Edgar Filing: BIOPHAN TECHNOLOGIES INC

On August 6, 2007, Biophan Technologies, Inc. (the “Company”) entered into an Intellectual Property Assignment Agreement with Medtronic, Inc., a Minnesota corporation (“Medtronic”), pursuant to which the Company agreed to transfer and sell to Medtronic all of its interest in and to certain intellectual property owned by the Company for an aggregate purchase price of $11,000,000, which amount would have reduced to $10,500,000 if the closing did not occur within 60 days of the execution of the agreement. The intellectual property which the Company is selling consists of the Company’s patents related to MRI safety of implantable medical devices, including pacemakers.

On October 10, 2007, the Company announced the closing of the sale to Medtronic, Inc. of certain intellectual property. A copy of the press release that discusses this matter is attached hereto as Exhibit 99.1 and is incorporated by reference in this Item 7.01. In accordance with Regulation FD, this current report is being filed to publicly disclose all information that was provided in the press release. This report under Item 7.01 is not deemed an admission as to the materiality of any information in this report that is required to be disclosed solely by Regulation FD.

Condensed Consolidated Balance Sheet
	Historical				Pro Forma			Pro Forma
	May 31, 2007				Adjustments			May 31, 2007

ASSETS
Current assets:
Cash and cash equivalents	$	740,354		(1)	$	11,000,000		$	11,740,354
Accounts receivable		12,427							12,427
Prepaid expenses		108,850							108,850
Other current assets		45,764							45,764
Total current assets		907,395				11,000,000			11,907,395
Property and equipment, net		401,466							401,466
Other assets:
Intangible assets, net of amortization
Myotech, LLC		22,729,640							22,729,640
Other		1,299,154		(2)		(66,500	)		1,232,654
Deferred financing costs, net of amortization		1,221,627							1,221,627
Investment in New Scale Technologies, Inc.		100,000							100,000
Deposits		206							206
Deferred tax asset, net of valuation allowance		--							--
		25,350,627				(66,500	)		25,284,127
	$	26,659,488			$	10,933,500		$	37,592,988

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
Current liabilities:
Current portion of capital lease obligation	$	9,610						$	9,610
Current portion of senior secured convertible
notes, net of discount		1,315,315							1,315,315
Accounts payable and accrued expenses		2,414,202							2,414,202
Liquidated damages payable		652,500							652,500
Note payable		60,050							60,050
Line of credit - related party		4,430,000							4,430,000
Due to related parties		79,430							79,430
Deferred revenues		145,833							145,833
Total current liabilities		9,106,940							9,106,940
Long-term debt:
Capital lease obligation		23,757							23,757
Senior secured convertible notes payable, less
discount		1,397,525							1,397,525

Total liabilities		10,528,222							10,528,222
Minority interest		12,657,272							12,657,272
Stockholders’ equity:
Common stock		417,158							417,158
Additional paid-in capital		61,034,639							61,034,639
		61,451,797							61,451,797
Less treasury stock		(8,467,698	)						(8,467,698	)
		52,984,099							52,984,099
Deficit accumulated during the development stage		(49,510,105	)	(1) (2)		10,933,500			(38,576,605	)
Total stockholders’ equity		3,473,994				10,933,500			14,407,494

	$	26,659,488			$	10,933,500		$	37,592,988

Condensed Consolidated Statement of Operations
	Historical							Pro Forma
	Three Months				Pro forma			Three Months
	May 31, 2007				Adjustments			May 31, 2007
Revenues:
Sale of intellectual property rights	$	--		(1)	$	11,000,000		$	11,000,000
License fees		62,500							62,500
Grant revenues		50,000							50,000
Consulting fees		59,833							59,833
		172,333				11,000,000			11,172,333
Operating expenses:
Research and development		1,319,947		(2)		(3,500	)		1,316,447
General and administrative		1,487,670							1,487,670
Write-off of intellectual property rights		--		(2)		70,000			70,000
		2,807,617				66,500			2,874,117
Operating income(loss)		(2,635,284	)			10,933,500			8,298,216
Other income(expense):
Interest income		15,441							15,441
Interest expense		(1,384,901	)						(1,384,901	)
Change in fair value of warrant liability		4,339,214							4,339,214
Liquidated damages		(652,500	)						(652,500	)
Other income		28,175							28,175
		2,345,429							2,345,429
Loss from continuing operations before minority
interest in Myotech, LLC		(289,855	)			10,933,500			10,643,645
Minority interest in Myotech, LLC		471,819							471,819
Income before income tax benefit		181,964				10,933,500			11,115,464
Income tax provision		--		(3)		--			--
Net income	$	181,964			$	10,933,500		$	11,115,464
Net income per common share:
Basic	$	0.002						$	0.142
Diluted	$	0.002						$	0.141
Weighted average shares outstanding:
Basic		78,508,619							78,508,619
Diluted		78,886,445							78,886,445

Nevada	000-26057	82-0507874
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(IRS Employer Identification No.)


	BIOPHAN TECHNOLOGIES, INC.

Dated: October 10, 2007	By:	/s/ John F. Lanzafame
		Name: John F. Lanzafame
		Title: Chief Executive Officer