UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB

(Mark One)

[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934

                              For the fiscal year ended February 28, 2007

[_]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

                              For the transition period from _______ to ________
                              Commission file number 33-51218

                          MEDISCIENCE TECHNOLOGY CORP.
                 (Name of small business issuer in its charter)

               New Jersey                                22-1937826
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

          1235 Folkestone Way
        Cherry Hill, New Jersey                             08034
(Address of principal executive offices)                 (Zip Code)

Issuer's telephone number: (215) 485 0362

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

      Title of each class              Name of each exchange on which registered
              None

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

                          Common stock, $.01 par value
                                (Title of class)

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

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

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 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. [X]

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

The issuer's revenues for the most recent fiscal year, ended February 28, 2007,
were $-0-.

The aggregate market value of the issuer's voting and non-voting common equity
held by non-affiliates, computed by reference to the average of the closing bid
and ask price reported on the OTC Bulletin Board on May 31, 2007, was
approximately $5,752,707.

As of May 31, 2007, there were outstanding 65,459,274 shares of the issuer's
common stock, $.01 par value.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

<page>

                                Table of Contents
                                -----------------

                                                                          Page
                                                                          ----
PART I
------

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

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

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

Item 4.  Submission of Matters To A Vote Of Security Holders............

PART II
-------

Item 5.  Market for Common Equity and Related Stockholder Matters.......

Item 6.  Management's Discussion and Analysis...........................

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

Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure...........................................

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

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

PART III
--------

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

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

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

Item 12. Certain Relationships and Related Transactions, and Director
         Independence...................................................

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

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

                                      -i-

<page>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
                -------------------------------------------------

Certain statements in this Annual Report on Form 10-KSB, including statements
under "Item 1. Description of Business," and "Item 6. Management's Discussion
and Analysis," contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, including but not limited to our assumptions underlying our statements
concerning business strategy, development and introduction of new products,
research and development, marketing, sales and distribution, manufacturing,
competition, third-party reimbursement, government regulation (including, but
not limited to, FDA requirements), continued clinical trial relationships and
operating and capital requirements, critical accounting determinations; efforts
to raise additional financing; and our commitment of resources. The
forward-looking statements may also be impacted by the additional risks faced by
us as described in this report, including those set forth under the section
entitled "Risk Factors." Forward-looking statements generally can be identified
by the use of terminology such as "may," "will," "expect," "intend," "estimate,"
"anticipate" or "believe" or similar expressions or the negatives thereof. These
expectations are based on management's assumptions and current beliefs based on
currently available information. Although we believe that the expectations
reflected in such statements are reasonable, we can give no assurance that such
expectations will be correct. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this annual
report on Form 10-KSB. Our operations are subject to a number of uncertainties,
risks and other influences, many of which are outside our control, and any one
of which, or a combination of which, could cause our actual results of
operations to differ materially from the forward-looking statements.

                                      -ii-

<page>

                                     PART I

Item 1.       Description of Business

         Background

         The Company operates in one business segment and is principally engaged
in the design and development of medical diagnostic instruments that detect
cancer in vivo in humans by using light to excite the molecules contained in
tissue and measuring the differences in the resulting molecular natural
fluorescence between cancerous and normal tissue. (e.g IP platform products
,CD-Ratiometer-- March 29, 2006 FDA approved pilot clinicals as "Adjunct to the
Pap Smear" and the Photonic ingestible Pill (See 8-K's March 26, 2006)

         Registrants business is to deploy commercially the Mediscience IP
platform technology of light spectroscopy to diagnose diseases: Non-invasively
(where excisional biopsies and x-rays are avoided, More reliable (where
pathology is verified) More rapidly: real time point of care diagnostics (where
pathology laboratory evaluation is supplanted). On December 1, 1988, registrant
acquired Laser Diagnostic Instruments, Inc. ("LDI"), a wholly owned subsidiary
whose principle asset was a patent "Method and Apparatus for Detecting Cancerous
Tissue Using Visible Luminescence," US patent number 4,930,516 June 5, 1990. On
August 8, 1998 in a US Patent Office re-examination. the "516" claims were
expanded from 9 to 59. Our research and development activities are clustered
around this patent and 26 related patents acquired by Mediscience as either
owner or exclusive licensee. The fundamental process used by these patents is
the interpretation of optical imaging data gathered by exposing select areas of
tissue to various forms of electromagnetic radiation. Our work with co-founder
Dr Robert Alfano demonstrates that the use of fluorescence leaves provides a
different and distinct molecular "signature"from normal or cancerous tissue.
That signature, in turn, can be converted into a specific algorithm that can
distinguish malignant tissue from normal tissue." Our collective IP claims
inter-relate in the process of non-invasively detecting cancerous tissue within
the body. Registrant regards its related patent cluster as pioneering, and
seminal in the area of cancer and physiological change diagnosis using its IP
fluorescence spectroscopy both in-vivo and in-vitro. Registrant believes the
Company's technology, if successfully developed commercially will have enhanced
diagnostic sensitivity and specificity with substantial commercial appeal due to
its: non-invasive nature and delivery of immediate results.

         Dr. Robert Alfano, co-founder of registrant formed Alfanix Ltd. a New
York State for-profit company. (See 8-K dated March 3., 2006) under alliance
contract with Registrant (see 8-K dated March 3., 2006 and 8KA dated May 18,
2006) to explore enhanced algorithmic development for the CDR (CD-Ratiometer)
unit, upon Registrants discretionary, selective, sole project approval, and
RFCUNY non-conflicting contract approval. Alfanix Ltd. may suggest investigative
relationships to registrant for Registrants management review and Board
consideration for registrants discretionary approval

         "Compact Photonic Explorer" (CPE): Registrant is partnered with its
equity investor Infotonics Technology Center of Rochester New York (a consortium
of Corning, Eastman Kodak and Xerox) and contractually acquired all Infotonics
patent rights to the "Photonic Pill." Both are developing the (CPE), for medical
applications to detect cancer and /or physiological change in vivo in humans.
The product is being designed to take an optical biopsy at the molecular level
of various areas in the human digestive tract utilizing Registrants proprietary
IP molecular spectroscopy. The first project for the (CPE) is to target
diagnosing various forms of cancer throughout the GI tract in real-time. The
(CPE) incorporates registrants IP photonics platform that utilizes the inherent
physical characteristics normal, pre-cancerous, and cancerous tissues exhibited
when illuminated with light of specific frequencies. Commercialization requires
specific engineering and implementation decisions be made concerning the
components and composition of the pill, including the selection of a particular
light emitter, light detector, power source, position detection means, and
casing design.

         The three main competitors in the optical biopsy pill market today are
Given Imaging, Olympus Optical LTD, and Smart Pill Corporation. Each company
offers a product supported by a different technical platform and with inherently
different capabilities. Given's PillCam involves recorded white-light optical
imaging and analysis, Olympus Optical LTD's EndoCapsule involves real-time
optical imaging, transmission and analysis, and SmartPill involves chemical
analysis of tissue as opposed to optical imaging. Registrants and Infotonics,
based on in depth market and technology review (see 8-K Mar. 26, 2006) believe
that a photonics technical platform of optical biopsy

                                     - 1 -
<page>

(CPE) introduces a new, better and more market promising concept into the
emerging endoscopic ingestible pill market. In brief, the CPE employes
autoflourescence sensing and imaging that provides diagnostic information beyond
that possible with the white-light imaging used by Given and Olympus. (See
CITIGROUP/Smith Barney Analyst Report 10-1-2004 by Peter Bye. Page 20
Registrant-Info tonics). (See 8-K filing w/ Syracuse University Law 57 pg.
report exhibit May 26, 2006)

         On March 29, 2006 the FDA approved as a "Non-significant Risk Device
Study, Registrants multi-center pilot study approval adjunct to the PAP intended
to establish the safety and parameters of efficacy of the (CD-R) for cancer
detection of the cervix preliminary to a pivotal study. The CD-R unit will be
used to detect changes in the cervix using a non-invasive/minimally invasive and
painless optical technology with a disposable probe to identify anomalous areas,
with cancerous or pre-cancerous tissues. The Purpose is to provide immediate
real-time cancer diagnosis reading in the Doctors office with accuracy presently
not available in the conventional PAP approach. The intent of the CD-R
technology is to replace the PAP including deployment in global regions where
PAP smears are not widely available.

         Based upon funding Registrant will commence the Pilot study observing
the regulations governing patient consent and related institutional IRB
approval. The FDA has provided Registrant comments and suggestions which will
assist in its pilot and pivotal clinical studies. The objectives of this pilot
study are to determine efficacy; the clinical sensitivity and clinical
specificity (ability for the device to distinguish between tissues that are
normal, benign, precancerous low grade, precancerous high grade, CIS and cancer)
by comparing the device real-time results to the Pap test and biopsy; and assess
any adverse events based on Good Clinical Practices. Frequency, type and
intensity of clinical adverse events will also be evaluated. Assuming the
results of this initial efficacy and safety study are satisfactory, in the
detection of cervical cancer precursors i.e. (pre-cancerous cells), indications
of possible cancer development, with FDA approval registrant will continue into
its pivotal study.

         Strategy

         The Company's strategy is maximize the value of the Company's IP
platform (over 25 patents in the areas of tissue spectroscopy and optical
imaging with applications in cancer detection) as a modern alternative to
traditional endoscopy; to commercialize real-time early cancer screening and
detection devices with less invasive ways of detecting abnormalities in the
human body based upon our IP platform, completed proto-type's, and expertise in
the area of fluorescent molecular imaging. In addition to seeking conventional
investment into the Company registrant can use its wholly owned subsidiary
LLC's, each with its own IP supported application. Our first effort
Medi-Photonics development LLC, (NY) is focused on early cancer screening and
detection by CD-R for cervical cancer adjunct to the Pap smear. Other considered
IP platform targets on early cancer are, mouth, colon, esophagus, and potential
applications of its ingestible "(CPE)." The ultimate goal of registrant's
optical biopsy IP is to algorithmically specifically identify whether "a tissue
is malignant, dysplastic [pre-cancer] or benign; in addition to whether it is
invasive cancer in any endoscopic, laproscopic or stereotactic procedure.
Registrant independently and with equity investor Infotonics Research is
actively exploring strategic distributors, partners, and investors.

         All above are Safe Harbor" statements per the Private Securities
Litigation Reform Act of 1995 as certain matters and subject areas discussed in
our strategy and not historical or current facts but deal with future
circumstances and developments. The discussion of such matters and subject areas
is qualified by the inherent risks and uncertainties surrounding future
expectations generally and may also differ materially from our future experience
involving any or more of such matters and subject areas. Such risks and
uncertainties include overall economic trends, successful development of
products and regulatory matters including but not limited to FDA as well as
those more fully described from time to time in our reports filed with the SEC.

         Registrant contract with the Research Foundation City University of New
York (RFCUNY) effective June 10, 2002 imposes registrant a royalty rate of 3.25%
as to those patent/patent applications of a medical nature not totally owned by
registrant. RFCUNY received the following consideration, issuance to RFCUNY of
283,228 SEC 144 shares and a five (5) year. Warrant to providing (RFCUNY) the
right to purchase six hundred thousand (600,000) SEC restricted 144 shares of
registrant at one dollar ($1.00) per share expiring June 10 2007. RFCUNY also
received from registrant payment of all appropriate patent preparation and
filing fees and all US, Japan, EU Patent Office maintenance fees associated with
the patents and applications listed in Exhibit A. The agreement

                                     - 2 -
<page>

affirms Registrant's ownership and/or exclusive license of all MEDICAL
APPLICATIONS embodied in Registrants patent list attached to the contract as
exhibit A.

         According to the terms registrant must negotiate a minimum royalty
Agreement within 5 years of the date of filing with the RFCUNY, or all licensed
patents for which product commercialization has not yet occurred. Our collective
IP claims inter-relate in the process of non-invasively detecting cancerous
tissue within the body thus, Registrant believes that present Mar. 29, 2006 FDA
pilot approval is a significant "product commercialization" as well as the FDA
effort performed by Memorial Sloan Kettering Cancer Center, supervised by Dr
Stimson Schantz (see scientific advisory board for CV) using a rat esophageal
model demonstrated that fluorescence could detect precancerous changes in the
rat esophagus prior to any visual indication of malignancy. This in vivo oral
cancer study at MSKCC was able to discern differences between normal healthy
controls and "normal" appearing contra lateral sites in oral cancer patients
achieving Phase I FDA approval. We currently have instrumentation which may
probe the following organ sites: oral cavity, cervix, aero-digestive tract and
colon. Use in the aerodigestive tract and colon requires that our
instrumentation be coupled to an endoscope. We have already coupled our
instrumentation to various GI tract endoscopes and our technology is embedded in
the (CPE) photonic pill patent.

         The Products

         Registrant is developing products in the areas of cervical, probe GI,
ingestible pill camera, and oral cavity probe that employ Molecular Optical
Biopsy IP for cancer screening and diagnosis. The Company's devices are based
upon the Company's Cancer Detection ("CD") Scan, CD Ratiometer and CD Map. These
devices use lamplight to provide a broad spectrum of safe, scanning excitation
light wavelengths to insure that the appropriate target tissue molecules are
sufficiently fluoresced to provide maximum diagnostic sensitivity. A fiber optic
probe is attached to each of our devices to transmit the optical excitation
signal. The CD instruments demonstrate a great deal of versatility and a broad
range of potential platform applications depending on the designated
configuration of the fiber optic probe and associated imaging optics. The probe
can be configured as hand held for easy-to-access areas such as the oral cavity
or the skin surface, or it can be fed down the working channel of a Rigid or
Flexible Endoscopes for assessment of the upper or lower GI tract, or through a
Cystoscope for study of the urinary tract, or Colposcope for gynecological
evaluation or Laparoscope's for evaluation of internal organs, and fed through a
core biopsy needle to optically assess breast tumors or other deep tissue
tumors, e.g. the pancreas, liver or prostate.

         The CD Scan is used in medical research to help define the critical
scanning and emission wavelengths for our two other prototypes products. It
provides optical scanning capability over a broad spectrum of optical
wavelengths for the evaluation of tissue.

         The CD-Ratiometer (FDA Mar. 29, 2006 approved for Pilot clinicals) is a
compact instrument with user-friendly features and characteristics and has been
designed to optically assess the target tissue only at pre-established optical
wavelengths and to instantaneously report out a "yes "no" or "maybe" result on a
computer screen. The CD-Ratiometer will provide fluorescence images of target
tissue as well as computed diagnostic information. We expect that the CD
Ratiometer with its anticipated assortment of disposable probe designs will be
the preferred product for medical practitioners to use in the office or clinical
setting.

         The Compact Photonic Explorer (CPE), Infotonics/Registrants Pill is
being designed with the merging of optical imaging techniques (fluorescent
light, excited photonic light, and varying spectroscopy techniques) and
Infotonics nano-technology miniature-scaling attributes and capabilities. Such
compact devices use three-dimensional mechanical components of various
configurations on a miniaturized scale including an optical component, resulting
in a Molecular Optical Biopsy Pill system. Registrant and Infotonics believe the
CPE would provide the ability to treat cancer through manipulation of visible
and ultra-violet fluorescence incorporating the science of registrant's
photonics cancer-detection IP platform to the (CPE) thus quickly and accurately
detecting and treating cancerous and pre-cancerous growths in vivo.

                                     - 3 -
<page>

         Research and Product Development

         The utility of native tissue fluorescence spectroscopy for in vivo
cancer detection in humans was first discovered in the early 1980's by Dr.
Robert Alfano co-founder of registrant, and President of Alfanix: (see Alfano
CV, chairman of registrant's scientific advisors). Dr. Alfano is currently
employed as a faculty member affiliated with the physics department at CUNY
since 1972. In 1992, registrant financially assisted in the establishment of the
Medi-photonics Laboratory ("MPL") at the City College of New York to provide
research and development services in the area of tissue spectroscopy and cancer
detection and other biological applications.

         The staff of MPL, which is supervised by Dr. Alfano, developed several
generations of the CD prototype device and has conducted in vitro, pre-clinical
testing of various human tissue types to develop the preferred optical scanning
and emission wavelengths that yield the most definitive information about native
fluorescence characteristics of specific scanned tissue. The insight gained from
this work has been the principal source of knowledge for the issued and pending
patents which registrant owns outright or possesses world wide exclusive
license. This in-vitro pre-clinical research and development work also provided
the starting basis for the optical scanning parameters for the Company's in vivo
human clinical studies.

         Clinical Development

         Registrant's products are designed primarily to be used directly on
human patients in-vivo. Part of the process of product development and FDA
approval is the development of sufficiently compelling clinical evidence to
demonstrate safety and effectiveness of one or more of the Company's prototype
CD products for each intended diagnostic application (labeled or intended use).
Because of potential clinical utility of our technology and prototype CD
products, we have developed collaborative clinical relationships with highly
regarded cancer center research hospitals in the United States to assist in FDA
clinical evaluations of our prototype products, present and future. These
institutions include Memorial Sloan-Kettering Cancer Center, Columbia
Presbyterian Hospital and the New York Hospital (Cornell Medical Center), each
of New York, and the Massachusetts General Hospital (Harvard Medical School) in
Boston.

         An FDA approved Phase I clinical feasibility study of the upper
aero-digestive tract was carried out at Memorial Sloan-Kettering under the
principal investigation of Stimson P. Schantz, M.D., Associate Professor of
Surgery and Director of Cancer Prevention, member of Registrants scientific
Board. It was established in this Phase I FDA approved study that the Company's
CD Scan prototype product is able to distinguish between cancerous and normal
tissue in the oral cavity using its technology. Phase II and III clinical
studies in the upper aero-digestive tract can be submitted for FDA consideration
on funding availability. Registrant intends to re-visit this important area in
the future.

         An FDA Phase I clinical study could be conducted at New York Hospital's
Cornell Medical Center to assess the potential utility of the Company's CD
Ratiometer with fiberoptic probe adapted to a flexible endoscope for monitoring
Barrett's Esophagus. On April 24, 1997, we entered into a clinical trial
agreement and provided initial funding for this Institutionally (IDE) approved
clinical study. However, further progress on this study through the FDA will
require additional funding which cannot be provided at this time due to resource
constraints. Barrett's Esophagus is thought to be a possible precursor to
esophageal cancer requiring routine monitored because of the predisposition to
esophageal cancer. Current medical practice requires that multiple excisional
biopsies be taken to monitor the progression of disease. The practice is
painful, costly and probably unnecessary in the majority of Barrett's patients,
but the current state of medical practice does not provide sufficient molecular
information to distinguish between the high risk group and the lower risk group.
Registrant believes that endoscopic application of our technology will provide
gastroenterologists with additional molecular information and the ability to
better assess the condition of Barrett's tissue without a need for painful
multiple biopsies and establish individual patient monitoring schedules.

         Dr. Basuk reported his work supports registrants UV emission
measurements which can distinguish normal esophageal tissue from Barrett's or
adenocarcinoma. Preliminary data indicates that the combination of UV emission
and Excitation measurements can potentially separate Barrett's from dysplasia
and cancer as well as from normal tissues. On March 19, 1999 the NEW ENGLAND
JOURNAL of MEDICINE (Vol.340, No. 11) reported "Symptomatic Gastrosophageal
Reflux as a risk factor for esophageal Adenocarcinoma," concluding that there is
a

                                     - 4 -
<page>

strong and probable causal relation between gastrosophageal reflux and
esophageal adenocarcinoma. Esophageal adenocarcinoma is treatable but rarely
curable, mortality is high and any chance of successful treatment depends on
early detection, thus screening high-risk patients using registrants CD
Ratiometer with fiberoptic probe would be desirable. Registrants supporting
experience in Excitation of important tissue molecules shows improved diagnostic
accuracy in the range of 80 to 90 percent with measurement time of a few seconds
(real-time).

         Business Development and Marketing

         The market for optical biopsy-related products is intertwined with the
impact of cancer on society and the benefits incurred through early detection
via various medical devices. The National Institute of Health reports cancer is
responsible for one out of every four deaths in the United States. Approximately
400,000 to 500,000 people in the United States died of one or more cancers
yearly. The financial costs of cancer reported in 2005, direct: medical costs of
cancer care totaled $74 billion, lost productivity and other effects added an
additional $136 billion. More than 1,200,000 new cancer cases are diagnosed
annually in the United States according to the American Cancer Society and as
many as 85 million people currently alive in the United States, nearly 1/3 of
the population, will develop cancer during their lifetimes. Cancer therapy has
progressed rapidly in recent years but the axiom that early diagnosis is
critical for successful treatment for the majority of cancer types still remains
true. Registrant early diagnosis IP platform suggests broad application
potential. Registrant has chosen as its first entry the improvement of Pap
tests. Cervical cancer is the second most common cancer among women. The cancer
is usually caused by common papilloma viruses, which are spread through sexual
contact. The Pap smear is the most widely used screening technique (some 50
million PAP smears are performed in the U.S. annually) in which cervical cells
collected by physicians are sent to laboratories for analysis (the total cost
ranges between $35-$50); however, the Pap test generates a significant number of
both false positive (as much as 40-50%) and false negative results (as much as
20-40%). The Company believes that its photonics technology offers the ability
to significantly improve sensitivity and specificity (to >90%), with potential
cost savings to the health care system in excess of $1B annually. If one
penetrates only 1% of the PAP market with registrants CD-R after market approval
by the FDA the sales for product ands disposables would be significant.

         Although several cancer screening techniques have been developed for
the early indication of various types of cancer in humans, such as, mammography
for breast cancer, PAP tests for cervical cancer, PSA tests for prostate cancer
and chest x-rays for lung cancer, excision biopsy is still the "gold standard"
for making a definitive cancer diagnosis and for cancer staging, i.e.,
determining the extent of the progression of the disease prior to mapping out
the most appropriate course of therapy.

         The excision biopsy requires a significant amount of surgical
intervention to collect an adequate tissue sample to make a proper diagnosis and
staging determinations. The process can sometimes expose the patient to
unnecessary risks, lengthy hospital stays, long recovery times, pain and
discomfort and significant health care expense. The Company's technology is
believed to offer the potential of a less physically invasive method to diagnose
and stage a variety of cancers without the excessive costs and potentially
debilitating effects of biopsy. The most widely practiced technique for
definitive diagnosis of breast cancer, the leading cause of death among American
women between the ages of 40 and 55, is open surgical biopsy (a specific type of
biopsy) which is done under a general anesthetic and typically results in
surgical excision of a golf ball-sized mass of breast tissue. About 800,000 such
procedures are performed annually in the United States at an estimated annual
cost of between $2 billion and $4 billion. If the Company can successfully adapt
its technology to diagnose and stage breast cancers, it believes it will save up
to half the current cost by reducing and /or eliminating extensive hospital
stays and frequency of surgery as well as impacting significantly the amount of
patient discomfort for those patients medically determined to have cancer, and
eliminate most of the trauma for the 70% to 80% of the patients who are found
not to have cancer.

         We believe that our technology incorporated into one or more of our
prototype CD products will be useful in diagnosing and staging for a wide range
of the more than 100 known types of cancers. In addition to the pre-clinical and
clinical evaluations currently projected or already completed, i.e., upper
aerodigestive tract, breast and esophagus, we are in the process of creating a
prioritized list of other potential applications to evaluate on a pre-clinical
basis. If successful, on a pre-clinical basis, we contemplate progressing to the
clinical evaluation phase and pre-market approval ("PMA") application phase.

                                     - 5 -
<page>

         We plan to develop certain of our CD products for diagnostic
applications, (sometimes referred to as "labeled indications"), that we will
ultimately market for our own account in the United States. In addition, we
desire to co-develop one or more of our prototype CD products for specific
cancer diagnostic applications with one or more selected other companies. We
continue to seek relationships with highly qualified companies which have
expressed interest in our IP space.

         We have, in the past, and continue to encourage any possible
collaboration especially with firms that have strong existing franchises in
certain specialized fields of diagnosis and treatment and who have established
reputations with prospective purchasers of diagnostic products and who have
proven selling, marketing and distribution capabilities. A select number of
these kinds of relationships, if we are successful in fostering them, are
expected to add value to the Company by leveraging our financial resource base
with development and licensing revenues that the Company can then use to help
fund the development of its own products. We also believe that a market for our
CD products will exist in Latin America, Africa, India the European Union and
possibly Asia. We contemplate making a concerted effort to identify one or more
possible licensees to help develop our products or variations thereof for key
markets during 2007-2008

         Manufacturing

         Our prototype products have been assembled through 2006 by the staff of
the MPL at the City College of New York from components that are generally
readily available from one or more sources in the marketplace. Starting in 2007,
reengineered prototypes will be developed through our New York subsidiary
BioScopix inc. and equity associate Info tonics Technology Center, using
advanced optical components that will positively impact overall system cost and
size. Although additional design improvements will likely be required to refine
the current prototype products for commercial use, we still believe that the key
components will be available from one or more suppliers. The manufacture of our
products will be carried out by our New York subsidiary BioScopix Inc.

         As needed BioScopix Inc. will use manufacturing contractors who will be
selected from a list of highly qualified New York companies who are familiar
with the regulatory requirements of the FDA for the manufacture of medical
devices, who are registered with and in good standing with the FDA and who
employ current Good Manufacturing Practices (GMP) in accordance with FDA
guidelines. Additionally, an opportunity for a business arrangement with a major
marketing co-developer could involve manufacture as well. We have also discussed
with Infotonics Research the establishment of Registrants BioScopix Inc
incubation site for business purposes and on site manufacturing at their
Rochester NY campus. This location would include New York State tax abatement
benefits as well as the potential for Empire State EDA funding and NYSTAR
grants.

         Competition

         CD-R

         Our IP Platform of Molecular In-vivo tissue autofluorescence and
spectral analysis represents a new diagnostic paradigm. The goal of optical
biopsy is determine whether "a tissue is malignant, dysplastic [pre-cancer] or
benign; in addition to whether it is invasive cancer. The use of fluorescence
produces a different "signature" depending on whether it is used on normal or
cancerous tissue. That signature, in turn, can be converted into an algorithm
that can distinguish malignant tissue from normal tissue. Registrant believes
its methods are less invasive than traditional surgical biopsies --no tissue is
excised from the body, results are instantaneous, more sensitive to change, and
possibly more accurate than other methods. Our IP when developed offers the
promise of providing cost effective and user friendly screening with increased
sensitivity and specificity, and ultimately, replacing excision biopsy as the
diagnostic gold standard. There is intense competitive activity in this area;
with at least seven companies to date conducting active research and development
programs, as well as the recent development of FDA approved HPV vaccines.

         Current screening systems are dominated by the Pap smear and
colposcopy, as well established and pervasive, and now the entry of Vaccines
(Merck Glaxo). Improvements and new technologies for cervical cancer detection
include Digene Corp. human papilloma Virus testing and Cytyc Corp's "Thin-Prep."
There are companies and institutions attempting to develop products using
bio-photonic technologies in cervical cancer detection including Spectrx Inc, MD
Anderson, and University of Michigan. Mediscience/BioScopix Inc. and its equity

                                     - 6 -
<page>

associates RFCUNY, and Infotonics Technology Center will continue to develop
devices that are more accurate, easier to use and/or less costly to administer
to maintain competitive advantage.

         Of special interest are HPV vaccines: by Merck and Glaxo. Registrant's
screening and Vaccination, are complimentary - each providing a tool to fight
cervical cancer. HPV has two different target populations. The first is those
who have not been infected with HPV, but are at risk for infection. This
population is in need of prevention. The second consists of those already
infected with HPV and those who will become infected (subjects for whom
prevention failed or not yet available). This population is in need of continual
screening, diagnosis, treatment and post-treatment monitoring.

         For the first group, vaccination is the important part of the solution
and there are many issues which may take significant time to resolve (i.e.
vaccines efficiency, need for repeated boosters, duration of immunization,
failure of immunization, emergence of new strains of viruses, etc). Merck's
short studies show that their vaccine only targets two carcinogenic strains of
HPV (HPV 16 and 18) out of 35 sexually transmitted strains of the virus. HPV 16
and 18, combined are responsible for 2/3 of cervical cancer and pre-cancer
cases. The other 33 strains as well as other potential but unknown factors,
which are not prevented by the vaccine, are responsible for the other 1/3 of the
cases. It will take many years to vaccinate a significant fraction of the worlds
at risk population. During this period, the CD-Ratiometer can provide an
efficient, cost effective, screening tool. Merck advises that despite the
results obtained with their vaccine, patients MUST BE FOLLOWED WITH PAP SMEARS
indefinitely. The vaccines will apply only to target population <15 year of age.

         For the second population group (those infected with HPV), patients
will also need to be screened, diagnosed, treated and/or monitored after
treatment for a period of 15 to 25 years (from age 18 to age 40/45). During this
period, the CD-Ratiometer can provide an efficient, cost effective, screening
tool with all the advantages of Molecular Optical Biopsy (no need to remove
tissue, real-time results, and high accuracy).

         Significant competitive approaches to cancer screening include, X-ray,
CT, ultrasound, magnetic resonance and radionuclide imaging technologies; all
based on the detection of intra-tissue structural abnormalities and are not
suited to the evaluation of tissue surface lesions.

         Our proprietary IP represents a new diagnostic paradigm. It offers the
promise of providing a more cost effective and user friendly screening procedure
with increased sensitivity and specificity, and ultimately, of replacing
excision biopsy as the diagnostic gold standard. We believe that we have strong
intellectual property position that will permit us to achieve a strong position
in this new area; competition from both new and established firms, continues to
be intense. Many of these firms have greater resources than registrant and more
experience in the field of cancer diagnostics. Finally, there can be no
assurances that the Mediscience Technology, even if developed successfully, will
be accepted commercially in the marketplace in any application format.

         The competitors in the optical biopsy pill market today offer a product
supported by a different technical platform and with inherently different
capabilities.

         Photonic Pill (CPE)

         Given's PillCam involves recorded white-light optical imaging and
analysis, Olympus Optical LTD's EndoCapsule involves real-time white-light
optical imaging, transmission and analysis, and SmartPill's involves chemical
analysis of tissue, Registrant/Info tonics Pill (CPE) utilizes molecular
autoflourecsence sensing

         The four scientific platforms upon which pill technology is being
produced use micro-electromechanical and micro-optic-electro-mechanical systems
technology combining the features of remote operation with MEMS and MOEMS
technology and in vivo imaging, (GIVEN-OLYMPUS) or in, chemical analysis
(SMARTPILL), or in the use of autoflourecsence data (MEDISCIENCE).

         Scientists are able to create in vivo systems that can collect large
quantities of data and transmit that data to external systems while the device
remains in vivo to enable doctors to navigate through the body to collect visual
chemical or photonic data. The expectation is that such developments will allow
doctors to generate new tests and

                                     - 7 -
<page>

better analyze and diagnose disease in the upper GI tract and other parts of the
body through less invasive and disruptive methods for the patient. The efforts
of Infotonics, in conjunction with Mediscience Technology Corp. and BioScopix
Inc., to develop a photonics biopsy pill based on a photonics platform that
utilizes the inherent molecular physical characteristics of normal,
pre-cancerous, and cancerous tissues exhibit when illuminated with light of
specific frequencies, registrant believes, represents the next step in
diagnostic technology.

         INFOTONICS, This technology is based on registrants IP Platform and
continued research at Infotonics. Registrant's photonics-based optical biopsy
pill introduces a new and promising concept into the imaging pill market of
molecular Optical Biopsy. Commercialization of the (CPE) requires the
finalization of specific engineering and implementation decisions concerning the
components and composition of the pill.

         Infotonics/Registrant's Optical Biopsy Pill has the capability of
merging registrant's optical imaging techniques and nano-technology
miniature-scaling. Such compact devices use three-dimensional mechanical
components of various configurations on a miniaturized scale including an
optical component, resulting in an ingestible Pill system. Registrant believes
that its (CPE) would provide an additional functionality of actually possessing
the ability to treat cancer through manipulation of ultra-violet and visible
autoflourecsence by incorporating much of registrants underlying IP platform
science of photonic cancer-detection. Dr. Alfano's research indicates that use
of fluorescent light, excited photonic light, and varying spectroscopy
techniques will aid in more quickly and accurately detecting and treating
cancerous and pre-cancerous growths in vivo.

         Once completed, registrants (CPE) pill can offer doctors a new and
valuable method of detecting cancerous and pre-cancerous cells in a way that
addresses the concerns of the current marketplace. There is need for a device
that is less invasive than the "Barium Swallow" without the risks and discomfort
of the procedure. By finalizing this product, Registrant could become market
leader by offering a competitive (CPE) design that physicians will embrace. Once
the (CPE) is accepted by the medical industry, as is the Given Imaging Pill,
insurance carriers will be more willing to cover its costs as re-imbursement.

         Infotonics, with the approval of registrant, commissioned Syracuse
University Law to prepare an in depth analysis of the ingestible Pill market,
the over-all business opportunity and an evaluation of the four participant
technical platforms utilized in respective ingestible Pills. The report covered
in depth registrants (CPE) effort utilizing photonics-based optical biopsy
technology as its technology base. (See 8-K filing w/Syracuse Univ. 57 Pg.
report exhibit May 26, 2006

         o The report concludes that the Photonic Biopsy Pill demonstrates great
promise in providing a non-invasive, preliminary means of detecting in vivo
pre-cancerous and cancerous tissues in the upper digestive tract.

         o A number of important design issues remain to be addressed on the
components and design of a miniaturized Photonic Biopsy Pill including the
selection of a particular light emitter, light detector, power source, and
position-detection system and casing design.

         o The Photonic Biopsy Pill has the potential to become a market leader
in diagnostic technology, perhaps the industry standard, as a new diagnostic
device that physicians will embrace because it addresses real concerns of the
current marketplace.

         o The assessment process did not reveal any obvious IP barriers to
commercializing the Photonic Biopsy Pill based on competitors' products in the
market today.

         GIVEN IMAGING: PillCam(TM) Capsule Endoscope, approved by the FDA, a
non-reusable capsule taken with water the same way an ordinary pill is taken.
Capable of transmitting 50,000 color images to be reviewed for medical
significance. The purpose is to process collected data and translate it into a
video image of the small intestine. The Given system allows doctors to look at,
alter, save, or e-mail the video, as well as save snapshots of the video or
small video clips Given Diagnostic system is marketed in the United States as
well as sixty other countries. Given Imaging, with a present $600 million market
capitalization is a young and rapidly growing company. (See CITIGROUP/Smith
Barney Analyst Report 10-1-2004 by Peter Bye. Page 20 "Registrant-Infotonics"
identified as competitors).

                                     - 8 -
<page>

         OLYMPUS: camera pill is the ingestible EndoCapsule, available in Europe
since October, with FDA approval pending in the United States. Like the Given
product, the Olympus camera pill generates white light images of the digestive
tract, providing an alternative to conventional white-light endoscopy. It
transmits images via a "built-in capsule antenna," which is capable of
transmitting to the data recorder at a rate of two images per second.

         SMARTPILL: ingestible capsule endoscopy provides data to a computer,
which monitors the progress of the pill. It is not a camera pill at all, it does
not produce a visual image rather it is a mechanism that uses sensors to record
and transmit data regarding pressure and pH levels as it moves completely
through the entire GI tract. Currently SmartPill is still a work in progress.
Clinical trials for SmartPill began in March of 2005, and successfully completed
the first phase of its clinical trials.

         Government Regulation (FDA) Matters

         The FDA classifies medical devices into one of three classes, Class I,
II, or III. This classification is based on the controls deemed necessary by the
FDA to reasonably insure the safety and effectiveness of the device. Class I
devices are those whose safety and effectiveness can be reasonably ensured
through the use of general controls, such as labeling, adherence to GMP
requirements and the "510-(k)" process of marketing pre-notification. Class II
devices are those whose safety and effectiveness can reasonably be ensured
through implementation of general and special controls, such as performance
standards, post market surveillance, patient registries, and FDA guidelines.
Class III devices are those devices that must receive pre-market approval
("PMA") to insure their safety and effectiveness. They are generally
life-sustaining, life-supporting, or implantable devices, and also include
devices that are not substantially equivalent to a legally marketed Class I or
II device or to a Class III device first marketed prior to May 28, 1976 for
which a PMA has not yet been requested by the FDA.

         January 4, 2006 -Mediscience Technology Corp. through its New York
subsidiary, Medi-Photonics Development LLC, formally filed with the FDA its
documented request for a pivotal study commencement of its optical biopsy
device, the CD-Ratiometer. The proposed indication for the use of the
CD-Ratiometer is as a device that serving as an adjunct to diagnosis for cancer
detection of the cervix and for other molecular physiological abnormalities. The
(FDA) reviewed our submission proposing a protocol for a pilot study for the C-D
Ratiometer entitled "A Multi-center Pilot study to establish the Safety and
Parameters of Efficacy of an Optical Biopsy Device (CDR) for Cancer Detection of
Cervix Preliminary to a Pivotal Study," and determined that our proposed
clinical investigation is a non-significant risk (NSR) device study because it
does not meet the definition of a significant risk (SR) device under the
applicable FDA regulations (21 CFR 812,).

         An IDE application is not required to be submitted to, or approved by,
FDA for a NSR study. A NSR study is, however, subject to the abbreviated
requirements described in the IDE regulations. The sponsor of the investigation
must properly label the device, obtain institutional review board approval of
the investigation as a NSR study; ensure that each investigator obtains informed
consent from each subject under the investigator's care; comply with the
monitoring requirements; maintain required records; file the reports required;
ensure that participating parties maintain required records and file all reports
required.

         Registrant must also comply with the prohibitions against promotion and
other practices as identified in ss. 812.7- According to this section of the
regulation, the sponsor of a NSR study, investigator, or any person acting for
or on behalf of the registrant or investigator, is prohibited from promoting or
test marketing the investigational device until after FDA has approved the
device for commercial distribution; commercializing the device by charging a
price greater them that necessary to recover the cost of manufacture, research,
development, and handling; unduly prolonging the investigation; and representing
the investigational device as being safe or effective for the purposes for which
it is being investigated.

         Although registrant believes that our cancer diagnostic products will
ultimately be approved, there is no assurance the FDA will act favorably or
quickly in making such reviews and approving our products for sale. We may
encounter delays or unanticipated costs in our efforts to secure needed funding
and all governmental approvals or licenses, which could delay or possibly
preclude us from completing our FDA process and/or marketing our CD products. To
the extent that we intend to market our CD products in foreign markets through
BioScopix Inc or others, we will be subject to foreign governmental regulations,
as well as USA, with respect to the manufacture and

                                     - 9 -
<page>

sale of our medical device products. We cannot accurately estimate the cost and
time that will be required in order to comply with such regulations.

         Patents and Proprietary Rights

         April 14, 2003 registrant secured the exclusive world-wide license for
US patent "Stokes-Shift Fluorescence Spectroscopy for Detection of Disease and
Physiological State of Specimen". The patent was filed under the Patent
Cooperation Treaty ("PCT") (1970) for EU approval on January 23, 2004 and
continues in that process.

         October 18, 2005 registrant agreed to secure the exclusive world-wide
license rights for US patent disclosure US 60/725,670 "Phosphorescence and
Fluorescence Spectroscopy for Detection of Cancer and Pre-Cancer from
Normal/Benign regions" from RFCUNY.

         Dr. Robert Alfano and registrant believe that all recent filings plus
registrants achieved IP claims in totality inter-relate in the process of
non-invasively detecting cancerous tissue within the body and on issuance would
extend the Company's core IP technology 17+ yrs expanding, maintaining and
continuing registrants IP position in the Optical Biopsy field. Registrant
regards this accumulated and related patent cluster as pioneering, blocking and
seminal in its area of cancer and physiological change diagnosis both in-vivo
and in-vitro. (See Patent list infra.)

         EU Patent Cooperation Treaty:

         Registrant is seeking patent protection simultaneously in each of a
large number of western European countries by filing an "international" patent
application. The application is subjected to an "international search. The
search results in an "international search report," a listing of the citations
of such published documents that might affect the patentability of the invention
claimed in the application. The ISA also prepares a written opinion on
patentability. The report and the written opinion are communicated to the
applicant for his decision to continue or not in the process.

         The medical device industry places considerable importance on obtaining
patent protection and protecting trade secrets for new technologies, products,
and processes because of the substantial length of time and expense associated
with bringing new products through development and regulatory approval to the
marketplace. Accordingly, the Company or the Research Foundation of CUNY files
patent applications to protect technologies that the Company believes are
significant to the development of the Company's business. The Company either
owns or holds exclusive licenses to 28 U.S. patents, plus 1 in Japan, for a
total of 29. There can be no assurance, however, that any pending patent
applications will issue as patents, or if patents do issue, that the claims will
be sufficiently broad to protect what the Company believes to be its proprietary
rights. In addition, there can be no assurance that issued patents or pending
patent applications will not be challenged or circumvented by competitors, or
that the rights granted there-under will provide competitive advantage to the
Company.

         The Company also relies on trade secrets and know-how that it seeks to
protect in part, through the use of Confidentiality Agreements. There can be no
assurance that these agreements will not be breached, that the Company will have
adequate remedies for any breach, or that the Company's trade secrets and
know-how will not otherwise become known to or independently developed by
competitors.

         Third Party Reimbursement

         Registrant ultimately will seek reimbursement from third-party payers,
primarily in the United States through Federal, State, Medicare, Medicaid and
private health insurance plans, and in other countries, typically national
government sponsored health and welfare plans. Such reimbursement will be
subject to the regulations and policies of governmental agencies and other
third-party payers. Reduced governmental expenditures in the United States and
in other countries continue to put pressure on diagnostic procedure
reimbursement. The Company cannot predict what, if any changes, may be
forthcoming in these policies and procedures, nor the effect of such changes on
our business potential of our screening and diagnostic technology in any
endoscopic format (CD-R, ingestible CPE Pill)

                                     - 10 -
<page>

         Other Technologies and other applications

         In addition to our developments in native tissue fluorescence
spectroscopy we have also invented certain other potentially useful diagnostic
optical imaging technology. The optical imaging technology uses laser light to
image dense tissues by capturing the early photons of light shown through the
imaged tissue and gating off the scattered, later arriving light, which reduces
the interference and results in clearer images than can be traditionally be seen
using currently available optical imaging technologies, such as, computed
tomography scanning or x-rays or mammograms.

         Our Patents

         Registrants independently owned and inter-related IP patent cluster
acquired through contract with the Research Foundation City University of New
York (RFCUNY), see 8-K filed June 1, 2002, Attachment "A" MTC Licensed/Funded
Patents:

         ATTACHMENT "A"

         Medical Diagnostic Optical Technology

         US Patent application US 60/725,670 "Phosphorescence and Fluorescence
Spectroscopy for Detection of Cancer and Pre-Cancer from Normal/Benign regions"

         # 7,192,783 March 20,2007 US Patent issued "Stokes-Shift Fluorescence
spectroscopy for detection of disease and physiological state of specimen".

         #5,042,494,August 27, 1991, Method and Apparatus for Detecting
Cancerous Tissue using Luminescence Excitation Spectra, R. R. Alfano.

         #5,131,398, July 21, 1992, Method and Apparatus for Distinguishing
Cancerous Tissue from Benign Tumor Tissue, Benign Tissue or Normal Tissue using
Native Fluorescence, R. R. Alfano, B. Das, G. Tang.

         #5,261,410, November 16, 1993, Method for determining if a Tissue is a
Malignant Tumor Tissue, a Benign Tumor Tissue, or a Normal Benign Tissue using
Raman Spectroscopy, R. R. Alfano, C. H. Liu, W. S. Glassman.

         #5,293,872, March 15, 1994, Method for Distinguishing between Calcified
Atherosclerotic Tissue and Fibrous Atherosclerotic Tissue or Normal
Cardiovascular Tissue Using Raman Spectroscopy, R. R. Alfano, C. H. Liu

         #5,348,018, September 20, 1994, Method for determining if Tissue is
Malignant as opposed to Non-Malignant using Time-Resolved Fluorescence
Spectroscopy, R. R. Alfano, A. Pradhan, G. C. Tang, L. Wang, Y. Budansky, B. B.
Das.

         #5,413,108, May 9, 1995, Method and Apparatus for Mapping a Tissue
Sample for and Distinguishing Different Regions thereof based on Luminescence
Measurements of Cancer-indicative Native Fluorophor, R. R. Alfano.

         #5,467,767, November 21, 1995, Method for Determining if Tissue is
Malignant as opposed to Non-Malignant using Time-resolved Fluorescence
Spectroscopy, R. R. Alfano, Asima Pradhan, G. C. Tang, L. Wang, Y. Budansky, B.
B. Das.

         #5,635,402, June 3, 1997. Technique for Determining whether a Cell is
Malignant as opposed to Non-malignant using Extrinsic Fluorescence Spectroscopy,
R. R. Alfano, Cheng H. Liu, Wei L. Sha, Yury Budansky.

                                     - 11 -
<page>

         #5,769,081, June 23, 1998, Method for Detecting Cancerous Tissue using
Optical Spectroscopy and Fourier Analysis, R. R. Alfano, A. Katz, Y. Yang.

         #5,849,595, December 15, 1998, Method for Monitoring the Effects of
Chemotherapeutic Agents on Neoplasmic Media, R. R. Alfano, G. C. Tang, S. P.
Schantz.

         #5,983,125, November 9, 1999, Method and apparatus for in vivo
examination of subcutaneous tissues inside an organ of a body using optical
spectroscopy, R. R. Alfano, Y. Budansky.

         #6,006,001, December 21, 1999, Fiber optic assembly useful in optical
spectroscopy, R. R. Alfano, S. Demos, G. Zhang.

         #6,080,584, June 27, 2000, Method and apparatus for detecting the
presence of cancerous and precancerous cells in a smear using native
fluorescence spectroscopy, Robert R. Alfano, Singaravelu Ganesan, and Yury
Budansky.

         #6,091,985, July 18, 2000, Detection of cancer and precancerous
conditions in tissues and/or cells using native fluorescence excitation
spectroscopy, Robert R. Alfano, Singaravelu Ganesan, Alvin Katz, Yang Yuanlong.

         Optical Imaging for Medical Purposes

         US Patent Pending "Three-dimensional Radiative Transfer Tomography for
Turbid Media."

         #5,371,368, December 6, 1994, Ultrafast Optical Imaging of Objects in a
Scattering Medium, R. R. Alfano, P. P. Ho, L. Wang.

         #5,625,458, April 29, 1997, Method and System for Imaging Objects in
Turbid Media using Diffusive Fermat Photons, R. R. Alfano, A. Y. Polishchuk.

         #5,644,429, July 1, 1997 (see #5,371,368), 2-Dimensional Imaging of
Translucent Objects in Turbid Media, R. R. Alfano, P. P. Ho, X. Liang.

         #5,710,429, January 20, 1998, Ultrafast Optical Imaging of objects in
or Behind Scattering Media, R. R. Alfano, Feng Liu, Q. Z. Wang P. Ho, L. M.
Wang, X. Liang.

         #5,719,399, February 17, 1998, Imaging and Characterization of Tissue
based upon the Preservation of Polarized Light transmitted therethrough, R. R.
Alfano, S. G. Demos.

         #5,799,656, September 1, 1998, Optical Imaging of Breast Tissues to
enable the Detection therein of Calcification Regions Suggestive of Cancer, R.
R. Alfano, P. P. Ho, L. Wang, X. Liang, P. Galland.

         #5,813,988, September 29, 1998, Time Resolved Diffusion Tomographic
Imaging in Highly Scattering Turbid Media, R. R. Alfano, W. Cai, F. Liu, M. Lax,
Bidyut B. Das.

         #5,847,394, December 8, 1998, Imaging of Objects Based upon the
Polarization or Depolarization of Light, R. R. Alfano, S. G. Demos.

         #5,931,789, August 3, 1999, Time-resolved diffusion tomographic 2D and
3D imaging in highly scattering turbid media, Robert R. Alfano, Wei Cai, Feng
Liu, Melvin Lax.

         # 6,208,886 B1, March 27, 2001, Non-linear optical tomography of turbid
media, Robert R. Alfano, Yici Guo, Feng Liu, Ping Pei Ho.

         # 6,215,587, April 10, 2001, Microscope imaging inside highly
scattering media, Robert R. Alfano, Gordon Anderson, Feng Liu.

                                     - 12 -
<page>

         The Company and CUNY Research Foundation have been diligent in the
payment of maintenance obligations to the US Patent Office during the life of
each of the Company's significant patents.

         Employees

         As of February 28, 2007 the Company had one (1) full-time employee/s in
its New York Subsidiary Medi-photonics LLC Peter Katevatis Chairman CEO, one (1)
retained consultant/s, Dr. Robert R. Alfano and one part-time employee Frank
Benick CFO

         As of February 28, 2006 the Company had two (one) full-time employee/s
in its New York Subsidiary Medi-photonics LLC Michael Engelhart President COO,
Peter Katevatis Chairman CEO, two (one) retained consultant/s, Dr. Robert R.
Alfano and John Matheu and one part-time employee Frank Benick CFO

         Michael Engelharts three year employment agreement terminated April 23,
2006. (his employment contract is part of and an attachment to Registrants SEC
10-K 2003 page 44 "Employment contract and warrants Exhibits "A","B","C" herein
incorporated by reference. See subsequent events Item 14 John Matheu one year
consulting agreement terminated April 6, 2006 by its terms.

         Neither the full or part-time employees nor the retained consultants
are governed by any collective bargaining agreement; the relations between the
Company and its present employees and retained consultants are believed to be
satisfactory.

Item 2.       Description of Property

         Registrant is having on-going discussions with David Smith President of
Infotonics Research, Rochester New York (CPE development partner and registrant
shareholder) to establish a company incubation site for development, assembly
and manufacturing capability on the New York State Infotonics Campus in
Rochester NY.

         Properties: Our corporate headquarters are located in Cherry Hill, New
Jersey. We have a month-to-month lease dated July 25, 2002 with Mr. Katevatis,
our Chairman and Chief Executive Officer, for use of approximately 3,000 square
feet of office space, pursuant to which we pay no rent but have assumed the
obligation to pay all taxes, maintenance, insurance, utilities and repairs
relating to such premises. We believe that our current facilities adequately
provide for our operations.

Item 3.       Legal Proceedings

         We are not presently a party to any pending litigation, nor, to the
knowledge of our management, is any litigation threatened against us which may
materially affect our operations or business.

Item 4.       Submission of Matters To A Vote Of Security Holders

         None.

                                     PART II

Item 5.       Market for Common Equity and Related Stockholder Matters

         Market Information

         The Company's Common Stock is traded on the over-the-counter market
under the symbol "MDSC." The following table sets forth the range of high and
low bid quotations of the Company's Common Stock for the periods set forth
below, as reported by the National Association of Securities Dealers, Inc. and
Silicon Investors Historical data. Such quotations represent inter-dealer
quotations, without adjustment for retail markets, markdowns or commissions, and
do not necessarily represent actual transactions.

                                     - 13 -
<page>

         Holders

         As of February 28, 2007, the approximate number of all holders of
record of the Company's Common Stock 735 and Series A Preferred Stock -0-

         Dividends

         The Company has not paid or declared any dividends on its Common Stock
since its inception, and intends to reinvest earnings, if any, in the Company to
accelerate its growth. Accordingly, the Company does not contemplate or
anticipate paying any dividends upon its Common Stock in the foreseeable future.

Item 6.       Management's Discussion and Analysis

         The following discussion should be read in conjunction with the
Financial Statements and the notes thereto that appear in Item 7 of this annual
report on Form 10-KSB.

         Critical Accounting Policies & Estimates

         Our consolidated financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America. Note 1
to the consolidated financial statements describes the significant accounting
policies and methods used in the preparation of our consolidated financial
statements.

         We have identified the policies below as some of the more critical to
our business and the understanding of our results of operations. These policies
may involve a higher degree of judgment and complexity in their application and
represent the critical accounting policies used in the preparation of our
financial statements. Although we believe our judgments and estimates are
appropriate and correct, actual future results may differ from our estimates. If
different assumptions or conditions were to prevail; the results could be
materially different from our reported results. The impact and any associated
risks related to these policies on our business operations is discussed
throughout Management's Discussion and Analysis of Financial Condition and
Results of Operations where such policies affect our reported and expected
financial results.

         Use of Estimates

         The preparation of our consolidated financial statements, in conformity
with accounting principles generally accepted in the United States, requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities and equity and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. These estimates have a
material impact on our financial statements, and are discussed in detail
throughout our analysis of the results of operations.

         In addition to evaluating estimates relating to the items discussed
above, we also consider other estimates, including, but not limited to, Patent
licenses and their related costs including the maintenance of Patents licenses
and all costs incurred in connection with acquiring patents, patent licenses and
other proprietary rights related to our commercially developed products, income
taxes, and financing operations. We base our 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, liabilities and equity that are not readily
apparent from other sources. Actual results could differ from those estimates
under different assumptions or conditions. Additional information regarding risk
factors that may impact our estimates is included below under "Risk Factors."

                                     - 14 -
<page>

         Income Taxes

         As part of the process of preparing our consolidated financial
statements we are required to estimate our income taxes in each of the
jurisdictions in which we operate. This process involves us estimating our
actual current tax expense together with assessing temporary differences
resulting from differing treatment of items, for tax and accounting purposes.
These differences result in deferred tax assets and liabilities, which are
included within our consolidated balance sheet. We must then assess the
likelihood that our deferred tax assets will be recovered from future taxable
income and to the extent we believe that recovery is not likely, we must
establish a valuation allowance. In the event that we determine that we would be
able to realize 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.

         Significant management judgment is required in determining the
valuation allowance recorded against our net deferred tax assets, which consist
of net operating loss carry forwards. We have recorded a valuation allowance of
$5.9 million as of February 28, 2006, due to uncertainties related to our
ability to utilize our deferred tax assets before they expire. The valuation
allowance is based on our estimates of taxable income by jurisdiction in which
we operate and the period over which our deferred tax assets will be
recoverable.

         Fiscal Years Ended February 28, 2007 and 2006

         Revenues

         We had no revenues during the year ending February 28, 2007 and
February 28, 2006. Our primary focus was our continued development of our
light-based technology.

         General and Administrative Expense

         General and administrative expenses decreased approximately $734,000 or
39% during the current year ended February 28, 2007 as compared to the year
ended February 28, 2006. This decrease is net of both increases and decreases in
key general and administrative expense categories. Included in the decrease in
general and administrative expenses is a decrease in consulting costs,
approximating $518,000 during the current year when compared to the prior year.
The decrease was partly comprised of approximately $381,000 of deferred costs
amortized as an expense, as compared to approximately $795,000 of deferred costs
amortized as an expense in the previous year, resulting in a decrease of
$414,000. The overall decrease in consulting costs was complimented by a
decrease of $12,500 in other consulting costs expended, all associated with
corporate management, investor relations, marketing opportunities, product
development and corporate funding. Advertising, travel and marketing decreased
approximately $29,000 in the current year when compared to the prior year. In
the prior year, the Company was very active in pursuing the establishment of
copromotional arrangements for the marketing, distributing, and commercial
exploitation of cancer detection technology, along with the promotional
activities of raising capital to support these objectives. Included in the
decrease in general and administrative expenses is a decrease in professional
fees approximating $38,000 during the current year when compared to the prior
year. In the prior year, the Company had incurred additional professional fee
costs associated with a Securities and Exchange Commission Filing and had
previously employed an accounting consultant which subsequently became employed
as the Chief Financial Officer. Also included in the decrease in general and
administrative expense is a decrease in salaries, wages and related costs
approximating $88,000 during the current year when compared to the prior year.
The decrease in payroll costs was net of an increase of $35,500 of payroll costs
associated with the employment of the Chief Financial Officer, who was
previously employed as an accounting consultant. All other general and
administrative expenses decreased approximately $61,000 during the current year
when compared to the prior year. The largest item of decline within the other
general and administrative expense category was rent expense for an office in
New York ($7,700).

         Research and Development Expense

         Research and development expense decreased approximately $61,000 during
the current year ended February 28, 2007 when compared to the prior year ended
February 28, 2006. This decrease was comprised of net

                                     - 15 -
<page>

increases and decreases in several key research and development categories.
Included in the increase was approximately $15,000 in payment, both associated
with the Company's agreement with Alfanix Technology to construct sophisticated
photonics devices for cancer diagnostics and to introduce the devices in Latin
America for testing on human subjects. Also included in the increase was $30,000
in payments to Infotonics for preliminary work in conjunction with the
development of the Compact Pill Explorer (CPE). The decrease was partly
comprised of approximately $177,000 of deferred costs amortized as an expense,
as compared to approximately $151,000 amortized in the previous year, resulting
in a decrease of $27,000. Also included in the decrease was approximately
$133,000 in payments made to Research Foundation of the City University of New
York.

         Liquidity and Capital Resources

         We had a deficiency in working capital as of February 28, 2007 of
approximately $3,404,000 compared to a deficiency of approximately $3,012,000 at
February 28, 2006 or an increase in the deficiency of approximately $392,000 for
the current year ended February 28, 2007. The increase in the deficiency was
comprised of an increase of approximately $24,000 in current assets and a
decrease of approximately $415,000 in current liabilities which is primarily
composed of accrued liabilities. The deficiency in working capital is primarily
represented by accruals for professional fees, consulting, salaries, and wages
and other general obligations.

         Cash flows from financing activities was $425,000 for the year ended
February 28, 2007, primarily related to the proceeds from the private placement
of common stock. The proceeds from the private placement will be primarily used
for working capital and clinical development of certain prototypes, regulators,
medical and scientific affairs, and market research.

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

         Off-Balance Sheet Arrangements

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

                                  RISK FACTORS

         The following risk factors should be considered carefully in addition
to the other information presented in this report. This report contains forward
looking statements that involve risks and uncertainties. Our actual results may
differ significantly from the results discussed in the forward looking
statements. Factors that might cause such differences include, but are not
limited to, the following:

                                     - 16 -
<page>

         We do not have a long operating history, which makes it difficult for
you to evaluate our business. Because limited historical information is
available on our revenue trends and operations, it will be difficult for you to
evaluate our business. Our prospects must be considered in light of the
substantial risks, expenses, uncertainties and difficulties encountered by
entrants into the medical device industry, which is characterized by increasing
intense competition and a high failure rate.



         We have a history of losses, and we expect losses to continue. We have
never been profitable, and we have had operating losses since our inception. We
expect our operating losses to continue as we continue to expend substantial
resources to launch our product line, to complete development of our products,
obtain regulatory clearances or approvals, and build our marketing, sales,
manufacturing and finance organizations, and conduct further research and
development. To date, we have been engaged primarily in research and development
efforts. The further development and commercialization of our products will
require substantial development, regulatory, sales and marketing, manufacturing
and other expenditures.

         If we cannot obtain additional funds when needed, we will not be able
to implement our business plan. We will require substantial additional capital
to develop our products, including completing product testing and clinical
trials, (pilot and Pivital) obtaining all required regulatory approvals and
clearances, beginning and scaling up manufacturing, and marketing our products.
We have historically funded a significant portion of our activities through
private placements and available University matching funds. We are seeking a
collaborative partner for our technology and are seeking targeted funding for
our FDA approved March 29, 2006 cervical cancer (Pap) program. Any failure to
find collaborative partners to fund our capital expenditures, or our inability
to obtain capital through other sources, would limit our ability to grow and
operate as planned. Even if we do enter into an agreement with a collaborative
partner, the obligations of a collaborative partner to fund our expenditures is
largely discretionary and depends on a number of factors, including our ability
to meet specified milestones in the development and testing of the relevant
product. We may not be able to meet these milestones, or our collaborative
partner may not continue to fund our expenditures.

         We bear responsibility for all aspects of our Optical Biopsy platform
product line and our cervical cancer CD-R and Compact Photonic ingestible Pill
product, (developed with a collaborative equity partner Infotonics research). We
may be required to raise additional funds through public or private financing,
additional collaborative relationships or other arrangements. We believe that
our existing capital resources may not be sufficient to fund our operations to
the point of commercial introduction of our monitoring products, our cervical
cancer detection products. . Any failure to achieve adequate funding in a timely
fashion would delay our development programs and could lead to abandonment of
one or more of our development initiatives. Any required additional funding may
not be available on terms attractive to us, or at all. To the extent we cannot
obtain additional funding, our ability to continue to develop and introduce
products to market will be limited. Any additional equity financing will be
dilutive to stockholders, and debt financing, if available, may involve
restrictive covenants that would limit how we conduct our business or finance
our operations.

         If we cannot obtain additional funds when needed, or achieve
profitability we may not be able to continue as a going concern. Our independent
auditors have included an explanatory paragraph in their audit report referring
to our recurring operating losses and a substantial doubt about our ability to
continue as a going concern. Absent additional funding from private or public
equity or debt financings, collaborative or other partnering arrangements, or
other sources and If we do not secure additional funding, we will be unable to
conduct all of our product development efforts as planned, and we may need to
cease operations or sell assets. In addition, the existence of the explanatory
paragraph in the audit report may in and of itself cause our stock price to
decline as certain investors may be restricted or precluded from investing in
companies that have received this notice in an audit report.

         Our ability to sell our products is controlled by government
regulations, and we may not be able to obtain any necessary clearances or
approvals. The design, manufacturing, labeling, distribution and marketing of
medical device products are subject to extensive and rigorous government
regulation including but not limited to FDA which can be expensive and uncertain
and can cause lengthy delays before we can begin selling our products.

                                     - 17 -
<page>

         In the united states, the Food and Drug Administration's actions could
delay or prevent our ability to sell our products, which would adversely affect
our growth and strategy plans. In order for us to market our products in the
United States, we must obtain continued clearance or approval from the Food and
Drug Administration. We cannot be sure: that we or any collaborative partners
will make timely filings with the FDA; that the FDA will act favorably or
quickly on these submissions; that we will not be required to submit additional
information or perform additional clinical studies; that we would not be
required to submit an application for PMA as described below; or that other
significant difficulties and costs will not be encountered to obtain FDA
clearance or approval. The pre-market approval process is more rigorous and
lengthier than the 510(k) clearance process for pre-market notifications; it can
take several years from initial filing and require the submission of extensive
supporting data and clinical information clinical study data.

         The FDA may impose strict labeling or other requirements as a condition
of its clearance or approval, any of which could limit our ability to market our
products. Further, if we wish to modify a product after FDA clearance of a
pre-market notification or approval of a pre-market approval application,
including changes in indications or other modifications that could affect safety
and efficacy, additional clearances or approvals will be required from the FDA.
Any request by the FDA for additional data, or any requirement by the FDA that
we conduct additional clinical studies or submit to the more rigorous and
lengthier pre-market approval process, could result in a significant delay in
bringing our products to market and substantial additional research and other
expenditures. Similarly, any labeling or other conditions or restrictions
imposed by the FDA on the marketing of our products could hinder our ability to
effectively market our products. Any of the above actions by the FDA could delay
or prevent altogether our ability to market and distribute our products.
Further, there may be new FDA policies or changes in FDA policies that could be
adverse to us.

         In foreign countries, including Latin American and European countries,
we are also subject to government regulation, which could delay or prevent our
ability to sell our products in those jurisdictions. In order for us to market
our products in Latin America or Europe and some other international
jurisdictions, we and our distributors and agents e.g. ALFANIX LTD must obtain
required regulatory registrations or approvals. We must also comply with
extensive regulations regarding safety, efficacy and quality in those
jurisdictions. We may not be able to obtain the required regulatory
registrations or approvals, or we may be required to incur significant costs in
obtaining or maintaining any regulatory registrations or approvals we receive.
Delays in obtaining any registrations or approvals required to market our
products, failure to receive these registrations or approvals, or future loss of
previously obtained registrations or approvals would limit our ability to sell
our products internationally. For example, international regulatory bodies have
adopted various regulations governing product standards, packaging requirements,
labeling requirements, import restrictions, tariff regulations, duties and tax
requirements. These regulations vary from country to country. For example In
order to sell our products in Europe, we must maintain ISO 9001 certification
and CE mark certification, which is an international symbol of quality and
compliance with applicable European medical device directives. Failure to
receive or maintain ISO 9001 certification or CE mark certification or other
international regulatory approvals would prevent us from selling in Europe and
similar requirements would prevent us from selling in Latin American countries.

         Even if we obtain clearance or approval to sell our products, we are
subject to ongoing requirements and inspections that could lead to the
restriction, suspension or revocation of our clearance. We, as well as any
collaborative partners, will be required to adhere to applicable FDA regulations
regarding good manufacturing practice, which include testing, control, and
documentation requirements. We are subject to similar regulations in foreign
countries. Ongoing compliance with good manufacturing practice and other
applicable regulatory requirements will be strictly enforced in the United
States through periodic inspections by state and federal agencies, including the
FDA, and in international jurisdictions by comparable agencies. Failure to
comply with these regulatory requirements could result in, among other things,
warning letters, fines, injunctions, civil penalties, recall or seizure of
products, total or partial suspension of production, failure to obtain
pre-market clearance or pre-market approval for devices, withdrawal of approvals
previously obtained, and criminal prosecution. The restriction, suspension or
revocation of regulatory approvals or any other failure to comply with
regulatory requirements would limit our ability to operate and could increase
our costs.

         Our success largely depends on our ability to obtain and protect the
proprietary information on which we base our products. Our success depends in
large part upon our ability to establish and maintain the proprietary nature of
our technology through the patent process, as well as our ability to possibly
license from others

                                     - 18 -
<page>

patents and patent applications necessary to develop products. If any of our
patents are successfully challenged, invalidated or circumvented, or our right
or ability to manufacture our products were to be limited, our ability to
continue to manufacture and market our products could be adversely affected. In
addition to patents, we rely on trade secrets and proprietary know-how, which we
seek to protect, in part, through confidentiality and proprietary information
agreements. The other parties to these agreements may breach these provisions,
and we may not have adequate remedies for any breach. Additionally, our trade
secrets could otherwise become known to or be independently developed by
competitors.

         We have been issued, or have rights to, 28 U.S. patents (including
those under license). In addition, we have filed for, or have rights to, U.S.
patents (including those under license) that are still pending. One or more of
the patents we hold directly or license from third parties, may be successfully
challenged, invalidated or circumvented, or we may otherwise be unable to rely
on these patents. We have contract obligations to financially maintain these
patents with periodic payments to the US, Japan and EU patent offices which
could be unmet jeopardizing our existing rights. These risks are also present
for the process we use or will use for manufacturing our products. In addition,
our competitors, many of whom have substantial resources and have made
substantial investments in competing technologies, may apply for and obtain
patents that prevent, limit or interfere with our ability to make, use and sell
our products, either in the United States or in international markets.

         The medical device industry has been characterized by extensive
litigation regarding patents and other intellectual property rights. In
addition, the United States Patent and Trademark Office may institute
interference proceedings. The defense and prosecution of intellectual property
suits, Patent and Trademark Office proceedings and related legal and
administrative proceedings are both costly and time consuming. Moreover, we may
need to litigate to enforce our patents, to protect our trade secrets or
know-how, or to determine the enforceability, scope and validity of the
proprietary rights of others. Any litigation or interference proceedings
involving us may require us to incur substantial legal and other fees and
expenses and may require some of our employees to devote all or a substantial
portion of their time to the proceedings. An adverse determination in the
proceedings could subject us to significant liabilities to third parties,
require us to seek licenses from third parties or prevent us from selling our
products in some or all markets. We may not be able to reach a satisfactory
settlement of any dispute by licensing necessary patents or other intellectual
property. Even if we reached a settlement, the settlement process may be
expensive and time consuming, and the terms of the settlement may require us to
pay substantial royalties. An adverse determination in a judicial or
administrative proceeding or the failure to obtain a necessary license could
prevent us from manufacturing and selling our products.

         We are developing our current product line independently from any
collaborative partners, which may require us to access additional capital and to
develop additional skills to produce, market and distribute these products. We
are also currently seeking direct funding for and expect to commercialize our
cervical cancer detection products independently of any collaborative partner.
These activities require additional resources and capital that we will need to
secure. There is no assurance that we will be able to raise sufficient capital
or attract and retain skilled personnel to enable us to finish development,
launch and market these products. Thus, there can be no assurance that we will
be able to commercialize all, or any.

         Because our products, which use different technology or apply
technology in more innovative ways than other medical devices, are or will be
new to the market, we may not be successful in launching our products and our
operations and growth would be adversely affected. Our products are based on new
methods of cervical cancer detection. If our products do not achieve significant
market acceptance, our sales will be limited and our financial condition may
suffer. Physicians and individuals may not recommend or use our products unless
they determine that these products are an attractive alternative to current
tests that have a long history of safe and effective use. To date, our products
have been used by only a limited number of people, and few independent studies
regarding our products have been published. The lack of independent studies
limits the ability of doctors or consumers to compare our products to
conventional products.

         If we are unable to compete effectively in the highly competitive
medical device industry, our future growth and operating results will suffer.
The medical device industry in general and the markets in which we expect to
offer products in particular, are intensely competitive. Many of our competitors
have substantially greater financial, research, technical, and manufacturing,
marketing and distribution resources than we do and have greater name
recognition and lengthier operating histories in the health care industry. We
may not be able to effectively

                                     - 19 -
<page>

compete against these and other competitors. Further, if our products are not
available at competitive prices, health care administrators who are subject to
increasing pressures to reduce costs may not elect to purchase them.
Accordingly, competition in this area is expected to increase.

         Furthermore, our competitors may succeed in developing, either before
or after the development and commercialization of our products, devices and
technologies that permit more efficient, less expensive non-invasive and less
invasive monitoring, or cancer detection. It is also possible that one or more
pharmaceutical or other health care companies will develop therapeutic drugs,
treatments or other products that will substantially render our products
obsolete.

         We have little manufacturing experience, which could limit our growth.
We do not have manufacturing experience that would enable us to make products in
the volumes that would be necessary for us to achieve significant commercial
sales, and we rely upon our suppliers. In addition, we may not be able to
establish and maintain reliable, efficient, full scale manufacturing at
commercially reasonable costs, in a timely fashion. Difficulties we encounter in
manufacturing scale-up, or our failure to implement and maintain our
manufacturing facilities in accordance with good manufacturing practice
regulations, international quality standards or other regulatory requirements,
could result in a delay or termination of production.

         The availability of third-party reimbursement for our products is
uncertain, which may limit consumer use and the market for our products. In the
United States and elsewhere, sales of medical products are dependent, in part,
on the ability of consumers of these products to obtain reimbursement for all or
a portion of their cost from third-party payers, such as government and private
insurance plans. Any inability of patients, hospitals, physicians and other
users of our products to obtain sufficient reimbursement from third-party payers
for our products, or adverse changes in relevant governmental policies or the
policies of private third-party payers regarding reimbursement for these
products, could limit our ability to sell our products on a competitive basis.
We are unable to predict what changes will be made in the reimbursement methods
used by third-party health care payers. Moreover, third-party payers are
increasingly challenging the prices charged for medical products and services,
and some health care providers are gradually adopting a managed care system in
which the providers contract to provide comprehensive health care services for a
fixed cost per person. Patients, hospitals and physicians may not be able to
justify the use of our products by the attendant cost savings and clinical
benefits that we believe will be derived from the use of our products, and
therefore may not be able to obtain third-party reimbursement.

         Reimbursement and health care payment systems in international markets
vary significantly by country and include both government sponsored health care
and private insurance. We may not be able to obtain approvals for reimbursement
from these international third-party payers in a timely manner, if at all. Any
failure to receive international reimbursement approvals could have an adverse
effect on market acceptance of our products in the international markets in
which approvals are sought.

         Our success depends on our ability to attract and retain scientific,
technical, managerial and finance personnel. Our ability to operate successfully
and manage our future growth depends in significant part upon the continued
service of key scientific, technical and managerial and finance personnel, as
well as our ability to attract and retain additional highly qualified personnel
in these fields. We may not be able to attract and retain key employees when
necessary, which would limit our operations and growth.

         We are significantly influenced by our directors, executive officers
and their affiliated entities. Our directors, executive officers and entities
affiliated with them beneficially owned an aggregate of 21.1 % of our
outstanding common stock as of February 28, 2006. Additionally Founders
Katevatis and Alfano have historical and board approved anti-dilution rights of
17% and 4% respectively. The founders are owed significant non-interest bearing
debt which they have the right to assign at any time or conversely convert upon
60 days notice to the board at $.25 cents per share. These stockholders, acting
together, would be able to exert significant influence on substantially all
matters requiring approval by our stockholders, including the election of
directors and the approval of mergers and other business combination
transactions.

Item 7.       Financial Statements

         The information that appears following Item 14 of this report and is
incorporated herein by reference.

                                     - 20 -
<page>

Item 8.       Changes in and Disagreements with Accountants on Accounting and
              Financial Disclosure

         None.

Item 8A.      Controls and Procedures

         Evaluation of disclosure controls and procedures.

         Our Chief Executive Officer and principle financial officer evaluated
the effectiveness of the Company's disclosure controls and procedures as of the
end of the period covered by this report. Based on that evaluation, the Chief
Executive Officer and principle financial officer concluded that our disclosure
controls and procedures as of the end of the period covered by this report are
functioning effectively to provide reasonable assurance that the information
required to be disclosed by the Company in reports filed under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules and
forms. A controlled system, no matter how well designed and operated, cannot
provide absolute assurance that the objectives of the controls are met, and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within a company have been detected.

         Changes in internal control over financial reporting.

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

        MEDISCIENCE TECHNOLOGY CORP. STRUCTURES AND GOVERNANCE PROCEDURES

         Over the past few years, new legal and regulatory requirements have
caused corporations to adopt many new governance practices and to formalize
previously informal practices. In developing and refining our practices during
this period, we have been fortunate to build on a history of strong governance.
We have sought not only to comply with new requirements, but to adopt best
practices ensuring that we maintain the highest standards of ethics while
building value for all of our stakeholders. The information, documents and
policies described in the Corporate Governance area of our Web site
MEDISCIENCETECH.com represent both the key components of our corporate
governance and the result of our continuing attention to governance matters.
Those components include:

         o        All Board Committees

         o        Corporate Governance Guidelines

         o        Code of Ethics

         o        EDGAR Filings

         o        Governance and policy

         Executive Officers, The Board/Committee Accountability, Audit and
Internal Control Framework

         Executive officers: The Chief Executive of Mediscience Technology Corp.
and other senior executives are responsible for the day-to-day management of the
Company. The Executive Committee which comprises the executive directors and
certain other senior executives of MTC (the 'Executive Officers'), assists the
Chief Executive in the management of the business. The following are Executive
Officers of MTC and all, are members of the executive committee: John Kennedy,
Peter Katevatis Esq., Michael Kouvatas Esq.

                                     - 21 -
<page>

         Board/Committees/Corporate Governance

         Registrant within the provisions of Sarbanes-Oxley Act is a
Non-Accelerated SEC filer. As such, for fiscal years beginning on or after
December 16, 2006 registrant must comply with S404 of the Sarbanes-Oxley Act of
2002. Management is required to report on the Group's internal controls over
financial reporting. Work has been carried out during 2004 and 2005 in
preparation for reporting in accordance with the Act and will continue to be
progressed during the year e.g. retention of CFO Frank Benick CPA

         The Board is committed to the highest standards of Corporate Governance
and considers that it has complied with the new Sarbanes Code throughout this
year. Its Audit Committee has the skills and experience of corporate financial
matters to discharge properly its responsibilities. Members John Kennedy
Chairman, Michael Kouvatas Esq. and William Armstrong (directors) satisfy the
definition of 'financial expert' in the Sarbanes-Oxley Act.

         Corporate Governance policies and procedures applied

         The Company's Shares are listed on the NASDAQ BB OTC and the Company is
therefore subject to the rules of the NASADAQ as well as the US securities laws
and the rules of the US Securities and Exchange Commission ("SEC" as
applicable.) . The Board believes that it has complied throughout the year with
both SEC and NASDAQ BB requirements related to corporate governance, with the
exception that, our Executive Board committee does not consist wholly of
independent directors. Registrant has recently applied for listing on the new
proposed NASDAQ OTC tiered framework as a company fully in compliance with
Sarbanes but trading under $1.00

         The Board: The Board of Directors of MTC consists of an non-independent
Chairman/CEO, Peter Katevatis and 4 directors. The meetings of the Board and the
various committees are described specifically infra. Board management has a
formal schedule of matters reserved for its decisions which include the approval
of certain policies, budgets, financing plans, large capital expenditure
projects, acquisitions, divestments and treasury arrangements and traditionally
delegates specific responsibilities to counsel, Board Committees and/or board
members. It reviews key activities of the businesses and considers and reviews
the work undertaken by the Committees and/or board members. The board is charged
with evaluating the performance of registrants executives performance. Board
meetings are held to enable directors to have a greater understanding of the
business and to query the management. D&O questionnaires are distributed each
year to be executed and sworn to by each director for use by registrant
internally and in audits as a requirement of corporate due diligence. All fully
participating and available directors have full and timely access to all
relevant information and, if necessary, to independent professional advice.
Legal updates relevant to Mediscience corporate issues is periodically
distributed and put into board minutes by inside counsel Peter Katevatis Esq.,
who is responsible to the Board for ensuring that Board legal procedures are
complied with.

         There is a clear division of respective responsibilities which have
been agreed by the Board. The Chairman's/CEO primary responsibility is for
leading the Board, including ensuring its effectiveness and setting its agenda,
supervising all other executive officers, whilst the Chief Operating Officer
under the specific terms and conditions of his contract is responsible for
managing the day-to-day business in accordance with the strategy, policies,
budgets and business plans approved by the Board. The executive Board members
stand ready to advise and assist in the management of the Company

         During fiscal year 2004, an informal periodic evaluation of the
performance of the Board and its Committees was undertaken by its then auditor
Parente Randolph LLP with the emphasis on registrants continuous improvement and
effectiveness of corporate governance in compliance to Sarbanes-Oxley as a as a
Non-Accelerated SEC filer. Suggestions were discussed by the audit committee in
three separate meetings with the auditor and to the extent described here have
been implemented. Each director was apprised and the suggestions presented to
the whole Board with a number of recommendations acted upon. e.g. the retention
of CFO Frank Benick on November 15, 2005

         With the exception of Peter Katevatis Esq. Chairman CEO and outside
counsel, John Matheu a contracted paid FDA consultant until April 6, 2006,
Michael Engelhart Pres COO until April 23, 2006. None of the directors or their
immediate families has ever had any direct relationship with registrant.

                                     - 22 -
<page>

         On review of D&O questionnaires submitted by complying directors, none
either directly as an employee or as a partner, shareholder or officer of any
organization that has a relationship with registrant have any relationship. No
director of registrant is a director of a company or an affiliate in which any
other director of MTC is a director.

         Directors to date do not receive remuneration and do not participate in
registrants, pension plans, share option or performance related pay programs

         Details of MTC material service/consulting contracts and compensation
payments are included herein either as narrative or as exhibits filed as part of
the SEC SB-2 registration effective Jan. 12, 2005 (included herein in its
totality by reference thereto) or if subsequent to January 12, 2005 have been
filed with the SEC as exhibits, 8-K filings, Form 4's and related Form 5's.

         MTC By-laws: any director who has been appointed by the Board of
Directors since the previous annual general meeting of shareholders, either to
fill a casual vacancy or as an additional director, holds office only until the
next annual general meeting and then is eligible for re-appointment by the
shareholders. The directors are subject to removal with or without cause by the
Board of Directors or the shareholders.

         The code of MTC business principles is available at MEDISCIENCETECH.com
and is available on request, applies to all directors, officers and employees.
Any breaches of the code are directed in writing to the Company Secretary who is
obliged to raise the issue with the Board. During 2005 and up until February 28,
2006 there have been no breaches of the Code that have not been reported. No
waivers have been put in place nor any amendments made to the Code.

         Board Committees: see infra and also found on MTC web site
MEDISCIENCETECH.com.



         Audit Committee

         The Audit Committee met on 1 occasion in 2005 but has received and
reviewed all 10-Q filings. (individual attendance is shown in parenthesis; The
Committee, consisting entirely of independent non-executive directors, is
chaired by John Kennedy (1). The other members of the Committee are Michael
Kouvatas Esq. (1), William Armstrong (1) Mr Matheu was removed as an audit
committee member upon entering into a paid consulting agreement with registrant
April 6, 2005.

         The Committee met on 4 occasions in 2004 consisting entirely of
independent non-executive directors, was chaired by John Kennedy (4). The other
members of the Committee were John Matheu (4), William Armstrong (4). The
Chairman of the Committee reports orally to the Board and minutes of the
meetings are circulated to all members of the Board as reflected in MTC
quarterly SEC 10-Q filings

         As a consequence of the preparatory work to satisfy and implement
compliance within the provisions of the Sarbanes-Oxley Act, Management has
identified certain internal control adjustments that were needed to effect
reconciliations in prior years and has restated for these as disclosed in its
SEC SB-2 registration filing with exhibits effective Jan. 12, 2005. These
adjustments, when taken together, are indicators of a material weakness in the
internal controls relating to US GAAS which management is in the process of
re-mediating. In our opinion there have been no other changes in registrants
internal control over financial reporting that occurred during the period
covered by this 10-KSB Annual Report that has materially affected, or is
reasonably likely to materially affect registrants internal control over
financial reporting.

         The principal activities of the Audit Committee during the year ended
February 28, 2006 include consideration of the reports on the quarterly reports,
interim and annual accounts; Consideration of the proposed changes to US GAAS
brought to the attention of the committee by auditors and CFO Frank Benick; The
Audit Committee has responsibility for: Monitoring the integrity of the
Company's accounts, ensuring that they meet statutory and associated legal and
regulatory requirements and reviewing significant financial reporting judgments

                                     - 23 -
<page>

contained; Monitoring announcements relating to the Company's financial
performance; Monitoring and reviewing the effectiveness of the Company's
internal audit function quarterly (10-Q) and annually (10-K); Making
recommendations to the Board, regarding the appointment, re-appointment and
removal of the external auditors, as appropriate; Approving the remuneration and
terms of engagement of the external auditors; Monitoring and reviewing the
external auditors' independence and the effectiveness of the audit process;
developing policy for and pre-approval of the external auditors to supply
non-audit services; Monitoring the effectiveness of internal financial controls;
Reviewing the operation of the risk management process; and Reviewing
arrangements by which staff may raise complaints against the Company regarding
financial reporting or other matters.

         Code of Business Principles:

         The Board of Directors has adopted a Code of Ethics for all officers
and directors which is available here and at MEDISCIENCETECH.com and is
available on request. It applies to all Executive, Officers and Directors. There
have been no waivers to any of the Code provisions nor any amendments made to
the Code during 2006 or up to February 28, 2007 and/or the date of this 10-KSB
2006 SEC EDGAR filing.

         These systems, including but not limited to a review of registrants
approach to internal financial control, its processes, outcomes and disclosures;
review of the reports from the auditors past and present on their professional
and regulatory compliance in order to maintain independence and objectivity,
including the possible rotation of partners; all which accord with within the
provisions OF Sarbanes-Oxley Act"code" applicable to registrant as a
Non-Accelerated SEC filer have been in place for Fiscal year ending Feb 28, 2007
and 2006 involving the identification, evaluation and management of key risks
through business reviews by the Board; and the review by the Audit Committee of
internal financial controls and the management process. These systems are to be
reviewed annually by the Board.

         It is important to advise that such systems are not providing absolute
assurance against material misstatements or loss; these systems are designed to
identify and manage those risks that could adversely impact the achievement of
the MTC objectives.

         The Chairman/CEO and Chief Financial Officer Frank Benick have
evaluated the effectiveness of the design and operation of registrants
disclosure controls and procedures as at February 28, 2007. Based upon, and as
of the date of, that evaluation, they concluded that the disclosure controls and
procedures were effective, in all material respects, to ensure that information
required to be disclosed in the SEC reports that MTC files and submits is
recorded, processed, summarized and reported as and when required. Management
will continue to refine the governance issues for compliance effectiveness in
year 2007.

         Corporate Governance and Management's Responsibility

         We, Peter Katevatis Chairman/CEO, John Kennedy Chairman Audit
Committee, and Frank Benick CPA Chief Financial Officer, the Sarbanes compliant
management of Mediscience Technology Corp., are responsible for the integrity
and objectivity of the accompanying financial statements and related
information. We are also responsible for ensuring that financial data is
reported accurately and in a manner that facilitates the understanding of this
data. We maintain a well-designed periodically reviewed system of internal
accounting controls, encourage open, strong and effective corporate governance
from our employees, consultants, executives. The Directors, continuously review
business results and strategic choices and focus on financial stewardship. Our
accountants and CFO monitor and critique our system of internal accounting
controls designed to provide reasonable assurance material assets are
safeguarded and that transactions and events are recorded properly. Our internal
controls include self-assessments and reviews. During 2004 the Company invested
significant time and cash resources (audit and legal review) addressing our
internal control system, and our compliance obligations as a non-accelerated SEC
filer (see SEC filed SB-2 130 pg. registration document effective Jan 12, 2005)
in order to ensure compliance with Section 404 of the Sarbanes-Oxley Act of
2002. We have concluded that our internal control over financial reporting was
effective as of January 12, 2005 and continues so effective as of February 28,
2006 and February 28, 2007 We have a systematic certification program and a
yearly sworn D&O questionnaire required of all directors to ensure compliance
with these policies at all employee levels. Our Audit Committee of the Board of
Directors is composed of (2) independent directors with the financial knowledge
and experience to provide appropriate oversight. We review internal control
matters and key accounting and financial reporting issues with the Audit

                                     - 24 -
<page>

Committee on a regular basis including a quarterly 10-Q review and discussion
meeting. In addition, the independent auditors, CFO and retained counsel may
meet in private sessions with our Audit Committee to discuss the results of
their work including observations on the adequacy of internal financial
controls, the quality of financial reporting and confirmation that they are
properly discharging their responsibilities and other relevant matters. Our
Intent is to ensure that we maintain objectivity in our business assessments,
constructively challenge the approach to business opportunities and issues and
monitor our business results and the related controls. Our consolidated
financial statements and financial data that follow have been prepared in
conformity with accounting principles generally accepted in the United States of
America and include amounts that are based upon our best judgments. We are
committed to present and discuss results of operations in a clear and
transparent manner in order to provide timely, accurate and understandable
information to our shareholders,

         In compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

         /s/  Peter Katevatis Esq., Chairman/ Chief Executive Officer

         /s/  Frank Benick, Chief Financial Officer

         /s/  John Kennedy, Chairman Audit committee

Item 8B.      Other Information

         Based In concert with equity partner Info tonics Technology Center and
after review of the Company' s accumulated patent portfolio including both
licensed and MTC proprietary IP it is the registrants position to concentrate
its IP investment and product development effort in the CD-R and CPE in its most
market viable applications as determined by the parties.

         The initial collaborative research and development agreement of Nov 9,
2004 between registrant and Info tonics has been successfully completed as of
May 31, 2007 The parties have executed a new agreement dated May 31, 2007 filed
as exhibit to an 8-K filing dated which continues their collaborative
relationship. The parties will focus any and all secured investment into
near-term market entry based upon MTC proprietary IP. All unrelated licensed IP
(imaging in turbid media) will not be pursued as a Mediscience-Infotonic
development effort. This continued partnership between BioScopix, Mediscience,
and Infotonics presents an important opportunity for the advancement of medical
equipment and diagnostic methods that utilize optical fluorescence and optical
biopsy in the application and interpretation of induced auto fluorescence as a
means of assessing biological processes.

         In furtherance of the parties continual pursut of grant support Medical
consultant Dr. Fredrick Naftolin advised that registrant New York subsidiary
BioScopix Inc. on May 24, 2007 was awarded $23,066 by the Finger Lakes New
Knowledge Fusion Project Seed Grant Funding Program, forregistrants proposal
entitled: "Use of Vulvar Autofluorescence in Dairy Cows to Improve Breeding."

                                    PART III

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

         The following table sets forth the name, age, position and term of
directorship, as applicable, of each of our directors and executive officers.
Directors are elected annually. Officers are selected by the Board of Directors
and serve at the pleasure of the Board.

<table>
<caption>

Name                            Age                         Position(s)
---------------------------  ---------  --------------------------------------------------

                              <c>                           <c>
Frank D. Benick, CPA, CVA        58                   Chief Financial Officer


                                     - 25 -
<page>

Peter Katevatis Esq.             73      Chairman of the Board, Treasurer, Chief Executive
                                                              Officer

John M. Kennedy                  69             Director, Vice President, Secretary

William Armstrong                89                          Director

Michael N. Kouvatas, Esq.        78                          Director

</table>

         Each director holds office until the next annual meeting of
shareholders or until their successors have been duly elected and qualified.
Executive officers are appointed and serve at the discretion of the Board of
Directors.

         No compensation has been paid to any individual for services rendered
as a director.

         Management Biographies

         Peter Katevatis has served as Chairman of the Board of Directors and
Chief Executive Officer since 1993 and as a director since 1981. As of April 24,
2006 he has served as interim President. On March 5, 2007 the board extended his
employment agreement as CEO until 2015. (see 8-K dtd March 10, 2007) Mr.
Katevatis was elected Treasurer of the Company in January 1996. Mr. Katevatis
has been a practicing attorney in Philadelphia, Penn. and Marlton, New Jersey,
and is licensed as an attorney in New York and in the District of Columbia. Mr.
Katevatis served as trustee of the New Jersey State's Police and Fireman
Retirement Pension Fund from 1989 to 1996 and as a member of the New Jersey
Investment Council from 1990 to December 1992. He is a member of the American
Arbitration Association, serves a listed arbitrator with the National
Association of Security Dealers, a member of the National District Attorney's
Association and the New York Academy of Science.

         John M. Kennedy currently serves as a Vice President, and Secretary of
our company, and has been a director of the Company since 1982 and chairman of
the audit committee since 2000. Mr. Kennedy served as Vice President since 1983,
as Treasurer from 1984 to January 1996 and as Secretary since 1986. Mr. Kennedy
is Chief Executive Officer of Pepco Manufacturing Co., a sheet metal fabricator
for the electronics industry. Mr. Kennedy also was a director and member of the
Audit Committee of First Peoples Bank of New Jersey from 1979 and also served as
a member of its executive board until 1994 when Core-States Bank purchased First
Peoples Bank.

         William W. Armstrong has served as a director since 1978 and as a
member of the audit committee since 2000. Mr. Armstrong has been in retirement
since 1982 following a 36 year career as a research scientist with Pfizer Inc, a
global consumer health care and pharmaceutical company. Since his retirement,
Mr. Armstrong has continued to serve as a consultant to Pfizer, currently in the
animal health division. Mr. Armstrong has been awarded 14 patents concerning
therapeutic agent dosage delivery systems.

          Michael N. Kouvatas has served as a director since 1971 and as an
independent member of the audit committee as of April 6, 2005. For the past 10
years, Mr. Kouvatas has been an attorney with offices in Haddonfield, New Jersey
and is a principal in various business operations in the Southern New Jersey
area.

         There are no family relationships between any of our directors or
executive officers.

         Board Committees

         The Board of Directors has six structured standing committees: Audit
Committee, Committee on Corporate Governance, Compensation and Benefits
Committee, Executive Committee, Finance Committee, and Committee on Public
Policy and Social Responsibility. Members of the individual committees are named
below: Registrant has retained a Chief Financial Officer with appropriate
Sarbanes-Oxley credentialed experience.

                                     - 26 -
<page>
<table>
<caption>

                                                                                                                Committee on
                         Committee on                                                                         Public Policy and
                          Corporate           Compensation and                                                    Social
      Audit               Governance              Benefits            Executive             Finance            Responsibility
-----------------      -----------------      ----------------     -----------------    -----------------     -----------------

                     <C>                     <C>                  <C>                <C>                    <C>
John Kennedy*          Michael Kouvatas       John Kennedy*        John Kennedy*        John Kennedy*          All directors
Michael Kouvatas       John Kennedy*          Michael Kouvatas     Michael Kouvatas*    William Armstrong
William Armstrong      Peter Katevatis        Peter Katevatis*     Peter Katevatis      Michael Kouvatas
                       William Armstrong
(*) Chairperson

</table>

         The Board has determined that John Kennedy is the audit committee
financial expert. The Board, which is comprised of two independent directors,
made a qualitative assessment of John Kennedy's and the other two member's level
of knowledge and experience based on a number of factors, including their
education and experience. The Audit Committee, its Charter is also available on
the Company's website. MEDISCIENCETECH.com

         The Committee on Corporate Governance is comprised of four directors
three of which are independent. The Committee assesses the size, structure and
composition of the Board and Board Committees and acts as a screening and
nominating committee for candidates considered for election to the Board. The
Committee, Its Charter is available on the Company's website.
MEDISCIENCETECH.com

         The Compensation and Benefits Committee, which is comprised of two
independent directors, consults generally with management on matters concerning
executive compensation and on pension, savings and welfare benefit plans. It
makes recommendations on compensation generally, executive officer salaries,
bonus awards and stock option grants, special awards and supplemental
compensation. Its Charter is available on the Company's website.
MEDISCIENCETECH.com

         The Executive Committee (3) which is comprised of two independent
directors, Michael Kouvatas Esq. and John Kennedy-- -Peter Katevatis Esq. CEO,
chair of the Audit committee, act for the Board of Directors when formal Board
action is required between meetings in connection with matters already approved
in principle by the full Board or to fulfill the formal duties of the Board.

         The Finance Committee, which is comprised of two independent directors,
considers and makes recommendations on matters related to the financial affairs
and policies of the Company, including capital structure issues, dividend
policy, investment and debt policies, asset and portfolio management and
financial transactions, all as necessary. Its Charter is available on the
Company's website. MEDISCIENCETECH.com

         The Committee on Public Policy and Social Responsibility, which is
comprised of all directors, advises the Board and management on Company policies
and practices that pertain to the Company's responsibilities and its obligations
as a Bio-Medical company whose products and services, might affect health and
quality of life around the world. Its Charter is available on the Company's
website. MEDISCIENCETECH.com

         Board and Board Committee Meetings

         Since March 1, 2006 the Board of Directors met 4 times, August 29,
2006, December 19, 2006, January 30, 2007 and March 5, 2007, with all above
committee members present. All incumbent directors attended 90 percent of the
meetings of the Board and of the committees on which they served.

         Compensation Committee Interlocks and Insider Participation: NONE

                                     - 27 -
<page>

Item 10.      Executive Compensation

         The following sets forth information for the three most recently
completed fiscal years concerning the compensation of (i) the Chief Executive
Officer and (ii) all other executive officers who earned in excess of $100,000
in salary and bonus in the fiscal year ended February 28, 2007.

<table>
<caption>

                                                         SUMMARY COMPENSATION TABLE

                                                                                               Nonqualified
                                                                                 Non-Equity      Deferred
                                                               Stock   Option  Incentive Plan  Compensation    All Other
                                                              Awards   Awards   Compensation     Earnings     Compensation    Total
Name and Principal Position     Year   Salary ($)  Bonus ($)    ($)     ($)          ($)             ($)           ($)         ($)

                             <c>    <c>         <c>          <c>      <c>          <c>            <c>           <c>         <c>
Peter Katevatis                 2007   $200,000      --         --       --           --              --      $60,961 (1)   $260,961
Chairman, Interim Pres.         2006   $200,000      --         --       --           --              --      $67,671 (1)   $267,671
and Chief Executive             2005   $200,000      --         --       --           --              --      $70,055 (1)   $270,055
Officer (PEO)

Michael Engelhart               2007   $ 60,000      --         --       --           --              --      $ 1,315 (2)   $ 61,315
President and Chief             2006   $120,000      --         --       --           --              --      $ 9,134 (2)   $129,134
Operating Officer (PEO)*        2005   $120,000      --         --       --           --              --      $ 4,030 (2)   $124,030

</table>

(1)      Includes annual retainer of $50,000 for the provision of legal
         services, automobile expense of $ 5,882 and health insurance of $5,079
         for 2007, an annual retainer of $50,000 for the provision of legal
         services, automobile expense of $ 5,292 and health insurance of $12,379
         for 2006 and an annual retainer of $50,000 for the provision of legal
         services, automobile expense of $ 8,612 and health insurance of $12,043
         for 2005.


(2)      Includes health insurance of $1,315 for 2007, automobile expense of
         $1,730 and health insurance of $7,404 for 2006 and automobile expense
         of $710 and health insurance of $ 3,320 for 2005.


* Mr. Engelhart's employment contract as President & COO terminated by its terms
April 23, 2006.

         Employment Agreements

         Peter Katevatis, our Chairman of the Board and Chief Executive Officer,
has an employment agreement with us ending March 5, 2015. The Agreement provides
that Mr. Katevatis will be compensated at an annual base salary of $250,000
(with an annual cost of living increase of no less than 6%) with a discretionary
annual bonus in an amount to be determined in accordance with a formula to be
agreed upon by the Board of Directors and Mr. Katevatis. The agreement may be
terminated by us for cause upon ninety days notice and by Mr. Katevatis for any
reason, and by us without cause, upon sixty days notice. If Mr. Katevatis is
terminated by us without cause, he will be entitled to his base salary for the
balance of the term of the Agreement and 200% of his annual bonus paid for the
most recently ended fiscal year.

         Michael Engelhart, our President and Chief Operating Officer,
employment agreement with registrant terminated in total by its terms April 23,
2006.

         Change of Control

         Our 1999 Stock Incentive Plan and our 2003 Consultants Stock Option,
Stock Warrant and Stock Award Plan provide that all outstanding options,
warrants and restricted stock will become vested and immediately exercisable, in
the case of options and warrants, or free from all restrictions, in the case of
restricted stock, upon the change of control of our company.

               OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE


                                     - 28 -
<page>
<table>
<caption>

                                            Option Awards                                        Stock Awards



                                                                                                                           Equity
                                                                                                                         Incentive
                                                Equity                                                Equity Incentive  Plan Awards:
                                              Incentive                                                 Plan Awards:     Market or
                   Number of     Number of   Plan Awards:                                    Market      Number of      Payout Value
                   Securities    Securities   Number of                         Number of   Value of      Unearned      of Unearned
                   Underlying    Underlying   Securities                        Shares or  Shares or   Shares, Units   Shares, Units
                  Unexercised   Unexercised   Underlying                        Units of    Units of      or Other        or Other
                    Options       Options    Unexercised   Option              Stock That  Stock That   Rights That     Rights That
                      (#)           (#)        Unearned   Exercise    Option    Have Not    Have Not      Have Not        Have Not
                                               Options     Price    Expiration   Vested      Vested        Vested          Vested
Name              Exercisable  Unexercisable     (#)        ($)        Date        (#)        ($)           (#)             ($)

              <C>            <C>             <C>        <C>        <C>          <C>        <C>           <C>             <C>

Peter Katevatis

Michael Engelhart

</table>
<table>
<caption>

                                                      DIRECTOR COMPENSATION TABLE
                                                                                         Change
                                                                                       in Pension
                                                                                       Value and
                                                                                      Nonqualified
                                                                        Non-Equity      Deferred
                         Fees Earned or                               Incentive Plan  Compensation    All Other
                          Paid in Cash   Stock Awards  Option Awards   Compensation     Earnings     Compensation  Total
Name                           ($)           ($)            ($)            ($)            ($)            ($)        ($)
---------------------    --------------  ------------  -------------  --------------  -------------  ------------  -----

                           <C>            <C>            <C>            <C>             <C>           <C>        <C>
Peter Katevatis Esq.            --            --             --             --             --             --         --

John M. Kennedy                 --            --             --             --             --             --         --

William Armstrong               --            --             --             --             --             --         --

Michael N. Kouvatas             --            --             --             --             --             --         --

</table>

         Scientific/Medical Advisory Board

         The Company established a Scientific Advisory Board in January, 1993
under the chairmanship of Co-Founder Professor Robert R. Alfano to provide
critical review and analysis of its research and product development programs in
the area of photonics (lasers and optics) and to serve as a source of
information on new product ideas, new technologies and current research
activities. Its function served the Company well during the formative stages of
its research. With the completed research at CUNY and the now present emphasis
on commercialization of our IP, the Board consisting of Dr. Alfano and one other
continuing member, is being expanded to include increased representation from
the medical arts, including pathology, OBGYN and will be staffed with medical
specialists who are skilled in the medical fields of primary interest to the
Company. We believe that we have attracted accomplished clinicians who will help
guide us in clinical study design aimed at gaining regulatory approval for
commercial applications of our diagnostic technology. They will also be called
upon to advise us about priorities and unmet needs in their respective
disciplines and in matters such as physician's habits and preferences that would
bear on product design and configuration.

         Dr. Fredrick Naftolin Contracted Senior Medical Consultant Date of
Birth: April 7, 1936

1955          A.A., University of California, Los Angeles

                                     - 29 -
<page>

1958          B.A., University of California, Berkeley (Honors)

1961          M.D., University of California, School of Medicine San Francisco
              (Honors)

1970          D.Phil., University of Oxford, Oxford, England

1961-62       Intern, King County Hospital, Seattle, Washington

1962-66       Resident, Obstetrics and Gynecology, UCLA Medical Center,
              Los Angeles (D.G. Morton)

1966-67       Research Training Fellow, University of Washington, Seattle (S.
              Klebanoff)

1967-68       Senior Endocrine Fellow, Department of Medicine, University of
              Washington, Seattle (C.A. Paulsen)

1968-70       Graduate studies, University of Oxford, Department of Human
              Anatomy, Oxford, England (G.W. Harris) Professional Experince:

1986          Director, Center for Research in Reproductive Biology, Yale
              University

1984          Professor of Biology, Department of Biology, Yale University
              (Joint appointment)

1982-83       Professor Invite, Department of Morphology, University of Geneva,
              Faculty of Medicine

1978          Professor and Chairman, Department of Obstetrics and Gynecology,
              Yale University School of Medicine

1975-78       Professor and Chairman, Department of Obstetrics and Gynecology,
              McGill University, Faculty of Medicine, Montreal

1975-78       Obstetrician and Gynecologist-in-Chief, Royal Victoria Hospital,
              Montreal

1973-75       Associate Professor of Obstetrics and Gynecology, Harvard Medical
              School

1972-73       Associate Professor of Obstetrics and Gynecology, University of
              California, San Diego

1970-72       Assistant Professor of Obstetrics and Gynecology, University of
              California, San Diego

1966-68       Research Associate and Assistant Chief, Gynecology Service, USPHS
              Hospital, Seattle, Washington

Selected Honors:

1958          Sigma Xi

1961          Alpha Omega Alpha

1968          J.P. Lane Award, United States Public Health Service Clinical
              Society

1968-70       NIH Special Research Fellowship (NICHHD)

1971          Squibb Prize paper, American Fertility Society

1975          Fellowship, American College of Obstetricians and Gynecologists

1975          M.A. (Hon.), McGill University, Montreal, Canada

1978          M.A. (Hon.), Yale University, New Haven, Conn.

1980          Fellow, Silliman College, Yale University

1982-83       Fogarty Senior International Fellow

1983          John Simon Guggenheim Jr. Memorial Fellow

1985          Wyeth Lecturer, Canadian Fertility and Andrology Society

1985          Royal College of Physicians and Surgeons of Canada Lecturer,
              University of Saskatchewan, Canada

1986          Royal College of Physicians and Surgeons of Canada Lecturer,
              University of Western Ontario, Canada

                                     - 30 -
<page>

1986          Fellowship, The American Gynecological and Obstetrical Society

1988          Lecturer, Frontiers of Reproductive Biology, Society for Study of
              Reproduction

1988          Plenary Lecturer, First Congress of the International Society of
              Gynaecological Endocrinology

1989          Keynote Speaker, 17th Annual New England Endocrine Conference

1991-92       President, Society for Gynecologic Investigation

1992-93       Berlex International Scholar

1997          Latta Distinguished Lecturer, University of Nebraska Medical
              School

1997-98       President Elect, North American Menopause Society Scientific
              Committee Chairman, North American Menopause Society Fellow ad
              eundem of the Royal College of Obstetricians and Gynaecologists
              "Frederick Naftolin Fellowship in Reproductive Biology" to be
              awarded annually by McGill University Faculty of Medicine

1999          Visiting Professor, "Extraordinary Professor, Chair in Advances in
              Medicine in Reproduction", Complutense University, Madrid, Spain

Licensure:California Connecticut Specialty Board: Obstetrics and Gynecology
(1972)

Societies:

Alpha Omega Alpha, Sigma Xi, The Endocrine Society, The Pacific Coast Fertility
Society (Honarary Member), Canadian Andrology and Fertility Societies (Honorary
Member), Society for Gynecologic Investigation, International Society of
Neuroendocrinology, International Society of Psychoneuroendocrinology, American
Gynecological and Obstetrical Society, International Society for Gynecological
Endocrinology .,Society for Neuroscience, North American Menopause
Society,International Menopause Society, Israeli Fertility Society Editorial
Boards:

1998          Proceedings of the Society for Experimental Biology and Medicine

1997          Climacteric, Journal of the International Menopause Society

1996          Founding Editorial Advisory Board, African Journal of Reproductive
              Health

1995          Founding Editorial Board, Early Pregnancy: Biology and Medicine

1993          Founding Editorial Board, Menopause

1993          Founding Associate Editor, Journal of the Society for Gynecologic
              Investigation

1988-95       Biomedicine and Pharmacotherapy

1988-93       Resident and Staff Physician

1987          Gynecological Investigation

1987-91       Endocrine Reviews

1987          Video Journal of Obstetrics and Gynecology

1980-88       Drug Intelligence and Clinical Pharmacy (editorial panel)

1979-82       New England Journal of Medicine

1979-82       Journal of Steroid Biochemistry

1974-92       Psychoneuroendocrinology

         The Chairman is Dr. Robert R. Alfano* distinguished Professor of
Science and Engineering and the Director of the IUSL at the City College of
CUNY. He is co-author of a number of patents concerning the Company's photonic
technology. and a *principal stockholder and co-founder of the Company. He has
supervised the research and development of registrants cancer diagnostic
technology as principal investigator at CCNY. . In May 1989, Dr. Alfano was
elected a Fellow of the Optical Society of America for his studies of ultra fast
phenomena. He received his B.S. and M.S. degrees in Physics from Farleigh
Dickinson University in 1963 and 1964, respectively. He received his Ph.D in
Physics from New York University in 1972. Dr. Alfano holds over 73

                                     - 31 -
<page>

patents and has published over 600 papers. Dr. Alfano's contract as company paid
consultant expired by its terms March 5, 2007 (See infra)

         Stimson P. Schantz, M.D. is Director of Cancer Prevention, Department
of Surgery Cornell University Memorial Sloan-Kettering Cancer Center, New York.
Dr. Schantz has been appointed as the principal investigator under the Company's
Clinical Trial Agreement with Memorial Hospital for Cancer and Allied Diseases
and in such capacity, oversees the pilot study of tissue auto fluorescence
pursuant to such agreement. Between 1984 and 1991, Dr. Schantz served in various
faculty positions at the M.D. Anderson Cancer Center in the Department of Head
and Neck Surgery. Dr. Schantz is presently a member of the Society of Surgical
Oncology, American Society for Head and Neck Surgeons, the Society of Head and
Neck Surgery, and has served as the Director of research programs and as a
member of the research committee at the University of Texas, M.D Anderson Cancer
Center. He has been the recipient of several honors and awards, including the
First Independent Investigator Award of the National Cancer Institute awarded in
March 1988 and an NCI contract to study biomarkers awarded in 1995. Dr. Schantz
serves as reviewer and editor of a number of professional medical publications
and is the author of numerous articles, papers, books and chapters, and
abstracts. He was awarded a Bachelor of Arts Degree from Harvard College in 1970
and his M.D. from the University of Cincinnati in 1975. In April, 1998 Dr.
Schantz was recruited to lead a multi-institutional effort revolving around
cancer prevention clinical research programs and constituting a consortium
effort with hospitals in the metropolitan New York City area supported by the
National Cancer Institute approval and high priority rating on a $1.6 million
dollar grant to carry out collaborative clinical trials which will be targeted
specifically at developing Mediscience Technology and positioned to conduct
phase II and phase III trials on a multi-organ basis involving diseases of the
breast, upper and lower aerodigestive tract, and gynecologic tissues.

         Stephane Lubicz, M.D. EDUCATION: 1965-1968 BS, Cum Laude, Free
University of Brussels, Belgium. M.D., - Free University of Brussels, Belgium.
PROFESSIONAL EXPERIENCE: Pharmaceutical, Medical and Gynecologic Oncology

         I. Pharmaceutical Industry Experience (A) USA consultant to B. & A,
Inc. The Company operates for the coordination and organization of clinical
trials in Mexico (and throughout Latin America). This includes all Phase II, III
trials and post marketing surveillance activities through Phase IV Clinical
trials). (B) Medical director, Clinical Development Oncology Daiichi
Pharmaceutical Corporation, Montvale, NJ (08/2000-011/2002)

         (I) Phase III: Project Pancreas- Global (US and Europe: Protocol Global
project (Japan, USA + Mexico, EU)

         (II) Phase II: completion and initiation of multiple Phase II studies:
Solid tumors and leukemia's, initiations and monitoring of sites and
investigators for Phase II (US, Canada, Mexico)

         (2) TZT-1027 project: Global project with Japan and EU (parallel and or
complementary studies in EU and Japan) Phase II: All Solid Tumors. Phase II
includes 3 studies (use of a template protocol for multiple protocols/drug
projects).

         (3) CPT-11 project: Gynecologic Project. Finalization of project in
gynecologic malignancies and selection of endometrial cancer project (a Phase II
study

         Clinical experience: 1969-1971 Rotating Externship, Brussels University
Hospitals, Brussels, Belgium. 1971-1972 Rotating Internship, Brussels University
Hospitals, Brussels, Belgium. 1972-1975 Residency, Obstetrics and Gynecology,
Brussels University Hospital and Affiliated Hospitals, Belgium. 1975-1979.
Residency, Obstetrics and Gynecology. The Jewish Hospital and Medical Center of
Brooklyn, N.Y.1979-1981 Fellow, Gynecology Oncology, Department of Obstetrics,
Gynecology and Reproductive Sciences. Mount Sinai School of Medicine, New York,
N.Y. 1981-1982 Attending Physician, Department of Obstetrics and Gynecology,
Mount Sinai Hospital Medical Center of Chicago, Chicago, IL. 1981-1982.
Assistant Professor, Rush Medical College, Chicago, IL.1981-1982. Director of
Medical Education for Residents and Students, Rush Medical College, Chicago,
IL.1982-1984 Full-time Attending, Department of Obstetrics, Gynecology, and
Reproductive Science, The Mount Sinai Medical Center, New York, N.Y.1982-1984
Assistant Director, Division of Gynecologic- Oncology, Department of Obstetrics
& Gynecology, and Reproductive Science, The Mount Sinai Medical Center, New
York, N.Y.1982-1991 Instructor, Mount Sinai School of Medicine, New York, N.Y.
1982-1984 Assistant Attending, Department of

                                     - 32 -
<page>

Obstetrics and Gynecology, The City Hospital Center at Elmhurst, N.Y. 1982-1984
Assistant Director, Gynecologic Oncology, Dept of Obstetrics and Gynecology, The
City Hospital Center at Elmhurst, N.Y 1985 to 1994-Pres Attending, The Mount
Sinai Medical Center, New York, N.Y., LaGuardia Hospital, Queens, N.Y., Doctors
Hospital, New York, N.Y. St. Vincent Hospital, New York, Syosset Community
Hospital, L.I. St. Clare's Hospital, N.Y.C. 1995-1996 Director, Division of
Gyn/Oncology St.Vincent's Hospital, N.Y 07/00-11/02Director of Oncology,
Clinical development, Daiichi Pharma. Corp Montvale, New Jersey (Japan, Canada,
Mexico and Europe)

         CERTIFICATION: E.C.F.M.G., July 25, 1973, #202-214-3. Board Certified
in Obstetrics and Gynecology, July 1977, Belgium., Board Certified in Obstetrics
and Gynecology, November 1982, U.S.A., Board Certified in Gynecologic Oncology,
December 1987., HIP Panel, Sub-Specialty Gynecologic Oncology, January 1988-
June 1996.

         The Scientific Advisory Board is paid a fee of $1,000 for each meeting
attended.

         Ronald Tygar

         President and Chairman of RT Industries, a NASDAQ publicly held
manufacturing and distribution Company specializing in Automobile brakes and
automotive computer parts; Chairman of RT funding Corp., a New York State based
mortgage lender; President and chairman of RT consultants advisory services in
business development, corporate marketing, manufacturing and distribution
operations. Mr. Tygar will counsel the Mediscience management team on matters
pertaining to business development, corporate marketing, and manufacturing and
distribution operations.

         Jeremy Rosen DDS

         Presents extensive Medical/Dental/Oral Health experience regarding FDA
Clinical, structuring, management, and overview and expertise in the area of
Dental/Oral applications of the Company's Technology. Dr. Rosen will be
supporting/participating in management presentations seeking corporate funding
and/or corporate relationships. Dr Rosen together with director William
Armstrong have agreed to review registrants interest in oral cancer diagnostics.

                                     - 33 -
<page>

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

         The following table sets forth, as of May 31, 2007, certain information
concerning the beneficial ownership of common stock by (i) each person known by
the company to be the owner of more than 5% of the outstanding common stock,
(ii) each director, (iii) each Named Executive Officer, and (iv) all directors
and executive officers as a group. In general, "beneficial ownership" includes
those shares a director or executive officer has the power to vote or the power
to transfer, and stock options and other rights to acquire common stock that are
exercisable currently or become exercisable within 60 days. Except as indicated
otherwise, the persons named in the table below have sole voting and investment
power with respect to all shares shown as beneficially owned by them. The
calculation of the percentage owned is based on 65,459,274 shares outstanding
(plus, with respect only to each holder of securities that are exercisable for
or convertible into common stock within 60 days, shares underlying such
securities).

                                                                  Percentage of
                                           Amount and Nature       Outstanding
           Name and Address             of Beneficial Ownership    Shares Owned
--------------------------------------  -----------------------   --------------
William W. Armstrong
P.O. Box 607
Tupper Lake, NY 12986.................          350,000 (1)                *

Michael Engelhart*2
161 North Franklin Turnpike
Ramsey, NJ 07446......................               -- (2)                *

Peter Katevatis
1235 Folkestone Way
Cherry Hill, NJ 08034.................        9,816,343 (3)           14.98%

John M. Kennedy
802 Chestnut Avenue
Somerdale, NJ 08083...................        2,535,933 (6)            3.87%

Michael N. Kouvatas
27 Kings Highway
East Haddonfield, NJ 08033............          424,666 (4)                *

John Matheu *2a
215 Longhill Drive
Short Hills, NJ 07078.................               -- (5)                *

All directors and executive
officers as a group (7 persons).......       13,161,942               20.10%

------------
*Represents less than 1%

(1)      Includes 6,000 shares held by Mr. Armstrong's wife for which Mr.
         Armstrong disclaims beneficial ownership.

(2)      April 23, 2006 Michael Engelharts three year employment agreement April
         23, 2003 to April 23, 2006 ended (his employment contract is part of
         and an attachment to Registrants SEC 10-K 2003 page 44 herein
         incorporated by reference. CEO, Chairman Katevatis assumed the interim
         role of President April 24, 2006.

(2a)     Employment agreement terminated by its terms on April 23, 2006 no
         shares were issued or vested as of February 28, 2006.

                                     - 34 -
<page>

(3)      Includes 6,217,357 (5,349,794 shares and 867,563 shares issued January
         20, 2005 as correction, 50,499,149 shares subject to 17% anti-dilution
         right all issued pursuant to an anti-dilution agreement/resolution nunc
         pro tunc dated July 16, 2004 between the Board and Mr. Katevatis, and
         (ii) 1,416,667 shares issued at $0.25 in lieu of salary and fees for
         legal services rendered to us by Mr. Katevatis, (iii) 552,664 shares
         issued in connection with a salary reduction required by the terms of a
         private placement of our stock, and (iv) 398,167 shares received in a
         cashless exercise of a stock option. (total 2,367,498) (See Katevatis
         employment agreement for terms 10-K 2005 incorporated herein by
         reference thereto) (see SEC Form 5 filed March 2006 incorporated and
         made a part hereof) Excludes 200,000 shares owned by Mr. Katevatis
         daughter as custodian for his grandchildren, and a total of 500,000
         shares owned by his sons, as to all of which he disclaims beneficial
         ownership.

(4)      Includes (i) 118,000 shares owned by Mr. Kouvatas's wife for which Mr.
         Kouvatas, disclaims beneficial ownership; and 40,000 shares currently
         in the estate of Mr. Kouvatas' son of which Mr. Kouvatas and his wife
         are beneficiaries. Includes restricted shares acquired by Mr. Kouvatas
         pursuant to the exercise of stock options, 6000 shares for which Mr.
         Kouvatas is custodian for three (3) of his children and 36,000 shares
         for which Mr. Kouvatas's daughter is custodian for her two children
         under the New Jersey Uniform Gift to Minors Act; and 30,000 shares
         registered in the names of each his children.

(5)      Includes 300,000 shares subject to a stock option at $1.50 per share.

(6)      Includes the issuance of a net of 1,833,333 restricted shares acquired
         by Mr. Kennedy pursuant to the exercise of stock options On December
         13, 1985. The Company granted stock options at an exercise price of
         $0.25 per share to the following Officers and Directors in exchange for
         cancellation of certain of the Company's accrued indebtedness to such
         persons, portions of which were assigned as follows: Mr. Katevatis
         received options to purchase 4,400,000 shares (2,200,000 of which were
         assigned by Mr. Katevatis to Mr. Kennedy); and also includes 100,000
         shares registered in the name of Mr. Kennedys wife.

NOTES

NOTE 1   Board minute/action of July16, 2004 in support of historical
         contractual continual anti-dilution (JV) issuances to Peter Katevatis
         and Robert Alfano founders is incorporated in its entirety and made a
         part hereof. (see SB-2 SEC registration filing exhibits board minute
         resolution SB-2 shares held by Katevatis and Alfano. "RESOLVED, that
         the Corporation's agreement to issue, from time to time, additional
         shares of Common Stock to Katevatis such that the Katevatis Shares
         represent the Katevatis Anti-Dilution Percentage (17%) and the Alfano
         Shares represent the Alfano Anti-Dilution Percentage (4%) of the issued
         and outstanding shares of Common Stock, and is hereby unanimously
         ratified, confirmed and approved nunc pro tunc in all respects". All
         Katevatis Anti-dilution transactions reflected in FORM 4 and Form 5
         Filings Katevatis SEC Form 4 filing dated 09/13/2004 Total shares
         issued as per his JV ant-dilution requirement 7, 717,292 (all SEC rule
         144; legend) Katevatis SEC Form 4 filing dated 05/ 13/2005 Total shares
         issued to March 30, 2005 per his JV ant-dilution requirement 9,220,895
         (all SEC rule 144 legend) Katevatis SEC Form 5 filing dated Feb 28,2006
         Total shares issued to Feb 28,2006 per his JV ant-dilution requirement
         9,332,558 (all SEC rule 144 legend)


Item 12.      Certain Relationships and Related Transactions, and Director
              Independence

         Mr. Katevatis is paid $50,000 for legal services rendered to us during
each fiscal year. Mr. Katevatis received $50,000 for each of our fiscal years
commencing in 1998 through 2007.

         In July 2002, we entered into a month-to-month lease agreement with
Peter Katevatis, our Chairman and Chief Executive Officer, for approximately
3,000 square feet for our corporate offices for which we pay no rent but have
assumed the obligation to pay all taxes, maintenance, insurance, utilities and
repairs relating to such premises. This agreement is still in effect.

         Mr. Katevatis and Dr Robert Alfano have agreed to forebear any and all
collection action for accrued salary and fees including forgiveness of interest
in exchange for the option of converting any such accrued salary and fees into
our common stock at $0.25 per share. If we receive financing, either may elect
to receive all or part of such accrued salary or fees in cash or common stock.
As of February 28, 2007, accrued salary and fees amounted to $1,689,667 for Mr.
Katevatis. As of February 28, 2007, accrued consulting fees amounted to
$1,394,818 for Dr Alfano.

         On December 1, 1988, we acquired from Dr. Robert Alfano, a principal
shareholder, all of the issued and outstanding stock of LDI including the
"Method and Apparatus for Detecting Cancerous Tissue Using Visible Luminescence"
patent in exchange for 1,500,000 shares of our Common Stock. LDI is under a
continuing obligation to pay a royalty in the aggregate amount of 1% of gross
sales from any equipment made, leased or sold which embodies the concepts
described in such patent to Michelle Alfano, Dr. Alfano's daughter. The "516"
patent expired by its terms on________________. As of February 28, 2006, accrued
consulting fees amounted to $1,394,818 for Dr Alfano As of February 28, 2006,
accrued consulting fees amounted to $ 1, 232,818 for Dr Alfano.

                                     - 35 -
<page>

         On August 1, 2004, registrant entered into a consulting agreement with
John Matheu, a director, former member of the audit committee to April 6, 2005.
Mr. Matheu provided management consulting services and was paid a monthly
consulting fee of $4,166 and received an option to purchase 300,000 shares of
Common Stock at $1.50 per share. The agreement terminated on April 6, 2006. *
Matheu SEC form 5 filed dated April 19, 2006 reflects 25,000@$0.17 and 6,500 @ $
0.20 shares disposed of as sales February 14, 2006. Mr. Matheu disclosed this
transaction to the board on April 19, 2006. After an investigation was completed
April 28,2006, he was removed for cause by majority board action on May 2, 2006.

         On July16, 2004 Board minute/action in support of contractual
anti-dilution (JV) issuances to co-founders Peter Katevatis and Robert Alfano is
incorporated in its entirety and made a part hereof. (see SB-2 SEC registration
filing effective Jan. 12, 2005 with exhibits including board minute resolution.
Reported shares by the company's transfer agent, Registrar and transfer Co., on
February 28, 2005 held by Peter Katevatis 8,921,525 and Robert Alfano 1,946,588
"RESOLVED, that the Corporation's agreement to issue, from time to time,
additional shares of Common Stock to Katevatis such that the Katevatis Shares
represent the Katevatis Anti-Dilution Percentage (17%) and the Alfano Shares
represent the Alfano Anti-Dilution Percentage (4%) of the issued and outstanding
shares of Common Stock, and is hereby ratified, confirmed and approved nunc pro
tunc in all respects"

         None of these transactions involved any underwriters, underwriting
discounts or commissions, except as specified below, or any public offering, and
we believe that each transaction was exempt from the registration requirements
of the Securities Act by virtue of Section 4(2) thereof and/or Regulation D
promulgated there-under. All recipients had adequate access, through their
relationships with us, to information about us.

         Director Independence

         The Board of Directors has determined that to be considered
independent, an outside director may not have a direct or indirect material
relationship with the Company. A material relationship is one which impairs or
inhibits--or has the potential to impair or inhibit--a director's exercise of
critical and disinterested judgment on behalf of the Company and its
stockholders. In determining whether a material relationship exists, the Board
consults with the Company's counsel to ensure that the Board's determinations
are consistent with all relevant securities and other laws, recent relevant
cases and regulations regarding the definition of "independent director,"
"business judgment" including those set forth in listing standards of the New
York Stock Exchange as in effect from time to time. Consistent with these
considerations, the Board affirmatively has determined that as of February 28,
2007 all directors are independent EXCEPT PETER KATEVATIS AND WILLIAM ARMSTRONG.
(SEE BELOW)

Item 13.      Exhibits

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

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

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

                                     - 36 -
<page>

Item 14.      Principal Accountant Fees and Services

         Audit Fees

         The aggregate fees billed for each of the fiscal years ended February
28, 2007 and 2006 for professional services rendered by the principal accountant
for the audit of our annual financial statements and reviews of the quarterly
financial statements was $45,000 and $46,000, respectively.

         Audit Related Fees

         $21,000

         Tax Fees

         $-0-

         All Other Fees

         $24,000


                                     - 37 -
<page>


                          MEDISCIENCE TECHNOLOGY CORP.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                         Page(s)
         Audited Consolidated Financial Statements:
         Report of Independent Registered Public Accounting Firm...........F-1
         Consolidated Balance Sheet as of February 28, 2007................F-2
         Consolidated Statements of Operations for the years ended
              February 28, 2007 and 2006...................................F-3
         Consolidated Statements of Changes in Stockholders' Deficit
              for the years ended February 28, 2007 and 2006...............F-4
         Consolidated Statements of Cash Flows for the years ended
              February 28, 2007 and 2006...................................F-5
         Notes to Consolidated Financial Statements........................F-6


<page>


             Report of Independent Registered Public Accounting Firm

To the Board of Directors
Mediscience Technology Corp.
Cherry Hill, New Jersey

We have audited the accompanying consolidated balance sheets of Mediscience
Technology Corp. and subsidiaries (the "Company") as of February 28, 2007 and
2006, and the related consolidated statements of operations, changes in
stockholders' deficit and cash flows for the years then ended. 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 on 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 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 financial position of Mediscience
Technology Corp. and subsidiaries as of February 28, 2007 and 2006, and the
results of their operations and their cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As disclosed in Note 1 to the
financial statements, the Company has no revenues, incurred significant losses
from operations, has negative working capital and an accumulated deficit which
raises substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is also described in Note 1. The
financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.

/s/ MORISON COGEN LLP
Bala Cynwyd, Pennsylvania
June 8, 2007


                                      F-1
<page>

                  MEDISCIENCE TECHOLOGY CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           FEBRUARY 28, 2007 AND 2006
<table>
<caption>
                                                              2007            2006
                                                          ------------    ------------

                                                             <c>              <c>

        ASSETS

CURRENT ASSETS
  Cash                                                    $    138,508    $    136,635
  Prepaid expenses                                              25,536           4,031
                                                          ------------    ------------

TOTAL CURRENT ASSETS                                           164,044         140,666

EQUIPMENT - Net                                                  1,162           2,107

DEFERRED CHARGES                                               750,994       1,114,682

OTHER ASSETS                                                     1,800           1,800
                                                          ------------    ------------

TOTAL ASSETS                                              $    918,000    $  1,259,255
                                                          ============    ============


        LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Convertible debt, net of discount of $75,000            $         --    $         --
  Accounts payable                                              35,971          29,204
  Accrued liabilities                                        3,531,898       3,123,458
                                                          ------------    ------------

TOTAL CURRENT LIABILITIES                                    3,567,869       3,152,662
                                                          ------------    ------------

TOTAL LIABILITIES                                            3,567,869       3,152,662
                                                          ------------    ------------

STOCKHOLDERS' DEFICIT
  Convertible preferred stock - $.01 par value, 50,000
    shares authorized, -0- shares issued and
    outstanding in 2007 and 2006, respectively                      --              --
  Common Stock - $.01 par value; 199,950,000 shares
    authorized; 64,128,274 and 59,553,893 shares issued
    and outstanding in 2007 and 2006, respectively             641,283         595,540

ADDITIONAL PAID-IN CAPITAL                                  25,073,282      24,462,292

ACCUMULATED DEFICIT                                        (28,364,434)    (26,951,239)
                                                          ------------    ------------

TOTAL STOCKHOLDERS' DEFICIT                                 (2,649,869)     (1,893,407)
                                                          ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT               $    918,000    $  1,259,255
                                                          ============    ============
</table>

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

                                      F-2
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     YEARS ENDED FEBRUARY 28, 2007 AND 2006

                                                        2007           2006
                                                    ------------   ------------
SALES                                               $         --   $         --

COST OF SALES                                                 --             --
                                                    ------------   ------------

GROSS PROFIT                                                  --             --
                                                    ------------   ------------

GENERAL AND ADMINISTRATIVE EXPENSE                     1,156,102      1,890,356

RESEARCH AND DEVELOPMENT EXPENSE                         260,137        320,953
                                                    ------------   ------------

TOTAL EXPENSE                                          1,416,239      2,211,309
                                                    ------------   ------------

LOSS FROM OPERATIONS                                  (1,416,239)    (2,211,309)

OTHER INCOME
  Interest income, net of interest expense of $647
    in 2007 and $190 in 2006                               3,044         12,641
                                                    ------------   ------------

LOSS BEFORE INCOME TAX BENEFIT                        (1,413,195)    (2,198,668)

INCOME TAX BENEFIT                                            --             --
                                                    ------------   ------------

NET LOSS                                            $ (1,413,195)  $ (2,198,668)
                                                    ============   ============


BASIC AND DILUTED NET LOSS PER
    COMMON SHARE                                    $     (0.023)  $     (0.037)
                                                    ============   ============

BASIC AND DILUTED WEIGHTED AVERAGE
    NUMBER OF SHARES OUTSTANDING                      62,280,549     58,865,855
                                                    ============   ============


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

                                      F-3
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                     YEARS ENDED FEBRUARY 28, 2007 AND 2006
<table>
<caption>

                                                     Preferred Stock        Common Stock
                                                    -----------------  ----------------------
                                                                                               Additional    Common
                                                    Number of             Number                 Paid-in      Stock     Accumulated
                                                     Shares    Amount   of Shares     Amount     Capital    Subscribed    Deficit
                                                     -------  -------  ------------  --------  -----------  ---------- ------------

                                                 <c>       <c>        <c>         <c>       <c>          <c>        <c>
BALANCE AT FEBRUARY 28, 2005                              --  $    --    56,124,210  $561,243  $23,217,702  $ 250,000  $(24,752,571)

Issuance of stock - previously subscribed                 --       --       500,000     5,000       24,500   (250,000)           --
Issuance of stock - future consulting services            --       --     1,366,000    13,660      618,380         --            --
Issuance of stock - anti-dilution rights                  --       --       715,449     7,155       (7,155)        --            --
Issuance of stock - cancellation of accrued expenses      --       --        74,834       748       16,419         --            --
Issuance of stock - services                              --       --        23,400       234        4,446         --            --
Issuance of stock - cash                                  --       --       750,000     7,500      367,500         --            --
Net loss for the year ended February 28, 2006             --       --            --        --           --         --    (2,198,668)
                                                     -------  -------  ------------  --------  -----------  ---------  ------------

BALANCE AT FEBRUARY 28, 2006                              --       --    59,553,893   595,540   24,462,292         --   (26,951,239)

Issuance of stock - prepaid lease                                  --            --   150,000        1,500     19,500            --
Issuance of stock - future consulting services            --       --     1,072,000    10,720      156,800         --            --
Issuance of stock - anti-dilution rights                  --       --       760,050     7,599       (7,599)        --            --
Issuance of stock - cancellation of accrued expenses      --       --       166,666     1,667       26,666         --            --
Issuance of stock - consulting services                   --       --        93,000       930       13,950         --            --
Issuance of stock - cash                                  --       --     2,332,665    23,327      326,673         --            --
Discount on debt due to beneficial conversion option      --       --            --        --       75,000         --            --
Net loss for the year ended February 28, 2007             --       --            --        --           --         --    (1,413,195)
                                                     -------  -------  ------------  --------  -----------  ---------  ------------

BALANCE AT FEBRUARY 28, 2007                              --  $    --    64,128,274  $641,283  $25,073,282  $      --  $(28,364,434)
                                                     =======  =======  ============  ========  ===========  =========  ============
</table>


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

                                      F-4
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED FEBRUARY 28, 2007 AND 2006

<table>
<caption>

                                                                  2007           2006
                                                              -----------    -----------

                                                           <c>            <c>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                    $(1,413,195)   $(2,198,668)
  Adjustments to reconcile net loss
    to net cash used in operating activities
      Depreciation                                                    945            600
      Amortization                                                531,208        971,192
      Common stock issued for other services                       14,880          4,680
      (Increase) decrease in assets
        Prepaid expenses                                             (505)          (183)
      Increase (decrease) in liabilities
        Accounts payable                                            6,767        (64,300)
        Accrued liabilities                                       436,773        147,714
                                                              -----------    -----------

  Net cash used in operating activities                          (423,127)    (1,138,965)
                                                              -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of equipment                                                --         (2,070)
                                                              -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of convertible debt                       75,000             --
  Repayments of officer and other loans                                --        (31,542)
  Issuance of common stock for cash                               350,000        375,000
                                                              -----------    -----------

  Net cash provided by financing activities                       425,000        343,458
                                                              -----------    -----------

NET INCREASE (DECREASE) IN CASH                                     1,873       (797,577)

CASH - BEGINNING OF YEAR                                          136,635        934,212
                                                              -----------    -----------

CASH - END OF YEAR                                            $   138,508    $   136,635
                                                              ===========    ===========

SUPPLEMENTAL SCHEDULE OF NON-CASH
  FINANCING ACTIVITIES:

   Common stock issued for prepaid lease                      $    21,000    $        --
                                                              ===========    ===========
   Common stock issued for deferred charges                   $   167,520    $   632,040
                                                              ===========    ===========
   Common stock issued for cancellation of accrued expenses   $    28,333    $    17,167
                                                              ===========    ===========
   Common stock issued - anti-dilutive rights                 $     7,599    $     7,155
                                                              ===========    ===========
   Discount on debt due to beneficial conversion option       $    75,000    $        --
                                                              ===========    ===========
</table>

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

                                      F-5
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2007 AND 2006

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

Nature of the Business
----------------------
The consolidated financial statements include the accounts of Mediscience
Technology Corp. ("Mediscience") and its wholly-owned subsidiaries, Laser
Diagnostic Instruments, Inc. ("Laser"), Photonics for Women's Oncology, LLC
("Photonics") and Mediphotonics Development, LLC ("Mediphotonics"), and
Bioscopix, Inc. ("Bioscopix"), (collectively the "Company"). All significant
intercompany transactions and balances have been eliminated in consolidation.
Mediphotonics is the only active subsidiary of the Company.

The Company operates in one business segment and is principally engaged in the
design and development of medical diagnostic instruments that detect cancer in
vivo in humans by using light to excite the molecules contained in tissue and
measuring the differences in the resulting natural fluorescence between
cancerous and normal tissue.

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

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

Use of Estimates

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

Equipment

Equipment is stated at cost. Depreciation is computed using the straight-line
method over an estimated useful life of five years. Depreciation expense was
$945 and $600 in 2007 and 2006, respectively.

                                      F-6
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2007 AND 2006

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

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

Research and Development
------------------------
Research and development costs are charged to operations when incurred. The
amounts charged to expense were $260,137 and $320,953 in 2007 and 2006,
respectively.

Loss per Common Share
---------------------
In accordance with SFAS No. 128, "Earnings per Share," basic and diluted net
loss per share is computed using net loss divided by the weighted average number
of shares of common stock outstanding for the period presented. Because the
Company reported a net loss for each of the years ended February 28, 2007 and
2006, common stock equivalents consisting of options and warrants were
anti-dilutive; therefore, the basic and diluted net loss per share for each of
these periods were the same.

Accounting for Stock-Based Compensation
---------------------------------------
The Company accounts for stock-based compensation in accordance with SFAS No.
123R, Share-Based Payment, which addresses the accounting for share-based
payment transactions in which an enterprise receives employee services in
exchange for (a) equity instruments of the enterprise or (b) liabilities that
are based on the fair value of the enterprise's equity instruments or that may
be settled by the issuance of such equity instruments. SFAS No. 123R eliminates
the ability to account for share-based compensation transactions using the
intrinsic value method under APB Opinion No. 25, and requires instead that such
transactions be accounted for using a fair-value-based method. The Company's
assessment of the estimated stock-based compensation expense is affected by the
Company's stock price as well as assumptions regarding a number of complex
variables and the related tax impact. These variables include, but are not
limited to, the Company's stock price, volatility, and employee stock option
exercise behaviors and the related tax impact. The Company will recognize
stock-based compensation expense on all awards on a straight-line basis over the
requisite service period using the modified prospective method. The adoption of
SFAS No. 123R effective March 1, 2006 had no effect on the Company's results of
operations since there were no nonvested options at March 1, 2006 and there were
no employee stock options issued during the current year ended February 28,
2007. Future changes to various assumptions used to determine the fair value of
awards issued or the amount and type of equity awards granted create uncertainty
as to whether future stock-based compensation expense will be similar to the
historical SFAS No. 123 pro forma expense.

During the prior year ended February 28, 2006, compensation cost for the
Company's employee stock option plan had been determined based on the intrinsic
fair value of the Company's common stock at the dates of awards as permitted
under SFAS No. 123. If the Company had used the fair value method for 2006, the
net loss and net loss per common share would have been increased to the pro
forma amounts indicated below. In 2006, the fair value amounts were estimated
using the Black-Scholes options pricing model with the following assumptions: no
dividend yield, expected volatility of 60%, risk-free interest rate of 4.5% and
expected option life of five years. During the year ended February 28, 2006, an
option was granted to purchase 300,000 shares of $1.00 per share.
                                                               2006
                                                           ------------
         Net loss:
              As reported                                  $  2,198,668
              Pro forma                                    $  2,210,668

         Net loss per common share basic and diluted:
              As reported                                  $     (0.037)
              Pro forma                                    $     (0.038)


                                      F-7
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2007 AND 2006

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

Concentration of Credit Risk Involving Cash
-------------------------------------------
The Company may have deposits with major financial institutions which exceed
Federal Deposit Insurance limits during the year. These financial institutions
have strong credit ratings, and management believes the credit risk related to
these deposits is minimal.

Recently Issued Accounting Pronouncements
-----------------------------------------
In June, 2006, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes.
FIN 48 prescribes detailed guidance for the financial statement recognition,
measurement and disclosure of uncertain tax positions recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
Accounting for Income Taxes. Tax positions must meet a
more-likely-than-not-recognition threshold at the effective date to be
recognized upon the adoption of Fin 48 and in subsequent periods. FIN 48 will be
effective for fiscal years beginning after December 15, 2006, and will become
effective for us beginning with the first quarter of 2007, and the provisions of
FIN 48 will be applied to all tax positions under Statement No. 109 upon initial
adoption. The cumulative effect of applying the provisions of this
interpretation will be reported as an adjustment to the opening balance of
retained earnings for that fiscal year. The Company is currently evaluating the
potential impact of FIN 48 on its consolidated financial statements.

In September, 2006, the SEC issued Staff Accounting Bulletin No. 108 ("SAB No.
108"). SAB No. 108 addresses the process and diversity in practice of
quantifying financial statement misstatements resulting in the potential build
up of improper amounts on the balance sheet. The Company was required to adopt
the provisions of SAB No. 108 in fiscal 2007. The adoption of SAB No. 108 did
not have a material impact on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS
No. 157 establishes a framework for measuring fair value and expands disclosures
about fair value measurements. The changes to current practice resulting from
the application of this Statement relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. The Statement is effective for fiscal years beginning after
November 15, 2007 and will become effective beginning with the first quarter of
2008. The Company has not yet determined the impact of the adoption of SFAS No.
157 on its financial statements and footnote disclosures.

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

NOTE 2 - RELATED PARTY TRANSACTIONS

Legal services rendered by Mr. Peter Katevatis amounted to $50,000 for each of
the two years ended February 28, 2007 and 2006. These amounts are recorded in
general and administrative expense.

As part of Mr. Katevatis' employment agreement, the Company pays property taxes
and certain operating expenses on the home of Mr. Katevatis in lieu of rent,
since the Company's operations are located in Mr. Katevatis' home. Expenses
recognized were $20,897 and $21,378 in 2007 and 2006, respectively, and are
recorded in general and administrative expense.

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

                                      F-8
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2007 AND 2006

NOTE 3 - DEFERRED CHARGES

In fiscal 2007 and 2006, the Company issued 1,072,000 and 1,366,000 fully vested
restricted shares of its common stock at fair market value to four different
consulting groups in exchange for a variety of services to be rendered, over a
period of 12 - 36 and 6 - 24 months, respectively, for matters such as corporate
management, marketing opportunities, product development and research, corporate
funding, investor relations and FDA clinical trials. These costs have been
capitalized and will be recognized ratably over the terms of the agreements.
Expected future amortization of deferred charges is as follows:

              Years Ending
            -----------------

            February 29, 2008              $  472,959
            February 28, 2009                 177,488
            February 28, 2010                 100,547
                                           ----------

                                           $  750,994
                                           ==========


NOTE 4 - ACCRUED LIABILITIES

Accrued liabilities consist of the following:

         --------------------------------------------------------------
                                                 2007          2006
         --------------------------------------------------------------
         Legal and professional fees         $   227,381    $  203,382
         --------------------------------------------------------------
         Consulting and university fees        1,438,415     1,276,414
         --------------------------------------------------------------
         Salaries and wages                    1,764,667     1,542,667
         --------------------------------------------------------------
         Other                                   101,435       100,995
         --------------------------------------------------------------
                                             $ 3,531,898    $3,123,458
         ==============================================================

Accrued legal and professional fees include services rendered by Mr. Peter
Katevatis. The amount of the accrual was $75,958 and $55,958 as of February 28,
2007 and 2006, respectively (Note 2).

Accrued consulting and university fees include costs owed to Dr. Robert R.
Alfano, a principal stockholder and chairman of the Company's Scientific
Advisory Board (Note 7), with respect to his consulting agreement of $1,394,818
and $1,232,818 as of February 28, 2007 and 2006, respectively.

Accrued expense reimbursements of $92,235 and $80,795 were due to Dr. Alfano at
February 28, 2007 and 2006.

Accrued salaries and wages include amounts due to Mr. Katevatis of $1,689,667
and $1,489,667, and $15,000 and $10,500 to Mr. Frank D. Benick, Chief Financial
Officer, and $60,000 and $42,500 due to Mr. Englehart, former President, as of
February 28, 2007 and 2006, respectively.

NOTE 5 - CONVERTIBLE DEBT

On January 10, 2007, the Company commenced a Private Placement Offering for
$2,000,000 of 12% convertible promissory notes ("the Notes") in amounts of not
less than $25,000. The Notes shall be due and payable, together with accrued and
unpaid interest on the earlier of April 15, 2008 or three months after the
completion of the initial public offering ("the IPO") of the shares of
Bioscopix. Holders of the Notes may convert the notes into (i) cash in the
amount of the principal and accrued and unpaid interest due and a warrant
exercisable until April 15, 2009 to purchase shares of Bioscopix in an amount
equal to 50% of the principal of the Notes at an exercise price of 120% of the
five day volume weighted average price preceding the effective date of the IPO
of Bioscopix or (ii) shares of Bioscopix at a price equal to 50% of the IPO
price of the Bioscopix shares of common stock in an amount equal to the
principal and accrued and unpaid interest due on the Notes. In accordance with
EITF 00-27 under option (ii), the carrying value of the Notes was reduced by the
intrinsic value of the beneficial conversion option resulting in a carrying
value of $0. As of February 28, 2007, $75,000 of Notes have been issued with
related discount of $75,000. The Notes will be accreted to their maturity value
over the term of the Notes.

                                      F-9
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2007 AND 2006

NOTE 6 - INCOME TAXES

There is no income tax benefit for operating losses for the years ended February
28, 2007 and 2006 due to the following:

         Current tax benefit - the operating losses cannot be carried back to
         earlier years.

         Deferred tax benefit - the deferred tax assets were offset by a
         valuation allowance required by FASB Statement 109, "Accounting for
         Income Taxes." The valuation allowance is necessary because, according
         to criteria established by FASB Statement 109, it is more likely than
         not that the deferred tax asset will not be realized through future
         taxable income.

The components of the net deferred income tax asset and liability as of February
28, 2007 and 2006 are as follows:

                                           -----------    -----------
         Deferred income tax asset:
         Net operating loss carryforward   $ 6,384,718    $ 5,933,439
         Valuation allowance                (6,384,718)    (5,933,439)
                                           -----------    -----------
         Deferred income tax liability              --             --
                                           -----------    -----------
                                           $        --    $        --
                                           ===========    ===========

As of February 28, 2007 and 2006, the Company has valuation allowances of
$6,384,718 and $5,933,439, respectively, which relates to federal and state net
operating loss carryforwards. The Company evaluates a variety of factors in
determining the amount of the valuation allowance, including the Company's
earnings history, the number of years the Company's operating losses can be
carried forward, the existence of taxable temporary differences, and near-term
earnings expectations. Future reversal of the valuation allowance will be
recognized either when the benefit is realized or when it has been determined
that it is more likely than not that the benefit will be realized through future
earnings. As of February 28, 2007 and 2006, the Company has net operating loss
carryforwards of approximately $17,471,000 and $16,391,000, respectively for
federal purposes and $7,482,000 and $6,069,000, respectively, for state
purposes, which may be used to reduce future income subject to income taxes.

The net operating losses are scheduled to expire in the following years:

                              Federal        State         Total
                            -----------   -----------   -----------
         2008                   370,000            --       370,000
         2009                   854,000            --       854,000
         2010                   615,000       129,000       744,000
         2011                 1,136,000       315,000     1,451,000
         2012                 1,556,000       216,000     1,772,000
         2013                 2,636,000       850,000     3,486,000
         2014                 1,128,000     2,361,000     3,489,000
         2015                        --     2,198,000     2,198,000
         2019(*)                808,000     1,413,000     2,221,000
         2020(*)                943,000            --       943,000
         2021(*)                298,000            --       298,000
         2022(*)                316,000            --       316,000
         2023(*)                182,000            --       182,000
         2024(*)                786,000            --       786,000
         2025(*)              2,284,000            --     2,284,000
         2026(*)              2,172,000            --     2,172,000
         2027(*)              1,387,000            --            --
                            -----------   -----------   -----------
             Total          $17,471,000   $ 7,482,000   $24,953,000
                            ===========   ===========   ===========

(*) Under the Taxpayer Relief Act of 1997, the carryforward period of net
operating losses arising after May 1, 1998 was extended from 15 to 20 years.

                                      F-10
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2007 AND 2006

NOTE 7- COMMITMENTS AND CONTINGENCIES

Dr. Robert R. Alfano
--------------------
The Company has a consulting agreement (the "Agreement") through March 2007 with
Dr. Robert R. Alfano, a principal stockholder of the Company and Chairman of its
Scientific Advisory Board. Pursuant to the terms of the Agreement, Dr. Alfano is
paid a consulting fee of not less than $150,000 per annum in exchange for
services to be rendered for approximately fifty days per annum in connection
with the company's medical photonics business. The Agreement further provides
that Dr. Alfano is to be paid a bonus and fringe benefits in accordance with
policies and formulas provided to key executives of the Company. It is not the
intention of management to renew with this agreement.

In connection with the acquisition of patent rights to its cancer detection
technology, the Company assumed an obligation to pay to Dr. Alfano's daughter a
royalty of one percent of the gross sales derived from any equipment made,
leased or sold which utilizes the concepts described in the Company's cancer
detection patent. Since there has been no activity, no amounts have been paid
during the two years ended February 28, 2007.

Other Royalties
---------------
The Company obtained worldwide licensing rights for patents from Yale University
and has agreed to pay royalties based on net sales of all products generated
from the patents and fifty percent of any income received from sublicensing of
the patents. The Company has not recorded any revenues since the inception of
this agreement and therefore has not recorded or paid any royalties during the
two years ended February 28, 2007.

Employment Agreements
---------------------
Mr. Peter Katevatis, the Chief Executive Officer, Chairman and a stockholder of
the Company, has an employment agreement. The agreement was renewed on March 5,
2007 which increased his salary from $200,000 to $250,000 per year. The
agreement also provides for a bonus and fringe benefits in accordance with
policies and formulas mutually agreed upon by Mr. Katevatis and the Board of
Directors. The contract expires March 5, 2015.

On November 15, 2005, the Company entered into a two year employment agreement
with Frank D. Benick as Chief Financial Officer. Mr. Benick will be paid a
monthly salary of $3,000 per month for the first two months, then increasing to
$4,000 per month for the remaining term of the agreement and received an option
to purchase 300,000 shares of common stock at $1.00 per share (see Note 1 for
pro forma disclosure).

NOTE 8 - STOCKHOLDERS' DEFICIT

Preferred Stock
---------------
The Company is authorized to issue 50,000 shares of preferred stock, $.01 par
value per share, which may be issued from time-to-time in one or more series,
the terms of which may be designated by the Board of Directors without further
action by stockholders. Any preferred stock issued will have preferences with
respect to dividends, liquidation and other rights, but will not have preemptive
rights.

Holders of series A preferred stock are entitled to a preference of $10 per
share before any payment is made to holders of common stock in liquidation of
the assets of the Company. Additionally, holders of series A preferred stock
have no redemption or dividend rights and vote only with respect to corporate
matters affecting their respective rights, preferences or limitations, but do
not vote for the election of directors or on general corporate matters.

Private Placements
------------------
     Common Stock
     ------------
     During fiscal 2006, the Company issued 750,000 shares of common stock at a
     price of $.50 per share for $375,000.

     During fiscal 2007, the Company issued 2,332,665 shares of common stock at
     a price of $.15 per share for $350,000.


                                      F-11
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2007 AND 2006

NOTE 8 - STOCKHOLDERS' DEFICIT (CONT.)

Common Stock Issued for Services
--------------------------------
During November 2005, the Company issued 23,400 shares of its common stock at a
fair market value of $.20 per share to a consultant for research and development
services. This non-cash expense was recorded as general and administrative
expense in the consolidated statement of operations.

During April 2006, the Company issued 93,000 shares of its common stock at a
fair market value of $.16 per share to a consultant for research and development
services. This non-cash expense was recorded as general and administrative
expense in the consolidated statement of operations.

Common Stock Issued for Future Services
---------------------------------------
During March 2005, the Company issued 711,000 restricted shares of its common
stock at a fair market value of $.64 and $.68 per share to two consulting groups
in exchange for medical and financial consulting services to be rendered over a
one year period.

During April 2005, the Company issued 100,000 restricted shares of its common
stock at a fair market value of $.55 per share to a consulting firm in exchange
for public and investor relations consulting services to be rendered over a six
month period.

During November 2005, the Company issued 100,000 restricted shares of its common
stock at a fair market value of $.20 per share to a consulting firm in exchange
for public and investor relations consulting services to be rendered over a two
year period.

During December 2005, the Company issued 375,000 restricted shares of its common
stock at an average fair market value approximating $.18 per share to a
consultant in exchange for medical consulting services to be rendered over a two
year period.

During February 2006, the Company issued 80,000 restricted shares of its common
stock at a fair market value of $.20 per share to a consultant in exchange for
medical consulting services to be rendered over a twenty-two month period.

During March, 2006, the Company issued 500,000 restricted shares of its common
stock at a fair market value of $0.16 per share to a consultant in exchange for
consulting services to be rendered over a three year period.

During March, 2006 and May, 2006, the Company issued a total of 372,000
restricted shares of its common stock at a fair market value of $0.16 per share
to a consultant in exchange for consulting services to be rendered over a twelve
month period.

During February, 2007, the Company issued 200,000 restricted shares of its
common stock at a fair market value of $0.14 per share to a consultant in
exchange for consulting services to be rendered over a twelve month period.

Common Stock Issued for Prepaid Lease
-------------------------------------
On February 22, 2007, the Company issued 150,000 shares at a fair market value
of $.14 per share for a two year lease on office space in California.

2003 Consultants Stock Plan
---------------------------
The Board of Directors previously adopted, subject to stockholder approval, a
2003 Consultants Stock Plan ("Consultants Plan"). The Consultants Plan was
subsequently approved by the stockholders on February 17, 2004. The aggregate
number of shares that may be issued under the options shall not exceed 7
million. No options were issued prior to stockholder approval and no options
were outstanding under this plan as of February 28, 2007 and 2006.

                                      F-12
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2007 AND 2006

NOTE 8 - STOCKHOLDERS' DEFICIT (CONT.)

1999 Incentive Stock Option Plan
--------------------------------
The Board of Directors previously adopted, subject to stockholder approval, a
1999 Incentive Stock Option Plan (the "Plan") for officers and employees of the
Company. The stockholders subsequently approved the Plan on February 17, 2004.
Accordingly awards issued under the Plan prior to February 17, 2004 were deemed
not to be granted until that date. The aggregate number of shares that may be
issued under the options shall not exceed 3 million.

During November 2005, Mr. Benick was granted options to purchase up to 300,000
shares of the Company's common stock at an option price of $1.00 per share. The
option has an expiration date of November 15, 2010.

Activity related to stock options during the two years ended February 28, 2007
is as follows:

                                   Shares          Range         Price
                                 ----------    -------------   ----------


Outstanding, February 28, 2005    2,400,000    $ .25 - $2.00   $     1.04
Granted                             300,000            $1.00   $     1.00
                                 ----------

Outstanding, February 28, 2006    2,700,000    $ .25 - $2.00   $     1.04
Granted                                  --               --   $       --
Forfeited                        (2,000,000)   $ .25 - $1.00
                                 ----------
Outstanding, February 28, 2007      700,000    $1.00 - $2.00   $     1.50
                                 ==========

Common Stock Subscribed

In February 2005, the Company received $250,000 in common stock subscriptions
for 500,000 shares issued in March 2005.

Stock Warrants

Stock warrant activity during the two year period ended February 28, 2007 was as
follows:

                                 ---------   -------------
Outstanding, February 28, 2005   3,350,000   $1.00 - $3.00
Granted                          1,250,000   $        1.00
Exercised                               --
Forfeited                               --
                                 ---------

Outstanding, February 28, 2006   4,600,000   $ .25 - $3.00
Granted                          1,999,332   $        0.25
Exercised                               --              --
Forfeited                               --              --
                                 ---------   -------------

Outstanding, February 28, 2007   6,599,332   $0.25 - $3.00
                                 =========   =============


For stock that had been previously subscribed, in connection with its private
placement offering during 2005, the Company granted warrants to purchase 500,000
shares of common stock at $1.00 per share. The warrants expire in August 2007.

In connection with its private placement offering in 2005 and its extension into
fiscal 2006, the Company granted warrants to purchase 750,000 shares of common
stock at $1.00 per share. The warrants expired in August 2007.

In connection with its private placement offers in 2005 and its extension into
fiscal 2007, the Company granted warrants to purchase 1,999,332 shares of common
stock at $1.00 per share. The warrants expire in August 2008.

                                      F-13
<page>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2007 AND 2006

NOTE 8 - STOCKHOLDERS' DEFICIT (CONT.)
Anti-Dilution Rights

The Company and Mr. Peter Katevatis have an anti-dilution rights agreement which
provides that Mr. Katevatis' ownership interest would at all times represent 17%
of the issued and outstanding shares of the Company. The anti-dilution rights
are exercisable at Mr. Katevatis' sole discretion. During the years ended
February 28, 2007 and 2006, Mr. Katevatis exercised his right and requested the
Company issue 641,478 and 579,173 common shares respectively. As of February 28,
2007, the Company is obligated to issue an additional 8,204 shares to Mr.
Katevatis in connection with the anti-dilution rights. In connection with the
issuance of these shares, the Company has capitalized only the stock's par value
from paid in capital because of the Company's accumulated deficit position.

Anti-Dilution Rights

The Company and Dr. Robert Alfano have an anti-dilution rights agreement which
provides that Dr. Alfano's ownership interest would at all times represent 4% of
the issued and outstanding shares of the Company. The anti-dilution rights are
exercisable at Dr. Alfano's sole discretion. During the years ended February 28,
2006 and 2005, Dr. Alfano exercised his right and requested the Company issue
118,572 and 136,276 common shares, respectively. As of February 28, 2007, the
Company is obligated to issue an additional 14,001 shares to Dr. Alfano in
connection with the anti-dilution rights. In connection with the issuance of
these shares, the Company has capitalized only the stock's par value from paid
in capital because of the Company's accumulated deficit position.

Debt Conversion

On March 8, 2005, the Trust converted $3,667 of accrued interest into 7,334
shares of the Company's common stock.

On November 8, 2005, the Company converted $13,500 of accrued professional fees
for 67,500 shares of the Company's common stock.

On November 15, 2006, the Company converted $28,333 of accrued salary for
166,666 shares of the Company's common stock.

                                      F-14
<page>

                                   SIGNATURES

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

                              MEDISCIENCE TECHNOLOGY CORP.



Date:  June 13, 2007          By:   /s/ Peter Katevatis
                                 -----------------------------------------------
                                    Peter Katevatis Esq.
                                    Chairman of the Board, Treasurer 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.


Date:  June 13, 2007          By:   /s/ Peter Katevatis
                                 -----------------------------------------------
                                    Peter Katevatis Esq.
                                    Chairman of the Board, Treasurer and
                                    Chief Executive Officer
                                    (Principal Executive Officer)



Date:  June 13, 2007          By:   /s/ Frank D. Benick
                                 -----------------------------------------------
                                    Frank D. Benick, CPA, CVA
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)



Date:  June 13, 2007          By:   /s/ John M. Kennedy
                                 -----------------------------------------------
                                    John M. Kennedy
                                    Director, Vice President and Secretary



Date:  June 13, 2007          By:   /s/ William Armstrong
                                 -----------------------------------------------
                                    William Armstrong
                                    Director



Date:  June 13, 2007          By:   /s/ Michael N. Kouvatas
                                 -----------------------------------------------
                                    Michael N. Kouvatas
                                    Director


<page>


                          MEDISCIENCE TECHNOLOGY CORP.

                                   Form 10-KSB
                   For the fiscal year ended February 28, 2007

                                  Exhibit Index




         31.1     Certification of the Chief Executive Officer required by Rule
                  13a-14(a) or Rule 15d-14(a) **

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

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

 * Previously filed
** Filed herewith