UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      DC 20549





**FORM
      10-KSB**





(Mark
                One)x
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.For
                the fiscal year ended October 31, 2006ORo
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934.For
                the transition period from ________to
                ________




Commission
      file number 0-27119





**SCIVANTA
      MEDICAL CORPORATION**


(Name
      of
      small business issuer in its charter)





Nevada
            22-2436721(State
                or other jurisdiction of
            (I.R.S.
                Employer Identification No.)incorporation
                or organization)215
                Morris Avenue, Spring Lake, New Jersey
            07762(Address
                of principal executive offices)
            (Zip
                Code)




(732)
      282-1620


Issuer’s
      telephone number





Securities
      registered under Section 12(b) of the Exchange Act: None





Securities
      registered under Section 12(g) of the Exchange Act:





Common
      Stock, par value $0.001


(Title
      of class)





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o





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








Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of the Registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o




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




Revenues
      for the fiscal year ended October 31, 2006 were $0.




The
      aggregate market value of the shares of the Registrant’s common stock, par value
      $0.001 per share, held by non-affiliates of the Registrant, as of December
      31,
      2006, was approximately $3,093,088. The Registrant has no other class of capital
      stock outstanding.




As
      of
      December 31, 2006, 21,701,090 shares of the Registrant’s common stock were
      outstanding .




DOCUMENTS
      INCORPORATED BY REFERENCE




None.




Transitional
      Small Business Disclosure Format (check one): Yes o No X




SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS




Certain
      information included in this annual report on Form 10-KSB and other filings
      of
      the Registrant under the Securities Act of 1933, as amended (the “Securities
      Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
      as well as information communicated orally or in writing between the dates
      of
      such filings, contains or may contain “forward-looking statements” within the
      meaning of the Private Securities Litigation Reform Act of 1995, Section 27A
      of
      the Securities Act and Section 21E of the Exchange Act. Such statements are
      subject to certain risks, trends and uncertainties that could cause actual
      results to differ materially from expected results. Among these risks, trends
      and uncertainties are economic conditions generally and in the industries in
      which the Registrant may participate; competition within the Registrant’s chosen
      industries, including competition from much larger competitors; technological
      advances; available capital; regulatory approvals; and failure by the Registrant
      to successfully develop or acquire products and form new business
      relationships.




In
      some
      cases, forward-looking statements can be identified by terminology such as
      “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential” or “continue” or the negative of such terms
      or other comparable terminology. Although the Registrant believes that the
      expectations reflected in the forward-looking statements contained herein are
      reasonable, the Registrant cannot guarantee future results, levels of activity,
      performance or achievements. Moreover, neither the Registrant, nor any other
      person assumes responsibility for the accuracy and completeness of such
      statements. The Registrant is under no duty to update any of the forward-looking
      statements contained herein after the date this annual report on Form 10-KSB
      is
      submitted to the Securities and Exchange Commission .





**SCIVANTA
      MEDICAL CORPORATION**





**INDEX
      TO FORM 10-KSB**





**PART
                I**Item
                1.
            Description
                of Business
            1Item
                2.
            Description
                of Property
            10Item
                3.
            Legal
                Proceedings
            10Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            13**PART
                II**Item
                5.
            Market
                for Common Equity, Related Stockholder Matters and Small Business
                Issuer
                Purchases of Equity Securities
            14Item
                6.
            Management’s
                Discussion and Analysis or Plan of Operation
            15Item
                7.
            Financial
                Statements
            20Item
                8.
            Changes
                In and Disagreements With Accountants on Accounting and Financial
                Disclosure
            20Item
                8A.
            Controls
                and Procedures
            21Item
                8B.
            Other
                Information
            21**PART
                III**Item
                9.
            Directors,
                Executive Officers, Promoters and Control Persons; Compliance with
                Section
                16(a) of the Exchange Act
            22Item
                10.
            Executive
                Compensation
            24Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            27Item
                12.
            Certain
                Relationships and Related Transactions
            36Item
                13.
            Exhibits
            37Item
                14.
            Principal
                Accountant Fees and Services
            37SIGNATURES
            38










**PART
      I**




**Item
              1.**
            **Description
                of Business**




**General**




On
      January 4, 2007, Medi-Hut Co., Inc. changed its name to Scivanta Medical
      Corporation (“Scivanta” or the “Company”). Scivanta
      is a Nevada corporation that is headquartered in Spring Lake, New Jersey. The
      Company was incorporated in the State of New Jersey on November 29, 1982. On
      January 28, 1998, the Company entered into an Agreement and Plan of
      Reorganization with Indwest, Inc., a Utah corporation, whereby the Company
      changed its domicile to the State of Utah and became subject to the reporting
      requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”). On February 2, 1998, the Company completed a second change of domicile
      transaction and became a Delaware corporation, and, in the fall of 2001,
      completed a third and final change of domicile transaction and became a Nevada
      corporation.




On
      October 17, 2003, the Company formed Scivanta Corporation, a New Jersey
      corporation and wholly-owned subsidiary of the Company. Scivanta Corporation
      was
      formed to be an operating subsidiary of the Company, but is currently
      inactive.




Currently,
      the Company is not selling any products or technologies. On November 10, 2006,
      the Company acquired
      the exclusive world-wide rights to develop, make and sell certain proprietary
      technologies known as the Hickey Cardiac Monitoring System (the “HCMS”), a
      minimally invasive two-balloon esophageal catheter system used to monitor
      cardiac performance.  The
      HCMS
      is currently in the development stage and the Company anticipates that it will
      take approximately 18 months to complete development and related clinical
      trials. In addition, the Company must also receive the appropriate regulatory
      approvals before the HCMS can be marketed in the United States or
      abroad . See
“Strategy for Business Development;” “Company Developments;” and “Principal
      Products.”




**Strategy
      for Business Development**




On
      November 10, 2006, the Company acquired the exclusive world-wide rights to
      develop, make and sell the HCMS. The HCMS will provide the primary measures
      of
      cardiac performance and left atrial pressure which are crucial measurements
      in
      treating critically ill patients. The HCMS is currently in the development
      stage
      and the Company anticipates that it will take approximately 18 months to
      complete development and related clinical trials. In addition, the Company
      must
      also receive the appropriate regulatory approvals before the HCMS can be
      marketed in the United States or abroad .




The
      Company anticipates funding the development of the HCMS through equity and/or
      debt financing and from the settlement proceeds received in connection with
      the
      Syntest litigation. See “Item 3. Legal Proceedings - Syntest Litigation.” No
      assurances can be given that the proceeds from the settlement of the Syntest
      Litigation will be sufficient to develop the HCMS or that the Company will
      otherwise have, or obtain through equity and/or debt financing, the financial
      and other resources necessary for it to successfully develop the HCMS, or that
      if successfully developed and marketed, the HCMS will be
      profitable.


1




In
      addition to developing the HCMS, the Company’s strategy for business development
      will focus on the acquisition, through licensing or purchasing, of technologies
      or products that are sold or are capable of being sold in a specialty or niche
      market. Technologies or products of interest include, but are not limited to,
      medical devices, pharmaceuticals and other proprietary technologies or patented
      products. Specialty or niche-market technologies or products, as opposed to
      commodities, generally offer greater margins. These products are distributed
      through specialty distributor networks or manufacturer representatives to the
      original equipment manufacturer market, supplier and provider markets and to
      the
      general marketplace.




Annual
      sales, if any, of the technologies and products that the Company will review
      are
      generally less than $5 million. The Company believes that these technologies
      or
      products generally are not attractive to larger companies because they do not
      represent opportunities for revenues and earnings that would be material to
      those companies. The Company will consider technologies and products that suffer
      from lower sales or lack of development because of inadequate distribution
      channels, lack of companion products or insufficient capital.




Following
      is a listing of criteria being utilized by the Company in identifying and
      reviewing potential technology or product acquisitions:




·
            Whether
                the technology or product is a specialty or niche-market product
                which is
                distributed through specialty
                distributors.




·
            Whether
                the technology or product is unique or
                patented.




·
            Whether
                the technology or product has, or is capable of achieving, an attractive
                gross margin, usually in excess of
                35%.




·
            Whether
                the prospective seller is receptive to receiving equity as part of
                the
                purchase price.




·
            Whether
                the market for the technology or product is expanding, but not to
                such a
                degree as to attract larger manufacturers or result in the technology
                or
                product achieving commodity status.




·
            Whether
                the Company can access marketing channels to sell and distribute
                the
                technology or product.




No
      assurances can be given that the Company will have the financial and other
      resources necessary for it to acquire additional technologies or products or
      implement any part of its business development strategy. In addition, no
      assurances can be given that any technology or product that the Company acquires
      as part of its business development strategy will be profitable.




**Company
      Developments**




*Litigation*




Syntest
      Litigation - See
“Item 3. Legal Proceedings - Syntest Litigation.”




Litigation
      Against Certain Former Officers and Directors and Others - See
“Item 3. Legal Proceedings - Litigation Against Certain Former Officers and
      Directors and Others.”




2




Litigation
      Against Former Accounting Firms - See
“Item 3. Legal Proceedings - Litigation Against Former Accounting
      Firms.”




Loures
      Lawsuit - See
“Item 3. Legal Proceedings - Loures Lawsuit.”




*Acquisition
      of the HCMS*




On
      November 10, 2006, the Company entered into a technology license agreement
      (the
“License Agreement”) with The Research Foundation of State University of New
      York, for and on behalf of the University at Buffalo (the “Foundation”), Donald
      D. Hickey, M.D. (“Hickey”) and Clas E. Lundgren (“Lundgren”). The Foundation,
      Hickey and Lundgren shall be collectively referred to herein as the
“Licensor.”




Pursuant
      to the License Agreement, the Licensor granted the Company the exclusive
      world-wide rights to develop, make and sell the HCMS, a minimally invasive
      two-balloon esophageal catheter system used to monitor cardiac performance.
      The
      term of the License Agreement commenced on November 10, 2006, the date of the
      License Agreement, and ends on the later of (i) the expiration date of the
      last
      to expire patent right related to the HCMS, which is currently June 12, 2018,
      or
      (ii) ten years from the sale of the first HCMS product.




Under
      the
      License Agreement, the Company is required to pay the Licensor a royalty of
      5%
      on annual net sales, as defined in the License Agreement, subject to certain
      reductions as detailed in the License Agreement. Beginning with the first full
      year of sales of the HCMS in the United States and for two years thereafter,
      the
      Company is required to pay an annual minimum royalty of $100,000 to the Licensor
      against which any royalty on net sales paid in the same calendar year for sales
      in the United States will be credited. Further, beginning with the first full
      year of sales of the HCMS outside the United States and for two years
      thereafter, the Company is required to pay an annual minimum royalty of $100,000
      to the Licensor against which any royalty on net sales paid in the same calendar
      year for sales outside the United States will be credited. In addition, the
      Company is required to pay the Licensor 25% of all sublicensing revenue received
      by the Company in connection with the HCMS. The Company is also obligated to
      make milestone payments to the Licensor as follows: (i) first insertion of
      a
      catheter utilizing the HCMS in a human clinical trial - $75,000; (ii) first
      submission of the HCMS for regulatory approval in any country - $100,000; and
      (iii) first notice of regulatory approval to market the HCMS in any country
      -
      $150,000. Further, the Company will reimburse the Licensor a total of $264,300
      for patent costs incurred prior to the execution of the License Agreement as
      follows: $40,900 within five (5) days of the signing of the License Agreement;
      $80,000 on or before November 1, 2007 and $143,400 on or before November 1,
      2008. The $40,900 payment has been made by the Company in accordance with the
      License Agreement.




The
      License Agreement also requires the Company to use commercially reasonable
      efforts to commercialize and market the HCMS within certain timeframes, subject
      to specified exceptions as detailed in the License Agreement. Further, the
      License Agreement contains standard provisions regarding indemnification,
      termination and patent prosecution. See “Principal Products.”


3




**Principal
      Product**




The
      HCMS
      is a minimally invasive two-balloon esophageal catheter system that will provide
      the primary measures of cardiac performance and left atrial pressure which
      are
      crucial measurements in treating critically ill patients. The HCMS two balloon
      catheter is inserted into the esophagus and capitalizes on the anatomic
      relationship of the left atrium and aortic arch proximate to the esophagus.
      Once
      positioned, the catheter’s balloons are inflated. The wall motion in the left
      atrium and the aorta generates pressure changes in the respective balloons.
      These signals, along with signals from an electrocardiogram, phonocardiogram
      and
      automated blood pressure cuff, are transmitted to the monitoring system, which
      converts the data into important, real-time, clinical measurements utilizing
      a
      proprietary software algorithm.




The
      current standard of care for monitoring critically ill patients suffering from
      various cardiovascular conditions is an invasive procedure known as pulmonary
      artery catheterization. That procedure requires an incision into a patient’s
      neck or groin and the insertion of a Swan-Ganz catheter into the right atrium
      and ventricle of the heart, and then into a pulmonary artery. That procedure
      must be performed in an intensive care unit.




Unlike
      the Swan-Ganz catheter, the HCMS will provide the primary measurements of
      cardiac performance in a minimally invasive and more cost effective manner
      and
      is designed to be used outside of an intensive care setting. In addition, the
      HCMS also provides clinical measurements of left ventricular contractility,
      left
      atrial transmural pressure and pleural pressure, which the Swan-Ganz does not
      provide. The Company believes that the measure of contractility during
      isovolumic contraction is an important advance offered by the HCMS, and is
      a
      distinct advantage over the Swan-Ganz catheter. Measurement of left ventricular
      contractility is potentially a new standard for monitoring the treatment of
      congestive heart failure.





The
      HCMS
      is currently in the development stage and the Company anticipates that it will
      take approximately 18 months to complete development and related clinical
      trials. In addition, the Company must also receive the appropriate regulatory
      approvals before the HCMS can be marketed in the United States or
      abroad. See
“Strategy for Business Development.”





**Patents
      and Copyrights**




The
      HCMS
      is the subject of 11 United States patents and corresponding patents in major
      international markets, including Canada, European Union, Japan and India. The
      patents cover the important facets of the HCMS, including catheter design and
      construction, catheter positioning, monitor design, algorithms and balloon
      inflation techniques. The United States patents include United States Patent
      and
      Trademark Office numbers 5,048,532; 5,181,517; 5,263,485; 5,398,692; 5,551,439;
      5,570,671; 5,697,375; 5,921,935; 6,120,442; 6,238,349 and 6,432,059. In
      addition, the software that converts the pressure signals into useful clinical
      information is the subject of copyright.




**Manufacturing;
      Principal Suppliers**




The
      Company outsourced all of its manufacturing requirements with respect to
      products previously sold by the Company. The Company currently intends to
      outsource the manufacturing of the components for the HCMS. No formal
      manufacturing agreements have been entered into at this time.


4




**Distribution,
      Sales and Marketing**




The
      Company currently does not maintain a dedicated sales force and currently does
      not sell any products. The Company currently intends to outsource the
      distribution and sales requirements related to the HCMS. No formal distribution
      or sales agreements have been entered into at this time.




**Competition**




The
      following devices are used to measure cardiac performance and it is anticipated
      that such devices would compete with the HCMS for market share.




The
      pulmonary artery catheter, otherwise known as the Swan-Ganz catheter, is the
      established tool for monitoring cardiac performance and left atrial pressure.
      The Swan-Ganz catheter is inserted through a vein into the right atrium and
      ventricle of the heart, and threaded into the pulmonary artery. Due to the
      invasive nature of the Swan-Ganz catheter, it must be inserted within a
      hospital’s intensive care unit and is not recommended for long-term cardiac
      monitoring. Major distributors of the Swan-Ganz catheter are Edwards
      Lifesciences Corporation and Hospira Inc.





Currently,
      there are products in the market that measure cardiac performance on a
      non-invasive or minimally-invasive basis. None of these products have been
      as
      successful as the Swan-Ganz catheter. Echocardiography has been utilized to
      measure cardiac performance. The echocardiography device measures the aortic
      diameter and the movement of red blood cells to determine the velocity and
      direction of blood flow to calculate stroke volume and thus cardiac performance.
      Echocardiography is thought to generate inconsistent results, is dependent
      on
      technician skill and technique, is limited in the kinds of patients it can
      address and is time intensive. Accordingly, echocardiography has not been widely
      accepted as an alternative device for measuring cardiac performance. Major
      distributors of echocardiography devices include Siemens Medical Solutions
      Inc.
      and Philips Medical Systems.





Trans-esophageal
      probes featuring a doppler transducer on the end of large bore esophageal
      catheters have been utilized to generate echocardiographic images from a
      position in close proximity to the heart. This method also has not met with
      widespread clinical acceptance for reasons of accuracy, significant patient
      discomfort in administration and its time-intensive nature. Arrow International,
      Inc. markets this type of device.





Impedance
      cardiography uses the heart’s electrical characteristics in order to measure the
      heart’s mechanical, or blood flow, characteristics. The procedure is inaccurate
      in many circumstances, such as in patients with septic shock and/or severe
      aortic valve regurgitation and/or irregular heartbeats. In addition,
      measurements can be inaccurate if the patient moves excessively while
      monitoring. CardioDynamics International Corporation markets this type of
      device.


5





**Government
      Regulation**




*Medical
      Devices*




As
      a
      developer and possible future distributor of medical devices, the Company is
      subject to regulation by, among other governmental entities, the United States
      Food and Drug Administration (the “FDA”), and the corresponding agencies of the
      states and foreign countries in which the Company may sell its products. These
      regulations govern the introduction of new medical devices, the observance
      of
      certain standards with respect to the manufacture, testing and labeling of
      such
      devices, the maintenance of certain records, the tracking of devices, and other
      matters, and could have a material impact on the Company’s future operations in
      the event the Company successfully develops the HCMS and implements its strategy
      for its business development and acquires or develops additional medical devices
      and related products. See “Strategy for Business Development.”




All
      medical device manufacturing establishments are required to be registered with
      the FDA. Similarly, all categories of medical devices marketed by a company
      in
      the United States are required to be listed. This listing information must
      be
      updated pursuant to FDA regulations. The FDA can take regulatory action against
      a company that does not provide or update its registration and listing
      information. Pursuant to the Food, Drug and Cosmetic Act (the “FDC Act”),
      medical devices intended for human use are classified into three categories,
      Classes I, II and III, on the basis of the controls deemed necessary by the
      FDA
      to reasonably assure their safety and effectiveness. Class I devices are subject
      to general controls (for example, labeling, premarket notification and adherence
      to good manufacturing practice regulations) and Class II devices are subject
      to
      general and special controls (for example, performance standards, postmarket
      surveillance, patient registries, and FDA guidelines). Generally, Class III
      devices are those which must receive premarket approval (“PMA”) from the FDA to
      ensure their safety and effectiveness (for example, life-sustaining,
      life-supporting and implantable devices, or new devices which have not been
      found substantially equivalent to legally marketed devices).




Some
      Class I devices and most Class II devices require premarket notification
      (510(k)) clearance pursuant to Section 510(k) of the FDC Act. Most Class III
      devices are required to have an approved PMA application. Obtaining PMA approval
      can take up to several years or more and involve preclinical studies and
      clinical testing. In contrast, the process of obtaining a 510(k) premarket
      notification clearance typically requires the submission of substantially less
      data and generally involves a shorter review period. A 510(k) premarket
      notification clearance indicates that the FDA agrees with an applicant’s
      determination that the product for which clearance has been sought is
      substantially equivalent in terms of safety and effectiveness to another medical
      device that has been previously marketed, but does not indicate that the product
      is safe and effective.




In
      addition to requiring clearance or approval for new products, the FDA may
      require clearance or approval prior to marketing products that are modifications
      of existing products. FDA regulations provide that new 510(k) premarket
      notification clearances are required when, among other things, there is a major
      change or modification in the intended use of the device or a change or
      modification to a legally marketed device that could significantly affect its
      safety or effectiveness. The developer and/or manufacturer is expected to make
      the initial determination as to whether a proposed change to a cleared device
      or
      to its intended use is of a kind that would necessitate the filing of a new
      510(k) premarket notification.




6




In
      order
      to conduct clinical trials of an uncleared or unapproved device, companies
      generally are required to comply with the FDA’s Investigational Device
      Exemptions regulations (“IDE regulations”). For significant risk devices, the
      IDE regulations require FDA approval of an investigational device before a
      clinical study may begin. In its approval letter for significant risk
      investigational device studies, the agency may limit the number of patients
      that
      may be treated with the device and/or the number of institutions at which the
      device may be used. Device studies subject to the IDE regulations, including
      both significant risk and non-significant risk device studies, are subject
      to
      various restrictions imposed by the FDA. Patients must give informed consent
      to
      be treated with an investigational device. The institutional review board of
      each institution where a study is being conducted must also approve the clinical
      study. The device generally may not be advertised or otherwise promoted.
      Unexpected adverse experiences must be reported to the FDA. The company
      sponsoring the investigation must ensure that the investigation is being
      conducted in accordance with the IDE regulations.




Pursuant
      to the FDA’s Good Manufacturing Practices under the Quality System Regulations
      (“GMP/QSR”), a medical device manufacturer must manufacture products and
      maintain records in a prescribed manner with respect to manufacturing, testing
      and control activities. Further, the manufacturer, distributor and/or owner
      of a
      medical device is required to comply with FDA requirements for labeling and
      promotion of its medical devices. For example, the FDA prohibits cleared or
      approved devices from being marketed or promoted for uncleared or unapproved
      uses. The medical device reporting regulations require that a company provide
      information to the FDA whenever there is evidence to reasonably suggest that
      one
      of the company’s devices may have caused or contributed to a death or serious
      injury, or that there has occurred a malfunction that would be likely to cause
      or contribute to a death or serious injury if the malfunction were to recur.
      Additionally, the FDA imposes other requirements on medical device
      manufacturers, including reporting and record keeping requirements for device
      corrections and removals (recalls).




Medical
      device manufacturers and distributors are generally subject to periodic
      inspections by the FDA. If the FDA determines that a company is not in
      compliance with applicable laws and regulations, it can, among other things,
      issue a warning letter apprising the company of violative conduct, detain or
      seize products, issue a recall, enjoin future violations and assess civil and
      criminal penalties against the company, its officers or its employees. In
      addition, it is possible that clearances or approvals could be withdrawn in
      certain circumstances. Failure to comply with regulatory requirements or any
      adverse regulatory action could have a material adverse effect on the Company’s
      future business, financial condition and results of operations.




Medical
      device laws and regulations are also in effect in many of the countries in
      which
      the Company may conduct business outside the United States. These range from
      comprehensive device approval requirements for certain medical device products
      to simple requests for product data or certifications. The number and scope
      of
      these requirements are increasing. Medical device laws and regulations are
      also
      in effect in many of the states in which the Company may conduct business in
      the
      future. State and foreign medical device laws and regulations may have a
      material impact on the Company. In addition, international sales of certain
      medical devices manufactured in the United States, but not cleared or approved
      by the FDA for distribution in the United States, are subject to FDA export
      requirements and policies, including a policy whereby the Company provides
      a
      statement to FDA certifying that the product to be exported meets certain
      criteria and FDA issues a certificate to facilitate device export.




7




Federal,
      state and foreign laws and regulations regarding the manufacture, sale and
      distribution of medical devices are subject to future changes. For example,
      the
      Congress enacted the Medical Device User Fee and Modernization Act of 2002,
      which included several significant amendments to the prior law governing medical
      devices. Additionally, the FDA made significant changes to its GMP/QSR
      regulations in 1996 and may make changes to other regulations as well. The
      Company cannot predict what impact, if any, such changes might have on its
      future business; however, such changes could have a material impact on the
      Company and its business, financial condition and operating
      results.




The
      Company currently believes that the HCMS will require 510(k) premarket
      notification clearance from the FDA. A working prototype of the HCMS currently
      exists. However, in order for the Company to be in a position to market the
      HCMS, the Company needs to: (1) design and construct production models of the
      HCMS for clinical testing, (2) file a request with the FDA for authority to
      conduct clinical trials, (3) undertake the clinical trials, (4) file for 510(k)
      premarket notification clearance to distribute the HCMS and (5) initiate
      manufacturing and distribution of the HCMS. The Company currently anticipates
      that it will take approximately 18 months to complete development and the
      related clinical trials and receive the appropriate regulatory approvals. If
      the
      FDA does not grant the Company a 510(k) premarket notification clearance for
      the
      HCMS, the Company would be required to apply for a PMA from the FDA which could
      significantly increase the amount of time required to receive the FDA’s approval
      to market the HCMS. No assurance can be given that the FDA will ultimately
      approve the HCMS for sale.





*Pharmaceutical
      Products*




Although
      the Company is not currently selling or developing any pharmaceutical products,
      if the Company can successfully implement its strategy for business development,
      it may acquire or develop one or more pharmaceutical products, which sale and
      development thereof will be subject to government regulation as briefly
      described below. See “Strategy for Business Development.”




The
      FDA
      and comparable regulatory agencies in state and local jurisdictions and in
      foreign countries impose substantial requirements upon the clinical development,
      manufacture and marketing of pharmaceutical products. These agencies and other
      federal, state and local entities regulate research and development activities
      and the testing, manufacture, quality control, safety, effectiveness, labeling,
      storage, record keeping, approval, advertising and promotion of such products.
      Under the FDC Act, all drugs require FDA approval before marketing, with certain
      limited exceptions. This approval requires that the drug company establish
      that
      the drug is safe and effective for its labeled use. These regulations could
      have
      a material impact on the Company’s future ability to distribute pharmaceutical
      products.




8




Additionally,
      products that contain controlled substances are subject to the requirements
      of
      the Drug Enforcement Administration (“DEA”) relating to the manufacturing,
      marketing and selling of such products. Under the DEA’s requirements, there are
      two ways in which a product can be legally manufactured, marketed and sold:
      registration or exemption. Under the registration requirements, a company that
      wishes to produce or market any product containing a controlled substance can
      register to manufacture, market and sell such product and this registration
      is
      done by schedule and not by product. Further, if a company is registered to
      produce products containing substances at a certain schedule level, the
      registration also includes the right to produce products containing ingredients
      on a “higher” numbered schedule. Under the exemption requirements, a product can
      be exempted from DEA requirements and can be legally manufactured, marketed
      and
      distributed. Exemptions are given on a product by product basis.




*General*




When
      offering for sale medical devices and pharmaceutical products, the Company
      may
      also have to comply with federal and state anti-kickback and other healthcare
      fraud and abuse laws. Moreover, approval must be obtained for a pharmaceutical
      product by comparable governmental regulatory authorities in foreign countries
      prior to the commencement of clinical trials and subsequent marketing of such
      product in those countries. The approval procedure varies from country to
      country, and the time required may be longer or shorter than that required
      for
      FDA approval.




The
      regulatory policies of the FDA and other regulatory bodies may change and
      additional governmental regulations may be enacted which could prevent or delay
      regulatory approval of the products the Company may distribute in the future.
      The Company cannot predict the likelihood, nature or extent of adverse
      governmental regulation that might arise from future legislative or
      administrative action, within the United States or abroad.




**Insurance**




The
      Company maintains insurance in such amounts and against such risks as it deems
      prudent, although no assurance can be given that such insurance will be
      sufficient under all circumstances to protect the Company against significant
      claims for damages. The occurrence of a significant event not fully insured
      could materially and adversely affect the Company’s business, financial
      condition and results of operations. Moreover, no assurance can be given that
      the Company will be able to maintain adequate insurance in the future at
      commercially reasonable rates or on acceptable terms.




**Employees**




As
      of
      December 31, 2006, David R. LaVance (President and Chief Executive Officer)
      and
      Thomas S. Gifford (Executive Vice President, Chief Financial Officer (Treasurer)
      and Secretary) are the only executive officers of the Company. Mr. LaVance
      and
      Mr. Gifford are engaged by the Company pursuant to the amended and restated
      Consulting Services Agreement, dated as of February 1, 2005, between the Company
      and Century Capital Associates, LLC (“Century Capital”). See “Item 10. Executive
      Compensation - Amended and Restated Consulting Services Agreement.” Excluding
      Messrs. LaVance and Gifford, who are consultants to the Company, the Company
      currently has one full-time employee. The Company has not experienced any work
      stoppages to date and management believes that the Company’s relationship with
      its employee is good.




9




**Item
              2.**
            **Description
                of Property**




On
      May 1,
      2004, the Company and Century Capital entered into a Shared Services Agreement
      whereby the Company rented three fully furnished, business equipped offices
      approximating 340 square feet inside Century Capital’s existing offices. This
      agreement has a month to month term that requires sixty day written notice
      to
      terminate. The monthly rental is $2,500. Century Capital is owned by David
      R.
      LaVance and Thomas S. Gifford, the Company’s executive management team. See
“Item 12. Certain Relationships and Related Transactions.”




**Item
              3.**
            **Legal
                Proceedings**




**Syntest
      Litigation**




On
      May
      12, 2003, the Company commenced an action in the United States District Court
      for the Eastern District of New York against Syntho Pharmaceuticals Inc.
      (“Syntho”) and its principal owner, Muhammed Malik (collectively, the “Syntho
      Group”), Breckenridge Pharmaceutical Inc. (“Breckenridge”) and its principal
      owner, Larry Runsdorf (the “Breckenridge Group”), Scott Schrader and his
      affiliates, namely Schrader Associates, Bluegrass Drug LLC and Medpharm
      Corporation (collectively, the “Schrader Group”), relating to the Company’s
      exclusive right to distribute the hormone replacement therapy drug, Syntest,
      under an agreement with Syntho which expired no earlier than November 2006.
      In
      its complaint, the Company alleged, among other things, that Syntho permitted
      Breckenridge, Medpharm Corporation and Bluegrass Drug LLC to distribute Syntest
      in violation of its agreement with Syntho and that Scott Schrader and Schrader
      Associates, which had been appointed by the Company as the exclusive broker
      with
      respect to sales of Syntest to drug wholesalers, chain drug stores and managed
      care companies, offered discounts, incentives and rebates to customers of the
      Company without the Company’s authorization.




On
      April
      21, 2004, the Company entered into a settlement agreement and limited release
      with the Schrader Group. Pursuant to this agreement, the Company and the
      Schrader Group agreed to dismiss with prejudice the actions which were pending
      against each other. As part of the settlement reached by the Company and the
      Schrader Group, the Schrader Group paid to the Company a cash payment of
      $375,000. In addition, the parties released each other from certain claims
      arising out of the distribution and sale of Syntest.




On
      October 17, 2005, the Company and Breckenridge entered into a purchase and
      settlement agreement pursuant to which the Company sold its distribution and
      other rights and business with respect to the hormone replacement drug, Syntest,
      to Breckenridge. In consideration for the sale of such rights and the other
      benefits provided under the purchase and settlement agreement,  Breckenridge
      agreed to pay the Company an aggregate of $1,000,000 as follows: (1) $250,000
      was paid shortly after the execution of the purchase and settlement agreement,
      and (2) $50,000 will be paid on the first day of each month for a 15 month
      period commencing on November 1, 2005 and ending on January 1, 2007. Further,
      pursuant to the settlement agreement, the Company and Breckenridge dismissed
      their actions against each other and released each other from any further claims
      arising out of the distribution and sale of Syntest, except as provided under
      the purchase and settlement agreement. As of December 31, 2006, the Company
      received an aggregate of $950,000 of payments from Breckenridge pursuant to
      the
      purchase and settlement agreement.




10




On
      November 22, 2006, the Company, Century Capital, David R. LaVance and Thomas
      S.
      Gifford entered into a settlement agreement and release with the Syntho Group
      and Intermax Pharmaceuticals, Inc. (“Intermax”). Pursuant to the settlement
      agreement, the Company and the Syntho Group agreed to dismiss with prejudice
      the
      actions against each other which were pending in the United States District
      Court for the Eastern District of New York and in the Superior Court of New
      Jersey. See “Litigation Against Certain Former Officers and Directors and
      Others.” In addition, the Syntho Group agreed to dismiss with prejudice the
      related actions against Century Capital, David R. LaVance and Thomas S. Gifford
      which were pending in the United States District Court for the Eastern District
      of New York and the Company and Intermax agreed to dismiss with prejudice the
      related actions against each other which were pending in the United States
      District Court for the Eastern District of New York and in the Superior Court
      of
      New Jersey. As part of the settlement reached by the parties, the Syntho Group
      agreed to pay the Company an aggregate of $3,100,000 (the “Settlement Amount”)
      as follows: (1) $250,000 was paid upon the execution of the settlement
      agreement; (2) $100,000 will be paid on the 27 th day of
      each month for a three month period commencing on December 27, 2006 and ending
      on February 27, 2007 and (3) $2,550,000 will be paid on or before March 27,
      2007. A portion of the Settlement Amount, $2,850,000, is secured by a first
      priority mortgage on real property owned by the spouse of Muhammed Malik. In
      the
      event that the Syntho Group defaults on the settlement agreement, the Syntho
      Group and Intermax will be responsible for all reasonable costs and expenses
      incurred by the Company as a result of the default, including any foreclosure
      related expenses associated with the real property which secures the first
      priority mortgage. In addition, upon a default by the Syntho Group, a consent
      judgment in favor of the Company in the amount of $4,000,000 will be entered
      into in the Superior Court of New Jersey against the Syntho Group and Intermax.
      As of December 31, 2006, the Company received an aggregate of $350,000 of
      payments from the Syntho Group pursuant to the settlement agreement.




**Litigation
      Against Certain Former Officers and Directors and Others**




On
      December 4, 2003, the Company commenced litigation in the Superior Court of
      New
      Jersey against certain of its former officers and directors, Healthgen
      Distributors, Inc. (formerly known as Larval Corp.), Kinray, Inc. and Santi
      Greco, an officer of Kinray, Inc. In its complaint, the Company alleged that
      Joseph A. Sanpietro, a former director and the former President and Chief
      Executive Officer of the Company, Vincent J. Sanpietro, a former director and
      the former Chief Operating Officer and Secretary of the Company, Laurence M.
      Simon, the former Chief Financial Officer of the Company, and Lawrence P.
      Marasco, the former Vice President of Sales of the Company, caused the Company
      to suffer significant damage and incur substantial costs by engaging in a scheme
      to overstate the Company’s revenues and earnings through fraudulent accounting
      practices. The Company also alleged in its complaint that these former officers
      and directors, in furtherance of their scheme to defraud, filed materially
      false
      and misleading documents with the Securities and Exchange Commission (the “SEC”)
      and disseminated materially false and misleading information to the general
      public, investors and financial advisors and brokers. In addition to the
      foregoing, the Company alleged in its complaint that these former officers
      and
      directors, with the assistance of Larval Corp., an entity controlled by Mr.
      Marasco, Kinray, Inc., a New York based pharmaceutical distributor, and Santi
      Greco, an officer of Kinray, Inc., committed violations of state and federal
      laws prohibiting forgery and fraudulent practices and otherwise participated
      in
“racketeering activity” as that term is defined in 18 U.S.C .
      §1961(1) and N.J.S.A .
      2C:41-1. Further, as set forth in the complaint, the Company sought payment
      of a
      promissory note in the principal amount of $575,000 issued to it by former
      officer and director Robert S. Russo, plus all accrued interest
      thereon.




11




On
      February 4, 2004, the Company entered into a settlement and release agreement
      with Vincent J. Sanpietro. In exchange for a one-time payment of $20,000, the
      return of 554,800 shares of the Company’s common stock and certain other
      non-monetary considerations, the Company agreed to discharge its claims against
      Mr. Sanpietro.




On
      April
      14, 2004, the Company entered into a settlement and release agreement with
      Joseph A. Sanpietro. In exchange for a one-time payment of $60,000 and the
      return of 3,179,200 shares of the Company’s common stock and certain other
      non-monetary consideration, the Company agreed to discharge its claims against
      Mr. Sanpietro.




On
      May
      14, 2004, the Company entered into a settlement and release agreement with
      Robert S. Russo. In exchange for a one-time payment of $300,000, the return
      of
      125,000 shares of the Company’s common stock and other non-monetary
      consideration, the Company agreed to discharge its claims against Mr.
      Russo.




On
      September 16, 2004, the Company entered into a settlement agreement and release
      with Lawrence P. Marasco. As part of the settlement, Mr. Marasco paid to the
      Company the sum of $60,000, returned 405,000 shares of the Company’s common
      stock and agreed to provide certain other non-monetary
      consideration.




On
      November 29, 2004, the Company entered into a settlement agreement and release
      with Laurence M. Simon. In exchange for the return of 30,000 shares of the
      Company’s common stock and certain other non-monetary consideration, the Company
      agreed to dismiss its claims against Mr. Simon.




On
      January 19, 2005, the Company entered into a settlement agreement and release
      in
      connection with its action against Kinray, Inc. and its officer, Santi Greco.
      As
      part of this settlement, Kinray, Inc. agreed to pay to the Company the sum
      of
      $300,000. This settlement was entered into without any admission of liability
      or
      any inferences of wrongdoing by any settling party.




On
      November 22, 2006, the Company entered into a settlement agreement and release
      with the Syntho Group and Intermax pursuant to which the Company, the Syntho
      Group and Intermax agreed to dismiss with prejudice the actions against each
      other which were pending in the Superior Court of New Jersey. See “Syntest
      Litigation.”




12


**Litigation
      Against Former Accounting Firms** **




On
      January 9, 2004, the Company commenced litigation in the Superior Court of
      New
      Jersey against two of its former accounting firms, Rosenberg, Rich, Baker,
      Berman & Company (“Rosenberg”) which served as the Company’s independent
      registered public accounting firm from February 1998 to March 2003, excluding
      a
      three week period in early 2002, and Koenig, Russo & Associates (“Koenig”),
      an accounting consultant engaged by the Company to review various tax documents,
      financial statements and filings by the Company with the SEC. Robert S. Russo,
      a
      former officer and director of the Company and a defendant in a litigation
      commenced by the Company against certain of its former officers and directors
      on
      December 4, 2003, is a principal of Koenig. In its complaint, the Company,
      among
      other things, alleged that Rosenberg and Koenig, through their negligence and
      accounting malpractice, caused the Company to suffer significant damage and
      incur substantial costs.




In
      connection with the settlement of the Company’s separate action against Robert
      S. Russo in the Superior Court of New Jersey (see “Litigation Against Certain
      Former Officers and Directors and Others”), on May 14, 2004, the Company entered
      into a settlement and release agreement with Koenig. In exchange for certain
      non-monetary consideration, the Company agreed to discharge its claims against
      Koenig.




On
      February 21, 2006, the Company entered into a settlement agreement and release
      with Rosenberg. As part of the settlement, the parties released each other
      from
      all claims and Rosenberg paid the Company the sum of $425,000. This settlement
      was entered into without any admission of liability or any inferences of
      wrongdoing by any settling party.




**Loures
      Lawsuit** **




On
      December 28, 2004, an action was commenced in the Superior Court of New Jersey
      by James J. Loures, Jr. and his wife, Christine Loures, against the Company
      and
      certain of its former officers and directors. The plaintiffs allege that the
      Company, its former officers and certain of its former directors engaged in
      a
      scheme to inflate the Company’s revenues and earnings through a series of
      accounting irregularities and fraudulent financial disclosures during the period
      June 2001 through March 2003 which resulted in the plaintiffs’ loss of
      approximately $120,000. The plaintiffs allegations are the same as those alleged
      in the consolidated class action lawsuit against the Company which was settled
      by the Company in 2004. The plaintiffs were one of eight parties that opted
      out
      of the settlement related to the consolidated class action lawsuit.




On
      October 4, 2006, the Company filed a motion to dismiss the plaintiffs’ complaint
      for failure to comply with discovery requests in the time required by the court.
      On November 3, 2006, the court granted the Company’s motion and dismissed the
      complaint without prejudice.




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




No
      matters were submitted to a vote of the Company’s shareholders during the fourth
      quarter of fiscal 2006.




13




**PART
      II**




**Item
                  5.**
                **Market
                    for Common Equity, Related Stockholder Matters****and Small Business Issuer Purchases of Equity
                    Securities**




No
      established public trading market exists for the Company’s common stock and
      shares of the Company’s common stock are neither listed on any national
      securities exchange, or presently traded on any public stock exchange or in
      any
      other public market. Although quotations for shares of the Company’s common
      stock may be obtained through the Pink Sheets maintained by Pink Sheets LLC,
      because secondary market activity for shares of the Company’s common stock has
      been limited and sporadic, such quotations may not actually reflect the price
      or
      prices at which purchasers and sellers would currently be willing to purchase
      or
      sell such shares.




The
      following table shows the range of high and low closing bid prices for the
      Company’s common stock for the period commencing November 1, 2005 through
      January 24, 2007 as reported by the Pink Sheets. For the period commencing
      November 1, 2005 through January 19, 2007, the Company’s common stock traded
      under the symbol “MHUT.” In connection with the change of the Company’s name to
      Scivanta Medical Corporation, effective January 22, 2007, the Company’s symbol
      changed to “SCVM.” These quotations represent prices between dealers and may not
      include retail markups, markdowns or commissions and may not necessarily
      represent actual transactions.




**Year
                Ending October 31, 2007**
            
            High
            
            LowFirst
                Quarter (through January 24, 2007)
            
            $
            0.29
            
            $
            0.015




**Year
                Ending October 31, 2006**
            
            High
            
            LowFirst
                Quarter
            
            $
            0.15
            
            $
            0.07Second
                Quarter
            
            
            0.08
            
            
            0.03Third
                Quarter
            
            
            0.08
            
            
            *Fourth
                Quarter
            
            
            0.07
            
            
            *




**Year
                Ended October 31, 2005**
            
            High
            
            LowFirst
                Quarter
            
            $
            0.15
            
            $
            0.02Second
                Quarter
            
            
            0.14
            
            
            0.03Third
                Quarter
            
            
            0.11
            
            
            0.05Fourth
                Quarter
            
            
            0.10
            
            
            0.04




*
      Less
      than $0.01.




Pink
      Sheets LLC is an electronic quotation and information service that collects
      and
      publishes market maker quotes for over-the-counter (“OTC”) securities and
      thereby enables National Association of Securities Dealers (NASD) broker-dealer
      firms to more efficiently deal in OTC securities. The Company’s common stock is
      currently classified as an OTC security. An investment in an OTC security is
      speculative and involves a degree of risk. Many OTC securities are relatively
      illiquid, or “thinly traded,” which can enhance volatility in the share price
      and make it difficult for investors to buy or sell without dramatically
      affecting the quoted price or may be unable to sell a position at a later
      date.




14


**Shareholders**




As
      of
      December 31, 2006, there were approximately 425 shareholders of record of the
      Company’s common stock and 21,701,090 shares of common stock
      outstanding **.**




**Dividends**




The
      Company has not paid cash or stock dividends on its common stock and does not
      intend to pay cash or stock dividends in the foreseeable future. ******




**Sales
      of Unregistered Securities for the Fiscal Year Ended October 31,
      2006**




There
      were no sales unregistered securities by the Company during the fiscal year
      ended October 31, 2006.




**Repurchases
      of Securities**




The
      Company did not repurchase any securities within the fourth quarter of the
      fiscal year covered by this report.




**Item
              6.**
            **Management’s
                Discussion and Analysis or Plan of
                Operation**




The
      following discussion of the financial condition and results of operations of
      the
      Company should be read in conjunction with the Company’s audited financial
      statements for the fiscal years ended October 31, 2006 and 2005 and the related
      notes thereto appearing elsewhere in this annual report on Form
      10-KSB.




**Background**




On
      January 4, 2007, the Company changed its name from Medi-Hut Co., Inc. to
      Scivanta Medical Corporation. Scivanta is a Nevada corporation headquartered
      in
      Spring Lake, New Jersey. The
      Company was incorporated in the State of New Jersey on November 29, 1982. On
      January 28, 1998, the Company entered into an Agreement and Plan of
      Reorganization with Indwest, Inc., a Utah corporation, whereby the Company
      changed its domicile to the State of Utah and became subject to the reporting
      requirements of the Exchange Act. On February 2, 1998, the Company completed
      a
      second change of domicile transaction and became a Delaware corporation, and,
      in
      the fall of 2001, completed a third and final change of domicile transaction
      and
      became a Nevada corporation.




On
      October 17, 2003, the Company formed Scivanta Corporation, a New Jersey
      corporation and wholly-owned subsidiary of the Company. Scivanta Corporation
      was
      formed to be an operating subsidiary of the Company, but is currently
      inactive.




Currently,
      the Company is not selling any products or technologies. On November 10, 2006,
      the Company acquired
      the exclusive world-wide rights to develop, make and sell the HCMS, a minimally
      invasive two-balloon esophageal catheter system used to monitor cardiac
      performance.  The
      HCMS
      is currently in the development stage and the Company anticipates that it will
      take approximately 18 months to complete development and related clinical
      trials. In addition, the Company must also receive the appropriate regulatory
      approvals before the HCMS can be marketed in the United States or
      abroad .  No
      assurance can be given that the Company will receive the appropriate regulatory
      approvals to market the HCMS. See
“Item
      1. Description of Business - Strategy for Business
      Development.”


15




**Results
      of Operations**




*Net
      Sales.* The
      Company discontinued all product sales during the fiscal year ended October
      31,
      2004 and currently does not
      have any revenue from any sources.  The
      Company is currently developing the HCMS.




*General
      and Administrative.* For the
      fiscal year ended October 31, 2006, general and administrative expenses were
      $1,288,869, as compared to $1,414,390 for the fiscal year ended October 31,
      2005. The $125,521, or 9%, decrease in general and administrative expenses
      for
      the fiscal year ended October 31, 2006 was primarily due to a $21,217 decrease
      in the cost of director and officer liability insurance, a $6,698 decrease
      in
      legal expenses primarily related to a reduction in general corporate and
      litigation costs, a $26,134 decrease in compensation and related benefits as
      a
      result of a reduction in personnel, a $10,509 decrease in accounting related
      fees, a $7,990 decrease in general office expenses and a $38,223 decrease in
      amortization expense.




The
      Company expects legal expenses related to litigation to decrease commencing
      with
      the first quarter of the fiscal year ending October 31, 2007 as a result of
      its
      settlement with the Syntho Group. General and administrative expenses overall
      should increase in the fiscal year ending October 31, 2007 as the Company
      develops the HCMS and pursues other corporate activities and strategic
      initiatives. The Company also expects research and development expenses to
      increase as a result of the development efforts related to the
      HCMS.




*Other
      Income (Expenses).* During
      the fiscal year ended October 31, 2006, the Company recorded $433,500 of other
      income primarily related to the settlement of litigation against Rosenberg
      as
      compared to $300,000 for the fiscal year ended October 31, 2005 which was
      related to the settlement of litigation with Kinray, Inc. During the fiscal
      year
      ended October 31, 2006, the Company incurred interest expense of $23,999, as
      compared to $13,808 for the fiscal year ended October 31, 2005. The $10,191
      increase in interest expense for the fiscal year ended October 31, 2006 was
      due
      to interest accrued on the debentures issued by the Company on May 26, 2005.





On
      November 22, 2006, the Company entered into a settlement agreement with the
      Syntho Group. See “Item 3. Legal Proceedings - Syntest Litigation.” The Company
      does not expect any further significant litigation settlements beyond the first
      quarter of the fiscal year ending October 31, 2007.





*Net
      Loss.* For
      the
      fiscal year ended October 31, 2006, the Company had a net loss of $897,324,
      or
      $0.04 per share (basic and diluted), as compared to a net loss of $1,127,493,
      or
      $0.07 per share (basic and diluted), for the fiscal year ended October 31,
      2005.


16





**Liquidity
      and Capital Resources**




As
      of
      October 31, 2006, the Company had a working capital deficiency of $302,418.
      As
      of October 31, 2006, cash on hand was $680,381, an increase of $68,305 from
      October 31, 2005. The increase in cash on hand was primarily due to an increase
      in accounts payable and related party accounts payable of $267,424, an increase
      in related party accrued expenses of $75,000 and a $600,000 decrease in the
      note
      receivable related to the sale of the Syntest distribution rights. These
      increases in cash were offset by the net loss of $897,324, which included
      $433,500 of other income related to the settlement of litigation and a decrease
      in accrued expenses of $29,579.





On
      February 21, 2006, the Company entered into a settlement agreement and release
      with Rosenberg pursuant to which the Company was paid $425,000. See “Item 3.
      Legal Proceedings - Litigation Against Former Accounting Firms.”





On
      November 22, 2006, the Company, Century Capital, David R. LaVance, Thomas S.
      Gifford, the Syntho Group and Intermax entered into a settlement agreement
      and
      release whereby the Syntho Group agreed to pay the Company an aggregate of
      $3,100,000 as follows: (1) $250,000 was paid upon the execution of the
      settlement agreement; (2) $100,000 will be paid on the 27 th day of
      each month for a three month period commencing on December 27, 2006 and ending
      on February 27, 2007 and (3) $2,550,000 will be paid on or before March 27,
      2007. As of December 31, 2006, the Company received an aggregate of $350,000
      of
      payments from the Syntho Group pursuant to the settlement agreement. See “Item
      3. Legal Proceedings - Syntest Litigation.”





The
      Company has sustained recurring losses and negative cash flows from operations.
      The Company’s operations have been funded through a combination of convertible
      debentures, private equity and proceeds received from the settlement of
      litigation.





No
      revenue is currently generated by the Company. As of December 31, 2006, the
      Company’s cash position was approximately $790,000. As of that date, $50,000 was
      due from Breckenridge pursuant to the purchase and settlement agreement entered
      into on October 17, 2005 by the Company and Breckenridge and $2,750,000 is
      to be
      received no later than March 27, 2007 from the Syntho Group pursuant to the
      settlement agreement and release entered into on November 22, 2006 by the
      Company, Century Capital, David R. LaVance, Thomas S. Gifford, the Syntho Group
      and Intermax. The Company estimates that the combination of the cash on hand
      and
      the monies due from Breckenridge and the Syntho Group is sufficient in order
      to
      fund the Company’s operations and the development of the HCMS for at least the
      next 12 months.





Management
      believes that the Company will require additional capital in order to complete
      the development of the HCMS, to acquire additional products and technologies
      and
      to otherwise implement its strategy for business development. The Company
      currently does not have any lending relationships with commercial banks and
      does
      not anticipate establishing such a relationship in the foreseeable future due
      to
      the Company’s limited operations and assets. Consequently, management believes
      that the Company will have to focus on obtaining additional capital through
      the
      private placement of its securities. There can be no assurance as to the
      availability or terms upon which such capital might be
      available.


17





**Inflation
      and Seasonality**




Inflation
      has had no material effect on the operations or financial condition of the
      Company’s business. In addition, the Company’s operations are not considered
      seasonal in nature.




**Critical
      Accounting Policies**




The
      discussion and analysis of the Company’s financial condition is based upon the
      financial statements contained elsewhere herein, which have been prepared in
      accordance with accounting principles generally accepted in the United States.
      The preparation of these financial statements required the Company to make
      estimates and judgments that affect the reported amounts of assets, liabilities,
      revenue and expenses, and related disclosure of contingent assets and
      liabilities. On an on-going basis, the Company evaluates its estimates,
      including those related to bad debts, income taxes, contingencies and
      litigation. The Company based its estimates on historical experience and on
      various other assumptions that are believed to be reasonable under the
      circumstances, the results of which form the basis for making judgments about
      the carrying value of assets and liabilities that are not readily apparent
      from
      other sources. Actual results may differ from these estimates under different
      assumptions or conditions.




The
      Company believes the following critical accounting policies affect the more
      significant judgments and estimates used in preparation of the financial
      statements contained elsewhere herein.




***Income
      Taxes***




The
      Company accounts for income taxes under Statement of Financial Accounting
      Standards (“SFAS”) No. 109, *Accounting
      for Income Taxes* .
      This
      statement requires that the Company recognize a current tax liability or asset
      for current taxes payable or refundable and a deferred tax liability or asset
      for the estimated future tax effects of temporary differences and carryforwards
      to the extent they are realizable. The Company records a valuation allowance
      to
      reduce the Company’s deferred tax assets to the amount that is more likely than
      not to be realized. While the Company has considered future taxable income
      and
      ongoing prudent and feasible tax planning strategies in assessing the need
      for
      the valuation allowance, in the event the Company was to determine that it
      would
      be able to realize the deferred tax assets in the future in excess of the net
      recorded amount, an adjustment to the deferred tax asset would increase income
      in the period such determination was made. Likewise, should the Company
      determine that it would not be able to realize all or part of its net deferred
      tax asset in the future, an adjustment to the deferred tax asset would be
      charged to income in the period such determination was made.




The
      valuation allowance as of October 31, 2006 and 2005 primarily relates to net
      operating losses for which the Company can only realize a benefit through the
      generation of future taxable income for which realization is uncertain. The
      Company’s net deferred tax asset was $0 as of October 31, 2006 and 2005. As a
      result of the settlement agreement with the Syntho Group, the Company expects
      to
      utilize a portion of its federal and state net operating losses during the
      fiscal year ending October 31, 2007.




18


***Stock-based
      Compensation***




*Stock
      Option Grants to Employees* .
      Stock-based compensation charges represent the difference between the exercise
      price of options granted to employees and the market value of the Company’s
      common stock on the date of grant for financial statement purposes in accordance
      with Accounting Principles Board Opinion No. 25, *Accounting
      for Stock Issued to Employees* ,
      and its
      related interpretations. The Company recognizes this compensation charge over
      the vesting periods of the shares purchasable upon exercise of options and
      applies a straight-line amortization policy for the deferred compensation.
      Should the Company’s assumptions of market value change, the amount recorded as
      intrinsic value may increase or decrease in the future. During the fiscal years
      ended October 31, 2006 and 2005, the Company recorded $0 of amortization expense
      related to the grant of stock options to the Company’s employees.




*Stock
      Option Grants to Non-Employees* *.* The
      Company accounts for options granted to non-employees under SFAS 123 and
      Emerging Issues Task Force Consensus No. 96-18, *Accounting
      for Equity Investments that are Issued to Other than Employees for Acquiring,
      or
      in Conjunction with Selling Goods or Services* (“EITF
      96-18”), and may be subject to periodic re-valuation over their vesting terms.
      The resulting stock-based compensation expense is recorded over the service
      period in which the non-employee provides services to the Company.




During
      the fiscal years ended October 31, 2006 and 2005, the Company recorded $18,071
      and $60,747, respectively, of consulting and amortization expense related to
      the
      grant of stock options and warrants to the Company’s non-employees.




***Legal
      Contingencies***




During
      the fiscal years ended October 31, 2006 and 2005, the Company was involved
      in
      certain legal proceedings. These legal proceedings against the Company were
      either settled or dismissed as of December 31, 2006. During the period when
      these legal proceedings were active, management periodically reviewed estimates
      of potential costs to be incurred by the Company in connection with the
      adjudication or settlement, if any, of the proceedings. Estimates were developed
      in consultation with outside counsel and were based on an analysis of potential
      litigation outcomes and settlement strategies. In accordance with the Financial
      Accounting Standards Board (the “FASB”) Statement No. 5, *Accounting
      for Contingencies* ,
      loss
      contingencies are accrued if, in the opinion of management, an adverse outcome
      is probable and such outcome can be reasonably estimated. The Company does
      not
      believe that there are any proceedings that could have a material adverse effect
      on its financial position; however, it is possible that future results for
      any
      particular quarter or annual period may be materially affected by changes in
      management’s assumptions or the effectiveness of the Company’s strategies
      relating to any legal proceedings. See “Item 3. Legal Proceedings.”  As
      of the
      fiscal years ended October 31, 2006 and 2005, the Company did not record any
      liability related to its legal proceedings.




19




**Recent
      Accounting Pronouncements**




In
      October 2004, the FASB concluded that the proposed SFAS No. 123R *,
      Share-Based Payment* (“SFAS
      123R”), which would require all companies to measure compensation cost for all
      share-based payments, including employee stock options, at fair value, would
      be
      effective for public companies (except small business issuers as defined in
      SEC
      Regulation S-B) for interim or annual periods beginning after June 15, 2005.
      The
      Company will not have to adopt SFAS 123R until the fiscal year ending October
      31, 2007. The Company does not expect SFAS 123R to have a material impact on
      its
      consolidated results of operations or financial condition.




In
      July
      2006, the FASB issued FASB Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109* (“FIN
      48” ),
      which
      clarifies the accounting and disclosure for uncertain tax positions, as defined.
      FIN 48 seeks to reduce the diversity in practice associated with certain aspects
      of the recognition and measurement related to accounting for income taxes.
      This
      interpretation is effective for fiscal years beginning after December 15, 2006.
      The Company does not expect FIN 48 to have a material impact on its consolidated
      results of operations or financial condition.





In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* (“SFAS
      157”). SFAS 157 defines fair value, establishes a framework for measuring fair
      value, and expands disclosure requirements regarding fair value measurement.
      Where applicable, this statement simplifies and codifies fair value related
      guidance previously issued within United States of America generally accepted
      accounting principles. SFAS 157 is effective for financial statements issued
      for
      fiscal years beginning after November 15, 2007, and interim periods within
      those
      fiscal years. The Company is currently reviewing SFAS 157 and has not yet
      determined the impact that the adoption of SFAS 157 will have on its
      consolidated results of operations or financial condition.




**Item
      7.**  **Financial
      Statements** ****




The
      financial statements and supplementary data of the Company called for by this
      item are submitted under a separate section of this report. Reference is made
      to
      the Index of Financial Statements contained on page F-1 hereof.




**Item
      8.**  **Changes
      In and Disagreements With Accountants on Accounting and** **Financial
      Disclosure**




On
      March
      3, 2005, the Company replaced Eisner, LLP (“Eisner”) as its independent auditors
      with the accounting firm, Weiser LLP (“Weiser”). Management believed that it was
      in the best interest of the Company to change auditors in order to facilitate
      the completion of the audit of the Company’s balance sheet as of October 31,
      2002. The change in auditing firms was reviewed and recommended by the Company’s
      Audit Committee and approved by the Company’s Board of Directors. The Company
      reported the dismissal of the Eisner firm as its independent auditors in a
      current report on Form 8-K, dated March 3, 2005. In that current report on
      Form
      8-K, the Company stated that in connection with its audits as of and for the
      fiscal years ended October 31, 2002 and 2001, respectively, and during any
      subsequent interim periods preceding the date of dismissal, there were no
      disagreements with Eisner on any matter regarding accounting principles or
      practices, financial statement disclosure, or auditing scope or procedure.
      In
      addition, during its engagement by the Company, Eisner did not issue any report
      on the financial statements or review any financial statements of the Company.




20




Pursuant
      to the procedure outlined in SEC Regulation S-B, Item 304, the Company included
      in the current report on Form 8-K a letter from Eisner in which the accounting
      firm agreed with the Company’s statements that there were no disagreements
      between the Company and Eisner on any matter regarding accounting principles
      or
      practices, financial statement disclosure, or auditing scope or
      procedure.




**Item
              8A.**
            **Controls
                and Procedures**




As
      required by Rule 13a-15 under the Exchange Act, as of the end of the period
      covered by this Annual Report on Form 10-KSB, the Company carried out an
      evaluation of the effectiveness of the design and operation of the Company's
      disclosure controls and procedures. This evaluation was carried out under the
      supervision and with the participation of the Company's management, including
      the Company's President and Chief Executive Officer and the Company's Chief
      Financial Officer and Secretary, who concluded that the Company's disclosure
      controls and procedures are effective. There has been no change in the Company’s
      internal control over financial reporting during the Company’s last fiscal
      quarter that has materially affected, or is reasonably likely to materially
      affect, the Company's internal control over financial reporting.





Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in the Company's reports filed
      or submitted under the Exchange Act is recorded, processed, summarized and
      reported, within the time periods specified in the SEC's rules and forms.
      Disclosure controls and procedures include, without limitation, controls and
      procedures designed to ensure that information required to be disclosed in
      the
      Company's reports filed under the Exchange Act is accumulated and communicated
      to management, including the Company's Chief Executive Officer and Chief
      Financial Officer, as appropriate, to allow timely decisions regarding required
      disclosure.




**Item
              8B.**
            **Other
                Information**





None.


21


**PART
      III**




**Item
              9.**
            **Directors,
                Executive Officers, Promoters and Control Persons; Compliance****with
                Section 16(a) of the Exchange
                Act**




The
      Company’s current executive officers and directors, their respective ages,
      positions with the Company and biographical information, including business
      experience, are set forth below.




**Name**
            
            **Age**
            
            **Position
                Held**David
                R. LaVance
            
            53
            
            Chairman
                of the Board, President and Chief Executive OfficerThomas
                S. Gifford
            
            38
            
            Executive
                Vice President, Chief Financial Officer (Treasurer), Secretary and
                DirectorRichard
                E. Otto
            
            57
            
            Director








There
      are
      no family relationships among the current executive officers and directors
      of
      the Company. None of the current executive officers or directors of the Company
      are directors of any company with a class of securities registered pursuant
      to
      Section 12 of the Exchange Act or subject to the requirements of Section 15(d)
      of the Exchange Act or any company registered as an investment company under
      the
      Investment Company Act of 1940, as amended, except for Mr. LaVance, who serves
      as a director of Hologic, Inc. (NASDAQ: HOLX) and Mr. Otto, who serves as a
      director of Corautus Genetics Inc. (AMEX: VEGF).




*David
      R. LaVance* *:* Mr.
      LaVance became the Company’s President and Chief Executive Officer and the
      Chairman of its Board of Directors on March 21, 2003. He also is the President
      and co-founder of Century Capital which was founded in 1997. Mr. LaVance was
      a
      Managing Director of KPMG Health Ventures, an advisory group providing
      investment banking services to healthcare service providers from 1995 through
      1997. Prior to joining KPMG Health Ventures, Mr. LaVance was a founder of
      Physicians Data Corporation, a startup health informatics company formed in
      1994, and served as the President of Nuclear Care, Inc., a nuclear imaging
      clinical services provider from 1992 through 1995. Mr. LaVance currently is
      a
      member of the Board of Directors of Hologic, Inc. (NASDAQ: HOLX), a medical
      device company specializing in digital imaging. Mr. LaVance received a B.A.
      degree from Furman University in 1976 and a J.D. degree from Washington College
      of Law of the American University in 1979.




*Thomas
      S. Gifford* :
      Mr.
      Gifford became the Company’s Executive Vice President, Chief Financial Office
      (Treasurer) and a director on March 21, 2003. He later became the Secretary
      of
      the Company on July 22, 2003. Mr. Gifford is also the Vice President and
      co-founder of Century Capital. He is a licensed attorney in New York and New
      Jersey and is a Certified Public Accountant. He was formerly a Manager and
      Associate Director of KPMG Health Ventures. Prior to KPMG Health Ventures,
      Mr.
      Gifford was an accountant for KPMG Peat Marwick LLP from 1990 through 1994,
      where he provided auditing and financial due diligence services to various
      publicly traded and privately held emerging technology companies. Mr. Gifford
      currently serves on the Board of Directors of Maloy Risk Services, Inc., a
      privately held insurance brokerage. Mr. Gifford received a B.S. degree from
      Rutgers University in 1990 and a J.D. degree from Seton Hall University School
      of Law in 1995.


22




*Richard
      E. Otto* :
      Mr.
      Otto was elected as a director of the Company on May 6, 2003. He has been the
      Chief Executive Officer and a director of Corautus Genetics Inc. (formerly
      GenStar Therapeutics Corporation), a publicly traded biopharmaceutical company
      (AMEX: VEGF) dedicated to the development of innovative gene therapy products
      for the treatment of cardio and vascular disease, since the merger of Corautus
      and Vascular Genetics Inc. on February 5, 2003. Prior to the merger, he served
      as Chief Executive Officer and a director of Vascular Genetics Inc., a developer
      of gene therapy for the treatment of severe cardiovascular disease, since
      January 2002. From June 1995 through April 1998, he was Chief Executive Officer
      and director of CardioDynamics International Corporation (NASDAQ: CDIS), a
      publicly traded company that develops, manufactures and markets noninvasive
      heart-monitoring devices. Mr. Otto has served as a consultant to the founder
      of
      WebMD and as a consultant to key management positions with Cardiac Pacemakers
      Inc. (now a Guidant company). Mr. Otto also held positions at Intermedics,
      Inc.,
      Medtronic Inc., and Eli Lilly and Company. Mr. Otto currently serves as a
      director and Chairman of ImaRx Therapeutics, a privately-held company engaged
      in
      medical technology development. He received a B.S. degree from the University
      of
      Georgia.




**Audit
      Committee**




For
      the
      year ended October 31, 2006, the Audit Committee of the Board of Directors
      of
      the Company consisted of directors John A. Moore and Richard E. Otto.
      Thereafter, Mr. Moore continued to serve on the Audit Committee until his
      resignation from the Board on January 2, 2007. Mr. Otto currently is the only
      member of the Audit Committee. Mr. Otto is qualified as an independent director
      in accordance with the rules of NASDAQ and the rules and regulations of the
      Securities and Exchange Commission. In addition, the Board has determined that
      Mr. Otto is both independent and qualifies as a financial expert by Securities
      and Exchange Commission rules. The Audit Committee’s primarily responsibility is
      to assist the Board in fulfilling its oversight responsibilities with respect
      to
      financial reports and other financial information, as well as such other
      responsibilities set forth in the Amended and Restated Charter of the Audit
      Committee which was adopted on May 14, 2004. The Company currently anticipates
      adding an additional director to the Audit Committee upon the filling of the
      vacancy on the Board left by Mr. Moore’s departure.




**Code
      of Ethics**




The
      chief
      executive and senior financial officers of the Company are held to the highest
      standards of honest and ethical conduct when conducting the affairs of the
      Company. All such individuals must act ethically at all times in accordance
      with
      the policies contained in Company’s Chief Executive and Senior Financial Officer
      Code of Ethics (the “Code of Ethics”). A copy of the Code of Ethics was attached
      as Exhibit 14.1 to the Company’s Annual Report on Form 10-KSB for the year ended
      October 31, 2002 which was filed with the Securities and Exchange Commission
      on
      November 25, 2005.




**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Exchange Act requires the Company’s directors, executive officers
      and persons who own more than 10% of the Company’s common stock, to file with
      the SEC initial reports of ownership and reports of changes in ownership of
      the
      Company’s common stock and other equity and derivative securities. Officers,
      directors and greater than 10% beneficial owners are required by SEC regulations
      to furnish the Company with copies of all Section 16(a) reports they file.
      To
      the knowledge of management, based upon review of the copies of the forms
      furnished to the Company during the fiscal year ended October 31, 2006, all
      filings required to be made by the Company’s executive officers and directors
      pursuant to Section 16(a) of the Exchange Act for the fiscal year ended October
      31, 2006 were filed within the time periods prescribed.




23




**Item
              10.**
            **Executive
                Compensation**




**Compensation
      of Executive Officers**




The
      following table sets forth information concerning the annual and long-term
      compensation for services in all capacities to the Company for the fiscal years
      ended October 31, 2006, 2005 and 2004 of any person who served as the Company’s
      President and Chief Executive Officer during the fiscal year ended October
      31,
      2006 and each other executive officer of the Company whose total annual salary
      and bonus for the fiscal year ended October 31, 2006 exceeded $100,000 (the
      “Named Executive Officers”).




**SUMMARY
                  COMPENSATION TABLE****Annual
                  Compensation**
              
              **Long
                  Term Compensation****Awards**
              
              **Payouts****Name
                  and Position**
              
              **Year**
              
              **Salary
                  ($)**
              
              **Bonus
                  ($)**
              
              **Other
                  Annual Compensa -tion ($)**
              
              **Restricted
                  Stock Award(s) ($)**
              
              **Securities
                  UnderlyingOptions #**
              
              **LTIP**
                **Payouts
                  ($)**
              
              **All
                  Other Compensa-tion ($)**David
                  R. LaVance,
              
              
              2006
              
              $
              —
              
              $
              —
              
              $
              —
              
              $
              —
              
              
              —
              
              $
              —
              
              $
              —President
                  and Chief
              
              
              2005
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Executive
                  Officer (1)
              
              
              2004
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Thomas
                  S. Gifford,
              
              
              2006
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Executive
                  Vice
              
              
              2005
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —President
                  and Chief
              
              
              2004
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Financial
                  Officer (1)







(1)
            The
                Company has entered into an amended and restated Consulting Services
                Agreement with Century Capital, pursuant to which the Company pays
                consulting fees and other remuneration to Century Capital for the
                services
                provided thereunder. Mr. LaVance and Mr. Gifford are owners and officers
                of Century Capital. Neither Mr. LaVance nor Mr. Gifford receives
                any
                direct compensation from the Company. See “Amended and Restated Consulting
                Services Agreement” and “Item 12. - Certain Relationships and Related
                Transactions.”




**Stock
      Option/Warrant Grants in Last Fiscal Year**




No
      stock
      options and/or warrants were granted to the Company’s Named Executive Officers
      during the fiscal year ended October 31, 2006.


24


**Aggregated
      Option/Warrant Exercises in Last Fiscal Year and Year End Option/Warrant
      Values**




The
      following table provides certain information with respect to options and/or
      warrants to purchase the Company’s common stock held by the Named Executive
      Officers at October 31, 2006.


**Number
                  of Shares of Common Stock Underlying Unexercised Options/Warrants
                  at
                  October 31, 2006 (1)**
              
              **Value
                  of Unexercised In-the-Money Options/Warrants at October 31, 2006
                  ($)****Name**
              
              **Shares
                  Acquired on Exercise (#)**
              
              **Value
                  Realized($)**
              
              **Exercisable**
              
              **Unexercisable**
              
              **Exercisable**
              
              **Unexercisable**David
                  R. LaVance
              
              
              —
              
              $
              —
              
              
              325,000
                  (2
              )
              
              300,000
                  (3
              )
              $
              —
                  (4
              )
              $
              —
                  (4
              )Thomas
                  S. Gifford
              
              
              —
              
              $
              —
              
              
              325,000
                  (2
              )
              
              300,000
                  (3
              )
              $
              —
                  (4
              )
              $
              —
                  (4
              )







(1)
            Shares
                reported are beneficially owned by the Named Executive
                Officers.




(2)
            Includes
                125,000 shares subject to the warrant issued on February 25, 2005
                to
                Century Capital to purchase a total of 500,000 shares of the Company’s
                common stock. Also includes 200,000 shares subject to the warrant
                issued
                on May 14, 2004 to Century Capital to purchase a total of 700,000
                shares
                of the Company’s common stock. Mr. LaVance and Mr. Gifford are owners and
                officers of Century Capital. Each of Mr. LaVance and Mr. Gifford
                disclaims
                beneficial ownership of these securities except to the extent of
                his
                ownership interest in Century
                Capital.




(3)
            Includes
                300,000 shares subject to the warrant issued on May 14, 2004 to Century
                Capital to purchase a total of 700,000 shares of the Company’s common
                stock. Mr. LaVance and Mr. Gifford are owners and officers of Century
                Capital. Each of Mr. LaVance and Mr. Gifford disclaims beneficial
                ownership of these securities except to the extent of his ownership
                interest in Century Capital.




(4)
            The
                exercise price of the warrant issued on May 14, 2004 was $0.04 per
                share
                and the exercise price of the warrant issued on February 25, 2005
                was
                $0.03 per share. The per share market price of the Company’s common stock
                on October 31, 2006 was $0.01. Inasmuch as the per share market price
                of
                the common stock on October 31, 2006 did not exceed the per share
                exercise
                price of either warrant, such warrants are not considered in-the-money
                and
                no value is attributable to such warrants for purposes of this
                table.




**Compensation
      of Directors**




Currently,
      the Company does not provide any cash compensation to its directors. The Company
      has, in prior fiscal years, issued to each of the outside directors warrants
      to
      purchase shares of the Company’s common stock. During the fiscal year ended
      October 31, 2006, the Company did not issue any warrants to purchase shares
      of
      the Company’s common stock to the outside directors.




**Employment
      Agreements**




Currently,
      there exists no employment agreement with any of the Company’s executive
      officers other than the amended and restated Consulting Services Agreement
      with
      Century Capital related to the services of David R. LaVance and Thomas S.
      Gifford. See “Amended and Restated Consulting Services
      Agreement.”


25




**Amended
      and Restated Consulting Services Agreement**




Effective
      February 1, 2005, the Company and Century Capital entered into an amended and
      restated Consulting Services Agreement which replaced the original Consulting
      Services Agreement that was entered into effective February 1, 2003. Pursuant
      to
      the amended and restated Consulting Services Agreement, Century Capital agreed
      to provide the services of Mr. LaVance and Mr. Gifford as the Company’s
      corporate officers. As provided in the amended and restated Consulting Services
      Agreement, Mr. LaVance will continue to serve as the Company’s President and
      Chief Executive Officer and Mr. Gifford will continue to serve as the Company’s
      Executive Vice President, Chief Financial Officer, Treasurer and Secretary.
      The
      amended and restated Consulting Services Agreement also provides that Mr.
      LaVance and Mr. Gifford will continue to be treated as independent contractors
      for the purposes of compensation, will not be paid any salary or other
      compensation directly by the Company and will not participate in the Company’s
      employee benefit plans.




The
      initial term of the amended and restated Consulting Services Agreement ended
      on
      January 31, 2006. Thereafter, the amended and restated Consulting Services
      Agreement continues until either party elects to terminate the amended and
      restated Consulting Services Agreement by providing sixty days’ written notice.
      As of December 31, 2006, such notice had not been given by either party. During
      the term of the amended and restated Consulting Services Agreement, Century
      Capital is entitled to receive a monthly consulting fee in the amount of $50,000
      and is entitled to be reimbursed for all reasonable and customary business
      expenses. Century Capital is also eligible to receive an annual bonus at the
      discretion of the independent members of the Company’s Board of Directors. For
      the period commencing February 1, 2006 and ending January 31, 2007, Century
      Capital was awarded a bonus of $100,000, of which $75,000 was accrued by the
      Company as of October 31, 2006.




The
      Company may terminate the amended and restated Consulting Services Agreement
      for
      cause if Century Capital fails to materially perform the consulting services
      and
      does not cure such non-performance within sixty days of receipt of written
      notice of such non-performance from the Board. Century Capital can terminate
      the
      amended and restated Consulting Services Agreement for cause for, among other
      reasons, (1) any breach of the amended and restated Consulting Services
      Agreement by the Company which is not cured within thirty days of receipt of
      written notice from Century Capital, (2) the failure of the Company to pay
      any
      compensation or bonus to Century Capital when due or payable, (3) the removal
      of
      David R. LaVance as President and Chief Executive Officer of the Company without
      the prior written approval of Century Capital, (4) the removal of Thomas S.
      Gifford as Executive Vice President, Chief Financial Officer (Treasurer) and
      Secretary of the Company, without the prior written approval of Century Capital
      (5) the removal of or failure to elect David R. LaVance and Thomas S. Gifford
      as
      members of the Company’s Board of Directors without the prior written approval
      of Century Capital, or (6) the Company becoming insolvent or
      bankrupt.




If
      the
      amended and restated Consulting Services Agreement is terminated by the Company
      for cause, Century Capital shall be paid all unpaid monthly fees and
      reimbursable expenses through the termination date. If the amended and restated
      Consulting Services Agreement is terminated by Century Capital for cause, then
      Century Capital shall be paid on the termination date a lump sum amount equal
      to
      the sum of all unpaid monthly fees and reimbursable expenses plus the full
      amount of the bonus target established for the year of termination and an amount
      equal to the product of Century Capital’s monthly fee multiplied by six
      months.


26




During
      the term of the amended and restated Consulting Services Agreement and for
      a
      period of twenty-four months after the termination of the amended and restated
      Consulting Services Agreement, Century Capital shall be entitled to receive
      a
      cash bonus upon the consummation by the Company of certain corporate
      transactions. The bonus compensation shall be an amount not less than 2.5%
      of
      the aggregate consideration to be paid in connection with a sale or acquisition
      of the Company or in connection with a change in control of the Company (which
      means a change in more than 50% of the issued and outstanding shares of the
      Company’s common stock). Century Capital shall be entitled to receive the bonus
      compensation for any corporate transaction which commences before, but is
      consummated after, the end of the twenty-four month period following the
      effective termination date of the amended and restated Consulting Services
      Agreement.




Upon
      the
      execution of the amended and restated Consulting Services Agreement, the Company
      issued Century Capital a ten year, non-cancelable warrant dated February 25,
      2005 to purchase 500,000 shares of the Company’s common stock at a purchase
      price of $0.03 per share. See “Item 11. Security Ownership of Certain Beneficial
      Owners and Management and Related Stockholder Matters - Equity Compensation
      Plans.”




As
      provided in the original Consulting Services Agreement, the Company is obligated
      to maintain D&O Policies while Mr. LaVance and Mr. Gifford hold positions as
      officers and/or directors of the Company and for a period of two years following
      termination of their service in such positions. The Company also agreed to
      indemnify and hold harmless Century Capital and its representatives, including
      Mr. LaVance and Mr. Gifford, from and against any and all claims, demands,
      liabilities, obligations, losses, fines, and expenses, including reasonable
      attorneys’ and accountants’ fees and expenses incurred in connection with the
      Company’s failure to perform under the amended and restated Consulting Services
      Agreement or any threatened, pending or completed action, suit or proceeding
      arising out of Century Capital’s relationship, or the relationship of any
      Century Capital representative with, the Company.




Commencing
      July 2005, Century Capital began deferring a portion of its monthly consulting
      fee due pursuant to the amended and restated Consulting Services Agreement
      in
      order to minimize the Company’s cash burn. As of December 31, 2006, $303,750 was
      due to Century Capital related to deferred monthly consulting fees, $100,000
      was
      due to Century Capital for the annual bonus for the period beginning February
      1,
      2006 and ending January 31, 2007 and $125,000 was due to Century Capital for
      the
      annual bonus for the period beginning February 1, 2004 and ending January 31,
      2005.




**Item
              11.**
            **Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters**




**Security
      Ownership of Certain Beneficial Owners and Management**




The
      following table sets forth information as of December 31, 2006, with respect
      to
      the beneficial ownership of the Company’s outstanding common stock by (1) each
      of the Company’s current officers and directors, (2) each of the Named Executive
      Officers and directors for the fiscal year ended October 31, 2006, (3) all
      current executive officers and current directors as a group, and (4) each person
      or group of persons known by the Company to be the beneficial owner of 5% of
      the
      Company’s outstanding common stock. Beneficial ownership is determined in
      accordance with the rules of the SEC and generally includes voting or investment
      power with respect to securities. Except as indicated by footnote, the persons
      named in the table below have sole voting power and investment power with
      respect to the shares of common stock shown as beneficially owned by
      them.


27






**Beneficial
                Ownership of**
              **Scivanta’s
                Common Stock****Name
                of Beneficial Owner**
            
            **No.
                of Shares (1)**
            
            **Percent
                of Class**David
                R. LaVance (2)(3)(4)
            
            
            3,237,500
            
            
            14.92
            %Thomas
                S. Gifford (3)(5)(6)
            
            
            3,548,438
            
            
            16.35
            %Richard
                E. Otto (3)(7)
            
            
            600,000
            
            
            2.69
            %John
                A. Moore (8)(9)
            
            
            1,600,000
            
            
            7.23
            %Richard
                S. Rimer (10)(11)
            
            
            3,375,000
            
            
            15.55
            %All
                current executive officers and directors as a group
                (4)(6)(7)
            
            
            8,675,000
            
            
            38.16
            %







(1)
            In
                accordance with Rule 13d-3 of the Exchange Act, a person is deemed
                to be
                the beneficial owner, for purposes of this table, of any shares of
                the
                Company’s common stock if he or she has voting or investment power with
                respect to such security. This includes shares (1) subject to options
                and
                warrants exercisable within sixty days, and (2)(a) owned by a spouse,
                (b)
                owned by other immediate family members, or (c) held in trust or
                held in
                retirement accounts or funds for the benefit of the named individuals,
                over which shares the person named in the table may possess voting
                and/or
                investment power.




(2)
            Such
                person serves as the Company’s President and Chief Executive
                Officer.




(3)
            Such
                person serves as a director of the Company and maintains a mailing
                address
                of 215 Morris Avenue, Spring Lake, New Jersey
                07762.




(4)
            Includes
                310,928 shares held by the LaVance Trust for Children, a trust established
                for the benefit of Mr. LaVance’s children. Mr. LaVance disclaims
                beneficial ownership of these
                securities.




(5)
            Such
                person serves as the Company’s Executive Vice President, Chief Financial
                Officer (Treasurer) and Secretary.




(6)
            Includes
                310,938 shares held by the LaVance Trust for Children. Mr. Gifford
                is the
                trustee for the LaVance Trust for Children. Mr. Gifford disclaims
                beneficial ownership of these
                securities.




(7)
            Represents
                the shares currently available for purchase or which are available
                for
                purchase within sixty days of December 31, 2006 under the warrants
                issued
                by the Company to him on July 24, 2003, May 14, 2004 and February
                25,
                2005.




(8)
            Mr.
                Moore, a former director of the Company, maintains a mailing address
                at
                403 Marsh Lane, Wilmington, Delaware
                19804.




(9)
            Includes
                433,400 shares currently available for purchase or which are available
                for
                purchase within sixty days of December 31, 2006 under the warrants
                issued
                by the Company to him on July 24, 2003, May 14, 2004 and February
                25,
                2005.




(10)
            Mr.
                Rimer maintains a mailing address at 17 Chemin De La Sapinere, 1253
                Vandoeuvres, Geneva, Switzerland.




(11)
            Includes
                375,000 shares subject to a debenture issued as of May 1,
                2005.


28





**Executive
      Compensation Plans**




The
      following table provides information as of December 31, 2006 on the number
      of
      securities to be issued upon the exercise of outstanding options, warrants
      and
      rights and the number of securities remaining available for future issuance
      under the Company’s 2002 Equity Incentive Plan and certain other compensation
      arrangements entered into or established for the officers and directors of
      the
      Company.




**EQUITY
                COMPENSATION PLAN TABLE****Plan
                Category**
            
            **Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights**
              **(a)**
            
            **Weighted-average
                exercise price of outstanding options, warrants and
                rights**
              **(b)**
            
            **Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column
                (a))**
              **(c)**Equity
                compensation plan approved by security holders (1)
            
            
            370,000
            (2)(3)(4)
            $
            0.07
            
            
            1,630,000Equity
                compensation arrangements not approved by security holders
            
            
            1,499,998
            (5)(6)(7)(8)
            $
            0.13
            
            
            —**Total**
            
            
            1,869,998
            (2)(3)(4)(5)(6)(7)(8)
            $
            0.12
            
            
            1,630,000







(1)
            The
                Company has no equity compensation plans other than the Company’s 2002
                Equity Incentive Plan described herein which has been approved by
                the
                Company’s shareholders.




(2)
            Includes
                185,000 shares available for purchase at a price of $0.08 per share
                pursuant to stock options granted to employees of the Company on
                December
                23, 2003.




(3)
            Includes
                50,000 shares available for purchase at a price of $0.08 per share
                pursuant to stock options granted to an employee of the Company on
                May 4,
                2004 and 35,000 shares available for purchase at a price of $0.02
                per
                share pursuant to stock options granted to employees of the Company
                on
                December 23, 2004.




(4)
            Includes
                100,000 shares available for purchase at a price of $0.08 per share
                pursuant to stock options granted to an employee of the Company on
                December 23, 2005.




(5)
            Includes
                200,000 shares available for purchase at a price of $0.04 per share
                under
                the warrant issued to Century Capital on May 14,
                2004.




(6)
            Includes
                200,000 shares available for purchase at a price of $0.26 per share
                under
                the warrant issued on July 24, 2003 to Richard E. Otto, a current
                director
                of the Company. Also includes 399,998 shares available for purchase
                at a
                price of $0.26 per share under warrants granted on July 24, 2003
                to John
                A. Moore (200,000 shares available for purchase), Salvatore J. Badalamenti
                (133,332 shares available for purchase), and James G. Aaron (66,666
                shares
                available for purchase), each a former director of the
                Company.




(7)
            Includes
                200,000 shares available for purchase at a price of $0.04 per share
                under
                the warrant issued on May 14, 2004 to Richard E. Otto, a current
                director
                of the Company. Also includes 200,000 shares available for purchase
                at a
                price of $0.04 per share under warrants granted on May 14, 2004 to
                John A.
                Moore (133,400 shares available for purchase) and Salvatore J. Badalamenti
                (66,600 shares available for purchase), each a former director of
                the
                Company.




29




(8)
            Includes
                200,000 shares available for purchase at a price of $0.03 per share
                under
                the warrant issued on February 25, 2005 to Richard E. Otto, a current
                director of the Company. Also includes 100,000 shares available for
                purchase at a price of $0.03 per share under the warrant granted
                on
                February 25, 2005 to John A. Moore, a former director of the
                Company.





*2002
      Equity Incentive Plan*




General




On
      July
      5, 2002, the shareholders approved the Company’s 2002 Equity Incentive Plan (the
“Equity Incentive Plan”) effective as of January 1, 2002. The Equity Incentive
      Plan was placed into effect in order to promote the long-term success of the
      Company and to (1) encourage employees, independent directors and consultants
      of
      the Company to focus on critical long-range objectives, (2) encourage the
      attraction and retention of employees, independent directors and consultants
      with exceptional qualifications, and (3) link employees, independent directors
      and consultants directly to shareholders’ interests through increased stock
      ownership.




The
      Equity Incentive Plan provides for awards in the form of restricted shares,
      incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”) (ISOs and
      NSOs are sometimes collectively referred to as “Options”) and stock appreciation
      rights (“SARs”). The aggregate number of shares of common stock which may be
      awarded under the Equity Incentive Plan is 2,000,000 shares.




Incentive
      Stock Options (ISOs)




Only
      employees of the Company or a parent or a subsidiary of the Company are eligible
      to receive grants of ISOs. Unless otherwise provided in a stock option
      agreement, the first $100,000 of optioned shares that are part of an option
      grant and can be exercised first in a given year shall be considered ISOs,
      and
      the remainder shall be considered NSOs. The exercise price of an ISO may not
      be
      less than 100% of the fair market value of a share of common stock on the date
      of grant. The term of an ISO shall in no event exceed ten years from the date
      of
      grant.




Non-Statutory
      Stock Options (NSOs)




Employees,
      independent directors and consultants of the Company are eligible to receive
      grants of NSOs. NSO grants to any optionee in a single fiscal year of the
      Company cannot cover more than 500,000 shares of common stock (750,000 shares
      of
      common stock for new employees in the fiscal year of the Company in which
      service as an employee first commences). Each individual stock option agreement
      shall specify the exercise price for the awards as determined by the Board.
      Options may be awarded in combination with SARs.




Automatic
      Option Grants to Independent Directors




Upon
      the
      conclusion of each annual meeting of the Company’s shareholders commencing in
      2002, each independent director who continues to serve on the Board after such
      annual meeting may receive an NSO at the discretion of the Board. All NSOs
      granted to an independent director may also become exercisable in full in the
      event of: (1) the termination of such independent director’s service because of
      death, total and permanent disability or retirement at or after age 65; or
      (2) a
      change in control with respect to the Company, with certain exceptions. The
      exercise price under all NSOs granted to an independent director shall be equal
      to 100% of the fair market value of a share of common stock on the date of
      grant. All NSOs granted to an independent director shall terminate on the
      earlier of (a) the 6 th anniversary of the date of grant or (b) the date 12 months after the termination
      of such independent director’s service for any reason. The Board may permit an
      independent director to elect to receive his or her annual retainer payments,
      if
      any, and/or meeting fees from the Company in the form of cash, NSOs, or
      restricted shares or a combination thereof, as determined by the Board. As
      of
      December 31, 2006, no option grants have been made to any of the Company’s
      independent directors under the Equity Incentive Plan.


30




Stock
      Appreciation Rights




SARs
      granted to any individual in a single fiscal year cannot cover more than 500,000
      shares of common stock (750,000 shares of common stock for new employees in
      the
      fiscal year of the Company in which service as an employee first commences).
      SARs may be awarded in combination with Options, which may vary in accordance
      with a predetermined formula while the SARs are outstanding. A SAR may be
      included in an ISO only at the time of grant but may be included in an NSO
      at
      the time of grant or thereafter.




Restricted
      Shares




The
      holders of restricted shares shall have the same voting, dividend and other
      rights as the Company’s shareholders, subject to any special restrictions
      contained in the restricted share agreement.




The
      Equity Incentive Plan also contains customary protection against dilution.
      Options and SARs shall terminate immediately prior to the dissolution or
      liquidation of the Company. Unless the applicable agreement provides otherwise,
      in the event of any change in control, the vesting and exercisability of each
      outstanding award shall automatically accelerate so that each such award shall,
      immediately prior to the effective date of the change in control, become fully
      exercisable for all of the shares of common stock at the time subject to such
      award and may be exercised for any or all of those shares as fully-vested common
      stock, except under certain circumstances.




A
      copy of
      the Equity Incentive Plan was attached as “Exhibit B” to the Company’s
      definitive proxy statement filed with the SEC on June 10, 2002. As of December
      31, 2006, options to purchase 370,000 shares of the Company’s common stock have
      been granted under the Equity Incentive Plan to employees of the Company.




**Warrants
      Issued to Century Capital**




*Warrant
      Dated February 1, 2003*




On
      February 1, 2003, a warrant to purchase 1,500,000 shares of common stock of
      the
      Company was issued to Century Capital. The warrant has a ten year term and
      was
      exercisable at the original Underlying Purchase Price of $1.34 per share until
      February 1, 2013. The per share purchase price was subject to certain pricing
      adjustments which included an adjustment if the average closing price of the
      Company’s common stock over a period of thirty days was less than the then
      existing Underlying Purchase Price. A total of 375,000 shares of common stock
      underlying the warrant vested immediately upon issuance with another 46,875
      shares vesting on and after the last day of each month commencing February
      28,
      2003 and ending January 31, 2005. Based upon the underlying features of the
      warrant, management determined that the best estimate of fair value was to
      utilize the intrinsic value method using the ultimate lowest exercise price
      to
      account for the value of this warrant issuance. As such, the Company recorded
      consulting expense as the warrant shares vested with the initial vesting of
      375,000 warrant shares on February 1, 2003 and 46,875 warrant shares vesting
      at
      the end of each month from February 28, 2003 through January 31, 2005.




31




The
      Underlying Purchase Price adjusted to $0.02 per share as of November 1, 2004
      when Century Capital exercised its right to purchase 421,876 shares of the
      Company’s common stock underlying the warrant. The $8,438 due to the Company
      from Century Capital as a result of this exercise was offset by the Company
      against monthly consulting fees due and owing to Century Capital that had been
      deferred for payment. On February 25, 2005, Century Capital exercised its right
      to purchase 140,624 shares of the Company’s common stock underlying the warrant
      at $0.02 per share. The $2,812 due to the Company from Century Capital as a
      result of this exercise was offset by the Company against monthly consulting
      fees due and owing to Century Capital that had been deferred for payment.




As
      of
      January 31, 2005, all of the shares of common stock underlying the warrant
      had
      vested. Accordingly, during the fiscal year ended October 31, 2006, the Company
      recorded no consulting expense with respect to the warrant. For the fiscal
      year
      ended October 31, 2005, the Company recorded $1,640 of consulting expense
      associated with the warrant shares that vested pursuant to the warrant. As
      of
      February 25, 2005, all 1,500,000 shares underlying the warrant had been
      purchased.




*Warrant
      Dated May 14, 2004*




On
      May
      14, 2004, the Company issued Century Capital a ten year, non-cancelable warrant
      to purchase 700,000 shares of the Company’s common stock at a purchase price of
      $0.04 per share. 100,000 shares of the Company’s common stock underlying the
      warrant became available for purchase as of May 14, 2004, with the remaining
      shares underlying the warrant becoming available for purchase upon the
      achievement of specific milestones as follows: 100,000 shares shall be available
      for purchase upon the Company’s receipt of at least $2,000,000 in cumulative
      proceeds related to the Syntho litigation; 100,000 shares shall be available
      for
      purchase upon the filing of the Company’s annual report on Form 10-KSB for the
      fiscal year ended October 31, 2002; 100,000 shares shall be available for
      purchase upon the filing of the Company’s quarterly reports on Form 10-QSB for
      the quarters ended January 31, 2003, April 30, 2003 and July 31, 2003; 100,000
      shares shall be available for purchase upon the Company’s receipt of at least
      $500,000 in cumulative proceeds from the litigation against certain former
      officers, directors and others and/or the litigation against the Rosenberg
      and
      Koenig accounting firms; 100,000 shares shall be available for purchase upon
      the
      Company becoming eligible to register its common stock pursuant to the
      Securities Act; and 100,000 shares became available for purchase upon the
      acquisition by the Company of a product or line of business.


32




In
      the
      event of a change in control of the Company, the warrant becomes fully vested
      as
      of ten days prior to the change in control. For purposes of the warrant, a
      change of control means any recapitalization, reorganization, reclassification,
      consolidation, merger, sale of all or substantially all of the Company’s assets
      to another individual, partnership, corporation or other such entity and any
      transaction which is effected in such a way that holders of more than 50% of
      the
      shares of common stock then outstanding are entitled to receive (either directly
      or upon subsequent liquidation) stock, securities or assets of another
      individual, partnership, corporation or other such entity with respect to or
      in
      exchange for their common stock. The warrant also contains standard
      anti-dilution provisions and limited registration rights. The warrant had a
      fair
      value of approximately $44,211 at the date of issuance.




On
      November 1, 2004, Century Capital exercised its right to purchase 200,000 shares
      of the Company’s common stock underlying the warrant. Of the shares purchased,
      100,000 shares became available for purchase on May 14, 2004, the issuance
      date
      of the warrant, and the other 100,000 shares became available for purchase
      during the fiscal year ended October 31, 2004 as a result of the Company’s
      receipt of $500,000 of cumulative proceeds from the litigation against certain
      former officers, directors and others which occurred in 2004. The $8,000 due
      to
      the Company from Century Capital as a result of this exercise was offset by
      the
      Company against monthly consulting fees due and owing to Century Capital that
      had been deferred for payment.




On
      November 13, 2006, Century Capital exercised its right to purchase 300,000
      shares of the Company’s common stock underlying the warrant. Of the shares
      purchased, 100,000 shares became available for purchase on November 24, 2005,
      the date the Company filed its annual report on Form 10-KSB for the fiscal
      year
      ended October 31, 2002. In addition, 100,000 shares became eligible for purchase
      on May 27, 2006, the date the Company filed its quarterly reports on Form 10-QSB
      for the quarters ended January 31, 2003, April 30, 2003 and July 31, 2003 and
      the other 100,000 shares became available for purchase on November 10, 2006,
      the
      date the Company acquired the exclusive world-wide rights to develop, make
      and
      sell the HCMS. The $12,000 due to the Company from Century Capital as a result
      of this exercise was offset by the Company against monthly consulting fees
      due
      and owing to Century Capital that had been deferred for payment.




For
      the
      fiscal years ended October 31, 2006 and 2005, the Company recorded $12,632
      and
      $0, respectively, of amortization expense associated with the warrant shares
      that vested pursuant to the warrant. As of December 31, 2006, 500,000 shares
      underlying the warrant had been purchased and 200,000 shares underlying the
      warrant remain unvested and are not yet available for purchase.




*Warrant
      Dated February 25, 2005*




On
      February 25, 2005, a warrant to purchase 500,000 shares of common stock of
      the
      Company was issued to Century Capital. The warrant had a ten year term and
      was
      exercisable at $0.03 per share until February 25, 2015. The warrant vested
      as
      follows: (a) 250,000 of the shares of the Company’s common stock underlying the
      warrant became available for purchase as of February 25, 2005; (b) an additional
      20,833 of the shares underlying the warrant became available for purchase on
      the
      last day of each month commencing February 28, 2005 and ending December 31,
      2005; and (c) 20,837 of the shares underlying the warrant became available
      for
      purchase on January 31, 2006. The warrant contained standard anti-dilution
      provisions and limited registration rights. The warrant had a fair value of
      approximately $10,674 at the date of issuance.




33




On
      February 25, 2005, Century Capital exercised its right to purchase 250,000
      shares of the Company’s common stock underlying the warrant. The $7,500 due to
      the Company from Century Capital as a result of this exercise was offset by
      the
      Company against amounts due and owing to Century Capital related to deferred
      monthly consulting fees.




On
      both
      May 20, 2005 and August 25, 2005, Century Capital exercised its right and
      purchased 62,500 shares of the Company’s common stock (125,000 shares in total).
      The $3,750 due to the Company from Century Capital as a result of these
      exercises was offset by the Company against deferred monthly consulting fees
      due
      to Century Capital.




On
      November 13, 2006, Century Capital exercised its right to purchase 125,000
      shares of the Company’s common stock underlying the warrant. The $3,750 due to
      the Company from Century Capital as a result of this exercise was offset by
      the
      Company against monthly consulting fees due and owing to Century Capital that
      had been deferred for payment.




For
      the
      fiscal years ended October 31, 2006 and 2005, the Company recorded $3,393 and
      $7,281, respectively, of amortization expense associated with the warrant shares
      that had vested pursuant to the warrant. As of November 13, 2006, all 500,000
      shares underlying the warrant had been purchased.




**Warrants
      Issued to Directors**




*Warrants
      Dated July 24, 2003*




On
      July
      24, 2003, a warrant to purchase 200,000 shares of common stock of the Company
      was issued to each of its directors, other than Mr. LaVance and Mr. Gifford.
      An
      aggregate amount of 800,000 shares of common stock could be issued pursuant
      to
      these warrants. Each warrant has a five year term and is exercisable at $0.26
      per share until July 24, 2008. The shares of common stock underlying each
      warrant vested on the date of issuance (66,666 shares), on the first anniversary
      of the date of issuance (66,666 shares) and on the second anniversary of the
      date of issuance (66,668 shares). Each warrant contains standard anti-dilution
      provisions and limited registration rights. The warrants had an aggregate fair
      value of approximately $155,138 at the date of issuance.




As
      of
      July 24, 2005, all of the shares of common stock underlying the warrants had
      vested. Accordingly, during the fiscal year ended October 31, 2006, the Company
      recorded no amortization expense with respect to the warrants. For the fiscal
      year ended October 31, 2005, the Company recorded $31,504 of amortization
      expense associated with the warrant shares that had vested pursuant to the
      warrant. As of December 31, 2006, an aggregate of 599,998 shares of the
      Company’s common stock are available for purchase under the warrants and an
      aggregate of 200,002 shares underlying the warrants had been cancelled.




34


*Warrants
      Dated May 14, 2004*




On
      May
      14, 2004, a warrant to purchase 200,000 shares of common stock of the Company
      was issued to each of its directors, other than Mr. LaVance and Mr. Gifford.
      An
      aggregate amount of 600,000 shares of common stock could be issued pursuant
      to
      these warrants. Each warrant has a five year term and is exercisable at $0.04
      per share until May 14, 2009. The shares of common stock underlying each warrant
      vested on the date of issuance (66,600 shares) and on the first anniversary
      of
      the date of issuance (133,400 shares). Each warrant contains standard
      anti-dilution provisions and limited registration rights. The warrants had
      an
      aggregate fair value of approximately $32,137 at the date of issuance.




On
      February 25, 2005, John A. Moore, a former director of the Company, exercised
      his right to purchase 66,600 shares of the Company’s common stock underlying the
      warrant. The Company received $2,664 in connection with the issuance of these
      shares.




As
      of May
      14, 2005, all of the shares of common stock underlying the warrants had vested.
      Accordingly, during the fiscal year ended October 31, 2006, the Company recorded
      no amortization expense with respect to the warrants. For the fiscal year ended
      October 31, 2005, the Company recorded $13,177 of amortization expense
      associated with the warrant shares that had vested pursuant to the warrants.
      As
      of December 31, 2006, an aggregate of 66,600 shares of the Company’s common
      stock underlying the warrants had been purchased, an aggregate of 400,000 shares
      underlying the warrants are available for purchase and an aggregate of 133,400
      shares underlying the warrants had been cancelled.




*Warrants
      Dated February 25, 2005*




On
      February 25, 2005, a warrant to purchase 200,000 shares of common stock of
      the
      Company was issued to each of its directors, other than Mr. LaVance and Mr.
      Gifford. An aggregate amount of 400,000 shares of common stock could be issued
      pursuant to these warrants. Each warrant has a five year term and is exercisable
      at $0.03 per share until February 25, 2010. The shares of common stock
      underlying each warrant vested on the date of issuance (100,000 shares) and
      on
      the first anniversary of the date of issuance (100,000 shares). Each warrant
      contains standard anti-dilution provisions and limited registration rights.
      The
      warrants had an aggregate fair value of approximately $6,378 at the date of
      issuance.




On
      February 25, 2005, John A. Moore, a former director of the Company, exercised
      his right to purchase 100,000 shares of the Company’s common stock underlying
      the warrant issued to him. The Company received $3,000 in connection with the
      issuance of these shares.




For
      the
      fiscal years ended October 31, 2006 and 2005, the Company recorded $2,046 and
      $4,332 of amortization expense associated with the warrant shares that had
      vested pursuant to these warrants. As of December 31, 2006, an aggregate of
      100,000 shares underlying the warrants had been purchased and an aggregate
      of
      300,000 shares underlying the warrants are available for purchase.


35


**Warrant
      Issued to Consultant**




On
      May
      11, 2005, a warrant to purchase 100,000 shares of common stock of the Company
      was issued to Dr. William Sear, a consultant to the Company. The warrant had
      a
      five year term and was exercisable at $0.05 per share until May 11, 2010. All
      of
      the shares of common stock underlying the warrant vested on the date of
      issuance, May 11, 2005. The warrant had a fair value of approximately $2,813
      at
      the date of issuance.





On
      May
      16, 2005, all 100,000 shares underlying the warrant were purchased. The Company
      received $5,000 of gross proceeds from the issuance of these shares. For the
      fiscal year ended October 31, 2005, the Company recognized $2,813 of consulting
      expense associated with the warrant shares that had vested pursuant to the
      warrant.





**Item
              12.**
            **Certain
                Relationships and Related
                Transactions**




David
      R.
      LaVance, the Company’s Chairman, President and Chief Executive Officer, and
      Thomas S. Gifford, the Company’s Executive Vice President, Chief Financial
      Officer (Treasurer) and Secretary, are owners and officers of Century Capital.
      Effective February 1, 2005, the Company and Century Capital entered into an
      amended and restated Consulting Service Agreement, pursuant to which Messrs.
      LaVance and Gifford currently provide services to the Company as executive
      management. For the fiscal year ended October 31, 2006, the Company was billed
      $600,000 for consulting services rendered by Century Capital and the Company
      recorded $75,000 of consulting expense related to the annual bonus due to
      Century Capital for the one year period commencing February 1, 2006 and ending
      January 31, 2007. During the fiscal year ended October 31, 2006, the Company
      also reimbursed Century Capital for expenses incurred in conjunction with
      performing the consulting services. As of October 31, 2006, the Company owed
      Century Capital $506,456 for unpaid monthly fees, bonuses and expenses, of
      which
      $17,706 was paid by the Company subsequent to the fiscal year ended October
      31,
      2006.




For
      the
      fiscal year ended October 31, 2005, the Company was billed $675,000 for
      consulting services rendered by Century Capital and the Company recorded $31,250
      of consulting expense related to the annual bonus due to Century Capital,
      pursuant to the Consulting Services Agreement, for the one year period
      commencing February 1, 2004 and ending January 31, 2005. During the fiscal
      year
      ended October 31, 2005, the Company also reimbursed Century Capital for expenses
      incurred in conjunction with performing the consulting services and issued
      Century Capital a warrant to purchase 500,000 shares of common stock. See “Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters - Warrants Issued to Century Capital.”




On
      May 1,
      2004, the Company and Century Capital entered into a Shared Services Agreement
      whereby the Company rented three fully furnished, business equipped offices
      approximating 340 square feet inside Century Capital’s existing offices. This
      agreement has a month to month term that requires sixty days’ written notice to
      terminate and a monthly rental fee of $2,500. During both the fiscal year ended
      October 31, 2006 and the fiscal year ended October 31, 2005, the Company was
      billed $30,000 for rent pursuant to the Shared Services Agreement. As of the
      fiscal year ended October 31, 2006, the Company owed Century Capital $50,000
      for
      rent, which was paid by the Company subsequent to the fiscal year ended October
      31, 2006.


36


**Item
                13.**
              **Exhibits**




Reference
      is made to the Index of Exhibits beginning on page E-1 herein.


**Item
                14.**
              **Principal
                  Accountant Fees and
                  Services**




**Audit
      Fees**




The
      Company was billed $49,500 by Weiser for audit fees relating to the Company’s
      fiscal year ended October 31, 2006 and was billed $35,000 by Weiser for audit
      fees relating to the Company’s fiscal year ended October 31, 2005. Audit fees
      consisted of fees for the audit of the Company's annual financial statements
      and
      review of quarterly financial statements as well as services normally provided
      in connection with statutory and regulatory filings or engagements, comfort
      letters, consents and assistance with and review of Company documents filed
      with
      the SEC.




**Audit
      Related Fees**




The
      Company did not incur any fees associated with audit related services with
      Weiser, or any other accounting firm, relating to fiscal years ended October
      31,
      2006 and 2005. Audit-related fees are fees for assurance and related services,
      including primarily employee benefit plan audits, due diligence related to
      acquisitions, accounting consultations in connection with acquisitions,
      consultation concerning financial accounting and reporting standards and
      consultation concerning matters related to Section 404 of the Sarbanes Oxley
      Act
      of 2002.




**Tax
      Fees**




The
      Company did not incur any fees associated with tax services with Weiser relating
      to fiscal years ended October 31, 2006 and 2005. The Company was billed $1,750
      by Karl Dienes, CPA, for tax compliance services relating to fiscal year ended
      October 31, 2006 and was billed $1,750 by Karl Dienes, CPA, for tax compliance
      services relating to fiscal year ended October 31, 2005. Tax fees consisted
      primarily of fees for tax compliance, tax advice and tax planning
      services.




**All
      Other Fees**




The
      Company did not incur any fees associated with non-audit services with Weiser,
      or any other accounting firm, relating to fiscal years ended October 31, 2006
      and 2005.




37


**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
      caused this report to be signed on its behalf by the undersigned, thereunto
      duly
      authorized.


**DATE:**
            **SCIVANTA
                MEDICAL CORPORATION**January
              26, 2007
            By:
            /s/
              David R. LaVanceDavid
                R. LaVance
              Chairman
                of the Board of Directors,President
                and Chief Executive Officer




In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the Registrant and in the capacities and on
      the
      dates indicated.


Signatures
              
              Title
              
              Date/s/
                  David R. LaVance
              
              Chairman
                  of the Board of
              
              January
                  26, 2007David
                  R. LaVance
              
              Directors,
                  President and Chief
                  Executive Officer/s/
                  Thomas S. Gifford
              
              Executive
                  Vice President,
              
              January
                  26, 2007Thomas
                  S. Gifford
              
              Chief
                  Financial Officer, Secretary
                  and Director/s/
                  Richard E. Otto
              
              Director
              
              January
                  26, 2007Richard
                  E. Otto


38




**Scivanta
      Medical Corporation and Subsidiary**


**(formerly
      Medi-Hut Co., Inc.)**





**Consolidated
      Financial Statements**





**Contents**




Report
                of Independent Registered Public Accounting Firm
            F-1Balance
                Sheets as of October 31, 2006 and 2005
            F-2Statements
                of Operations for the Fiscal Years Ended October 31, 2006 and
                2005
            F-3Statements
                of Stockholders’ Equity (Deficiency) for the Fiscal Years Ended October
                31, 2006 and 2005
            F-4Statements
                of Cash Flows for the Fiscal Years Ended October 31, 2006 and
                2005
            F-6Notes
                to the Consolidated Financial Statements
            F-7







REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors and


Stockholders
      of Scivanta Medical Corporation





We
      have
      audited the accompanying consolidated balance sheets of Scivanta Medical
      Corporation, formerly Medi-Hut Co., Inc., and subsidiary (the “Company”) as of
      October 31, 2006 and 2005 and the related consolidated statements of operations,
      stockholders’ equity (deficiency) and cash flows for each of the two years in
      the period ended October 31, 2006. These consolidated financial statements
      are
      the responsibility of the Company’s management. Our responsibility is to express
      an opinion on these consolidated financial statements based upon our
      audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements. An audit also includes assessing the accounting
      principles used and the significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audits provide a reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of Scivanta
      Medical Corporation and subsidiary as of October 31, 2006 and 2005 and the
      consolidated results of their operations and their consolidated cash flows
      for
      each of the two years in the period ended October 31, 2006 in conformity with
      accounting principles generally accepted in the United States of
      America.





/s/
      Weiser LLP





New
      York,
      New York





January
      23, 2007


F-1


**Scivanta
      Medical Corporation and Subsidiary**


**(formerly
      Medi-Hut Co., Inc.)**


**Consolidated
      Balance Sheets**




**October
                31,**
              **2006**
            
            **October
                31,**
              **2005****Assets**Current
                assets:Cash
                and cash equivalents
            
            $
            680,381
            
            $
            612,076Prepaid
                insurance and other
            
            
            13,005
            
            
            14,645Note
                receivable, current portion
            
            
            150,000
            
            
            600,000Total
                current assets
            
            
            843,386
            
            
            1,226,721Other
                assets:Note
                receivable, net of current portion
            
            
            —
            
            
            150,000Other
            
            
            791
            
            
            33,864Total
                other assets
            
            
            791
            
            
            183,864Total
                assets
            
            $
            844,177
            
            $
            1,410,585**Liabilities**Current
                liabilities:Accounts
                payable
            
            $
            179,309
            
            $
            106,209Accounts
                payable - related party
            
            
            481,456
            
            
            287,132Accrued
                expenses
            
            
            110,039
            
            
            139,618Accrued
                expenses - related party
            
            
            75,000
            
            
            —Convertible
                debentures
            
            
            300,000
            
            
            —Total
                current liabilities
            
            
            1,145,804
            
            
            532,959Long
                term liabilities:Convertible
                debentures
            
            
            —
            
            
            300,000Commitments
                and contingencies**Stockholders'
                Equity (Deficiency)**Common
                stock, $.001 par value; 100,000,000 shares authorized;21,276,090
                shares issued and outstanding
            
            
            21,276
            
            
            21,276Additional
                paid in capital
            
            
            19,766,486
            
            
            19,766,486Deferred
                compensation
            
            
            (18,947
            )
            
            (37,018
            )Accumulated
                deficit
            
            
            (20,070,442
            )
            
            (19,173,118
            )Total
                stockholders' (deficiency) equity
            
            
            (301,627
            )
            
            577,626Total
                liabilities and stockholders' equity (deficiency)
            
            $
            844,177
            
            $
            1,410,585





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




F-2


**Scivanta
      Medical Corporation and Subsidiary**


**(formerly
      Medi-Hut Co., Inc.)**


**Consolidated
      Statements of Operations**





**Years
                Ended**
              **October
                31,****2006**
            
            **2005**Net
                sales
            
            $
            —
            
            $
            —Cost
                of sales
            
            
            —
            
            
            —Gross
                profit
            
            
            —
            
            
            —Operating
                expenses:General
                and administrative
            
            
            1,288,869
            
            
            1,414,390Loss
                from operations
            
            
            (1,288,869
            )
            
            (1,414,390
            )Proceeds
                from settlement of litigation
            
            
            433,500
            
            
            300,000Loss
                on sale and disposal of property and equipment
            
            
            (17,956
            )
            
            —Interest
                income
            
            
            —
            
            
            705Interest
                expense
            
            
            (23,999
            )
            
            (13,808
            )Net
                loss
            
            $
            (897,324
            )
            $
            (1,127,493
            )Net
                loss per common share, basic and diluted
            
            $
            (0.04
            )
            $
            (0.07
            )Weighted
                average number of common shares outstanding, basic and
                diluted
            
            
            21,276,090
            
            
            16,544,417





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




F-3


**Scivanta
      Medical Corporation and Subsidiary**


**(formerly
      Medi-Hut Co., Inc.)**


**Consolidated
      Statements of Stockholders’ Equity (Deficiency)**


**For
      the Fiscal Years Ended October 31, 2006 and 2005**




**Total****Common
                Stock**
            
            **Additional**
            
            
            
            
            
            **Stockholders'****Number**
            
            **$0.001**
            
            **Paid
                in**
            
            **Deferred**
            
            **Accumulated**
            
            **Equity****of
                Shares**
            
            **Par
                Value**
            
            **Capital**
            
            **Compensation**
            
            **Deficit**
            
            **(Deficiency)**Balance
                at October 31, 2004
            
            
            13,801,990
            
            $
            13,802
            
            $
            19,454,635
            
            $
            (91,054
            )
            $
            (18,045,625
            )
            $
            1,331,758Cancellation
                of warrants issued to a former director
            
            
            
            
            
            
            
            
            (14,794
            )
            
            14,794
            
            
            
            
            
            —Shares
                issued to Century Capital for partial exercise of warrant dated February
                1, 2003
            
            
            562,500
            
            
            562
            
            
            10,689
            
            
            
            
            
            
            
            
            11,251Shares
                issued to Century Capital for partial exercise of warrant dated May
                14,
                2004
            
            
            200,000
            
            
            200
            
            
            7,800
            
            
            
            
            
            
            
            
            8,000Common
                stock retired - settlement of lawsuits with former
                officers
            
            
            (30,000
            )
            
            (30
            )
            
            30
            
            
            
            
            
            
            
            
            —Shares
                issued to Century Capital for partial exercise of warrant dated February
                25, 2005
            
            
            375,000
            
            
            375
            
            
            10,874
            
            
            
            
            
            
            
            
            11,249Shares
                issued to Century Capital for annual bonus due for the one year period
                commencing February 1, 2003 and ending January 31, 2004
            
            
            500,000
            
            
            500
            
            
            14,500
            
            
            
            
            
            
            
            
            15,000Shares
                issued to Century Capital as payment of monthly consulting
                fees
            
            
            1,600,000
            
            
            1,600
            
            
            56,400
            
            
            
            
            
            
            
            
            58,000Shares
                issued to John A. Moore for partial exercise of warrant dated May
                14,
                2004
            
            
            66,600
            
            
            67
            
            
            2,597
            
            
            
            
            
            
            
            
            2,664Shares
                issued to John A. Moore for partial exercise of warrant dated February
                25,
                2005
            
            
            100,000
            
            
            100
            
            
            2,900
            
            
            
            
            
            
            
            
            3,000Shares
                issued to Dr. William Sear for exercise of warrant dated May 11,
                2005
            
            
            100,000
            
            
            100
            
            
            4,900
            
            
            
            
            
            
            
            
            5,000Shares
                issued in connection with the August 25, 2005 private placement of
                common
                stock
            
            
            4,000,000
            
            
            4,000
            
            
            194,450
            
            
            
            
            
            
            
            
            198,450





F-4


**Scivanta
      Medical Corporation and Subsidiary**


**(formerly
      Medi-Hut Co., Inc.)**


**Consolidated
      Statements of Stockholders’ Equity (Deficiency)**


**For
      the Fiscal Years Ended October 31, 2006 and 2005**


**(Continued)**




**Total****Common
                Stock**
            
            **Additional**
            
            
            
            
            
            **Stockholders'****Number**
            
            **$0.001**
            
            **Paid
                in**
            
            **Deferred**
            
            **Accumulated**
            
            **Equity****of
                Shares**
            
            **Par
                Value**
            
            **Capital**
            
            **Compensation**
            
            **Deficit**
            
            **(Deficiency)**Consulting
                expense - warrant issued to Century Capital and warrant issued to
                Dr.
                William Sear
            
            
            
            
            
            
            
            
            4,453
            
            
            
            
            
            
            
            
            4,453Deferred
                compensation - warrants issued to Century Capital and to
                directors
            
            
            
            
            
            
            
            
            17,052
            
            
            (17,052
            )
            
            
            
            
            —Amortization
                of deferred compensation
            
            
            
            
            
            
            
            
            
            
            
            56,294
            
            
            
            
            
            56,294Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,127,493
            )
            
            (1,127,493
            )Balance
                at October 31, 2005
            
            
            21,276,090
            
            
            21,276
            
            
            19,766,486
            
            
            (37,018
            )
            
            (19,173,118
            )
            
            577,626Amortization
                of deferred compensation
            
            
            
            
            
            
            
            
            
            
            
            18,071
            
            
            
            
            
            18,071Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (897,324
            )
            
            (897,324
            )Balance
                at October 31, 2006
            
            
            21,276,090
            
            $
            21,276
            
            $
            19,766,486
            
            $
            (18,947
            )
            $
            (20,070,442
            )
            $
            (301,627
            )





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





F-5


**Scivanta
      Medical Corporation and Subsidiary**


**(formerly
      Medi-Hut Co., Inc.)**


**Consolidated
      Statements of Cash Flows**




**Years
                Ended**
              **October
                31,****2006**
            
            **2005**Cash
                flows from operating activities:Net
                loss
            
            $
            (897,324
            )
            $
            (1,127,493
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
            
            
            12,617
            
            
            8,648Amortization
                of deferred compensation
            
            
            18,071
            
            
            56,294Consulting
                expense related to warrants
            
            
            —
            
            
            4,453Loss
                on sale and disposal of property and equipment
            
            
            17,956
            
            
            —Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            —
            
            
            5,369Prepaid
                insurance and other
            
            
            1,640
            
            
            21,037Income
                tax refund
            
            
            —
            
            
            38,246Accounts
                payable
            
            
            73,100
            
            
            (12,401
            )Accounts
                payable - related party
            
            
            194,324
            
            
            129,012Accrued
                expenses
            
            
            (29,579
            )
            
            35,858Accrued
                expenses - related party
            
            
            75,000
            
            
            —Net
                cash used in operating activities
            
            
            (534,195
            )
            
            (840,977
            )Cash
                flows from investing activity:Proceeds
                from sale of distribution rights
            
            
            600,000
            
            
            250,000Proceeds
                from sale of property and equipment
            
            
            2,500
            
            
            —Net
                cash provided by investing activities
            
            
            602,500
            
            
            250,000Cash
                flows from financing activities:Proceeds
                from note payable
            
            
            —
            
            
            52,520Repayment
                of note payable
            
            
            —
            
            
            (52,520
            )Proceeds
                from exercise of warrants
            
            
            —
            
            
            10,664Proceeds
                from issuance of convertible debentures
            
            
            —
            
            
            300,000Net
                proceeds from issuance of common stock
            
            
            —
            
            
            198,450Net
                cash provided by financing activities
            
            
            —
            
            
            509,114Increase
                (decrease) in cash and cash equivalents
            
            
            68,305
            
            
            (81,863
            )Cash
                and cash equivalents - beginning of period
            
            
            612,076
            
            
            693,939Cash
                and cash equivalents - end of period
            
            $
            680,381
            
            $
            612,076Supplemental
                disclosure of cash flow information:Cash
                paid during the period for interest
            
            $
            —
            
            $
            1,710Cash
                paid during the period for income taxes
            
            $
            500
            
            $
            500Noncash
                financing activity:Issuance
                of common stock as payment of amounts due to related party
            
            $
            —
            
            $
            103,500





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


F-6


**Scivanta
      Medical Corporation and Subsidiary**


**(formerly
      Medi-Hut Co., Inc.)**


**Notes
      to the Consolidated Financial Statements**





**1.**
            **Organization
                and Description of
                Business**




On
      January 4, 2007, Medi-Hut Co., Inc. changed its name to Scivanta Medical
      Corporation “Scivanta” or the “Company”). Scivanta
      is a Nevada corporation headquartered in Spring Lake, New Jersey. The Company
      was incorporated in the State of New Jersey in November 1982. On January 28,
      1998, the Company entered into an Agreement and Plan of Reorganization with
      Indwest, Inc., a Utah corporation, whereby the Company changed its domicile
      to
      the State of Utah and became subject to the reporting requirements of the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”). On February 2,
      1998, the Company completed a second change of domicile transaction and became
      a
      Delaware corporation, and, in the fall of 2001, completed a third and final
      change of domicile transaction and became a Nevada corporation.




On
      October 17, 2003, the Company formed Scivanta Corporation, a New Jersey
      corporation and wholly-owned subsidiary of the Company. Scivanta Corporation
      was
      formed to be an operating subsidiary of the Company, but is currently
      inactive.




The
      Company ceased selling all products during the fiscal year ended October 31,
      2004 and has not had any significant recurring revenue from the sale of products
      since the second quarter of 2003.




On
      November 10, 2006, the Company acquired
      the exclusive world-wide rights to develop, make and sell certain proprietary
      technologies known as the Hickey Cardiac Monitoring System (the “HCMS”), a
      minimally invasive two-balloon esophageal catheter system used to monitor
      cardiac performance.  The
      HCMS
      is currently in the development stage and the Company anticipates that it will
      take approximately 18 months to complete development and related clinical
      trials. In addition, the Company must also receive the appropriate regulatory
      approvals before the HCMS can be marketed in the United States or
      abroad .  No
      assurance can be given that the Company will receive the appropriate regulatory
      approvals to market the HCMS. See
      Note
      11.




**2.**
            **Basis
                of Presentation**




On
      May
      26, 2005, the Company closed on a private placement of 8% convertible debentures
      (the “Debentures”). The gross proceeds received in connection with this private
      placement were $300,000. See Note 9.




On
      August
      25, 2005, the Company closed on a private placement of 4,000,000 shares of
      its
      common stock. The gross proceeds received in connection with this private
      placement were $200,000 ($.05 per share). See Note 8.




On
      October 17, 2005, the Company and Breckenridge Pharmaceutical Inc.
      (“Breckenridge”) entered into a purchase and settlement agreement pursuant to
      which the Company sold its distribution and other rights and business with
      respect to the hormone replacement drug, Syntest, to Breckenridge. In
      consideration for the sale of such rights and the other benefits provided under
      the purchase and settlement agreement,  Breckenridge
      agreed to pay the Company an aggregate of $1,000,000 as follows: (1) $250,000
      was paid shortly after the execution of the purchase and settlement agreement,
      and (2) $50,000 will be paid on the first day of each month for a 15 month
      period commencing on November 1, 2005 and ending on January 1, 2007. As of
      December 31, 2006, the Company received an aggregate of $950,000 of payments
      from Breckenridge pursuant to the purchase and settlement agreement. See Notes
      3, 5 and 11.




F-7




On
      February 21, 2006, the Company entered into a settlement agreement and release
      with its former independent registered public accounting firm, Rosenberg, Rich,
      Baker, Berman & Company (“Rosenberg”), pursuant to which Rosenberg paid the
      Company the sum of $425,000. See Note 3.




On
      November 22, 2006, the Company entered into a settlement agreement and release
      with Syntho Pharmaceuticals Inc. (“Syntho”) and its principal owner, Muhammed
      Malik (collectively, the “Syntho Group”) and Intermax Pharmaceuticals, Inc.
      (“Intermax”) relating to the Company’s exclusive right to distribute the hormone
      replacement therapy drug, Syntest. As part of the settlement reached by the
      parties, the Syntho Group agreed to pay the Company an aggregate of $3,100,000
      (the “Settlement Amount”) as follows: (1) $250,000 was paid upon the execution
      of the settlement agreement; (2) $100,000 will be paid on the 27 th day of
      each month for a three month period commencing on December 27, 2006 and ending
      on February 27, 2007 and (3) $2,550,000 will be paid on or before March 27,
      2007. A portion of the Settlement Amount, $2,850,000, is secured by a first
      priority mortgage on real property owned by the spouse of Muhammed Malik. As
      of
      December 31, 2006, the Company received an aggregate of $350,000 of payments
      from the Syntho Group pursuant to the settlement agreement. See Notes 3 and
      11.




Management
      believes the funds received in connection with the issuance of the Debentures
      and the sale of common stock and the proceeds received from the settlement
      agreements with Breckenridge, Rosenberg and the Syntho Group, together with
      funds currently available to the Company, will be sufficient to support planned
      operations through February 1, 2008. Management believes that the Company will
      require additional capital to complete the development of the HCMS and to be
      able to acquire additional products and technologies.




**3.**
            **Litigation**




The
      Company has been involved in several separate litigations.





Syntest
      Litigation .
      On May
      12, 2003, the Company commenced an action in the United States District Court
      for the Eastern District of New York against Syntho and its principal owner,
      Muhammed Malik , Breckenridge and its principal owner, Larry Runsdorf (the
      “Breckenridge Group”), Scott Schrader and his affiliates, namely Schrader
      Associates, Bluegrass Drug LLC and Medpharm Corporation (collectively, the
      “Schrader Group”), relating to the Company’s exclusive right to distribute the
      hormone replacement therapy drug, Syntest, under an agreement with Syntho which
      expired no earlier than November 2006. In its complaint, the Company alleged,
      among other things, that Syntho permitted Breckenridge, Medpharm Corporation
      and
      Bluegrass Drug LLC to distribute Syntest in violation of its agreement with
      Syntho and that Scott Schrader and Schrader Associates, which had been appointed
      by the Company as the exclusive broker with respect to sales of Syntest to
      drug
      wholesalers, chain drug stores and managed care companies, and Scott Schrader
      and Schrader Associates offered discounts, incentives and rebates to customers
      of the Company without the Company’s authorization.




F-8




On
      April
      21, 2004, the Company entered into a settlement agreement and limited release
      with the Schrader Group. Pursuant to this agreement, the Company and the
      Schrader Group agreed to dismiss with prejudice the actions which were pending
      against each other. As part of the settlement reached by the Company and the
      Schrader Group, the Schrader Group paid to the Company a cash payment of
      $375,000. In addition, the parties released each other from certain claims
      arising out of the distribution and sale of Syntest.




On
      October 17, 2005, the Company and Breckenridge entered into a purchase and
      settlement agreement pursuant to which the Company sold its distribution and
      other rights and business with respect to the hormone replacement drug, Syntest,
      to Breckenridge. In consideration for the sale of such rights and the other
      benefits provided under the purchase and settlement agreement, Breckenridge
      agreed to pay the Company an aggregate of $1,000,000 as follows: (1) $250,000
      was paid shortly after the execution of the purchase and settlement agreement,
      and (2) $50,000 will be paid on the first day of each month for a 15 month
      period commencing on November 1, 2005 and ending on January 1, 2007. Further,
      pursuant to the settlement agreement, the Company and Breckenridge dismissed
      their actions against each other and released each other from any further claims
      arising out of the distribution and sale of Syntest, except as provided under
      the purchase and settlement agreement. As of December 31, 2006, the Company
      received an aggregate of $950,000 of payments from Breckenridge pursuant to
      the
      purchase and settlement agreement. See Notes 5 and 11.




Litigation
      Against Certain Former Officers and Directors and Others. On
      December 4, 2003, the Company commenced litigation in the Superior Court of
      New
      Jersey against certain of its former officers and directors, Healthgen
      Distributors, Inc. (formerly known as Larval Corp.), Kinray, Inc. and Santi
      Greco, an officer of Kinray, Inc. In its complaint, the Company alleged that
      Joseph A. Sanpietro, a former director and the former President and Chief
      Executive Officer of the Company, Vincent J. Sanpietro, a former director and
      the former Chief Operating Officer and Secretary of the Company, Laurence M.
      Simon, the former Chief Financial Officer of the Company, and Lawrence P.
      Marasco, the former Vice President of Sales of the Company, caused the Company
      to suffer significant damage and incur substantial costs by engaging in a scheme
      to overstate the Company’s revenues and earnings through fraudulent accounting
      practices. The Company also alleged in its complaint that these former officers
      and directors, in furtherance of their scheme to defraud, filed materially
      false
      and misleading documents with the Securities and Exchange Commission (the “SEC”)
      and disseminated materially false and misleading information to the general
      public, investors and financial advisors and brokers. In addition to the
      foregoing, the Company alleged in its complaint that these former officers
      and
      directors, with the assistance of Larval Corp., an entity controlled by Mr.
      Marasco, Kinray, Inc., a New York based pharmaceutical distributor, and Santi
      Greco, an officer of Kinray, Inc., committed violations of state and federal
      laws prohibiting forgery and fraudulent practices and otherwise participated
      in
“racketeering activity” as that term is defined in 18 U.S.C .
      §1961(1) and N.J.S.A .
      2C:41-1. Further, as set forth in the complaint, the Company sought payment
      of a
      promissory note in the principal amount of $575,000 issued to it by former
      officer and director, Robert S. Russo, plus all accrued interest
      thereon.




On
      February 4, 2004, the Company entered into a settlement and release agreement
      with Vincent J. Sanpietro. In exchange for a one time payment of $20,000, the
      return of 554,800 shares of the Company’s common stock and certain other
      non-monetary considerations, the Company agreed to discharge its claims against
      Mr. Sanpietro.




F-9




On
      April
      14, 2004, the Company entered into a settlement and release agreement with
      Joseph A. Sanpietro. In exchange for a one-time payment of $60,000 and the
      return of 3,179,200 shares of the Company’s common stock and certain other
      non-monetary consideration, the Company agreed to discharge its claims against
      Mr. Sanpietro.




On
      May
      14, 2004, the Company entered into a settlement and release agreement with
      Robert S. Russo. In exchange for a one-time payment of $300,000, the return
      of
      125,000 shares of the Company’s common stock and other non-monetary
      consideration, the Company agreed to discharge its claims against Mr.
      Russo.




On
      September 16, 2004, the Company entered into a settlement agreement and release
      with Lawrence P. Marasco. As part of the settlement, Mr. Marasco paid to the
      Company the sum of $60,000, returned 405,000 shares of the Company’s common
      stock and agreed to provide certain other non-monetary
      consideration.




On
      November 29, 2004, the Company entered into a settlement agreement and release
      with Laurence M. Simon. In exchange for the return of 30,000 shares of the
      Company’s common stock and certain other non-monetary consideration, the Company
      agreed to dismiss its claims against Mr. Simon.




On
      January 19, 2005, the Company entered into a settlement agreement and release
      in
      connection with its action against Kinray, Inc. and its officer, Santi Greco.
      As
      part of this settlement, Kinray, Inc. agreed to pay to the Company the sum
      of
      $300,000. This settlement was entered into without any admission of liability
      or
      any inferences of wrongdoing by any settling party.




Litigation
      Against Former Accounting Firms .
      On
      January 9, 2004, the Company commenced litigation in the Superior Court of
      New
      Jersey against two of its former accounting firms, Rosenberg, which served
      as
      the Company’s independent registered public accounting firm from February 1998
      to March 2003, excluding a three week period in early 2002, and Koenig, Russo
      & Associates (“Koenig”), an accounting consultant engaged by the Company to
      review various tax documents, financial statements and filings by the Company
      with the SEC. Robert S. Russo, a former officer and director of the Company
      and
      a defendant in a litigation commenced by the Company against certain of its
      former officers and directors on December 4, 2003, is a principal of Koenig.
      In
      its complaint, the Company, among other things, alleged that Rosenberg and
      Koenig, through their negligence and accounting malpractice, caused the Company
      to suffer significant damage and incur substantial costs.




In
      connection with the settlement of the Company’s separate action against Robert
      S. Russo in the Superior Court of New Jersey (see “Litigation Against Certain
      Former Officers and Directors and Others”), on May 14, 2004, the Company entered
      into a settlement and release agreement with Koenig. In exchange for certain
      non-monetary consideration, the Company agreed to discharge its claims against
      Koenig.




On
      February 21, 2006, the Company entered into a settlement agreement and release
      with Rosenberg. As part of the settlement, the parties released each other
      from
      all claims and Rosenberg paid the Company the sum of $425,000. This settlement
      was entered into without any admission of liability or any inferences of
      wrongdoing by any settling party.




F-10




Loures
      Lawsuit .
      On
      December 28, 2004, an action was commenced in the Superior Court of New Jersey
      by James J. Loures, Jr. and his wife, Christine Loures, against the Company
      and
      certain of its former officers and directors. The plaintiffs allege that the
      Company, its former officers and certain of its former directors engaged in
      a
      scheme to inflate the Company’s revenues and earnings through a series of
      accounting irregularities and fraudulent financial disclosures during the period
      June 2001 through March 2003 which resulted in the plaintiffs’ loss of
      approximately $120,000. The plaintiffs’ allegations are the same as those
      alleged in the consolidated class action lawsuit against the Company which
      was
      settled by the Company in 2004. The plaintiffs were one of eight parties that
      opted out of the settlement related to the consolidated class action lawsuit.




On
      October 4, 2006, the Company filed a motion to dismiss the plaintiffs’ complaint
      for failure to comply with discovery requests in the time required by the court.
      On November 3, 2006, the court granted the Company’s motion and dismissed the
      complaint without prejudice.




**4.**
            **Summary
                of Significant Accounting
                Policies**




***Principles
      of Consolidation***




The
      consolidated financial statements include the accounts of the Company and its
      wholly owned subsidiary. All significant intercompany accounts and transactions
      have been eliminated in consolidation. See Note 1.




***Use
      of Estimates***




The
      preparation of the consolidated financial statements in conformity with
      accounting principles generally accepted in the United States of America
      requires management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the consolidated financial statements and the
      reported amounts of revenues and expenses during the reporting periods.
      Significant estimates relied upon in preparing the consolidated financial
      statements include the allowance for notes receivable, contingent liabilities
      and utilization of the Company’s net deferred tax assets and related valuation
      allowance.




Although
      the Company regularly assesses these estimates, actual results could differ
      materially from these estimates. Changes in estimates are recorded in the period
      in which they become known. The Company based its estimates on historical
      experience and various other assumptions that it believes to be reasonable
      under
      the circumstances. Actual results may differ from management’s estimates if past
      experience or other assumptions do not turn out to be substantially accurate.




***Cash
      and Cash Equivalents***




The
      Company considers all highly liquid investments with an original maturity (at
      date of purchase) of three months or less to be cash equivalents. Cash and
      cash
      equivalents consist of cash on deposit with banks and money market instruments.
      The Company places its cash and cash equivalents with established U.S. financial
      institutions.




F-11




***Concentration
      of Credit Risk***




The
      Company has no significant off balance sheet risk such as foreign exchange
      contracts, option contracts or other foreign hedging arrangements. The Company’s
      financial instruments that are exposed to concentration of credit risks consist
      primarily of cash and cash equivalents and notes receivable. The Company
      maintains its cash and cash equivalents in bank accounts which, at times, exceed
      federally insured limits. The Company invests its cash in high-quality money
      market instruments and  has
      not
      experienced any losses in such accounts and, accordingly, believes it is not
      exposed to significant credit risk on cash and cash equivalents.




***Property
      and Equipment***




Property
      and equipment are stated at cost, less accumulated depreciation and
      amortization. Depreciation is computed using the straight-line method over
      the
      estimated useful lives of the respective assets which average from three to
      seven years. Leasehold improvements are amortized over the lesser of the lease
      term or the estimated useful lives of the related assets, generally five years.
      Expenditures for repairs and maintenance are expensed as incurred. Gross assets
      as of October 31, 2006 and 2005 amounted to $1,703 and $95,451, respectively,
      and accumulated depreciation amounted to $912 and $61,587, respectively. The
      net
      book value as of October 31, 2006 and 2005 of $791 and $33,864, respectively,
      is
      included in other assets.




***Income
      Taxes***




The
      Company provides for deferred income taxes in accordance with SFAS No. 109,
      “Accounting for Income Taxes” (“SFAS 109”). SFAS 109 requires an asset and
      liability approach for financial accounting and reporting for income taxes
      based
      on tax effects of differences between the financial statement and tax bases
      of
      assets and liabilities, based on enacted rates expected to be in effect when
      such basis differences reverse in future periods. Deferred tax assets are
      periodically reviewed for realizability. Valuation allowances are recorded
      when
      realizability of deferred tax assets is not likely.




***Stock-Based
      Compensation***




As
      permitted under the Statement of Financial Accounting Standards (“SFAS”) No.
      123R, “Share-Based Payment” (“SFAS 123R”), which replaces SFAS No. 123,
“Accounting for Stock-Based Compensation,” and supersedes Accounting Principles
      Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), the
      Company applies the intrinsic value method prescribed in APB 25 to measure
      compensation expense for stock-based awards to employees and thus, recognizes
      no
      stock-based compensation expense for options granted with exercise prices equal
      to or greater than the market value of the Company’s common stock on the date of
      grant. The Company records deferred stock-based compensation when the market
      value of the Company’s common stock for financial accounting purposes exceeds
      the exercise price of the stock options on the date of grant. Any stock-based
      compensation is amortized over the vesting period of the individual
      options.




The
      Company accounts for options granted to non-employees under SFAS 123 and
      Emerging Issues Task Force Consensus No. 96-18, “Accounting for Equity
      Investments that are Issued to Other than Employees for Acquiring, or in
      Conjunction with Selling Goods or Services” (“EITF 96-18”). These options may be
      subject to periodic re-valuation over their vesting terms. The resulting
      stock-based compensation expense is recorded over the service period in which
      the non-employee provides services to the Company.




F-12




During
      the fiscal year ended October 31, 2006, the Company granted 100,000 options
      to
      purchase common stock to an employee. No stock-based compensation is reflected
      in the net loss for the fiscal year ended October 31, 2006 as all options
      granted had an exercise price equal to the market value of the underlying common
      stock on the date of grant. During the fiscal year ended October 31, 2006,
      the
      Company recognized a total of $16,025 of amortization expense related to the
      warrants issued to Century Capital Associates, LLC (“Century Capital”) on May
      14, 2004 and February 25, 2005 and a total of $2,046 of amortization expense
      related to the warrants issued to the Company’s directors, other than David R.
      LaVance and Thomas S. Gifford, on February 25, 2005. See Note 8.




During
      the fiscal year ended October 31, 2005, the Company granted 35,000 options
      to
      purchase common stock to employees. No stock-based compensation is reflected
      in
      the net loss for the fiscal year ended October 31, 2005 as all options granted
      had an exercise price equal to the market value of the underlying common stock
      on the date of grant. During the fiscal year ended October 31, 2005, the Company
      recognized a total of $8,921 of consulting and amortization expense related
      to
      the warrants issued to Century Capital on February 1, 2003, May 14, 2004 and
      February 25, 2005, a total of $49,013 of amortization expense related to the
      warrants issued to the Company’s directors, other than David R. LaVance and
      Thomas S. Gifford, on July 24, 2003, May 14, 2004 and February 25, 2005 and
      $2,813 of consulting expense related to the warrant issued to Dr. William Sear
      on May 11, 2005. See Note 8.




The
      following table illustrates the effect on net loss and loss per share if the
      fair value based method had been applied to all awards.




**Years
                Ended**
              **October
                31,****2006**
            
            **2005**Reported
                net loss
            
            $
            (897,324
            )
            $
            (1,127,493
            )Stock-based
                employee compensation expense included in net loss, net of related
                tax
                effects
            
            
            —
            
            
            —Stock-based
                employee compensation determined under the fair value based method,
                net of
                related tax effects
            
            
            (3,820
            )
            
            (7,236
            )Pro
                forma net loss
            
            $
            (901,144
            )
            $
            (1,134,729
            )Basic
                and diluted net loss per share:As reported
            
            $
            (0.04
            )
            $
            (0.07
            )Pro forma
            
            $
            (0.04
            )
            $
            (0.07
            )





***Net
      Loss Per Common Share***





Basic
      net
      loss per share is computed by dividing the net loss by the weighted average
      number of common shares outstanding during the period. Diluted earnings per
      share reflect, in periods in which they have a dilutive effect, the impact
      of
      common shares issuable upon exercise of stock options and warrants and
      conversion of convertible debt, provided that the exercise price of the stock
      options and warrants and the conversion price of the convertible debt is less
      than the fair market value of the common stock. In periods where a net loss
      exists, diluted net loss per share is calculated using basic common shares
      outstanding since including potential common shares from the exercise of stock
      options and warrants would be anti-dilutive.


F-13




During
      the fiscal years ended October 31, 2006 and 2005, the Company incurred a net
      loss. Accordingly, the weighted average number of shares outstanding for both
      the basic and the diluted net loss per share computation is the same. As of
      October 31, 2006, total potential dilutive securities included 2,104,998 shares
      of common stock subject to warrants, 370,000 shares of common stock subject
      to
      options and 2,250,000 shares of common stock issuable upon conversion of the
      Debentures. As of October 31, 2005, total potential dilutive securities included
      2,104,998 shares of common stock subject to warrants, 270,000 shares of common
      stock subject to options and 2,250,000 shares of common stock issuable upon
      conversion of the Debentures.




***Recent
      Accounting Pronouncements***




In
      October 2004, the Financial Accounting Standards Board (the “FASB”) concluded
      that the proposed SFAS No. 123R *,*“Share-Based Payment” (“SFAS
      123R”), which would require all companies to measure compensation cost for all
      share-based payments, including employee stock options, at fair value, would
      be
      effective for public companies (except small business issuers as defined in
      SEC
      Regulation S-B) for interim or annual periods beginning after June 15, 2005.
      The
      Company will not have to adopt SFAS 123R until the fiscal year ending October
      31, 2007. The Company does not expect SFAS 123R to have a material impact on
      its
      consolidated results of operations or financial condition.




In
      July
      2006, the FASB issued FASB Interpretation No. 48, “ Accounting
      for Uncertainty in Income Taxes - an Interpretation of FASB Statement No.
      109” ** (“FIN
      48” ),
      which
      clarifies the accounting and disclosure for uncertain tax positions, as defined.
      FIN 48 seeks to reduce the diversity in practice associated with certain aspects
      of the recognition and measurement related to accounting for income taxes.
      This
      interpretation is effective for fiscal years beginning after December 15, 2006.
      The Company does not expect FIN 48 to have a material
      impact on its consolidated results of operations or financial
      condition.





In
      September 2006, the FASB issued SFAS No. 157, “ Fair
      Value Measurements” (“SFAS
      157”). SFAS 157 defines fair value, establishes a framework for measuring fair
      value, and expands disclosure requirements regarding fair value measurement.
      Where applicable, this statement simplifies and codifies fair value related
      guidance previously issued within United States of America generally accepted
      accounting principles. SFAS 157 is effective for financial statements issued
      for
      fiscal years beginning after November 15, 2007, and interim periods within
      those
      fiscal years. The Company is currently reviewing SFAS 157 and has not yet
      determined the impact that the adoption of SFAS 157 will have on its
      consolidated results of operations or financial condition.




**5.**
            **Note
                Receivable**




On
      October 17, 2005, the Company sold its distribution and other rights and
      business with respect to Syntest, to Breckenridge. In consideration for the
      sale
      of such rights and the other benefits provided under the purchase and settlement
      agreement between Breckenridge and the Company,  Breckenridge
      agreed to pay the Company an aggregate of $1,000,000 as follows: (1) $250,000
      was paid in October 2005 after the execution of the purchase and settlement
      agreement, and (2) $50,000 is to be paid on the first day of each month for
      a 15
      month period commencing on November 1, 2005 and ending on January 1, 2007.




F-14




During
      the fiscal year ended October 31, 2006, the Company received aggregate payments
      of $600,000 from Breckenridge on the note receivable. As of October 31, 2006,
      the outstanding balance on the note receivable was $150,000. As of December
      31,
      2006, the Company received aggregate payments of $700,000 on the note
      receivable. See Notes 3 and 11.




**6.**
            **Income
                Taxes**




Significant
      components of the Company’s deferred tax assets as of October 31, 2006 and 2005
      are shown below. In determining the realizability of the Company’s deferred tax
      assets, the Company considered numerous factors, including historical
      profitability, estimated future taxable income and the industry in which it
      operates. At October 31, 2006 and 2005, a valuation allowance was recorded
      to
      fully offset the net deferred tax asset, as it was determined by management
      that
      the realization of the deferred tax asset was not likely to occur in the
      foreseeable future. The change in the valuation allowance for fiscal 2006 was
      an
      increase of $275,005 attributable primarily to net operating losses.




**Years
                Ended**
              **October
                31,****2006**
            
            **2005**Net
                operating loss
            
            $
            5,848,556
            
            $
            4,033,608Write-down
                of impaired assets
            
            
            77,883
            
            
            1,507,469Depreciation
                and amortization
            
            
            67,604
            
            
            146,658Other
            
            
            5,076
            
            
            36,379Total
                gross deferred tax assets
            
            
            5,999,119
            
            
            5,724,114Valuation
                allowance
            
            
            (5,999,119
            )
            
            (5,724,114
            )Net
                deferred tax assets
            
            $
            —
            
            $
            —





As
      of
      October 31, 2006, the Company had federal and state operating losses of
      approximately $15,184,252 and $15,163,974, respectively, which will expire
      as
      follows:




**Federal**
            
            **State****Year
                Expiring**
            
            **Amount**
            
            **Year
                Expiring**
            
            **Amount**2021
            
            $
            980,973
            
            
            2008
            
            $
            966,9062022
            
            
            1,373,163
            
            
            2009
            
            
            1,373,1632023
            
            
            2,745,837
            
            
            2010
            
            
            2,745,8372024
            
            
            2,955,050
            
            
            2011
            
            
            2,950,6892025
            
            
            2,584,960
            
            
            2012
            
            
            2,583,6602026
            
            
            4,544,269
            
            
            2013
            
            
            4,543,719$
            15,184,252
            
            
            
            
            $
            15,163,974





Utilization
      of the net operating loss carryforwards may be subject to a substantial annual
      limitation due to the ownership change limitations provided by the Internal
      Revenue Code of 1986, as amended (the “Internal Revenue Code”), and similar
      state provisions. The Company has not performed a detailed analysis to determine
      whether an ownership change under Section 382 of the Internal Revenue Code
      occurred. The effect of an ownership change would be the imposition of an annual
      limitation on the use of net operating loss carryforwards attributable to
      periods before the change.


F-15




**7.**
            **Related
                Party Transactions**




David
      R.
      LaVance, the Company’s Chairman, President and Chief Executive Officer, and
      Thomas S. Gifford, the Company’s Executive Vice President, Chief Financial
      Officer (Treasurer) and Secretary, are owners and officers of Century Capital.
      Effective February 1, 2005, the Company and Century Capital entered into an
      amended and restated Consulting Service Agreement, pursuant to which Messrs.
      LaVance and Gifford currently provide services to the Company as executive
      management. For the fiscal year ended October 31, 2006, the Company was billed
      $600,000 for consulting services rendered by Century Capital and the Company
      recorded $75,000 of consulting expense related to the annual bonus due to
      Century Capital for the one year period commencing February 1, 2006 and ending
      January 31, 2007. During the fiscal year ended October 31, 2006, the Company
      also reimbursed Century Capital for expenses incurred in conjunction with
      performing the consulting services. As of October 31, 2006, the Company owed
      Century Capital $506,456 for unpaid monthly fees, bonuses and expenses, of
      which
      $17,706 was paid by the Company subsequent to the fiscal year ended October
      31,
      2006. See Note 11.




For
      the
      fiscal year ended October 31, 2005, the Company was billed $675,000 for
      consulting services rendered by Century Capital and the Company recorded $31,250
      of consulting expense related to the annual bonus due to Century Capital,
      pursuant to the Consulting Services Agreement, for the one year period
      commencing February 1, 2004 and ending January 31, 2005. During the fiscal
      year
      ended October 31, 2005, the Company also reimbursed Century Capital for expenses
      incurred in conjunction with performing the consulting services and issued
      Century Capital a warrant to purchase 500,000 shares of common stock. As of
      October 31, 2005, the Company owed Century Capital $242,132 for unpaid monthly
      fees, bonuses and expenses. See Note 8.




On
      May 1,
      2004, the Company and Century Capital entered into a Shared Services Agreement
      whereby the Company rented three fully furnished, business equipped offices
      approximating 340 square feet inside Century Capital’s existing offices. This
      agreement commenced has a month to month term that requires sixty days’ written
      notice to terminate and a monthly rental fee of $2,500. During both the fiscal
      year ended October 31, 2006 and the fiscal year ended October 31, 2005, the
      Company was billed $30,000 for rent pursuant to the Shared Services Agreement.
      As of the fiscal year ended October 31, 2006, the Company owed Century Capital
      $50,000 for rent, which was paid by the Company subsequent to October 31,
      2006.




F-16


**8.**
            **Stockholders’
                Equity**




***Stock
      Option Plan***




On
      July
      5, 2002, the shareholders approved the Company’s 2002 Equity Incentive Plan (the
“Equity Incentive Plan”), effective as of January 1, 2002. The Equity Incentive
      Plan was placed into effect in order to promote the long-term success of the
      Company and to (1) encourage employees, independent directors and consultants
      of
      the Company to focus on critical long-term objectives, (2) encourage the
      attraction and retention of employees, independent directors and consultants
      with exceptional qualifications, and (3) link employees, independent directors
      and consultants directly to shareholders’ interests through increased stock
      ownership.




The
      Equity Incentive Plan provides for awards in the form of restricted shares,
      incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”) (ISOs and
      NSOs are sometimes collectively referred to as “Options”) and stock appreciation
      rights (“SARs”). The aggregate number of shares of common stock which may be
      awarded under the Equity Incentive Plan is two million (2,000,000).




Incentive
      Stock Options (ISOs)




Only
      employees of the Company are eligible to receive grants of ISOs. Unless
      otherwise provided in a stock option agreement, the first $100,000 of optioned
      shares that are part of an option grant and can be exercised first in a given
      year shall be considered ISOs, and the remainder shall be considered NSOs.
      The
      exercise price of an ISO may not be less than 100% of the fair market value
      of a
      share of common stock on the date of grant. The term of an ISO shall in no
      event
      exceed ten years from the date of grant.




Non-Statutory
      Stock Options (NSOs)




Employees,
      independent directors and consultants of the Company are eligible to receive
      grants of NSOs. NSO grants to any optionee in a single fiscal year of the
      Company cannot cover more than 500,000 shares of common stock (750,000 shares
      of
      common stock for new employees in the fiscal year of the Company in which
      service as an employee first commences). Each individual stock option agreement
      shall specify the exercise price for the awards as determined by the Company’s
      Board of Directors (the “Board”). Options may be awarded in combination with
      SARs.




Automatic
      Option Grants to Independent Directors




Upon
      the
      conclusion of each annual meeting of the Company’s shareholders commencing in
      2002, each independent director who continues to serve on the Board after such
      annual meeting may receive an NSO at the discretion of the Board. All NSOs
      granted to an independent director may also become exercisable in full in the
      event of: (a) the termination of such independent director’s service because of
      death, total and permanent disability or retirement at or after age 65; or
      (b) a
      change in control with respect to the Company, with certain exceptions. The
      exercise price under all NSOs granted to an independent director shall be equal
      to 100% of the fair market value of a share of common stock on the date of
      grant. All NSOs granted to an independent director shall terminate on the
      earlier of (1) the 6 th anniversary of the date of grant or (2) the date 12 months after the termination
      of such independent director’s service for any reason. The Board may permit an
      independent director to elect to receive his or her annual retainer payments,
      if
      any, and/or meeting fees from the Company in the form of cash, NSOs, or
      restricted shares or a combination thereof, as determined by the
      Board.




F-17




Stock
      Appreciation Rights




SARs
      granted to any individual in a single fiscal year cannot cover more than 500,000
      shares of common stock (750,000 shares of common stock for new employees in
      the
      fiscal year of the Company in which service as an employee first commences).
      SARs may be awarded in combination with Options, which may vary in accordance
      with a predetermined formula while the SARs are outstanding. A SAR may be
      included in an ISO only at the time of grant but may be included in an NSO
      at
      the time of grant or thereafter.




Restricted
      Shares




The
      holders of restricted shares shall have the same voting, dividend and other
      rights as the Company’s shareholders, subject to any special restrictions
      contained in the restricted share agreement.




The
      Equity Incentive Plan also contains customary protection against dilution.
      Options and SARs shall terminate immediately prior to the dissolution or
      liquidation of the Company. Unless the applicable agreement provides otherwise,
      in the event of any change in control, the vesting and exercisability of each
      outstanding award shall automatically accelerate so that each such award shall,
      immediately prior to the effective date of the change in control, become fully
      exercisable for all of the shares of common stock at the time subject to such
      award and may be exercised for any or all of those shares as fully-vested common
      stock, except under certain circumstances .




As
      of
      October 31, 2006, the Company had available to issue 1,630,000 options under
      the
      Equity Incentive Plan.




Stock
      option transactions for employees during the fiscal years ended October 31,
      2006
      and 2005 were as follows:




**Option
                Shares**
            ****
            **Vested
                Shares**
            ****
            **Exercise
                Price Per Common Share**
            ****
            **Weighted
                Average Exercise Price Per Common Share**Balance,
                October 31, 2004
            
            
            248,200
            
            
            91,952
            
            $
            0.08
                & $6.75
            
            $
            0.43Options
                granted/vested during the year
            
            
            35,000
            
            
            103,748
            
            $
            0.02
            
            $
            0.02Exercised
                during the year
            
            
            —
            
            
            —
            
            
            —
            
            
            —Expired/terminated
                during the year
            
            
            (13,200
            )
            
            (13,200
            )
            $
            6.75
            
            $
            6.75Balance,
                October 31, 2005
            
            
            270,000
            
            
            182,500
            
            $
            0.02
                & $0.08
            
            $
            0.07Options
                granted/vested during the year
            
            
            100,000
            
            
            87,500
            
            $
            0.08
            
            $
            0.08Exercised
                during the year
            
            
            —
            
            
            —
            
            
            —
            
            
            —Expired/terminated
                during the year
            
            
            —
            
            
            —
            
            
            —
            
            
            —Balance,
                October 31, 2006
            
            
            370,000
            
            
            270,000
            
            $
            0.02
                & $0.08
            
            $
            0.07





F-18


Information
      with respect to employee stock options outstanding and employee stock options
      exercisable at October 31, 2006 is as follows:





**Exercise**
              **Price**
            ****
            **Number
                Outstanding**
            ****
            **Weighted
                Average Remaining Contractual Life (Years)**
            ****
            **Weighted
                Average Exercise Price Per Common Share**
            ****
            **Number
                Exercisable**
            ****
            **Weighted
                Average Exercise Price Per Common Share**$
            0.02
            
            
            35,000
            
            
            8.2
            
            $
            0.02
            
            
            35,000
            
            $
            0.02$
            0.08
            
            
            335,000
            
            
            7.8
            
            $
            0.08
            
            
            235,000
            
            $
            0.08370,000
            
            
            7.8
            
            $
            0.07
            
            
            270,000
            
            $
            0.07





No
      stock
      options were issued to non-employees during the fiscal years ended October
      31,
      2006 and 2005.





***Warrants
      to Purchase Common Stock***




Century
      Capital Warrant Dated February 1, 2003 .
      Pursuant to the Consulting Services Agreement, effective as of February 1,
      2003,
      between the Company and Century Capital, on February 1, 2003 a warrant to
      purchase 1,500,000 shares of common stock of the Company was issued to Century
      Capital. The warrant had a ten year term and was exercisable at $1.34 per share
      (the “Underlying Purchase Price”). The per share purchase price was subject to
      certain pricing adjustments which included an adjustment if the average closing
      price of the Company’s common stock over a period of thirty days was less than
      the then existing Underlying Purchase Price. 375,000 shares of common stock
      underlying the warrant vested immediately upon issuance with another 46,875
      shares vesting on and after the last day of each month commencing February
      28,
      2003 and ending January 31, 2005. Based upon the underlying features of the
      warrant, management determined that the best estimate of fair value was to
      utilize the intrinsic value method using the ultimate lowest exercise price
      to
      account for the value of this warrant issuance. As such, the Company recorded
      consulting expense as the warrant shares vested with the initial vesting of
      375,000 warrant shares on February 1, 2003 and 46,875 warrant shares vesting
      at
      the end of each month from February 28, 2003 through January 31,
      2005.




The
      Underlying Purchase Price adjusted to $0.02 per share as of November 1, 2004,
      the date when Century Capital exercised its right to purchase 421,876 shares
      of
      the Company’s common stock underlying the warrant. The $8,438 due to the Company
      from Century Capital as a result of this exercise was offset by the Company
      against monthly consulting fees due and owing to Century Capital that had been
      deferred for payment.




F-19




On
      February 25, 2005, Century Capital exercised its right to purchase 140,624
      shares of the Company’s common stock underlying the warrant at $0.02 per share.
      The $2,812 due to the Company from Century Capital as a result of this exercise
      was offset by the Company against monthly consulting fees due and owing to
      Century Capital that had been deferred for payment.




As
      of
      January 31, 2005, all of the shares of common stock underlying the warrant
      had
      vested. Accordingly, during the fiscal year ended October 31, 2006, the Company
      recorded no consulting expense with respect to the warrants. For the fiscal
      year
      ended October 31, 2005, the Company recorded $1,640 of consulting expense
      associated with the warrant shares that vested pursuant to the warrant. As
      of
      February 25, 2005, all 1,500,000 shares underlying the warrant had been
      purchased.




Century
      Capital Warrant Dated May 14, 2004 .
      On May
      14, 2004, the Company issued Century Capital a ten year, non-cancelable warrant
      to purchase 700,000 shares of the Company’s common stock at a purchase price of
      $.04 per share. 100,000 shares of the Company’s common stock underlying the
      warrant became available for purchase as of May 14, 2004, with the remaining
      shares underlying the warrant available for purchase upon the achievement of
      specific milestones as follows: 100,000 shares became available for purchase
      upon the filing of the Company’s annual report on Form 10-KSB for the fiscal
      year ended October 31, 2002; 100,000 shares became available for purchase upon
      the filing of the Company’s quarterly reports on Form 10-QSB for the quarters
      ended January 31, 2003, April 30, 2003 and July 31, 2003; 100,000 shares became
      available for purchase upon the Company’s receipt of at least $500,000 in
      cumulative proceeds from the litigation against certain former officers,
      directors and others and/or the litigation against the Rosenberg and Koenig
      accounting firms; 100,000 shares shall be available for purchase upon the
      Company’s receipt of at least $2,000,000 in cumulative proceeds related to the
      Syntho litigation; 100,000 shares shall be available for purchase upon the
      Company becoming eligible to register its common stock pursuant to the
      Securities Act of 1933, as amended; and 100,000 shares became available for
      purchase upon the acquisition by the Company of a product or line of business.




The
      fair
      value of the warrant was estimated on the date of issuance using the
      Black-Scholes pricing model with the following weighted average assumptions:
      dividend yield of 0%; risk free interest of 4.79%; volatility of 50.47%; and
      an
      expected life of 10 years. The warrant had a fair value of approximately $44,211
      on the date of issuance.




On
      November 1, 2004, Century Capital exercised its right to purchase 200,000 shares
      of the Company’s common stock underlying the warrant. Of the shares purchased,
      100,000 shares became available for purchase on May 14, 2004, the issuance
      date
      of the warrant, and the other 100,000 shares became available for purchase
      during the fiscal year ended October 31, 2004 as a result of the Company’s
      receipt of $500,000 of cumulative proceeds from the litigation against certain
      former officers, directors and others that was commenced on December 4, 2003.
      The $8,000 due to the Company from Century Capital as a result of this exercise
      was offset by the Company against monthly consulting fees due and owing to
      Century Capital that had been deferred for payment.




For
      the
      fiscal years ended October 31, 2006 and 2005, the Company recorded $12,632
      and
      $0, respectively, of amortization expense associated with the warrant shares
      that vested pursuant to the warrant. As of October 31, 2006, 200,000 shares
      underlying the warrant had been purchased, 200,000 shares underlying the warrant
      are available for purchase and 300,000 shares underlying the warrant remained
      unvested and were not yet available for purchase.


F-20




Century
      Capital Warrant Dated February 25, 2005 .
      Pursuant to the amended and restated Consulting Services Agreement, on February
      25, 2005, a warrant to purchase 500,000 shares of common stock of the Company
      was issued to Century Capital. The warrant has a ten year term and is
      exercisable at $0.03 per share until February 25, 2015. The warrant vested
      as
      follows: (a) 250,000 of the shares of the Company’s common stock underlying the
      warrant became available for purchase as of February 25, 2005; (b) an additional
      20,833 of the shares underlying the warrant became available for purchase on
      the
      last day of each month commencing February 28, 2005 and ending December 31,
      2005; and (c) 20,837 of the shares underlying the warrant became available
      for
      purchase on January 31, 2006.




The
      fair
      value of the warrant was estimated on the date of issuance using the
      Black-Scholes pricing model with the following weighted average assumptions:
      dividend yield of 0%; risk free interest of 4.27%; volatility of 57.77%; and
      an
      expected life of one month for 250,000 shares underlying the warrant and an
      expected life of two years for 250,000 shares underlying the
      warrant.  The
      warrant had a fair value of approximately $10,674 on the date of issuance.




On
      February 25, 2005, Century Capital exercised its right to purchase 250,000
      shares of the Company’s common stock underlying the warrant. The $7,500 due to
      the Company from Century Capital as a result of this exercise was offset by
      the
      Company against amounts due and owing to Century Capital related to deferred
      monthly consulting fees. On both May 20, 2005 and August 25, 2005, Century
      Capital exercised its right to purchase 62,500 shares of the Company’s common
      stock (125,000 shares in total). The $3,750 due to the Company from Century
      Capital as a result of these exercises was offset by the Company against
      deferred monthly consulting fees due to Century Capital.




For
      the
      fiscal years ended October 31, 2006 and 2005, the Company recorded $3,393 and
      $7,281, respectively, of amortization expense associated with the warrant shares
      that had vested pursuant to the warrant. As of October 31, 2006, 375,000 shares
      underlying the warrant had been purchased and 125,000 shares underlying the
      warrant are available for purchase.




Director
      Warrants Dated July 24, 2003 . ** On
      July
      24, 2003, a warrant to purchase 200,000 shares of common stock of the Company
      was issued to each of its directors, other than Mr. LaVance and Mr. Gifford.
      An
      aggregate amount of 800,000 shares of common stock could be issued pursuant
      to
      these warrants. Each warrant has a five year term and is exercisable at $.26
      per
      share until July 24, 2008. The shares of common stock underlying each warrant
      vested on the date of issuance (66,666 shares), on the first anniversary of
      the
      date of issuance (66,666 shares), and on the second anniversary of the date
      of
      issuance (66,668 shares).




The
      fair
      value of the warrants were estimated on the date of issuance using the
      Black-Scholes pricing model with the following weighted average assumptions:
      dividend yield of 0%; risk free interest of 3.08%; volatility of 105.64%; and
      an
      expected life of five years. The warrants had a fair value of approximately
      $155,138 at the date of issuance.




As
      of
      July 24, 2005, all of the shares of common stock underlying the warrants had
      vested. Accordingly, during the fiscal year ended October 31, 2006, the Company
      recorded no amortization expense with respect to the warrants. For the fiscal
      year ended October 31, 2005, the Company recorded $31,504 of amortization
      expense associated with the warrant shares that had vested pursuant to the
      warrant. As of October 31, 2006, an aggregate of 599,998 shares of the Company’s
      common stock are available for purchase under the warrants and an aggregate
      of
      200,002 shares underlying the warrants had been cancelled.




F-21




Director
      Warrants Dated May 14, 2004 .
      On May
      14, 2004, a warrant to purchase 200,000 shares of common stock of the Company
      was issued to each of its directors, other than Mr. LaVance and Mr. Gifford.
      An
      aggregate amount of 600,000 shares of common stock could be issued pursuant
      to
      these warrants. Each warrant has a five year term and is exercisable at $.04
      per
      share until May 14, 2009. The shares of common stock underlying each warrant
      vested on the date of issuance (66,600 shares) and on the first anniversary
      of
      the date of issuance (133,400 shares).




The
      fair
      value of the warrants were estimated on the date of issuance using the
      Black-Scholes pricing model with the following weighted average assumptions:
      dividend yield of 0%; risk free interest of 3.92%; volatility of 50.47%; and
      an
      expected life of five years. The warrants had an aggregate fair value of
      approximately $32,137 at the date of issuance.




On
      February 25, 2005, John A. Moore, a former director of the Company, exercised
      his right to purchase 66,600 shares of the Company’s common stock underlying the
      warrant issued to him. The Company received gross proceeds of $2,664 from the
      issuance of these shares.




As
      of May
      14, 2005, all of the shares of common stock underlying the warrants had vested.
      Accordingly, during the fiscal year ended October 31, 2006, the Company recorded
      no amortization expense with respect to the warrants. For the fiscal year ended
      October 31, 2005, the Company recorded $13,177 of amortization expense
      associated with the warrant shares that had vested pursuant to the warrants.
      As
      of October 31, 2006, an aggregate of 66,600 shares of the Company’s common stock
      underlying the warrants had been purchased, an aggregate of 400,000 shares
      underlying the warrants are available for purchase and an aggregate of 133,400
      shares underlying the warrants had been cancelled.




Director
      Warrants Dated February 25, 2005 .
      On
      February 25, 2005, a warrant to purchase 200,000 shares of common stock of
      the
      Company was issued to each of its directors, other than Mr. LaVance and Mr.
      Gifford. An aggregate amount of 400,000 shares of common stock could be issued
      pursuant to these warrants. Each warrant has a five year term and is exercisable
      at $.03 per share until February 25, 2010. The shares of common stock underlying
      each warrant vested on the date of issuance (100,000 shares) and on the first
      anniversary of the date of issuance (100,000 shares). Each warrant contains
      standard anti-dilution provisions and limited registration rights.




The
      fair
      value of the warrants were estimated on the date of issuance using the
      Black-Scholes pricing model with the following weighted average assumptions:
      dividend yield of 0%; risk free interest of 3.91%; volatility of 57.77%; and
      an
      expected life of five years. The warrants had an aggregate fair value of
      approximately $6,378 at the date of issuance.




On
      February 25, 2005, John A. Moore, a former director of the Company, exercised
      his right to purchase 100,000 shares of the Company’s common stock underlying
      the warrant issued to him. The Company received $3,000 in connection with the
      issuance of these shares.




F-22




For
      the
      fiscal years ended October 31, 2006 and 2005, the Company recorded $2,046 and
      $4,332, respectively, of amortization expense associated with the warrant shares
      that had vested pursuant to the warrant. As of October 31, 2006, an aggregate
      of
      100,000 shares underlying the warrants had been purchased and an aggregate
      of
      300,000 shares underlying the warrants were available for purchase.




Consultant
      Warrant Issued May 11, 2005 :
      On May
      11, 2005, a warrant to purchase 100,000 shares of common stock of the Company
      was issued to Dr. William Sear for consulting services rendered by Dr. Sear
      to
      the Company. The warrant had a five year term and was exercisable at $0.05
      per
      share until May 11, 2010. All of the shares of common stock underlying the
      warrant vested on the date of issuance, May 11, 2005.





The
      fair
      value of the warrant was estimated on the date of issuance using the
      Black-Scholes pricing model with the following weighted average assumptions:
      dividend yield of 0%; risk free interest of 3.93%; volatility of 62.59%; and
      an
      expected life of one month. The warrant had a fair value of approximately $2,813
      at the date of issuance.





On
      May
      16, 2005, all 100,000 shares underlying the warrant were purchased. The Company
      received $5,000 of gross proceeds from the issuance of these shares. For the
      fiscal year ended October 31, 2005, the Company recognized $2,813 of consulting
      expense associated with the warrant shares that had vested pursuant to the
      warrant.





Stock
      warrant transactions during the fiscal years ended October 31, 2006 and 2005
      were as follows:




**Warrant
                Shares**
            ****
            **Vested
                Shares**
            ****
            **Exercise
                Price Per Common Share**
            ****
            **Weighted
                Average Exercise Price Per Common Share**Balance,
                October 31, 2004
            
            
            2,709,166
            
            
            1,468,337
            
            $
            0.02
                - $4.50
            
            $
            0.32Warrants
                granted/vested during the year
            
            
            1,000,000
            
            
            1,278,258
            
            $
            0.03
                & $0.05
            
            $
            0.03Exercised
                during the year
            
            
            (1,404,100
            )
            
            (1,404,100
            )
            $
            0.02
                - $0.05
            
            $
            0.03Expired/terminated
                during the year
            
            
            (200,068
            )
            
            —
            
            $
            0.04
                & $0.26
            
            $
            0.11Balance,
                October 31, 2005
            
            
            2,104,998
            
            
            1,342,495
            
            $
            0.03
                - $4.50
            
            $
            0.39Warrants
                granted/vested during the year
            
            
            —
            
            
            462,503
            
            $
            0.03
                & $0.04
            
            
            —Exercised
                during the year
            
            
            —
            
            
            —
            
            
            —
            
            
            —Expired/terminated
                during the year
            
            
            (180,000
            )
            
            (180,000
            )
            $
            2.45
                & $4.50
            
            $
            3.48Balance,
                October 31, 2006
            
            
            1,924,998
            
            
            1,624,998
            
            $
            0.03
                - $0.26
            
            $
            0.12




F-23





Information
      with respect to warrants outstanding and warrants exercisable at October 31,
      2006 is as follows:




**Range
                of**
              **Exercise
                Prices**
            ****
            **Number
                Outstanding**
            ****
            **Weighted
                Average Remaining Contractual Life (Years)**
            ****
            **Weighted
                Average Exercise Price Per Common Share**
            ****
            **Number
                Exercisable**
            ****
            **Weighted
                Average Exercise Price Per Common Share******
            ****
            ****
            ****
            ****
            ****
            ****
            ****
            ****
            ****
            ****$
            0.03
                - $0.05
            
            
            1,325,000
            
            
            5.1
            
            $
            0.04
            
            
            1,025,000
            
            $
            0.04$
            0.26
            
            
            599,998
            
            
            1.8
            
            $
            0.26
            
            
            599,998
            
            $
            0.261,924,998
            
            
            4.1
            
            $
            0.11
            
            
            1,624,998
            
            $
            0.12




***Issuances
      and Retirement of Common Stock***




On
      February 25, 2005, the Company issued 500,000 shares of common stock (fair
      market value of $0.03 per share or $15,000) to the owners and officers of
      Century Capital, David R. LaVance and Thomas S. Gifford, in lieu of the $50,000
      bonus deferred by Century Capital for the period commencing February 1, 2003
      and
      ending January 31, 2004. In addition, on February 25, 2005, the Company issued
      600,000 shares of common stock (fair market value of $0.03 per share or $18,000)
      to the owners and officers of Century Capital, David R. LaVance and Thomas
      S.
      Gifford, in lieu of $60,000 of monthly consulting fees that had been deferred
      by
      Century Capital. The Company recorded a $77,000 reduction in consulting expense
      during the fiscal year ended October 31, 2005 in order to account for the
      difference between the fair market value on the date of issuance of the common
      stock issued to Century Capital ($33,000) and the amount of accounts payable
      that was satisfied by the issuance of the common stock ($110,000). The Company
      did not receive any proceeds from either issuance of common stock.





On
      August
      25, 2005, the Company issued 1,000,000 shares of common stock (fair market
      value
      of $0.04 per share or $40,000) to the owners and officers of Century Capital,
      David R. LaVance and Thomas S. Gifford, in lieu of $50,000 of monthly consulting
      fees that had been deferred by Century Capital. The Company recorded a $10,000
      reduction in consulting expense during the fiscal year ended October 31, 2005
      in
      order to account for the difference between the fair market value on the date
      of
      issuance of the common stock issued to Century Capital ($40,000) and the amount
      of accounts payable that was satisfied by the issuance of the common stock
      ($50,000). The Company did not receive any proceeds from this issuance of common
      stock.





On
      August
      25, 2005, the Company closed on a private placement of 4,000,000 shares of
      common stock. The gross proceeds received in connection with this private
      placement were $200,000 ($0.05 per share). 3,000,000 shares of common stock
      were
      purchased by Richard Rimer, a private investor, for $150,000. 1,000,000 shares
      of common stock were purchased by John A. Moore, a former director of the
      Company, for $50,000. The market price of the common stock on the date of the
      closing of the transaction was $0.04 per share.




On
      November 29, 2004, the Company retired 30,000 shares of common stock that was
      received pursuant to the settlement and release agreement entered into by the
      Company and Laurence M. Simon.


F-24




**9.**
            **Convertible
                Debentures**




On
      May
      26, 2005, the Company closed on a private placement of Debentures. The gross
      proceeds received in connection with this private placement were $300,000.
      The
      Debentures have a two year term maturing on April 30, 2007, and bear interest
      at
      a rate of 8% per annum. Interest is payable in annual installments, beginning
      on
      May 1, 2006, in cash or, at the option of the Company, in shares of the
      Company’s common stock. If the Company elects to pay the interest in shares of
      the Company’s common stock, the number of shares issued as payment will be equal
      to the quotient of the unpaid interest divided by the market price of the
      Company’s common stock as defined in the Debentures. Up to 50% of the aggregate
      principal amount of the Debentures are convertible into the Company’s common
      stock, at the option of the holders, at a conversion price of $0.10 per share.
      The remaining 50% of the aggregate principal amount of the Debentures are
      convertible into the Company’s common stock, at the option of the holders, at a
      conversion price of $0.20 per share.




For
      the
      fiscal years ended October 31, 2006 and 2005, the Company recorded a total
      of
      $23,999 and $12,098, respectively, of interest expense related to the
      Debentures. As of October 31, 2006, the Company had accrued $36,097 of interest
      related to the Debentures, which amount remains outstanding.




**10.**
            **Commitments**




***Amended
      and Restated Consulting Agreement with Century
      Capital***




Effective
      February 1, 2005, the original Consulting Services Agreement entered into
      between the Company and Century Capital as of February 1, 2003, was replaced
      by
      an amended and restated Consulting Services Agreement. Pursuant to the amended
      and restated Consulting Services Agreement, Century Capital agreed to provide
      the services of Mr. LaVance and Mr. Gifford as the Company’s corporate officers.
      As provided in the amended and restated Consulting Services Agreement, Mr.
      LaVance will continue to serve as the Company’s President and Chief Executive
      Officer and Mr. Gifford will continue to serve as the Company’s Executive Vice
      President, Chief Financial Officer, Treasurer and Secretary. The amended and
      restated Consulting Services Agreement also provides that Mr. LaVance and Mr.
      Gifford will continue to be treated as independent contractors for the purposes
      of compensation, will not be paid any salary or other compensation directly
      by
      the Company and will not participate in the Company’s employee benefit plans.




The
      initial term of the amended and restated Consulting Services Agreement ended
      on
      January 31, 2006. Thereafter, the amended and restated Consulting Services
      Agreement continues until either party elects to terminate the amended and
      restated Consulting Services Agreement by providing sixty days written notice.
      As of December 31, 2006, neither the Company nor Century Capital had provided
      notice of termination. During the term of the amended and restated Consulting
      Services Agreement, Century Capital is entitled to receive a monthly consulting
      fee in the amount of $50,000 and is entitled to be reimbursed for all reasonable
      and customary business expenses. Century Capital is also eligible to receive
      an
      annual bonus at the discretion of the independent members of the Company’s Board
      of Directors. For the period commencing February 1, 2006 and ending January
      31,
      2007, Century Capital was awarded a bonus of $100,000. As of October 31, 2006,
      the Company recorded a liability of $75,000 to account for the portion of the
      bonus that related to the fiscal year ended October 31, 2006.


F-25




During
      the term of the amended and restated Consulting Services Agreement and for
      a
      period of twenty-four months after the termination of the amended and restated
      Consulting Services Agreement, Century Capital shall be entitled to receive
      a
      cash bonus upon the consummation by the Company of certain corporate
      transactions. The bonus compensation shall be an amount not less than 2.5%
      of
      the aggregate consideration to be paid in connection with a sale or acquisition
      of the Company or in connection with a change in control of the Company (which
      means a change in more than 50% of the issued and outstanding shares of the
      Company’s common stock). Century Capital shall be entitled to receive the bonus
      compensation for any corporate transaction which commences before, but is
      consummated after, the end of the twenty-four month period following the
      effective termination date of the amended and restated Consulting Services
      Agreement.




Upon
      the
      execution of the amended and restated Consulting Services Agreement, the Company
      issued Century Capital a ten year, non-cancelable warrant dated February 25,
      2005 to purchase 500,000 shares of the Company’s common stock at a purchase
      price of $0.03 per share. The warrant had a fair value of $10,674 on the date
      of
      issuance. See Note 8.




On
      February 25, 2005, Century Capital exercised its right to purchase 250,000
      shares of the Company’s common stock pursuant to the warrant dated February 25,
      2005. On both May 20, 2005 and August 25, 2005, Century Capital exercised its
      right to purchase 62,500 shares of the Company’s common stock (125,000 shares in
      total) underlying the warrant. The $11,250 due to the Company from Century
      Capital as a result of these exercises was offset by the Company against
      deferred monthly consulting fees due to Century Capital. See Note 8.




**11.**
            **Subsequent
                Events**




***Warrants
      to Purchase Common Stock***




Century
      Capital Warrant Dated May 14, 2004 .
      On
      November 13, 2006, Century Capital exercised its right to purchase 300,000
      shares of the Company’s common stock underlying the warrant. Of the shares
      purchased, 100,000 shares became available for purchase on November 24, 2005,
      the date the Company filed its annual report on Form 10-KSB for the fiscal
      year
      ended October 31, 2002. In addition, 100,000 shares became eligible for purchase
      on May 27, 2006, the date the Company filed its quarterly reports on Form 10-QSB
      for the quarters ended January 31, 2003, April 30, 2003 and July 31, 2003 and
      the other 100,000 shares became available for purchase on November 10, 2006,
      the
      date the Company acquired the exclusive world-wide rights to develop, make
      and
      sell the HCMS. The $12,000 due to the Company from Century Capital as a result
      of this exercise was offset by the Company against monthly consulting fees
      due
      and owing to Century Capital that had been deferred for payment.




Century
      Capital Warrant Dated February 25, 2005 .
      On
      November 13, 2006, Century Capital exercised its right to purchase 125,000
      shares of the Company’s common stock underlying the warrant. The $3,750 due to
      the Company from Century Capital as a result of this exercise was offset by
      the
      Company against monthly consulting fees due and owing to Century Capital that
      had been deferred for payment.




F-26




***Litigation***




Syntest
      Litigation .  On
      November 22, 2006, the Company, Century Capital, David R. LaVance and Thomas
      S.
      Gifford entered into a settlement agreement and release with the Syntho Group
      and Intermax. Pursuant to the settlement agreement, the Company and the Syntho
      Group agreed to dismiss with prejudice the actions against each other which
      were
      pending in the United States District Court for the Eastern District of New
      York
      and in the Superior Court of New Jersey (see Litigation Against Certain Former
      Officers and Directors and Others). In addition, the Syntho Group agreed to
      dismiss with prejudice the related actions against Century Capital, David R.
      LaVance and Thomas S. Gifford which were pending in the United States District
      Court for the Eastern District of New York and the Company and Intermax agreed
      to dismiss with prejudice the related actions against each other which were
      pending in the United States District Court for the Eastern District of New
      York
      and in the Superior Court of New Jersey. As part of the settlement reached
      by
      the parties, the Syntho Group agreed to pay the Company an aggregate of
      $3,100,000 as follows: (1) $250,000 was paid upon the execution of the
      settlement agreement; (2) $100,000 will be paid on the 27 th day of
      each month for a three month period commencing on December 27, 2006 and ending
      on February 27, 2007 and (3) $2,550,000 will be paid on or before March 27,
      2007. A portion of the Settlement Amount, $2,850,000, is secured by a first
      priority mortgage on real property owned by the spouse of Muhammed Malik. In
      the
      event that the Syntho Group defaults on the settlement agreement, the Syntho
      Group and Intermax will be responsible for all reasonable costs and expenses
      incurred by the Company as a result of the default, including any foreclosure
      related expenses associated with the real property which secures the first
      priority mortgage. In addition, upon a default by the Syntho Group, a consent
      judgment in favor of the Company in the amount of $4,000,000 will be entered
      into in the Superior Court of New Jersey against the Syntho Group and Intermax.
      As of December 31, 2006, the Company received an aggregate of $350,000 of
      payments from the Syntho Group pursuant to the settlement agreement.




Litigation
      Against Certain Former Officers and Directors and Others . ** On
      November 22, 2006, the Company entered into a settlement agreement and release
      with the Syntho Group and Intermax pursuant to which the Company, the Syntho
      Group and Intermax agreed to dismiss with prejudice the actions against each
      other which were pending in the Superior Court of New Jersey. See Syntest
      Litigation.




***Acquisition
      of the HCMS***




On
      November 10, 2006, the Company entered into a technology license agreement
      (the
“License Agreement”) with The Research Foundation of State University of New
      York, for and on behalf of the University at Buffalo (the “Foundation”), Donald
      D. Hickey, M.D. (“Hickey”) and Clas E. Lundgren (“Lundgren”). The Foundation,
      Hickey and Lundgren shall be collectively referred to herein as the “Licensor.”




Pursuant
      to the License Agreement, the Licensor granted the Company the exclusive
      world-wide rights to develop, make and sell the HCMS, a minimally invasive
      two-balloon esophageal catheter system used to monitor cardiac performance.
      The
      term of the License Agreement commenced on November 10, 2006, the date of the
      License Agreement, and ends on the later of (i) the expiration date of the
      last
      to expire patent right related to the HCMS or (ii) ten years from the sale
      of
      the first HCMS product.




F-27




Under
      the
      License Agreement, the Company is required to pay the Licensor a royalty of
      5%
      on annual net sales, as defined in the License Agreement, subject to certain
      reductions as detailed in the License Agreement. Beginning with the first full
      year of sales of the HCMS in the United States and for two years thereafter,
      the
      Company is required to pay an annual minimum royalty of $100,000 to the Licensor
      against which any royalty on net sales paid in the same calendar year for sales
      in the United States will be credited. Further, beginning with the first full
      year of sales of the HCMS outside the United States and for two years
      thereafter, the Company is required to pay an annual minimum royalty of $100,000
      to the Licensor against which any royalty on net sales paid in the same calendar
      year for sales outside the United States will be credited. In addition, the
      Company is required to pay the Licensor 25% of all sublicensing revenue received
      by the Company in connection with the HCMS. The Company is also obligated to
      make milestone payments to the Licensor as follows: (i) first insertion of
      a
      catheter utilizing the HCMS in a human clinical trial - $75,000; (ii) first
      submission of the HCMS for regulatory approval in any country - $100,000; and
      (iii) first notice of regulatory approval to market the HCMS in any country
      -
      $150,000. Further, the Company will reimburse the Licensor a total of $264,300
      for patent costs incurred prior to the execution of the License Agreement as
      follows: $40,900 within five (5) days of the signing of the License Agreement;
      $80,000 on or before November 1, 2007 and $143,400 on or before November 1,
      2008. The $40,900 payment has been made by the Company in accordance with the
      License Agreement.


F-28


**INDEX
      OF EXHIBITS**




Exhibit
                No.
            
            Description
                of Exhibit3.1
            
            Restated
                Articles of Incorporation of Scivanta Medical Corporation, formerly
                Medi-Hut Co., Inc. (the “Registrant”), which was filed in the Office of
                the Secretary of State of the State of Nevada on January 23, 2007
                (Incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly
                Report on Form 10-QSB for the quarter ended January 31, 2006, filed
                with
                the Securities and Exchange Commission (the “SEC”) on January 29,
                2007).3.2
            
            Amended
                and Restated Bylaws of the Registrant (Incorporated by reference
                to
                Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-QSB for the
                quarter ended January 31, 2006, filed with the SEC on January 29,
                2007).4.1
            
            Specimen
                stock certificate representing the Registrant’s common stock (Incorporated
                by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form
                10-QSB for the quarter ended January 31, 2006, filed with the SEC
                on
                January 29, 2007).4.2
            
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Manor Oaks Capital
                Management (Incorporated by reference to Exhibit 4.2 to the Registrant’s
                Annual Report on Form 10-KSB for the fiscal year ended October 31,
                2002,
                filed with the SEC on November 25, 2005).4.3
            
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Chartwell Partners,
                LLP (Incorporated by reference to Exhibit 4.3 to the Registrant’s Annual
                Report on Form 10-KSB for the fiscal year ended October 31, 2002,
                filed
                with the SEC on November 25, 2005).4.4
            
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Glenwood Partners,
                L.P. (Incorporated by reference to Exhibit 4.4 to the Registrant’s Annual
                Report on Form 10-KSB for the fiscal year ended October 31, 2002,
                filed
                with the SEC on November 25, 2005).4.5
            
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Radiology for
                South
                Philadelphia Profit Sharing Plan (Incorporated by reference to Exhibit
                4.5
                to the Registrant’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).4.6
            
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Mark W. Cooper
                (Incorporated by reference to Exhibit 4.6 to the Registrant’s Annual
                Report on Form 10-KSB for the fiscal year ended October 31, 2002,
                filed
                with the SEC on November 25, 2005).4.7
            
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Richard Rimer
                (Incorporated by reference to Exhibit 4.7 to the Registrant’s Annual
                Report on Form 10-KSB for the fiscal year ended October 31, 2002,
                filed
                with the SEC on November 25, 2005).




E-1




10.1
            
            The
                Registrant’s 2002 Equity Incentive Plan, adopted and effective January 1,
                2002 (Incorporated by reference to Exhibit B of the Registrant’s
                definitive proxy statement, filed with the SEC on June 10, 2002).10.2*
            
            Amended
                and Restated Consulting Services Agreement, dated as of February
                1, 2005,
                between the Registrant and Century Capital Associates, LLC (Incorporated
                by reference to Exhibit 10.7 to the Registrant’s Annual Report on Form
                10-KSB for the fiscal year ended October 31, 2002, filed with the
                SEC on
                November 25, 2005).10.3*
            
            Warrant
                to purchase 200,000 shares of common stock of the Registrant, dated
                July
                24, 2003, issued to James G. Aaron. (Incorporated by reference to
                Exhibit
                10.9 to the Registrant’s Annual Report on Form 10-KSB for the fiscal year
                ended October 31, 2002, filed with the SEC on November 25,
                2005).10.4*
            
            Warrant
                to purchase 200,000 shares of common stock of the Registrant, dated
                July
                24, 2003, issued to Richard E. Otto. (Incorporated by reference to
                Exhibit
                10.10 to the Registrant’s Annual Report on Form 10-KSB for the fiscal year
                ended October 31, 2002, filed with the SEC on November 25,
                2005).10.5*
            
            Warrant
                to purchase 200,000 shares of common stock of the Registrant, dated
                July
                24, 2003, issued to John A. Moore. (Incorporated by reference to
                Exhibit
                10.11 to the Registrant’s Annual Report on Form 10-KSB for the fiscal year
                ended October 31, 2002, filed with the SEC on November 25,
                2005).10.6*
            
            Warrant
                to purchase 200,000 shares of common stock of the Registrant, dated
                July
                24, 2003, issued to Salvatore J. Badalamenti. (Incorporated by reference
                to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-KSB for the
                fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).10.7*
            
            Warrant
                to purchase 200,000 shares of common stock of the Registrant, dated
                May
                14, 2004, issued to Richard E. Otto. (Incorporated by reference to
                Exhibit
                10.13 to the Registrant’s Annual Report on Form 10-KSB for the fiscal year
                ended October 31, 2002, filed with the SEC on November 25,
                2005).10.8*
            
            Warrant
                to purchase 200,000 shares of common stock of the Registrant, dated
                May
                14, 2004, issued to John A. Moore. (Incorporated by reference to
                Exhibit
                10.14 to the Registrant’s Annual Report on Form 10-KSB for the fiscal year
                ended October 31, 2002, filed with the SEC on November 25,
                2005).10.9*
            
            Warrant
                to purchase 200,000 shares of common stock of the Registrant, dated
                May
                14, 2004, issued to Salvatore J. Badalamenti. (Incorporated by reference
                to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-KSB for the
                fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).10.10*
            
            Warrant
                to Purchase 700,000 shares of common stock of the Registrant, dated
                May
                14, 2004, issued to Century Capital Associates, LLC. (Incorporated
                by
                reference to Exhibit 10.16 to the Registrant’s Annual Report on Form
                10-KSB for the fiscal year ended October 31, 2002, filed with the
                SEC on
                November 25, 2005).




E-2





10.11*
            
            Warrant
                to Purchase 500,000 shares of common stock of the Registrant, dated
                February 25, 2005, issued to Century Capital Associates, LLC.
                (Incorporated by reference to Exhibit 10.17 to the Registrant’s Annual
                Report on Form 10-KSB for the fiscal year ended October 31, 2002,
                filed
                with the SEC on November 25, 2005).10.12*
            
            Warrant
                to Purchase 200,000 shares of common stock of the Registrant, dated
                February 25, 2005, issued to John A. Moore. (Incorporated by reference
                to
                Exhibit 10.18 to the Registrant’s Annual Report on Form 10-KSB for the
                fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).10.13*
            
            Warrant
                to Purchase 200,000 shares of common stock of the Registrant, dated
                February 25, 2005, issued to Richard E. Otto. (Incorporated by reference
                to Exhibit 10.19 to the Registrant’s Annual Report on Form 10-KSB for the
                fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).10.14
            
            Shared
                Services Agreement, dated May 1, 2004, between the Registrant and
                Century
                Capital Associates LLC. (Incorporated by reference to Exhibit 10.23
                to the
                Registrant’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).10.15
            
            Technology
                License Agreement between The Research Foundation of State University
                of
                New York for and on behalf of University of Buffalo and the Registrant
                dated November 10, 2006 (Incorporated by reference to Exhibit 10.24
                to the
                Registrant’s Current Report on Form 8-K filed with the SEC on November 14,
                2006).21.1
            
            List
                of Subsidiaries of the Registrant.31.1
            
            Section
                302 Certification of Chief Executive Officer.31.2
            
            Section
                302 Certification of Chief Financial Officer.32.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section
                1350.32.2
            
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. Section
                1350.




*Constitutes
      a management contract under Section 601 of Regulation S-B.




E-3