Imaging Diagnostic Systems (fka IMDS)

[Michel]

Pag. 21

During fiscal 2012, a significant reduction in operating overhead/expenses occurred due to the reduction in key staff. This reduction in staff halted any progress towards getting the PMA application started as a result of our financial and funding limitations. We will not be able to proceed with the PMA application process until funding has been secured and the FDA consultants engaged to continue the process. There can be no assurance that we will obtain this funding.

In summary, our management team believes that the more structured and proven PMA application approach with its semi-rigid timetable for mandatory responses would provide us with the best route to achieve marketing clearance for our innovative new imaging modality that in the future will be classified as Diffuse Optical Tomography.