumulative column in the condensed
consolidated statements of operations and cash flows for the period from
March 1, 2002 to November 30, 2002. These financial statements are the
responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
for them to be in conformity with accounting principles generally accepted in
the United States of America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet as of
February 28, 2002, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended and for the
period from August 1, 1968 (date of inception) to February 28, 2002(not
presented herein). In our report dated April 5, 2002, except for Note 10, as
to which the date was June 7, 2002, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information set
forth in the accompanying condensed consolidated balance sheet as of February
28, 2002, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.

/s/GOLDSTEIN GOLUB KESSLER LLP
New York, New York

January 3, 2003

Pg. F-1

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

CONSOLIDATED BALANCE SHEETS

November 30, 2002
(Unaudited) February 28, 2002
-------------------------------------------

ASSETS
Current Assets:
Cash and equivalents $ 28,053 $ 12,199
Marketable securities, at market value - 568,805
Due from related parties 16,779
Prepaid expenses 130,468 91,819
-------------------------------------------
Total Current Assets 175,300 672,823

Fixed Assets, at cost, net 69,642 80,882

Other Assets:
Intellectual property rights 110,000 110,000
Security deposit 2,933 2,933
Deferred private equity placement costs 20,000 -
Deferred tax asset, net of valuation allowance of
$1,718,000 and $1,305,000 respectively - -
-------------------------------------------
132,933 112,933
-------------------------------------------
$ 377,875 $ 866,638
===========================================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities:
Accounts payable and accrued expenses $ 326,780 $ 129,040
Loan payable to stockholder 143,570
Payable to related party 300,000 500,000
Due to related parties 4,790 16,349
-------------------------------------------
Total Current Liabilities 775,140 645,389

Long-term payable to related party 500,000

Stockholders' Equity (Deficiency):
Common stock, $.005 par value
Authorized, 60,000,000 shares
Issued and outstanding, 32,987,759 and 29,549,439
shares respectively 164,939 147,747
Additional paid-in capital 5,786,427 4,608,407
Deficit accumulated during the development stage (6,848,631) (4,534,905)
-------------------------------------------
(897,265) 221,249
-------------------------------------------
$ 377,875 $ 866,638
===========================================

See Notes to Consolidated Financial Statements.

Pg. F-2

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

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Period from August
Three Months Ended Nine Months Ended 1, 1968 (date of
November 30, November 30, inception) to
2002 2001 2002 2001 November 30, 2002
------------------------------------------------------------------------

Operating expenses:
Salaries and related $ 146,462 $ 149,392 $ 493,589 $ 264,299 $ 1,015,079
Research and development 195,842 284,035 837,123 570,790 1,899,391
Professional fees 104,784 243,357 374,804 415,994 1,724,405
Write-down of intellectual property
rights - - - - 490,000
General and administrative 111,321 194,063 398,930 283,155 901,010
------------------------------------------------------------------------
Operating loss (558,409) (870,847) (2,104,446) (1,534,238) (6,029,885)

Other income(expense):
Interest income 177 11,088 16,878 16,758 44,558
Interest expense (162,862) (292,499) (334,422) (524,117) (887,965)
Other income 47,345 47,109 137,069 47,109 179,104
Other expense (41,020) (28,805) (51,493) (65,086)
------------------------------------------------------------------------
(115,340) (275,322) (209,280) (511,743) (729,389)
------------------------------------------------------------------------
Loss from continuing operations (673,749) (1,146,169) (2,313,726) (2,045,981) (6,759,274)

Loss from discontinued operations - - - - (89,357)
------------------------------------------------------------------------
Net loss $ (673,749) $(1,146,169) $(2,313,726) $(2,045,981) $(6,848,631)
========================================================================
Loss per common share -basic
and diluted $ ( 0.02) $ (0.04) $ (0.08) $ (0.08)
=======================================================
Weighted average shares outstanding 31,902,380 27,270,895 30,359,831 26,228,246
=======================================================

See Notes to Consolidated Financial Statements.

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

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Period from August
Nine Months Ended 1, 1968 (date of
November 30, inception) to
2002 2001 November 30, 2002
---------------------------------------------------

Cash flows - operating activities:
Net loss $ (2,313,726) $ (2,045,981) $ (6,848,631)
Adjustments to reconcile net loss to net cash
used for operating activities:
Depreciation 19,191 3,800 34,120
Unrealized loss on marketable securities - 51,493 38,143
Amortization of interest on convertible note payable 300,000 - 300,000
Losses on marketable securities 28,805 - 28,805
Write-down of intellectual property rights - - 490,000
Amortization of discount on payable to
related party - 46,500 75,000
Issuance of common stock for services - - 101,108
Issuance of common stock for interest - 469,759 468,823
Grant of stock options for services 138,000 - 840,800
Expenses paid by stockholder - - 2,640
Changes in operating assets and liabilities:
Increase in due from related parties (16,779) - (16,779)
Increase in prepaid expenses (38,649) (86,625) (130,468)
Increase in security deposits (2,933)
Increase in accounts payable and
accrued expenses 197,740 840 313,449
Decrease in due to related parties (11,559) (189,362) (38,706)
---------------------------------------------------
(1,696,977) (1,749,576) (4,344,629)
---------------------------------------------------
Cash flows - investing activities:
Purchases of fixed assets (7,951) (31,448) (103,762)
Deferred equity placement costs (20,000) - (20,000)
Cost of web site development - (41,259)
Security deposit - (2,933)
Sales of marketable securities 540,000 - 917,270
Purchases of marketable securities - (984,217) (984,218)
---------------------------------------------------
512,049 (1,059,857) (190,710)
---------------------------------------------------
Cash flows - financing activities:
Proceeds of bridge loans - 986,500 986,500
Loan from stockholder 143,570 - 143,570
Line of credit borrowing from related party 300,000 - 300,000
Net proceeds from sales of capital stock 757,212 1,783,675 3,133,322
---------------------------------------------------
1,200,782 2,770,175 4,563,392
---------------------------------------------------

Net increase(decrease) in cash and cash equivalents 15,854 (39,258) 28,053

Cash and cash equivalents, beginning 12,199 172,092 -
---------------------------------------------------
Cash and cash equivalents, ending $ 28,053 $ 132,834 $ 28,053
===================================================
Supplemental schedule of noncash investing and
financing activities:
Intellectual property acquired through issuance of
capital stock and assumption of related party payable $ - $ - $ 175,000
===================================================
Acquisition of intellectual property $ - $ - $ 425,000
===================================================
Issuance of common stock upon conversion of
bridge loans $ - $ - $ 986,500
==================================================

See Notes to Consolidated Financial Statements.

Pg. F-4

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 2002

INTERIM FINANCIAL STATEMENTS:

The consolidated financial statements as of November 30, 2002 and for the
three and nine months ended November 30, 2002 and 2001 are unaudited.
However, in the opinion of management of the Company, these financial
statements reflect all adjustments, consisting solely of normal recurring
adjustments, necessary to present fairly the financial position and results of
operations for such interim periods. The results of operations for the
interim periods presented are not necessarily indicative of the results to be
obtained for a full year.

BASIS OF CONSOLIDATION

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

ORGANIZATIONAL 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. 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, originally dated December 1, 2000 and subsequently
amended, 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 ("MRI technology purchase liability payable")
The Assignment was consummated pursuant to, and in accordance with, an
Assignment and Security Agreement, originally dated December 1, 2000 and
subsequently amended, by and between the Company and Biomed.

Pg. F-5

PRINCIPAL BUSINESS ACTIVITIES

The Company is developing technologies that make biomedical devices safe for
use in an MRI (Magnetic Resonance Imaging) machine. Many biomedical devices
are prohibited for use in an MRI machine, including pacemakers, cardioverter-
defibrillators, neurostimulators, bladder control devices, insulin pumps with
wire connected sensors, pain control devices, interluminal imaging coils,
interventional catheters and guide wires, endoscopes, and others. The Company
plans to manufacture and market a temporary pacemaker and to supply sub-system
components and intellectual property licenses to manufacturers of other
biomedical devices.

The Company is in the development stage and is expected to remain so for at
least the next twelve months.

LOAN AGREEMENTS:

In June 2002, the Company signed a Loan Agreement with a holder providing
for borrowings of up to $400,000 with interest payable at 8% per annum.
Principal and accrued interest become due and payable on December 31, 2003.
At November 30, 2002, $143,570 had been borrowed under this Agreement.

In June 2002, the Company executed a line-of-credit agreement (the "Line")
with Biomed that provided for borrowings up to $250,000. Interest accrues at
8% per annum. Upon execution of the Line, Biomed received warrants to
purchase 325,000 shares of restricted common stock at $1.00 per share. The
warrants were valued at approximately $234,000 which was recorded as a
discount against the Convertible Promissory Note (the "Note") supporting the
Line. At issuance, the Note was convertible into shares of the Company's
common stock, at a price below the market value of such stock. The intrinsic
value of the beneficial conversion feature of the Note was recorded as an
additional discount, such that the full $250,000 issued was discounted, with
a corresponding increase to additional paid-in capital. On August 19, 2002,
the Line was increased by $100,000 and the expiration date thereof was
extended to August 19, 2003. The payment date of amounts borrowed under the
original Line was extended to December 1, 2002. In consideration for the
increase in the Line, Biomed received additional warrants to purchase shares
of restricted common stock at a price dependent on the Company's traded market
price, as defined. These warrants have no value. The Company has drawn an
additional $50,000 under the Line, which was also fully discounted as a result
of the beneficial conversion feature, which was recorded as additional paid-in
capital. At November 30, 2002, the Company has borrowed $300,000 in aggregate
under the Line.

At it's November meeting, the Board of Directors approved extending the
maturity date of the $500,000 MRI technology purchase liability payable to
Biomed to June 1, 2004 and the Line of Credit loan to such time as funds are
received from the pending registered offering through an institutional
investor.
Pg. F-6

CHANGES IN EQUITY:

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. Gross proceeds of $2,399,750 (net proceeds of
$2,188,332) were received.

In June 2001, the Company entered into bridge loan agreements providing gross
proceeds of $986,500. Loans of $400,000 from one lender provided for a
maturity date of December 15, 2001 and interest payable by issuance of 100,000
shares of stock on the due date. As additional consideration, the noteholder
received 100,000 shares of stock and warrants to purchase an additional
100,000 shares at $1.00 per share. The noteholder had the right to convert
the principal amounts into stock at $.75 per share at any time prior to
maturity. The Company also received proceeds from a series of bridge loans
aggregating $586,500 upon the same general terms as above except that interest
was payable by issuance of 73,324 shares of stock at the maturity date of
October 29, 2001 (extended to November 29, 2001). All bridge lenders
exercised their conversion options on November 29, 2001, at which time the
Company issued 1,315,334 shares of common stock to convert the loans to equity.

During June 2002, the Company entered into a Stock Purchase Agreement with an
institutional investor whereby the Company agreed to sell up to $2,400,000 of
the Company's common stock. In November 2002, the agreement was revised to
provide for sales of stock up to $3,000,000. The agreement requires the
Company 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 immediately after the SEC
declares the above-mentioned Registration Statement effective. The Company is
in the process of filing for registration.

In July and August 2002, the Company entered into finder's agreements for the
sale of restricted common stock to foreign investors pursuant to the exemption
from registration provided in Regulation S of the 1933 Securities Act. The
Company issued a total of 2,186,760 shares of stock for aggregate net proceeds
of $503,412 under these agreements.

Effective August 22, 2002, the Company entered into a finder's agreement with
a domestic consulting firm providing for the sale of restricted shares of
common stock pursuant to Regulation D under the Securities Act. The finder
receives a cash fee of 10% plus stock. Through January 6, 2003, net cash
proceeds of $1,277,772 were received under this agreement.

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

* his act or failure to act constituted a breach of his fiduciary duties
as a director or officer; and

* his breach of those duties involved intentional misconduct, fraud or a
knowing violation of law.

Item 25. Other Expenses of Issuance and Distribution.

SEC registration fee $ 1,534.90
Printing and engraving expenses $ 5,000.00
Legal and accounting fees and expenses $ 50,000.00
------------
TOTAL $ 56,534.90
============

All amounts in the above table are estimated except the SEC registration
fee.

Item 26. Recent Sales of Unregistered Securities.

The securities of Biophan that were issued or sold by the Company within the
past three years and were not registered with the SEC are described below.

On December 1, 2000, we acquired LTR Antisense Technology, Inc., a New York
corporation, from Biomed Solutions, LLC (formerly Biophan, LLC), a New York
limited liability company in a share for share exchange. As a result of the
exchange, LTR became a wholly owned subsidiary. 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 Biophan, LTR and Biomed.
In connection with the exchange, we issued an aggregate of 10,759,101 shares
of common stock to Biomed in exchange for all the issued shares of LTR, and
issued an aggregate of 10,759,101 shares of common stock to a promoter group
consisting of all accredited investors for $175,000 in cash and the
undertaking to assist us in additional capital raising. This transaction was
exempt from registration under section 4(2) of the Securities Act of 1933.

In June 2001, we entered into bridge loan agreements providing gross proceeds
of $986,500. Loans of $400,000 from one lender provided for a maturity date
of December 15, 2001 and interest payable by issuance of 100,000 shares of
stock on the due date. As additional consideration, the noteholder received
100,000 shares of stock and warrants to purchase an additional 100,000 shares
at $1.00 per share. The noteholder had the right to convert the principal
amounts into stock at $.75 per share at any time prior to maturity. We also
received proceeds from a series of bridge loans to 15 accredited investors
aggregating $586,500 upon the same general terms as above except that interest
was payable by issuance of 73,324 shares of stock at the maturity date of
October 29, 2001 (extended to November 29, 2001). Warrants to purchase
146,627 at $1.00 per share were issued to these lenders. All bridge lenders
exercised their conversion options on November 29, 2001, at which time the
Company issued 1,315,334 shares of common stock to convert the loans to
equity. This transaction was exempt from registration under Regulation D,
Rule 506 under the Securities Act of 1933.

Pursuant to a Private Placement Memorandum dated July 2, 2001, we offered to
sell 3,000,000 shares of common stock at $1.00 per share, solely to accredited
investors. The offering was concluded in January 2002. Gross proceeds of
$2,399,750 were received, less offering costs of $254,467. The private
offering was made pursuant to Regulation D, Rule 506 under the Securities
Act. In connection with this offering, we issued a total of 99,667 warrants
at an exercise price of $1.00 per share, to three individuals for their
services in placing a portion of the offering.

In June 2002, a line-of-credit bridge loan agreement was executed with Biomed
Solutions, LLC that provided for borrowings up to $250,000 with interest
payable at 8% per annum. Additionally, Biomed received warrants to purchase
75,000 shares of common stock at $1.00 per share. On August 19, 2002,the
line was increased by $100,000. In consideration of this and for extending the
due date of the Transfer Agreement debt, Biomed received 30,000 additional
warrants and all warrants then held by Biomed (a total of 680,000) were priced
and repriced to be exercisable at the lowest of (i) the closing bid price on
June 4, 2002; (ii) the closing bid price on the date of exercise; or (iii) the
lowest per share purchase price paid by any third party between June 4, 2002
and the exercise date. On November 7, 2002, the maturity of the Line was
extended to the effective date of this registration statement; thereafter, the
loan will be paid over time. Biomed also has the option of converting amounts
due into common stock at the price established by the warrant formula
described above This transaction is exempt under section 4(2) of the
Securities Act of 1933.

In July 2002, we issued warrants to purchase 2,000,000 shares at $1.00 per
share and 1,000,000 shares at $1.50 per share, to SBI E2-Capital (USA), Inc.
as consideration for financial advisory services. These warrants were
replaced on December 8, 2002 by warrants which extended the exercise period
but were otherwise identical to the original warrants. We relied on an
exemption from registration under Section 4(2) of the Securities Act.

Also in July, 2002, we issued warrants to purchase a total of 50,000 shares at
an exercise price of $1.00 per share to 4 individuals in consideration of
certain investment banking services. In November 2002, we issued an
additional 71,572 warrants to three of those 4 individuals in consideration of
services in the nature of finder in connection with a portion of the
Regulation S offering and other loans to the Company. We relied on exemptions
from Registration under Section 4(2) of the Securities Act of 1933.

During August and September 2002, we issued issued a total of 2,186,760 shares
of common stock for gross cash proceeds of $515,397, less commissions and
offering costs of $11,985. In connection with these transactions, we also
issued 99,388 shares of common stock as additional commission. These shares
were issued solely to nonaffiliated, non U.S. persons in offshore transactions
exempt from registration under the Securities Act of 1933 pursuant to
Regulation S.

From September 2002 through January 6, 2003, we raised $1,385,275 by selling
5,541,100 shares at a per share price of $.25 to 200 accredited investors.
Those investors also received warrants to purchase an additional 2,770,550
shares, half at an exercise price of $.25 per share and half at $.50 per
share. In connection with this offering, we paid cash commissions of $107,503
and issued 258,006 shares to broker-dealers in consideration of their
placement of shares. This offering was exempt from registration under
Regulation D, Rule 506 of the Securities Act of 1933.

Item 27. Exhibits.

No.

*EX-2.1 Articles of Merger filed as Exhibit to Form 10-KSB for the
year ended February 29, 2000.

*EX-2.2 Articles of Dissolution filed as Exhibit to Form 10-KSB for
the year ended February 29, 2000.

*EX-2.3 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.

*EX-3.1 Certificate of Incorporation (Nevada) filed as Exhibit to
Form 10-KSB for the year ended February 29, 2000.

*EX-3.2 Bylaws (Nevada) Filed as exhibit to Form 10-KSB for the year
ended February 28, 2002.

*EX-3.3 Amendment to the Articles of Incorporation filed as part of
Form 8-K, filed December 15, 2000.

*EX-3.4 Amendment to Exchange Agreement filed as Exhibit to Form
10-KSB for the year ended February 28, 2001.

*EX-3.5 Certificate of Amendment to Articles of Incorporation filed
as exhibit to Form 8-K on August 27, 2001.

*EX-4.1 Stock Purchase Warrant between the Company and Biomed
Solutions, LLC dated June 4, 2002, filed as Exhibit to Form
10-QSB for the period ended May 31, 2002.

*EX-4.2 Stock Purchase Warrant between the Company and Bonanza
Capital Masterfund LTD, filed as Exhibit to Form 10-QSB for
the period ended May 31, 2002.

*EX-4.3 Restated Stock Purchase Warrant between the Company and Biomed
Solutions, LLC, dated January 8, 2003, filed as Exhibit to Form
10-QSB for the period ended November 30, 2002.

*EX-4.4 Stock Purchase Warrant between the Company and Biomed Solutions, LLC
dated November 11, 2002, filed as Exhibit to Form 10-QSB for the
period ended November 30, 2002.

*EX-4.5 Form of Stock Purchase Warrant issued to principals of Carolina
Financial Services, for a total of 121,572 shares, filed as Exhibit
to Form 10-QSB for the period ended November 30, 2002.

*EX-4.6 Form of Stock Purchase Warrant to be issued to Carolina Financial
services in connection with the Stock Purchase Agreement with
Spectrum Advisors, Ltd, filed as Exhibit to Form 10-QSB for the
period ended November 30, 2002.

*EX-4.7 Form of Stock Purchase Warrant issued to investors in private
placement of securities , for a total of 2,770,550 shares, filed as
Exhibit to Form 10-QSB for the period ended November 30, 2002.

*Ex-4.8 Stock Purchase Warrant issued to SBI E2-Capital (USA), Inc. , filed
as Exhibit to Form 10-QSB for the period ended November 30, 2002.

EX-5.1 Opinion of counsel

*EX-10.1 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.

*EX-10.2 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.

*EX-10.3 Transfer Agreement filed as Exhibit to Form 10-KSB for the
year ended February 28, 2001.

*EX-10.4 Amendment to Transfer Agreement filed as Exhibit to Form
10-KSB for the year ended February 28, 2001.

*EX-10.5 Line of Credit Agreement between the Company and Biomed
Solutions, LLC dated June 4, 2002, filed as Exhibit to Form
10-QSB for the period ended May 31, 2002.

*EX-10.6 Convertible Promissory Note between the Company and Biomed
Solutions, LLC dated June 4, 2002, filed as Exhibit to Form
10-QSB for the period ended May 31, 2002.

*EX-10.7 Loan Agreement between the Company and H. Deworth Williams
dated June 18, 2002, filed as Exhibit to Form 10-QSB for
the period ended May 31, 2002.

*EX-10.8 Stock Purchase Agreement between the Company and Bonanza
Capital Masterfund LTD, filed as Exhibit to Form 10-QSB for
the period ended May 31, 2002.

*EX-10.9 Escrow Agreement between the Company, Bonanza Capital
Masterfund LTD and Boylan, Brown, Code, Vigdor & Wilson LLP,
filed as Exhibit to Form 10-QSB for the period ended May
31, 2002.

*EX-10.10 Registration Rights Agreement between the Company and
Bonanza Capital Masterfund LTD, filed as Exhibit to Form
10-QSB for the period ended May 31, 2002.

*EX-10.11 Executive Employment Agreement between the Company and
Michael L. Weiner dated December 1, 2000, filed as Exhibit
to Form 10-QSB for the period ended May 31, 2002.

*EX-10.12 Executive Employment Agreement between the Company and
Jeffrey L. Helfer dated June 6, 2002, filed as Exhibit to
Form 10-QSB for the period ended May 31, 2002.

*EX-10.13 Executive Employment Agreement between the Company and
Stuart G. MacDonald dated June 6, 2002, filed as Exhibit to
Form 10-QSB for the period ended May 31, 2002.

*EX-10.14 Executive Employment Agreement between the Company and
Robert J. Wood dated June 6, 2002, filed as Exhibit to Form
10-QSB for the period ended May 31, 2002.

*EX-10.15 Financial Accommodations Agreement between the Company and
Bellador (Labuan) Ltd dated July 1, 2002, filed as Exhibit
to Form 10-QSB for the period ended May 31, 2002.

*EX-10.16 Stock Purchase Agreement between the Company and Spectrum
Advisors, LTD., filed as Exhibit to Form 10-QSB for the period
ended November 30, 2002.

*EX-10.17 Escrow Agreement between the Company, Spectrum Advisors, Ltd.
and Boylan, Brown, Code, Vigdor & Wilson LLP., filed as Exhibit to
Form 10-QSB for the period ended November 30, 2002.

*EX-10.18 Registration Rights Agreement between the Company and
Spectrum Advisors, Ltd., filed as Exhibit to Form 10-QSB for the
period ended November 30, 2002.

*EX-16.1 Letter on change of accountants filed as Exhibit to Form
10-KSB for the year ended February 28, 2001.

*EX-16.2 Appointment of independent public accountants filed as
exhibit to Form 8-K on May 7, 2001.

*EX-21 Subsidiaries filed as Exhibit to Form 10-KSB for the year
ended February 28, 2001.

*EX-22.1 Definitve Proxy Statement filed with the Securities and Exchange
Commission on January 10, 2000

*EX-22.2 Definitive Proxy Statement filed with the Securities and
Exchange Commission on June 3, 2001.

EX-23.1 Auditors' Consent - Goldstein, Golub, Kessler, LLP

*EX-23.2 Consent of Boylan, Brown, Code, Vigdor & Wilson, LLP is included in
its opinion filed as Exhibit 5.1.

*EX-24.1 Power of Attorney (included on Signature Page of their Registration
Statement)

*EX-99 2001 Stock Option Plan filed as exhibit to Form 8-K on August
27, 2001.

* 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.

Item 28. Undertakings.

The undersigned registrant hereby undertakes that it will:

(1) File, during any period in which it offers or sells securities, a post-
effective amendment to this Registration Statement to:

(i) Include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;

(ii) Reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; and

(iii) Include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement;

(2) For the purpose of determining any liability under the Securities Act of
1933, treat each such post-effective amendment as a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time to be the initial bona fide offering thereof; and

(3) Remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.

Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purpose of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(3) For the purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
section 13 or 15(d) of the Securities Exchange Act of 1034 that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

SIGNATURES

In accordance with the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form SB-2 and has
authorized this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of West Henrietta,
State of New York on January 15, 2002.

BIOPHAN TECHNOLOGIES, INC.

By: /s/Michael L. Weiner
----------------------------------------
Michael L. Weiner,
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each director and officer whose signature
appears below constitutes and appoints Robert J. Wood as such person's true
and lawful attorney-in-fact and agent, will full powers of substitution and re-
substitution, for such person in name, place and stead, to sign in any and all
amendments (including post-effective amendments) to this Registration
Statement on Form SB-2, in any and all capacities, and to file the same, with
all exhibits thereto and all other documents in connection therewith, with
the Securities and Exchange Commission, granting unto such attorney-in-fact
and agent, and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorney-in-fact and agent may lawfully
do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 15, 2003.

Signature Title Date
--------------------- --------------------------- ---------------

/s/ Michael L. Weiner President, CEO and Director January 15, 2003
---------------------
Michael L. Weiner (Principal Executive Officer)

/s/ Robert J. Wood Vice President, Treasurer and CFO January 15, 2003
--------------------- (Principal Financial and Accounting
Robert J. Wood Officer)
/s/ David A. Miller Secretary January 15, 2003
---------------------
David A. Miller

/s/ Guenter H. Jaensch Director January 15, 2003
---------------------
Guenter H. Jaensch

/s/ Ross B. Kenzie Director January 15, 2003
---------------------
Ross B. Kenzie

/s/ Steven Katz Director January 15, 2003
---------------------
Steven Katz

/s/ Robert S. Bramson Director January 15, 2003
---------------------
Robert S. Bramson