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 EXCHANGE ACT OF 1934 
|- | --------------------------------------------------------------------------------------------
|  | For the quarterly period ended March 31, 2015                                               
|  |                                                                                             
|  |                                                                                             
| ̈ | 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 000-00935



MEDITE CANCER DIAGNOSTICS, INC.

(Exact name of registrant as specified in
its charter)



|Delaware                                 | 36-4296006         
|---------------------------------------- | -------------------
|(State or other jurisdiction of          | (I.R.S. Employer   
|incorporation or organization)           | Identification No.)
|                                         |                    
|4203 SW 34th Street, Orlando,
    FL     | 32811              
|(Address of principal executive offices) | (Zip Code)         



(407) 996-9630

(Registrant’s telephone number, including
area code)



Securities registered pursuant to Section 12(b)
of the Act:



|Title
    of each class |  | Name
    of each exchange on which registered
|----------------------- |  | ---------------------------------------------
|None                    |  | Not Applicable                               



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 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. YesxNo ̈



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

YesxNo ̈(not required) ̈



Indicate by check mark whether the registrant
is a large accelerated filer, an 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 Rue 12b-2
of the Exchange Act. (Check one):



|Large Accelerated Filer ̈ | Accelerated Filer ̈        
|------------------------ | --------------------------
|                         |                           
|Non-Accelerated Filer ̈   | Smaller Reporting Companyx



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



The number of shares outstanding of each of
the issuer’s classes of common equity, as of the latest practicable date:



COMMON STOCK, $0.001 PAR VALUE, AT May 20, 2015: 19,679,956











MEDITE Cancer Diagnostics,
Inc.



QUARTERLY REPORT ON
FORM 10-Q



TABLE OF CONTENTS



|                                                                                                                                                                  | Page                                                                                 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------
|PART I.  – FINANCIAL INFORMATION                                                                                                                                  |                                                                                      
|                                                                                                                                                                  |                                                                                      
|Item 1.                                                                                                                                                           | Financial Statements                                                                 
|                                                                                                                                                                  |                                                                                      
|a) Condensed Consolidated Balance Sheets – March 31, 2015 (unaudited) and December 31, 2014                                                                       | 3                                                                                    
|                                                                                                                                                                  |                                                                                      
|b) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) — Three months ended March 31, 2015 (unaudited) and March 31, 2014 (unaudited) | 4                                                                                    
|                                                                                                                                                                  |                                                                                      
|c) Condensed Consolidated Statements of Cash Flows – Three months ended March 31, 2015 (unaudited) and March 31, 2014 (unaudited)                                 | 5                                                                                    
|                                                                                                                                                                  |                                                                                      
|d) Notes to Condensed Consolidated Financial Statements (unaudited)                                                                                               | 6                                                                                    
|                                                                                                                                                                  |                                                                                      
|Item 2.                                                                                                                                                           | Management’s Discussion and Analysis of Financial Condition and Results of Operations
|                                                                                                                                                                  |                                                                                      
|Item 4.                                                                                                                                                           | Controls and Procedures                                                              
|                                                                                                                                                                  |                                                                                      
|PART II. — OTHER INFORMATION                                                                                                                                      |                                                                                      
|                                                                                                                                                                  |                                                                                      
|Item 1.                                                                                                                                                           | Legal Proceedings                                                                    
|                                                                                                                                                                  |                                                                                      
|Item 2.                                                                                                                                                           | Unregistered Sales of Equity Securities and Use of Proceeds                          
|                                                                                                                                                                  |                                                                                      
|Item 3.                                                                                                                                                           | Defaults upon Senior Securities                                                      
|                                                                                                                                                                  |                                                                                      
|Item 6.                                                                                                                                                           | Exhibits                                                                             
|                                                                                                                                                                  |                                                                                      
|SIGNATURES                                                                                                                                                        | 20                                                                                   
|                                                                                                                                                                  |                                                                                      
|EXHIBIT INDEX                                                                                                                                                     | 21                                                                                   
|                                                                                                                                                                  |                                                                                      
|Exhibit 31.1     Section
    302 Certification of Chief Executive Officer                                                                                         |                                                                                      
|Exhibit 31.2     Section
    302 Certification of Chief Financial Officer                                                                                         |                                                                                      
|Exhibit 32.1     Section
    906 Certification of Chief Executive Officer                                                                                         |                                                                                      
|Exhibit 32.2     Section
    906 Certification of Chief Financial Officer                                                                                         |                                                                                      



2







PART I. — FINANCIAL INFORMATION



MEDITE CANCER DIAGNOSTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share
amounts)



|                                                                                                                                                                                                                                                                                                                     |  | March 31,   |        |   | December 31, |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ------ | - | ------------ | -
|                                                                                                                                                                                                                                                                                                                     |  | 2015        |        |   | 2014         |  
|                                                                                                                                                                                                                                                                                                                     |  | (unaudited) |        |   |              |  
|Assets                                                                                                                                                                                                                                                                                                               |  |             |        |   |              |  
|                                                                                                                                                                                                                                                                                                                     |  |             |        |   |              |  
|Current assets:                                                                                                                                                                                                                                                                                                      |  |             |        |   |              |  
|Cash and cash equvalents                                                                                                                                                                                                                                                                                             |  | $           | 1,026  |   |              | $
|Accounts receivable                                                                                                                                                                                                                                                                                                  |  |             | 1,833  |   |              |  
|Inventories                                                                                                                                                                                                                                                                                                          |  |             | 3,175  |   |              |  
|Prepaid expenses and other current assets                                                                                                                                                                                                                                                                            |  |             | 94     |   |              |  
|Total current assets                                                                                                                                                                                                                                                                                                 |  |             | 6,128  |   |              |  
|                                                                                                                                                                                                                                                                                                                     |  |             |        |   |              |  
|Property and equipment, net                                                                                                                                                                                                                                                                                          |  |             | 2,002  |   |              |  
|In-process research and development                                                                                                                                                                                                                                                                                  |  |             | 4,620  |   |              |  
|Trademarks, trade names                                                                                                                                                                                                                                                                                              |  |             | 1,240  |   |              |  
|Goodwill                                                                                                                                                                                                                                                                                                             |  |             | 2,453  |   |              |  
|Other assets                                                                                                                                                                                                                                                                                                         |  |             | 415    |   |              |  
|Total assets                                                                                                                                                                                                                                                                                                         |  | $           | 16,858 |   |              | $
|                                                                                                                                                                                                                                                                                                                     |  |             |        |   |              |  
|Liabilities and Stockholders’ Equity                                                                                                                                                                                                                                                                                 |  |             |        |   |              |  
|                                                                                                                                                                                                                                                                                                                     |  |             |        |   |              |  
|Current liabilities:                                                                                                                                                                                                                                                                                                 |  |             |        |   |              |  
|Secured lines of credit and current portion of long-term debt                                                                                                                                                                                                                                                        |  | $           | 2,392  |   |              | $
|Account payable and accrued expenses                                                                                                                                                                                                                                                                                 |  |             | 4,088  |   |              |  
|Advances – related parties                                                                                                                                                                                                                                                                                           |  |             | 1,060  |   |              |  
|Total current liabilities                                                                                                                                                                                                                                                                                            |  |             | 7,540  |   |              |  
|Long-term debt, net of current portion                                                                                                                                                                                                                                                                               |  |             | 1,032  |   |              |  
|Total liabilities                                                                                                                                                                                                                                                                                                    |  |             | 8,572  |   |              |  
|                                                                                                                                                                                                                                                                                                                     |  |             |        |   |              |  
|Commitments and contingencies                                                                                                                                                                                                                                                                                        |  |             |        |   |              |  
|                                                                                                                                                                                                                                                                                                                     |  |             |        |   |              |  
|Stockholders’ equity :                                                                                                                                                                                                                                                                                               |  |             |        |   |              |  
|Preferred stock, $0.001 par value; 10,000,000 shares authorized; 198,355
    and 373,355 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively (liquidation value of all
    classes of preferred stock $1,121 and $2,871 as of March 31, 2015 and December 31, 2014, respectively) |  |             | 962    |   |              |  
|Common stock, $0.001 par value; 3.5 billion shares
    authorized, 19,679,956 and 19,427,331 issued, issuable and outstanding as of March 31, 2015 and December 31, 2014, respectively                                                                                                                               |  |             | 20     |   |              |  
|Additional paid-in capital                                                                                                                                                                                                                                                                                           |  |             | 6,644  |   |              |  
|Treasury stock                                                                                                                                                                                                                                                                                                       |  |             | (327   | ) |              |  
|Accumulated other comprehensive loss                                                                                                                                                                                                                                                                                 |  |             | (396   | ) |              |  
|Retained earnings                                                                                                                                                                                                                                                                                                    |  |             | 1,383  |   |              |  
|Total stockholders’ equity                                                                                                                                                                                                                                                                                           |  |             | 8,286  |   |              |  
|                                                                                                                                                                                                                                                                                                                     |  |             |        |   |              |  
|Total liabilities and stockholders’ equity                                                                                                                                                                                                                                                                           |  | $           | 16,858 |   |              | $



The accompanying notes are an integral part
of these condensed consolidated financial statements.



3







MEDITE CANCER DIAGNOSTICS,
INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands,
except per share amounts)



|                                                      |  | Three Months Ended March 31, |           
|----------------------------------------------------- |  | ---------------------------- | ----------
|                                                      |  | 2015                         |           
|                                                      |  | (unaudited)                  |           
|                                                      |  |                              |           
|Net sales                                             |  | $                            | 2,287     
|Cost of revenues                                      |  |                              | 1,369     
|Gross profit                                          |  |                              | 918       
|                                                      |  |                              |           
|Operating expenses                                    |  |                              |           
|Depreciation and amortization expense                 |  |                              | 34        
|Research and development                              |  |                              | 262       
|Selling, general and administrative                   |  |                              | 807       
|                                                      |  |                              |           
|Total operating expenses                              |  |                              | 1,103     
|Operating income (loss)                               |  |                              | (185      
|                                                      |  |                              |           
|Other expenses                                        |  |                              |           
|Interest expense                                      |  |                              | 58        
|Other expenses                                        |  |                              | 50        
|Total other expenses                                  |  |                              | 108       
|                                                      |  |                              |           
|Income (loss) before income taxes                     |  |                              | (293      
|                                                      |  |                              |           
|Income tax expense (benefit)                          |  |                              | (38       
|Net income (loss)                                     |  |                              | (255      
|                                                      |  |                              |           
|Preferred dividend                                    |  |                              | (23       
|                                                      |  |                              |           
|Net income (loss) to common stockholders              |  | $                            | (278      
|                                                      |  |                              |           
|Condensed statements of comprehensive income (loss)   |  |                              |           
|Net income (loss)                                     |  |                              | (255      
|Other comprehensive loss                              |  |                              |           
|Foreign currency translation adjustments              |  |                              | (247      
|                                                      |  |                              |           
|Comprehensive income (loss)                           |  | $                            | (502      
|                                                      |  |                              |           
|Earnings per share                                    |  |                              |           
|Net income (loss) to common stockholders              |  |                              | (278      
|Basic and diluted earnings (loss) per share           |  |                              | (0.01     
|Weighted average basic and diluted shares outstanding |  |                              | 19,546,116



The accompanying notes
are an integral part of these condensed consolidated financial statements.



4







MEDITE CANCER DIAGNOSTICS,
INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS



|                                                                                                  |  | Three Months Ended March 31, |      
|------------------------------------------------------------------------------------------------- |  | ---------------------------- | -----
|                                                                                                  |  | 2015                         |      
|                                                                                                  |  | (unaudited)                  |      
|Cash flows from operating activities:                                                             |  |                              |      
|Net income (loss)                                                                                 |  | $                            | (255 
|Adjustments to reconcile net income (loss) to cash (used in) provided by operating
    activities |  |                              |      
|Depreciation and amortization                                                                     |  |                              | 34   
|Deferred income taxes                                                                             |  |                              | (66  
|                                                                                                  |  |                              |      
|Changes in assets and liabilities:                                                                |  |                              |      
|Accounts receivable, net                                                                          |  |                              | 158  
|Inventories                                                                                       |  |                              | 240  
|Prepaid expenses and other current assets                                                         |  |                              | 60   
|Accounts payable and accrued liabilities                                                          |  |                              | (46  
|Net cash (used in) provided by operating activities                                               |  |                              | 125  
|                                                                                                  |  |                              |      
|Cash flows from investing activities                                                              |  |                              |      
|Purchases of equipment                                                                            |  |                              | (28  
|Increase in other assets                                                                          |  |                              | (104 
|Proceeds from related party advances                                                              |  |                              | 950  
|Net cash provided from (used in) investing activities                                             |  |                              | 818  
|                                                                                                  |  |                              |      
|Cash flows from financing activities:                                                             |  |                              |      
|Net advances (repayments) on lines of credit and long-term debt                                   |  |                              | (340 
|Proceeds from sale of common stock, net of issuance
    costs $28                                 |  |                              | 357  
|Net cash provided by financing activities                                                         |  |                              | 17   
|                                                                                                  |  |                              |      
|Effect of exchange rates on cash and cash equivalents                                             |  |                              | (164 
|Net increase (decrease) in cash and cash equivalents                                              |  |                              | 796  
|Cash and cash equivalents at beginning of year                                                    |  |                              | 230  
|                                                                                                  |  |                              |      
|Cash and cash equivalents at end of the period                                                    |  | $                            | 1,026
|                                                                                                  |  |                              |      
|Supplemental disclosure of cash flow information:                                                 |  |                              |      
|Cash paid for interest                                                                            |  | $                            | 55   
|Cash paid for income taxes                                                                        |  | $                            | 28   
|                                                                                                  |  |                              |      
|Supplemental schedule of non-cash financing activity:                                             |  |                              |      
|Conversion of preferred stock to common stock                                                     |  | $                            | 525  



The accompanying notes are an integral part
of these condensed consolidated financial statements.



5







MEDITE CANCER DIAGNOSTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

(Tabular data in thousands, except per share
amounts)



|Note 1. | Organization and Summary of Significant Accounting
    Policies
|------- | ---------------------------------------------------------------



MEDITE Cancer Diagnostics,
Inc., (“MDIT”, “MEDITE” or the “Company”) was incorporated in Delaware in December 1998.



These statements include
the accounts of MEDITE Cancer Diagnostics, Inc., (former CytoCore, Inc., the “Company”, “we” and “us”)
and its wholly owned subsidiaries, which consists of MEDITE Enterprise, Inc., MEDITE GmbH, Burgdorf, Germany, MEDITE GmbH, Salzburg,
Austria, MEDITE Lab Solutions, Inc. (formerly MEDITE Inc.), Orlando, USA, MEDITE sp. z o.o., Zilona-Gora, Poland and CytoGlobe,
GmbH, Burgdorf, Germany.



In April 2014, the shareholders
of the Company consummated a transaction in which 100% of the issued and outstanding shares of MEDITE Enterprise, Inc., were acquired
by CytoCore, Inc. in exchange for the issuance by CytoCore, Inc., of 14,687,500 shares of its common stock to the shareholders
of the Company. The result of this transaction was for the Company and its wholly owned subsidiaries to become wholly owned subsidiaries
of CytoCore, Inc., a US public company. In addition, the shareholders of the Company became the majority owners of CytoCore, Inc.,
which resulted in the transaction being accounted for as a reverse merger, in which the financial statements of MEDITE Enterprise,
Inc. and its subsidiaries became those of CytoCore, Inc., now MEDITE Cancer Diagnostics, Inc.



MEDITE is a medical technology
company specializing in the development, engineering, manufacturing and marketing of premium medical devices and consumables for
detection, risk assessment and diagnosis of cancer and related diseases. By acquiring MEDITE the company changed from solely
research operations to an operating company with 76 employees in four countries, a distribution network to about 70 countries
worldwide, a well-known and established brand name, a wide range of selling products and the established infrastructure necessary
for a company acting in the medical industry.



Consolidation, Basis of
Presentation and Significant Estimates



The accompanying condensed
consolidated financial statements for the periods ended March 31, 2015 and 2014 included herein are unaudited and have been prepared
in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such consolidated
financial statements reflect, in the opinion of management, all adjustments necessary to present fairly the financial position
and results of operations as of and for the periods indicated. All such adjustments are of a normal recurring nature. These interim
results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2015 or for any other
period. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance
with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission. The Company believes that the disclosures are adequate to make the interim information
presented not misleading. These consolidated financial statements should be read in conjunction with the Company’s audited
consolidated financial statements disclosed in the Report on Form 10-K/A for the year ended December 31, 2014 and other filings
with the Securities and Exchange Commission.



The accompanying condensed
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company
balances and transactions have been eliminated in consolidation. In preparing the accompanying financial statements, management
has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies.
Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.



Revenue Recognition



The Company derives its revenue
primarily from the sale of medical products and supplies for the diagnosis and prevention of cancer. Product revenue is recognized
when all four of the following criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery of
the products has occurred; (3) the selling price of the product is fixed or determinable; and (4) collectability is
reasonably assured. The Company generates the majority of its revenue from the sale of inventory. The Company recognizes revenue
when title and risk of loss transfer to the customer and all other revenue recognition criteria have been met. For a small subset
of sales, the Company and its customers agree in the sales contract that risk of loss and title transfer upon the Company packing
the items for shipment, segregating the items packaged and notifying the Customer that their items are ready for pickup. The Company
records such sales at time of completed packaging and segregation of the items from general inventory and notification has been
confirmed by the customer.



6







Cash and Cash Equivalents



The Company considers all
cash on deposit and highly-liquid debt instruments purchased with original maturities of three months or less to be cash and cash
equivalents.



Property and Equipment



Property and equipment are
stated at cost, less accumulated depreciation and amortization. Property and equipment are depreciated using the straight-line
method over the estimated useful lives of the assets as follows:



|Buildings                          | 33
    yrs
|---------------------------------- | ----------
|Machinery
    and equipment        | 3-10 yrs  
|Office furniture
    and equipment | 2-10 yrs  
|Vehicles                           | 5 yrs     
|Computer equipment                 | 3-5 yrs   



Normal maintenance and repairs
for equipment are charged to expense as incurred, while significant improvements are capitalized.



Research and Development



All research and development
costs are expensed as incurred. Research and development costs consist of engineering, product development, testing, developing
and validating the manufacturing process, and regulatory related costs.



Acquired In-Process Research
and Development



Acquired in-process research
and development (“IPR&D”) that the Company acquires through business combinations represents the fair value assigned
to incomplete research projects which, at the time of acquisition, have not reached technological feasibility. The amounts are
capitalized and are accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment
of the projects. Upon successful completion of each project, MEDITE will make a determination as to the then useful life of the
intangible asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated,
and begin amortization. The Company tests IPR&D for impairment at least annually, or more frequently if impairment indicators
exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D
intangible asset is less than its carrying amount. If the Company concludes it is more likely than not that the fair value is
less than the carrying amount, a quantitative test that compares the fair value of the IPR&D intangible asset with its carrying
value is performed. If the fair value is less than the carrying amount, an impairment loss is recognized in operating results.



Impairment or Disposal
of Long-Lived Assets Including Finite Lived Intangibles



At each balance sheet date
or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, management
of the Company evaluates the recoverability of such assets. An impairment loss is recognized if the amount of undiscounted cash
flows is less than the carrying amount of the asset, in which case the asset is written down to fair value. The fair value of
the asset is measured by either quoted market prices or the present value of estimated expected future cash flows using a discount
rate commensurate with the risks involved. Unless events or circumstances have changed significantly, we generally do not re-test
at year end assets acquired from a business combination in the year of acquisition.



Impairment of Indefinite
Lived Intangible Assets Other Than Goodwill



The Company has the option
first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely
than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances,
the Company concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity
is not required to take further action. However, if the Company concludes otherwise, then it is required to determine the fair
value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the
carrying amount in accordance with Financial Accounting Standards Board Codification Subtopic 350-30.



7







Goodwill



The Company allocates goodwill to reporting
units based on the reporting unit expected to benefit from the business combination. The Company evaluates our reporting units
on an annual basis. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating
segment) on an annual basis (December 31) and between annual tests if an event occurs or circumstances change that would more
likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include
a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition
of a significant portion of a reporting unit. Unless events or circumstances have changed significantly, we generally do not re-test
at year end assets acquired from a business combination in the year of acquisition.



Application of the goodwill impairment test
requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment
of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit
is estimated using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future
cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation
of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.



Impairment Policy and Procedures for In
Process Research and Development, Trademarks, Trade Names and Goodwill



The estimates used to calculate the fair value
of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these
estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.



These assets were independently valued at April
3, 2014, the date of the MEDITE Enterprise, Inc. purchase by CytoCore, Inc., based upon valuation assumptions such as projected
discounted cash-flow amongst others and updated through March 31, 2015. In the future, the Company plans to review the assumptions
annually to determine if any impairment allowances are necessary until the underlying products under development and long-lived
assets have been commercialized.



|Note 2. | Reverse Merger
|------- | --------------



In January 2014, the Company and the previous
owners of MEDITE Enterprise, Inc. entered into an agreement to merge with the former CytoCore, Inc. The merger required as a pre-requisite
that among other items CytoCore settle certain outstanding payroll amounts in stock and that CytoCore complete a private placement
with gross proceeds of a minimum of $2 million, which was later amended to $1.5 million. On April 3, 2014 CytoCore issued 697,234
shares of its common stock in satisfaction of approximately $1.6 million in outstanding accrued payroll. On April 4, 2014 the
Company closed on a private placement in which it received gross proceeds of $1.5 million and issued 955,875 shares of its common
stock. The merger closed on April 4, 2014 with the previous owners of MEDITE Enterprise, Inc. receiving 14,687,500 shares of the
Company’s common stock. An additional 312,500 shares remain to be issued because certain conditions have been fulfilled
in accordance with the agreement to complete the exchange for 100% of the issued and outstanding stock of MEDITE Enterprise, Inc.
The consideration paid was determined based upon the number of shares outstanding from the former CytoCore, Inc. of approximately
3,502,700 common shares outstanding before the merger at $1.60 per share (the same price per share in the concurrent private placement
noted above).



Because the owners of MEDITE Enterprise, Inc.
received approximately 81.1% of the then issued and outstanding stock of the Company, the merger was treated as a reverse acquisition,
in which for accounting purposes MEDITE Enterprise, Inc. acquired CytoCore, Inc. Therefore, the consolidated statements of operations
and comprehensive income (loss) for the three months ended March 31, 2014 represents the financial results of MEDITE Enterprise,
Inc. and subsidiaries only as the transaction did not occur until April 4, 2014.



8







Under the purchase method of accounting, the
assets acquired and liabilities assumed are recorded at their respective fair values as of the transaction date. In connection
with the merger, the consideration paid, the assets acquired and liabilities assumed, recorded at fair value on the date of acquisition,
are summarized in the following table:



|                                               |  | In thousands |      
|---------------------------------------------- |  | ------------ | -----
|Assets acquired                                |  |              |      
|Cash                                           |  | $            | 1    
|Other current assets                           |  |              | 12   
|Property and equipment                         |  |              | 81   
|Trade names /trademarks                        |  |              | 1,240
|In-Process research and development            |  |              | 4,620
|Goodwill                                       |  |              | 2,453
|                                               |  |              | 8,407
|                                               |  |              |      
|Liabilities assumed                            |  |              |      
|Accounts payable & accrued expenses            |  |              | 3,220
|Related party advances                         |  |              | 102  
|Loans payable                                  |  |              | 21   
|                                               |  |              | 3,343
|                                               |  |              |      
|Consideration paid in the form of common stock |  | $            | 5,064



The Company is treating the fair value assigned
to trade names/trademarks as indefinite lived intangibles. The in process research and development covers four separate areas
(a) breast pap device and related consumables (b) new biomarkers (c) a new stain and (d) the SoftKit. Until the Company either
completes development or abandons such development, the in-process research and development costs are treated as indefinite lived
intangible assets. If the Company is successful in these development projects, it expects the in-process research and development
will be amortized over an approximate 15 year life.



|Note 3. | Inventories
|------- | -----------



The following is a summary of the components
of inventories (in thousands):



|                 |  | March 31,   |       |  | December 31, |  
|---------------- |  | ----------- | ----- |  | ------------ | -
|                 |  | 2015        |       |  | 2014         |  
|                 |  | (unaudited) |       |  |              |  
|Raw materials    |  | $           | 1,208 |  |              | $
|Work in progress |  |             | 27    |  |              |  
|Finished Goods   |  |             | 1,940 |  |              |  
|                 |  |             |       |  |              |  
|                 |  | $           | 3,175 |  |              | $



No amounts were reserved for obsolete inventory
as of March 31, 2015 and December 31, 2014.



9







|Note 4. | Property and Equipment
|------- | ----------------------



The following is a summary of the components
of property and equipment (in thousands):



|                               |  | March 31,   |       |   | December 31, |  
|------------------------------ |  | ----------- | ----- | - | ------------ | -
|                               |  | 2015        |       |   | 2014         |  
|                               |  | (unaudited) |       |   |              |  
|Land                           |  | $           | 208   |   |              | $
|Buildings                      |  |             | 1,152 |   |              |  
|Machinery and equipment        |  |             | 492   |   |              |  
|Office furniture and equipment |  |             | 237   |   |              |  
|Vehicles                       |  |             | 92    |   |              |  
|Computer equipment             |  |             | 106   |   |              |  
|Construction in progress       |  |             | 510   |   |              |  
|Less: Accumulated depreciation |  |             | (795  | ) |              |  
|                               |  | $           | 2,002 |   |              | $



Depreciation expense amounted to approximately
$34,000 and $62,000 for the three months ended March 31, 2015 and 2014, respectively.



|Note 5. | Long-term Debts and Lines of Credit
|------- | -----------------------------------



The Company’s outstanding note payable
indebtedness was as follows as of (in thousands):



|                                                  |  | March 31,   |       |  | December 31, |  
|------------------------------------------------- |  | ----------- | ----- |  | ------------ | -
|                                                  |  | 2015        |       |  | 2014         |  
|                                                  |  | (unaudited) |       |  |              |  
|Hannoversche Volksbank credit line #1             |  | $           | 1,787 |  |              | $
|Hannoversche Volksbank credit line #2             |  |             | 409   |  |              |  
|Hannoversche Volksbank term loan #1               |  |             | 93    |  |              |  
|Hannoversche Volksbank term loan #2               |  |             | 74    |  |              |  
|Hannoversche Volksbank term loan #3               |  |             | 226   |  |              |  
|Ventana Medical Systems, Inc. Promissory Note     |  |             | 21    |  |              |  
|Debenture DZ Equity Partners Participation rights |  |             | 814   |  |              |  
|                                                  |  | $           | 3,424 |  |              | $



In July 2006, MEDITE GmbH, Burgdorf, entered
into a master line of credit agreement #1 with Hannoversche Volksbank. The line of credit was amended in 2012 and was later amended
to increase the credit limit to Euro 1.8 million ($2.0 million as of March 31, 2015). In January 2015, the master credit line
was reduced to Euro 1.6 million ($1.7 million as of March 31, 2015) and to be reduced by a further Euro 500,000 ($542,505 as of
March 31, 2015) to Euro 1.1 million ($1.2 million as of March 31, 2015) effective June 1, 2015. Borrowings on the master line
of credit agreement #1 bears interest at a variable rate based on Euribor (Euro Interbank Offered Rate) depending on the type
of advance elected by the company and defined in the agreement. Interest rates depending on the type of advance elected range
from 3.77 – 8.00 % during the period ended March 31, 2015. The line of credit has no stated maturity date. The line of credit
is collateralized by the accounts receivable and inventory of MEDITE GmbH, Burgdorf, a mortgage on the buildings owned by the
Company and is guaranteed by Michaela Ott and Michael Ott, the former sole shareholders of the Company.



In June 2012, CytoGlobe, GmbH, Burgdorf, entered
into a line of credit agreement #2 with Hannoversche Volksbank. The line of credit granted a maximum borrowing authority of Euro
400,000 ($434,000 as of March 31, 2015). Borrowings on the master line of credit agreement #2 bears interest at a variable rate
based on Euribor (Euro Interbank Offered Rate) depending on the type of advance elected by the company and defined in the agreement.
Interest rates depending on the type of advance elected range from 3.77 – 8.00 % during the period ended March 31, 2015.
The line of credit has no stated maturity date. The line of credit is collateralized by the accounts receivable and inventory
of CytoGlobe GmbH, Burgdorf and is guaranteed by Michaela Ott and Michael Ott, the former sole shareholders of the Company and
the state of Lower Saxony (Germany) to support high-tech companies in the area.



In December 2006, MEDITE GmbH, Burgdorf, entered
into a Euro 500,000 ($542,500 as of March 31, 2015) term loan agreement #1 with Hannoversche Volksbank with an interest rate of
3.4% per annum. The term loan has a maturity of September 2016 and requires semi-annual principal payments of approximately Euro
27,780 ($30,141 as of March 31, 2015) each. The term loan is guaranteed by Michaela Ott and Michael Ott, the former sole shareholders
of the Company and also a mortgage on the property of the Company.



10







In June 2006, MEDITE GmbH, Burgdorf, entered
into a Euro 400,000 ($434,000 as of March 31, 2015) term loan #2 with Hannoversche Volksbank with an interest rate of 3.6 % per
annum. The term loan has a maturity of June 2016, requires 18 semi-annual principal repayments of approximately Euro 22,220 ($24,109
as of March 31, 2015) each. The term loan is guaranteed by Michaela Ott and Michael Ott, the former sole shareholders of the Company
and is collateralized by subordinated assignments of all of the receivables and inventories of MEDITE GmbH, Burgdorf and also
has a subordinated pledge of share term life insurance policies.



In November 2008, MEDITE GmbH, Burgdorf, entered
into a Euro 400,000 ($434,000 as of March 31, 2015) term loan #3 with Hannoversche Volksbank with a variable interest rate of
approximately 4.7% per annum as of December 31, 2014. The term loan has a maturity of December 31, 2018, and requires quarterly
principal repayments of Euro 13,890 ($15,071 as of March 31, 2015) each. The term loan is guaranteed by Michaela Ott and Michael
Ott, the former sole shareholders of the Company, and is collateralized by a partial subordinated pledge of the receivables and
inventory of MEDITE GmbH, Burgdorf.



In March 2009, the Company entered into a participation
rights agreement in the form of a debenture with a mezzanine lender who advanced the Company up to Euro 1.5 million in two tranches
of Euro 750,000 each. The first tranche was paid to the Company at closing with the second tranche being conditioned on MEDITE
GmbH, Burgdorf and its subsidiaries hitting certain performance targets. Those targets were not met and the second tranche was
never called. The debenture pays interest at the rate of 12.15% per annum and matures at December 31, 2016.



As of the date of filing, the remaining balance
of approximately $21,000 on the note payable to Ventana Medical Systems, Inc. was in default. However, on February 23, 2015, the
Company reached an agreement with Ventana Medical Systems, Inc. whereby both parties have agreed that Ventana Medical Systems,
Inc. will accept $38,281 as payment in full for all outstanding principal and accrued interest. The $38,281 has been included
in current portion of long-term debt on the consolidated balance sheet. As part of this agreement, Ventana Medical Systems, Inc.
has agreed to convert $1.75 million stated value of Series D Preferred stock and all outstanding accrued dividends of $656,250
for 12,000 shares of the Company’s common stock. Prior to the execution of this agreement, the Company had failed to make
principal and interest payments when due and is in breach of certain warranties and representations under the notes included above.



|Note 6. | Related Party Advances
|------- | ----------------------



At December 31, 2014, the Company owed its
then CFO and Chairman of the Board for prior advances of approximately $110,000. The CEO Michaela Ott together with the COO Michael
Ott provided an additional $950,000 in a non-interest bearing short term advance at the end of the first quarter 2015. This advance
is due on demand and at the date of the filing $620,000 was repaid to them, leaving an unpaid balance of $330,000.



|Note 7. | Common Stock
|------- | ------------



During the first quarter 2015, the Company
issued 240,625 shares of unregistered stock to qualified individuals pursuant to exemptions from registration under Regulation
D and Section 4(2) of the Securities Act of 1933 at 1.60 for proceeds of $385,000, net of 28,000 of issuance costs.



During the first quarter ended March 31, 2015,
the Company issued 12,000 shares of common stock in a Series D Preferred Stock conversion as further discussed in Note 8.



|Note 8. | Preferred Stock and Warrants
|------- | ----------------------------



A summary of the Company’s preferred
stock as of March 31, 2015 and December 31, 2014 is as follows.



|                                              |  | March 31,       |         |  | December 31,    | 
|--------------------------------------------- |  | --------------- | ------- |  | --------------- | 
|                                              |  | 2015            |         |  | 2014            | 
|                                              |  | (unaudited)     |         |  |                 | 
|                                              |  | Shares Issued & |         |  | Shares Issued & | 
|Offering                                      |  | Outstanding     |         |  | Outstanding     | 
|Series A convertible                          |  |                 | 47,250  |  |                 | 
|Series B convertible, 10% cumulative dividend |  |                 | 93,750  |  |                 | 
|Series C convertible, 10% cumulative dividend |  |                 | 38,333  |  |                 | 
|Series D convertible, 10% cumulative dividend |  |                 | -       |  |                 | 
|Series E convertible, 10% cumulative dividend |  |                 | 19,022  |  |                 | 
|Total Preferred Stock                         |  |                 | 198,355 |  |                 | 



11







As of March 31, 2015 and December 31, 2014,
the Company had cumulative preferred undeclared and unpaid dividends. In accordance with the Financial Accounting Standard Board’s
Accounting Standards Codification 260-10-45-11, “Earningsper Share”, these dividends were added to the net
loss in the net loss per share calculation.



On February 23, 2015, the Company reached an
agreement with Ventana Medical Systems, Inc. to convert $175,000 stated value of Series D Preferred Stock and all outstanding
accrued dividends of $656,250 for 12,000 shares of the Company’s common stock.



Summary of Preferred Stock Terms



Series A Convertible Preferred Stock

|Liquidation Value: | $4.50 per share, $212,625                                                
|------------------ | -------------------------------------------------------------------------
|Conversion Price:  | $10,303 per share                                                        
|Conversion Rate:   | 0.00044—Liquidation Value divided
    by Conversion Price ($4.50/$10,303)
|Voting Rights:     | None                                                                     
|Dividends:         | None                                                                     
|Conversion Period: | Any time                                                                 



Series B Convertible Preferred Stock

|Liquidation Value: | $4.00 per share, $375,000                                              
|------------------ | -----------------------------------------------------------------------
|Conversion Price:  | $1,000 per share                                                       
|Conversion Rate:   | 0.0040—Liquidation Value divided
    by Conversion Price ($4.00/$1,000)
|Voting Rights:     | None                                                                   
|Dividends:         | 10%—Quarterly—Commencing
    March 31, 2001                            
|Conversion Period: | Any time                                                               

Cumulative dividends in arrears at March 31,
2015 and December 31, 2014 were $530,038 and $520,665, respectively.



Series C Convertible Preferred Stock

|Liquidation Value: | $3.00 per share, $115,000                                            
|------------------ | ---------------------------------------------------------------------
|Conversion Price:  | $600 per share                                                       
|Conversion Rate:   | 0.0050—Liquidation Value divided
    by Conversion Price ($3.00/$600)
|Voting Rights:     | None                                                                 
|Dividends:         | 10%—Quarterly—Commencing
    March 31, 2002                          
|Conversion Period: | Any time                                                             

Cumulative dividends in arrears at March 31,
2015 and December 31, 2014 were $154,288 and $151,413, respectively.



Series E Convertible Preferred Stock

|Liquidation Value: | $22.00 per share, $418,488                                           
|------------------ | ---------------------------------------------------------------------
|Conversion Price:  | $800.00 per share                                                    
|Conversion Rate:   | .0275—Liquidation Value divided
    by Conversion Price ($22.00/$800)
|Voting Rights:     | Equal in all respects to holders of
    common shares                
|Dividends:         | 10%—Quarterly—Commencing
    May 31, 2002                            
|Conversion Period: | Any time                                                             

Cumulative dividends in arrears at March 31,
2015 and December 31, 2014 were $568,177 and $558,173 respectively.



Warrants outstanding



|                                 |  |             |         |  |          |   |      |           |  |  | Weighted     | 
|-------------------------------- |  | ----------- | ------- |  | -------- | - | ---- | --------- |  |  | ------------ | 
|                                 |  |             |         |  | Weighted |   |      |           |  |  | Average      | 
|                                 |  |             |         |  | Average  |   |      | Aggregate |  |  | Remaining    | 
|                                 |  | Options and |         |  | Exercise |   |      | Intrinsic |  |  | Contractual  | 
|                                 |  | Warrants    |         |  | Price    |   |      | Value     |  |  | Life (Years) | 
|Outstanding at December 31, 2014 |  |             | 143,308 |  |          | $ | 2.64 |           |  |  | —            | 
|Granted                          |  |             | —       |  |          | $ | —    |           |  |  | —            | 
|Exercised                        |  |             | —       |  |          |   | —    |           |  |  | —            | 
|Expired                          |  |             | —       |  |          |   | —    |           |  |  | —            | 
|Outstanding at December 31, 2013 |  |             | 143.308 |  |          | $ | 2.64 |           |  |  | —            | 



12







|Note 9. | Commitments and Contingencies
|------- | -----------------------------



The Company currently leases 13 vehicles for
sales and service employees, delivery and other purposes with expirations ranging from May 2015 through February 2018. The current
minimum monthly payment for these vehicle leases is approximately $6,024.



The Company has several operation leases for
office, laboratory and manufacturing space. The Company’s operating lease for one of its German facilities can be cancelled
by either party with a 3 months’ notice, its Poland facility can be terminated by either party with a six month notice.
Monthly rent payments for the German and Poland facilities are Euro 4,000 ($4,513 as of March 31, 2015) and PLN 6,240 ($1,645
as of March 31, 2015) respectively. The Company’s laboratory facility in Chicago, IL terminates June 30, 2015 and requires
monthly payments of $1,070. The Company also sublease its former Chicago laboratory facility for $3,916 per month. The lease for
this facility terminates October 30, 2016 and require monthly rent payments of $4,270. The Company’s Orlando facility has
escalating rents ranging from $2,345 to $2,563 per month and terminates July 31, 2018. The total aggregate monthly lease payments
(net of the sublease) required on these leases is approximately $9,800.



In 2014, the Company became subject
to a lawsuit brought by D&D Technologies, Inc. (“D&D”) in the state of New Jersey for breach of contract and
breach of implied covenant of good faith that occurred in 2013 and prior by the former CytoCore for failure to pay for past contractual
services. The original complaint was dismissed and then refiled by D&D. D&D is seeking damages over $86,000 plus equitable
relief. In 2015, the Company and D&D engaged in settlement negotiations and at the time of this filing had verbally agreed
to settle the matter for approximately $15,000, however, no formal written settlement has yet been entered into. This settlement
has been accrued as of March 31, 2015 and included in account payable and accrued expenses on the accompanying condensed consolidated
balance sheet.



|Note 10. | Segment Information
|-------- | -------------------



The Company operates in one operating
segment. However, the Company has assets and operations in the United States, Germany and Poland. For the revenue and net income
the March 31, 2014 numbers are the former MEDITE part only while the March 31, 2015 numbers are after the reverse merger and therefore
combined with the former CytoCore, Inc. The influence by the significant chance of the currency exchange rate between USD and
EURO since March 31, 2014 compared to March 31, 2015 is about $0.47 million. The following tables show the breakdown of the Company’s
operations and assets by region (in thousands):



|                          |  | United States  |       |  | Germany           |   |       | Poland         |  |   | Total             | 
|------------------------- |  | -------------- | ----- |  | ----------------- | - | ----- | -------------- |  | - | ----------------- | 
|                          |  | March 31, 2015 |       |  | December 31, 2014 |   |       | March 31, 2015 |  |   | December 31, 2014 | 
|Assets                    |  | $              | 9,307 |  |                   | $ | 9,387 |                |  | $ | 7,449             | 
|Property & equipment, net |  |                | 99    |  |                   |   | 98    |                |  |   | 1,896             | 
|Intagible assets          |  |                | 8,313 |  |                   |   | 8,313 |                |  |   | -                 | 



|                  |  | United States  |      |   | Germany        |   |     | Poland         |  |   | Total          |  
|----------------- |  | -------------- | ---- | - | -------------- | - | --- | -------------- |  | - | -------------- | -
|                  |  | March 31, 2015 |      |   | March 31, 2014 |   |     | March 31, 2015 |  |   | March 31, 2014 |  
|Revenues          |  | $              | 280  |   |                | $ | 157 |                |  | $ | 2,003          |  
|Net income (loss) |  |                | (163 | ) |                |   | 19  |                |  |   | (76            | )



13







Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations



Caution Regarding Forward-Looking Statements



This report contains “forward-looking
statements” – that is, statements related to future, not past, events. In this context, forward-looking statements
often address our expected future business and financial performance and financial condition, and often contain words such as
“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,”
“see,” or “will.” These forward-looking statements are not guarantees and are subject to known and unknown
risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such
forward-looking statements. For us, particular uncertainties that could cause our actual results to be materially different than
those expressed in our forward-looking statements include: our ability to raise capital; our ability to retain key employees;
our ability to engage third party distributors to sell our products; economic conditions; technological advances in the medical
field; demand and market acceptance risks for new and existing products, technologies, and healthcare services; the impact of
competitive products and pricing; U.S. and international regulatory, trade, and tax policies; product development risks, including
technological difficulties; ability to enforce patents; and foreseeable and unforeseeable foreign regulatory and commercialization
factors, our ability to develop new products and respond to technological changes in the markets in which we compete, our ability
to obtain government approvals of our products, our ability to market our products, changes in third-party reimbursement procedures,
and such other factors that may be identified from time to time in our Securities and Exchange Commission ("SEC") filings
and other public announcements including those set forth under the caption “Risk Factors” in Part 1, Item 1A of our
Annual Report on Form 10-K/A for the year ended December 31, 2014. All subsequent written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing. Readers are cautioned
not to place undue reliance on our forward-looking statements, as they speak only as of the date made. Except as required by law,
we assume no duty to update or revise our forward-looking statements.



Overview of MEDITE Cancer Diagnostics, Inc.



MEDITE Cancer Diagnostics,
Inc. (the “Company”, “we”, or “us”), formerly CytoCore, Inc., is a medical technology company
specializing in the development, engineering, manufacturing and marketing of premium medical devices and consumables for detection,
risk assessment and diagnosis of cancer and related diseases. Depending upon the type of cancer, segments within the current target
market of approximately $5.8 billion are growing at annual rates between 10 and 30%.



By acquiring MEDITE in
2014, the Company changed from just research operations to an operating company with 76 employees in four countries, a distribution
network to about 70 countries worldwide, a well-known and established brand name, a wide range of selling products and the established
infrastructure necessary for a company acting in the medical industry. Both company structures and cultures were successfully
merged to one new company organization.



Several synergies were
realized with this strategy, for example cost reduction of the former CytoCore research segment by about 50 %, complementary products
in the cytology product segment which is now addressing all components from cell collection through cell processing to diagnostic
tools like cancer markers and screening systems. Some of them are already selling and some are in a late stage of development
expecting to sell within one or two years.



The cancer markers developed
by the former CytoCore over the last three years are showing excellent results in internal studies but have not yet been tested
in formal clinical trials. In our opinion, one of the tests based upon these biomarkers has the potential for displacing the current
expensive Human Papilloma Virus (HPV) testing methods in both initial and follow up testing, resulting in less costs for the patient,
laboratory and payer. The test may identify cancerous and precancerous cells regardless of the presence of HPV. The Company hopes
to market the test globally outside the United States in 2015, and in the United States by 2017.



Another major business
focus for 2015 is the Chinese market, which the Company entered in 2014. It is the fastest growing, and by 2016 management expect
it will be the largest, market for the Company’s products. With its Chinese distributor UNIC Medical the Company successfully
received China Food and Drug Administration (“CFDA”) approval for all MEDITE histology laboratory devices end of 2014.
The UNIC sales team now can sell MEDITE products in China, and currently successfully is doing so. For this first quarter, the
Company can report orders of approximately $500,000 from China. Also, together with UNIC, the Company is part of a government
supported project to standardize the histology laboratory process there using MEDITE equipment and consumables for the processing
part of the process, MEDITE immuno-assays, and the UNIC technology for digitalization and computer aided diagnostics utilizing
the latest cloud technology.



Several other innovative
product developments are in the marketing pipeline for this fiscal year of 2015. In the first quarter, the Company’s important
German priority patent for the fully automated histology lab, a Lab-In-One unit, has been granted. This technology is demanded
by the market, following the trend toward higher automation in the industry and has the ability change the competition in histology.



14







To sell the Company’s
complete cytology product line set “SureThin” also in the US, a US Food and Drug Administration (“FDA”)
application is required to be submitted and approved, which currently is under preparation and is expected to be submitted soon.
The use with the currently highest market volume for products is in cervical cancer screening, but increasingly also in non-gynecology
applications such as lung cancer screening.



The Company operates in one industry segment
for cancer diagnostics instruments and consumables for histology and cytology laboratories.



|Definition: | Histology - Cancer diagnostics
    based on the structures of cells in tissues
|----------- | ------------------------------------------------------------------------------
|            | Cytology - Cancer diagnostics based
    on the structures of individual cells 



Cancers and precancerous conditions are defined
in terms of structural abnormalities in cells. For this reason, cytology is widely used for the detection of such conditions,
while histology is typically used for the confirmation, identification and characterization of the cellular abnormalities detected
by cytology. Other diagnostics methods, such as marker-based assays, provide additional information that can supplement, but which
cannot replace cytology and histology. The trend towards more personalized treatment of cancer increases the need for cytology,
histology and assays for identifying and testing the best treatment alternatives. We believe that this segment will therefore
be increasingly important for future development of strategies to fight the “cancer epidemic” (World Health Organization:
World Cancer Report 2014) which expects approximately a 50 % increase in cancer cases worldwide within the next 20 years.



This segment sees a trend toward, and demand
for, higher automation for more throughput in bigger laboratories, process standardization, digitalization of cell and tissue
slides and computer aided diagnostic systems, while also looking for cost effective solutions. In the US, the Patient Protection
and Affordable Care Act is a national example for the industry. More people have health insurance, and therefore can afford early
cancer screening, while at the same time the payers for health care continue looking for cost reductions.



MEDITE acts as a one-stop-shop for histology
(also known as anatomic pathology) laboratories either as part of a hospital, as part of a chain of laboratories or individually.
It is one out of only four companies offering all equipment and consumables for these type of laboratories worldwide. The MEDITE
Brand stands for innovative and high quality products – most equipment made in Germany – and competitive pricing.



For the cytology market, MEDITE offers a wide
range of consumable products and equipment; in particular for liquid-based-cytology, which is an important tool in cancer screening
and detection in the field of cervical, bladder, breast, lung and other cancer types. We also developed an innovative new type
of easy to use standardized staining solutions, and a very innovative and effective early cancer detection marker-based assay.
These new developments are cost effective solutions able to replace more expensive competitive products, and therefore are also
becoming the first choice for the growing demand in emerging countries.



All of the Company’s
operations during the reporting period were conducted and managed within this segment, with management teams reporting directly
to our Chief Executive and Operating Officers. For information on revenues, profit or loss and total assets, among other financial
data, attributable to our operations, see the unaudited condensed consolidated financial statements included herein.

Outlook



Due to promising new products and distributions
contracts executed in the last two years, management believes the profitability and cash-flow of the business will grow and improve.
However, significant on-going operating expenditures may be necessary to manufacture and market new and existing products to achieve
the accelerated sales growth targets outlined in the Company’s business plan. To realize the planned growth potential, management
will focus its efforts on 1.) Finishing and gaining approval for the products currently under development and 2.) Increase direct
sales in the USA and continue to expand Chinese market sales by broadening the Company’s collaborations with the local distributor
UNIC. We also will work on continuously optimizing manufacturing cost to increase our gross margin. Implementation of our plans
will be contingent upon securing substantial additional debt and/or equity financing. If we are unable to obtain additional capital
or generate profitable sales revenues, we may be required to curtail product development and other activities.



Currently, approximately 90 % of the Company’s
sales are generated in Euro currency. During the previous year first quarter ended March 31, 2014, on average, $1.37533 was received
for every Euro. During the first quarter ended March 31, 2015, the average exchange rate of Euro for dollars dropped to $1.1283.
Therefore, the Company’s revenues translated from Euro into dollars may be down year over year if the exchange rate remains
at $1.12830 or lower during the remainder of 2015. The Company is working to lessen the impact of the Euro’s decline versus
the dollar by increasing the percentage of overall product sales in the United States and other countries such as China whose
currency is not pegged to the Euro.



15







The Company believes the combination of MEDITE
Enterprise, Inc. with CytoCore, Inc. will expedite the development and marketability of CytoCore’s cytology products which
include collection devices, image analysis software, special stains and immuno-assays. Currently, the recent launch of new products,
the positive impact from several new initiatives, and some recently executed distribution contracts in the United States, Europe
and China are some primary positive factors assisting growth.



Results of Operations



The following discussion
and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements presented
in Part I, Item 1 of this Quarterly Report and the notes thereto, and our audited consolidated financial statements and notes
thereto, as well as our Management’s Discussion and Analysis contained in our Annual Report on Form 10-K/A for the year
ended December 31, 2014 filed with the SEC on May 8, 2015.



The results of the Company
for the three months ended March 31, 2015, include the results of the entire MEDITE Cancer Diagnostics, Inc. group (consolidated
former CytoCore, Inc. with MEDITE Enterprise, Inc.) while the results for the three months periods ended March 31, 2014, are of
MEDITE Enterprise, Inc. only.



Three months ended March 31, 2015 as
compared to the three months ended March 31, 2014 (in thousand USD)



Revenue



Revenue for the three months ended March 31,
2015, was $2,287 as compared to $2,734 for the three months ended March 31, 2014. Due to the fact that approximately 90 % of all
sales are invoiced in Euro currency, the recent fluctuation of the USD/EURO exchange rate had a major impact of approximately
$470 on the revenue decrease compared to last year’s exchange rate. On a comparable exchange rate, the revenue of the first
quarter 2015 would have been increased by 1 %. Due to some seasonality in the industry, usually the first quarter of a year is
weak because many public customers buy during the last 4 to 5 months of a year.



Costs of Revenue



Cost of revenues were $1,369, or 60% of the
revenues for the three months ended March 31, 2015 as compared to $1,474, or 54% of the revenues for the three months ended March
31, 2014. More sales through international distributors as compared to higher margin direct sales is the major reason for the
decreased gross margin.



Research and Development



Research and development expenses are an important
part of our business to keep our existing products competitive, and to develop new innovative solutions with interesting market
potential that will help us grow future revenues. These expenses include research work for cancer marker consumables and developing
work, including engineering and industrial design, for histology and cytology laboratories worldwide. Major parts of these expenses
are payroll-related costs for in-house scientific research, mechanical and electrical engineering, instrument related software
development staff, prototype expenses and material purchased for R&D.



For the first quarter 2015, research and development
expenses increased to $262 compared to $199 for the first quarter 2014. This increase of $63 or 32% is the result of the
inclusion of the former CytoCore, Inc. and MEDITE Poland expenses in the first quarter 2015. We expect to continue to expend considerable
effort and resources to continue to grow our product offerings.



Selling, General and Administrative



For the first quarter 2015, SG&A expenses
were $807 as compared to $629 for the first quarter 2014. The first quarter 2015 compared to the first quarter 2014 expense are
now burdened with the administrative costs of the former CytoCore, Inc., which amounted to $107.



Operating Income (Loss)



The operating loss of $185 for the first quarter
of 2015 compares to MEDITE’s operating profit of $370 for the first quarter of 2014 as a standalone company before the purchase
of MEDITE by CytoCore effective on April 3, 2014.



Interest Expense



Interest expenses decreased by 23% to $58 in
the three months ended March 31, 2015 compared to $75 for the three months ended March 31, 2014, due to the decreased use of lines
of credit and repayment of term loans, both used for working capital financing of the European entities.



16







Net Income (Loss)



The net income (loss) for the quarter ended
March 31, 2015, totaled $255, as compared to net income of $219 for the quarter ended March 31, 2014. As noted above the primary
reason for the loss in 2015 was the inclusion of the results of the former CytoCore, Inc. and the additional expenses related
the new R&D facility in Poland.



Liquidity and Capital Resources



In the first quarter 2015, the Company issued
240,625 shares of unregistered stock to qualified individuals under SEC Rule 144 at $1.60 for proceeds of $357, net of issuance
costs of $28. In addition, the major shareholders, officers and directors of the Company, Michaela Ott and Michael Ott provided
a $950 short term loan to the Company. The Company repaid $620 by the date of filing.



Historically, the Company has raised $1.75
million in funds through two private placements and plans on raising additional equity through other private placements that have
yet to close.



Due to promising new products and distributions
contracts executed in the last two years, management believes the profitability and cash flow of the business will grow and improve.
However, significant on-going operating expenditures may be necessary to manufacture and market new and existing products to achieve
the accelerated sales growth targets outlined in the Company’s business plan. To realize the planned growth potential management
will focus its efforts on 1.) Finishing and gaining approval for the products currently under development and 2.) Increase direct
sales in the USA and continue to expand Chinese market sales by broadening the Company’s collaborations with the local distributor
UNIC. We also will work on continuously optimizing manufacturing cost to increase our gross margin. Implementation of our plans
will be contingent upon securing substantial additional debt and/or equity financing. If we are unable to obtain additional capital
or generate profitable sales revenues, we may be required to curtail product development and other activities. Approximately,
$1.9 million of accrued liabilities represents unpaid wages and vacation benefits. We believe subject to employee approval at
least 75% of this liability will be converted into equity. In summary, management believes current working capital is sufficient
to fund current operations.



A part of the Company’s outstanding indebtedness
under its master credit line #1 with Hannoversche Volksbank availability will be reduced by Euro 500 ($543 as of March 31, 2015)
effective June 1, 2015. The bank has already granted extensions to the Company and the Company believes that the bank will work
with the Company as we raise additional equity. Should the bank be unwilling to grant further extensions, management believes
that we can obtain bank funding elsewhere at equivalent terms, or if necessary, raise the funds needed through operations.



Off-Balance Sheet Arrangements



As of March 31, 2015, we did not have any relationships
with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose
entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in
such relationships.



Item 4. Controls and Procedures



Evaluation of Disclosure Controls and Procedures



Our chief executive officer
and our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, the “Exchange Act”) as of the end
of the period covered by this report. Based on that evaluation, our chief executive and chief financial officers have concluded
that our disclosure controls and procedures were not effective to provide reasonable assurance that the information we are required
to disclose in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms, and accumulated and communicated to our management, including our
chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.



17







Part II. Other Information



Item 1. Legal Proceedings.



The Company has a litigation
case with D&D Technology, Inc., Union, NJ, about third party development costs. As of the filing this case is verbally settled
with a final payment of $15,000 by MEDITE to D&D Technology, the written settlement is pending. The expected settlement is
accrued in our condensed consolidated financial statements.



On August 2013, the German
local state court ruled the Company was not in breach of claims pursued by plantiff, Hologic Deutschland GmbH, Germany. However,
the court ruled the Company must clearly differentiate their products in the German market from those offered by Hologic or be
subject to court imposed penalties with a limit of Euro 250,000 ($271,252 as of March 31, 2015). Hologic has appealed the verdict
and in addition the Company has appealed the provision of the verdict which applies to the possible penalty as described.



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



During the first quarter
2015, the Company issued 240,625 shares of unregistered stock to qualified individuals pursuant to exemptions from registration
under Regulation D and Section 4(2) of the Securities Act of 1933 at 1.60 for proceeds of $385,000, net of $28,000 of issuance
costs.



The Company also issued
12,000 shares of common stock in a Series D Preferred Stock conversion.



We issued the foregoing
securities in reliance on the safe harbor and exemptions from registration provided by Regulation D and Section 4(a)(2) of
the Securities Act of 1933, as amended, for sales to a limited number of accredited investors, employees, service providers, or
creditors with whom we had prior relationships, without engaging in any general solicitation, and without payment of underwriter
discounts or commissions to any person.



Item 3. Defaults upon Senior Securities.



As of the date of filing,
the remaining balance of approximately $21,000 on the note payable to Ventana Medical Systems, Inc. was in default. However, on
February 23, 2015, the Company reached an agreement with Ventana Medical Systems, Inc. whereby both parties have agreed that Ventana
Medical Systems, Inc. will accept $38,281 as payment in full for all outstanding principal and accrued interest. The $38,281 has
been included in current portion of long-term debt on the consolidated balance sheet. As part of this agreement, Ventana Medical
Systems, Inc. has agreed to convert $1.75 million stated value of Series D Preferred stock and all outstanding accrued dividends
of $656,250 for 12,000 shares of the Company’s common stock. Prior to the execution of this agreement, the Company had failed
to make principal and interest payments when due and is in breach of certain warranties and representations under the notes included
above.



18







Item 6. Exhibits



|Exhibit  |  |                                                                                                                                                                                                                            
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number   |  | Description                                                                                                                                                                                                                
|         |  |                                                                                                                                                                                                                            
|31.1     |  | Section 302 certification by the principal
    executive officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes Oxley Act of 2002.
|         |  |                                                                                                                                                                                                                            
|31.2     |  | Section 302 certification by the chief financial officer pursuant
    to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes
    Oxley Act of 2002.    
|         |  |                                                                                                                                                                                                                            
|32.1     |  | Section 906 certification by the principal executive pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                         
|         |  |                                                                                                                                                                                                                            
|32.2     |  | Section 906 certification by the chief financial officer pursuant
    to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                     
|         |  |                                                                                                                                                                                                                            
|101.INS* |  | XBRL Instance                                                                                                                                                                                                              
|         |  |                                                                                                                                                                                                                            
|101.SCH* |  | XBRL Taxonomy Extension Schema                                                                                                                                                                                             
|         |  |                                                                                                                                                                                                                            
|101.CAL* |  | XBRL Taxonomy Extension Calculation                                                                                                                                                                                        
|         |  |                                                                                                                                                                                                                            
|101.DEF* |  | XBRL Taxonomy Extension Definition                                                                                                                                                                                         
|         |  |                                                                                                                                                                                                                            
|101.LAB* |  | XBRL Taxonomy Extension Labels                                                                                                                                                                                             
|         |  |                                                                                                                                                                                                                            
|101.PRE* |  | XBRL Taxonomy Extension Presentation                                                                                                                                                                                       



* To be filed by
Amendment



19







SIGNATURES



Pursuant to the requirements
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.



|                    | MEDITE Cancer Diagnostics, Inc.
|------------------- | -------------------------------
|                    |                                
|Date:  May 20, 2015 | /s/ Michaela Ott               
|                    | Michaela Ott                   
|                    | Chief Executive Officer        
|                    |                                
|Date: May 20, 2015  | /s/ Robert F. McCullough, Jr.  
|                    | Robert F. McCullough, Jr.      
|                    | Chief Financial Officer        





20