UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C.   20549





FORM 10-Q





(Mark One)





[X]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934





For the quarterly period ended November 30, 2009


or





[   ]           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 000-07405





SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES.


(Exact name of registrant as specified in its charter)





New Jersey
22-1937826(State or other jurisdiction of
(I.R.S. Employer Identification No.)incorporation or organization77 Ridgeland RoadHenrietta, New York
14623(Address of principal executive offices)
(Zip Code)





(585) 413-9080


(Registrant’s telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such short 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 large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.





Large accelerated filer
[  ]
Accelerated filer [  ]Non-accelerated filer
[  ]
Smaller reporting company [X](Do not check if a smaller reporting company)





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


Yes [  ]      No [X]





As of November 30, 2009, there were outstanding 15,865,612 shares of the registrant’s common stock, $.01 par value.








“THE REVIEW OF THE NOVEMBER 30, 2009 AND 2008 FINANCIAL STATEMENTS THAT ARE REQUIRED


FOR FILING THE COMPANY’S FORM 10-Q HAS NOT BEEN COMPLETED BY THE COMPANY’S


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AS OF THE DATE OF THIS FILING”





SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES


CONSOLIDATED FINANCIAL STATEMENTS


NOVEMBER 30, 2009





INDEX


PAGEPART 1.
Financial InformationItem 1.
Financial StatementsConsolidated Balance Sheet as of November 30, 2009 (Unaudited) and February 28, 2009 (Audited)
1Consolidated Statement of Operations for the Nine and Three Months Ended November 30, 2009 (Unaudited) and November 30, 2008 (Unaudited)
2Consolidated Statement of Changes in Stockholders’ Deficit for the Nine Months Ended November 30, 2009 (Unaudited)
3Consolidated Statement of Cash Flows for the Nine Months Ended November 30, 2009 (Unaudited) and November 30, 2008 (Unaudited)
4Notes to Consolidated Financial Statements
5-15Item 2.
Management’s Discussion and Analysis
16-17Item 3.
Quantitative and Qualitative Disclosures About Market Risk
18Item 4T.
Controls and Procedures
18PART 11.
Other Information
19Item 1.
Legal ProceedingsItem 1A.
Risk FactorsItem 2.
Unregistered Sales of Equity Securities and Use of ProceedsItem 3.
Defaults Upon Senior SecuritiesItem 4.
Submission of Matters to a Vote of Security HoldersItem 5.
Other InformationItem 6.
Exhibits
20Signatures
21Exhibit Index
22Exhibits
23-25











SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEET





ASSETSNovember 30, 2009
(Unaudited)


February 29, 2008
(Audited)CURRENT ASSETSCash and Cash Equivalents

$
42,427


$
76,797Prepaid Expenses and Other Current Assets


1,190



17,262Total Current Assets


43,617



94,059PROPERTY PLANT AND EQUIPMENTNet of Accumulated Depreciation of $207,322


-



-OTHER ASSETSIntellectual Property - Net of Accumulated Amortization of $140,428


2,668,136



-Security Deposit


2,800



2,800Deferred Costs


47,227



130,547TOTAL ASSETS

$
2,761,780


$
227,406LIABILITIES AND STOCKHOLDERS' DEFICITCURRENT LIABILITIESConvertible Debt, Net of Discount of $-0- and $86,036

$
512,300


$
1,570,464Accounts Payable


271,932



73,895Note Payable


49,830



-Officer Loan


5,524



-Loan Payable


50,000



-Accrued Liabilities


2,187,333



4,140,431Total Current Liabilities


3,076,919



5,784,790STOCKHOLDERS' DEFICITConvertible Preferred Stock, $.01 Par Value, 5,000 SharesAuthorized; Issued and Outstanding -0- Shares November 30,2009; -0- Shares February 28, 2009


-



-Common Stock $.01Par Value, Authorized 19,995,000Shares; Issued and Outstanding Shares - 15,865,612 SharesNovember 30, 2009; 7,123,241 Shares - February 28, 2009


158,655



71,232Common and Preferred Stock Subscribed


280,000



150,000Additonal Paid-in Capital


32,911,858



27,784,596Accumulated Deficit


(33,665,652
)


(33,563,212
)Total Stockholders' Deficit


(315,139
)


(5,557,384
)TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT

$
2,761,780


$
227,406








See Notes to Consolidated Financial Statements.
 1





SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF OPERATIONS


FOR THE NINE AND THREE MONTHS ENDED NOVEMBER 30, 2009 AND 2008


(UNAUDITED)





NINE MONTHS


THREE MONTHS2009


2008


2009


2008Net Sales

$
-


$
-


$
-


$
-Cost of Sales


-



-



-



-Gross Profit


-



-



-



-General and Administrative Expense


896,916



870,700



249,635



434,249Product Development Expense


243,085



136,999



76,560



47,242Total Expenses


1,140,001



1,007,699



326,195



481,491Interest Income


74



4,203



18



951Cancellation of Indebtedness


1,252,776



-



-



-Interest Expense


(129,253
)


(141,058
)


(38,901
)


(50,573
)Accretion of Interest on Convertible Debt


(86,036
)


(553,105
)


-



(170,199
)Total Other Income and Expense


1,037,561



(689,960
)


(38,883
)


(219,821
)Net Loss

$
(102,440
)

$
(1,697,659
)

$
(365,078
)

$
(701,312
)Basic and Diluted Loss Per Common Share

$
(0.008
)

$
(0.025
)

$
(0.023
)

$
(0.010
)Weighted Average Common SharesOutstanding


13,014,811



6,766,004



15,855,612



6,847,813





See Notes to Consolidated Financial Statements.
 2


SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT


FOR THE NINE MONTHS ENDED NOVEMBER 30, 2009


(UNAUDITED)




Common andPreferred Stock


Common Stock





PreferredShares


Amount


Shares


Amount


Additional Paid-In Capital


Stock
Subscribed


AccumulatedDeficitBALANCE, FEBRUARY 28, 2009


-


$
-



7,123,241


$
71,232


$
27,784,596


$
150,000


$
(33,563,212
)Common Stock Issued for Services


-



-



31,333



313



20,707



-



-Receipt of Cash for Preferred Stock Subscribed


-



-



-



-



-



100,000



-Common Stock Issued in Acquisition of SensiVidaMedical Systems, Inc.


-



-



3,333,333



33,333



2,717,999



-



-Common Stock Issued in Cancellation of Debt


-



-



1,172,510



11,725



926,283



-



-Receipt of Cash for Common Stock Subscribed


-



-



-



-



-



30,000



-Cancellation of Fractional Shares as a Result ofReverse Stock Split


-



-



(27
)


-



-



-



-Common Stock Issued for Future Services


-



-



50,000



500



49,500



-



-Common Stock Issued in Conversion of Debtand Accrued Interest


-



-



4,155,222



41,552



1,412,773



-



-Net (Loss)


-



-



-



-



-



-



(102,440
)BALANCE, NOVEMBER 30, 2009


-


$
-



15,865,612


$
158,655


$
32,911,858


$
280,000


$
(33,665,652
)


See Notes to Consolidated Financial Statements.
 3





SENSIVIDA MEDICAL TECHNOLOGIES, INC.


CONSOLIDATED STATEMENT OF CASH FLOWS


FOR THE NINE MONTHS ENDED NOVEMBER 30, 2009 AND 2008


(UNAUDITED)





2009


2008CASH FLOWS FROM OPERATING ACTIVITIESAdjustments to Reconcile Net Income (Loss) to Net Cash Used InOperating Activities:Net (Loss)

$
(102,440
)

$
(1,697,659
)Accretion of Interest on Convertible Debt


86,036



553,105(Gain) on Cancellation of Debt with Issuance of Common Stock


(1,209,179
)


-Common Stock Issued for Services


21,020



220,256Depreciation and Amortization


140,428



345Amortization of Deferred Costs


133,320



140,937Subtotal


(930,815
)


(783,016
)Changes in Assets and LiabilitiesDecrease in Prepaid Expense and Other Current Assets


16,072



37,209Increase in Loan Payable


50,000



-(Decrease) Increase in Accounts Payable


198,037



(56,581
)Increase in Accrued Liabilities


441,536



253,812Net Cash Used for Operating Activities


(225,170
)


(548,576
)CASH FLOWS FROM INVESTING ACTIVITIES


-



-CASH FLOWS FROM FINANCING ACTIVITIESCommon and Preferred Stock Subscribed


130,000



-Proceeds from Issuance of Convertible Debt


60,800



538,500Net Cash Provided by Financing Activities


190,800



538,500INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


(34,370
)


(10,076
)CASH AND CASH EQUIVALENTSBeginning Balance


76,797



123,582Ending Balance

$
42,427


$
113,506SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCINGACTIVITIES:Common Stock Issued in Acquisition of Intellectual Property andOther Liabilities

$
2,751,332


$
-Discount on Debt Due to Beneficial Conversion Option

$
-


$
538,500Common Stock Issued in Cancellation of Debt

$
938,008


$
-Common Stock Issued in Conversion of Debt and Accrued Interest

$
1,454,325


$
-Common Stock Issued for Future Services

$
50,000


$
-Common Stock Issued for Anti-Dilution Rights

$
-


$
5,349





See Notes to Consolidated Financial Statements.
 4
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Nature of the Business


The consolidated financial statements include the accounts of SensiVida Medical Technologies, Inc. f/k/a Mediscience Technology Corp. (“SensiVida”) and its wholly-owned subsidiaries, Laser Diagnostic Instruments, Inc. (“Laser”), Photonics for Women’s Oncology, LLC (“Photonics”)
and Mediphotonics Development, LLC (“Mediphotonics”), and Bioscopix, Inc. (“Bioscopix”), (collectively the “Company”).   All significant intercompany transactions and balances have been eliminated in consolidation.  All wholly-owned subsidiaries are currently inactive.





The Company has operated in one business segment and continues to be engaged in the design and development of medical diagnostic instruments that detect cancer in vivo in humans by using light to excite the molecules contained in tissue and measuring the differences in the resulting natural fluorescence between cancerous
and normal tissue.  Effective March 3, 2009, with the merger of SensiVida Medical Systems, Inc. into the Company’s wholly-owned subsidiary BioScopix, Inc., the Company’s technology will also focus on the automation of analysis and data acquisition for allergy testing, glucose monitoring, blood coagulation testing, new tuberculosis testing, and cholesterol monitoring.





Management’s Plan


The Company is subject but not limited to a number of risks similar to those of other companies at this stage of development, including dependence on key individuals, the development of commercially usable products and processes, competition from substitute products or alternative processes, the impact of research and
product development activity, competitors of the Company, many of whom have greater financial or other resources than those of the Company, the uncertainties related to technological improvements and advances, the ability to obtain adequate additional financing necessary to fund continuing operations and product development and the uncertainties of future profitability.  The Company expects to incur substantial additional costs before beginning to generate income from product sales, including costs
related to ongoing research and development activities, preclinical studies and regulatory compliance.  Substantial additional financing is needed by the Company.





The Company has no revenues, incurred significant losses from operations, has an accumulated deficit and a highly leveraged position that raises substantial doubt about the Company’s ability to continue as a going concern.  The consolidated financial statements do not include any adjustments relating
to recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  The Company expects to incur substantial expenditures to further the development and commercialization of its products.  To achieve this, management will seek to enter into an agreement with a consulting firm to be an advisor and explore options for the Company to commercialize its technology, will
seek additional financing through private placements or other financing alternatives, and might also seek to sell the Company or its technology.  There can be no assurance that continued financings will be available to the Company or that, if available, the amounts will be sufficient or that the terms will be acceptable to the Company.





Use of Estimates


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





Equipment


Equipment is stated at cost.  Depreciation is computed using the straight-line method over an estimated useful life of five years.  Depreciation expense was $-0- and $345 for the nine months ended November 30, 2009 and 2008, respectively.


5
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)





Intellectual Property


Intellectual Property is stated at cost.  Amortization is computed using the straight-line method over an estimated useful life of fifteen years.  Amortization expense was $140,428 and $0 for the nine months ended November 30, 2009 and 2008, respectively.





Income Taxes


The Company accounts for income taxes under Statement of Financial Accounting Standards (“SFAS”) No. 109, Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes.  Deferred
income tax assets and liabilities are computed annually for temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Income tax expense is the tax
payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.





Research and Development


Research and development costs are charged to operations when incurred.  The amounts charged to expense were $166,524 and $89,757 for the nine months ended November 30, 2009 and 2008, respectively.





Loss per Common Share


In accordance with SFAS No. 128, Earnings per Share, basic and diluted net income or loss per share was computed using net income or loss divided by the weighted average number of shares of common stock outstanding for the period presented.  Because
the Company reported a net loss for the nine months ended November 30, 2009, common stock equivalents consisting of options and warrants were anti-dilutive; therefore, the basic and diluted net loss per share were the same.





Accounting for Stock-Based Compensation


In December 2004, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment.  SFAS No. 123R requires measurement of all employee stock-based compensation awards using a fair value method and the recording of such
expense in the consolidated financial statements.  In addition, the adoption of SFAS No. 123R requires additional accounting related to the income tax effects and additional disclosure regarding the cash flow effects resulting from share-based payment arrangements.  There were no employee stock options issued during the nine months ended November 30, 2009 and 2008.





Concentration of Credit Risk Involving Cash


The Company may have deposits with major financial institutions which exceed Federal Deposit Insurance limits during the year.








RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS





In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements.  SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements.  The changes to current practice resulting from the application of this statement relate to the definition
of fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements.  SFAS No. 157 is effective for fiscal years beginning after November 15, 2007.   In February 2008, the FASB issued FSP No. SFAS 157-2,


6
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)





Effective Date of FASB Statement No. 157, which provides a one-year deferral of the effective date of SFAS No. 157 for non-financial assets and non-financial liabilities, except those that are recognized or disclosed in the financial statements at fair value at least annually.  Therefore the Company has adopted
on March 1, 2008, the provisions of SFAS No. 157 with respect to its financial assets and liabilities only.  However, the Company does not anticipate that the full adoption of SFAS 157 will significantly impact their consolidated financial statements.





In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities.  This statement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value.  The
objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.  This statement also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities.  This statement is effective
for financial statements issued for fiscal years beginning after November 15, 2007. The Company adopted SFAS No. 159 on March 1, 2008, and did not elect the fair value option for any of its assets or liabilities.





In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, The Hierarchy of Generally Accepted Accounting Principles (“FAS 162”).  This Standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of
financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles.  FAS 162 directs the hierarchy to the entity, rather than the independent auditors, as the entity is responsible for selecting accounting principles for financial statements that are presented in conformity with generally accepted accounting principles.  Effective November 15, 2008, the Company adopted SFAS No. 162, which did not have any impact on the Company’s
financial statements.





In December 2007, the FASB issuedSFAS No. 141 (revised 2007), Business Combinations (“SFAS 141R”).  SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired.  SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination.  This statement is effective for the Company starting March 1, 2009 and will change the accounting for business combinations on a prospective basis.





RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED





On December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling Interest in Consolidated Financial Statements (SFAS No. 160).  SFAS No. 160 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements.  The statement establishes
a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation and expands disclosures in the consolidated financial statements.  SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years.  SFAS No. 160 is not currently applicable to the Company.





In March 2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and Hedging Activities which is effective January 1, 2009.  SFAS 161 requires enhanced disclosures about derivative instruments and hedging activities to allow for a better understanding of their effects on an entity’s
financial position, financial performance and cash flows.  Among other things, SFAS 161 requires disclosures of the fair values of derivative instruments and associated gains and losses in a tabular formant.  SFAS 161 is not currently applicable to the Company since the Company does not have derivative instruments or hedging activity.


7
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)





In April 2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, Determination of the Useful Life of Intangible Assets, which amends the factors that should be considered in developing renewal or extension





assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets.  This Staff Position is effective for financial statements issued for fiscal years beginning after December
15, 2008, and interim periods within those fiscal years.  Early adoption is prohibited.  The Company is currently evaluating the impact that FSP No. 142-3 will have on its consolidated financial statements.





In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities.  This FSP provides that unvested share-based payment awards that contain nonforfeitable rights to dividendsor dividend equivalents (whether paid or unpaid) are participating securities and shall
be included in the computation of earnings per share pursuant to the two-class method.  The Company does not currently have any share-based awards that would qualify as participating securities.  Therefore, application of this FSP is not expected to have an effect on the Company’s financial reporting.





In May 2008, the FASB issued FASB Staff Position (FSP) APB 14-1, Accounting for Convertible Debt That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)(“FSP 14-1”).  FSP 14-1 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008.  The FSP includes guidance that convertible debt instruments that may be settled in cash upon conversion should be separated between the liability and equity components, with each component being accounted for in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods.  The Company is currently evaluating the impact of FSP 14-1 on its consolidated
financial statements and footnote disclosures.





In June 2008, the FASB issued EITF Issue No. 07-5, Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock (“EITF Issue No. 07-5”) which is effective for financial statements for fiscal years beginning after December 15, 2008, and interim periods within those fiscal
years.  The Issue addresses the determination of whether an instrument (or an embedded feature) is indexed to an entity’s own stock, which is the first part of the scope exception in Paragraph 11(a) of SFAS No. 133 for the purpose of determining whether the instrument is classified as an equity instrument or accounted for as a derivative instrument which would be recognized either as an asset or liability and measured at fair value.  The guidance shall be applied to outstanding instruments
as of the beginning of the fiscal year in which this Issue is initially applied.  Any debt discount that was recognized when the conversion option was initially bifurcated from the convertible debt instrument shall continue to be amortized.  The cumulative effect of the change in accounting principles shall be recognized as an adjustment to the opening balance of retained earnings.  The Company is currently evaluating the impact of EITF Issue No. 07-5 on its consolidated financial
statements and footnote disclosure.








NOTE 2 – RELATED PARTY TRANSACTIONS





Legal services rendered by Mr. Peter Katevatis amounted to $45,000 and $38,139 for the nine months ended November 30, 2009 and 2008, respectively.  These amounts are recorded in general and administrative expense.  Effective November 2008, Mr. Katevatis’ legal service agreement was amended
to $60,000 per year.





As part of Mr. Katevatis’ prior employment agreement, the Company paid property taxes and certain operating expenses on the home of Mr. Katevatis in lieu of rent, since the Company’s operations were located in Mr. Katevatis’ home through November 2008.  Expenses recognized were $-0-
and $17,294 for the nine months ended November 30, 2009 and 2008, respectively, and are recorded in general and administrative expense.  In December 2008, the Company leased an office in Henrietta, New York.





See Note 7 for details regarding the Company’s consulting agreement with one of its principal stockholders and Note 4 for related party loans and accrued liabilities.


8
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 3 – DEFERRED CHARGES





Expected future amortization of deferred charges is as follows:





Years EndingFebruary 28, 2010

$
13,750February 28, 2011


25,000February 28, 2012


8,477$
47,227





NOTE 4 – ACCRUED LIABILITIES





Accrued liabilities consist of the following:





November 30, 2009


February 28, 2009Legal and professional fees

$
264,246


$
182,826Consulting and university fees


1,397,019



1,440,615Salaries and wages


275,500



2,148,786Accrued Interest


158,333



275,969Other


92,235



92,235Totals

$
2,187,333


$
4,140,431





Accrued legal and professional fees include services rendered by Mr. Peter Katevatis.  The amount of the accrual was $55,000 and $46,901 as of November 30, 2009 and February 28, 2009, respectively (Note 2).





Accrued consulting and university fees include costs owed to Dr. Robert R. Alfano, a principal stockholder and former chairman of the Company’s Scientific Advisory Board (Note 7), with respect to his prior consulting agreement, of $1,397,019 as of November 30, 2009 and February 28, 2009,





Accrued expense reimbursements of $92,235 were due to Dr. Alfano at November 30, 2009 and February 28, 2009.  The Company has accrued these costs in conjunction with Dr. Alfano’s prior consulting agreement.





Accrued salaries and wages include amounts due to Mr. Katevatis of $-0- and $2,110,286 as of November 30, 2009 and February 28, 2009, respectively.





Mr. Katevatis and Dr. Robert Alfano have agreed to forebear any and all collection action for accrued fees and, in the case of Mr. Katevatis’, salary, including forgiveness of interest, in exchange for the option of converting any such accrued salary and fees into the Company’s common stock at $0.25 per
share.  The option is unlimited in duration.  If the Company were to receive financing, either may elect to receive all or part of such accrued salary or fees in cash or common stock.  As of November 30, 2009, accrued consulting fees and expenses amounted to $1,489,254 for Dr. Alfano.





On March 23, 2009 Mr. Katevatis exercised his option to convert all outstanding salary and fees accrued through November 3, 2008 totaling $2,147,187, along with the termination of his employment agreement and anti-dilution rights in exchange for 1,172,510, shares of the Company’s common stock.





Accrued salaries and wages include amounts due to Frank D. Benick, Chief Financial Officer, of $23,000 and $6,000, as of November 30, 2009 and February 28, 2009, respectively.





9
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 4 – ACCRUED LIABILITIES (CONT.)





Accrued salaries and wages also include amounts due to Kamal Sarbadhikari, former Chief Executive Officer, and Jose Mir, Chief Technical Officer of $93,750 and $6,250 each as of November 30, 2009 and February 28, 2009, respectively.





Accrued salaries and wages include amounts due to David R. Smith, Chairman of the Board, of $65,000 and $20,000 as of November 30, 2009 and February 28, 2009, respectively.








NOTE 5 – CONVERTIBLE DEBT AND NOTE PAYABLE





Convertible Debt


On January 10, 2007, the Company commenced a Private Placement Offering for $2,000,000 of 12% convertible promissory notes (“the Notes”) in amounts of not less than $25,000.  The Notes shall be due and payable, together with accrued and unpaid interest, on the earlier of April 15, 2008 for the
first $1,000,000 tranche and April 15, 2009 for the second $1,000,000 tranche (of which $656,500 had been raised as of April 15, 2009) or three months after the completion of the initial public offering (“the IPO”) of the shares of BioScopix (now SensiVida Medical Technologies, Inc. as a result of the merger of BioScopix into Mediscience Technology Corp. and subsequent name changes of the Company to BioScopix and then SensiVida Medical Technologies, Inc. (SensiVida), after the merger of BioScopix
and SensiVida Medical Technologies, Inc. Holders of the Notes may convert the notes into (i) cash in the amount of the principal and accrued and unpaid interest due and a warrant exercisable until April 15, 2009 to purchase shares of BioScopix (now SensiVida) in an amount equal to 50% of the principal of the Notes at an exercise price of 120% of the five day volume weighted average preceding the effective date of the IPO of SensiVida or (ii) shares of SensiVida at a price equal to 50% of the IPO price of the
SensiVida shares of common stock in an amount equal to the principal and accrued and unpaid interest due on the Notes.  In accordance with EITF 00-27 under option (ii), the carrying value of the Notes was reduced by the intrinsic value of the beneficial conversion option resulting in a carrying value of $-0-.  On January 29, 2008, the Notes were modified to provide for two additional options.  In addition to options (i) and (ii), holders of the notes may now also convert the notes
into (iii) SensiVida stock with a six month lockup in the amount of principal and accrued interest and receive 50% warrant coverage at 75% of the SensiVida stock IPO price and (iv) combination of alternatives (ii) and (iii).  The additional options did not require an adjustment to the value of the Notes.





As of May 31, 2009, the notes have been accreted to their maturity value.  Accretion of discount on convertible debt amounted to $86,036 and $382,906 for the nine months ended November 30, 2009 and 2008, respectively.





Accrued interest payable as of November 30, 2009 and February 28, 2009 was $127,955 and $275,969, respectively.  Accrued interest expense for the nine months ended November 30, 2009 and 2008 was $114,642 and $141,058 respectively.





Effective April 15, 2008, the first $1,000,000 tranche of the Notes were in default.  Under the terms of the Notes, in the event of default, the entire principal and unpaid accrued interest is immediately due and payable. The January 29, 2008 modification of the Notes provided two additional options to the
Note holders as compensation for the delay of the IPO which was expected to take place prior to April 15, 2009.





Effective April 15, 2009, the second tranche of the Notes in the amount of $656,500 were in default.  Under the terms of the Notes, in the event of default, the entire principal and unpaid accrued interest is immediately due and payable.





On July 31, 2009, certain note holders converted the note and accrued interest thru July 31, 2009 into common stock of the Company at the net price of $.35 per share.  Principal of $1,205,000 and accrued interest of $249,326 were converted into 4,155,222 shares of the Company’s common stock.


10
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 5 – CONVERTIBLE DEBT AND NOTE PAYABLE (CONT.)





Loan Payable





On September 1, 2009, the Company borrowed $50,000 from a shareholder.  The loan calls for interest at 12%.  The principal and accrued interest is convertible into the company’s common stock at $.66 per share after six months at the discretion of the note holder.  Proceeds of the
loan are to be used for the company’s patient allergy clinical trial and related clinical expenses.





Note Payable


On September 1, 2005, SensiVida Medical Systems, Inc. (SensiVida) issued a $50,000 convertible subordinated note to the order of Excell Partners, Inc. (Holder).  Principal and accrued interest was due and payable in one installment on September 1, 2008, the maturity date.  Interest was accruable
at 2% per annum on the unpaid principal amount of the Note.  Upon any default of this Note, the Holder has the right to convert the Note to Common Stock of SensiVida.  The number of shares of Common Stock would be determined by dividing the outstanding principal and accrued interest to the date of conversion by the conversion price or fair market value paid in a most recent Qualified Transaction by SensiVida.  The note was in default upon acquisition and was amended as of December
1, 2009.  Commencing January 1, 2010, interest will accrue on the balance at a rate of 8% compounded annually.  The note has a maturity date of January 1, 2011.  If the entire unpaid balance of the note is not paid when due, then the amount unpaid shall bear interest at the current rate plus 1% and such rate shall increase by an additional one percent each year until the note is paid in full.  The amount drawn on the note at November 30, 2009 and February 28, 2009 was $49,828
and $49,828, respectively.  Interest accrued on the note was $3,455 and $2,888 as of November 30, 2009 and February 28, 2009, respectively.








NOTE 6 – INCOME TAXES





There is no provision for income taxes for the nine months ended November 30, 2009 and 2008.  As of November 30, 2009 the Company has sufficient federal and state net operating loss carryforwards to offset the current interim period income.  Also any deferred tax benefit or asset that would be considered
was offset by a valuation allowance as required by FASB Statement No. 109, Accounting for Income Taxes.








NOTE 7– COMMITMENTS AND CONTINGENCIES





Dr. Robert R. Alfano


The Company had a consulting agreement (the “Agreement”) through March 2007 with Dr. Robert R. Alfano, a principal stockholder of the Company and prior Chairman of its Scientific Advisory Board.  Pursuant to the terms of the Agreement, Dr. Alfano was paid a consulting fee of not less than $150,000
per annum in exchange for services to be rendered for approximately fifty days per annum in connection with the company’s medical photonics business.  The Agreement further provided that Dr. Alfano was to be paid a bonus and fringe benefits in accordance with policies and formulas provided to key executives of the Company.  The agreement expired on March 5, 2007.





In connection with the acquisition of patent rights to its cancer detection technology, the Company assumed an obligation to pay to Dr. Alfano’s daughter a royalty of one percent of the gross sales derived from any equipment made, leased or sold which utilizes the concepts described in the Company’s cancer
detection patent.  Since there has been no revenue, no amounts have been paid during the nine months ended November 30, 2009 and 2008.





Other Royalties


The Company obtained worldwide licensing rights for patents from Yale University and has agreed to pay royalties based on net sales of all products generated from the patents and fifty percent of any income received from sublicensing of the patents.  The Company has not recorded any revenues since the inception
of this agreement and therefore has not recorded or paid any royalties during the nine months ended November 30, 2009 and November 30, 2008.


11
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 7– COMMITMENTS AND CONTINGENCIES (CONT.)





Employment Agreements


Mr. Peter Katevatis, a former Chief Executive Officer and Chairman and a stockholder of the Company, had an employment agreement.  The prior agreement was renewed on March 5, 2007 which increased his salary from $200,000 to $250,000 per year. The agreement also provided for a bonus and fringe benefits in accordance
with policies and formulas mutually agreed upon by Mr. Katevatis and the Board of Directors.  The contract was due to expire on March 5, 2015.  In November 2008, Mr. Katevatis terminated his employment agreement as Chief Executive Officer and Chairman along with his anti-dilution rights and exercised his option to convert all outstanding salary and fees accrued thru November 2008 in exchange for 1,172,510 shares of the Company’s common stock.





On November 15, 2005, the Company entered into a two year employment agreement with Frank D. Benick as Chief Financial Officer.  Mr. Benick will be paid a monthly salary of $3,000 per month for the first two months, then increasing to $4,000 per month for the remaining term of the agreement and received an
option to purchase 30,000 shares of common stock at $10.00 per share.  This agreement has not been formally updated.





On November 5, 2008, the Company entered into a three (3) year employment contract with Kamal Sarbadhikari as Chief Executive Officer and Jose Mir as Chief Technical Officer.  Mr. Sarbadhikari and Mr. Mir will each be paid a base salary of $150,000 per annum.  On November 2, 2009, Mr. Kamal Sarbadhikari
resigned for health reasons effective December 31, 2009.  Jose Mir has been appointed interim President effective December 31, 2009.





On November 10, 2008, the Company entered into a three (3) year employment contract with David R. Smith as Chairman of the Board.  Mr. Smith will be paid $60,000 per annum.








NOTE 8 – STOCKHOLDERS’ DEFICIT





Reverse Stock Split


The consolidated balance sheets, statements of changes in stockholders’ deficit, and related notes to consolidated financial statements have been adjusted to reflect a 10 for 1 reverse stock split that was effective May 18, 2009.





Preferred Stock


The Company is authorized to issue 5,000 shares of preferred stock, $.01 par value per share, which may be issued from time-to-time in one or more series, the terms of which may be designated by the Board of Directors without further action by stockholders.  Any preferred stock issued will have preferences
with respect to dividends, liquidation and other rights, but will not have preemptive rights.





Holders of series A preferred stock are entitled to a preference of $100 per share, before any payment is made to holders of common stock in liquidation of the assets of the Company.  Additionally, holders of Series A preferred stock have no redemption or dividend rights and vote only with respect to corporate
matters affecting their respective rights, preferences or limitations, but do not vote for the election of directors or on general corporate matters.





Common Stock Issued for Services


During 2009, the company issued 31,333 restricted shares of its common stock with a value of $21,020 to a group of consultants in exchange for professional services, as per their agreements.  The transactions were recognized based on the fair market value of the shares issued (the closing price of the Company’s
common stock of the date of issuance).


12
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009


NOTE 8 – STOCKHOLDERS’ DEFICIT (CONT.)





Common Stock Issued In Acquisition of SensiVida Medical Systems, Inc.


On March 3, 2009, the Company (formerly known as Mediscience Technology Corp.) and SensiVida Medical Systems, Inc. completed a merger of the two companies, with Mediscience changing its name to SensiVida Medical Technologies, Inc.  As consideration for the merger, the Company issued 3,333,333 shares of the
Company’s common stock, par value $.01 per share to the three stockholders of SensiVida Medical Systems, Inc. as consideration for the transaction.  The transaction was recognized based on the fair market value of the shares issued (the closing weighted average price of the Company’s common stock for a period prior and after the merger date).





Common Stock Issued in Cancellation of Debt


In March 2009, the Company issued 1,172,510 shares of its common stock to Mr. Katevatis in settlement of all his accrued fees and salary to include termination of his employment agreement as Chief Executive Officer and Chairman, along with cancellation of his anti-dilution rights.





Common Stock Issued for Future Services


During July 2009, the Company issued 50,000 restricted shares of its common stock with a value of $50,000 to a medical consultant in exchange for professional services, as per agreement.  The transaction was recognized based on the fair market value of the shares issued (the closing price of the company’s
common stock of the date of the agreement).





Preferred Stock Subscribed


During February 2009, a current shareholder advanced $150,000 plus an additional $100,000 received in March 2009 in exchange for 250,000 of Series A Preferred stock having a par value of $1.00 (the shares).  Each Series A Preferred share is convertible into 15 shares of common stock for a total of 3,750,000
shares (pre-reverse split) of common stock together with warrants to purchase up to 500,000 shares (pre-reverse split) of common stock with an exercise price of $.10. In the event the Company, at any time while Series A Preferred shares are still outstanding, issues or grants any right to re-price, common stock or any type of securities at a price below the conversion price, the investor shall be extended full-ratchet and anti-dilution protection of the Series A shares and warrants (reduction in price and proportional
increase in number of shares).





Common Stock Subscribed


In August 2009, the Company received $30,000 for 30,000 shares of the Company’s common stock.  As of November 30, 2009, the shares have not yet been issued.





2003 Consultants Stock Plan


The Board of Directors previously adopted, subject to stockholder approval, a 2003 Consultants Stock Plan (“Consultants Plan”).  The Consultants Plan was subsequently approved by the stockholders on February 17, 2004.  The aggregate number of shares that may be issued under the options
shall not exceed 700,000.  No options were issued prior to stockholder approval and no options were outstanding under this plan as of November 30, 2009 and November 30, 2008.





1999 Incentive Stock Option Plan


The Board of Directors previously adopted, subject to stockholder approval, a 1999 Incentive Stock Option Plan (the “Plan”) for officers and employees of the Company.  The stockholders subsequently approved the Plan on February 17, 2004.  Accordingly awards issued under the Plan prior
to February 17, 2004 were deemed not to be granted until that date.  The aggregate number of shares that may be issued under the options shall not exceed 300,000.





Stock Options


Activity related to stock options during the nine months ended November 30, 2009 is as follows:




WeightedExercise


AverageShares


Price Range


Exercise PriceOutstanding, February 28, 2009


300,000


$
10.00


$
10.00Granted


-Exercised


-Forfeited


-Outstanding, August 31, 2009


300,000


$
10.00


$
10.00


13
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 8 – STOCKHOLDERS’ DEFICIT (CONT.)





Stock Warrants


Stock warrant activity during the nine months ended November 30, 2009 was as follows:





WeightedShares


Exercise


AverageAvailable


Price Range


Exercise PriceOutstanding, February 28, 2009


399,933


$
1.00 - $ 30.00


$
8.01Granted


127,500


$
.10 - $1.00Exercised


-



-Forfeited


-



-Outstanding, November 30, 2009


527,433


$
1.00 - $ 30.00


$
6.92





In conjunction with the Series A Preferred Stock Subscription, the Company granted warrants to purchase 50,000 shares of common stock at an exercise price of $1.00 per share.  The warrants have a five year term.





Anti-Dilution Rights


The Company and Mr. Peter Katevatis had an anti-dilution rights agreement which provided that Mr. Katevatis’ ownership interest would at all times represent 17% of the issued and outstanding shares of the Company.  The anti-dilution rights were exercisable at Mr. Katevatis’ sole discretion.  In
November 2008, Mr. Katevatis terminated his employment agreement as Chief Executive Officer and Chairman along with his anti-dilution rights and exercised his option to convert all outstanding salary and fees accrued thru November 2008 in exchange for 1,172,510 shares (post reversal stock split) of the Company’s common stock.





The Company and Dr. Robert Alfano had an anti-dilution rights agreement which provided that Dr. Alfano’s ownership interest would at all times represent 4% of the issued and outstanding shares of the Company.  The anti-dilution rights were exercisable at Dr. Alfano’s sole discretion.  As
of February 28, 2007, the Company was obligated to issue an additional 1,400 shares to Dr. Alfano in connection with the anti-dilution rights.   As a result of the completion of Dr. Alfano’s consulting agreement as of March 5, 2007, the anti-dilution rights terminated.  Subsequent to March 5, 2007, Dr. Alfano was issued 6,400 shares of the Company’s common stock in connection with the anti-dilution rights of which 5,000 shares were issued in error.  The Company has
placed a stop order and requested the 5,000 shares be returned by Dr. Alfano for cancellation.  Dr. Alfano’s anti-dilution rights are currently in the process of litigation along with amounts owed to him for consulting and related expenses.








NOTE 9 - ACQUISITION OF SENSIVIDA SYSTEMS, INC.





On November 5, 2008, Mediscience Technology Corp., a New Jersey corporation (“Mediscience”) entered into an agreement and plan of reorganization (the “Merger Agreement”) with SensiVida Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Mediscience (“Merger Sub”),
and SensiVida Medical Systems, Inc., a Delaware corporation (“SensiVida”), pursuant to which Merger Sub will be merged into SensiVida and thereafter SensiVida will be merged with and into Mediscience (the “Merger”).  As a condition precedent to completing the Merger, on January 29, 2009, BioScopix, Inc., a Delaware corporation and wholly-owned subsidiary of Mediscience, merged with and into Mediscience, with the surviving corporation changing its name to BioScopix, Inc. (such
surviving corporation hereafter referred to as the “Company”).





On March 3, 2009, the Company and SensiVida completed the Merger and the Company changed its name to SensiVida Medical Technologies, Inc.  As consideration for the Merger, the Company issued 33,333,333 shares (pre-split) of the company’s common stock, par value $.01 per share (the “Common Stock”)
to the three stockholders of SensiVida as consideration for the transaction.  In addition, the Company issued 11,725,100 (pre-split) shares of its Common Stock to Mr. Katevatis in settlement of all of his accrued claims and salary, to include termination of his employment agreement as Chief Executive Officer and Chairman, along with cancellation of his anti-dilution rights.


14
 SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2009





NOTE 9 - ACQUISITION OF SENSIVIDA SYSTEMS, INC. (CONT.)





The merger will be accounted for under the acquisition method in accordance with SFAS 141(R), Business Combination.  The merger of SensiVida Medical Systems, Inc. into the Company’s wholly-owned subsidiary BioScopix, Inc. will enable the Company to focus on the automation of analysis and data acquisition
for allergy testing, glucose monitoring, blood coagulation testing, new tuberculosis testing, and cholesterol monitoring.  The fair value of the consideration was approximately $2,809,000, the value of the 3,333,333 shares on March 3, 2009, plus, the assumption of various liabilities totaling approximately $58,000.  The Company has completed its valuation of the identifiable assets acquired and liabilities assumed at their acquisition date fair values as follows:





Cash

$
558Patents


2,808,564Note Payable


(49,829
)Accrued Expenses


(2,437
)Officer Loan


(5,524
)Net Value of Common Stock Issued

$
2,751,332





The Company had engaged the services of a valuation firm to estimate the value of SensiVida Medical Systems, Inc..  Their estimate of value approximated $3,800,000.  At this time the Company has temporarily elected not to adjust the non-financial assets acquired to fair value.








15


Item 2.                      Managements Discussion and Analysis of Financial Condition and Results of Operation





Results of Operations





Nine Months Ending November 30, 2009 Compared to


Nine Months Ending November 30, 2008





Revenues





We had no revenues during the nine months ending November 30, 2009 and November 30, 2008.  Our focus was our continued development of our light-based technology.  Effective March 3, 2009, with the merger of SensiVida Medical Systems, Inc. into the Company’s wholly-owned subsidiary BioScopix,
Inc., the Company’s technology will primarily focus on the automation of analysis and data acquisition for allergy testing, glucose monitoring, blood coagulation testing, tuberculosis testing, and cholesterol monitoring.





General and Administrative Expense





General and administrative expenses increased approximately $26,000, or 3%, during the current nine month period ended November 30, 2009 as compared to the nine month period ended November 30, 2008.  The increase was the net of increases and decreases in major expense components.  Salaries, wages
and related expenses approximating $306,000 increased approximately $82,000 over the prior year period, as a result of the employment agreements of the new CEO, CTO and Chairman of the Board.  In addition, professional fees increased approximately $88,000 during the current period, primarily due to the increased professional activities associated with the merger and related matters.  Also, adding to the increase in general and administrative expense was approximately $140,000 of amortization
costs associated with the Company’s intellectual property.  In addition, all other general and administrative expenses increased approximately $5,000.  As an offset to the increases, there was a decrease in financial service (bridge fees and related costs) totaling approximately $289,000





Product Development Expense





Product development expense increased approximately $106,000, or 77%, during the current nine month period ended November 30, 2009 when compared to the prior nine month period ended November 30, 2008.  The increase is due to allergy research being conducted in Rochester, NY, by the Company and its consultants.





Cancellation of Indebtedness





In March, 2009, Mr. Katevatis voluntarily terminated his employment agreement as Chief Executive Officer and Chairman along with his anti-dilution rights and exercised his option to convert all outstanding salary and fees accrued thru November 2008 totaling $2,147,187 in exchange for 1,172,510 shares of the Company’s
common stock.  The gain was recognized based on the fair market value of the shares issued (the closing price of the Company’s common stock of the date of issuance) in comparison to the outstanding obligation resulting in a gain approximating $1,209,179.





In addition, the Company has written off certain accrued consulting fees totaling $43,597 that had been outstanding for a number of years due to lack of completion of the engagement by the consultant.





Liquidity and Capital Resources





We had a deficiency in working capital as of November 30, 2009 of approximately $3,033,000 compared to a deficiency of approximately $5,691,000 at February 28, 2009 representing a decrease in the deficiency of approximately $2,658,000 for the current nine month period ended November 30, 2009.  The decrease
in the deficiency consisted of a decrease of approximately $50,000 in current assets, consisting of cash and prepaid expenses, and an offsetting decrease of approximately $2,708,000 in current liabilities.  The principal reason for the decline in accrued liabilities is the cancellation of approximately $2,147,000 of obligations to Mr. Katevatis who terminated his employment agreement as Chief Executive Officer and Chairman along with his anti-dilution rights and exercised his option to convert an outstanding
salary and fees accrued thru November 2008 in exchange for 1,172,510 shares of the Company’s common stock.  In addition, certain note holders converted $1,205,000 of note principal and $249,326 of accrued interest into common stock of the Company.  The current deficiency in working capital is primarily represented by accruals for professional fees, consulting, salaries and wages and convertible debt.


16





Our ability to continue our operations is largely dependent upon obtaining regulatory approval for the commercialization of our cancer detection technology.  There can be no assurance as to whether or when the various requisite government approvals will be obtained or the terms or scope of these approvals,
if granted.  We intend to defray the costs of obtaining regulatory approval for the commercialization of such technology by the establishment of clinical trial arrangements with medical institutions.  We intend to continue to pursue the establishment of co-promotional arrangements for the marketing, distribution and commercial exploitation of its cancer detection technology.  Such arrangements, if established, may include up-front payments, sharing of sales revenues after deduction
of certain expenses, and/or product development funding.  Our management anticipates that substantial resources will be committed to a continuation of our research and development efforts and to finance government regulatory applications.  While management believes that we will obtain sufficient funds to satisfy our liquidity and capital resources needs for the short term from the private placement of our securities and short term borrowings, no assurances can be given that additional funding
or capital from other sources, such as co-promotion arrangements, will be obtained on a satisfactory basis, if at all.  In the absence of the availability of financing on a timely basis, we may be forced to materially curtail or cease our operations.  Our operating and capital requirements, as described above, may change depending upon several factors, including: (i) results of research and development activities; (ii) competitive and technological developments; (iii) the timing and cost of
obtaining required regulatory approvals for our products; (iv) the amount of resources which we devote to clinical evaluation and the establishment of marketing and sales capabilities; and (v) our success in entering into, and cash flows derived from, co-promotion arrangements.





Off-Balance Sheet Arrangements





We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.





Critical Accounting Policies





The preparation of financial statements requires management to make estimates and assumptions that affect amounts reported herein.  The most significant of these involve the use of estimates.  In each situation, management is required to make estimates about the effects of matters or future events
that are inherently uncertain.





The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and, as such, include amounts based on informed estimates and judgments of management, such as:





Ø
Determining accruals and contingencies;


Ø
Valuing options and other equity instruments;


Ø
Reviewing the realization/recoverability of deferred costs resulting from the issuance of common stock to acquire certain consulting services to be rendered in future periods.


Ø
Deferred tax valuation allowance.


Ø
Measurement of effects on business combinations.





The Company used what it believes are reasonable assumptions where applicable, established valuation techniques in making its estimates.  Actual results could differ from those estimates.


17








Item 3.       Quantitative and Qualitative Disclosures About Market Risk





Not Applicable





Item 4T.    Controls and Procedures





(a) Evaluation of Disclosure Controls and Procedures





As of June 30, 2009, our board of directors carried out an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities exchange Act of 1934, as amended (the Exchange Act”) under the supervision
and with the participation of our management, including Kamal Sarbadhikari, former Chief Executive Officer.  Based upon that evaluation, Mr. Kamal Sarbadhikari concluded that our disclosure controls and procedures are not effective based on material weaknesses identified by management as described in Management’s Report on Internal Control over Financial Reporting set forth in Item 9A of our Annual Report on Form 10-K for the period ended February 28, 2009.





Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s
(the “SEC”) rules and forms.





Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure.





(b) Change in Internal Control over Financial Reporting





No change in our internal control over financial reporting occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.








18


PART II - OTHER INFORMATION











Item 1.        Legal Proceedings





In October 2009, a civil action was entered against the company by Dr. Robert Alfano.  The litigation centers around payment for accrued consulting fees and expenses totaling approximately $1,490,000.  In addition, Dr. Alfano is contesting the termination of his anti-dilution rights and the transfer
of his former Mediscience Technology Corp. stock into SensiVida Medical Technologies, Inc. stock.  The company filed a response to his action.  The matter is pending.





Item 1A.     Risk Factors





Not Applicable





Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds





During November 2009, the company issued 15,000 restricted shares of its common stock with a value of $9,600 to a consultant in exchange for professional services as per an agreement.  The transaction was recognized based on the fair market value of the shares issued (the closing price of the Company’s common stock on the date of issuance).





Item 3.        Defaults Upon Senior Securities





Effective April 15, 2008, the first $1,000,000 tranche of the Company’s 12% convertible promissory notes (the “Notes”) were in default.  Under the terms of the Notes, in the event of default, the entire principal and unpaid accrued interest is immediately due and payable.  The
January 29, 2008 modification of the Notes provided two additional options to the Note holders as compensation for the delay of the secondary offering which is expected to take place prior to April 15, 2009.





Effective April 15, 2009, the second tranche of the Notes in the amount of $656,500 were also in default.  Under the terms of the Notes, in the event of default, the entire principal and unpaid accrued interest is immediately due and payable.





On July 31, 2009, certain note holders converted the note and accrued interest thru July 31, 2009 into common stock of the company at the net price of $.35 per share.  Principal of $1,205,000 and accrued interest of $249,326 were converted into 4,155,222 shares of the Company’s common stock.





The Company acquired a $50,000 convertible subordinated note as part of its recent acquisition of SensiVida Medical Systems, Inc.  The note was in default upon acquisition and was amended as of December 1, 2009, commencing January 1, 2010.  Interest will accrue on the balance as a rate of 8% compounded
annually.  The note has a maturity date of January 1, 2011.  If the entire unpaid balance of the note is not paid when due, then the amount unpaid shall bear interest at the current rate plus 1% and such rate shall increase by an additional one percent each year until the note is paid in full.





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





None





Item 5.        Other Information





None





19








Item 6.              Exhibits





10.1*
Notification that as of October 12, 2009, Peter Katevatis tendered his letter of resignation as a Director.





10.2*
Notification that as of November 2, 2009, Kamal Sarbadhikari tendered his letter of resignation as President and Director because of health reasons.  Jose Mir, Chief Technology Officer and Director was appointed interim President effective December 31, 2009.





31.1
Certification of the Chairman of the Board required by Rule 13a-14(a) or Rule 15d-14(a)





31.2
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)





32
Certification of the Chairman of the Board and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350





*  Previously filed








20


SIGNATURES











Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.














SENSIVIDA MEDICAL TECHNOLOGIES, INC.(Registrant)January 19, 2010

By:  /s/ David R. SmithDavid R. SmithChairman of the BoardJanuary 19, 2010

By:  /s/ Frank D. BenickFrank D. Benick, CPA, CVAChief Financial OfficerPrincipal Financial and Accounting Officer














21


EXHIBIT INDEX











EXHIBIT NO.
DESCRIPTION10.1*
Notification that as of October 12, 2009, Peter Katevatis tendered his letter of resignation as a Director.10.2*
Notification that as of November 2, 2009, Kamal Sarbadhikari tendered his letter of resignation as President and Director because of health reasons.  Jose Mir, Chief Technology Officer and Director was appointed interim President effective December 31, 2009.31.1
Certification of the Chairman of the Board required by Rule 13a-14(a) or Rule 15d-14(a)31.2
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)32
Certification of the Chairman of the Board and the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350*  Previously filed






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