UNITED STATES

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

[X]Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to §240.14a-12

PHYTOMEDICAL TECHNOLOGIES, INC.

(Name of Registrant As Specified In Its Charter)

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[X] No fee required

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[ ] Fee paid previously with preliminary materials.

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4) Date Filed:_________________________________________

PHYTOMEDICAL TECHNOLOGIES, INC.

100 Overlook Drive, 2nd Floor

Princeton, New Jersey, 08540

Telephone: 800-611-3388

July 20, 2007

Dear Stockholders:

You are cordially invited to attend the 2007 Annual Meeting of Stockholders of PhytoMedical Technologies, Inc. The meeting will be held at 2:00 p.m., local time, on September 20, 2007, at the Marriott Courtyard Somerset, 250 Davidson Avenue, Somerset, New Jersey. Enclosed are the official notice of this meeting, a proxy statement, a form of proxy, and the 2006 Annual Report on Form 10-KSB for the year ended December 31, 2006.

At this meeting you will be asked to elect directors to serve until the next annual meeting, ratify the selection of the Company's independent auditors for 2007, and to transact any other business as may properly come up before the meeting.

Please note that attendance at the Annual Meeting will be limited to stockholders of record at the close of business on July 18, 2007, and to guests of the Company.

If your shares are registered in your name and you plan to attend the Annual Meeting, please bring the enclosed ballot with you to the meeting.

If your shares are held by a broker, bank or other nominee and you plan to attend the meeting, please contact the person responsible for your account regarding your intention to attend the meeting so they will know how you intend to vote your shares at that time.

Stockholders who do not expect to attend the Annual Meeting in person may submit their ballot to the Management of the Company at 100 Overlook Drive, 2nd Floor, Princeton, New Jersey.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Greg Wujek

Greg Wujek

President and CEO

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

OF PHYTOMEDICAL TECHNOLOGIES, INC. TO BE HELD SEPTEMBER 20, 2007

To the Stockholders of PhytoMedical Technologies, Inc.:

NOTICE IS HEREBY GIVEN that the 2007 Annual Meeting of Stockholders (the "Annual Meeting") of PhytoMedical Technologies, Inc., a Nevada corporation (the "Company"), will be held at Marriott Courtyard Somerset, 250 Davidson Avenue, Somerset, New Jersey, on the 20th day of September, 2007, at 2:00 p.m. (local time) for the following purposes:

To elect 4 directors to the Board of Directors to serve until the next Annual Meeting of stockholders or until their respective successors are duly elected and have qualified;

To ratify the appointment of Peterson Sullivan, PLLC as the Company's independent auditor for the fiscal year ending December 31, 2007;

To transact any and all other business that may properly come before the Annual Meeting or any adjournment(s) thereof.

Pursuant to the Company's Bylaws (the "Bylaws"), the record date (the "Record Date") for the determination of stockholders entitled to notice of and to vote at such meeting or any adjournment(s) thereof shall be the close of business on July 18, 2007. Only holders of record of the Company's Common Stock at the close of business on the Record Date are entitled to notice of and to vote at the Annual Meeting. Shares can be voted at the Annual Meeting only if the holder is present or represented by proxy. The stock transfer books will not be closed.

A copy of the Company's 2006 Annual Report to Stockholders, in the form of the 10-KSB filed with the Securities and Exchange Commission, which includes audited financial statements, has been included in this mailing to the Company's stockholders. A list of stockholders entitled to vote at the Annual Meeting will be available for examination at the offices of the Company for ten (10) days prior to the Annual Meeting.

You are cordially invited to attend the Annual Meeting; whether or not you expect to attend the meeting in person, however, you are urged to mark, sign, date, and mail or telefax the enclosed form of proxy promptly so that your shares of stock may be represented and voted in accordance with your wishes and in order that the presence of a quorum may be assured at the meeting. Your proxy will be returned to you if you should be present at the Annual Meeting and should request its return in the manner provided for revocation of proxies on the initial page of the enclosed proxy statement.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Greg Wujek

Greg Wujek

President and CEO

Princeton, NJ

July 20, 2007

PHYTOMEDICAL TECHNOLOGIES, INC.

100 Overlook Drive, 2nd Floor

Princeton, New Jersey, 08540

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD SEPTEMBER 20, 2007

SOLICITATION AND REVOCABILITY OF PROXIES

The accompanying proxy is solicited by the Board of Directors on behalf of PhytoMedical Technologies, Inc., a Nevada corporation (the "Company"), to be voted at the 2007 Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be held on September 20, 2007, at the time and place and for the purposes set forth in the accompanying Notice of Annual Stockholders (the "Notice") and at any adjournment(s) thereof. When proxies in the accompanying form are properly executed and received, the shares represented thereby will be voted at the Annual Meeting in accordance with the directions noted thereon; if no direction is indicated, such shares will be voted FOR the election of the nominees listed thereon, FOR the ratification of the independent auditor, and in their discretion with respect to any other matters that may properly come before the stockholders at the Annual Meeting.

The executive offices of the Company are located at, and the mailing address of the Company is, 100 Overlook Drive, 2nd Floor, Princeton, New Jersey, 08540.

Management does not anticipate that any matters will be presented at the Annual Meeting other than matters set forth in the Notice.

This proxy statement (the "Proxy Statement") and accompanying proxy are being mailed on or about August 3, 2007. The Company's Annual Report on Form 10-KSB (the "2006 Annual Report"), which serves as the Annual Report to Stockholders, covering the Company's fiscal year ended December 31, 2006, is attached.

Any stockholder of the Company giving a proxy has the right to revoke their proxy at any time prior to the voting thereof by voting in person at the Annual Meeting, by delivering a duly executed proxy bearing a later date or by giving written notice of revocation to the Company addressed to Greg Wujek, President, 100 Overlook Drive, 2nd Floor, Princeton, New Jersey, 08540; no such written notice shall be effective, however, until such notice of revocation has been received by the Company at or prior to the Annual Meeting.

In addition to the solicitation of proxies by use of the mail, officers and regular employees of the Company may solicit the return of proxies, either by mail, telephone, telefax, telegraph or through personal contact. Such officers and employees will not be additionally compensated but will be reimbursed for out-of-pocket expenses. Brokerage houses and other custodians, nominees, and fiduciaries will, in connection with shares of the Company's common stock, $0.00001 par value per share (the "Common Stock"), registered in their names, be requested to forward solicitation material to the beneficial owners of such shares of Common Stock.

The cost of preparing, printing, assembling, and mailing the 2006 Annual Report, the Notice, this Proxy Statement, and the enclosed form of proxy, as well as the cost of forwarding solicitation materials to the beneficial owners of shares of Common Stock and other costs of solicitation, are to be borne by the Company.

QUORUM AND VOTING

The record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting was the close of business on July 18, 2007 (the "Record Date"). On the Record Date, there were 189,714,957 shares of Common Stock issued and outstanding.

Each share of Common Stock is entitled to one vote on all matters to be acted upon at the Annual Meeting, and neither the Company's Certificate of Incorporation (the "Certificate of Incorporation") nor its Bylaws allow for cumulative voting rights. The presence, in person or by proxy, of the holders of a majority of the issued and outstanding Common Stock entitled to vote at the meeting is necessary to constitute a quorum to transact business. If a quorum is not present or represented at the Annual Meeting, the stockholders entitled to vote thereat, present in person or by proxy, may adjourn the Annual Meeting from time to time without notice or other announcement until a quorum is present or represented. Assuming the presence of a quorum, the affirmative vote of a plurality of votes cast is required for the election of each of the nominees for director. A majority of the votes represented and entitled to vote at the Annual Meeting will be required for the approval of all other matters to be voted upon. Abstentions and broker non-votes will each be counted towards the presence of a quorum, but (i) will not be counted as votes cast and, accordingly, will have no effect on the plurality vote required for the election of directors, and (ii) will be counted as votes represented at the Annual Meeting and, accordingly, will have the effect of a vote "against" all other matters to be acted upon.

Proxies in the accompanying form which are properly executed and returned to the Company will be voted at the Annual Meeting in accordance with the instructions contained in such proxies and, at the discretion of the proxy holders, on such other matters as may properly come before the meeting. Where no such instructions are given, the shares will be voted for the election of each of the nominees for director and the ratification of Peterson Sullivan, PLLC.

A stockholder that intends to present a proposal at the 2007 Annual Meeting of Stockholders for inclusion in the Company's proxy statement and form of proxy relating to such meeting must submit such proposal by August 20, 2007. The proposal must be mailed to the Company's offices at 100 Overlook Drive, 2nd Floor, Princeton, New Jersey, 08540.

SUMMARY

The Company, a Nevada Corporation, has an authorized capital of 301,000,000 shares of which 300,000,000 shares are $0.00001 par value common stock, with 189,714,957 outstanding, and 1,000,000 shares are $0.25 par value preferred stock, of which none are outstanding.

PhytoMedical Technologies, Inc., together with its subsidiaries, is a pharmaceutical company focused on research, development and commercialization of pharmaceutical products.

The Company's 2006 Annual Report provides a review of our operations during the past year.

The following is a brief summary of certain information contained elsewhere in this Proxy Statement. This summary is not intended to be complete and is qualified in all respects by reference to the detailed information appearing elsewhere in this Proxy Statement and the exhibit hereto.

THE MEETING

Date, Time and Place of the Annual Meeting

The Annual Meeting of PhytoMedical Technologies, Inc. is scheduled to be held on September 20, 2007, at 2:00 p.m. (local time) at the Marriott Courtyard Somerset, 250 Davidson Avenue, Somerset, New Jersey.

Record Date

Only holders of record of shares of Common Stock at the close of business on July 18, 2007, are entitled to receive notice of and to vote at the Annual Meeting.

Vote Required

Assuming the presence of a quorum, the affirmative vote of a plurality of votes cast is required for the election of each of the nominees for director. A majority of the votes cast with a quorum present at the Annual Meeting will be required for the approval of all other matters to be voted upon.

Accountants

Peterson Sullivan, PLLC has been selected by the Company to act as its independent auditor for 2007. It is not expected that the representatives of Peterson Sullivan, PLLC will attend the Annual Meeting or be available to answer questions from the stockholders.

Recommendations

THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR ("PROPOSAL 1"), AND VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF PETERSON SULLIVAN, PLLC AS THE COMPANY'S INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING DECEMBER 31, 2007 ("PROPOSAL 2").

PROPOSAL NO. 1:

ELECTION OF BOARD MEMBERS

Nominees

The Company's Board of Directors is currently comprised of four directors. Each of the nominees is presently a director of the Company. If so directed in the enclosed proxy, the persons named in such proxy will vote the shares represented by such proxy for the election of the following named nominees for the office of director of the Company, to hold office until next annual meeting of the stockholders or until their respective successors shall have been duly elected and shall have qualified.

Information Concerning Nominees

Name

Age

Position

Director/Officer Since

Greg Wujek

Director, President and CEO

April 2006

Gary Branning

Director

September 2006

Rick Henson

Director

September 2006

Harmel S. Rayat

Director, Secretary, Treasurer

December 2000

The Board of Directors does not contemplate that any of the above-named nominees for director will refuse or be unable to accept election as a director of the Company, or be unable to serve as a director of the Company. Should any of them become unavailable for nomination or election or refuse to be nominated or to accept election as a director of the Company, then the persons named in the enclosed form of proxy intend to vote the shares represented in such proxy for the election of such other person or persons as may be nominated or designated by the Board of Directors. No nominee is related by blood, marriage, or adoption to another nominee or to any executive officer of the Company or its subsidiaries or affiliates.

Assuming the presence of a quorum, each of the nominees for director of the Company requires for his election the approval of a plurality of the votes cast by the shares of Common Stock entitled to vote at the Annual Meeting.

The Board of Directors regard all of the individuals being nominated to the Board as extremely competent professionals with many years of experience in different fields of endeavor, including sales and marketing, management, healthcare, and corporate finance and development. The Board feels that this collective base of experience and knowledge is crucial in the overall development of the Company's business.

Information Concerning Current Officers and Directors

The following narrative describes the positions held by the Company's current officers and directors. During 2006, each board member attended at least 75% of the board meetings that were held while they were in office.

GREG WUJEK (Age 45). President, Chief Executive Officer, Director. Mr. Greg Wujek earned his Bachelor’s degree in Science from Illinois State University in 1986. From November 2000 to May 2005, Mr. Wujek was employed by Andrx Laboratories. During his tenure at Andrx Laboratories, Mr. Wujek managed a team of over 450 individuals, and held several positions, including Vice President of Business Development, Vice President of Sales, as well as Vice President of Managed Care. During June 2005 to September 2005, Mr. Wujek performed independent consulting services for branded pharmaceutical companies. Consulting services ranged from sales management training, optimizing sales, managed care, and sales operations. From September 2005 to March 2006, Mr. Wujek was employed by Savient Pharmaceuticals, where he held the position of Vice President, Sales, and was responsible for sales, operations, training, and managed care. Mr. Wujek joined the Company as President, Chief Executive Officer and Director on April 3, 2006.

GARY BRANNING (Age 53) Director. Mr. Branning received his Bachelor of Science degree in Business Administration from Wagner College, on Staten Island, NY, and an MBA in finance from Fairleigh Dickinson University. In 2001, Mr. Branning joined Pharmacia Corporation. Mr. Branning was the Executive Director of Managed Markets Marketing for Pharmacia Corporation. The Marketing Unit of the Managed Markets Marketing of Pharmacia was a service organization focused on the development of brand programs, value added services and health management programs in managed markets. In 2003, Mr. Branning joined Managed Market Resources, a health care consulting and medical communications company as Managing Partner and Senior Vice President of Managed Market Resources. Mr. Branning’s responsibilities included strategic consulting, new product development, business development, and executing Managed Market Resource’s sales and marketing plans. Mr. Branning joined the Company as a Director on September 13, 2006.

RICK HENSON (Age 57). Director. Mr. Henson earned his Bachelor’s degree in Education from Wichita State University. In 2001, Mr. Henson joined Andrx Corporation, where he held the position of Senior Vice President of Sales, and was responsible for sales, operations, and training. During his tenure at Andrx Corporation, Mr. Henson built a 500-plus person branded sales division from inception and increased division sales to $120 million. Andrx Laboratories was recently acquired by Watson Pharmaceuticals for $1.9 billion. In 2005, Mr. Henson joined Vernalis Pharmaceuticals, Inc. as a consultant to start up a US commercial operation and was responsible for strategic planning, training, sales management and product acquisition. In 2006, Mr. Henson accepted the position of Vice President of Sales with complete oversight of sales function for Vernalis US. Mr. Henson joined the Company as a Director on September 13, 2006.

HARMEL S. RAYAT (Age 46). Secretary, Treasurer, Chief Financial Officer, Principal Accounting Officer, Director. Mr. Rayat has been in the brokerage and venture capital industry since 1981. Between January 1993 and April 2001, Mr. Rayat served as the president of Hartford Capital Corporation, a company that provided financial consulting services to a wide range of emerging growth corporations. From April 2001 through January 2002, Mr. Rayat acted as an independent consultant advising small corporations and since January 2002, he has been president of Montgomery Asset Management Corporation, a privately held firm providing financial consulting services to emerging growth corporations. Mr. Rayat has served, and continues to serve, as a director, executive officer and majority shareholder of a number of publicly traded and privately held corporations, including, Hepalife Technologies, Inc., Entheos Technologies, Inc., and International Energy, Inc. Mr. Rayat has served as one of our directors since December 4, 2000. In 2002 he was appointed secretary and treasurer. On August 12, 2005 he was appointed our president and chief executive and financial officer, as well as our principal accounting officer. On April 3, 2006, Mr. Rayat resigned as President and Chief Executive Officer.

There are no family relationships among or between any of our officers and directors.

During the past five years, except as set forth below, none of our directors, executive officers, promoters or control persons has been:

(a) the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(b) convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

(c) subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

(d) found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

Mr. Harmel S. Rayat, EquityAlert.com, Inc., Innotech Corporation and Mr. Bhupinder S. Mann, a former part-time employee of ours (collectively the “respondents”), consented to a cease-and-desist order pursuant to Section 8A of the Securities Act of 1933. The matter related to the public resale by EquityAlert of securities received as compensation from or on behalf of issuers for whom EquityAlert and Innotech provided public relation and stock advertising services; Mr. Rayat was the president of Innotech and Equity Alert was the wholly-owned subsidiary of Innotech at the time.

The U.S. Securities & Exchange Commission contended and alleged that Equity Alert had received the securities from persons controlling or controlled by the issuer of the securities, or under direct or indirect common control with such issuer with a view toward further distribution to the public; as a result, the U.S. Securities & Exchange Commission further alleged that the securities that Equity Alert had received were restricted securities, not exempt from registration, and hence could not be resold to the public within a year of their receipt absent registration; and, accordingly, the U.S. Securities & Exchange Commission further alleged, since Equity Alert effected the resale within a year of its acquisition of the securities, without registration, such resale violated Sections 5(a) and 5(c) of the Securities Act.

Without admitting or denying any of the findings and/or allegations of the U.S. Securities & Exchange Commission the respondents agreed, on October 23, 2003 to cease and desist, among other things, from committing or causing any violations and any future violations of Section 5(a) and 5(c) of the Securities Act of 1933. EquityAlert.com, Inc. and Innotech Corporation agreed to pay disgorgement and prejudgment interest of $31,555.14.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the Company's directors, officers and persons who own more than 10 percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission ("the Commission"). Directors, officers and greater than 10 percent beneficial owners are required by applicable regulations to furnish the Company with copies of all forms they file with the Commission pursuant to Section 16(a). Other than Mr. Harmel S. Rayat, the Company is not aware of any beneficial owner of more than 10 percent of its registered Common Stock for purposes of Section 16(a).

Based solely upon a review of the copies of the forms furnished to the Company, the Company believes that during fiscal 2006 all filing requirements applicable to its directors and executive officers were satisfied.

Director Compensation

Certain Directors of the Company are a paid a stipend of $250 per month, plus $100 for each Directors’ meeting attended. All Directors are reimbursed for any out-of-pocket meeting expenses.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE INDIVIDUALS NOMINATED FOR ELECTION AS A DIRECTOR.

PROPOSAL NO. 2:

THE RATIFICATION OF THE APPOINTMENT OF PETERSON SULLIVAN, PLLC

AS THE COMPANY’S INDEPENDENT AUDITOR

The Board of Directors has selected Peterson Sullivan, PLLC as independent auditors for the Company for the fiscal year ending December 31, 2007, subject to ratification of the selection by shareholders. Peterson Sullivan, PLLC has served as independent public accountants for the Company since March 13, 2006, prior to which the firm of Ernst & Young, LLP served as the Company's independent public accountants from May 5, 2005.

To the knowledge of the Company, at no time has Peterson Sullivan, PLLC had any direct or indirect financial interest in or any connection with the Company or any of its subsidiaries other than in connection with services rendered to the Company as described below.

It is not expected that the representatives of Peterson Sullivan, PLLC or any other auditors will attend the Annual Meeting. Peterson Sullivan, PLLC has not indicated their desire to make a statement. They will respond to written questions submitted to the Company.

During and for the year ended December 31, 2006, Peterson Sullivan, PLLC provided the following audit, audit-related and other professional services for the Company. The services were as follows:

the audit of the annual financial statements included in the Company’s Form 10-KSB;

Consultation in connection with various tax and accounting matters; and

Certain other professional services.

The cost of providing these services during and for the year ended December 31, 2006, by specified categories, were as follows:

Audit Fees: $9,851 These fees covered the audit of the Company’s annual financial statements.

Financial Information Systems Design and Implementation Fees: None

All Other Fees: $0 These fees covered services principally involving internal audit support and income tax consulting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF PETERSON SULLIVAN, PLLC AS THE COMPANY'S INDEPENDENT AUDITOR.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of July 20, 2007, the beneficial ownership of the Company's Common Stock by each director and executive officer of the Company and each person known by the Company to beneficially own more than 5% of the Company's Common Stock outstanding as of such date and the executive officers and directors of the Company as a group.

Number of Shares

Person or Group

of Common Stock

Percent

Harmel S. Rayat (1)

117,561,471

62%

216-1628 West First Avenue

Vancouver, B.C. V6J 1G1 Canada

Greg Wujek (2)

2,000,000

100 Overlook Drive, 2nd Floor

Princeton, NJ 08540

Gary Branning

100 Overlook Drive, 2nd Floor

Princeton, NJ 08540

Rick Henson

100 Overlook Drive, 2nd Floor

Princeton, NJ 08540

Indy Panchi (3)

216-1628 West First Avenue

Vancouver, B.C. V6J 1G1 Canada

Derek Cooper (4)

216-1628 West First Avenue

Vancouver, B.C. V6J 1G1 Canada

Directors and Executive Officers

119,561,471

62%

as a group (6 persons)

(1) Includes 31,300 shares held by Tajinder Chohan, Mr. Rayat's wife. Additionally, other members of Mr. Rayat's family hold shares and share purchase warrants. Mr. Rayat disclaims beneficial ownership of the shares and share purchase warrants beneficially owned by his wife and other family members.

(2) 2,000,000 stock options were granted on August 1, 2006, which may be acquired pursuant to options granted and exercisable under the Company's stock option plans.

(3) Mr. Indy Panchi resigned as a Director on September 13, 2006

(4) Mr. Derek Cooper resigned as a Secretary, Treasurer and Director on September 13, 2006

Voting Intentions of Certain Beneficial Owners and Management

The Company's directors and officers have advised that they will vote the 117,561,471 shares owned or controlled by them FOR each of the Proposals in this Proxy Statement. These shares represented 62% of the outstanding Common Stock of the Company as of July 20, 2007.

Remuneration and Executive Compensation

The following table shows, for the three-year period ended December 31, 2006, the cash compensation paid by the Company, as well as certain other compensation paid for such year, to the Company's Chief Executive Officer and the Company's other most highly compensated executive officers. Except as set forth on the following table, no executive officer of the Company had a total annual salary and bonus for 2006 that exceeded $100,000.

Summary Compensation Table

Securities

Underlying

Name and

Options

All Other

Principal Position Year

Salary

Bonus

Other

Granted

Compensation

Greg Wujek

2006

$161,250

2,000,000

President, CEO

2005

and Director

2004

Harmel S. Rayat

2006

$3,900

Secretary, Treasurer

2005

$1,800

and Director

2004

$3,500

Gary Branning

2006

$1,200

Director

2005

2004

Rick Henson

2006

$1,200

Director

2005

2004

Indy Panchi (1)

2006

$2,850

Director

2005

$2,400

2004

$4,700

Derek Cooper, (2)

2006

$2,850

Secretary, Treasurer

2005

$1,800

and Director

2004

$3,500

(1) Mr. Indy Panchi resigned as a Director on September 13, 2006

(2) Mr. Derek Cooper resigned as a Secretary, Treasurer and Director on September 13, 2006

Stock Option Grants in Last Fiscal Year

Shown below is further information regarding employee stock options awarded during 2006 to the named officers and directors:

Number of

% of Total

Securities

Options Granted

Underlying

to Employees

Exercise

Expiration

Name

Options

in 2006

Price ($/sh)

Date

Greg Wujek

2,000,000

100

$0.52

August 1, 2016

Harmel Rayat

n/a

Gary Branning

n/a

Rick Henson

n/a

Indy Panchi (1)

n/a

Derek Cooper (2)

n/a

(1) Mr. Indy Panchi resigned as a Director on September 13, 2006

(2) Mr. Derek Cooper resigned as a Secretary, Treasurer and Director on September 13, 2006

Aggregated Option Exercises during Last Fiscal Year and Year End Option Values

The following table shows certain information about unexercised options at year-end with respect to the named officers and directors:

Common Shares Underlying Unexercised Value of Unexercised In-the-money

Options on December 31, 2006

Name

Exercisable

Unexercisable

Exercisable

Unexercisable

Greg Wujek

2,000,000

$1,060,000

Harmel Rayat

Gary Branning

Rick Henson

Indy Panchi (1)

Derek Cooper (2)

(1) Mr. Indy Panchi resigned as a Director on September 13, 2006

(2) Mr. Derek Cooper resigned as a Secretary, Treasurer and Director on September 13, 2006

Related Transactions

Management Fees: During the year ended December 31, 2006, the Company charged $18,300 (2005: $6,000) to operations for director fees incurred for services rendered by directors. As of December 31, 2006, the Company owed $nil (2005: $63,000) for outstanding management fees owed to a director and major shareholder, which is included in accounts payable – related parties.

Notes Payable and Accrued Interest: Notes Payable totaled $1,213,776 as at December 31, 2006 (2005: $1,703,776), representing unsecured loans of $140,000 (8.25%), $323,776 (8.50%) and $750,000 (8.50%) due to Mr. Harmel S. Rayat, a director and majority shareholder of the Company. During the year ended December 31, 2006, the Company repaid $490,000 to the director and majority shareholder with the accrued interest of $51,785. The entire principal and accrued interest is due and payable on demand. Accrued and unpaid interest on these notes as of December 31, 2006, amounted to $193,847 (December 31, 2005 - $133,228) and is included in accounts payable - related parties.

Rent: The Company’s administrative office is located at 1628 West 1st Avenue, Suite 216, Vancouver, British Columbia, Canada, V6J 1G1. These premises are owned by a private corporation controlled by a director and majority shareholder. The Company pays a monthly rent of C$3,200 effective from April 1, 2006. The Company paid rent of $25,555 (2005: $nil) for the year ended December 31, 2006.

Mr. Harmel S. Rayat is an officer, director and majority stockholder of the Company. He is also an officer, director and majority shareholder of each of HepaLife Technologies, Inc., Entheos Technologies, Inc., Octillion Corp. and International Energy, Inc.

All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business.

Employment Contracts

The Company currently has an employment agreement with its President and CEO, Mr. Greg Wujek.

COPIES OF FORM 10-KSB

The Company hereby undertakes to provide without charge to each person, including any beneficial owner, to whom a copy of this Proxy Statement has been delivered, on the written request of any such person, a copy of the Company's most recent Form 10-KSB. Written requests for such copies should be directed to Greg Wujek, President of the Company, at 100 Overlook Drive, 2nd Floor, Princeton, New Jersey 08540.

PHYTOMEDICAL TECHNOLOGIES, INC.

100 Overlook Drive, 2nd Floor

Princeton, New Jersey, 08540

PROXY FOR 2007 ANNUAL MEETING OF STOCKHOLDERS

This proxy is solicited on behalf of the Board of Directors of PhytoMedical Technologies, Inc.

The undersigned, a stockholder of PhytoMedical Technologies, Inc. (the “Company”) hereby constitutes and appoints each of Mr. Greg Wujek and Mr. Harmel S. Rayat the attorney, agent and proxy of the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to vote and act with respect to all of shares of the Common Stock of the Company standing in name of the undersigned or in respect of which the undersigned is entitled to vote, with all powers of the undersigned would process if personally present at such meeting upon the following matters, and otherwise in his discretion:

FOR AGAINST ABSTENTION

ITEM 1.

To elect directors to serve until the next annual

meeting of stockholders or until their successors

are elected and have qualified.

Mr. Greg Wujek

[ ] [ ]

[ ]

Mr. Gary Branning

[ ] [ ]

[ ]

Mr. Rick Henson

[ ] [ ]

[ ]

Mr. Harmel S. Rayat

[ ] [ ]

[ ]

ITEM 2.

To ratify the appointment of Peterson Sullivan, PLLC

[ ] [ ]

[ ]

for the fiscal year ending December 31, 2007

ITEM 3.

To transact any such other business as may

[ ] [ ]

[ ]

properly come before the meeting or an

adjournment (s) therefore.

If no direction is indicated, this proxy will be voted in the discretion of the proxy holder. Please date, sign and print your name on this proxy exactly as your name appears on your stock certificate and return immediately to the address printed above.

DATED:_______________________________

SIGNATURE:_____________________________

NO. OF SHARES:_______________________

PRINT NAME:____________________________

FORM 10-KSB

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006.

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to _____________________

Commission File Number 000-30156

PHYTOMEDICAL TECHNOLOGIES, INC.
AND SUBSIDIARIES

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation)

87-0429962

(I.R.S Employer Identification No.)

100 OVERLOOK DRIVE, PRINCETON, NEW JERSEY 08540

(Address of principal executive offices)

(800) 611-3388

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:

Title of Each Class

Common Stock, $.00001 par value per share

Name of Each Exchange on Which Registered

OTC Bulletin Board

Securities registered under Section 12(g) of the Exchange Act:

None

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Yes [ ] No [X]

Check whether the registrant: (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing for the past 90 days. Yes [X] No [_]

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes [ ] No [X]

Revenues for its most current fiscal year: None

Aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of March 21, 2007: $28,843,268

Number of shares of Common Stock, $0.00001 par value, outstanding as of March 21, 2007: 189,669,641.

Documents incorporated by reference: None.

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

TABLE OF CONTENTS

PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

ANNUAL REPORT ON FORM 10-KSB

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006

PART I

PAGE

Item 1. Description of Business

Item 2. Description of Property

Item 3. Legal Proceedings

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

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Item 6. Management's Discussion and Analysis or Plan of Operations

Item 7. Financial Statements

Item 8. Changes In and Disagreements with Accountants on Accounting and

Financial Disclosure

Item 8a.

Controls and Procedures

Item 8b.

Other information

PART III

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

Compliance with Section 16(a) of the Exchange Act

Item 10.

Executive Compensation

Item 11.

Security Ownership of Certain Beneficial Owners and Management

and Related Stockholder Matters

Item 12. Certain Relationships and Related Transactions

Item 13. Exhibits

Item 14. Principal Accountant Fees and Services

Signatures

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995:

Except for the historical information presented in this document, the matters discussed in this Form 10-KSB for the fiscal year ending December 31, 2006, and specifically in the items entitled "Management’s Discussion and Analysis or Plan of Operation", or otherwise incorporated by reference into this document, contain "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are identified by the use of forward-looking terminology such as "believes", "plans", "intend", "scheduled", "potential", "continue", "estimates", "hopes", "goal", "objective", expects", "may", "will", "should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties.

The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by the Company. The reader is cautioned that no statements contained in this Form 10-KSB should be construed as a guarantee or assurance of future performance or results. These forward-looking statements involve risks and uncertainties, including those identified within this Form 10-KSB. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. These forward-looking statements are based on current expectations, and the Company assumes no obligation to update this information. Readers are urged to carefully review and consider the various disclosures made by the Company in this Form 10-KSB and in the Company's other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect the Company's business.

The Company

PhytoMedical Technologies, Inc. (“PhytoMedical” or the “Company”), together with its subsidiaries, is a pharmaceutical company focused on research, development and commercialization of pharmaceutical products.

Cachexia

Presently, through contract research organizations, the Company is working to isolate potentially active pharmacological elements in PhytoMedical's first plant derived compound, BDC-03, which has been successful in reducing body fat percentage, increasing lean muscle mass and lowering cholesterol in a study of growing animals.

For obese or overweight individuals, BDC-03’s potential capacity to decrease the deposition of fat and lower cholesterol would be a vitally important therapeutic outcome. However, its prospective ability to induce overall weight gain in the form of lean muscle mass may well be the difference between life and death for individuals suffering from cachexia.

Cachexia, which is characterized by dramatic weight loss, not only of fatty tissue, but also muscle tissue and bone, is among the most devastating and life-threatening aspects of AIDS and cancer. Once the body loses 30% of its lean muscle mass, major organs are affected, resulting in death.

Sadly, cachexia afflicts 25% of all AIDS patients and upwards of 90% of all advanced cancer patients. In fact, half of all cancer related deaths are a result of cachexia, not the cancer itself.

Diabetes

Additionally, through a Cooperative Research and Development Agreement (CRADA), PhytoMedical was working with the United States Department of Agriculture (USDA) and Iowa State University (ISU) towards synthesizing the active components of several polyphenolic compounds found in cinnamon bark and identifying a Type 2 Diabetes candidate for an IND (Investigational New Drug) application with the FDA. However, in November 2006, it was announced that PhytoMedical would terminate the CRADA as of February 1, 2007, in favor of moving all development to a true pharmaceutical contract research organization to expedite and prepare for a future IND filing.

These compounds, which increase insulin sensitivity by activating key enzymes that stimulate insulin receptors, while inhibiting the enzymes that deactivate them, have increased sugar metabolism by a factor of 20 in test tube assays using fat cells. Impaired sugar and fat metabolism, present in millions around the world, may lead to Type-2 diabetes and cardiovascular diseases.

Insulin is a hormone made by the pancreas to help the body use glucose (sugar) for energy. In people with Type-2 diabetes, either the pancreas doesn't make enough insulin or the body is unable to use it correctly. Without sufficient insulin, glucose accumulates in the blood and urine, and the cells of the body are starved, a condition known as diabetes - the leading cause of end-stage renal disease, blindness and lower limb amputations.

Diabetes, which results from the body’s inability to produce enough insulin or use it efficiently, affects 20.8 million people in the United States, or 7% of the population (American Diabetes Association). The Centers for Disease Control and Prevention expects this number to rise to over 30 million by 2030. As the leading cause of end-stage renal disease, blindness and lower limb amputations, diabetes now costs the health care system over $132 billion each year.

While the causes of diabetes are not entirely clear, it is known that diet plays a key role in the prevention and cure of diabetes. In fact, research studies have shown that aqueous extracts of cinnamon improves the action of insulin and helps to control risk factors associated with diabetes including, glucose, insulin, cholesterol, triglycerides and related variables.

One study published in Diabetes Care, a journal of the American Diabetes Association, showed that as little as one gram a day of cinnamon – one-fourth of a teaspoon twice a day – can lower blood sugar by an average of 18 to 29 percent, triglycerides (fatty acids in the blood) by 23 to 30 percent, LDL (or “bad”) cholesterol by 7 to 27 percent and total cholesterol by 12 to 26 percent. Changes in HDL (“good”) cholesterol were not significant. Amazingly, the study found that the beneficial effects of cinnamon lasted for at least 20 days after people stopped taking it.

At present, the Company does not currently have commercial products intended to diagnose, treat, cure or prevent any disease. The statements contained in this Form 10-KSB regarding our on going research and development and the results attained by us to-date have not been evaluated by the Food and Drug Administration. There can be no assurance that further research and development, and /or whether clinical trial results, if any, will validate and support the results of our preliminary research and studies.

Cooperative and License Agreements

New York University (NYU)

On July 29, 2004, PhytoMedical Technologies Corporation, a wholly owned subsidiary of PhytoMedical Technologies, Inc., entered into an exclusive worldwide licensing agreement with New York University (NYU) for certain patented inventions (“NYU Patents”) related to pharmacologically active elements of a muira puama plant extract and ion channel modulators from natural sources.

In consideration for the grant of the license, PhytoMedical Technologies Corporation agreed to:

- reimburse NYU for its patent costs incurred to date;

- pay to NYU a royalty of four percent (4%) of the net sales of all licensed products related to medical, pharmacological, therapeutic, prophylactic, nutritional and research applications of the muira puama extract;

- pay NYU twenty percent (20%) of the net sales for all other licensed products;

- pay NYU ten percent (10%) of all sublicense fees.

In connection with the licensing agreement, PhytoMedical Technologies Corporation granted to each of NYU and Dr. Bruce Cherksey, a NYU scientist and inventor of the NYU Patents, an option to acquire, for a period of two years from July 29, 2004, a number of shares equal to 12.5% of the outstanding common stock of PhytoMedical on a fully diluted basis. On May 30, 2006, Dr. Bruce Cherksey exercised the option and acquired 12.5% of PhytoMedical Technologies Corporation. On June 30, 2006, NYU and PhytoMedical Technologies Corporation agreed to extend the option to July 20, 2008. All other terms and conditions of the option agreement will remain in full force and effect.

This combined 25% equity position may not be diluted until a total of $1,825,000, after deduction of all related financing costs, has been invested to further develop the technology. Thereafter, NYU and Dr. Cherksey will be diluted pari passu with other equity holders of PhytoMedical Technologies Corporation.

USDA's Agricultural Research Service (ARS) and Iowa State University (ISU)

On December 1, 2004, PolyPhenol Technologies Corporation, a wholly owned subsidiary of PhytoMedical Technologies, Inc., entered into a three year, three-way Cooperative Research and Development Agreement (CRADA) with the USDA's Agricultural Research Service (ARS) and Iowa State University (ISU). PolyPhenol Technologies Corporation committed to providing $666,336 in research funding to the ARS and $186,865 to ISU.

On March 6, 2006, PolyPhenol Technologies Corporation, a wholly-owned subsidiary of PhytoMedical Technologies, Inc. agreed to extend its Cooperative Research and Development Agreement (CRADA) with the USDA’s Agricultural Research Service (ARS) and Iowa State University (ISU) for an additional two years through October 31, 2009.

Effective February 1, 2007, the Company terminated its CRADA agreement with the USDA’s Agricultural Research Service (ARS) and Iowa State University (ISU) in favor of moving all development to a true pharmaceutical contract research organization to expedite and prepare for a future IND filing.

Iowa State University Research Foundation Inc. (“ISURF”)

On June 12, 2006, the Company, through its wholly owned subsidiary, PolyPhenol Technologies Corporation, entered into an exclusive license agreement with Iowa State University Research Foundation Inc. (“ISURF”) to develop, market and distribute novel synthesized compounds derived from type A-1 polyphenols, which have been linked to insulin sensitivity by lead researcher, Dr. Richard Anderson of the USDA's Agricultural Research Service.

Under terms of the agreement, the Company has to pay to ISURF license fees of $320,000, of which $20,000 is payable (paid) within 30 days of execution of the agreement, $50,000 is payable upon completion of the first successful Phase 2 clinical trial and the remaining $250,000 is payable upon first approval by the regulatory authority on new drug application. In addition, ISURF will receive royalty payments equal to 5% on the net sales of products, except that 3% will apply on the net sales of pharmaceutical products. The Company will pay a minimum annual royalty of $20,000, $50,000 and $100,000 in calendar year 2010, 2011, 2012 and onwards, respectively. The Company also has to reimburse ISURF the cost incurred for filing, prosecuting and maintaining the licensed patents together with 15% of the said costs, not exceeding $10,000, as the administration fee. The Company will administrate the development, regulatory approval and commercialization of the compounds and pursue future collaborative arrangements.

As of December 31, 2006, the Company paid in total of $20,000 for the License Fee and $25,381 for reimbursement of the patent costs and research expenses as per agreement with ISURF.

Effective February 1, 2007, the Company, through its wholly owned subsidiary, PolyPhenol Technologies Corporation, entered into an expanded sponsored research agreement with Iowa State University (ISU). Under terms of the agreement, PhytoMedical will continue to undertake its research at ISURF for development of the Company’s novel, synthesized type A-1 ‘polyphenolic’ compounds – an entirely new, innovative class of compounds derived from cinnamon, shown in published human and pre-clinical animal studies to favorably effect type-2 diabetes without side effects.

ISU:

Year 1: $62,251 to ISU in 4 quarterly installments, the first of which is due within 30 days of signing of the sponsored research agreement, the second of which is due to ISU 3 months from the previous payment;

Year 2: $70,295 to ISU in 4 quarterly installments, the first of which is due to ISU 3 months from the previous payment; and

Year 3: $72,140 to ISU in 4 quarterly installments, the first of which is due to ISU 3 months from the previous payment.

All rights, title, and interest in any subject invention made solely by the Company are owned by the Company, solely by ISU are owned by ISU, owned jointly by the two parties if made by any of the parties.

The Agreement or parts thereof, is subject to termination at any time by mutual consent. Any party may unilaterally terminate the entire agreement at any time by giving the other parties written notice not less than sixty calendar days prior to the desired termination date.

Employees

At December 31, 2006, the Company employed 5 full-time person and 2 part-time persons. All of our research and development activities are provided on our behalf by scientists and others employed governmental agencies and academic institutions with which we have agreements or by third party providers. To the best of the Company’s knowledge, none of the Company’s officers or directors is bound by restrictive covenants from prior employers. None of the Company’s employees are represented by labor unions or other collective bargaining groups. We consider relations with our employees to be good. We plan to retain and utilize the services of outside consultants as the need arises.

Risk Factors

We have sought to identify what we believe to be the most significant risks to our business. However, we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our Common Stock. We provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here could adversely affect us.

Inability to Obtain Funding

The process of developing our products requires significant research and development efforts, including basic research, preclinical and clinical development, as well as FDA regulatory approval. Our ability to achieve profitability depends on our ability, alone or with future potential collaborators, to develop our drug candidates, conduct clinical trials, obtain necessary regulatory approvals, and manufacture, distribute, market and sell our drug products. We cannot assure you that we will be successful at any of these activities or predict when we will ever become profitable.

We may not be able to obtain additional funding when needed, which could limit future expansion and marketing opportunities, as well as result in lower than anticipated revenues. We may require additional financing to pursue relationships with joint venture partners. If the market price of the common stock declines, some potential financiers may either refuse to offer us any financing or will offer financing at unacceptable rates or unfavorable terms. If we are unable to obtain financing on favorable terms, or at all, this unavailability could prevent us from expanding our business, which could materially impact our future potential revenues.

Lack of Operating History

Our business is subject to the risks inherent in the establishment of a new business. In formulating our business plan, we have relied on the judgment of our officers, directors and consultants but have not conducted any formal independent market studies concerning the demand for our products. Because of our limited operating history and lack of past profitability, you may lose your investment if we are unable to successfully market our products and implement our business plan.

We have had limited revenues since inception. In both 2006 and 2005, we had zero revenues. We have not been profitable, experiencing an accumulated loss of $22,904,995 through December 31, 2006. Even if we become profitable in the future, we cannot accurately predict the level of, or our ability to sustain profitability. Because we have not yet been profitable and cannot predict any level of future profitability, you bear the risk of a complete loss of your investment in the event our business plan is unsuccessful.

Continued Control by Existing Management

You may lack an effective vote on corporate matters and management may be able to act contrary to your objectives. As of March 21, 2007, our officers and board members own 62% of the 189,669,641 of our outstanding common stock, excluding stock options. If management votes together, it could influence the outcome of corporate actions requiring shareholder approval, including the election of directors, mergers and asset sales. As a result, new stockholders may lack an effective vote with respect to the election of directors and other corporate matters. Therefore, it is possible that management may take actions with respect to its ownership interest, which may not be consistent with your objectives or desires.

Liquidity of Shares in Market Place

As of March 21, 2007, one of our directors beneficially owns approximately 62% of the Company’s outstanding common stock, which could affect the liquidity of the company’s shares in the market.

Dividends

We have not paid and do not currently intend to pay dividends, which may limit the current return you may receive on your investment in our common stock. Since inception, we have paid no dividends to our stockholders. Future dividends on our common stock, if any, will depend on our future earnings, capital requirements, financial condition and other factors. We currently intend to retain earnings, if any, to increase our net worth and reserves. Therefore, we do not anticipate that any holder of common stock will receive any cash, stock or other dividends on his shares of common stock at any time in the near future. You should not expect or rely on the potential payment of dividends as a source of current income.

Dependence on Executive Officers and Technical Personnel

The success of our business plan depends on attracting qualified personnel, and failure to retain the necessary personnel could adversely affect our business. Competition for qualified personnel is intense, and we may need to pay premium wages to attract and retain personnel. Attracting and retaining qualified personnel is critical to our business. Inability to attract and retain the qualified personnel necessary would limit our ability to implement our business plan successfully.

Adverse Effect of Shares Eligible for Future Sale

Future sales of large amounts of common stock could adversely affect the market price of our common stock and our ability to raise capital.

Future sales of our common stock by existing stockholders pursuant to Rule 144 under the Securities Act, or following the exercise of outstanding options and warrants, could adversely affect the market price of our common stock. Substantially all of the outstanding shares of our common stock are freely tradable, without restriction or registration under the Securities Act, other than the sales volume restrictions of Rule 144 applicable to shares held beneficially by persons who may be deemed to be affiliates. Our directors and executive officers and their family members are not under lockup letters or other forms of restriction on the sale of their common stock. The issuance of any or all of these additional shares upon exercise of options or warrants or conversion of preferred stock will dilute the voting power of our current stockholders on corporate matters and, as a result, may cause the market price of our common stock to decrease. Further, sales of a large number of shares of common stock in the public market could adversely affect the market price of the common stock and could materially impair our future ability to generate funds through sales of common stock or other equity securities.

Government Regulation

Regulation by government authorities in the United States and foreign countries is a significant factor in the development, manufacture and marketing of our proposed products and in our ongoing research and product development activities. All of our products will require regulatory approval by government agencies prior to commercialization. In particular, human therapeutic products are subject to rigorous preclinical studies and clinical trials and other approval procedures of the FDA and similar regulatory authorities in foreign countries. Various federal and state statutes and regulations also govern or influence testing, manufacturing, safety, labeling, storage and record-keeping related to such products and their marketing. The process of obtaining these approvals and the subsequent compliance with appropriate federal and state statutes and regulations require the expenditure of substantial time and financial resources.

Preclinical studies generally are conducted in laboratory animals to evaluate the potential safety and the efficacy of a product. Drug developers submit the results of preclinical studies to the FDA as a part of an IND application that must be approved before clinical trials can begin in humans. Typically, clinical evaluation involves a time consuming and costly three-phase process.

Phase I

Clinical trials are conducted with a small number of patients to determine the early safety profile, maximum tolerated dose and pharmacological properties of the product in human volunteers.

Phase II

Clinical trials are conducted with groups of patients afflicted with a specific disease in order to determine preliminary efficacy, optimal dosages and expanded evidence of safety.

Phase III

Large-scale, multi-center, comparative clinical trials are conducted with patients afflicted with a specific disease in order to determine safety and efficacy as primary support for regulatory approval by the FDA to market a product candidate for a specific disease.

The FDA closely monitors the progress of each of the three phases of clinical trials that are conducted in the United States and may, at its discretion, reevaluate, alter, suspend or terminate the testing based upon the data accumulated to that point and the FDA’s assessment of the risk/benefit ratio to the patient. To date, we have not conducted any clinical trials.

Once Phase III trials are completed, drug developers submit the results of preclinical studies and clinical trials to the FDA in the form of an NDA or a biologics licensing application for approval to commence commercial sales. In response, the FDA may grant marketing approval, request additional information or deny the application if the FDA determines that the application does not meet regulatory approval criteria. FDA approvals may not be granted on a timely basis, or at all. Furthermore, the FDA may prevent a drug developer from marketing a product under a label for its desired indications, which may impair commercialization of the product.

If the FDA approves the NDA, the drug becomes available for physicians to prescribe in the United States. After approval, the drug developer must submit periodic reports to the FDA, including descriptions of any adverse reactions reported. The FDA may request additional studies, known as Phase IV, to evaluate long-term effects.

In addition to studies requested by the FDA after approval, a drug developer may conduct other trials and studies to explore use of the approved compound for treatment of new indications. The purpose of these trials and studies and related publications is to broaden the application and use of the drug and its acceptance in the medical community.

We will also have to complete an approval process similar to that in the United States in virtually every foreign target market for our products in order to commercialize our product candidates in those countries. The approval procedure and the time required for approval vary from country to country and may involve additional testing. Foreign approvals may not be granted on a timely basis, or at all. In addition, regulatory approval of prices is required in most countries other than the United States. We face the risk that the resulting prices would be insufficient to generate an acceptable return to us or our corporate collaborators.

Competition

The biotechnology and pharmaceutical industries are subject to rapid and intense technological change. We face competition from numerous pharmaceutical companies, pharmaceutical divisions of chemical companies, and biotechnology companies of various sizes. Many of these companies have commercial arrangements with other companies in the biotechnology industry to supplement their own research capabilities. Developments by others may render our product candidates or technologies obsolete or noncompetitive.

Compared to us, many of our competitors and potential competitors have substantially greater:

capital resources;

research and development resources, including personnel and technology;

regulatory experience;

preclinical study and clinical testing experience;

manufacturing and marketing experience; and

production facilities.

Any of these competitive factors could harm our business, prospects, financial condition and results of operations, which could negatively affect our stock price.

Limited Experience

Even if we are able to develop our products and obtain necessary regulatory approvals, we have limited experience or capabilities in marketing or commercializing our products. We currently have no sales, marketing or distribution infrastructure. Accordingly, we are dependent on our ability to find collaborative marketing partners or contract sales companies for commercial sale of any future products. Even if we find a potential marketing partner, we may not be able to negotiate a licensing contract on favorable terms to justify our investment or achieve adequate revenues.

Intellectual Property

The Company relies on a combination of copyright law, trade secret protection, confidentiality agreements and other contractual arrangements with employees, vendors and others to protect its rights to intellectual property. These measures, however, may be inadequate to deter misappropriation of proprietary information. Failure to adequately protect its intellectual property could harm the Company, devalue its proprietary content and affect the Company's ability to compete effectively.

Our success depends in significant part on our ability to obtain important research and invention licenses, obtain patents, protect trade secrets, operate without infringing upon the proprietary rights of others and prevent others from infringing on our proprietary rights.

If we do obtain patents, the claims allowed may not be sufficiently broad to protect our technology. In addition, issued patents that we own or license may be challenged, invalidated or circumvented. Our patents also may not afford us protection against competitors with similar technology. Because patent applications in the United States are maintained in secrecy until patents issue, third parties may have filed or maintained patent applications for technology used by us or covered by our pending patent applications without our being aware of these applications.

We may not hold proprietary rights to all of the patents related to our proposed products. These patents may be owned or controlled by third parties. As a result, we or any future collaborative partners may be required to obtain licenses under third-party patents to market our proposed products. If licenses are not available on acceptable terms, we or any future collaborative partners will not be able to market these products or services.

Research Agreements

We expect to enter into research agreements and licenses in the future that relate to important technologies that may be necessary for the development and commercialization of related and unrelated products. These agreements and licenses may impose various commercialization, indemnification, royalty, insurance and other obligations on us, which, if we fail to comply may result in the termination of these agreements and licenses or make the agreements and licenses non-exclusive, which could affect our ability to exploit important technologies that are required for successful development of our products.

Insurance Coverage

Our products may prove to be unsuccessful if various parties, including government health administration authorities, private healthcare insurers and other healthcare payers, such as health maintenance organizations and self-insured employee plans that determine reimbursement to the consumer, do not accept our products for reimbursement. Sales of therapeutic and other pharmaceutical products depend in significant part on the availability of reimbursement to the consumer from these third party payers. Third party payers are increasingly challenging the prices charged for medical products and services. We cannot assure you that reimbursement will be available, if at all. If we fail to achieve adequate reimbursement levels, patients may not purchase our products and sales of these products will be absent or reduced.

We are considered a penny stock.

The Company's stock differs from many stocks, in that it is a "penny stock." The Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks." These rules include, but are not limited to, Rules 3a5l-l, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act of 1934, as amended.

Because our securities probably constitute "penny stock" within the meaning of the rules, the rules would apply to us and our securities. The rules may further affect the ability of owners of our stock to sell their securities in any market that may develop for them. There may be a limited market for penny stocks, due to the regulatory burdens on broker-dealers. The market among dealers may not be active. Investors in penny stock often are unable to sell stock back to the dealer that sold them the stock. The mark-ups or commissions charged by the broker-dealers may be greater than any profit a seller may make. Because of large dealer spreads, investors may be unable to sell the stock immediately back to the dealer at the same price the dealer sold the stock to the investor. In some cases, the stock may fall quickly in value. Investors may be unable to reap any profit from any sale of the stock, if they can sell it at all.

Stockholders should be aware that, according to the Securities and Exchange Commission Release No. 34- 29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. These patterns include:

- Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

- Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

- "Boiler room" practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;

- Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and

- The wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

Furthermore, the "penny stock" designation may adversely affect the development of any public market for the Company's shares of common stock or, if such a market develops, its continuation. Broker-dealers are required to personally determine whether an investment in "penny stock" is suitable for customers.

Penny stocks are securities (i) with a price of less than five dollars per share; (ii) that are not traded on a "recognized" national exchange; (iii) whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks must still meet requirement (i) above); or (iv) of an issuer with net tangible assets less than $2,000,000 (if the issuer has been in continuous operation for at least three years) or $5,000,000 (if in continuous operation for less than three years), or with average annual revenues of less than $6,000,000 for the last three years.

Section 15(g) of the Exchange Act, and Rule 15g-2 of the Commission require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor's account. Potential investors in the Company's common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be "penny stock."

Rule 15g-9 of the Commission requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for the Company's stockholders to resell their shares to third parties or to otherwise dispose of them.

Stock Price Fluctuations

The market price of our common stock could be subject to significant fluctuations. Among the factors that could affect our stock price are:

negative results from our research efforts, future clinical or pre-clinical studies or adverse FDA decisions related to our product candidates;

speculation in the press or investment community;

strategic actions by us or our competitors, such as acquisitions or restructurings;

low average daily trading volumes;

general market conditions, and

numerous other factors unrelated to our performance.

The stock markets in general and the markets for biotechnology stocks in particular, have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock.

Independent Directors.

We cannot guarantee our Board of Directors will have a majority of independent directors in the future. In the absence of a majority of independent directors, our executive officers, who are also principal stockholders and directors, could establish policies and enter into transactions without independent review and approval thereof. This could present the potential for a conflict of interest between the Company and its stockholders generally and the controlling officers, stockholders or directors.

Environmental Matters

The Company believes it conducts its business in compliance with all environmental laws presently applicable to its facilities. To date, there have been no expenses incurred by the Company related to environmental issues.

ITEM 2. DESCRIPTION OF PROPERTY

The Company's corporate office is located at 100 Overlook Drive, 2nd Floor, Princeton, New Jersey, 08540. The Company’s administrative office is located at 1628 West First Avenue, Suite 216, Vancouver, British Columbia, Canada, V6J 1G1. These premises in Vancouver, British Columbia are owned by a private corporation controlled by a director and majority shareholder.

ITEM 3. LEGAL PROCEEDINGS

The Company is not party to any current legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of the security holders in the fourth quarter of 2006. It is our intention to schedule a shareholder’s meeting to elect directors and transact any additional business in the second or third quarter of 2007.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

The Company's Common Stock is listed on the OTC Bulletin Board under the symbol "PYTO". The following table sets forth the high and low sale prices for the periods indicated:

High

Low

First Quarter 2005

$1.24

$0.85

Second Quarter 2005

$1.46

$0.89

Third Quarter 2005

$1.12

$0.65

Fourth Quarter 2005

$1.09

$0.56

First Quarter 2006

$1.54

$0.96

Second Quarter 2006

$1.34

$0.63

Third Quarter 2006

$0.63

$0.38

Fourth Quarter 2006

$0.88

$0.39

January 1, 2007 – March 21, 2007

$0.53

$0.38

As of March 22, 2007, there were approximately 290 stockholders of record of the Company's Common Stock.

Dividend Policy

We do not have a history of paying dividends on our Common Stock, and there can be no assurance that we will pay any dividends in the foreseeable future. We intend to use any earnings, which may be generated, to finance the growth of our businesses. Our Board of Directors has the right to authorize the issuance of preferred stock, without further shareholder approval, the holders of which may have preferences over the holders of the Common Stock as to payment of dividends.

Securities Authorized for Issuance Under Equity Compensation Plans

Number of securities

remaining available for

Number of Securities to be

Weighted-average exercise

future issuance under

issued upon exercise of

price of outstanding

equity compensation plans

outstanding options,

options, warrants and

(excluding securities

warrants and rights

rights

reflected in column (a))

Plan Category

(a)

(b)

(c)

____________________________________________________________________________________________________________

Equity compensation plans

approved by security holders

2,000,000

$0.52

20,275,000

Equity compensation plans not

approved by security holders

____________________________________________________________________________________________________________

Total

2,000,000

$0.52

20,275,000

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion should be read in conjunction with the financial statements and notes thereto included in Item 7 of this Form 10-KSB. Except for the historical information contained herein, the discussion in this Annual Report on Form 10-KSB contains certain forward-looking statements that involve risk and uncertainties, such as statements of the Company's plans, objectives, expectations and intentions as of the date of this filing. The cautionary statements made in this document should be read as being

applicable to all related forward-looking statements wherever they appear in this document. The Company's actual results could differ materially from those discussed here. Factors that could cause differences include those discussed in "Risk Factors", as well as discussed elsewhere herein.

Overview

Currently, the Company is working to isolate potentially active pharmacological elements in PhytoMedical's first plant derived compound, BDC-03, which has been successful in reducing body fat percentage, increasing lean muscle mass and lowering cholesterol in a study of growing animals.

PhytoMedical is also continuing to undertake its research at ISURF for development of the Company’s novel, synthesized type A-1 ‘polyphenolic’ compounds – an entirely new, innovative class of compounds derived from cinnamon, shown in published human and pre-clinical animal studies to favorably effect type-2 diabetes without side effects.

Results of Operations

Revenues: The Company generated revenues of $0 for the years ended December 31, 2006 and December 31, 2005.

General and Administrative Expenses: During 2006, the Company incurred $3,337,079 in general and administrative expenses, a decrease of 1% over 2005 expenses of $3,322,323. The decrease is primarily attributable to decreases in investor relations costs and the stock offering expense that incurred in the Fusion Capital transaction with the issuance of commitment shares.

Interest Income: Interest income was $16,930 and $3,697 for the years ended December 31, 2006, and 2005, respectively. Interest earned in the future will be dependent on Company funding cycles and prevailing interest rates.

Provision for Income Taxes: As of December 31, 2006, the Company's accumulated deficit was $22,904,995, and as a result, there has been no provision for income taxes to date.

Net Loss: For the year ended December 31, 2006, the Company recorded a net loss of $3,852,569, a decrease of 10%, compared to a net loss of $4,257,382 for the same period in 2005. The decrease is primarily attributable to decreases in investor relations costs and the stock offering expense that incurred in the Fusion Capital transaction with the issuance of commitment shares.

Liquidity and Capital Resources

At December 31, 2006, the Company had a cash balance of $386,547 compared to a cash balance of $63,770 at December 31, 2005.

During 2006, the Company used $2,331,943 of net cash from operating activities, an increase of 10%, as compared to net cash flows used by operating activities of $2,117,231 in 2005, primarily due to increases in accounts payable and stock based compensation.

Net cash flows used in investing activities was $21,367 for 2006, compared to $20,540 for 2005, due to a license fee in 2006 and equipment purchases during 2005.

Net cash provided by financing activities was $2,675,997 for 2006 compared to $1,864,003 for 2005. The Company has financed its operations primarily from cash on hand, through loans from shareholders, proceeds from stock option and warrant exercises and through the common stock purchase agreement with Fusion Capital.

During the year ended December 31, 2006, Fusion Capital has purchased 4,044,454 (2005: 733,136) shares of the Company for total proceeds of $3,165,997 (2005: $465,002).

Plan of Operation

Additionally, through an expanded sponsored research agreement with ISU, PhytoMedical is working towards synthesizing the active components of several polyphenolic compounds found in cinnamon bark and characterizing their beneficial health effects in cell cultures systems, animals and ultimately humans.

The Company anticipates that through its common stock purchase agreement with Fusion Capital, the Company will receive sufficient funds to satisfy the cash needs of the Company through calendar year ending December 31, 2007, however, if necessary additional funds maybe provided by debt or equity financings.

Due to the "start up" nature of the Company's business, the Company expects to incur losses as the Company conducts its ongoing research and product development programs. We will require additional funding to continue our research and product development programs, to conduct preclinical studies and clinical trials, for operating expenses, to pursue regulatory approvals for our product candidates, for the costs involved in filing and prosecuting patent applications and enforcing or defending patent claims, if any, for any possible acquisitions or new technologies, and we may require additional funding to establish manufacturing and marketing capabilities in the future. We may seek to access the public or private equity markets whenever conditions are favorable. We may also seek additional funding through strategic alliances and other financing mechanisms. We cannot assure you that adequate funding will be available on terms acceptable to us, if at all. If adequate funds are not available, we may be required to curtail significantly one or more of our research or development programs or obtain funds through arrangements with collaborators or others. This may require us to relinquish rights to certain of our technologies or product candidates. To the extent that we are unable to obtain third-party funding for such expenses, we expect that increased expenses will result in increased losses from operations. We cannot assure you that we will successfully develop our products under development or that our products, if successfully developed, will generate revenues sufficient to enable us to earn a profit.

Related Party Transactions

All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business.

Going Concern

The Company has incurred net operating losses since inception. The Company faces all the risks common to companies in their early stages of development, including under capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain

revenue streams, and difficulties in managing growth. The Company’s recurring losses raise substantial doubt about its ability to continue as a going concern. The Company’s financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. The Company expects to incur losses from its business operations and may require additional funding during 2007. The satisfaction of our cash hereafter will depend in large part on the Company’s ability to successfully raise capital from external sources to pay for planned expenditures and to fund operations.

To meet these objectives, the Company has arranged a Common Stock Purchase Agreement with Fusion Capital Fund II, LLC to purchase from the Company up to $10,000,000 of the Company’s common stock over a twenty-five month period. Management believes that its current and future plans enable it to continue as a going concern. The Company's ability to achieve these objectives cannot be determined at this time. These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

ITEM 7. FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2006 and 2005

Consolidated Statements of Operations for years ended December 31, 2006 and 2005

Consolidated Statements of Changes in Stockholders’ Deficiency for the years ended
December 31, 2006 and 2005

Consolidated Statements of Cash Flows for the years ended December 31, 2006 and 2005

Notes to the Financial Statements

23-33

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

PhytoMedical Technologies, Inc.

Princeton, New Jersey

We have audited the accompanying consolidated balance sheets of PhytoMedical Technologies, Inc. and Subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of operations, stockholders' deficiency, and cash flows for the years then ended. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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 PhytoMedical Technologies, Inc. and Subsidiaries as of December 31, 2006 and 2005, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has experienced recurring losses from operations since inception, and has a substantial accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/S/ PETERSON SULLIVAN PLLC

March 28, 2007

Seattle, Washington


PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
(Formerly Enterprises Technologies, Inc.)

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2006 AND 2005


(Expressed in U.S. Dollars)	2006	2005

ASSETS
Current assets
Cash	$386,457	$63,770
Prepaid expenses	4,788	-

Total current assets	391,245	63,770

Property and Equipment, Net	9,621	18,881
Intangible asset - License fee (Note 6)	20,000	-


Total assets	$420,866	$82,651

LIABILITIES
Current
Accounts payable and accrued liabilities	$194,027	$113,333
Accounts payable - related parties (Note 4)	193,847	203,062
Promissory notes - related party (Note 4)	1,213,776	1,703,776

Total liabilities	1,601,650	2,020,171

STOCKHOLDERS' DEFICIENCY

Stockholders' Deficiency
Preferred stock: $0.25 par value; Authorized: 1,000,000
Issued and outstanding: nil	-	-
Common stock: $0.00001 par value; Authorized: 300,000,000
Issued and outstanding: 189,181,866 (2005: 185,137,412)	1,892	1,851
Additional paid-in capital	21,722,319	17,113,055
Accumulated deficit	(22,904,995)	(19,052,426)

Total stockholders' deficiency	(1,180,784)	(1,937,520)

Total liabilities and stockholders' deficiency	$420,866	$82,651


(The accompanying notes are an integral part of these consolidated financial statements)


PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
(Formerly Enterprise Technologies, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended December 31, 2006 and 2005


(Expressed in U.S. Dollars)	2006	2005


Revenue	$-	$-

Expenses
Management fees - related party (Note 4)	18,300	6,000
Investor relations	999,894	1,589,440
Other operating expenses, including interest of
$112,403 in 2006 and $128,967 in 2005	860,801	479,685
Research and development costs (Note 5 and 6)	547,196	267,745
Stock based compensation	1,443,308	924,000
Stock offering costs	-	994,209
	3,869,499	4,261,079

Operating loss	(3,869,499)	(4,261,079)

Other income
Interest income	16,930	3,697

Net loss available to common shareholders	$(3,852,569)	$(4,257,382)


Loss per common share - basic and diluted	$(0.02)	$(0.02)

Weighted average number of common shares
outstanding - basic and diluted	187,496,408	173,456,330


(The accompanying notes are an integral part of these consolidated financial statements)


PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
(Formerly Enterprise Technologies, Inc.)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
for the years ended December 31, 2006 and 2005

						Accumulated other	Total
	Common Stock		Additional	Accumulated	Comprehensive	comprehensive	Stockholders'
(Expressed in U.S. Dollars)	Shares	Amount	paid-in capital	deficit	loss	income	Deficiency

Balance, December 31, 2004	168,541,165	$1,685	$14,210,010	$(14,795,044)	$ -	$ -	$ (583,349)

Common stock issued upon
exercise of stock options	550,000	6	419,994	-	-	-	420,000

Stock based compensation expenses	-	-	924,000	-	-	-	924,000

Common stock issued upon
exercise of warrants, at
$0.007 per share	14,285,714	143	99,857	-	-	-	100,000

Restricted common stock issued
pursuant to share purchase agreement	1,027,397	10	994,199	-	-	-	994,209

Common stock issued for cash	733,136	7	464,995	-	-	-	465,002

Loss, year ended December 31, 2005	-	-	-	(4,257,382)	(4,257,382)	-	(4,257,382)

					$ (4,257,382)
Balance, December 31, 2005	185,137,412	$1,851	$17,113,055	$(19,052,426)	-	-	$(1,937,520)

Common stock issued for cash	4,044,454	41	3,165,956	-	-	-	3,165,997

Stock based compensation expenses	-	-	1,443,308	-	-	-	1,443,308

Loss, year ended December 31, 2006	-	-	-	(3,852,569)	(3,852,569)	-	(3,852,569)

					$(3,852,569)
Balance, December 31, 2006	189,181,866	$1,892	$21,722,319	$(22,904,995)		-	$(1,180,784)


(The accompanying notes are an integral part of these consolidated financial statements)


PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
(Formerly Enterprise Technologies, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 2006 and 2005


(Expressed in U.S. Dollars)	2006	2005

Cash flows from operating activities
Reconciliation of net loss to net cash used in operating activities
Net loss	$(3,852,569)	$(4,257,382)
Adjustments for items not involving cash:
Accrued interest expense to stockholder	60,619	128,542
Amortization and depreciation	10,627	1,659
Stock based compensation	1,443,308	924,000
Stock offering costs	-	994,209
Change in non-cash working capital items:
Increase in prepaid expenses	(4,788)	-
Decrease in related party accounts payable	(69,834)
Increase in accounts payable	80,694	91,741
Net cash used in operating activities	(2,331,943)	(2,117,231)

Cash flows from investing activities
Additions to property and equipment	(1,367)	(20,540)
Additions to intangible asset	(20,000)	-
Net cash used in investing activities	(21,367)	(20,540)

Cash flows from financing activities
Proceeds from issuance of common stock	3,165,997	985,003
Repayment of loan to stockholder	(490,000)	(21,000)
Promissory note proceeds from a major stockholder	-	900,000
Net cash used provided by financing activities	2,675,997	1,864,003

Increase (decrease) in cash	322,687	(273,768)

Cash, beginning of year	63,770	337,538
Cash, end of year	$386,457	$63,770


Supplemental disclosure of cash flow information:
Interest paid in cash	$52,728	$425
Income tax paid in cash	$-	$-

Noncash financing activities:
Issuance of common stock as stock offering costs	$-	$994,209

(The accompanying notes are an integral part of these consolidated financial statements)

PHYTOMEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

(Formerly Enterprise Technologies, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2006

(Expressed in US Dollars)

Note 1 - Organization and Nature of Operations

PhytoMedical Technologies, Inc. (formerly Enterprise Technologies, Inc.) (the “Company”), a Nevada Corporation, has an authorized capital of 301,000,000 shares of which 300,000,000 shares are $0.00001 par value common stock and 1,000,000 shares are $0.25 par value preferred stock. On September 7, 2004, the Company changed its name to PhytoMedical Technologies, Inc.

The Company, together with its subsidiaries, is a pharmaceutical company focused on research, development and commercialization of pharmaceutical products.

The Company has incurred net operating losses since inception. The Company faces all the risks common to companies that are relatively new, including under capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. The Company’s recurring losses raise substantial doubt about its ability to continue as a going concern. The Company’s financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. The Company expects to incur losses from its business operations and will require additional funding during 2007. The future of the Company hereafter will depend in large part on the Company’s ability to successfully raise capital from external sources to pay for planned expenditures and to fund operations.

To meet these objectives, the Company has arranged a Common Stock Purchase Agreement with Fusion Capital Fund II, LLC to purchase from the Company up to $10,000,000 of the Company’s common stock over a twenty-five month period (Note 8). Management believes that its current and future plans enable it to continue as a going concern. The Company's ability to achieve these objectives cannot be determined at this time. These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

Note 2 – Significant Accounting Policies

(a) Principles of Accounting

These financial statements are stated in U.S. Dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America.

(b) Principles of Consolidation

The accompanying consolidated financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States, and include the accounts of PhytoMedical Technologies, Inc. and its subsidiaries, PhytoMedical Technologies Corp. and PolyPhenol Technologies Corp., which both were incorporated under the laws of the State of Nevada. All significant inter-company transactions and accounts have been eliminated in consolidation.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared.

Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.

(d) Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents for the years ended December 31, 2006 and 2005. The Company occasionally has cash deposits in excess of insured limits. The Company places its cash and cash equivalents with high credit quality financial institutions.

(e) Equipment and Depreciation

Equipment is initially recorded at cost and is depreciated under the straight-line method over its estimated useful life as follows:

Computer equipment

2 years

Office equipment

2 years

Repairs and maintenance costs are charged to operations as incurred.

(f) Research and Development Costs

Research and development costs are expensed as incurred.

(g) Fair Value of Financial Instruments

Fair value of financial instruments is made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, accounts payable - related parties, and notes/advances payable to related parties approximates their fair value because of the short-term nature of these instruments.

(h) Advertising Expenses

The Company expenses advertising costs as incurred. The Company did not incur any advertising costs during the years ended December 31, 2006 and 2005.

(i) Impairment and Disposal of Long-Lived Assets

Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable in accordance with the guidance established in Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. For assets that are to be held and used, an impairment loss is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.

(j) Income Taxes

The Company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes”. Under SFAS No. 109, deferred income tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based

on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary, to reduce deferred income tax assets to the amount expected to be realized.

(k) Earnings (Loss) Per Share

Basic earnings (loss) per share is based on the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the weighted average number of common shares outstanding and dilutive common stock equivalents. Basic earnings (loss) per share is computed by dividing income (loss) (numerator) applicable to common stockholders by the weighted average number of common stocks outstanding (denominator) for the period. All earnings (loss) per share amounts in the financial statements are basic earnings (loss) per share, as defined by SFAS No. 128, “Earnings Per Share”. Diluted earnings (loss) per share does not differ materially from basic earnings per share for all periods presented. Convertible securities that could potentially dilute basic earnings (loss) per share in the future, such as options and warrants, are not included in the computation of diluted earnings (loss) per share because to do so would be anti-dilutive.

(l) Stock-Based Compensation

On January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment, (“SFAS 123R). Prior to January 1, 2006, the Company accounted for stock-based payments under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”), and related Interpretations, as permitted by SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS 123”). In accordance with APB 25, no compensation cost was required to be recognized for options granted that had an exercise price equal to the market value of the underlying common stock on the date of grant.

The Company adopted SFAS 123R using the modified-prospective transition method. Under that transition method, compensation cost recognized for the year ended December 31, 2006, and thereafter will include: (a) compensation costs for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and (b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R. The financial results for the prior periods have not been restated. The Company will amortize stock compensation cost ratably over the requisite service period.

Had compensation expense for the Company's stock-based compensation plans been determined under SFAS No. 123, based on the fair market value at the grant dates, the Company's pro forma net loss and pro forma net loss per share would have been reflected as follows:


		2005

Net income (loss)		$(4,257,382)
Stock-based employee compensation
expenses as determined under the
fair value based method		(4,158,131)
Stock-based compensation using intrinsic value		924,000
Pro-forma		$(7,491,513)

Net income (loss) per stock -
basic and diluted
	As reported	$(0.02)
	Pro-forma	$(0.04)

The weighted average fair values of the options vested in 2005 was estimated using the Black-Scholes Option Pricing Model with the following weighted average assumptions: dividend yield of 0%, expected volatility of 91.5%, risk free interest rates of 3.6%, and expected lives of 3.4 years.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, the existing model may not necessarily provide a reliable measure of the fair value of its stock options.

(m) Comprehensive Income (Loss)

The Company has adopted SFAS No. 130, “Reporting Comprehensive Income”, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statements of Changes in Stockholders' Equity (Deficiency). Comprehensive income (loss) comprises all equity changes except those resulting from investments by owners and distributions to owners.

(n) Foreign Currency Translations

The Company maintains both U.S. Dollar and Canadian Dollar bank accounts at a financial institution in Canada. Foreign currency transactions are translated into their functional currency, which is U.S. Dollar, in the following manner:

At the translation date, each asset, liability, revenue and expense is translated into the functional currency by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities are translated into U.S. Dollars by using the exchange rate in effect at that date. There are no subsidiaries using a functional currency other than the U.S. Dollar at December 31, 2006 and 2005. Transaction gains and losses that arise from exchange rate fluctuations are included in the results of operations.

(o) Accounting for Derivative Instruments and Hedging Activities

The Company adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, which requires companies to recognize all derivatives contracts as either assets or liabilities in the balance sheet and to measure them at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that is attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.

The Company has not entered into derivative contracts either to hedge existing risks or for speculative purposes. The adoption of this pronouncement does not have an impact on the Company’s financial statements.

(p) Intangible Assets

The Company adopted the SFAS No. 142, “Goodwill and Other Intangible Assets”, which requires that goodwill and intangible assets with indefinite life to not be amortized but rather tested at least annually for impairment. Intangible assets with a definite life are required to be amortized over its useful life.

The intangible asset is not amortized but we perform the annual review for possible impairment in the fourth calendar quarter of each year. No Intangible asset impairment was recognized based on the evaluations performed.

(q) Related Party Transactions

A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties (See Note 4).

(r) Stock Offering Costs

As discussed in Note 8, the fair value of stock issued to Fusion Capital under the stock purchase agreement was expensed in the year the stock was issued because the agreement can be terminated without the stock being returned.

(s) New Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainties in Income Taxes”, (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 is effective for financial statements as of December 15, 2006. The adoption of FIN 48 is expected to have no impact on the Company's financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements but does not require any new fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company has not yet determined the impact of applying SFAS 157.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”, (“SFAS 158”). SFAS 158 requires an employer to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS 158 is effective for financial statements as of December 31, 2006. The adoption of FAS No. 158 is expected to have no impact on the Company's financial statements.

Note 3 – Equipment


	2006	2005

Computer equipment	$2,293	$19,266
Office equipment	19,613	1,274
	21,906	20,540
Less: accumulated depreciation	(12,285)	(1,659)
	$9,621	$18,881

Depreciation expenses charged to operations for the year ended December 31, 2006 were $10,627 (2005: $1,659).

Note 4 - Related Party Transactions

Rent: The Company’s principal office is located at 1628 West 1st Avenue, Suite 216, Vancouver, British Columbia, Canada, V6J 1G1. These premises are owned by a private corporation controlled by a director and majority

shareholder. The Company pays a monthly rent of C$3,200 effective from April 1, 2006. The Company paid rent of $25,555 (2005: $nil) for the year ended December 31, 2006.

All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business.

Note 5 – Cooperative Agreements

On July 29, 2004, PhytoMedical Technologies Corporation (“PTC”), a wholly owned subsidiary of the Company, Inc., entered into an exclusive worldwide licensing agreement with New York University (“NYU”) for certain patented inventions (“NYU Patents”) related to pharmacologically active elements of a muira puama plant extract and ion channel modulators from natural sources.

In consideration for the grant of the License, PTC agreed to:

(a) reimburse NYU for its patent costs incurred to date;

(b) pay to NYU a royalty of 4% of the net sales of all licensed products related to medical, pharmacological, therapeutic, prophylactic, nutritional and research applications of the muira puama extract;

(d) pay NYU 10% of all sublicense fees.

In connection with the licensing agreement, PTC granted to each of NYU and Dr. Bruce Cherksey, a NYU scientist and inventor of the NYU Patents, an option to acquire, for a period of two years from July 29, 2004, a number of shares equal to 12.5% of the outstanding common stock of PTC on a fully diluted basis. The option was exercised by Dr. Cherksey on May 30, 2006. On June 30, 2006, NYU and PhytoMedical Technologies Corporation agreed to extend the option to July 20, 2008. All other terms and conditions of the option agreement will remain in full force and effect.

On December 1, 2004, PolyPhenol Technologies Corporation (“PolyPhenol”), a wholly owned subsidiary of the Company, entered into a three year, three-way Cooperative Research and Development Agreement (“CRADA”) with the USDA's Agricultural Research Service (“ARS”) and Iowa State University (“ISU”). PolyPhenol committed to providing $666,366 in research funding to the ARS and $186,865 to ISU under the following schedule below.

On March 6, 2006, PolyPhenol agreed to extend its CRADA with the USDA’s ARS and ISU for an additional two years through October 31, 2009.

The USDA’s Agricultural Research Service will receive $1,760,845, or $1,094,479 in additional funds, to support the research work and related administrative costs. This represents a 164% increase over the prior funding commitment of $666,366.

ARS:

Year 1: $238,300 in 4 installments, the first of which is due to ARS within 30 days of signing of the CRADA, with the following three payments commencing at the hiring of appropriate research personnel and at three month intervals thereafter;

Year 2: $482,964 in 4 quarterly installments, the first of which is due to ARS 3 months from the previous payment; and

Year 3: $507,114 in 4 quarterly installments, the first of which is due to ARS 3 months from the previous payment.

Year 4: $532,467 in 4 quarterly installments, the first of which is due to ARS 3 months from the previous payment.

The agreement was terminated by mutual agreement in December 2006. As of December 31, 2006, the Company totally incurred $640,819 under the agreement with USDA’s ARS.

ISU:

Year 1: $60,000 to ISU in 4 quarterly installments, the first of which is due within 30 days of signing of the CRADA, with the following three payments commencing at the hiring of appropriate research personnel and at three month intervals thereafter;

Year 2: $62,251 to ISU in 4 quarterly installments, the first of which is due to ISU 3 months from the previous payment; and

Year 3: $70,295 to ISU in 4 quarterly installments, the first of which is due to ISU 3 months from the previous payment.

Year 4: $72,140 to ISU in 4 quarterly installments, the first of which is due to ISU 3 months from the previous payment.

As at December 31, 2006, the Company paid in total of $137,252 as per agreement with ISU.

All rights, title, and interest in any subject invention made solely by employee(s) of ARS shall be owned by ARS, solely by the Company are owned by the Company, solely by ISU are owned by ISU, owned jointly by any of three parties if made by any of those parties.

Note 6 – License Agreement

As of December 31, 2006, the Company paid in total of $20,000 for the license fee and $25,381 for reimbursement of the patent costs and research expenses as per agreement with ISURF.

Note 7 – Development Agreements

During the quarter ended September 30, 2006, the Company entered into two development agreements with Ricerca BioSciences (“Ricerca”), a world class pharmaceutical development laboratory, to begin developmental work on the Company’s BDC-03 compound for cachexia, a devastating muscle wasting condition that afflicts 25% of all AIDS patients and upwards of 90% of all advanced cancer patients. BDC-03 has pharmacologically active elements that

have been successful in reducing body fat percentage, increasing lean muscle mass and lowering cholesterol in a study of growing animals. Ricerca’s responsibilities will eventually expand to include the Company’s other compounds.

As at December 31, 2006, the Company paid in total of $51,558 as per the two agreements with Ricerca.

Note 8 – Common Stock

On July 8, 2005, the Company entered into a Common Stock Purchase Agreement (“Purchase Agreement”) and a Registration Rights Agreement (“Registration Agreement”) with Fusion Capital Fund II, LLC (“Fusion Capital”). Pursuant to the terms of the Purchase Agreement, the Company had to issue to Fusion Capital 863,724 shares (issued) of its common stock, which Fusion has agreed to hold for twenty-five months. Fusion Capital has agreed to purchase from the Company up to $10,000,000 of the Company’s common stock over a twenty-five month period. Pursuant to the terms of the Registration Agreement, the Company has filed a registration statement (the “Registration Statement”) with the Securities and Exchange Commission covering shares which may be purchased by Fusion Capital under the Purchase Agreement.

The Registration Statement was declared effective on October 14, 2005. On each trading day during the term of the Purchase Agreement, the Company has the right to sell to Fusion Capital $20,000 of the Company’s common stock at a purchase price equal to the lower of the (a) the lowest sale price of the common stock on such trading day and (b) the arithmetic average of the three (3) lowest closing sale prices for the common stock during the twelve (12) consecutive trading days immediately preceding the date of purchase. At the Company’s option, Fusion Capital can be required to purchase fewer or greater amounts of common stock each month. The Company has the right to control the timing and the number of shares sold to Fusion Capital.

The Company shall always have the right at any time to decrease the amount of the daily purchase amount by delivering written notice to the buyer which notice shall specify the new daily purchase amount. The decrease in the daily purchase amount shall become effective one trading day after receipt by the buyer of the daily purchase amount decrease notice. The Company shall have the right (but not the obligation) to increase the amount of the daily purchase amount in accordance with the terms and conditions set forth in this Section 1(c)(iii) by delivering written notice to the buyer stating the new amount of the daily purchase amount. With respect to increases in the daily purchase amount above the original daily purchase amount, as the market price for the Common Stock increases the Company shall have the right from time to time to increase the daily purchase amount as follows. For every $0.20 increase in threshold price above $1.00 (subject to equitable adjustment for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), the Company shall have the right to increase the daily purchase amount by up to an additional $2,000 in excess of the original daily purchase amount. “Threshold price” for purposes hereof means the lowest sale price of the Common Stock during the five (5) consecutive trading days immediately prior to the submission to the buyer of a daily purchase amount increase notice (subject to equitable adjustment for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction). For example, if the threshold price is $1.20, the Company shall have the right to increase the daily purchase amount to up to $22,000 in the aggregate. If the threshold price is $2.00, the Company shall have the right to increase the daily purchase amount to up to $30,000 in the aggregate.

During the year ended December 31, 2006, Fusion Capital has purchased 4,044,454 (2005: 733,136) shares of the Company for total proceeds of $3,165,997 (2005: $465,002).

As of March 23, 2007, Fusion Capital has purchased 5,310,681 shares of common stock of the Company for total proceeds of $3,860,999.

Note 9 – Warrants

The movement of share purchase warrants can be summarized as follows:


		Weighted average
	Number of warrants	exercise price

Balance, December 31, 2004	14,285,714	$0.007


Exercised	(14,285,714)	0.007
Balance, December 31, 2006 and 2005	-

As of December 31, 2006, there are no outstanding share purchase warrants.

Note 10 - Stock Options

As of December 31, 2006, the Company had an active stock option plan that provides shares available for options granted to employees, directors and others. Options granted to employees under the Company’s option plans generally vest over two to five years or as otherwise determined by the plan administrator. Options to purchase shares expire no later than ten years after the date of grant.

The movement of stock options can be summarized as follows:


			Remaining	Aggregate
		Weighted average	contractual	intrinsic
	Number of options	exercise price	term	value

Outstanding, December 31, 2004	4,575,000	$0.24
Granted	6,700,000	0.90
Exercised	(550,000)	0.76
Cancelled	(1,450,000)	0.24
Outstanding, December 31, 2005	9,275,000	0.68
Granted	4,250,000	0.89
Cancelled	(2,250,000)	1.22
Outstanding, December 31, 2006	11,275,000	0.65	8.12 years	$882,750

Exercisable at December 31, 2006	9,275,000	0.68	7.81 years	$862,750

Available for grant at December 31, 2006	11,000,000

The aggregate intrinsic value in the table above represents the total pretax intrinsic value for all “in-the-money” options (i.e. the difference between the Company’s closing stock price on the last trading day of 2006 and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on December 31, 2006. This amount changes based on the fair market value of the Company’s stock. Total intrinsic value of options exercised was $nil (2005: $176,500) for the year ended December 31, 2006. Weighted average fair value of options granted during the year ended December 31, 2006 was $0.83 (2005: $0.62) per share.

A summary of the Company’s unvested stock options and changes during the years ended December 31 is as follows:


		Fair value
	Shares	per share

Outstanding at December 31, 2004	-	$-
Granted during 2005	-	-
Vested during 2005	(6,700,000)	0.62
Outstanding at December 31, 2005	-	-
Granted during 2006	4,250,000	0.83
Cancelled during 2006	(2,250,000)	(1.15)
Outstanding at December 31, 2006	2,000,000	0.48

On April 4, 2006, the Company granted 2,250,000 stock options at an exercise price of $1.22 to an employee, expiring on April 4, 2016. The vesting periods for the options are as follows: 250,000 stock options shall vest if and when an IND is filed for any current or future compound; another 250,000 stock options shall vest if and when a phase 1 clinical trial is commenced for any current or future compound; 1,750,000 stock options shall vest if and when the Company acquires any current or future compound or enters into a strategic collaborative agreement for any current or future compound.

As the 2,250,000 stock options will vest based on certain performance conditions, the Company expects that the first 250,000 stock options will vest at around 16 months from the date of grant, the second 250,000 stock options will vest at around 22 months from the date of grant and the remaining 1,750,000 stock options will vest at around 16 months from the date of grant. The fair value of each batch of stock options will be amortized over their expected service periods. The Company will periodically reassess the probability of the performance conditions being met and the estimated service period of each batch of stock options.

The fair value of the 2,250,000 stock options granted was estimated at $1.15 each, for a total amount of $2,587,500, by using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, expected volatility of 91.8%, risk-free interest rates of 4.15%, and expected life of three years.

On August 1, 2006, the Company cancelled 2,250,000 stock options granted to an employee on April 6, 2006, while simultaneously granting 2,000,000 stock options. The 2,000,000 stock options have an exercise price of $0.52 per share, the closing price of the Company’s shares on July 31, 2006. The options vest as follows: (a) 250,000 options shall vest if and when an Investigational New Drug (IND) application is filed for any current or future compounds; (b) 250,000 options shall vest if and when a phase I clinical trial is commenced for any current or future compounds; and (c) 1,500,000 options shall vest if and when the Company or a wholly owned subsidiary or any one current or future compound is acquired, in whole or in part, or when either through the Company or a subsidiary, enters into a strategic collaborative agreement for any one current or future compound, provided that the Company’s Board of Directors has approved, by written resolution, any such acquisition, sale or agreement.

As the 2,000,000 stock options will vest based on certain performance conditions, the Company expects that the first 250,000 stock options will vest at around 12 months from the date of grant, the second 250,000 stock options will vest at around 18 months from the date of grant and the remaining 1,500,000 stock options will vest at around 12 months from the date of grant. The fair value of each batch of stock options will be amortized over their expected service periods. The Company will periodically reassess the probability of the performance conditions being met and the estimated service period of each batch of stock options.

The fair value of the 2,000,000 options granted was estimated at $0.48 each, for a total of amount of $960,000, by using the Black-Scholes Option Pricing Model with the following weighted average assumptions: dividend yield of 0%, expected volatility of 89.7%, risk-free interest rates of 4.91%, and expected lives of three years.

Additional stock-based compensation expense of $80,000 was recognized as a result of the cancellation and re-issuance of stock options.

During the year ended December 31, 2006, compensation expenses of $1,443,308 (2005: $924,000) was recognized for options previously granted and vesting over time. As of December 31, 2006, the Company had $1,224,192 of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a period of one year.

The options outstanding and exercisable as of December 31, 2006 can be summarized as follows:


	Outstanding			Exercisable
		Weighted
	Number	Average	Weighted	Number	Weighted
Range of	Outstanding at	Remaining	Average	Exercisable at	Average
Exercise	December 31,	Contractual	Exercise	December 31,	Exercise
Prices	2006	Life (Years)	Price	2006	Price



$0.24	2,975,000	6.73	$0.24	2,975,000	$0.24
0.52	2,000,000	9.59	0.52	-	-
0.60	1,200,000	8.93	0.60	1,200,000	0.60
0.96	5,100,000	8.17	0.96	5,100,000	0.96
$0.24 - $0.96	11,275,000	8.12	$0.65	9,275,000	$0.68

The Company does not repurchase shares to fulfill the requirements of options that are exercised. Further, the Company issues new shares when options are exercised.

All options other than those issued in 2006 were cancelled effective March 5, 2007.

Note 11 - Income Taxes

There is no current or deferred tax expense for the years ended December 31, 2006 and 2005, due to the Company's loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes and has recorded a 100% valuation allowance against the deferred tax asset.

The income tax effect, utilizing a 34% income tax rate, of temporary differences giving rise to the deferred tax assets and deferred tax liabilities is a result of the following:


		2006	2005

Deferred tax assets:
	Net operating loss carryforwards	$6,192,000	$5,710,000
	Research and development expenses	305,000	-
	Stock based compensation	490,000	-
	Valuation allowance	(6,987,000)	(5,710,000)
Net deferred tax assets		$-	$-

The 2006 increase in the valuation allowance was $1,277,000 (2005: $795,000).

The Company has available net operating loss carry-forwards of approximately $18,213,000 for tax purposes to offset future taxable income, which expires commencing 2008 through to the year 2026. Pursuant to the Tax Reform Act of 1986, annual utilization of the Company’s net operating loss carry-forwards may be limited if a cumulative change in ownership of more than 50% is deemed to occur within any three-year period.

A reconciliation between the statutory federal income tax rate (34%) and the effective rate of income tax expense for each of the years during the years ended December 31 follows:


	2006	2005

Statutory federal income tax rate	-34.0%	-34.0%
Valuation allowance	34.0%	26.1%
Stock offering costs	0.0%	7.9%
Effective income tax rate	0.0%	0.0%

ITEM 8: CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We have had no disagreements with our certified public accountants with respect to accounting practices, procedures or financial disclosure.

ITEM 8a: CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Securities Exchange Act of 1934 (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Notwithstanding the foregoing, there can be no assurance that our disclosure controls and procedures will detect or uncover all failures of persons associated with us to disclose material information otherwise required to be set forth in our periodic reports. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives.

There have been no significant changes in internal controls, or in factors that could significantly affect internal controls, subsequent to the date that management, including the Chief Executive Officer and the Chief Financial Officer, completed their evaluation

ITEM 8b: OTHER INFORMATION

None.

ITEM 9: DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Set forth below is certain information regarding each of the directors and officers of the Company:

Greg Wujek – President, Chief Executive Officer, Director

Mr. Greg Wujek earned his Bachelor’s degree in Science from Illinois State University in 1986. From November 2000 to May 2005, Mr. Wujek was employed by Andrx Laboratories. During his tenure at Andrx Laboratories, Mr. Wujek managed a team of over 450 individuals, and held several positions, including Vice President of Business Development, Vice President of Sales, as well as Vice President of Managed Care. During June 2005 to September 2005, Mr. Wujek performed independent consulting services for branded pharmaceutical companies. Consulting services ranged from sales management training, optimizing sales, managed care, and sales operations. From September 2005 to March 2006, Mr. Wujek was employed by Savient Pharmaceuticals, where he held the position of Vice President, Sales, and was responsible for sales, operations, training, and managed care. Mr. Wujek joined the Company as President, Chief Executive Officer and Director on April 3, 2006.

Gary Branning – Director

Mr. Branning received his Bachelor of Science degree in Business Administration from Wagner College, on Staten Island, NY, and an MBA in finance from Fairleigh Dickinson University. In 2001, Mr. Branning joined Pharmacia Corporation. Mr. Branning was the Executive Director of Managed Markets Marketing for Pharmacia Corporation. The Marketing Unit of the Managed Markets Marketing of Pharmacia was a service organization focused on the development of brand programs, value added services and health management programs in managed markets. In 2003, Mr. Branning joined Managed Market Resources, a health care consulting and medical communications company as Managing Partner and Senior Vice President of Managed Market Resources. Mr. Branning’s responsibilities included strategic consulting, new product development, business development, and executing Managed Market Resource’s sales and marketing plans. Mr. Branning joined the Company as a Director on September 13, 2006.

Rick Henson – Director

Mr. Henson earned his Bachelor’s degree in Education from Wichita State University. In 2001, Mr. Henson joined Andrx Corporation, where he held the position of Senior Vice President of Sales, and was responsible for sales, operations, and training. During his tenure at Andrx Corporation, Mr. Henson built a 500-plus person branded sales division from inception and increased division sales to $120 million. Andrx Laboratories was recently acquired by Watson Pharmaceuticals for $1.9 billion. In 2005, Mr. Henson joined Vernalis Pharmaceuticals, Inc. as a consultant to start up a US commercial operation and was responsible for strategic planning, training, sales management and product acquisition. In 2006, Mr. Henson accepted the position of Vice President of Sales with complete oversight of sales function for Vernalis US. Mr. Henson joined the Company as a Director on September 13, 2006.

Harmel S. Rayat - Secretary, Treasurer, Chief Financial Officer, Director

Mr. Rayat has been in the brokerage and venture capital industry since 1981. Between January 1993 and April 2001, Mr. Rayat served as the president of Hartford Capital Corporation, a company that provided financial consulting services to a wide range of emerging growth corporations. From April 2001 through January 2002, Mr. Rayat acted as an independent consultant advising small corporations and since January 2002, he has been president of Montgomery Asset Management Corporation, a privately held firm providing financial consulting services to emerging growth corporations. Mr. Rayat has served, and continues to serve, as a director, officer and majority shareholder of a number of publicly traded and privately held corporations, including, HepaLife Technologies, Inc., Entheos Technologies, Inc., Octillion Corp., and International Energy, Inc. Mr. Rayat has served as one of our directors since December 4, 2000. In 2002, Mr. Rayat was appointed secretary and treasurer. On August 12, 2005, Mr., Rayat was appointed our president and chief executive and financial officer, as well as our principal accounting officer. On April 3, 2006, Mr. Rayat resigned as president and chief executive officer. On September 13, 2006, Mr. Rayat was appointed secretary and treasurer.

There are no family relationships among or between any of our officers and directors.

During the past five years, except as set forth below, none of our directors, executive officers, promoters or control persons has been:

(a)

the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(b)

convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

(c)

subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

(d)

found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

Compliance With Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the Company's directors, officers and persons who own more than 10 percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission ("the Commission"). Directors, officers and greater than 10 percent beneficial owners are required by applicable regulations to furnish the Company with copies of all forms they file with the Commission pursuant to Section 16(a). Based solely upon a review of the copies of the forms furnished to the Company, the Company believes that during fiscal 2006, the Section 16(a) filing requirements applicable to its directors and executive officers were satisfied.

ITEM 10: EXECUTIVE COMPENSATION

Remuneration and Executive Compensation

Summary Compensation Table

Securities

Underlying

Name and

Options

All Other

Principal Position Year

Salary

Bonus

Other

Granted

Compensation

Greg Wujek

2006

$161,250

2,000,000

President, CEO

2005

and Director

2004

Harmel S. Rayat

2006

$3,900

Secretary, Treasurer

2005

$1,800

and Director

2004

$3,500

Gary Branning

2006

$1,200

Director

2005

2004

Rick Henson

2006

$1,200

Director

2005

2004

Indy Panchi (1)

2006

$2,850

Director

2005

$2,400

2004

$4,700

Derek Cooper, (2)

2006

$2,850

Secretary, Treasurer

2005

$1,800

and Director

2004

$3,500

(1) Mr. Indy Panchi resigned as a Director on September 13, 2006

(2) Mr. Derek Cooper resigned as a Secretary, Treasurer and Director on September 13, 2006

Stock Option Grants in Last Fiscal Year

Shown below is further information regarding employee stock options awarded during 2006 to the named officers and directors:

Number of

% of Total

Securities

Options Granted

Underlying

to Employees

Exercise

Expiration

Name

Options

in 2006

Price ($/sh)

Date

Greg Wujek

2,000,000

100

$0.52

August 1, 2016

Harmel Rayat

n/a

Gary Branning

n/a

Rick Henson

n/a

Indy Panchi (1)

n/a

Derek Cooper (2)

n/a

(1) Mr. Indy Panchi resigned as a Director on September 13, 2006

(2) Mr. Derek Cooper resigned as a Secretary, Treasurer and Director on September 13, 2006

Aggregated Option Exercises During Last Fiscal Year and Year End Option Values

The following table shows certain information about unexercised options at year-end with respect to the named officers and directors:

Common Shares Underlying Unexercised Value of Unexercised In-the-money

Options on December 31, 2006

Name

Exercisable

Unexercisable

Exercisable

Unexercisable

Greg Wujek

2,000,000

$1,060,000

Harmel Rayat

Gary Branning

Rick Henson

Indy Panchi (1)

Derek Cooper (2)

(1) Mr. Indy Panchi resigned as a Director on September 13, 2006

(2) Mr. Derek Cooper resigned as a Secretary, Treasurer and Director on September 13, 2006

Changes in Control

There are no understandings or agreements, aside from the transaction completed and described under “Certain Relationships and Related Transactions,” known by management at this time which would result in a change in control of the Company. If such transactions are consummated, of which there can be no assurance, the Company may issue a significant number of shares of capital stock which could result in a change in control and/or a change in the Company’s current management.

ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 21, 2007, the beneficial ownership of the Company's Common Stock by each director and executive officer of the Company and each person known by the Company to beneficially own more than 5% of the Company's Common Stock outstanding as of such date and the executive officers and directors of the Company as a group.

Number of Shares

Person or Group

of Common Stock

Percent

Harmel S. Rayat (1)

117,561,471

62%

216-1628 West First Avenue

Vancouver, B.C. V6J 1G1 Canada

Greg Wujek (2)

2,000,000

100 Overlook Drive, 2nd Floor

Princeton, NJ 08540

Gary Branning

100 Overlook Drive, 2nd Floor

Princeton, NJ 08540

Rick Henson

100 Overlook Drive, 2nd Floor

Princeton, NJ 08540

Indy Panchi (3)

216-1628 West First Avenue

Vancouver, B.C. V6J 1G1 Canada

Derek Cooper (4)

216-1628 West First Avenue

Vancouver, B.C. V6J 1G1 Canada

Directors and Executive Officers

119,561,471

62%

as a group (6 persons)

(2) 2,000,000 stock options were granted on August 1, 2006, which may be acquired pursuant to options granted and exercisable under the Company's stock option plans.

(3) Mr. Indy Panchi resigned as a Director on September 13, 2006

(4) Mr. Derek Cooper resigned as a Secretary, Treasurer and Director on September 13, 2006

ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business.

ITEM 13: EXHIBITS

(a) The following exhibits are filed as part of this Annual Report:

31.1

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)

31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)

32.1

Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) During the Company’s fourth fiscal quarter, there were no reports filed on Form 8-K

October 16, 2006: PhytoMedical Technologies, Inc. issued a news release to announce the addition of pharmacology researcher and drug discovery and development expert, Dr. Jay R. Wiggins, to the Company’s Scientific Advisory Board.

December 7, 2006: PhytoMedical Technologies, Inc. issued a news release to announce plans to expedite the development of its new class of cinnamon-derived 'polyphenolic' compounds, which possess unique antioxidant and insulin enhancing qualities, distinct from existing classes of drugs for diabetes.

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

The firm of Ernst & Young, LLP served as the Company's independent accountants from May 5, 2005 until their dismissal in March 2006. The firm of Peterson Sullivan, PLLC currently serves as the Company’s independent accountants. The Board of Directors of the Company, in its discretion, may direct the appointment of different public accountants at any time during the year, if the Board believes that a change would be in the best interests of the stockholders. The Board of Directors has considered the audit fees, audit-related fees, tax fees and other fees paid to the Company's accountants, as disclosed below, and had determined that the payment of such fees is compatible with maintaining the independence of the accountants.

Audit Fees: The aggregate fees, including expenses, billed by the Company's principal accountant in connection with the audit of our consolidated financial statements for the most recent fiscal year and for the review of our financial information included in our Annual Report on Form 10-KSB and our quarterly reports on Form 10-QSB during the fiscal years ending December 31, 2006 and December 31, 2005 were $9,851 and $17,221 respectively.

Tax fees: The aggregate fees billed to the Company for tax compliance, tax advice and tax planning by the Company’s principal accountant for fiscal 2006 and 2005 were $0.

All Other Fees: The aggregate fees, including expenses, billed for all other services rendered to the Company by its principal accountant during year 2006 and 2005 were $0.

The Company does not currently have an audit committee.

SIGNATURES

Pursuant to the requirements of Sections 13 or 15 (d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 30th day of March, 2007.

PhytoMedical Technologies, Inc.

/s/ Greg Wujek

Greg Wujek

President and CEO

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in capacities and on the dates indicated.

Signature

Title

Date

/s/ Greg Wujek

President, Chief Executive

March 30, 2007

Greg Wujek

Officer and Director

/s/ Harmel S. Rayat

Secretary, Treasurer,

March 30, 2007

Harmel S. Rayat

Chief Financial Officer,

Principal Accounting Officer

and Director

/s/ Gary Branning

Director

March 30, 2007

Gary Branning

/s/ Rick Henson

Director

March 30, 2007

Rick Henson