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

                                   FORM 10-QSB

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                 For the quarterly period ended October 31, 2005

[ ] 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: 000-49972

                      IN VERITAS MEDICAL DIAGNOSTICS, INC.
             (Exact name of registrant as specified in its charter)


          Colorado                                       84-1579760
-------------------------------                    -------------------
(State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                   Identification No.)


The Green House, Beechwood Business Park North,
              Inverness, Scotland                            IV2 3BL
-------------------------------------------------           ----------
   (Address of principal executive offices)                 (Zip Code)

                               011 44-1463-667-347
                           --------------------------
                           (Issuer's telephone number)

                                 WITH COPIES TO:

                            Richard A. Friedman, Esq.
                      Sichenzia Ross Friedman Ference, LLP
                           1065 Avenue of the Americas
                            New York, New York 10018
                                 (212) 930-9700

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

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes [_] No [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of  the  latest  practicable  date:  As of  December  1,  2005,  the
registrant had 80,700,123  shares of common stock issued,  25,685,000  shares of
common stock held in escrow which are deemed as issued but not outstanding,  and
55,015,123 shares of common stock outstanding.

Transitional Small Business Disclosure Format (check one): Yes [_] No [X]
<PAGE>
                      IN VERITAS MEDICAL DIAGNOSTICS, INC.
                                   FORM 10-QSB

                  For the Fiscal Quarter Ended October 31, 2005


Part I                                                                     Page

Item 1.  Financial Statements.                                              F-1

Item 2.  Management's Discussion and Analysis or Plan of Operations.

Item 3.  Controls and Procedures

Part ll                                                                    Page

Item 1.  Legal Proceedings.                                                  10

Item 2.  Unregistered Sale of Equity Securities and Use of Proceeds          10

Item 3.  Defaults Upon Senior Securities                                     11

Item 4.  Submission of Matters to a Vote of Security Holders.                11

Item 5.  Other Information                                                   11

Item 6. Exhibits.                                                            12

Signatures.                                                                  15

                                       2
<PAGE>

ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                                                                                       Page
                                                                                                  ----------------



<S>                                                                                                    <C>
Unaudited Consolidated Balance Sheet at October 31, 2005 ...............................................F-2

Unaudited Consolidated Statements of Operations for the three months ended
     October 31, 2005 and 2004 and for the period
     from March 26, 1997 (Inception) through October 31, 2005...........................................F-3

Unaudited Consolidated Statements of Accumulated Other Comprehensive Loss
     for the three months ended July 31, 2005 and 2004 and for the period
     from March 26, 1997 (Inception) through October 31, 2005...........................................F-4

Unaudited Statement of Changes in Shareholders' Deficit for the period from
     March 26, 1997 (Inception) through October 31, 2005................................................F-5

Unaudited Consolidated Statements of Cash Flows for the three months
     ended October 31, 2005 and 2004 and for the period
     from March 26, 1997 (Inception) through October 31, 2005...........................................F-7

Notes to the Unaudited Consolidated Financial Statements................................................F-8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                      IN VERITAS MEDICAL DIAGNOSTICS, INC.
                  (formerly In Vivo Medical Diagnostics, Inc.)
                          (A Development Stage Company)
                           Consolidated Balance Sheet
                                October 31, 2005
                                  (Unaudited)

                                     Assets
Current assets:
<S>                                                                                 <C>
    Cash ........................................................................   $    89,587
    Accounts receivable .........................................................       149,720
    Prepaid expenses and other ..................................................       197,638
    Deferred debt issue costs ...................................................       195,362
                                                                                    -----------
                 Total current assets ...........................................       632,307
Property and equipment, net (Note 3) ............................................        25,298
Intangible assets:
    Patent costs ................................................................        68,099
                                                                                    -----------

                                                                                    $   725,704
                                                                                    ===========

                      Liabilities and Shareholders' Deficit

Current liabilities:
    Accounts payable ............................................................   $   708,327
    Accrued liabilities .........................................................       620,621
    Indebtedness to related parties (Note 2) ....................................        19,042
                                                                                    -----------
                 Total current liabilities ......................................     1,347,990

Long-term debt:
    Secured convertible debenture (Note 8) ......................................       856,500
    Notes payable, related party (net of discount) (Note 2) .....................     1,710,692
                                                                                    -----------
                 Total liabilities ..............................................     3,915,182
                                                                                    -----------

Shareholders' deficit:
    Preferred stock, $001 par value, 50,000,000 shares authorized (aggregate
      liquidation preference of $8 million)
      Series A Preferred stock, 34,343,662 shares issued and outstanding (Note 4)        34,344
    Common stock, $001 par value, 100,000,000 shares authorized,
      80,700,123 shares issued, 25,685,000 held in escrow, and
      55,015,123 shares outstanding (Note 5).....................................        80,700
    Additional paid-in capital ..................................................     7,627,703
    Stock issued as security for convertible
      debentures (Notes 5 and 8).................................................    (3,339,050)
    Accumulated other comprehensive loss- foreign currency adjustment ...........      (405,361)
    Deficit accumulated during the development stage ............................    (7,187,814)
                                                                                    -----------

                 Total shareholders' deficit ....................................    (3,189,478)
                                                                                    -----------

                                                                                    $   725,704
                                                                                    ===========

     See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                      IN VERITAS MEDICAL DIAGNOSTICS, INC.
                  (formerly In Vivo Medical Diagnostics, Inc.)
                          (A Development Stage Company)
                            Statements of Operations
                                  (Unaudited)





                                                                                                              March 26, 1997
                                                                                  Three Month Period Ended     (Inception)
                                                                                           Oct-31                Through
                                                                                  --------------------------      Oct-31
                                                                                     2005           2004           2005
                                                                                  -----------    -----------    -----------

Net sales and gross revenues:
<S>                                                                               <C>            <C>           <C>
    Net sales .................................................................   $   352,993    $   417,405   $  2,653,670
    Cost of sales .............................................................          --              260        242,097
                                                                                  -----------    -----------    -----------

                   Gross profit ...............................................       352,993        417,145      2,411,573
                                                                                  -----------    -----------    -----------

Operating expenses:
    Research and development ..................................................       265,209        270,625      3,164,091
    Depreciation ..............................................................         8,189          4,069        145,619
    Legal & Professional ......................................................        65,205         90,000        889,699
    General & Administrative
       Stock Based Compensation
          Stock options expense ...............................................         5,871           --           58,569
          Consulting expense ..................................................       127,500           --          654,278
       Non stock based general & administrative ...............................        59,505        189,471      5,081,226
                                                                                  -----------    -----------    -----------
    Total general & administrative ............................................       192,876        189,471      5,794,073
                                                                                  -----------    -----------    -----------

    Total operating expenses ..................................................       531,479        554,165      9,993,481
                                                                                  -----------    -----------    -----------

       Loss before other income ...............................................      (178,486)      (137,020)    (7,581,908)
Nonoperating income (expense):
    UK government grant
    Interest expense ..........................................................          --             --          194,896
    Gain (loss) on foreign exchange ...........................................       (44,691)          --         (275,233)
    Costs of finance raising activities .......................................        19,698           --         (110,417)
    Gain (loss) from extinguishments of debt ..................................       (77,761)          --          (77,761)
                                                                                         --             --          662,610
                                                                                  -----------    -----------    -----------

       Loss before income taxes
                                                                                     (281,240)      (137,020)    (7,187,814)
    Income tax provision                                                          -----------    -----------    -----------
                   Net loss                                                       $  (281,240)   $  (137,020)   $(7,187,814)
                                                                                  ===========    ===========    ===========
Basic and diluted loss per share
                                                                                       -0.005    $    -0.003
                                                                                  ===========    ===========
Weighted average number of common shares
    outstanding                                                                    54,638,212     50,822,886
                                                                                  ===========    ===========

     See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                      IN VERITAS MEDICAL DIAGNOSTICS, INC.
                  (formerly In Vivo Medical Diagnostics, Inc.)
                          (A development stage company)

          CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS
                                  (Unaudited)

                                                                                                       March 26, 1997
                                                                 Three Month Period Ended               (Inception)
                                                                     October 31,                          Through
                                                         ------------------------------------------      October 31,
                                                                2005                  2004                  2005
                                                         -------------------   --------------------   -------------------

<S>                                                            <C>                   <C>                   <C>
Net loss......................................           $          (281,240)  $           (137,020) $         (7,187,814)

Other comprehensive loss, net of tax:
    Cumulative translation adjustment.........                       (35,869)               (40,034)             (405,361)
                                                         -------------------   --------------------  --------------------

                   Comprehensive loss.........           $          (317,109)  $           (177,054) $         (7,593,175)
                                                         ===================   ====================  ====================

     See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                      IN VERITAS MEDICAL DIAGNOSTICS, INC.
                  (formerly In Vivo Medical Diagnostics, Inc.)
                          (A Development Stage Company)
         Consolidated Statement of changes in Shareholders' Deficit


                                                  Preferred Stock Outstanding                                      Common Stock
                                                          Series A                   Series B                        Shares
                                                   Shares          Par Value     Shares    Par Value  Issued       Outstanding
                                                 ------------  ---------------- ---------- --------- ----------- ------------------
<S>                                                      <C>             <C>        <C>        <C>     <C>             <C>
Balance, March 26, 1997...                             --      $        --           --    $    --        --             --
October 2000, sale of stock, ($00035/share)....    4,366,377           4,366         --         --
December 2001, sale of stock, ($00035/share)...    6,545,703           6,545         --         --
October 2001, sale of stock, ($00202/share)....   23,431,582          23,432         --         --        --             --

Foreign currency
    translation adjustment.....................        --               --           --         --        --             --
Net loss.......................................        --               --           --         --        --             --
                                                 --------------  -------------- ----------  -------- ------------ -----------------
Balance, July 31, 2001.........................   34,343,662          34,344         --                   --             --

Foreign currency
    translation adjustment.....................        --               --           --         --        --             --
Net loss.......................................        --               --           --         --        --             --
                                                 --------------  -------------- ----------  -------- ------------ -----------------
Balance, July 31, 2002.........................   34,343,662          34,344         --         --        --             --

Foreign currency
    translation adjustment.....................        --               --           --         --        --             --
Net loss.......................................        --               --           --         --        --             --
                                                 --------------  -------------- ----------  -------- ------------ -----------------
Balance, July 31, 2003.........................   34,343,662          34,344         --         --        --             --

Merger with HEMP (Note 8)......................        --               --           --         --    38,397,164    38,397,164
July 2004, merger with SIPC....................        --               --           --         --    10,550,000    10,550,000
July 2004, issuance of common
    stock for bridge loans, ($02750/share).....        --               --           --         --     1,636,233     1,636,233
July 2004, issuance of common
    stock for services, ($04093/share).........        --               --           --         --       239,289       239,289
Foreign currency
    translation adjustment.....................        --               --           --         --        --             --
Reclassification of debt forgiveness
    by Westek (Notes 2 and 9)..................        --               --           --         --        --             --
Net loss.......................................        --               --           --         --        --             --
                                                 --------------  -------------- ----------  -------- ------------ -----------------
Balance, July 31, 2004...                         34,343,662          34,344         --         --    50,822,686    50,822,686

August 2004, additional paid in capital from
    bridge loans exchanged for shares..........        --               --           --         --        --             --
August 2004, offering costs adjustment.........        --               --           --         --        --             --
December 2004, issuance of stock for interest
    on bridge loan.............................        --               --           --         --        60,096        60,096
February 2005, issuance of stock for services..        --               --           --         --       694,550       694,550
March 2005, issuance of stock for services.....        --               --           --         --       100,000       100,000
April 2005, issuance of stock warrants for
    services...................................        --               --           --         --        --             --
April 2005, sale of preferred Series B stock
    net of $97,995 offering costs ($001 par),
    ($065/share)...............................        --               --       617,692       618        --             --
April 2005, issuance of stock for
    debt forgiveness...........................        --               --       246,152       246        --             --
June 2005, issuance of stock options for
    services...................................        --               --           --         --        --             --
June 2005, issuance of common stock for
    convertible preferred shares...............   (1,301,178)         (1,301)        --         --     1,301,178     1,301,178
July 2005, issuance of stock for services......        --               --           --         --       120,000       120,000
July 2005, issuance of stock for conversion
    of debt....................................        --               --           --         --     1,162,791     1,162,791
Foreign currency translation adjustment........        --               --           --         --        --             --
Net loss.......................................        --               --           --         --        --             --
                                                 --------------  -------------- ----------  -------- ------------ -----------------
Balance July 31, 2005..........................   33,042,484          34,043     863,844       864    54,261,301    54,261,301

Conversion of Preferred Stock into Debentures..        --               --      (863,844)     (864)       --             --
    (Note 4) (Unaudited)
Conversion of common stock into preferred stock
    (Unaudited)................................    1,301,178           1,301         --         --    (1,301,178)   (1,301,178)
Shares issued as security for convertible
    debentures (Note 8) (Unaudited)............        --               --           --         --    25,685,000           --
Stock issued for services (Unaudited)..........        --               --           --         --     1,583,000     1,583,000
Stock issued for interest (Unaudited)..........        --               --           --         --       472,000       472,000
Foreign currency translation adjustment
    (Unaudited)................................        --               --           --         --        --             --
Net loss (Unaudited)...........................        --               --           --         --        --             --
                                                 --------------  -------------- ----------  -------- ------------ -----------------
Balance October 31, 2005 (Unaudited)...........   34,343,662     $    34,344         --     $   --    80,700,123    55,015,123
                                                 ==============  ============== ==========  ======== ============ =================
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                      IN VERITAS MEDICAL DIAGNOSTICS, INC.
                  (formerly In Vivo Medical Diagnostics, Inc.)
                          (A Development Stage Company)
           Consolidated Statement of changes in Shareholders' Deficit
                                  (Continued)

                                                                                       Deficit
                                                                                     Accumulated         Accumulated
                                                                   Additional          During              Other
                                                                    paid-in          Development       Comprehensive
                                                   Par Value        capital            Stage               Loss          Total
                                                 ------------  ----------------   ---------------     -------------  --------------
<S>                                                   <C>             <C>                 <C>            <C>               <C>
Balance, March 26, 1997...                             --         $       --      $     --            $      --      $        --
October 2000, sale of stock, ($0.0035/share)...                         10,874                                              15,240
December 2001, sale of stock, ($0.0035/share)..                         16,301                                              22,847
October 2001, sale of stock, ($0.0202/share)...        --              448,906          --                   --            472,338

Foreign currency
    translation adjustment.....................        --                  --           --                  21,203          21,203
Net loss.......................................        --                  --       (1,350,829)              --         (1,350,829)
                                                 ------------  ----------------   ---------------     -------------  --------------
Balance, July 31, 2001.........................        --              476,081      (1,350,829)             21,203        (819,201)

Foreign currency
    translation adjustment.....................        --                  --           --                (140,377)       (140,377)
Net loss.......................................        --                  --       (1,007,362)              --         (1,007,362)
                                                 ------------  ----------------   ---------------     -------------  --------------
Balance, July 31, 2002.........................        --              476,081      (2,358,191)           (119,174)     (1,966,940)

Foreign currency
    translation adjustment.....................        --                  --           --                (185,391)       (185,391)
Net loss.......................................        --                  --       (1,080,619)              --         (1,080,619)
                                                 ------------  ----------------   ---------------     -------------  --------------
Balance, July 31, 2003.........................        --              476,081      (3,438,810)           (304,565)     (3,232,950)

Merger with HEMP (Note 8)......................       38,397           (29,397)         --                   --              9,000
July 2004, merger with SIPC....................       10,550           (10,688)         --                   --               (138)
July 2004, issuance of common
    stock for bridge loans, ($0.2750/share)....        1,636           448,364          --                   --            450,000
July 2004, issuance of common
    stock for services, ($0.4093/share)........          239            97,702          --                   --             97,941
Foreign currency
    translation adjustment.....................        --                  --           --                (339,570)       (339,570)
Reclassification of debt forgiveness
    by Westek (Notes 2 and 9)..................        --            2,030,298          --                   --          2,030,298
Net loss.......................................        --                  --       (1,016,972)              --         (1,016,972)
                                                 ------------  ----------------   ---------------     -------------  --------------
Balance, July 31, 2004...                        $    50,822   $     3,012,360    $ (4,455,782)       $   (644,135)  $  (2,002,391)

August 2004, additional paid in capital from
    bridge loans exchanged for shares..........        --               17,495          --                   --             17,495
August 2004, offering costs adjustment.........        --               (6,000)         --                   --             (6,000)
December 2004, issuance of stock for interest
    on bridge loan.............................           60            76,100          --                   --             76,160
February 2005, issuance of stock for services..          695           427,695          --                   --            428,390
March 2005, issuance of stock for services.....          100            62,880          --                   --             62,980
April 2005, issuance of stock warrants for
    services...................................        --               17,295          --                   --             17,295
April 2005, sale of preferred Series B stock
    net of $97,995 offering costs ($.001 par),
    ($0.65/share)..............................        --              302,887          --                   --            303,505
April 2005, issuance of stock for
    debt forgiveness...........................        --              159,754          --                   --            160,000
June 2005, issuance of stock options for
    services...................................        --               35,403          --                   --             35,403
June 2005, issuance of common stock for
    convertible preferred shares...............        1,301               --           --                   --               --
July 2005, issuance of stock for services......          120            35,288          --                   --             35,408
July 2005, issuance of stock for conversion
    of debt....................................        1,163           278,047          --                   --            279,210
Foreign currency translation adjustment........         --                 --           --                 274,643         274,643
Net loss.......................................         --                 --       (2,450,792)              --           (281,240)
                                                 ------------  ----------------   ---------------     -------------  --------------
Balance July 31, 2005..........................  $    54,261   $     4,419,204   $  (6,906,574)       $    (369,492)  $  (2,768,694)

Conversion of Preferred Stock into Debentures..         --            (555,636)         --                   --           (556,500)
    (Note 4) (Unaudited)
Conversion of common stock into preferred stock
    (Unaudited)................................       (1,301)              --           --                   --               --
Shares issued as security for convertible
    debentures (Note 8) (Unaudited)............       25,685         3,313,365          --                   --          3,339,050
Stock issued for services (Unaudited)..........        1,583           389,882          --                   --            391,465
Stock issued for interest (Unaudited)..........          472            60,888          --                   --             61,360
Foreign currency translation adjustment
    (Unaudited)................................          --               --            --                 (35,869)        (35,869)
Net loss (Unaudited)...........................          --               --          (281,240)              --           (281,240)
                                                 ------------  ----------------   ---------------     -------------  --------------
Balance October 31, 2005 (Unaudited)...........  $    80,700   $     7,627,703    $ (7,187,814)       $   (405,361)  $     466,681
                                                 ============  ================   ===============     =============  ==============

          See accompanying notes to consolidated financial statements.
</TABLE>
                                      F-6
<PAGE>
<TABLE>
<CAPTION>
                      IN VERITAS MEDICAL DIAGNOSTICS, INC.
                  (formerly In Vivo Medical Diagnostics, Inc.)
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                                  (Unaudited)

                                                                                        March 26, 1997
                                                                                         (Inception)
                                                             Three Months Ended            Through
                                                                  October 31,             October 31,
                                                           --------------------------
                                                              2005           2004            2005
                                                           -----------    -----------    -----------

Cash flows from operating activities:
<S>                                                        <C>            <C>              <C>
    Net loss ...........................................   $  (281,240)   $  (137,020)     $(7,187,814)
    Adjustments to reconcile net loss to net cash
       used by operating activities:
          Depreciation and amortization ................         8,189          4,069        143,287
          Intercompany interest income .................          --             --          144,382
          Stock issued for services ....................       391,465         90,000        970,941
          Stock issued for interest ....................        61,360           --          147,520
          Gain (loss) on debt forgiveness ..............          --             --         (662,610
          Changes in operating assets and liabilities:
               Receivables .............................      (118,650)        43,746       (172,089)
               Prepaid expenses and other current assets      (131,219)        (1,277)      (177,962)
               Deferred debt issue costs ...............      (195,362)          --         (195,362)
               Accounts payable ........................       (10,204)       171,565        702,451
               Accrued expenses ........................        77,070         (6,230)       627,752
               Accounts payable (related party) ........          --             --          (56,458
               Other ...................................       (28,786)       (63,518)        41,034
                                                           -----------    -----------    -----------
                     Net cash used in
                        operating activities ...........      (227,377)       101,335     (5,674,928)
                                                           -----------    -----------    -----------

Cash flows from investing activities:
    Acquisition of patents .............................        (7,360)          --          (68,099)
    Acquisition of equipment ...........................        (3,481)        (2,900)      (154,689)
                                                           -----------    -----------    -----------
                     Net cash used in
                        investing activities ...........       (10,841)        (2,900)      (222,788)
                                                           -----------    -----------    -----------

Cash flows from financing activities:
    Advances from affiliates ...........................          --             --        4,378,963
    Repayments of advances from affiliates .............          --          (96,203)      (728,426)
    Advances from related parties ......................          --             --           83,050
    Proceeds from issuance of preferred stock ..........          --             --          813,930
    Discount on notes payable ..........................        25,252           --          169,634
    Proceeds from Debenture issue ......................       300,000                       300,000
    Proceeds from issuance of notes payable ............          --             --          962,495
                                                           -----------    -----------    -----------
                     Net cash used in
                        financing activities ...........       325,252        (96,203)     5,979,646
                                                           -----------    -----------    -----------

Effect on cash from foreign currency translation .......           539           --            7,658

                     Net change in cash and
                        cash equivalents ...............        87,573          2,232         89,588

Cash and cash equivalents:
    Beginning of period ................................         2,015         46,191           --
                                                           -----------    -----------    -----------

    End of period ......................................   $    89,588    $    48,423    $    89,588
                                                           ===========    ===========    ===========

Supplemental disclosure of cash flow information:
    Cash paid during the year for:
       Income taxes ....................................   $      --      $      --      $      --
                                                           ===========    ===========    ===========
       Interest ........................................   $      --      $      --      $      --
                                                           ===========    ===========    ===========

Non-cash financing activities:
    Conversion of note payable to common stock .........   $      --      $   450,000    $   700,000
    Conversion of interest to common stock .............          --             --           86,160
    Conversion of preferred stock into debentures ......       556,500           --          556,500
    Stock-based compensation ...........................          --             --          612,113
                                                           -----------    -----------    -----------
                                                           $   556,500    $   450,000    $ 1,954,773
                                                           ===========    ===========    ===========
</TABLE>
          See accompanying notes to consolidated financial statements.

                                      F-7

<PAGE>
                        IN VIVO MEDICAL DIAGNOSTICS, INC.
              Notes to Condensed, Consolidated Financial Statements
                                   (Unaudited)


NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

In the opinion of management,  the accompanying  unaudited  condensed  financial
statements contain all adjustments  (consisting of normal recurring adjustments)
necessary to present  fairly our  financial  position as of October 31, 2005 and
our  results of  operations  and cash  flows for the three  month  period  ended
October 31, 2005 and 2004 and the period from March 26, 1997 (date of inception)
to October  31,  2005.  The results of  operations  for the three  months  ended
October 31, 2005 are not  necessarily  indicative  of the results to be expected
for the full year. Interim financial data presented herein are unaudited.

Certain footnote  disclosures normally included in financial statements prepared
in accordance with accounting principles generally accepted in the United States
of  America  have  been  omitted  in  accordance  with the  published  rules and
regulations of the Securities and Exchange  Commission.  The condensed financial
statements  in this  report  should be read in  conjunction  with the  financial
statements  and notes thereto  included in the Form 10-K for the year ended July
31, 2005.

We are a  development  stage  company  as  defined  in  Statement  of  Financial
Accounting  Standards  No. 7. We are devoting  substantially  all of its present
efforts to developing new products.  Our planned  principal  operations have not
commenced and, accordingly, no significant revenue has been derived therefrom.

We  have  reported  net  losses  of  approximately  $2,450,792,  $1,016,972  and
$6,906,574  for the fiscal  years ended July 31,  2005,  2004 and for the period
from the date of inception,  March 26, 1997 to July 31, 2005, respectively.  The
loss from date of  inception,  March 26,  1997 to October  31,  2005  amounts to
$7,187,814.

Our  long-term  continued  operations  will  depend  on  our  ability  to  raise
additional  funds  through  various  potential  sources  such as equity and debt
financing,  our  development  contract and license  agreement,  our research and
development  contracts,  revenues  from royalty  arrangements,  licensing of our
prothrombin blood clotting  measuring device and our ability to realize the full
potential of our technology and measuring devices via licensing  agreements with
other companies.  Such additional funds may not become available as needed or be
available on acceptable terms.  Through October 31, 2005, a significant  portion
of our financing has been through the sale of equity  securities and convertible
notes in private placements and the exercise of stock options.  Until and unless
our operations generate significant  revenues, we expect to continue to fund our
operations  from the sources of capital  previously  described.  There can be no
assurance that we will be able to raise the capital needed on acceptable  terms,
if at all. As of October 31, 2005,  management believes that our cash balance is
sufficient  to fund our  operations  at least  through  July  2006  based on our
expected  level  of   expenditures  in  relation  to  research  and  development
activities  and  other  ongoing  operations  of the  Company.  However,  we will
continue to seek  additional  financing  through  equity or debt  financings but
cannot be sure that we will be able to raise  capital on  favorable  terms or at
all. We may also obtain  additional  capital through the exercise of outstanding
options and warrants, although it cannot provide any assurance of such exercises
or the amount of capital it will receive, if any.

NOTE 2. RELATED PARTY TRANSACTIONS

As of  October  31,  2005,  $19,042  was due to related  parties.  There were no
financial  transactions with related parties during the four month periods ended
October 31, 2005 or 2004.

In July  2004,  Westek  agreed  to  release  us from  $2,030,298  of  previously
accumulated  advances  in exchange  for a  noninterest-bearing  promissory  note
totalling $1,800,000.  We reflected a capital contribution  totalling $2,030,298


                                      F-8
<PAGE>
                        IN VIVO MEDICAL DIAGNOSTICS, INC.
              Notes to Condensed, Consolidated Financial Statements
                                   (Unaudited)

in our financial statements at that time. The promissory note is payable in full
by September  30, 2006.  Under the terms of the note,  we are  obligated to make
repayments  of the principle  amount  earlier prior to September 30, 2006 out of
any equity or equity type financings made before that date by applying an agreed
percentage of the  aggregate  net proceeds  from any such equity or  equity-type
financings.  The  agreed  percentage  is 56% of any net  proceeds  which  exceed
$2,000,000  (up to  $3,000,000)  and  25% of  all  net  proceeds  in  excess  of
$3,000,000.  As of October 31, 2005,  we are indebted to Westek in the amount of
$1,710,692, net of discount of $89,308.

NOTE 3:  PROPERTY AND EQUIPMENT

Major classes of property and equipment as of October 31, 2005 are listed below:

Furniture and fixtures.......................................... $       16,523
Office equipment................................................         89,814
Plant and equipment.............................................         20,939
                                                                 ---------------
                                                                        127,276
Less: accumulated depreciation..................................        101,978
                                                                 ---------------
                                                                 $       25,298
                                                                 ===============

Depreciation  expense  was $8,189 and $4,069 for the three month  periods  ended
October 31 2005 and 2004, respectively.

NOTE 4:  PREFERRED STOCK

We are authorized to issue 50,000,000 shares of preferred stock.

4% Convertible Preferred Stock

As of October 31, 2005, the Company had 34,343,662  shares of Series A 4% voting
redeemable  convertible  preferred stock outstanding.  Such shares pay an annual
dividend of 4% and are  convertible at any time at the option of the holder into
Common Stock at the rate of one share Common Stock for each outstanding share of
Series A Preferred Stock commencing October 30, 2005,  provided the Common Stock
have  traded at a price of $3.00 per share for at least 30  consecutive  trading
days,  and at any time after  January  30,  2006.  Holders of Series A Preferred
Stock have  priority over all of the shares of In Veritas  Medical  Diagnostics,
Inc. on liquidation or sale at the rate of $.233 per share. Holders are entitled
to vote on all matters as to which  Common  Stock  shareholders  are entitled to
vote.

The aggregate of arrearages  in cumulative  preferred  dividends on the Series A
Preferred Shares through October 31, 2005, are $25,843.

5% Convertible Preferred Stock

On April 15, 2005, we completed the sale of 863,845  units (the  "Units"),  each
Unit  consisting of one share of Series B 5% Convertible  Preferred  Stock,  one
warrant to purchase one share of the Company's common stock ("Stock  Warrants"),
and one warrant to purchase an additional  unit ("Unit  Warrants").  Such shares
pay an annual  dividend of 5% and are  convertible  at any time at the option of
the holder into Common  Stock at the rate of one share of Common  Stock for each


                                       F-9
<PAGE>
                        IN VIVO MEDICAL DIAGNOSTICS, INC.
              Notes to Condensed, Consolidated Financial Statements
                                   (Unaudited)

outstanding  share of Series B Preferred  Stock  commencing  April 15, 2005. The
Stock  Warrants are  exercisable  from April 15, 2005 until April 15, 2008 at an
exercise price of $1.50 per share, subject to adjustment.  The Unit Warrants are
exercisable for a period of 180 days from the effective date of the registration
statement at an exercise  price of $0.65 per unit,  subject to  adjustment.  All
preferential amounts to be paid to the holders of Series B Preferred Stock shall
be paid on a pari-passu  basis with any  preferential  amounts to be paid to the
holders of our Series A Preferred Stock, and prior to the common stock.

As part the finance raising  described in Note 8 to these Financial  Statements,
in September, 2005 the Company entered into a Securities Purchase Agreement (the
"Accredited  Investor  Purchase  Agreement") with the investors (the "Accredited
Investors")  in its  April  2005  financing  pursuant  to which  the  Accredited
Investors agreed to exchange the securities that they purchased for an aggregate
of  $556,500  principal  amount  of  Debentures.  Specifically,  the  Accredited
Investors  agreed to exchange an aggregate of 863,845  units (the  "Units"),  as
well as a warrant to purchase an  additional  Unit for an  aggregate of $556,500
principal  amount  of  Debentures.  Each  Unit  consisted  of  one  share  of 5%
convertible  preferred stock of the Company,  $.001 par value per share, and one
warrant to purchase one share of the Company's common stock.

NOTE 5:  COMMON STOCK

We are  authorized to issue  100,000,000  shares of common stock.  We issued the
following  shares of common  stock for services  during the three month  periods
ended October 31, 2005 and 2004, respectively:
<TABLE>
<CAPTION>
                                                      October 31, 2005                     October 31, 2004
                                             ------------------------------------  ----------------------------------
                                                  Number           Fair Value          Number          Fair Value
                                                 of Shares          of Shares         of Shares         of Shares
                                                  Issued             Issued            Issued            Issued
                                             ------------------  ----------------  ----------------  ----------------
<S>                                                    <C>            <C>              <C>               <C>
CLX & Associates Inc                                   750,000   $       255,000                 -   $             -
Sichenzia Ross Friedman Ference LLP                    805,000           132,825                 -                 -
Cornell Capital Partners LP                            472,000            61,360                 -                 -
Monitor Capital Inc                                     28,000             3,640                 -                 -
Shares issued to escrow                             25,685,000         3,339,050                 -                 -
                                             ------------------  ----------------  ----------------  ----------------
                                                    27,740,000   $     3,791,875                 -   $             -
                                             ==================  ================  ================  ================
</TABLE>
Prior to the merger,  we valued the shares of common stock based on the value of
the  services.  After the merger,  we valued the shares of common stock based on
the quoted market price of the stock.

During the three month period ended October 31, 2005 we issued 25,685,000 shares
which the Company recorded at fair value.  These shares are deemed as issued but
not  outstanding and have been placed in escrow to secure the debenture which is
described in Note 8.

No other units of common stock were issued  during the three month periods ended
October 31, 2005 and 2004.

NOTE 6:  STOCK WARRANTS

As explained in Note 8, on September 9 the Company  issued to Montgomery  Equity
Partners Ltd three-year  warrants to purchase  350,000 shares of Common Stock at
$0.001 per share. These warrants were granted as part of the arrangement fee for
the  issuance  of the Secured  Convertible  Debenture  described  in Note 8. The
Company's common stock's traded market value on the date that the negotiation of
this  transaction  was  completed  (August  25,  2005) of grant was  $0.13.  The
weighted  average exercise price and fair value of these warrants at the date of
their grant were $0.001 and $0.076, respectively.


                                      F-10
<PAGE>
                        IN VIVO MEDICAL DIAGNOSTICS, INC.
              Notes to Condensed, Consolidated Financial Statements
                                   (Unaudited)

The fair value for these  warrants was  estimated at the date of grant using the
Black-Scholes option-pricing model with the following assumptions:


Risk-free interest rate..............................................      4.18%
Dividend yield.......................................................      0.00%
Volatility factor....................................................     88.40%
Weighted average expected life.......................................    3.years

The  following  schedule  summarizes  the changes in the  Company's  outstanding
stock option awards:
<TABLE>
<CAPTION>
                                                  Options Outstanding
                                        ----------------------------------------    Weighted Average
                                            Number of           Exercise Price        Exercise Price
                                              Shares              Per Share              Per Share
                                        ------------------- --------------------    ----------------
<S>                                              <C>                  <C>                 <C>
Balance at July 31, 2005                         10,370,769   $    0.55 to $1.50     $          0.97
   Awards granted......................             350,000   $             .001     $          0.00
   Awards exercised....................                   -   $             0.00     $             -
   Awards cancelled/expired............                   -   $             0.00     $             -
                                         -------------------                         ----------------

Balance at July 31, 2005...............          10,720,769   $   0.001.to.$1.50     $          0.94
                                         ===================                         ================
</TABLE>
NOTE 7: INCOME TAXES

We record our income taxes in accordance with Statement of Financial  Accounting
Standard No. 109,  "Accounting for Income Taxes".  We offset  operating  profits
during the three  months  ended  October 31, 2005  against a deferred tax asset,
which was fully allowed for; therefore,  the net benefit and expense resulted in
$-0- income taxes.

NOTE 8: SECURED CONVERTIBLE DEBENTURE AND RELATED FINANCINGS

On September 7, 2005,  the Company  entered into a Standby  Equity  Distribution
Agreement  (the  "Distribution  Agreement")  with  Cornell  Capital  Partners LP
("Cornell")  providing for the sale and issuance to Cornell of up to $10,000,000
of  Common  Stock  over a period of up to 24 months  after  the  signing  of the
Distribution Agreement.  Under the Distribution Agreement,  the Company may sell
to Cornell up to $500,000  in shares of its common  stock (the  "Common  Stock")
once every five trading  days at a price of 97% of the lowest  closing bid price
(as reported by Bloomberg  L.P.),  of the Common Stock on the  principal  market
where the Common Stock is traded for the five consecutive trading days following
a notice by the Company to Cornell of its intention to sell shares.  The Company
will  also  pay  a 5%  commitment  fee  upon  each  sale  of  shares  under  the
Distribution  Agreement.  Cornell  has  agreed not to short any of the shares of
Common Stock. In addition as part of the commitment fee arrangements the Company
issued 472,000 shares of the Company's Common Stock to Cornell.

Also on  September  7, 2005,  the Company  entered  into a  Securities  Purchase
Agreement  (the  "Purchase  Agreement")  with  Montgomery  Equity  Partners Ltd.
("Montgomery"),  an  affiliated  fund of Cornell,  providing for the sale by the
Company to Montgomery of its 18% secured convertible debentures in the aggregate
principal amount of $750,000 (the  "Debentures") of which $300,000 was funded on
September  7, 2005;  $200,000  was to be funded two  business  days prior to the
Company's  completion of its audited  financial  statements  for the fiscal year
ended July 31, 2005, and; $250,000 was to be funded within five business days of
the date the Registration  Statement is declared effective by the SEC. Under the
Purchase  Agreement,  the Company also issued to Montgomery  three-year warrants
(the "Warrants") to purchase 350,000 shares of Common Stock at $0.001 per share.


                                      F-11
<PAGE>
                        IN VIVO MEDICAL DIAGNOSTICS, INC.
              Notes to Condensed, Consolidated Financial Statements
                                   (Unaudited)

In addition to the  foregoing,  the Company  entered into a Securities  Purchase
Agreement (the "Accredited Investor Purchase Agreement") with the investors (the
"Accredited  Investors")  in its April 2005  financing  (which is  described  in
Footnote  4 to these  Financial  Statements)  pursuant  to which the  Accredited
Investors  agreed  to  exchange  the  securities  that  they  purchased  in such
financing  for  an  aggregate  of  $556,500   principal  amount  of  Debentures.
Specifically,  the  Accredited  Investors  agreed to  exchange an  aggregate  of
863,845 units (the "Units"), as well as a warrant to purchase an additional Unit
for an aggregate of $556,500 principal amount of Debentures. Each Unit consisted
of one share of 5% convertible  preferred stock of the Company,  $.001 par value
per share, and one warrant to purchase one share of the Company's common stock.

The Debentures  mature on the first anniversary of the date of issuance and bear
interest  at the annual  rate of 18% in cash.  The  Company is  required to make
monthly  interest  payments  commencing on October 7, 2005,  and to make monthly
principal payments commencing on March 7, 2006.

Holders may convert,  at any time, the principal  amount  outstanding  under the
Debentures into shares of Common Stock, at a conversion price per share equal to
$0.144,  subject to adjustment,  which  approximated  to the market price of the
Company's  common stock on the date that the  negotiation of the transaction was
completed (which was August 25, 2005). Upon  three-business  day advance written
notice,  the  Company  may  redeem  the  Debentures,  in whole  or in part.  The
redemption amount will be calculated at 112% of the Debentures' face value.

As further  security for its obligations  under the above mentioned  facilities,
the Company has deposited into escrow 25,685,000  shares of common stock.  These
shares are deemed  issued but not  outstanding  and the  Company  valued them at
their fair value.

Subsequent to the  completion of the Standby Equity  Distribution  Agreement and
the sale of the 18% secured  convertible  debentures  pursuant to the Securities
Purchase  Agreement  in  September  2005,  the  Company  prepared  and  filed  a
registration  statement on Form SB-2 with the Securities and Exchange Commission
for  the  purpose  of  registering  the  securities  underlying  such  financing
transactions.  In connection  therewith,  the Company has received comments from
the  Commission  indicating  that,  in the  Commission's  view,  based  upon the
structure of the transactions,  the Company may not register the securities sold
in the financing  transactions.  As a result, the Company has not drawn down any
further amounts under the Debenture and is in discussions  with the investors in
the recent financing  transactions regarding the possible restructuring of these
financing  transactions.  No  assurance  can be  given as to  when,  or if,  the
transactions will be restructured, or that the transactions will be restructured
in a manner that is acceptable to the  Commission to allow  registration  of the
securities sold in these transactions.


                                      F-12


<PAGE>
ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF RESULTS OF  OPERATIONS  AND
LIQUIDITY AND CAPITAL RESOURCES

Forward-Looking Statements

The  information in this quarterly  report contains  forward-looking  statements
within the meaning of the Private Securities litigation Reform Act of 1995. This
Act  provides  a "safe  harbor"  for  forward-looking  statements  to  encourage
companies to provide  prospective  information  about themselves so long as they
identify these statements as forward looking and provide  meaningful  cautionary
statements  identifying  important  factors that could cause  actual  results to
differ from the projected results. All statements other than these statements of
historical  fact made in this report are forward  looking.  In  particular,  the
statements herein regarding  industry prospects and future results of operations
or financial position are forward looking statements. Forward-looking statements
reflect  management's  current  expectations and are inherently  uncertain.  Our
actual results may differ significantly from management's expectations.

The following  discussion and analysis  should be read in  conjunction  with the
financial statements of In Veritas Medical Diagnostics, Inc., included herewith.
This  discussion  should not be  construed  to imply that the results  discussed
herein will necessarily continue into the future, or that any conclusion reached
herein will necessarily be indicative of actual operating results in the future.
Such discussion represents only the best present assessment of our management.

Overview

In Veritas Medical Diagnostics, Inc. (formerly In Vivo Medical Diagnostics, Inc.
and  Sports   Information   and   Publishing   Corp.)  (the   "Company")   is  a
development-stage  enterprise  that is  engaged  in the  development  of lateral
applications   of  novel   measurement   techniques  in  medical   devices  with
`near-patient'  (i.e.  point of care) testing  applications.  We are  developing
medical  diagnostic  products for personal and professional  use. Several of the
products  for  which  we are  developing  practical  applications  are  based on
technology  that utilizes the Hall Effect,  a physical  phenomenon that measures
the electrical  activity as it relates to magnetic fields,  which was discovered
more than a hundred  years ago. We are also  developing  products  that  utilize
novel signal processing for the late-term pregnancy market.

The Company was originally  incorporated  under the laws of Colorado on March 1,
2001 under the name  Sports  Information  Publishing  Corp.  for the  purpose of
engaging in sports prognostication. In July 2004, the Company entered into Share
Exchange  Agreement pursuant to which the Company acquired all of the issued and
outstanding shares of Hall Effect Medical Products,  Inc.  ("HEMP"),  a Delaware
corporation, from the security holders of HEMP.

We currently have two operating subsidiaries,  IVMD(UK) Ltd. ("IVMD") and Jopejo
Ltd.  ("Jopejo"),  both of which are incorporated  under the laws of England and
Wales and based in Inverness,  Scotland. IVMD(UK) has a platform of patents from
which to exploit unique  commercial  applications.  Jopejo is a biotech research
company utilizing similar development techniques.  The fundamental premise is in
the transfer of  measurement  technology,  the principles of which are known and
established in the world of physical  science,  into medical devices with global
near-patient applications.  This is done through the creation of novel, patented
methods  and  apparatus  for which  IVMD is the sole  owner of the  intellectual
property.  One  application,  forecast to generate  royalty  revenues  from 2005
onwards,  is in the final  phase of  development  with  route-to-market  secured
through a major distributor.

Products and Services

We currently have applied for eleven patents (see table below),  from granted to
pending, covering the generic application of our products and technology. We are
currently  working on a number of additional  patents for submission  during the
next year.  We have allowed two  additional  patents to lapse because we believe
that they are no longer core to our  business and have no  commercial  value for
us. We have engineered prototypes on three distinct products:

o a prothrombin  device for measuring the clotting or coagulation  time of blood
in patients at risk of heart disease and stroke - a critical  measurement  for a
condition affecting millions worldwide


                                       3
<PAGE>
o a suite of products for fetal heart  monitoring  and  predicting  the onset of
labor several weeks in advance of the commencement of labor pains

o a device to establish proof of principle, and a prototype to demonstrate a low
cost and non-harmful alternative to conventional X-ray imaging

We have also  established the concept and are developing  proof of principle for
other low-cost and safe magnetic detection systems for additional  applications,
including:

o a  minimally-invasive,  rapid and accurate  system for  detection of compounds
within blood

o a non-invasive  glucose  monitoring  system for diabetics  which can be merely
clipped to a  patient's  ear lobe (or other area with  blood rich  tissue)  and,
without  taking  blood from the patient,  will measure  levels of glucose in the
blood;

o a rapid, non-invasive monitoring device for osteoporosis

o a surgical instrument positioning system.

The initial commercial product was a computer input device based on our patented
technology,  known as the "Evomouse,"  which was developed to the point of sale.
Although  the  initial  response  in the  computer  peripheral  press  was  very
encouraging,  we  determined  that this  device is non-core to the future of our
business.  Accordingly,  we  discontinued  production and are seeking to sell or
license  rights to the  "Evomouse."  We have recently  entered into an agreement
with UTEK, and American corporation, for the potential sale or licensing of this
technology.

We have  limited  assets and  limited  revenues.  At October  31, 2005 we had an
accumulated deficit from inception of $7,184,173.  As a result, our auditors, in
their report on our financial statement for the fiscal year ended July 31, 2005,
have  expressed  substantial  doubt  about our  ability to  continue  as a going
concern.

Results of Operations

Three Months Ended  October 31, 2005  compared to Three Months Ended October 31,
2004

Revenues

During the three months ended October 31, 2005 we had sales of $352,993.  During
the three months ended October 31, 2004,  we had sales of $417,405.  This change
is not  representative  of ongoing  (research and development)  activity,  which
continues at a strong level.

Depreciation Expenses

Depreciation  expenses for the three months ended October 31, 2005  increased to
$8,189 from $4,069 for the three months ended October 31, 2004.

General & Administrative Expenses

General and administrative  expenses for the three months ended October 31, 2005
increased to $192,876 from $189,471 for the three months ended October 31, 2004.
This change is immaterial,  although underlying it is an increase in promotional
an  marketing  cost and  decrease  in  general  administrative  costs,  which we
continue to control carefully.


                                       4
<PAGE>
Research & Development Expenditure

Research and development  activity  remains strong,  with no significant  change
between periods. In the three months ended October 31, 2005 we spent $265,209 on
research  and  development  compared to $270,625 in the three month period ended
October 31, 2004.

Net Income (Loss)

The net loss for the  three  months  ended  October  31,  2005 was  $281,240  as
compared to a net loss of $137,020 for the three months ended  October 31, 2004.
In the context of the  company's  status as a  development  stage  company  this
difference  is not deemed  significant.  The  difference is caused mainly by (i)
increased  costs incurred on finance  raising  activities as part of our ongoing
efforts to raising  capital to support the  company's  research and  development
activities;  and (ii)  interest on debt.  In the quarter  ended  October 31 2005
these costs amounted to $77,761 and $44,691  respectively,  whilst no such costs
were incurred in the three month period ended October 31, 2004.

Liquidity and Capital Resources

The Company's  primary needs for liquidity and capital resources are the funding
of salaries,  administrative  expenses and research and development  activities.
The Company's  cash  balances at October 31, 2005 are not  sufficient to support
operations for the next twelve months and it will therefore be necessary for the
Company to continue to seek additional financing in the form of equity and debt,
further grants from the UK government and income from development contracts with
new and existing  commercial  partners.  As explained in Note 8 to the Unaudited
consolidated  Financial  Statements  (set  out in  Item  1  above)  and  further
explained in the section below  entitled  "Recent  Financings",  the Company has
been active,  and  continues  to be active,  is seeking to secure new sources of
financing.

Critical Accounting Policies

Principles of consolidation

Our consolidated  financial  statements include our accounts and the accounts of
our two wholly owned foreign  subsidiaries;  IVMD UK Limited ("IVMD") and Jopejo
Limited ("Jopejo"), both UK companies. The assets and liabilities of our foreign
subsidiaries  have been  translated  from British  pounds into US dollars at the
exchange  rate in effect  at  October  31,  2005  with the  related  translation
adjustments reported as a separate component of shareholders' deficit. Operating
statement  accounts have been translated at the average  exchange rate in effect
during the period presented. All significant intercompany transactions have been
eliminated.


                                       5
<PAGE>
Basis of presentation

Our research and  development  is conducted in Inverness,  Scotland  through our
subsidiaries:  IVMD UK Limited and Jopejo Limited.  Development-stage activities
consist of raising capital,  obtaining financing,  medical products research and
development  and  administrative  matters.  We plan to continue to raise capital
through stock sales and debt issuances to fund our development.  In addition, we
obtain cash from UK  government  grants that are designed to support  employment
and  enterprise and from  commercial  partners who  contribute  towards  certain
development projects. In due course, we expect our primary revenue to consist of
royalties  received  from  commercial  partners  in  respect  of the  commercial
exploitation of our products, once developed and successfully taken to market.

Inherent   in  our   development-stage   enterprise   are   various   risks  and
uncertainties,  including our limited operating  history,  historical  operating
losses,  dependence upon strategic alliances,  and market acceptance of the Hall
Effect  technology.  Our ability to generate  revenues  from  royalties  will be
dependent  upon  our  ability  to  enter  into   licenses,   joint  ventures  or
distribution  agreements  with  established  businesses  with existing sales and
marketing  structures.  Our future success will be dependent upon our ability to
develop  and  provide  new  medical   devices  that  meet   customers   changing
requirements,  including  the effective  use of the Hall Effect  technology,  to
continue to enhance our current products under development, and to influence and
respond to emerging  industry  standards  and other  technological  changes on a
timely and cost-effective basis.

In  common  with  most  development  stage  entities  we  have  incurred  losses
(principally  represented  by  research  and  development   expenditures)  since
inception and we have an inevitable net capital  deficit at October 31, 2005. We
also had substantial net current liabilities at October 31, 2005. These factors,
among others,  raise  substantial doubt about our ability to continue as a going
concern,  in common with many  development  stage companies in our industry.  As
explained  above,  in 2004, we merged with a public shell  company.  This merger
provides us with  limited  access to the capital  markets via the OTCBB.  During
fiscal years 2004 and 2005,  we raised  limited  amounts of capital by virtue of
our OTCBB quote;  we need to continue to raise capital through public or private
stock offerings to finance our development activities and ultimately, to achieve
profitability.  However, there is no assurance that we will be successful in our
efforts to raise capital or to become a profitable company.

Use of Estimates

The preparation of financial  statements in accordance  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported  amounts of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities at the date of financial  statements and the
reported  amounts of revenues and expenses during the reporting  period.  Actual
results could differ from those estimates.

Research & Development Expenditure

Research & Development expenditure is written off as it is incurred.

Revenue Recognition

Currently  we receive  revenue  mainly from  contracts  which we enter into with
commercial  partners who work with us to develop new  products  which employ our
core technology.  This revenue is generally in the form of contribution  towards
development  costs that we incur and is  accounted  for in  accordance  with the
underlying  cointracts.  In future we  anticipate  the  nature of our  principle
revenues changing from contribution  towards development  expenditure to royalty
income from developed  products,  this change will not take place until products
that are currently in development have been completed and are taken to market.


                                       6
<PAGE>
Recent Financings

September 2005 Financing

Standby Equity Distribution Agreement

On September 7, 2005,  the Company  entered into a Standby  Equity  Distribution
Agreement  (the  "Distribution  Agreement")  with  Cornell  Capital  Partners LP
("Cornell")  providing for the sale and issuance to Cornell of up to $10,000,000
of  Common  Stock  over a period of up to 24 months  after  the  signing  of the
Distribution Agreement.  Under the Distribution Agreement,  the Company may sell
to Cornell up to $500,000  in shares of its common  stock (the  "Common  Stock")
once every five trading  days at a price of 97% of the lowest  closing bid price
(as reported by Bloomberg  L.P.),  of the Common Stock on the  principal  market
where the Common Stock is traded for the five consecutive trading days following
a notice by the Company to Cornell of its intention to sell shares.  The Company
will  also  pay  a 5%  commitment  fee  upon  each  sale  of  shares  under  the
Distribution  Agreement.  Cornell  has  agreed not to short any of the shares of
Common Stock. In addition as part of the commitment fee arrangements the Company
is to issue 472,000 shares of the Company's Common Stock to Cornell.

18% Secured Convertible Debentures

Also on  September  7, 2005,  the Company  entered  into a  Securities  Purchase
Agreement  (the  "Purchase  Agreement")  with  Montgomery  Equity  Partners Ltd.
("Montgomery"),  an  affiliated  fund of Cornell,  providing for the sale by the
Company to Montgomery of its 18% secured convertible debentures in the aggregate
principal amount of $750,000 (the  "Debentures") of which $300,000 was funded on
September  7,  2005;  $200,000  shall be funded two  business  days prior to the
Company's  completion of its audited  financial  statements  for the fiscal year
ended July 31, 2005, and;  $250,000 shall be funded within five business days of
the date the Registration  Statement is declared effective by the SEC. Under the
Purchase  Agreement,  the Company also issued to Montgomery  three-year warrants
(the "Warrants") to purchase 350,000 shares of Common Stock at $0.001 per share.

In addition to the  foregoing,  the Company  entered into a Securities  Purchase
Agreement (the "Accredited Investor Purchase Agreement") with the investors (the
"Accredited  Investors") in its April 2005 financing  (described below) pursuant
to which the Accredited  Investors  agreed to exchange the securities  that they
purchased in such  financing  for an aggregate of $556,500  principal  amount of
Debentures.  Specifically,  the  Accredited  Investors  agreed  to  exchange  an
aggregate of 863,845  units (the  "Units"),  as well as a warrant to purchase an
additional  Unit for an aggregate of $556,500  principal  amount of  Debentures.
Each  Unit  consisted  of one  share of 5%  convertible  preferred  stock of the
Company, $.001 par value per share, and one warrant to purchase one share of the
Company's common stock.

The Debentures  mature on the first anniversary of the date of issuance and bear
interest  at the annual  rate of 18% in cash.  The  Company is  required to make
monthly  interest  payments  commencing on October 7, 2005,  and to make monthly
principal payments commencing on March 7, 2006.

Holders may convert,  at any time, the principal  amount  outstanding  under the
Debentures into shares of Common Stock, at a conversion price per share equal to
$0.144,  subject to adjustment.  Upon three-business day advance written notice,
the  Company  may redeem the  Debentures,  in whole or in part.  The  redemption
amount will be calculated at 112% of the Debentures' face value.


                                       7
<PAGE>
As further  security for its  obligations  under the Purchase  Agreement and the
Accredited  Investor Purchase  Agreement,  the Company has deposited into escrow
25,685,000  shares (the  "Escrow  Shares") of common  stock.  The Escrow  Shares
shares are deemed issued but not outstanding.

April 2005 Financing

On April 15, 2005, we completed the sale of 863,845  units (the  "Units"),  each
Unit  consisting of one share of 5% convertible  preferred stock of the Company,
$.001 par value per share (the "Preferred  Stock"),  and one warrant to purchase
one  share  of the  Company's  common  stock  (the  "Warrants"),  to  accredited
investors  pursuant for an aggregate  purchase price of approximately  $561,500.
The aggregate purchase price consisted of the sale of $401,500 of Units for cash
and the sale of $160,000 of Units for the forgiveness of debt. In addition, each
purchaser of a Unit received a warrant to purchase an additional Unit (the "Unit
Warrants").  The  aforementioned  securities  were  sold in  reliance  upon  the
exemption  afforded by the  provisions of Regulation  D, as  promulgated  by the
Securities and Exchange Commission under the Securities Act of 1933, as amended.

Current Status of Financing Activity

Subsequent to the  completion of the Standby Equity  Distribution  Agreement and
the sale of the 18% secured  convertible  debentures  pursuant to the Securities
Purchase  Agreement  in  September  2005,  the  Company  prepared  and  filed  a
registration  statement on Form SB-2 with the Securities and Exchange Commission
for  the  purpose  of  registering  the  securities  underlying  such  financing
transactions.  In connection  therewith,  the Company has received comments from
the  Commission  indicating  that,  in the  Commission's  view,  based  upon the
structure of the transactions,  the Company may not register the securities sold
in the financing  transactions.  As a result, the Company has not drawn down any
further amounts under the Debenture and is in discussions  with the investors in
the recent financing  transactions regarding the possible restructuring of these
financing  transactions.  No  assurance  can be  given as to  when,  or if,  the
transactions will be restructured, or that the transactions will be restructured
in a manner that is acceptable to the  Commission to allow  registration  of the
securities sold in these transactions.

Off Balance Sheet Arrangements

We do not have any off balance sheet  arrangements  as of October 31, 2005 or as
of the date of this report.

Recent Accounting Pronouncements

Statement of Financial  Accounting  Standards No. 123 (revised 2004) Share-Based
Payment (SFAS 123R) establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments for goods or services.  It also
addresses  transactions  in which an entity incurs  liabilities  in exchange for
goods or  services  that are  based on the  fair  value of the  entity's  equity
instruments or that may be settled by the issuance of those equity  instruments.
This  Statement  focuses  primarily on accounting for  transactions  in which an


                                        8
<PAGE>
entity obtains  employee  services in  share-based  payment  transactions.  This
Statement  does not change  the  accounting  guidance  for  share-based  payment
transactions  with parties  other than  employees  provided in Statement  123 as
originally issued and EITF Issue No. 96-18,  "Accounting for Equity  Instruments
That Are Issued to Other Than  Employees for Acquiring,  or in Conjunction  with
Selling,  Goods or Services." This Statement does not address the accounting for
employee share ownership plans, which are subject to AICPA Statement of Position
93-6,  Employers'  Accounting for Employee Stock Ownership Plans. The Company is
required to adopt SFAS 123R effective January 1, 2006. The standard provides for
a prospective application. Under this method, the Company will begin recognizing
compensation  cost for equity based  compensation for all new or modified grants
after the date of adoption. In addition, the Company will recognize the unvested
portion  of the grant  date fair value of awards  issued  prior to the  adoption
abased on the fair values  previously  calculated  for disclosure  purposes.  At
December 31, 2004, the Company had no unvested options.

In May 2003,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial Accounting Standard ("SFAS") No. 150, Accounting for Certain Financial
Instruments with  Characteristics  of both Liabilities and Equity.  SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument this is within its scope
as a liability.  Many of those instruments were previously classified as equity.
SFAS No. 150 is effective for financial  instruments  entered into after May 31,
2003,  and otherwise is effective at the  beginning of the first interim  period
beginning  after June 15,  2003,  except for  mandatorily  redeemable  financial
instruments of nonpublic entities. For nonpublic entities, mandatorily financial
instruments  are subject to SFAS No. 150 for the first  period  beginning  after
December  15,  2003.  Adoption  of SFAS No.  150 will  require  us to report any
cumulative  redeemable  preferred  stock and any  cumulative  Class C redeemable
preferred stock outstanding at the time of adoption as a liability.

ITEM 3. CONTROLS AND PROCEDURES

(a)  Evaluation  of  Disclosure  Controls and  Procedures.  As of the end of the
period covered by this report, we conducted an evaluation, under the supervision
and with the  participation  of our chief executive  officer and chief financial
officer of our disclosure  controls and procedures (as defined in Rule 13a-15(e)
and Rule 15d-15(e) of the Exchange Act). Based upon this  evaluation,  our chief
executive  officer and chief  financial  officer  concluded  that our disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  by us in the reports that we file or submit under the Exchange Act is
recorded, processed,  summarized and reported, within the time periods specified
in the Commission's rules and forms.

(b) Changes in internal  controls.  There was no change in our internal controls
or in other  factors  that could affect  these  controls  during our last fiscal
quarter that has  materially  affected,  or is  reasonably  likely to materially
affect, our internal control over financial reporting.


                                       9
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In September  2005 the Company issued 750,000 shares of common stock pursuant to
a consulting agreement dated July 21, 2005.

In  September  2005  the  Company  issued  805,000  shares  of  common  stock as
compensation for legal services.

On September 7, 2005, the Company entered into a Securities  Purchase  Agreement
(the "Purchase Agreement") with Montgomery Equity Partners Ltd.  ("Montgomery"),
an  affiliated  fund of  Cornell,  providing  for the  sale  by the  Company  to
Montgomery of its 18% secured convertible  debentures in the aggregate principal
amount of $750,000 (the  "Debentures") of which $300,000 was funded on September
7, 2005;  $200,000  shall be funded  two  business  days prior to the  Company's
completion of its audited  financial  statements  for the fiscal year ended July
31, 2005,  and;  $250,000  shall be funded within five business days of the date
the Registration  Statement is declared effective by the SEC. Under the Purchase
Agreement,  the  Company  also issued to  Montgomery  three-year  warrants  (the
"Warrants") to purchase 350,000 shares of Common Stock at $0.001 per share.

In addition to the  foregoing,  the Company  entered into a Securities  Purchase
Agreement (the "Accredited Investor Purchase Agreement") with the investors (the
"Accredited  Investors")  in its  April  2005  financing  pursuant  to which the
Accredited  Investors  agreed to exchange the securities  that they purchased in
such  financing  for an aggregate of $556,500  principal  amount of  Debentures.

Specifically,  the  Accredited  Investors  agreed to  exchange an  aggregate  of
863,845 units (the "Units"), as well as a warrant to purchase an additional Unit
for an aggregate of $556,500 principal amount of Debentures. Each Unit consisted
of one share of 5% convertible  preferred stock of the Company,  $.001 par value
per share, and one warrant to purchase one share of the Company's common stock.


                                       10
<PAGE>

In August 2005,  the Company  issued  472,000  shares of common stock to Cornell
Capital  Partners as a commitment fee pursuant to a Standby Equity  Distribution
Agreement.

In August  2005,  the Company  issued  28,000  shares of common stock to Monitor
Capital, Inc. pursuant to a placement agent agreement dated September 7, 2005.


* All of the above  offerings  and sales were deemed to be exempt under rule 506
of Regulation D and Section 4(2) of the Securities  Act of 1933, as amended.  No
advertising or general solicitation was employed in offering the securities. The
offerings and sales were made to a limited  number of persons,  all of whom were
accredited  investors.  In addition to representations  by the  above-referenced
persons,   we   have   made   independent   determinations   that   all  of  the
above-referenced  persons were accredited or sophisticated  investors,  and that
they were capable of  analyzing  the merits and risks of their  investment,  and
that they understood the speculative  nature of their  investment.  Furthermore,
all of the above-referenced  persons were provided with access to our Securities
and Exchange Commission filings.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

We are not currently in default upon senior securities.

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

None.

ITEM 5. OTHER INFORMATION

None.


                                        11
<PAGE>
ITEM 6. EXHIBITS

EXHIBITS

  10.1    Employment Agreement among Hall Effect Technologies Limited, a company
          registered in England,  Jonathan Andrew Fuller and Hall Effect Medical
          Products Inc., a Delaware  corporation.  (as incorporated by reference
          to the Annual  Report on Form 10-KSB,  filed with the  Securities  and
          Exchange Commission on February 3, 2005).

  10.2    Employment Agreement among Hall Effect Technologies Limited, a company
          registered in England,  Brian Cameron and Hall Effect Medical Products
          Inc., a Delaware  corporation.  (as  incorporated  by reference to the
          Annual Report on Form 10-KSB,  filed with the  Securities and Exchange
          Commission on February 3, 2005).

  10.3    Research  and  Development  Agreement  dated July 1, 2002 between Hall
          Effect Technologies  Limited and Unipath Limited.  (as incorporated by
          reference to the Amended  Annual Report on Form  10-KSB/A,  filed with
          the Securities and Exchange Commission on August 15, 2005).

  10.4    Patent Licence  Agreement  dated September 1, 2002 between Hall Effect
          Technologies   Limited  and  Unipath  Limited.   (as  incorporated  by
          reference to the Amended  Annual Report on Form  10-KSB/A,  filed with
          the Securities and Exchange Commission on August 15, 2005).

  10.5    Subscription  Agreement,  dated December 22, 2004 by and among In Vivo
          Medical Diagnostics,  Inc. and NITE Capital,  L.P. (as incorporated by
          reference  to  Form  8-K,  filed  with  the  Securities  and  Exchange
          Commission on December 29, 2004).

  10.6    Registration Rights Agreement, dated December 22, 2004 by and among In
          Vivo Medical Diagnostics, Inc. and NITE Capital, L.P. (as incorporated
          by  reference  to Form 8-K,  filed with the  Securities  and  Exchange
          Commission on December 29, 2004).

  10.7    Form  of  8%  Promissory  Note  issued  to  NITE  Capital,   L.P.  (as
          incorporated  by reference to Form 8-K,  filed with the Securities and
          Exchange Commission on December 29, 2004).

  10.8    Certificate of the Powers, Designations, Preferences and Rights of the
          Series B Preferred  Stock (As  incorporated  by reference to Form Form
          8-K filed with the  Securities  and Exchange  Commission  on April 21,
          2005).

  10.9    Form of  Subscription  Agreement - April 2005  private  placement  (As
          incorporated  by reference to Form Form 8-K filed with the  Securities
          and Exchange Commission on April 21, 2005).

  10.10   Form of Common Stock Purchase  Warrant - April 2005 private  placement
          (As  incorporated  by  reference  to Form  Form  8-K  filed  with  the
          Securities and Exchange Commission on April 21, 2005).

  10.11   Form of Unit Warrant - April 2005 private  placement (As  incorporated
          by reference to Form Form 8-K filed with the  Securities  and Exchange
          Commission on April 21, 2005).


                                       12
<PAGE>
  10.12   Form of Registration  Rights Agreement - April 2005 private  placement
          (As  incorporated  by  reference  to Form  Form  8-K  filed  with  the
          Securities and Exchange Commission on April 21, 2005).

  10.13   Secured Convertible  Debenture issued to Montgomery dated September 7,
          2005 (as incorporated by reference to the Company's  Current Report on
          Form  8-K,  filed  with the  Securities  and  Exchange  Commission  on
          September 13, 2005).

  10.14   Warrant issued to Montgomery  dated September 7, 2005 (as incorporated
          by reference to the Company's  Current  Report on Form 8-K, filed with
          the Securities and Exchange Commission on September 13, 2005).

  10.15   Form of Convertible Debenture dated September 7, 2005 (as incorporated
          by reference to the Company's  Current  Report on Form 8-K, filed with
          the Securities and Exchange Commission on September 13, 2005).

  10.16   Investor  Registration Rights Agreement dated September 7, 2005 by and
          between the Company and  Montgomery (as  incorporated  by reference to
          the Company's  Current  Report on Form 8-K,  filed with the Securities
          and Exchange Commission on September 13, 2005).

  10.17   Pledge and Escrow  Agreement  dated September 7, 2005 by and among the
          Company,   Montgomery   and  David   Gonzalez  as  escrow   agent  (as
          incorporated by reference to the Company's Current Report on Form 8-K,
          filed with the  Securities  and Exchange  Commission  on September 13,
          2005).

  10.18   Securities  Purchase  Agreement dated September 7, 2005 by and between
          the  Company and  Montgomery  (as  incorporated  by  reference  to the
          Company's  Current  Report on Form 8-K,  filed with the Securities and
          Exchange Commission on September 13, 2005).

  10.19   Security  Agreement dated September 7, 2005 by and between the Company
          and Montgomery (as incorporated by reference to the Company's  Current
          Report on Form 8-K, filed with the Securities and Exchange  Commission
          on September 13, 2005).

  10.20   Standby Equity  Distribution  Agreement dated September 7, 2005 by and
          between the Company and Cornell (as  incorporated  by reference to the
          Company's  Current  Report on Form 8-K,  filed with the Securities and
          Exchange Commission on September 13, 2005).

  10.21   Registration  Rights  Agreement dated September 7, 2005 by and between
          the and Cornell (as incorporated by reference to the Company's Current
          Report on Form 8-K, filed with the Securities and Exchange  Commission
          on September 13, 2005).

  10.22   Placement  Agent  Agreement dated September 7, 2005 by and between the
          Company and Monitor Capital, Inc. (as incorporated by reference to the
          Company's  Current  Report on Form 8-K,  filed with the Securities and
          Exchange Commission on September 13, 2005).

  10.23   Intercreditor  Agreement  dated  September  7,  2005 by and  among the
          Company, Montgomery and the investors identified in Schedule I thereto
          (as incorporated by reference to the Company's  Current Report on Form
          8-K, filed with the  Securities  and Exchange  Commission on September
          13, 2005).

  10.24   Investor  Registration Rights Agreement dated September 7, 2005 by and
          between  the  Company  and  the  investors   identified   thereto  (as
          incorporated by reference to the Company's Current Report on Form 8-K,
          filed with the  Securities  and Exchange  Commission  on September 13,
          2005).

                                       13
<PAGE>
  10.25   Securities  Purchase  Agreement dated September 7, 2005 by and between
          the Company and the investors  identified  thereto (as incorporated by
          reference to the Company's  Current Report on Form 8-K, filed with the
          Securities and Exchange Commission on September 13, 2005).

  10.26   Security  Agreement dated September 7, 2005 by and between the Company
          and the investors  identified thereto (as incorporated by reference to
          the Company's  Current  Report on Form 8-K,  filed with the Securities
          and Exchange Commission on September 13, 2005).

  31.1    Certification by John Fuller,  President and Chief Executive  Officer,
          pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

  31.2    Certification by Martin Thorp,  Chief Financial  Officer,  pursuant to
          Section 302 of the Sarbanes-Oxley Act of 2002.

  32.1    Certification by John Fuller,  President and Chief Executive  Officer,
          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

  32.2    Certification by Martin Thorp,  Chief Financial  Officer,  pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.


                                       14
<PAGE>
ITEM 7. SIGNATURES
                                   SIGNATURES

Pursuant to the  requirements  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.

                      IN VERITAS MEDICAL DIAGNOSTICS, INC.

December 20, 2005



                      By:   /s/ John Fuller
                      --------------------------------
                      John Fuller
                      Chief Executive Officer
                      (Principal Executive Officer)

                      /s/ Martin E. Thorp
                      --------------------------------
                      Martin E. Thorp
                      Chief Financial Officer
                      (Principal Financial and Accounting Officer)


                                       15