Forward-Looking Statements

Except for the historical information presented in this document, the matters discussed in this Form 10-Q for the three and nine months ended September 30, 2009, and specifically in the items entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations," 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-Q 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-Q. 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-Q 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.

Overview

The following Management's Discussion and Analysis ("MD&A") is intended to help the reader understand the consolidated results of operations and financial condition of Phytomedical Technologies, Inc. The MD&A is provided as a supplement to, and should be read in conjunction with the Company's consolidated financial statements and the accompanying notes to the consolidated financial statements included in this Form 10-Q.

The Company's discussion and analysis of its financial condition and results of operations is based on its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosures. The Company reviews its estimates on an ongoing basis.

PhytoMedical Technologies, Inc. (the "Company") was incorporated in the State of Nevada on July 25, 2001; and together with its wholly owned subsidiaries PhytoMedical Technologies Corporation ("PhytoMedical Corp."), PolyPhenol Technologies Corporation ("PolyPhenol") and PhytoMedical Technologies Ltd. ("PhytoMedical Ltd.") is a pharmaceutical company focused on research, development and commercialization of pharmaceutical products. PhytoMedical Corp. was incorporated on March 10, 2004 in the State of Nevada and has no assets and liabilities. PolyPhenol was incorporated on August 24, 2004 in the State of Nevada and has no assets and liabilities. PhytoMedical Ltd. was incorporated on April 11, 2007 in the Province of British Columbia, Canada for providing administrative services to the Company's Canada office. The Company ceased to conduct business in Canada on August 31, 2008 and closed this office.
As a result, the Company dissolved PhytoMedical Ltd. and eliminated all intercompany balances, effective January 1, 2009.

Because the Company is a smaller reporting company, certain disclosures otherwise required to be made in a Form 10-Q are not required to be made by the Company.

Dartmouth Sponsored Research Agreement

Pursuant to the Company's Sponsored Research Agreement with Dartmouth College ("Dartmouth"), which was amended on October 1, 2008 extending it to September 30, 2009, it is synthesizing and testing a novel class of anti-cancer agents which have a 'cytotoxic' or poisonous affinity for cancer cells, and are designed to bind tightly to cancer cell DNA (deoxyribonucleic acid), the blueprint of life for the cancer cell. Previous studies conducted by Dartmouth using a leukemia mouse cell line, have demonstrated that such binding (or intercalation) should stop the replication of the DNA, and, ultimately, lead to the death of the cancer cell. Following the preparation of starting materials, researchers will design, synthesize and test new examples of compounds known to bind to DNA, called bis-acridines; these bis-acridines will be tethered to the DNA with both flexible and semi-rigid linking chains. If successfully synthesized, the compounds will be submitted for evaluation in human cancer cell lines.

Depending on research outcomes, the Company plans to fund various in vitro (test tube) and in vivo (animal) experiments that will involve the use of several commercially available human cancer cell lines covering key areas of concern such as glioblastoma (tumors related to the central nervous system, including but not limited to the brain, spinal cord and optic nerve), small cell lung, breast, kidney, pancreatic, and liver cancers. The Company's goal, based on the results of both the in vitro and in vivo tests, will involve identification of the key compound(s) that demonstrated the greatest anti-cancer activity per human cancer cell line.

On February 3, 2009, the Company issued a news release to announce results from recent in vivo efficacy and toxicity tests where the Company's patented anti-cancer compound was administered to specimens with difficult-to-treat human brain cancer (SF295 glioblastoma xenografts) and, according to researchers, proved to be least toxic and effective in controlling the growth of SF295 human glioblastoma xenografts.

As of September 30, 2009, Dartmouth had concluded their research and development and provided the Company with a key anti cancer compound for glioblastoma. Based on the results of these tests, the Company has partnered with LATITUDE Pharmaceuticals, Inc. ("Latitude") to develop an intravenous ("IV") formulation for its lead anti cancer compound for glioblastoma.

Dartmouth granted the Company the option of a world-wide, royalty-bearing exclusive license to make, have made, use and sell in the field of oncology, the products embodying or produced through Dartmouth's previous and future patents and through any joint-inventions related to the agreement, at reasonable terms and conditions as the parties may agree.

The Company will reimburse Dartmouth for all costs associated with obtaining and maintaining Dartmouth's pre-existing patents related to the subject technology.

As of September 30, 2009, the Company has paid a total of $220,260 pursuant to the Sponsored Research Agreement with Dartmouth and $1,253 for reimbursement of expenses, of which $35,710 and $60,463 is included in research and development expense for the three and nine months ended September 30, 2009 and $0 and $103,550 is included in research and development expense for the three and nine months ended September 30, 2008.

Dartmouth License Agreement

On September 1, 2008, the Company entered into an exclusive license agreement with the Trustees of Dartmouth College ("DC") to develop, market and distribute a novel class of synthesized compounds known as bis-intercalators. These anti-cancer agents which have a 'cytotoxic' or poisonous affinity for cancer cells, and are designed to bind tightly to cancer cell DNA (deoxyribonucleic acid), the blueprint of life for the cancer cell.

Under the terms of the license agreement, the Company has to pay license fees to DC based upon milestones, in addition to an upfront payment of $15,000 (paid) within 30 days of execution of the agreement. In addition, DC will receive royalty payments on the net sales of products. The Company will pay an annual royalty throughout the duration of the agreement. The Company will also reimburse DC the costs incurred for filing, prosecuting and

The Company submitted a Confidential Treatment Request ("CTR") Request with the United States Securities and Exchange Commission (the "SEC") on October 22, 2008 requesting permission to withhold disclosure of certain of the provisions of the Dartmouth License Agreement. On March 9, 2009, the SEC granted the CTR. Accordingly, certain terms of the Dartmouth License Agreement, subject to the CTR, do not need to be released to the public until August 5, 2013.

LATITUDE Agreement

On July 6, 2009, the Company entered into an agreement with Latitude to develop an IV formulation for the Company's lead anti cancer compound for glioblastoma, D11B, to use in the Company's preclinical efficacy and toxicology evaluation and possible early stage human clinical trials. As of September 30, 2009, the Company has paid $23,400 pursuant to the terms of the agreement with Latitude, all of which is included in research and development expense for the three and nine months ended September 30, 2009.

Diabetes Research

Iowa State University Sponsored Research Agreement

On February 1, 2007, the Company, through its wholly owned subsidiary, PolyPhenol, entered into a Sponsored Research Agreement with Iowa State University ("ISU"). Under terms of the agreement, the Company continued to undertake its research at ISU for development of the Company's novel, synthesized type A-1 'polyphenolic' compounds. On January 6, 2009, the Company provided written notice to ISU terminating the Sponsored Research Agreement between the Company and ISU. The termination was effective March 6, 2009.

Contractual Obligations under the ISU Sponsored Research Agreement were as follows:

Year 1: $62,251 (paid as of March 31, 2009) to ISU in 4 quarterly installments, the first of which was due within 30 days of signing of the Sponsored Research Agreement, the second of which was due to ISU 3 months from the previous payment;

Year 2: $70,295 ($52,721 of which was paid as of March 31, 2009) to ISU in 4 quarterly installments, the first of which was due to ISU 3 months from the previous payment; and

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

Upon written notice of termination of the Sponsored Research Agreement to ISU on January 6, 2009, the Company was current with respect to all contractual obligations owed to ISU pursuant to the Sponsored Research Agreement.

As of September 30, 2009, the Company had paid a total of $114,972 pursuant to the terms of the ISU Sponsored Research Agreement. The Company did not incur any research and development expense pursuant to the terms of the ISU Sponsored Research Agreement during the three and nine months ended September 30, 2009. During the three and nine months ended September 30, 2008 the Company incurred $33,137 and $66,273 pursuant to the terms of the ISU Sponsored Research Agreement. In addition to contractual obligations pursuant to the ISU Sponsored Research Agreement, the Company reimbursed ISU $92 and $506 during the three and nine months ended September 30, 2008 for other out-of-pocket costs that are included in research and development expense.

Iowa State University Research Foundation License Agreement

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

Under terms of the license agreement, the Company had to pay to ISURF license fees, of which $20,000 was payable (paid) within 30 days of execution of the agreement, $50,000 was payable upon completion of the first successful Phase 2 clinical trial and the remaining $250,000 was payable upon first approval by the regulatory authority on new drug application. The Company also had 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.

Upon written notice of termination of the license agreement to ISURF on January 6, 2009, the Company was current with respect to all contractual obligations owed to ISURF pursuant to the license agreement.

As of September 30, 2009, the Company had paid a total of $20,000 to ISURF for the license fee and $31,223 for reimbursement of patent costs and research expenses as per agreement with ISURF, none of which is included in research and development expense for the three and nine months ended September 30, 2009 and 2008.

Ricerca Development Agreements

The Company utilizes Ricerca BioSciences LLC ("Ricerca") as a research vendor, on an as needed basis, to assist in the development of the Company's technologies. The terms and scope of the work that Ricerca performs is in accordance with formalized statements of work.

During the three and nine months ended September 30, 2009 the Company incurred $0 and $5,400 for services provided by Ricerca, which is included in research and development expense. During the three and nine months ended September 30, 2008 the Company incurred $61,503 and $151,103 for services provided by Ricerca, which is included in research and development expense.

Results of Operations



A summary of the Company's operating expense for the three and nine months ended
September 30, 2009 and 2008 was as follows:



                             Three Months Ended                        Nine Months Ended
                               September 30,        Percentage           September 30,        Percentage
                              2009        2008        Change           2009        2008         Change

Operating expenses
       Director fees -   $      1,900 $    3,000          (37) %   $    5,100 $      6,150          (17) %
       related party
       Investor                 1,125      6,815          (83)          2,533      492,360          (99)
       relations
       Wages and               63,806     98,051          (35)        198,487      288,128          (31)
       benefits
       Research and            60,110    116,017          (48)         92,849      343,968          (73)
       development
       Professional fees       34,643     15,859           118        107,974       77,894            39
       Other operating         29,918     24,793            21         34,630      106,583          (68)
       expenses
Total operating expenses $    191,502 $  264,535          (28) %   $  441,573 $  1,315,083          (66) %

Director fees - related party

Non-employee directors receive $250 per month for their services as directors plus $100 for each Board meeting attended.

Directors fees for the three months ended September 30, 2008 includes $1,500 of fees earned for the three months ended June 30, 2008, but not recognized for financial reporting purposes until the subsequent quarter ended September 30, 2008. The $1,500 was not deemed significant to the consolidated financial statements taken as a whole.

Investor relations

Investor relations costs represent fees paid to publicize the Company's technology within the investor community with the purpose of increasing company recognition and branding, and to facilitate the efforts to raise funds in equity or debt financings.

During the first half of fiscal year 2008, the Company increased its production of newsletters, analyst coverage, and information distribution to the investor community as a result of technological advances made pursuant to the Sponsored Research Agreement with Dartmouth at the end of the fiscal year 2007 and the beginning of the fiscal year 2008, resulting in higher investor relations expense during the nine months ended September 30, 2008 compared to the nine months ended September 30, 2009. Effective October 1, 2008, the Company ceased using an investor relations firm and therefore does not expect investor relations expense to be as high as it was in previous periods.

Effective April 15, 2009, the Company entered into a one-year Shareholder Communication Services Agreement (the "Shareholder Communications Agreement") with a third party consultant to provide shareholder communication and related administrative services. In accordance with the terms of the Shareholder Communications Agreement, the Company pays the third party consultant $375 per month.

Wages and benefits

During the three and nine months ended September 30, 2009, the Company incurred $63,806 and $198,487 in wages and benefits expense for services rendered by Mr. Greg Wujek, the President, Chief Executive Officer, and Director of the Company.

During the three months ended September 30, 2008, the Company incurred a total of $98,051 in wages and benefits expense, consisting of $65,408 for services rendered by Mr. Wujek and $32,643 for services rendered by the employees in the Company's administrative office in Vancouver, Canada, which was closed on August 31, 2008.

During the nine months ended September 30, 2008, the Company incurred a total of $288,158 in wages and benefits expense consisting of $198,498 for services rendered by Mr. Wujek, $13,624 of stock based compensation expense related to the amortization of a stock option previously granted to Mr. Wujek to purchase 2,000,000 shares of the Company's common stock at an exercise price of $0.52 per share, and $76,036 for services rendered by the employees in the Vancouver, Canada office.

Research and development

Research and development costs represent costs incurred to develop the Company's technologies and are incurred pursuant to the Company's sponsored research agreements with Dartmouth, ISU, Ricerca, Latitude, and other third party contract research organizations. The sponsored research agreements include salaries and benefits for research and development personnel, allocated overhead and facility occupancy costs, contract services and other costs. Research and development costs are expensed when incurred, except for nonrefundable advance payments for future research and development activities which are capitalized and recognized as expense as the related services are performed.

                              Three Months Ended                       Nine Months Ended
                                 September 30,         Increase/         September 30,         Increase/
                               2009         2008      (Decrease)       2009         2008       (Decrease)

Research and development
expense
    ISU Sponsored         $         -  $     33,137 $    (33,137) $         -  $     66,273 $     (66,273)
    Research Agreement
    Dartmouth Sponsored         35,710           -         35,710       60,463      103,550       (43,087)
    Research Agreement
    Ricerca                         -        61,503      (61,503)        5,400      151,103      (145,703)
    Latitude                    23,400           -         23,400       23,400           -          23,400
    Agreement
    Other research and           1,000       21,377      (20,377)        3,586       23,042       (19,456)
    development expense
Total research and        $     60,110 $    116,017 $    (55,907) $     92,849 $    343,968 $    (251,119)
development expense

Professional fees

Professional fees substantially consist of accounting fees, audit and tax fees, legal fees, and SEC related filing costs.

Professional fees increased $18,784 during the three months ended September 30, 2009 compared to the same period in 2008 substantially due to increases in legal fees of approximately $12,100 and accounting and tax related fees of approximately $4,300. Accounting related fees increased due to costs incurred for the preparation and filing of the amended Form 10-Q for the quarter ended March 31, 2009. Tax related fees increased as a result of costs incurred for the preparation and filing of the Company's Form 1120 for fiscal year 2008. The increase in legal fees is substantially the result costs incurred for legal counsel to prepare the Securities Exchange Agreement (see "Change in fair value of warrant liability and gain on extinguishment of warrant liability" below).

Professional fees increased $30,080 during the nine months ended September 30, 2009 compared to the same period in 2008 substantially due to increases in legal fees of approximately $5,100 and accounting and tax related fees of approximately $18,300. The increase in accounting fees is partially the result of the Company closing its administrative office in Vancouver, British Columbia, Canada, effective August 31, 2008, terminating all of the employees in Vancouver, Canada. Due to this downsizing, as of September 1, 2008, the Company began outsourcing its accounting function to third parties resulting in an increase in accounting fees. Also contributing to the increase in accounting and tax related fees during the nine months ended September 30, 2009 is costs incurred for the preparation and filing of the amended Form 10-Q and Form 1120 discussed in the preceding paragraph.

Other operating expenses

Other operating expenses include patent application fees, license related fees, travel and entertainment, rent, office supplies, printing and mailing, information technology related fees and other administrative costs.

Other operating expenses increased $5,125 during the three months ended September 30, 2009 compared to the same period in 2008 substantially due to increases in patent application fees of approximately $17,500 and license related fees of $10,000 offset by decreases in travel and entertainment of approximately $4,600, office supplies, printing and mailing of approximately $11,400, and rent of approximately $5,500 as a result of the Company closing its administrative office in Vancouver, Canada, effective August 31, 2008.

Other operating expenses decreased $71,953 during the nine months ended September 30, 2009 compared to the same period in 2008 substantially due to decreases in travel and entertainment of approximately $36,700, office supplies, printing and mailing of approximately $27,200, rent of $19,500, and office repair and maintenance of approximately $6,700, as a result of the Company closing its administrative office in Vancouver, Canada, effective August 31, 2008. These decreases are offset by increases in patent application fees of approximately $17,500 and license related fees of $10,000.

A summary of the Company's other income (expense) for the three and nine months ended September 30, 2009 and 2008 was as follows:

                                  Three Months Ended                             Nine Months Ended
                                   September 30,         Percentage                September 30,          Percentage
                                2009          2008         Change                2009          2008         Change

Other income (expense)
     Interest              $         -  $       3,546         *     %      $          -  $      21,698         *     %
   income
     Interest expense          (16,068)      (19,864)          (19)             (47,682)      (65,857)          (28)
     Change in fair value of      6,744            -          *                 (93,910)            -          *
   warrant liability
     Gain on extinguishment      52,631            -          *                   52,631            -          *
   of warrant liability
     Loss on disposal of             -        (8,068)         *                       -        (8,068)         *
   fixed assets
     Loss on dissolution of          -             -          *                    (523)            -          *
   foreign subsidiary
     Foreign exchange loss           -        (3,391)         *                       -        (6,969)         *

* Not meaningful

Interest income

Interest income for the three and nine months ended September 30, 2008 represents interest earned on proceeds received as a result of the 2007 Private Placement completed by the Company in September 2007, raising net proceeds of $3,109,500. The Company's interest-bearing bank account was maintained at a financial institution located in Canada. Effective August 31, 2008, the Company closed its administrative office in Vancouver, Canada. As a result, the Company also closed the bank account at the Canadian financial institution on December 31, 2008 and transferred all of its cash to a non-interest bearing account at an U.S. financial institution.

Interest expense

The Company had arranged with Mr. Harmel S. Rayat, former Chief Financial Officer, Director, and majority shareholder of the Company, a loan amount up to $2,500,000 that may be drawn down on an "as needed basis" at a rate of prime plus 3%. Effective September 15, 2008, Mr. Rayat and the Company terminated this loan agreement. At January 1, 2008, the outstanding principal balance of the note payable was $1,000,000. In February 2008, the Company repaid $250,000 of the principal balance of the note payable. The remaining $750,000 note payable to Mr. Rayat, which was due on March 8, 2006, bears interest at an annual rate of 8.50% and is payable on demand.

Change in fair value of warrant liability and gain on extinguishment of warrant liability

The Company's Class A Warrants are considered derivative liabilities and are therefore required to be adjusted to fair value each quarter. The Company values its warrant liability using a Black-Scholes model. The Company's stock price, remaining term of the Class A Warrants and the volatility of the Company's stock all impact the fair value of the Company's Class A Warrants.

On September 29, 2009, the Company consummated a securities exchange agreement ("Securities Exchange Agreement") with the holders of the Company's Class A Warrants whereby the holders and the Company agreed to exchange the holders' . . .