UNITED STATES


SECURITIES AND EXCHANGE
COMMISSION


Washington, DC 20549


FORM 10-K





(Mark One)





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





For the fiscal year ended February 28,
2010


or





 ̈
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the transition period from _______
to _______





Commission file number
33-51218





SensiVida
Medical Technologies Inc.


(Exact name of registrant as specified
in its charter)





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





77 Ridgeland Road, Henrietta, New
      York
            14623(Address of Principal Executive
      Offices)
            (Zip
  Code)





Registrant's telephone number, including
area code: (585)413-9080





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





Title of each
      class
            Name of each exchange on which
      registeredNone





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





Common stock, $.01 par
value


(Title of Class)





Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.


Yes ̈Nox





Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.


Yes ̈Nox





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes  ̈ No  ̈


(the
Registrant is not yet required to submit Interactive Data)





Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes ̈Nox





Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K (ss.229.405 of this
chapter) is not contained herein, and will not 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-K or any amendment to this
Form 10-K. ̈





Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of "large accelerated
filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.





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





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





The aggregate market value of the voting
and non-voting common equity held by non-affiliates computed by reference to the
price at which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the registrant's
most recently completed second fiscal quarter, was approximately
$2,236,750.





As of June 16, 2010, there were
outstanding 15,998,112 shares of the registrant'scommon stock, $.01 par
value.





DOCUMENTS INCORPORATED BY
REFERENCE





None.








Table of
Contents





PagePART
      IItem
      1.
                        Business
                        
                        1Item
1A.
                        Risk
Factors
                        
                        15Item
1B.
                        Unresolved Staff
      Comments
                        
                        19Item 2.
                        Properties
                        
                        19Item 3.
                        Legal
      Proceedings
                        
                        19Item 4.
                        Submission of Matters to a Vote of
      Security Holders
                        
                        19PART
      IIItem
      5.
                        Market for Registrant's Common
      Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities
                        
                        19Item
      6.
                        Selected Financial
      Data
                        
                        21Item
      7.
                        Management's Discussion and
      Analysis of Financial Condition and Results of
      Operations
                        
                        21Item
      7A.
                        Quantitative and Qualitative
      Disclosures About Market Risk
                        
                        23Item
      8.
                        Financial Statements and
      Supplementary Data
                        
                        24Item
      9.
                        Changes in and Disagreements With
      Accountants on Accounting and Financial Disclosure
                        
                        47Item
      9A(T)
                        Controls and
      Procedures
                        
                        47Item
      9B.
                        Other
      Information
                        
                        48PART
      IIIItem
      10.
                        Directors, Executive Officers and
      Corporate Governance
                        
                        48Item
11.
                        Executive
      Compensation
                        
                        51Item
12.
                        Security Ownership of Certain
      Beneficial Owners and Management and Related Stockholder
      Matters
                        
                        52Item
      13.
                        Certain Relationships and Related
      Transactions, and Director Independence
                        
                        52Item
      14.
                        Principal Accounting Fees and
      Services
                        
                        53PART
      IVItem
      15.
                        Exhibits, Financial Statement
      Schedules
                        
                        53Signatures
                        
                        54Exhibit
    Index
                        
                        55


-i-





SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS





Certain statements in this Annual Report
on Form 10-K, including statements under "Item 1. Business," and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations," 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, as amended (the "Exchange Act"), although the safe harbor under those
statutes do not apply to companies, such as us, that issue penny stock.
Forward-looking statements include, amongother things, 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-K. 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.





PART I





Item
1. Business





Business
Background





We area minimally invasive bio-medical
diagnostic device company. Its proprietary optical Micro-systems based
technology automates bio-sensing and data acquisition while minimizing patient
discomfort.Ourplatform technology
addresses a number of disease state diagnostics - allergy testing, pain-free
automated glucose monitoring without bio-fouling, blood coagulation testing
(e.g. for Coumadin patients), TB testing and cholesterol
monitoring.





We havebeen developing two products based on
its platform technology. The initial market priority focus is to commercialize a
highly accurate, rapid,
3X productive, pain-free
allergy test system in the US($1.2B market growing at a compounded rate of
7%). Several prototypes have been made and proof-of-concept human clinical
trials have been
successfully performed. The
second product, based on the same technology is a unique portable glucose monitor
($10B market growing
ata compounded rate of
7%). This highly
differentiated device consists of a patch having multiple individually -
addressable sensors that are activated in accordance to the patient's test
schedule, automatically measuring the glucose level without bio-fouling,
clogging or daily calibration.





In addition,we have a patent portfolio in the area
of"Molecular Optical
Biopsy." i.e.the design and development of medical
diagnostic instruments that detect cancer without a traditional biopsy 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.We seek to licensea unique Molecular Optical
Biopsy technology (Photonic "pill") that permits the diagnosis of cancerous or
pre-cancerous tissue without a biopsy.Thesmall, optical diagnostic device that
can be swallowed,could bea replacement for
traditional endoscopy to diagnose cancers of the mouth, esophagus, colon and the
rest of the digestive tract.


1





We have partneredwith a number ofcompaniesin the areas ofbiomedical device product development,FDA clinical
studies,and reimbursement. It has received clearance from the
Western IRB to conduct 100 human clinical studies in the area of allergy
testing. Thus far, the first studies have shown that our minimally-invasive
allergy test significantly reduces: 1) extent of reaction, 2) test time, 3)
test-to-test variation. The objectives of thestudy are to determine efficacy; the
clinical sensitivity and clinical specificity for the various diagnostic
methods. Comparative analyses performed usingourmethods and existing tests (e.g.
allergy testing, glucose
monitoring) will be used to
assess relative efficacy, sensitivity, and safety.





Strategy





Ourprimary source of revenue will be
through the sale of high margin disposable products. In some product families,
hardware and software would be provided for free to accelerate product adoption.Ourfirst product family is an allergy test
system comprising of a disposable Microsystems cartridge that painlessly and
rapidly administers a large number of allergens. A compact imaging module
captures images of the patient’s skin and provides them to a computer for
display and analysis. The
product targets the $1.2B
U.S. allergy test market and the needs of a large and growing (7% CAGR) health
care problem affecting over 50% of the U.S. population and responsible for an
estimated $18B in health care costs and lost productivity. Compounding the
problem, there is a need for 100 additional Allergists each year to keep up with
demand and to compensate for an attrition of 20 Allergists per year. In the
U.S., more than 75% of all Allergy tests are done via the “Skin Prick Test”
method- it is estimated that 6M skinpricktests are performed each year. Current
allergy tests take an average of 35 minutes, are uncomfortable and stressful
especially for children.OurMicrosystems based test can accomplish the same test in
12pain-free minutes, while
concomitantly improving the Allergists’ profitability by
25%.





One significant advantage of image-based
digital diagnostic systems is their ability to use image processing to quantify
allergic reactions, a significant advantage over today’s subjective tests. We
believe this capability will grow the channels for allergy testing, thereby
increasing business penetration and use in preventive modes. Over time,
SensiVida’s test will provide a new allergy screening option toRetail Clinics and potentially200,000 Primary Care
Physicians (PCP’s) who see on the average one allergy patient a
day.





Commercialization ofourAllergy test will be facilitated by the
following:


•
              Allergens and reagents used by the
      SensiVida system are already FDA
approved
 •
              First products to market will be
      intuitive image-based systems, substantially equivalent to today’s
      test
 •
              3800 U.S. Allergists form a small
      community in the U.S. and can be easily
  reached
 •
              Supporting hardware and software
      expense will be provided free, thereby reducing adoption
      barriers
 •
              Test accuracy and reproducibility
      will be greatly improved
 •
              Risk for human error is
      reduced
 •
              Value Proposition to Allergists is
      positive- Profitability could be25% higher, reduced and more efficient
      management of labor costs, automatic/simply electronic medical
      records
 •
              Value Proposition to patients
      is positive –
      painless, lessinvasive,
      fastertest
 •
              Value Proposition to payers is
      positive- test is more accurate than today’s test (may reduce need for
      follow-on tests e.g. intradermal or indicate more effective therapy) and
      lower dosage of allergen may lower risk of test
      complications.
 •
              We,along withourpartners,havethe means to develop the needed
      technology and the ability to do rapid
      commercialization.


The allergy test represents a near term
revenue opportunity, having low regulatory hurdles. Based on our current
forecast for product development, clinical testing, and FDA approvals,weexpect to launch an allergy test
productin the 3rd Quarter
of 2011serving the
Allergist.Due to our
inability to raise needed capital during 2009, FDA clinical trials and product
launch has been delayed by approximately nine months. Beginning in March 2010,
we have been raising money steadily; as of June 16, 2010, approximately $1.5M
has been raised. As a result, critical product development, clinical studies,
and collaborative projects with commercialization partners have gained
significant momentum.


2





Oursecond product family, based on the same
fundamental proprietary technology base, addresses glucose monitoring, another
multi-billion dollar market
($10B)having many unmet
needs. The large and growing number of diabetics, currently estimated to be 18M
in the U.S. and 177M worldwide, also lack a convenient, painless method to
monitor their glucose level. The estimated annual cost of diabetes in the U.S.
is estimated to be $132B, and is rapidly on the rise (also a 7% CAGR). In
addition to diabetes, related ailments such as obesity, heart disease, kidney
disease, blindness (e.g. diabetic retinopathy), atherosclerosis, and amputation
can be triggered or caused by diabetes. Given the dimensions of the diabetes
problem, it is difficult to quantitatively estimate the size of this large
market. A simple indicator is revealed from understanding money spent by
diabetics glucose testing. Assuming 18M diabetics in the U.S. perform two daily
tests (at ~$1/test), yields a number exceeding $10B. This number obviously
excludes standard blood tests performed by clinics, system costs, insulin shots,
pumps, etc.





Current methods for glucose monitoring
require periodic manual blood sampling using “fingersticks”. Children and many
adults find these tests painful, inconvenient, and often are not in compliance.
SensiVida will address this market need with an unobtrusive, wearable glucose
monitoring system having a disposable microlancet array chip with individually
monitored sensors selectively actuated in accordance to the patient’s test
schedule. The uniqueness and advantages over existing offerings
are:




•
              Continuous measurements without
      bio-fouling effect or
clogging
 •
              Accuracy equivalent to the
      fingerstick test since it is a direct chemical
      measurement
 •
              Hygiene benefits- no blood is
      extracted
 •
              Virtually pain-free to the
      patient


Ourminimally-invasive in vivo diagnostics
technology has the potential to be extended to other billion dollar markets such
as blood coagulation testing (e.g. Prothrombin Time test for patients on
Coumadin), TB testing, and cholesterol monitoring. TB skin testing, for example,
benefits from mobile continuous optical monitoring since reactions take days and
may be missed in the follow-up visit. A mobile continuous monitoring system
would be able to capture and store patient reactivity to be conveniently
downloaded at a later time. The method would also reduce scheduling problems and
inefficiencies that occur when tested patients are unable to make follow-up
scheduled appointments.





Our third business
opportunitywill involvepartnering with established
industry players and/or licensing itsfluorescence tissue spectroscopy.The“Compact Photonic Explorer” pill is a
modern alternative to traditional endoscopy that will provide more extensive,
complete, and accurate diagnostics that visual methods used by
others.  Advantages of the Compact Photonic Explorer pill over
traditional endoscopy include:


•
              Fluorescence spectroscopy
      technology detect both pre-cancer and cancer
  cells.
 •
              Spectroscopy improves diagnostic
      accuracy over video-only pills (e.g.
  GIVEN)
 •
              Eliminates unnecessary images of
      non diseased areas.
 •
              Eliminates pain and patient
      sedation associated with current GI cancer
  screens.


Other potential diagnostics applicationsforourfluorescence tissue spectroscopy include
probing the following organ sites for cancer: oral cavity, cervix,
aero-digestive tract and colon. Our strategy istomaximize the value of oursignificant patent portfolio
intissue spectroscopyby licensingitsoptical imagingtechnology forapplications in cancer
detectionWe
wish toposition ourIntellectual Propertyasenablingreal-time, less invasive,alternatives to traditional cancer
diagnosis method  e.g.our ("CPE" or "Photonic
Pill"), a small, optical diagnostic device that can be swallowed, targeted as a
replacement for traditional Endoscopy to diagnose cancers of the mouth,
esophagus, colon.





Our
Products





The SensiVida Allergy Test system, first
product in the company’s family plan, offers the Allergist an objective,
painless allergy testing system that consists of the
following:


•
              A disposable microlancet
      chip/cartridge that painlessly and rapidly administers the
      allergens.


3


•
            A compact imaging module/digital
      imager that captures real-time allergic reactions and sends images and
      data wirelesslyto a computer provided at no
      cost.


•
            User-friendly software that allows
      the user to monitor the allergic reaction that provides quantitative data
      regarding reaction extent, positive/negative diagnosis versus allergen,
      and reaction kinetics. An e-record patient report is automatically created
      which can printed or
transmitted.





Several configurations for the allergen
chip/cartridge have been covered inourpatent applications. The simplest
involves a microlancet array individually coated with the set of allergens. Upon insertion into the subject, the
aqueous interstitial fluid dissolves the allergen matrix, allowing it to diffuse
into the skin, thereby triggering the allergic reaction. In another embodiment,
encapsulated allergens are packaged 1:1 along with each microlancet and
released upon
actuation. A removable film
seals the packaged allergen array, keeping it sterile until it is ready to
use.





The SensiVida Allergy Test provides a
number of benefits to physicians and patients:





Value Proposition:
Physicians
 •
              Automates today’s subjective,
      manual Skin Prick Test with a standardized
  test
 •
              Produces digital records of
      allergic reactions and their
diagnosis
 •
              Quantitative image analysis vs.
      subjective diagnosis
 •
              Achieves a 25% improvement in
      profitability
 •
              Significant improvement in test
      accuracy have been demonstrated (1/3 variability of standard
      test)
 •
              Reduces test-to-test variability
      and operator error
 •
              Improved diagnosis of dark-skinned
      subjects, currently difficult and
  inefficient
 •
              Short procedure facilitates
      pediatric test
 
 Value Proposition:
Patients
 •
              Eliminates discomfort and
      fear
 •
              Significantly reduces procedure
      time, less agonizing
chair-time
 •
              Friendlier test for
      children
 •
              Reduced reaction
      areas
 •
              More reliable test results for
      dark-skinned patients, e.g. African
  Americans
 •
              Covered by health insurance
      (unlike in vitro
tests)





The SensiVida Allergy Testsystem is expected to receive rapid
510(k)approval since the
system uses FDA approved allergens, has received non-significant risk
classification by the WIRB, andis based on the well-knownpredicate device, theSkin Prick Test.





The second product inourproduct family is an unobtrusive,
wearableor mobileglucose monitoring system
with a disposable microlancet chip having individually-monitored sensors that
are actuated in accordance to the patient’s test schedule. The uniqueness and
advantage over the existing offerings are: (1) continuous measurements without
bio-fouling or clogging; (2) accuracy equivalent to fingerstick test since it is
a direct chemical test; (3) hygiene benefits since no blood is extracted; (4)
the test is virtually painless. The first version of this product will target
hospital use and then migrate to personal/mobile use. The glucose monitor will
be comfortably worn as a band or patch. At user-defined time intervals, each
needle of the array is individually deployed by an actuator, causing insertion
into the patient’s skin. The fine tips of each microlancet are coated with a
glucose sensitive enzyme (e.g. glucose oxidase) that is either optically or
electrically read out by system electronics. The data are calibrated so as to
represent actual glucose concentrations and displayed, stored, or transmitted
depending on the application.





A compelling aspect ofourglucose monitor is that it provides a
positive Value Proposition for a number of customer segments in the value chain,
e.g. health care facilities, hospitals, and patients:


4





Value Proposition: Health Care Facility,
Hospital
 •
              Automated timed measurements-
      reduced monitoring by the medical
staff
 •
              Hygiene benefits- no blood is
      extracted
 •
              Convenient data recording- direct
      input to digital patient
records
 •
              Minimally invasive, virtually
      pain-free
 •
              Densely spaced sensors permit many
      measurements over extended
times
 •
              Minimal periodic
      calibration
 •
              Wireless transmission to nursing
      station and/or alerts for dangerous
  levels
 •
              Opportunity for closed loop smart
      system using insulin pump
 
 Value Proposition:
Patient
 •
              Painless- patient friendly to
      children and elderly
 •
              Microlancets are much less
      invasive- reduced puncture skin
damage
 •
              Hygiene benefits- no blood is
      extracted
 •
              Automated data recording and
      management, improved
compliance
 •
              Less disruption to patient during
      meals, nighttime, activities at hospital or
  home
 •
              More continuous operation reveals
      high-low glucose levels
 •
              Comparable cost per test as
      current fingerstick test
 •
              Opportunity for closed loop smart
      system using insulin
pump




Product
Developmentand
Partnerships





We are an equity partner of the Infotonics
Technology Center (ITC), a 501(c) not-for-profit NYS Center of Excellence.
SensiVida will be able to leverage Infotonics’ state-of-the-art $80M
Microsystems facility, housed in a 120,000-ft2 building and focused on applied
research & development and commercialization of photonics and Microsystems.
In addition to its human and capital resources, Infotonics draws support from
partner educational institutions including Cornell University, Rochester
Institute of Technology, Syracuse University, University of Buffalo, and the
University of Rochester. Since several of these universities have excellent
medical schools, SensiVida will also tap into their associated hospitals for
medical and clinical work. In addition, the Rochester Regional Photonics Cluster
an association of over 70 small companies dedicated to photonics, optics and
imaging technology have joined Infotonics as a small business member. The
expertise resident collectively in these companies will be engaged in the
various optical subsystems part ofourproduct plan, e.g. imaging
modulesand optical
chemical sensors. A partnership for the development of our digital allergy
testing module has been recently established with Dhurjati Electronics
Consulting, LLC of Rochester, NY.





In May 2010,weestablished a partnership with Wi Inc.,
a Colorado-based company with years of experience developing biomedical devices.
Wi, Inc. (www.wiinc.net) is a vertically integrated product development firm
specializing in assisting clients in the commercialization of in vitro
diagnostics devices from concept to pilot build. Wi’s team of scientists and engineers are
knowledgeablein the
clinical applications of the markets they serve and dedicated to advancing
medical science through point-of-care diagnostics and lifesaving therapies that
ultimately reduce the cost of healthcare. Under the agreement, Wi will provide
design and prototype development for the disposable allergen delivery component
of the allergy test system,buildinguponourdisposable allergen cartridge
technology using design-for-manufacturing (DFM) disciplines while providing
access to high volume manufacturing partners. In addition to developing
preferred designs and prototypes, Wi’s pilot manufacturing capabilities will
help reduceourcycle time to reach FDA clinicals and
product launch.





We have also established a partnership
with MDC Associates, a consulting firm that specializes in FDA clearance and
compliance, establishing company quality systems for regulatory compliance, FDA
documentation, developing pre-market submissions, facility audits and more.
After product launch, MDC will provide our customer support services including
its comprehensive call center, over-the-phone training all conducted in
compliance with FDA and ISO system requirements.


5





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 devices 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.





The Allergy test, glucose monitor and
other future product offerings will requireusto prove efficacy prior to
commercialization. As such, these will be classified under the FDA’s Devices
category and will be required to prove “substantial equivalence” via a 510k (all
the allergens are FDA approved). Due to the fact that the allergen
cartridge will lightly breach the skin, it will most likely be classified as a
Class II device. Initial Allergyclinical tests,are being performed under an
IRB,which authorizes human clinical testing
on100 patients.A first round of testing performed on a
subset of the 100 approved subjects is virtually complete as of May 2010.
Additional tests as approved by the IRB are being strategically reserved for
later in 2010, after refined engineering prototypes closely resembling the final
product design will become available from Wi inc. and Dhurjati Electronic
Consulting.





Ourminimally-invasive allergy
testeruses FDA approved
allergens and is an extension of the current gold standard, the Skin Prick Test.We believe, based on
initial assessment by the Western IRB that this test will be classified as a
“non-significant risk”, potentially expediting theFDA clinical trials. Future testswill compare dose response
characteristics of our test using side-by-side testing of the Company’s
technology vs. the standard
test. Although the statistics for the number of patients required for the FDAclinical trials has not been set, it is expected that
less than 500 patients willbe sufficient. We expect to
work closely with MDC Associates for the next 14 months as it defines and
implements its clinical trials strategy.





Wemust 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 ouror
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.





Althoughwebelieve thatourproducts 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 products. To the extent that we may market
our products in foreign markets, we will be subject to foreign governmental
regulations, as well as USA, with respect to the manufacture and 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.





Business
Development and Marketing





Whileourplatform technologies can address
several billion dollar diagnostic markets, our initial focus is to commercialize
a rapid pain-free allergy test. Based on our current forecast for product
development, clinical testing, and FDA approvals,weexpect to launch an allergy test product in the Third Quarter
of 2011serving the
Allergist. A second product
will become available at Retail Clinics as a simple allergy screen test.
Based on our current assumptions and projections,we expect revenue fromourallergy products  grow to $270M in
2016, withgrossmargins of 65%or more.


6





Although allergies affect many
industrialized countries worldwide, the U.S. is viewed asourprimary market. Skin testing is still
considered the gold standard in the U.S. due to its sensitivity, predictive
value,lowcost, health insurance reimbursement
policies, and its role in the Allergist’s current practice/business. In vitro
testing is more prevalent in some European countries (~50% of tests) and Japan
(~85% of tests) where socialized medical practices and the small number of
Allergists per capita affects the dynamics and Value Chain of the local
industry. Given its lower cost, immediacy, sensitivity, and the aforementioned
reasons, rapid adoption of in vitro allergy tests in the U.S.is not expected, barring unexpected major changes in
our healthcare system. Due to similarities with the U.S. in this regard,
Australia and some European countries could also adoptourallergy test system. Nevertheless,our marketing and sales focus will be the
UnitedStates.





Early adoption by Allergists is an essential part of
ourstrategy since it
validates the technology and provides expert scientific and clinical information
needed for market adoption.Ourprimary target segment will be rapidly
growing young practices that are receptive to adopting digital patient records
technology. Based on surveys and demographic data, we estimate that this segment
constitutes approximately one third of the 3800 practicing Allergists. U.S.
Allergists share a relatively common set of processes, customers, and suppliers.
They are well connected by societies such as the Academy of Allergy, Asthma,
& Immunology (AAAAI), its associated Journal of Allergy and Clinical
Immunology, the American College of Allergy, Asthma, and Immunology (ACAAI), the
National Institute of Health’s National Institute of Allergy and Infectious
Diseases (NIAID), the Asthma and Allergy Foundation of America (AAFA), and a
number of annual meetings and conferences. Due to this relatively small number
of specialists, achieving customer reach and awareness in this segment will be
relatively straightforward.Wewill pursue the following approaches to
achieve awareness in this segment:


·
            Develop relationships and advocacy with Key
      Opinion Leaders
      (KOL’s) in field


·
            Extensive tradeshow and conference
      participation e.g. AAAAI
meetings


·
            Talks and white paper describing
      minimally-invasive allergy
testing


·
            Posters presenting benefits to
      specialist and patient


·
            Professionally engineered
      prototypes demonstrated at SensiVida’s
  booth


·
            Demo software for testing
      process


·
            Scientific and trade journal
      advertising


·
            Direct contact using contract
      sales marketing in key regional
hubs


·
            Mailing product and company
      brochures


·
            Development of SensiVida website
      describing product and scientific
data





Ourallergy test is an innovative, high-tech
system that will require careful cultivation of KOL’s. Early feedback from
KOL’s, has been positive, especially relative to the possibility ofouradding more “science” to allergy testing
through improved quantification and reproducibility. Notwithstanding these and
other advantages, extending the life of skin testing through technological
improvements would also reduce disruption to specialists who significantly
depend on in-office testing and diagnostics for their livelihood. We plan to use
these factors to help create partnerships with a high level panel of KOL’s who
would serve as key advocates ofourtechnology.





Given the lack of scientific data
involving minimally-invasive approaches in skin allergy testing, we plan to
publish a vetted “white paper” that gains credibility and creates scientific
interest from KOL’s. Additional work done in collaboration with the KOL’s will
be presented as a peer-review document in journals like Journal of Allergy and
Clinical Immunology, American Journal of Immunology, International Journal of
Allergy and Immunology, European Academy of Allergy and Clinical Immunology etc.
In parallel, selected KOL’s and SensiVida representatives can jointly make
presentations and participate in “Poster Sessions” in key allergy and immunology
conferences. This will provide an excellent opportunity to disseminate technical
and company literature such as laminated copies of key charts and graphs from
the “white paper”, FDA clinical data summary, and information presenting
expected improvements in Allergists’ profitability. These will be subtle
messages, while the key focus would be to present the benefits ofoursystem. The one-on-one interaction with
practitioners will also provide the opportunity to gather names and contact
information to collect as potential customer leads.


7





Since the number of U.S. Allergists is
relatively small, a direct mailing campaign will be mounted that communicates
the efficacy ofoursystem as well as the relative
profitability of the practitioners who adopt our system. Full-page ads in trade
magazines or newspapers that coincide with FDA approval will also enhance
customer awareness.


The primary positioning of our product
is threefold: a) practice building for Allergists, b) pain-free Allergy testing
for the patients, and c) accuracy, reliability, and standardization. Tag lines
include: “A new era of allergy testing”, “The new standard of care”, “Automatic
digital patient records”. An important element of the marketing plan will be to
communicate financial benefits of the SensiVida Allergy Test to the
practitioner.





Product adoption will largely depend on
acceptance of key basic premises behindourAllergy test. In addition to clinical
issues and cost, human factors aspects of the Value Proposition such as ease of
use, reliability, and productivity will strongly influence adoption, especially
early in the market cycle. For this reason,oursales and marketing plan includes a
mobile sales team that visits doctors’ offices to demonstrate the product, thus
allowing them to become familiar with the user-friendly software and system.
Leads resulting in customer visits will be harvested from the various marketing
activities described above as well as regional business research and
teleprospecting. Given the relatively small revenue ofourhardware and software compared to the
consumable revenue stream, the sales pitch will emphasize minimal adoption cost
and rapid increase in the physician’s profitability. The low unit manufacturing
cost of the hardware  and software allowsusto offer these at no cost to minimize
adoption barriers. Promotional literature estimating average gains in
productivity and profitability will also be widely
distributed.





Following purchase ofoursystem, consumable cartridges will be
made available to Allergists through web or catalog sales, providing pricing
advantages if done on a subscription basis. These channels for purchasing
consumables and supplies are familiar to Allergists who routinely purchase
allergen extracts, controls, and lancets in this manner.Ourwebsite, customers, and sales team will
be connected by a Customer Relationship Management system (CRM) to optimize
sales effectiveness, customer satisfaction, and retention.  Product
upgrades, new product/services, usage tips, training, and other services that
can retain customers and expand customer base can be effectively marketed when
customers buy consumables throughourweb or catalog.





Our second product (launch
2012) is a screening test
provided at retail clinics that targets the estimated 32M US patients that go
untested each year. The low cost, simplified allergy screening test includes 15
broad spectrum allergens that will provide a, convenient option for today’s
undiagnosed allergic patients. Retail clinics are an attractive channel for the
SensiVida Allergy Screen Test. Facilities such as MinuteClinics, RediClinics,
and Take Care Health are growing nationwide at rapid rates, already providing
1000’s of sites with in-place capabilities for SensiVida’s simple screening
test. A recent announcement by MinuteClinic (CVS) of a $60 in vitro allergy
screen test validates that interest and need are there, in spite of the fact
that in vitro is a more expensive, less immediate, and non-reimbursable option.
The retail clinic allergy test can be either referred by the PCP or provided as
walk-in business.





Ourallergy screening test will have
automated image analysis capability, providing data in digital pictorial/tabular
formats and hard copy (will help transition from paper to digital record
keeping). Convenient file sharing capabilities will be integrated in the
software allowing clinics to share their results with PCP’s and insurance
companies productively, securely, and in a timely manner. Prior acceptance ofourtest by the specialist community, will
aid adoption of the screen product by one or more of the major retail clinics.
By product introduction planned for 2012(a year following the Allergist
product) the expected reach of retail clinics will substantially satisfy the
needs of the target population. Furthermore, retail clinics will likely drive
their own advertising campaigns to the general public through their extensive
channels.





Due toourtest automation and simplicity, the
need for highly specialized nursing staff is obviated. Furthermore,the reduced test cycle time
(12minutes vs. 35 minutes)
has significant impact on patient throughput and profitability. Theclinic profitability of approximately 50%
EBITtakes into account
increased test productivity and somewhat reduced labor costs compared to
the Allergist practice. We
believe that ourtest
provides a very profitable opportunity for the clinics and a low cost
(potentially reimbursed), painless option for allergy
patients.


8





Aswe progressin the allergy test market,wewill seek to expand its business into
other markets that highly leverage its core technology. Most notably, glucose
and blood monitoring products will be explored for future business expansion and
growth in subsequent years. Although the company will aggressively focus on
allergy testing, a number of patents based onourcore microlancet andimage processingtechnology have been filed that should
provide the company significant future market options and growth
opportunities.





Competitive
Landscape





Although it is highly labor intensive
and subject to operator variability, the Skin Prick Test is still the gold
standard and the most widely used test in the U.S. Some of its advantages are:
1) highest positive predictive value, 2) immediate results and, 3) low cost. One
major negative is that the test can be traumatic to the patients, especially
children.ourproduct automates this labor intensive
test, taking the subjectivity out of the equation and making the testing
experience significantly less traumatic to patients. While in vivo Skin Prick
Tests dominate in the U.S., in vitro tests such as RAST, MAST, ELISA, ImmunoCAP
are also used. The advantage of in vitro tests is that a small amount of blood
can be drawn at any location without minimal trauma and results come back as
quantitative data versus the subjectivity of the Skin Prick Test. On the
negative side, test results are not immediately available, costs are high, and
tests are still subject to false positives or negatives. The position of allergy
specialists in the U.S. relative to in vivo (skin test) and in vitro testing is
summarized below:





"In vivo tests, most commonly skin
tests, are viewed by many as the most relevant indicator of IgE antibody since
they involve direct observation of a biological response in the patient. It
remains the primary method used by Allergists to detect IgE antibody, because of
its sensitivity, specificity, speed, cost effectiveness, and ease of
performance."


American Academy of Allergy Asthma and
Immunology Work Group Report: Allergy Diagnosis in Clinical Practice, November
2006





"Skin tests with allergens represent the
primary diagnostic tool in determining atopic status. Prick tests are the most
commonly used for diagnostic purposes. Their characteristics–simplicity,
rapidity of performance, low cost, and high sensitivity–explain their key
position... Measurement of specific IgE in serum (in vitro) does not surpass
skin tests and is more expensive."


Global Strategy for Asthma Management
and Prevention: NIH Publication 02-3659 update, 2005





"Skin testing remains the principal tool
in the determination of the presence of allergic sensitization. Reliability of
skin testing and understandable documentation of test results are important when
a patient is being evaluated by an Allergist and when a patient changes
Allergists... almost all Allergists (in their survey) performed Skin Prick
Testing (98.7%)"


Skin Testing: a Survey of Allergists,
Oppenheimer et al, Ann. Allergy Asthma Immunol.
2006;96:19–23.





For these reasons, U.S. insurance
providers generally do not cover in vitro tests, except for special cases (e.g.
patients with delicate skin, infants). Another issue slowing adoption in the
U.S. is that in vitro testing bypasses the Allergist’s revenue source by
outsourcing this profitable part of their business. On the other hand, an
analysis of Allergists’
cost structure reveals that oursystem should be financially attractive
and supportive of their profession.





Feedback regarding the Sensivida Allergy
Test from some independent and internationally known medical research
professionals, as well as Key Opinion Leaders from the field of allergy and
immunology has provided valuable insights regarding the Value Proposition to the
Allergist. A sampling of their commentary is provided below:


“... a good market niche exists for a
fully automated allergy testing system, particularly if it has benefits for the
patient and physician related to cost, time, and clinical
usefulness.”


“... a good imaging subsystem can
circumvent some of the most difficult parameters of allergy testing to
overcome...”


9


“...The company (SensiVida) has identified
a significant market opportunity.”


“...(current) skin testing is
embarrassing- anything that’s going to standardize, is reproducible, and
quantifiable will be great.”


“...Clearly opens up skin testing for
kids.”





Market participants in allergy testing
include Alk Abello, Greer, Hollister-Stier, Allergy Labs of Ohio, Lincoln
Diagnostics for in vivo testing,and Phadia for in vitro testing. In
spite of the number of participants, no offering such asSensiVida’s digital allergy test that overcomes shortcomings of skin
tests while providing objectivity of in vitro tests (at a lower cost and with
immediacy) is available.





Due to its large business potential,
many companies, large and small, are pursuing less invasive, continuous,
automated ways to sample glucose and other blood chemicals. A
samplingof the various
technologiesis given
below:





-
            Subcutaneous “CGM”: sensor
      inserted into abdomen like infusion
set


-
            NIR in vivo: spectral analysis of
      near infrared by implanted
sensor


-
            NIR ex vivo: spectral analysis of
      near infrared scattered from
skin


-
            Ophthalmic: Spectral/fluorescence
      by retina or aqueous humor


-
            Impedance analysis: glucose
      migrates to skin‐impedance
      analysis


-
            Ultrasonic: glucose diffusion
      through skin produced by
ultrasound


-
            Photoacoustic: IR light pulse into
      skin produces acoustic
signal


-
            Sampling: Small amount of
      blood/interstitial fluid drawn for
  analysis





Although many of these technologies have
been investigated for many years, only subcutaneous CGM’s hasbeen granted FDA approval. Even
thosemethods marketed by
companies like Dexcom, Medtronics, and Abbott, have a ways to gobefore they achieve therapeutic accuracy
and do not requireexcessive calibration.





Developed and proposed methods found in
the literature to monitor blood chemistry suffer from a number of disadvantages.
The standard fingerstick test requires the use of a lancet that pierces the skin
and is able to draw blood for subsequent measurements. Unfortunately, this
process is not only invasive, but inconvenient as well. Furthermore,
fingerstick-based monitors provide periodically sampled measurements of the
subject’s blood chemistry even though glucose levels may be fluctuating rapidly
between readings. Non invasive optical approaches are being investigated that
are continuous and non-invasive but suffer from calibration problems and
day-to-today subject variation. Implantable devices could be continuous but are
prone to a process known as bio-fouling, poor calibration, and periodic
replacement needs.





Technical literature suggests that there
are companies that are pursuing “microneedle-based” technologies capable of
sampling minute quantities of blood or interstitial fluid with minimal impact or
pain to the subjects. In spite of this advantage, microneedle systems described
in the literature are still somewhat invasive since they extract blood from the
patients for the measurements or reside long term as in vivo sensors. In vivo
devices are also hampered by bio-fouling, long start-up times,and require frequent calibration or
device replacement.





In view of the above information,ourprimary advantages that set it apart
from other automated/minimally invasive monitors are in the following four
areas:


•
              It is a true chemical analysis- potentially accurate
      asfingerstick
      test
 •
              Less prone to calibration problems
      than optical or implanted
devices
 •
              No blood is extracted- test is
      done in vivo
 •
              Each microlancet is used for only
      a short time- no
biofouling
  10





Our optical biopsy Intellectual Property
offers some unique advantages over other technologies fromGiven 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 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. Based on
in-depth market and
technology review (see 8-K Mar. 26, 2006)webelieve that a photonics technical
platform of optical biopsy (CPE) introduces a new,and capableconceptforthe emerging endoscopic ingestible pill
marketthat may be of
interest to other market players(See CITIGROUP/Smith Barney Analyst
Report 10-1-2004 by Peter
Bye. Page 20 Mediscience-Infotonics).





Intellectual
Property





We have secured a worldwide exclusive
license to 8minimally-invasive in vivo diagnostics patent applications, including a number
of PCT and European filings (see Patent list). In addition to allergy testing
and glucose monitoring using microlancet technologies, coagulation monitoring
for patients on blood thinners (e.g. Coumadin), cholesterol and other blood
chemistry. 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.




OnApril 14, 2003wesecured 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 Mediscience secured 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" Dr. Robert Alfano and Mediscience believe
that all recent filings plus Mediscience’s 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 Mediscience’s IP leadership in the Optical
Biopsy field. Mediscience regards this accumulated and related patent cluster as
pioneering, blocking and dominant in its area of cancer and physiological change
diagnosis both in-vivo and in-vitro. (see Patent list
infra.)




EU Patent
Cooperation Treaty




We areseeking 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.Weeither own or hold
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 provideus acompetitive
advantage.




Wealso relyon trade secrets and know-how to protect
in part, through the use of Confidentiality Agreements. There can be no
assurance that these agreements will not be breached, thatwewill have adequate remedies for any
breach, or thatourtrade secrets and know-how
will not otherwise become known to or independently developed by
competitors.




Our
Patents




WePatents secured from the CUNY Research
Foundation:




US Patent Medical Diagnostic Optical
Technology US Patent Pending "Stokes-Shift Fluorescence spectroscopy for
detection of disease and physiological state of specimen" discussed
above.




#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”


11




#5,293,872, March 15, 1994, “Method for
Distinguishing between Calcified Atherosclerotic Tissue and Fibrous
Atherosclerotic Tissue or Normal Cardiovascular Tissue Using Raman
Spectroscopy”




#5,348,018, September 20, 1994, “Method
for determining if Tissue is Malignant as opposed to Non-Malignant using
Time-Resolved Fluorescence Spectroscopy”




#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”




#5,467,767, November 21, 1995, “Method
for Determining if Tissue is Malignant as opposed to Non-Malignant using
Time-resolved Fluorescence Spectroscopy”




#5,635,402, June 3, 1997. “Technique for
Determining whether a Cell is Malignant as opposed to Non-malignant using
Extrinsic Fluorescence Spectroscopy”




#5,849,595, December 15, 1998, “Method
for Monitoring the Effects of Chemotherapeutic Agents on Neoplasmic
Media”




#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”




#6,006,001, December 21, 1999,
“Fiber optic assembly useful in optical spectroscopy”




#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”




#6,091,985, July 18, 2000, “Detection of
cancer and precancerous conditions in tissues and/or cells using native
fluorescence excitation spectroscopy”




#5,371,368, December 6, 1994, “Ultrafast
Optical Imaging of Objects in a Scattering Medium”




#5,625,458, April 29, 1997, “Method and
System for Imaging Objects in Turbid Media using Diffusive Fermat
Photons”




#5,644,429, July 1, 1997 (see
#5,371,368),” 2-Dimensional Imaging of Translucent Objects in Turbid
Media”




5,710,429, January 20, 1998, “Ultrafast
Optical Imaging of objects in or Behind Scattering Media”




#5,719,399, February 17, 1998, “Imaging
and Characterization of Tissue based upon the Preservation of Polarized Light
transmitted therethrough”




#5,799,656, September 1, 1998, “Optical
Imaging of Breast Tissues to enable the Detection therein of Calcification
Regions Suggestive of Cancer”




#5,813,988, September 29, 1998, “Time
Resolved Diffusion Tomographic Imaging in Highly Scattering Turbid
Media”




#5,847,394, December 8, 1998, “Imaging
of Objects Based upon the Polarization or Depolarization of
Light”




#5,931,789, August 3, 1999,
“Time-resolved diffusion tomographic 2D and 3D imaging in highly scattering
turbid media”




# 6,208,886 B1, March 27, 2001,
“Non-linear optical tomography of turbid media”




# 6,215,587, April 10, 2001, “Microscope
imaging inside highly scattering media”




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.




Patent applications exclusively licensed
from the Infotonics Technology Center:




“Minimally Invasive Allergy Testing
Systems and Methods”, PCT/US2006/026774, US Non-provisional app.
11/995,366




“Minimally Invasive Allergy Testing
System with Coated Allergens”, PCT/US2007/061604




“Allergy Testing Cartridge with Coated
Allergens”, PCT/US2007/061601




“Compact Minimally Invasive Biomedical
Monitor”, US Non-provisional app. 11/754,987, PCT/US08/65024




“Blood Monitoring Systems and Methods”,
US Non-provisional app. 11/279,290, European application EP 06 749
731.3


12


“MEMS
Interstitial Prothrombin Time Test”, US Non-Provisional app.
12/189,509
  Patents
filed by and assigned to SensiVida Medical Technologies:
  “Improved
Compact Minimally Invasive Biomedical Monitor Using Image Processing”, US
Provisional 61/276116
  “Remote
Automated Skin Testing System”, US Provisional filed 5/3/2010
  Third Party
Reimbursement
  We will
ultimately 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. We 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.
  Our has
recently contracted Scott Taylor Associates Inc., a Newbury Massachusetts-based
firm, to conduct a set of marketing studies and interviews with leading
payers/HMO’s. Feedback from payers will be used to refine the Company’s
reimbursement strategy and ascertain what if any changes to current
reimbursement guidelines would be required relative to today’s Skin Prick Test
(SPT). We believe that our allergy test provides a positive Value Proposition to
payers based on the following: 1) improved accuracy over SPT may reduce need for
re-testing or inappropriate therapy (both increase reimbursement expense), 2)
lower allergen concentration and dosage may reduce risk of test complications
such as anaphylaxis, 3) creation of accurate electronic medical records at
minimal cost increases operation efficiency and better ascertains patients’
allergic profile with time.
  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 Mediscience’s
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:
  Employees
  As of May
31, 2010, we had one full-time employee, one part time employee, and a number of
contracted workers. None of our employees are covered by collective bargaining
agreements and none are represented by labor unions. We believe that relations
with our employees and contractors are good.
  ScientificStaffand Medical
Advisors
 
 We have
assembled a group of experienced technology and industry experts to provide
critical review and analysis of product development programs and to serve as a
source of information on new and existing product ideas, new technologies and
current research activities. We also believe that we have attracted accomplished
scientists, engineers, and clinicians who will help guide us in product
development and 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.
 
 Key
people are:
  13
  •
              Jose Mir:President, President,CTO
  Over
      30 years experience managing innovation and New Business Development.
      Co-founder of Eastman Kodak’s new business incubator. GM of $15M digital
      motion picture business. Director of Infotonics Biomedical Initiatives.
      SensiVida Medical Systems founder. 70+ patents and
      publications.
  •
              David R. Smith,
      Chairman
  Former
CEO, Chairman and Founding Member of Infotonics Technology Center, Inc. from
2002 to 2008.Director
of Engineering and Technology at Eastman Kodak. 35 years of diverse technology
development experience. Board Chair of Optoelectronic Industry Development
Association.
  •
              John Condemi, M.D.:Medical
      Advisor (Independent)
  President
      of the Allergy Asthma Immunology of Rochester (AAIR) and Director of the
      Clinical Research Department and Infusion Center. Fellow of all major
      allergy/immunology societies. Over 90 technical papers, 23 chapters, 350
      clinical studies.
  •
              Scott Taylor: FDA and
      Reimbursement Advisor(Independent)
  Has
      more than 15 years consulting experience with Diagnostics, Medical Device,
      Point-of-Care Testing (POCT), and Pharmaceutical companies facilitating
      FDA approval process, reimbursement issues, and CPT Codes. President and
      CEO of Scott Taylor Associates.
  •
              John
      Agostinelli
  Ph.D
(Univ. of Rochester) in Optics. Research Fellow at Kodak and Chief Technologist
at Kodak’s Display Research Center. A Kodak “Elite Inventor”. Over 70 patents
issued and pending.
  •
              Larry
    DeMejo
  PhD. (U.
Mass.) in Polymer Science and Engineering. Developed and scaled up impact
resistant composites at General Electric. Expertise in adhesion of small
particles on surfaces. Developed Kodak’s ink jet media technology and novel
protective overcoats. Over 80 patents and publications.
  •
              Margy
    Lydon
  M.S.
Materials Science and Engineering (RIT). Senior level manager with over 20 years
experience in operations management, product development in the medical device
field. Former GM of Angiotech BioCoatings, Vice President of Operations and
Product Development STS Biopolymers.
  •
              Scott
      Rosebrough
  PhD.
(Univ. of Rochester) in Pharmacology. Product development experience in Medical
Devices including Director of drug delivery coatings at Angiotech. Medical
Device start ups, including Quality Assurance and Regulatory
Affairs.
  •
              John
      Spoonhower
  PhD.
(Cornell) in Applied and Engineering Physics. Creator of several multi-hundred
million dollar business enterprises at Kodak. Former Managing Director of
Kauffman Foundation Innovation interface at Cornell – a multi university project
to investigate new businesses at Cornell and MIT. 56 patents and several
pending
  14
  Item. 1A.
              Risk
      Factors
  The
following risk factors should be considered carefully in addition to the other
information presented herein:
  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 slow adoption, 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, 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.
Any failure of such funding to take place or to be in an amount sufficient to
commercialize our technology may compel us to find other collaborative partners
to fund our capital expenditures, or our inability to obtain capital through
other sources will 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
Minimally-Invasive Diagnostic Platform Technology and its product line
consisting of Allergy Test System, Glucose and Blood Diagnostic Test System, and
its Optical Biopsy Pill products (early development done jointly with the
research of our collaborative equity partner, Infotonics Technology Center). 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 diagnostic 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. 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.
  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.
  15
  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 IDE as
described below; or that other significant difficulties and costs will not be
encountered to obtain FDA clearance or approval. The IDE approval
process  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 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.
  16
  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 patents and patent applications
necessary to develop products. If any of our patent applications are not
allowed, 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, 10
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 United States, Japan and European Union
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
CURRENTLY 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
products independently of any collaborative partner. These activities will
require development of partnerships and/or additional resources and capital that
we will expect to be provided through this Offering. There is no assurance that
we will be able to raise sufficient capital through the Offering or attract and
retain skilled personnel to enable us to finish development, launch and market
these products.
  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 in vivo diagnostics analogous to Skin Prick
Allergy Testing (SPT), glucose monitoring, and endoscopy. If our products do not
achieve significant market penetration, 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 not been used by anyone, and
no  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.
  17
  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 compete against these and other competitors.
Furthermore, if our products are not available at competitive prices, health
care providers, and health insurance companies who are subject to increasing
pressures to reduce costs may not elect to purchase or reimburse 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.
  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 58.1% of our outstanding common stock as of June 15, 2010.
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.
  18
  Item 1B.
              Unresolved
      Staff Comments
  None.
 
 Item 2.
              Description
      of Property
  Our
corporate headquarters are located in Henrietta, New York. We have
a  month-to-month lease with Rochester BioVentures Center, a 40,000
square feet facility containing office and laboratory space. The Company
utilizes the Center’s conference, phone, internet, utilities as well as a 200
square foot wet lab space for its dedicated work.  We believe that our
current facility adequately provides for our operations, but as more employees
and contractors are hired, we expect to require additional laboratory and office
space for sales, marketing and business development.
 
 Item 3.
              Legal
      Proceedings
 
 We have
been sued  by Dr. Robert R. Alfano in a case styled Robert R. Alfano v.
SensiVida Medical Technologies, Inc., C.A. No 09 CV 8753 (SDNY 2009). Dr.
Alfano alleges that he is owed $1,487,053 in consulting fees in connection with
a consulting agreement that he claims we breached.  Dr. Alfano also is
claiming that he is owed 132,000 post reverse split shares of our common stock
under the terms of alleged various anti-dilution agreements with us. We have
filed an Answer and a Motion to Dismiss which is scheduled to be heard by the
court in June 2010.
 
 Item 4.
              Submission of
      Matters to a Vote of SecurityHolders
 
 None.
 
 PART
II
 
 Item
      5.
              Market
      for Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchase of Equity Securities
 
 Market
Information
 
 Our
common stock is traded under the symbol "SVMT" on the OTC Bulletin Board. The
following table sets forth the range of high and low closing bid for our common
stock for the periods set forth below as reported by the OTC Bulletin
Board.  Such quotations represent inter-dealer quotations, without
adjustment for retail markets, markdowns or commissions, and do not necessarily
represent actual transactions.  The prices reflect our 10-to-1 reverse
stock split effected on May 18, 2009.
 
 High
                    
                    
                    Low3/1/2009
      through 5/31/2009
                    
                    $
                    2.00
                    
                    
                    $
                    0.626/1/2009
      through 8/31/2009
                    
                    
                    1.05
                    
                    
                    
                    0.259/1/2009
      through 11/30/2009
                    
                    
                    0.79
                    
                    
                    
                    0.5112/1/2009
      through 2/29/2010
                    
                    
                    0.54
                    
                    
                    
                    0.113/1/2008
      through 5/31/2008
                    
                    $
                    0.10
                    
                    
                    $
                    0.066/1/2008
      through 8/31/2008
                    
                    
                    0.20
                    
                    
                    
                    0.059/1/2008
      through 11/30/2008
                    
                    
                    0.10
                    
                    
                    
                    0.0412/1/2008
      through 2/28/2009
                    
                    
                    0.14
                    
                    
                    
                    0.03
  19
 
 Holders
 
 As of
June 16, 2010, there were approximately 663 holders of record of our common
stock.
 
 Dividends
 
 We do not
intend to pay cash dividends on our common stock for the foreseeable future, but
currently intend to retain any future earnings to fund the development and
growth of our business. The payment of dividends if any, on the common stock
will rest solely within the discretion of the Board of Directors and will
depend, among other things, upon our earnings, capital requirements, financial
condition, and other relevant factors. We have not paid or declared any
dividends upon our common stock since inception.
 
 Securities
Authorized for Issuance Under Equity Compensation Plans
 
 We have
two equity compensation plans. Our 1999 Stock Incentive Plan effective as of
April 1, 2003 (the "1999 Plan") provides for the issuance of up to 300,000
incentive and non-qualified stock options, stock appreciation rights and shares
of common stock to our eligible employees and consultants and our 2003
Consultants Stock Option, Stock Warrant and Stock Award Plan effective as of
February 17, 2004 (the "2003 Plan," and together with the 1999 Plan, the "Stock
Option Plans") provides for the issuance of up to 700,000 non-qualified stock
options, stock purchase warrants and shares of common stock to our eligible
employees and consultants. Each of the Stock Option Plans was approved by our
Board of Directors and ratified by the holders of a majority of our issued and
outstanding shares of common stock within 12 months of such board approval. The
following table presents certain information relating to outstanding awards and
shares available for future grant under our Stock Option Plans in accordance
with Item 201(d) of Regulation S-K.
 
 Equity Compensation Plan
Information [PLEASE
UPDATE]
 
 Number
      of securitiesremaining
      available forfuture
      issuance underNumber
      of securities to
                    
                    
                    Weighted-average
                    
                    
                    equity
      compensationbe
      issued upon exercise
                    
                    
                    exercise
      price of
                    
                    
                    plans
      (excludingof
      outstanding options,
                    
                    
                    outstanding
      options,
                    
                    
                    securities
      reflected inwarrants
      and rights
                    
                    
                    warrants
      and rights
                    
                    
                    column
      (a))Plan category
                    
                    (a)
                    
                    
                    (b)
                    
                    
                    (c)Equity
      compensation plans approved by security holders
                    
                    
                    30,000
                    
                    
                    $
                    10.00
                    
                    
                    
                    670,000Equity
      compensation plans not approved by
    security holders
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    N/ATotal
                    
                    
                    30,000
                    
                    
                    $
                    10.00
                    
                    
                    
                    670,000
  20
  Recent
Sales of Unregistered Securities
 
 The information required by Item 701 of
Regulation S-K has been previously included in one or more current reports on
Form 8-K filed by the Company.
 
 Item
      6.
              Selected
      Financial Data
 
 We
are a “smaller reporting company” as such term is defined in Rule 12b-2 of
the Exchange Act and are exempt from making the disclosures required by this
item pursuant to paragraph (c) of Item 301 of
Regulation S-K.
 
 Item
      7.
              Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
 
 The
following discussion should be read in conjunction with the Financial Statements
and the notes thereto that appear in Item 8 of this annual report on Form
10-K.
 
 Results of
Operations
 
 Year Ending February 28,
2010 Compared to
 Year Ending February 28,
2009
 
 Revenues
 
 We had no
revenues during the years ending February 28, 2010 and February 28,
2009.  Our prior focus was our continued development of our
light-based technology, however, effective March 3, 2009, with the merger of
SensiVida Medical Systems, Inc. into the Company’s wholly-owned subsidiary
BioScopix, Inc., the Company’s technology has focused on the automation of
analysis and data acquisition for allergy testing, glucose monitoring, blood
coagulation testing, tuberculosis testing, and cholesterol
monitoring.
 
 General and Administrative
Expense
 
 General
and administrative expenses increased approximately $16,000, or 1%, during the
current year ended February 28, 2010 as compared to the year ended February 28,
2009.  The increase was the net of increases and decreases in major
expense components.  Salaries, wages and related expenses
approximating $387,000 increased approximately $44,000 over the prior year
period, as a result of the employment agreements of the new CEO, CTO and
Chairman of the Board.  The increase was partially offset by the
voluntary termination of Mr. Katevatis’ employment agreement. In addition,
professional fees increased approximately $73,000 during the current year,
primarily due to the increased professional activities associated with the
merger and related matters. In October 2009, a civil action was entered against
the company by Dr. Robert Alfano.  The litigation centers around
payment for accrued consulting fees and expenses totaling approximately
$1,490,000.  In addition, Dr. Alfano is contesting the termination of
his anti-dilution rights and the transfer of his former Mediscience Technology
Corp. stock into SensiVida Medical Technologies, Inc. stock.  The
Company does not believe the case has merit and has filed a Motion to
Dismiss.  The Company intends to vigorously defend these
claims.  Also, adding to the increase in general and administrative
expense was approximately $187,000 of amortization costs associated with the
Company’s intellectual property.  As an offset to the increases, there
was a decrease in financial service (bridge fees and related costs) totaling
approximately $284,000 along with a decrease in other general and administrative
expenses approximating $4,000.
  21
  Product Development
Expense
 
 Product
development expense increased approximately $79,000, or 39%, during the current
year ended February 28, 2010 when compared to the prior year ended February 28,
2009.  The increase is due to allergy research being conducted in
Rochester, NY, by the Company and its consultants.
 
 Cancellation of
Indebtedness
 
 The
Company has written off certain accrued consulting fees totaling $43,597 that
had been outstanding for a number of years due to lack of completion of the
engagement by the consultant.
 
 Liquidity and Capital
Resources
 
 We had a
deficiency in working capital as of February 28, 2010 of approximately
$3,366,000 compared to a deficiency of approximately $5,841,000 at February 28,
2009 representing a decrease in the deficiency of approximately $2,475,000 for
the current year ended February 28, 2010.  The decrease in the
deficiency consisted of a decrease of approximately $82,000 in current assets,
consisting of cash and prepaid expenses, and an offsetting decrease of
approximately $2,557,000 in current liabilities.  The principal reason
for the decline in accrued liabilities is the cancellation of approximately
$2,147,000 of obligations to Mr. Katevatis who terminated his employment
agreement as Chief Executive Officer and Chairman along with his anti-dilution
rights and exercised his option to convert outstanding salary and fees accrued
thru November 2008 in exchange for 1,172,510 shares of the Company’s common
stock.  In addition, certain note holders converted $1,205,000 of note
principal and $249,325 of accrued interest into common stock of the
Company.  The current deficiency in working capital is primarily
represented by accounts payable, accruals for professional fees, consulting,
salaries and wages and convertible debt.  Subsequent to the Company’s
February 28, 2010 fiscal year end, the Company began an offering of a maximum of
$10,000,000 of Series A Preferred stock at $1.00 per share.  The
Series A Preferred stock is convertible into shares of the Company’s common
stock, par value $.01 per share at $0.35 per share for a period of three years
from the date of issuance and bears interest at 12% per annum, such interest to
accrue and be paid in cash at the end of three years from the date of issuance
of the Series A Preferred stock or in shares of common stock if the investor
elects to convert the Series A Preferred stock.  The investor also
will receive warrants to acquire shares of common stock in an amount equal to
50% of the number of shares of common stock into which the Series A Preferred
stock converts.  The exercise price of the warrant is also at $1.00
per share.  Series A Preferred stock subscriptions to date have
exceeded $1,400,000.
  22
 
 Our
ability to continue our operations is largely dependent upon obtaining
regulatory approval for the commercialization of our diagnostic technology for
allergy testing, glucose monitoring, blood coagulation testing, tuberculosis
testing and cholesterol monitoring.  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 our technology.  Such arrangements, if established,
may include up-front payments, sharing of sales revenues after deduction of
certain expenses, and/or product development funding.  Our management
anticipates that substantial resources will be committed to a continuation of
our research and development efforts and to finance government regulatory
applications.  While management believes that we will obtain
sufficient funds to satisfy our liquidity and capital resources needs for the
short term from the private placement of our securities and short term
borrowings, no assurances can be given that additional funding or capital from
other sources, such as co-promotion arrangements, will be obtained on a
satisfactory basis, if at all.  In the absence of the availability of
financing on a timely basis, we may be forced to materially curtail or cease our
operations.  Our operating and capital requirements, as described
above, may change depending upon several factors, including: (i) results of
research and development activities; (ii) competitive and technological
developments; (iii) the timing and cost of obtaining required regulatory
approvals for our products; (iv) the amount of resources which we devote to
clinical evaluation and the establishment of marketing and sales capabilities;
and (v) our success in entering into, and cash flows derived from, co-promotion
arrangements.
 
 Off-Balance Sheet
Arrangements
 
 We have
no off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.
 
 Recent Accounting
Pronouncement
 
 Reference
is made to the summary or significant accounting policies included in the
consolidated financial statements for a discussion and analysis of recently
issued accounting pronouncements and their impact on the Company.
 
 Item 7A.
              Quantitative
      and Qualitative Disclosures About Market
Risk
 
 We
are a smaller reporting company, as defined by Item 10(f)(1) of
Regulation S-K, and we are not required to make the disclosures required by
this item pursuant to Item 305(e) of Regulation S-K.
  23
  Item 8.
              Financial
      Statements and Supplementary Data
 SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED FINANCIAL
STATEMENTS
 
 FEBRUARY 28, 2010 AND
2009
  24
  CONTENTS
 
 PAGEREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  26CONSOLIDATED
      BALANCE SHEETS
                  27CONSOLIDATED
      STATEMENTS OF OPERATIONS
                  28CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
                  29CONSOLIDATED
      STATEMENTS OF CASH FLOWS
                  30NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
                  31 -
      46
  25
  REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Board of Directors
 SensiVida
Medical Technologies, Inc.
 77
Ridgeland Rd.
 Henrietta,
New York
 
 We have
audited the accompanying consolidated balance sheets of SensiVida Medical
Technologies, Inc. and subsidiaries, (the “Company”) as of February 28, 2010 and
2009, 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.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  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 SensiVida Medical
Technologies, Inc. and subsidiaries as of February 28, 2010 and 2009, 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
      LLPBala Cynwyd, PennsylvaniaJune
      16, 2010
  26
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE
SHEETS
 FEBRUARY 28, 2010 AND
2009
 
 2010
                                                                                
                                                                                
                                                                                2009ASSETSCURRENT
      ASSETSCash
                                                                                
                                                                                $
                                                                                12,002
                                                                                
                                                                                
                                                                                $
                                                                                76,797Prepaid
      Expenses and Other Current Assets
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                17,262TOTAL
      CURRENT ASSETS
                                                                                
                                                                                
                                                                                12,002
                                                                                
                                                                                
                                                                                
                                                                                94,059PROPERTY
      PLANT AND EQUIPMENTNet
      of Accumulated Depreciation of $207,322 (2010) and$207,322
      (2009)
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -OTHER
      ASSETSIntellectual
      Property - Net of Accumulated Amortizationof
      $187,237 (2010) and $-0- (2009)
                                                                                
                                                                                
                                                                                2,621,327
                                                                                
                                                                                
                                                                                
                                                                                -Deferred
      Costs
                                                                                
                                                                                
                                                                                49,167
                                                                                
                                                                                
                                                                                
                                                                                130,547Other
      Assets
                                                                                
                                                                                
                                                                                3,016
                                                                                
                                                                                
                                                                                
                                                                                2,800Restricted
      Cash
                                                                                
                                                                                
                                                                                18,727
                                                                                
                                                                                
                                                                                
                                                                                -TOTAL
      ASSETS
                                                                                
                                                                                $
                                                                                2,704,239
                                                                                
                                                                                
                                                                                $
                                                                                227,406LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIESConvertible Debt,
      Net of Discount of $-0- and $86,036 for 2010
      and 2009, respectively
                                                                                
                                                                                $
                                                                                451,500
                                                                                
                                                                                
                                                                                $
                                                                                1,570,464Other
      Loans Payable
                                                                                
                                                                                
                                                                                99,828
                                                                                
                                                                                
                                                                                
                                                                                -Accounts
      Payable
                                                                                
                                                                                
                                                                                255,189
                                                                                
                                                                                
                                                                                
                                                                                73,895Officer
      Loan Payable
                                                                                
                                                                                
                                                                                5,524
                                                                                
                                                                                
                                                                                
                                                                                -Accrued
      Liabilities
                                                                                
                                                                                
                                                                                2,315,680
                                                                                
                                                                                
                                                                                
                                                                                4,140,431Preferred
      Stock Subscribed
                                                                                
                                                                                
                                                                                250,000
                                                                                
                                                                                
                                                                                
                                                                                150,000TOTAL
      CURRENT LIABILITIES
                                                                                
                                                                                
                                                                                3,377,721
                                                                                
                                                                                
                                                                                
                                                                                5,934,790TOTAL
      LIABILITIES
                                                                                
                                                                                
                                                                                3,377,721
                                                                                
                                                                                
                                                                                
                                                                                5,934,790STOCKHOLDERS'
      DEFICITConvertible
      Preferred Stock - $.01 par value, 5,000 sharesauthorized,  -0-
      shares issued and outstanding in 2010 and2009
      respectively
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -Common
      Stock - $.01 par value, 19,995,000 shares authorized,15,980,612
      and 7,123,241 shares issued and outstanding in2010
      and 2009, respectively
                                                                                
                                                                                
                                                                                159,806
                                                                                
                                                                                
                                                                                
                                                                                71,232COMMON
      STOCK SUBSCRIBED
                                                                                
                                                                                
                                                                                140,800
                                                                                
                                                                                
                                                                                
                                                                                -ADDITIONAL
      PAID-IN CAPITAL
                                                                                
                                                                                
                                                                                34,153,453
                                                                                
                                                                                
                                                                                
                                                                                27,784,596ACCUMULATED
      DEFICIT
                                                                                
                                                                                
                                                                                (35,127,541
                                                                                )
                                                                                
                                                                                
                                                                                (33,563,212
                                                                                )TOTAL
      STOCKHOLDERS' DEFICIT
                                                                                
                                                                                
                                                                                (673,482
                                                                                )
                                                                                
                                                                                
                                                                                (5,707,384
                                                                                )TOTAL
      LIABILITIES & STOCKHOLDERS' DEFICIT
                                                                                
                                                                                $
                                                                                2,704,239
                                                                                
                                                                                
                                                                                $
                                                                                227,406
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  27
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF
OPERATIONS
 YEARS ENDED FEBRUARY 28,
2010 AND 2009
 
 2010
                                                    
                                                    
                                                    2009SALES
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    -COST
      OF SALES
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -GROSS
      PROFIT
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -GENERAL
      AND ADMINISTRATIVE EXPENSE
                                                    
                                                    
                                                    1,094,041
                                                    
                                                    
                                                    
                                                    1,078,416RESEARCH
      AND DEVELOPMENT EXPENSE
                                                    
                                                    
                                                    278,536
                                                    
                                                    
                                                    
                                                    199,880TOTAL
      EXPENSE
                                                    
                                                    
                                                    1,372,577
                                                    
                                                    
                                                    
                                                    1,278,296LOSS
      FROM OPERATIONS
                                                    
                                                    
                                                    (1,372,577
                                                    )
                                                    
                                                    
                                                    (1,278,296
                                                    )OTHER
      INCOME (EXPENSE)Cancellation
      of Indebtedness
                                                    
                                                    
                                                    43,597
                                                    
                                                    
                                                    
                                                    -Interest
      Income
                                                    
                                                    
                                                    86
                                                    
                                                    
                                                    
                                                    4,380Interest
      Expense
                                                    
                                                    
                                                    (149,399
                                                    )
                                                    
                                                    
                                                    (190,751
                                                    )Accretion
      of Discount on Convertible Debt
                                                    
                                                    
                                                    (86,036
                                                    )
                                                    
                                                    
                                                    (721,434
                                                    )Total
      Other Income and (Expense)
                                                    
                                                    
                                                    (191,752
                                                    )
                                                    
                                                    
                                                    (907,805
                                                    )NET
      LOSS
                                                    
                                                    $
                                                    (1,564,329
                                                    )
                                                    
                                                    $
                                                    (2,186,101
                                                    )BASIC
      AND DILUTED NET LOSS PERCOMMON
      SHARE
                                                    
                                                    $
                                                    (0.112
                                                    )
                                                    
                                                    $
                                                    (0.319
                                                    )BASIC
      AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES
      OUTSTANDING
                                                    
                                                    $
                                                    13,984,738
                                                    
                                                    
                                                    $
                                                    6,845,941
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  28
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS’ DEFICIT
 YEARS ENDED FEBRUARY 28,
2010 AND 2009
 
 Preferred Stock
                                  
                                  
                                  Common Stock
                                  
                                  
                                  
                                  
                                  
                                  CommonNumber
                                  
                                  
                                  
                                  
                                  
                                  Number
                                  
                                  
                                  
                                  
                                  
                                  Additional
                                  
                                  
                                  Stock
                                  
                                  
                                  Accumulatedof Shares
                                  
                                  
                                  Amount
                                  
                                  
                                  of Shares
                                  
                                  
                                  Amount
                                  
                                  
                                  Paid-in Capital
                                  
                                  
                                  Subscribed
                                  
                                  
                                  DeficitBALANCE
      AT FEBRUARY 29, 2008
                                  
                                  
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  
                                  6,725,099
                                  
                                  
                                  $
                                  67,251
                                  
                                  
                                  $
                                  26,999,821
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  (31,377,111
                                  )Issuance
      of stock - anti-dilution rights
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  53,491
                                  
                                  
                                  
                                  535
                                  
                                  
                                  
                                  (535
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Issuance
      of stock - services
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  314,651
                                  
                                  
                                  
                                  3,146
                                  
                                  
                                  
                                  217,110
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Issuance
      of stock - future consulting services
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  30,000
                                  
                                  
                                  
                                  300
                                  
                                  
                                  
                                  29,700
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Discount
      on debt due to beneficial conversion option
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  538,500
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Net
      loss for the year ended February 28, 2009
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (2,186,101
                                  )BALANCE
      AT FEBRUARY 28, 2009
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  7,123,241
                                  
                                  
                                  
                                  71,232
                                  
                                  
                                  
                                  27,784,596
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (33,563,212
                                  )Common
      stock subscribed
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  140,800
                                  
                                  
                                  
                                  -Acquisition
      of SensiVida Medical Systems, Inc.
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  3,333,333
                                  
                                  
                                  
                                  33,334
                                  
                                  
                                  
                                  2,717,999
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Common
      stock issued in cancellation of shareholder debt
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,172,510
                                  
                                  
                                  
                                  11,725
                                  
                                  
                                  
                                  2,135,462
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Conversion
      of debt and acrrued interest
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  4,155,222
                                  
                                  
                                  
                                  41,552
                                  
                                  
                                  
                                  1,412,773
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Cancellation
      of fractional shares as a result of reversestock
      split
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (27
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Common
      stock issued for future services
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  150,000
                                  
                                  
                                  
                                  1,500
                                  
                                  
                                  
                                  76,000
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Common
      stock issued for services
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  46,333
                                  
                                  
                                  
                                  463
                                  
                                  
                                  
                                  26,623
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Net
      loss for the year ended February 28, 2010
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (1,564,329
                                  )BALANCE
      AT FEBRUARY 28, 2010
                                  
                                  
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  
                                  15,980,612
                                  
                                  
                                  $
                                  159,806
                                  
                                  
                                  $
                                  34,153,453
                                  
                                  
                                  $
                                  140,800
                                  
                                  
                                  $
                                  (35,127,541
                                  )
 
 The accompanying notes are an integral
part of these consolidated financial statements.
  29
  
 SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF
CASH FLOWS
 YEARS ENDED FEBRUARY 28,
2010 AND 2009
 
 2010
                                          
                                          
                                          2009CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                                          
                                          $
                                          (1,564,329
                                          )
                                          
                                          $
                                          (2,186,101
                                          )Adjustments
      to reconcile net loss to net cash used in operating
    activitiesDepreciation
      and Amortization
                                          
                                          
                                          187,237
                                          
                                          
                                          
                                          345Amortization
      of deferred costs
                                          
                                          
                                          158,880
                                          
                                          
                                          
                                          178,642Accretion
      of discount on convertible debt
                                          
                                          
                                          86,036
                                          
                                          
                                          
                                          721,434Common
      stock issued for services
                                          
                                          
                                          27,086
                                          
                                          
                                          
                                          220,256Subtotal
                                          
                                          
                                          (1,105,090
                                          )
                                          
                                          
                                          (1,065,424
                                          )Changes
      in assets and liabilities(Increase)
      decrease in assetsPrepaid
      expenses
                                          
                                          
                                          17,262
                                          
                                          
                                          
                                          43,681Other
      assets
                                          
                                          
                                          (216
                                          )
                                          
                                          
                                          (1,000
                                          )Restricted
      Cash
                                          
                                          
                                          (18,727
                                          )
                                          
                                          
                                          -Increase
      (decrease) in liabilitiesAccounts
      payable
                                          
                                          
                                          181,294
                                          
                                          
                                          
                                          (54,752
                                          )Accrued
      liabilities
                                          
                                          
                                          569,882
                                          
                                          
                                          
                                          342,210Net
      cash used in operating activities
                                          
                                          
                                          (355,595
                                          )
                                          
                                          
                                          (735,285
                                          )CASH
      FLOWS FROM INVESTING ACTIVITIES
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from issuance of convertible debt
                                          
                                          
                                          -
                                          
                                          
                                          
                                          538,500Subscription
      for convertible debt
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          150,000Proceeds
      from common stock subscribed
                                          
                                          
                                          140,800
                                          
                                          
                                          
                                          -Increase
      in other loans payable
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          -Net
      Cash provided by financing activities
                                          
                                          
                                          290,800
                                          
                                          
                                          
                                          688,500NET
      DECREASE IN CASH
                                          
                                          
                                          (64,795
                                          )
                                          
                                          
                                          (46,785
                                          )CASH
      - BEGINNING OF YEAR
                                          
                                          
                                          76,797
                                          
                                          
                                          
                                          123,582CASH
      - END OF YEAR
                                          
                                          $
                                          12,002
                                          
                                          
                                          $
                                          76,797SUPPLEMENTAL
      SCHEDULE OF NON-CASH FINANCING
      ACTIVITIES:Common
      stock issued in acquisition of intellectual  property and other
      liabilities (Note 10)
                                          
                                          $
                                          2,751,332
                                          
                                          
                                          $
                                          -Common
      stock issued for future services
                                          
                                          $
                                          77,500
                                          
                                          
                                          $
                                          30,000Common
      stock issued - anti-dilutive rights
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          535Discount
      on debt due to beneficial conversion option
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          538,500Retroactive
      adjustment for 10 for 1 reverse stock split related to common stock and
      additional paid in capital
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          577,155Common
      stock issued in conversion of debt and accrued interest
                                          
                                          $
                                          1,454,325
                                          
                                          
                                          $
                                          -Common
      stock issued in cancellation of shareholder debt
                                          
                                          $
                                          2,147,187
                                          
                                          
                                          $
                                          -
  The
accompanying notes are an integral part of these consolidated financial
statements.
  30
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 
 Nature of the
Business
 The
consolidated financial statements include the accounts of SensiVida Medical
Technologies, Inc. f/k/a Mediscience Technology Corp. (“SensiVida”) and its
wholly-owned subsidiaries, Laser Diagnostic Instruments, Inc. (“Laser”),
Photonics for Women’s Oncology, LLC (“Photonics”) and Mediphotonics Development,
LLC (“Mediphotonics”), and Bioscopix, Inc. (“Bioscopix”), (collectively the
“Company”).   All significant intercompany transactions and
balances have been eliminated in consolidation.  Bioscopix and
Mediphotonics have been the only active subsidiaries of the
Company.
 
 The
Company had operated in one business segment encompassing in the design and
development of medical diagnostic instruments that detect cancer in vivo in
humans by using light to excite the molecules contained in tissue and measuring
the differences in the resulting natural fluorescence between cancerous and
normal tissue.  Effective March 3, 2009, with the merger of SensiVida
Medical Systems, Inc. into the Company’s wholly-owned subsidiary BioScopix, Inc.
(Note 10), the Company’s technology now focuses on the automation of analysis
and data acquisition for allergy testing, glucose monitoring, blood coagulation
testing, new tuberculosis testing, and cholesterol monitoring.
 
 Management’s
Plan
 The
Company is subject but not limited to a number of risks similar to those of
other companies at this stage of development, including dependence on key
individuals, the development of commercially usable products and processes,
competition from substitute products or alternative processes, the impact of
research and product development activity, competitors of the Company, many of
whom have greater financial or other resources than those of the Company, the
uncertainties related to technological improvements and advances, the ability to
obtain adequate additional financing necessary to fund continuing operations and
product development and the uncertainties of future
profitability.  The Company expects to incur substantial additional
costs before beginning to generate income from product sales, including costs
related to ongoing research and development activities, preclinical studies and
regulatory compliance.  Substantial additional financing is needed by
the Company.
 
 The
Company has no revenues, incurred significant losses from operations, has an
accumulated deficit and a highly leveraged position that raises substantial
doubt about the Company’s ability to continue as a going concern.  The
consolidated financial statements do not include any adjustments relating to
recoverability and classification of recorded asset amounts or the amount and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.  The Company expects to incur
substantial expenditures to further the development and commercialization of its
products.  To achieve this, management will seek to enter into an
agreement with a consulting firm to be an advisor and explore options for the
Company to commercialize its technology, will seek additional financing through
private placements or other financing alternatives, and might also seek to sell
the Company or its technology.  There can be no assurance that
continued financings will be available to the Company or that, if available, the
amounts will be sufficient or that the terms will be acceptable to the
Company.
 
 Use of
Estimates
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.
 
 Equipment
 Equipment
is stated at cost.  Depreciation is computed using the straight-line
method over an estimated useful life of five years.  Depreciation
expense was $-0- and $345 in 2010 and 2009, respectively.
  31
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT.)
 
 Intellectual
Property
 Intellectual
property consists of technology with patents pending approval that was included
in the acquisition of SensiVida Medical Systems, Inc. (see Note 10) and is
stated at cost.  Amortization is computed using the straight-line
method over an estimated useful life of fifteen years.  Amortization
expense was $187,238 and $-0- for the years ended February 28, 2010 and 2009,
respectively.
 
 Income
Taxes
 The
Company accounts for income taxes under Statement of Financial Accounting
Standards (“SFAS”) No. 109, Accounting for Income Taxes,
which requires an asset and liability approach to financial accounting and
reporting for income taxes.  Deferred income tax assets and
liabilities are computed annually for temporary differences between the
financial statement and tax bases of assets and liabilities that will result in
taxable or deductible amounts in the future based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income.  Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be
realized.  Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities.
 
 Research and
Development
 Research
and development costs are charged to operations when incurred.  The
amounts charged to expense were $278,536 and $199,880 in 2010 and 2009,
respectively.
 
 Loss per Common
Share
 In
accordance with FASB ASC 260 (formerly 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, 2010 and 2009, 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
 In
December 2004, the FASB issued FASB ASC 718 (formerly SFAS 123R), Share-Based
Payment.  This statement requires measurement of all employee
stock-based compensation awards using a fair value method and the recording of
such expense in the consolidated financial statements.  In addition,
the adoption of FASB ASC 718 (formerly SFAS 123R) requires additional accounting
related to the income tax effects and additional disclosure regarding the cash
flow effects resulting from share-based payment arrangements.  There
were no employee stock options issued during the years ended February 28, 2010
and 2009.
 
 Concentration of Credit Risk
Involving Cash
 The
Company may have deposits with major financial institutions which exceed Federal
Deposit Insurance limits during the year.
 
 Reclassification
 The
February 28, 2009 financial statements have been reclassified to conform to the
2010 financial statement presentation.
  32
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT.)
 
 RECENTLY
ADOPTED ACCOUNTING PRONOUNCEMENTS
 
 FASB ASC
820-10 (formerly, 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 standard relate to the
definition of fair value, the methods used to measure fair value and the
expanded disclosures about fair value measurements.  This standard is
effective for fiscal years beginning after November 15, 2007; however, it
provides a one-year deferral of the effective date for non-financial assets and
non-financial liabilities, except those that are recognized or disclosed in the
financial statements at fair value at least annually. The Company adopted this
standard for financial assets and financial liabilities and nonfinancial assets
and nonfinancial liabilities disclosed or recognized at fair value on a
recurring basis (at least annually) as of January 1, 2008.  The
Company adopted the standard for non-financial assets and non-financial
liabilities on March 1, 2009.  The adoption of this standard in each
period did not have a material impact on its financial statements.
 
 FASB ASC
805 (formerly, SFAS No. 141R) establishes principles and requirements for how an
acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in the
acquiree and the goodwill acquired.  This standard also establishes
disclosure requirements to enable the evaluation of the nature and financial
effects of the business combination.  This standard was adopted by the
Company beginning March 1, 2009 and will change the accounting for business
combinations on a prospective basis.
 
 FASB ASC
810-10 (formerly, SFAS No. 160) requires all entities to report noncontrolling
(minority) interests in subsidiaries as equity in the consolidated financial
statements.  The standard establishes a single method of accounting
for changes in a parent’s ownership interest in a subsidiary that do not result
in deconsolidation and expands disclosures in the consolidated financial
statements.  This standard is effective for fiscal years beginning
after December 15, 2008 and interim periods within those fiscal
years.  This standard is not currently applicable to the
Company.
 
 FASB ASC
815-10 (formerly, SFAS No. 161) is effective for fiscal years beginning after
November 15, 2008.  This standard requires enhanced disclosures about
derivative instruments and hedging activities to allow for a better
understanding of their effects on an entity’s financial position, financial
performance and cash flows.  Among other things, this standard
requires disclosures of the fair values of derivative instruments and associated
gains and losses in a tabular formant.  This standard is not currently
applicable to the Company since the Company does not have derivative instruments
or hedging activity.
 
 FASB
      ASC 350-30 and 275-10 (formerly, FSP FAS 142-3) amend the factors that
      should be considered in developing renewal or extension assumptions used
      to determine the useful life of a recognized intangible asset. This
      standard is effective for financial statements issued for fiscal years
      beginning after December 15, 2008, and interim periods within those fiscal
      years.  Early adoption is prohibited.  The adoption of
      this standard did not have any impact on the Company’s financial
      statements.
 
 FASB
      ASC 260-10 (formerly, FSP EITF 03-6-1) provides that unvested share-based
      payment awards that contain nonforfeitable rights to dividendsor dividend
      equivalents (whether paid or unpaid) are participating securities and
      shall be included in the computation of earnings per share pursuant to the
      two-class method.   This standard is effective for
      financial statements issued for fiscal years beginning after December 15,
      2008, and interim periods within those fiscal years.  The
      Company does not currently have any share-based awards that would qualify
      as participating securities.  Therefore, application of this
      standard is not expected to have an effect on the Company’s financial
      reporting.
 
  33
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT.)
 
 FASB ASC
470-20 (formerly, FSP APB 14-1) will be effective for financial statements
issued for fiscal years beginning after December 15, 2008.  The
standard includes guidance that convertible debt instruments that may be settled
in cash upon conversion should be separated between the liability and equity
components, with each component being accounted for in a manner that will
reflect the entity’s nonconvertible debt borrowing rate when interest costs are
recognized in subsequent periods.  The adoption of this standard did
not have any impact on the Company’s financial statements
 
 FASB ASC
815-10 and 815-40 (formerly, EITF No. 07-5) are effective for financial
statements for fiscal years beginning after December 15, 2008, and interim
periods within those fiscal years.  The standard addresses the
determination of whether an instrument (or an embedded feature) is indexed to an
entity’s own stock, which is the first part of the scope exception for the
purpose of determining whether the instrument is classified as an equity
instrument or accounted for as a derivative instrument which would be recognized
either as an asset or liability and measured at fair value.  The
standard shall be applied to outstanding instruments as of the beginning of the
fiscal year in which this standard is initially applied.  Any debt
discount that was recognized when the conversion option was initially bifurcated
from the convertible debt instrument shall continue to be
amortized.  The cumulative effect of the change in accounting
principles shall be recognized as an adjustment to the opening balance of
retained earnings.  The Company adopted this standard as of March 1,
2009, and was not required to reclassify any of its warrants as
liabilities.
 
 In April
2009, the FASB issued FASB Staff Position No. 157-4 (FSP FAS 157-4) provides
additional guidance for Fair
Value Measurements, when the volume and level of activity for the asset
or liability has significantly decreased.  This standard is effective
for interim and annual reporting periods ending after June 15,
2009.  The adoption of this standard did not have a material effect on
its financial statements.
 
 FASB ASC
320-10 (formerly, FSP FAS 115-2 and FSP FAS 124-2) amends the
other-than-temporary impairment guidance for debt and equity
securities.  This standard is effective for interim and annual
reporting periods ending after June 15, 2009.  The adoption of this
standard did not have a material effect on its financial
statements.
 
 FASB ASC
855-10 (formerly, SFA No. 165) is effective for interim or annual financial
periods ending after June 15, 2009 and establishes general standards of
accounting and disclosure of events that occur after the balance sheet but
before financial statements are issued or are available to be
issued.  However, since the Company is a public entity, management is
required to evaluate subsequent events through the date that financial
statements are issued and disclose the date through which subsequent events have
been evaluated, as well as the date the financial statements were
issued.  The standard was adopted for its interim period ending August
31, 2009.  Subsequent events have been evaluated through the date the
financial statements were issued.
 
 In June
2009, the FASB issued Accounting Standards Update No. 2009-01, The FASB Accounting Standards
Codification, which establishes the Codification as the source of
authoritative GAAP recognized by the FASB to be applied by nongovernmental
entities.  This standard is effective for financial statements issued
for interim and annual periods ending after September 15, 2009.  The
adoption of this standard changes the referencing of financial
standards.
 
 In
January 2010, FASB issued ASU No. 2010-01, Equity (ASC Topic 505), Accounting
for Distributions to Shareholders with Components of Stock and
Cash.  The update clarifies that the stock portion of a
distribution to shareholders that allows them to elect to receive cash or stock
with a potential limitation on the total amount of cash that all shareholders
can elect to receive in the aggregate is considered a share issuance that is
reflected prospectively in earnings per share and is not considered a stock
dividend for purposes of ASC Topic 505 and Topic 260, Earnings Per
Share  This standard is effective for interim and annual
periods ending on or after December 15, 2009, and should be applied on a
retrospective basis.  This standard is not currently applicable to the
Company.
  34
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT.)
 
 As of
February 28, 2010, the FASB has issued Accounting Standards Update (ASU) through
No. 2010-10.  None of the ASUs have had a material impact on the
Company’s financial statements.
 
 Recently Issued Accounting
Pronouncements Not Yet Adopted
 In
January 2010, FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures (ASC Topic 820), Improving Disclosures about Fair Value
Measurements.  This update provides amendments to ASC Topic 820
that will provide more robust disclosures about (1) the different classes of
assets and liabilities measured at fair value, (2) the valuation techniques and
inputs used, (3) the activity in Level 3 fair value measurements, and (4) the
transfers between Levels 1, 2 and 3.  This standard is effective for
interim and annual reporting periods beginning after December 15, 2009, except
for the disclosures about purchases, sales, issuances, and settlements in the
roll forward of activity in Level 3 fair value measurements.  Those
disclosures are effective for fiscal years beginning after December 15, 2010,
and for interim periods within those fiscal years.  This standard is
not currently applicable to the Company.
 
 In
January 2010, FASB issued ASU No. 2010-05, Compensation - Stock Compensation
(ASC Topic 718), Escrowed Share Arrangements and the Presumption of
Compensation.  This update codifies Emerging Issues Task Force
D-110.  This standard is not currently applicable to the
Company.
 
 NOTE
2 – RELATED PARTY TRANSACTIONS
 
 Legal
services rendered by Mr. Peter Katevatis amounted to $55,000 and $53,139 for the
two years ended February 28, 2010 and February 28, 2009,
respectively.  These amounts are recorded in general and
administrative expense.  Effective November 2008, Mr. Katevatis’ legal
service agreement was amended to $60,000 per year.  On February 3,
2010, Mr. Katevatis resigned from his legal service agreement.
 
 As part
of Mr. Katevatis’ prior employment agreement, the Company paid property taxes
and certain operating expenses on the home of Mr. Katevatis in lieu of rent,
since the Company’s operations were located in Mr. Katevatis’ home through
November 2008.  Expenses recognized were $1,823 and $18,463 in 2010
and 2009, respectively, and are recorded in general and administrative
expense.  In December 2008, the Company leased an office in Henrietta,
New York.
 
 See Note
7 for details regarding the Company’s consulting agreement with one of its
principal stockholders and Note 4 for related party loans and accrued
liabilities.
 
 NOTE
3 – DEFERRED CHARGES
 
 In fiscal
2010 and 2009, the Company issued 150,000 and 30,000, respectively, of fully
vested restricted shares of its common stock at fair market value to different
consulting groups in exchange for a variety of services to be rendered, over a
period of 12 months for matters such as corporate management, marketing
opportunities, product development and research, corporate funding and investor
relations.  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
      EndingFebruary
      28, 2011
                        
                        $
                        49,167
  35
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
4 – ACCRUED LIABILITIES
 
 Accrued
liabilities consist of the following:
 
 2010
                          
                          
                          2009Legal
      and professional fees
                          
                          $
                          301,247
                          
                          
                          $
                          182,826Consulting
      and university fees
                          
                          
                          1,397,019
                          
                          
                          
                          1,440,615Salaries
      and wages
                          
                          
                          346,500
                          
                          
                          
                          2,148,786Accrued
      Interest
                          
                          
                          178,479
                          
                          
                          
                          275,969Other
                          
                          
                          92,435
                          
                          
                          
                          92,235Totals
                          
                          $
                          2,315,680
                          
                          
                          $
                          4,140,431
 
 Accrued
legal and professional fees include services rendered by Mr. Peter
Katevatis.  The amount of the accrual was $65,000 and $46,901 as of
February 28, 2010 and February 28, 2009, respectively (Note 2).
 
 Accrued
consulting and university fees include costs owed to Dr. Robert R. Alfano, a
principal stockholder and former chairman of the Company’s Scientific Advisory
Board (Note 7), with respect to his prior consulting agreement, of $1,397,019 as
of February 28, 2010 and February 28, 2009.
 
 Accrued
expense reimbursements of $92,235 were due to Dr. Alfano at February 28, 2010
and February 28, 2009.  The Company has accrued these costs in
conjunction with Dr. Alfano’s prior consulting agreement.
 
 Accrued
salaries and wages include amounts due to Mr. Katevatis of $-0- and $2,110,286
as of February 28, 2010 and February 28, 2009, respectively.
 
 Mr.
Katevatis agreed to forebear any and all collection action for accrued fees and
salary, including forgiveness of interest, in exchange for the option of
converting any such accrued salary and fees into the Company’s common stock at
$0.25 per share.  The option is unlimited in duration.  If
the Company were to receive financing, either may elect to receive all or part
of such accrued salary or fees in cash or common stock.  As of
February 28, 2009, accrued salary and fees amounted to $2,157,187 for Mr.
Katevatis.  As of February 28, 2010, accrued consulting fees and
expenses amounted to $1,489,254 for Dr. Alfano.  (See Note 9 -
Anti-Dilution Rights).
 
 On March
23, 2009 Mr. Katevatis exercised his option to convert all outstanding salary
and fees accrued through November 3, 2008 along with the termination of his
employment agreement and anti-dilution rights in exchange for 1,172,510, shares
of the Company’s common stock.
 
 Accrued
salaries and wages include amounts due to Frank D. Benick, Chief Financial
Officer, of $29,000 and $6,000, as of February 28, 2010 and February 28, 2009,
respectively.
 
 Accrued
salaries and wages include amounts due to Kamal Sarbadhikari, former Chief
Executive Officer, of $106,250 and $6,250 as of February 28, 2010 and February
28, 2009, respectfully.
 
 Accrued
salaries and wages include amounts due to Jose Mir, current Chief Executive
Officer and Chief Technical Officer of $131,250 and $6,250 as of February 28,
2010 and February 28, 2009, respectfully.
 
 Accrued
salaries and wages include amounts due to David R. Smith, Chairman of the Board,
of $80,000 and $20,000 as of February 28, 2010 and February 28, 2009,
respectfully.
 
 Accrued
interest includes interest accrued on convertible debt of $141,431 (see Note 5),
interest accrued on the preferred stock subscribed of $29,836 (see Note 7) and
other debt.
  36
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
5 – CONVERTIBLE DEBT AND OTHER DEBTS
 
 On
January 10, 2007, the Company commenced a Private Placement Offering for
$2,000,000 of 12% convertible promissory notes (“the Notes”) in amounts of not
less than $25,000.  The Notes shall be due and payable, together with
accrued and unpaid interest, on the earlier of April 15, 2008 for the first
$1,000,000 tranche and April 15, 2009 for the second $1,000,000 tranche (of
which $656,500 had been raised as of February 28, 2009) or three months after
the completion of the initial public offering (“the IPO”) of the shares of
BioScopix (now SensiVida Medical Technologies, Inc. as a result of the merger of
BioScopix into Mediscience Technology Corp. and subsequent name changes of the
Company to BioScopix and then SensiVida Medical Technologies, Inc. (SensiVida),
after the merger of BioScopix and SensiVida Medical Technologies, Inc. Holders
of the Notes may convert the notes into (i) cash in the amount of the principal
and accrued and unpaid interest due and a warrant exercisable until April 15,
2009 to purchase shares of BioScopix (now SensiVida) in an amount equal to 50%
of the principal of the Notes at an exercise price of 120% of the five day
volume weighted average preceding the effective date of the IPO of SensiVida or
(ii) shares of SensiVida at a price equal to 50% of the IPO price of the
SensiVida shares of common stock in an amount equal to the principal and accrued
and unpaid interest due on the Notes.  In accordance with EITF 00-27
(codified in FASB ASC 470.2), under option (ii), the carrying value of the Notes
was reduced by the intrinsic value of the beneficial conversion option resulting
in a carrying value of $-0-.  On January 29, 2008, the Notes were
modified to provide for two additional options.  In addition to
options (i) and (ii), holders of the notes may now also convert the notes into
(iii) SensiVida stock with a six month lockup in the amount of principal and
accrued interest and receive 50% warrant coverage at 75% of the SensiVida stock
IPO price and (iv) combination of alternatives (ii) and (iii).  The
additional options did not require an adjustment to the value of the
Notes.
 
 As of May
31, 2009, the notes have been accreted to their maturity
value.  Accretion of discount on convertible debt amounted to $86,036
and $721,434 for the fiscal years 2010 and 2009.
 
 Accrued
interest payable on the notes as of February 28, 2010 and 2009 was $141,431 and
$275,969, respectively.  Interest expense for the years ended February
28, 2010 and 2009 was $149,399 and $190,751, respectively.
 
 Effective
April 15, 2008, the first $1,000,000 tranche of the Notes were in
default.  Under the terms of the Notes, in the event of default, the
entire principal and unpaid accrued interest is immediately due and payable. The
January 29, 2008 modification of the Notes provided two additional options of
the Note holders as compensation for the delay of the IPO which was expected to
take place prior to April 15, 2009.
 
 Effective
April 15, 2009, the second tranche of the Notes in the amount of $656,500 were
in default.  Under the terms of the Notes, in the event of default,
the entire principal and unpaid accrued interest is immediately due and
payable.
 
 On July
31, 2009, certain note holders converted the note and accrued interest thru July
31, 2009 into common stock of the Company at the net price of $.35 per share
which represents 50% of the opening market value of the stock on this
date.   Principal of $1,205,000 and accrued interest of $249,325
were converted into 4,155,222 shares of the Company’s common stock.
 
 As of May
19, 2010, one convertible note holder demanded repayment of principal of $50,000
with a subsequent demand for accrued interest approximating
$17,588.  As of June 1, 2010,both principal and interest
had been satisfied.  The remaining notes are in
default.
  37
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
5 – CONVERTIBLE DEBT AND OTHER DEBTS (CONT).
 
 Note
Payable
 On
September 1, 2005, SensiVida Medical Systems, Inc. (SensiVida) issued a $50,000
convertible subordinated note to the order of Excell Partners, Inc.
(Holder).  Principal and accrued interest was due and payable in one
installment on September 1, 2008, the maturity date.   Interest
was accruable at 2% per annum on the unpaid principal amount of the
Note.  Upon any default of this Note, the Holder has the right to
convert the Note to Common Stock of SensiVida.  The number of shares
of Common Stock would be determined by dividing the outstanding principal and
accrued interest to the date of conversion by the conversion price or fair
market value paid in a most recent Qualified Transaction by
SensiVida.  The note was in default upon acquisition (by the Company)
and was amended as of December 1, 2009.  Commencing January 1, 2010,
interest will accrue on the balance at a rate of 8% compounded
annually.  The Note has a maturity date of January 1,
2011.  If the entire unpaid balance of the note is not paid when due,
then the amount unpaid shall bear interest at the current rate plus 1% and such
rate shall increase by an additional one percent each year until the note is
paid in full.  The amount drawn on the note at February 28, 2010 and
February 28, 2009 was $49,828 and $-0-, respectively. Interest accrued on the
note was $4,286 and $-0- as of February 28, 2010 and 2009,
respectively.
 
 Loan
Payable
 On
September 1, 2009, the Company borrowed $50,000 from a
shareholder.  The loan called for interest at 12% per
annum.  The principal and accrued interest was convertible into the
company’s common stock at $.66 per share after six months at the discretion of
the note holder.  Proceeds of the loan were to be used for the
company’s patient allergy clinical trial and related clinical
expenses.  As of February 28, 2010, $18,727 of the original loan
remains in a restricted cash account for it’s intended use as approved by the
lender.  Interest accrued on the note was $2,926 as of February 28,
2010.  Subsequent to year end February 28, 2010, the terms of the loan
were modified to provide for an option to convert principal and accrued interest
into the preferred stock Series A.  See Note 11 - Subsequent
Events.
 
 NOTE
6 - PREFERRED STOCK SUBSCRIBED
 
 Preferred Stock
Subscribed
 During
February 2009, a current shareholder advanced $150,000 plus an additional
$100,000 received in March 2009 in exchange for 2,500 of Series A Preferred
stock having a par value of $100 (the shares).  Each Series A
Preferred share is convertible into 150 shares of common stock for a total of
375,000 shares of common stock together with warrants to purchase up to 50,000
shares of common stock with an exercise price of $1.00.  Because the
Company did not have the required authorized Preferred Stock to execute this
transaction, the Company has recorded the advances as a liability.
 
 On April
13, 2010, the Company and a current preferred stock subscriber mutually agreed
to revised terms on a prior $250,000 unissued preferred stock subscription
agreement.  The new terms call for a “ratcheted” conversion to common
stock, at a price of $0.35 from $0.66.  In addition, accrued interest
of $34,849 as of May 1, 2010, on the $250,000 subscription, the subscription,
plus a 10% premium of $28,485 on the principal and accrued interest all totaling
$313,334, are available at the option of subscriber to roll over the total into
the Company’s current Series A subscription agreement.  Also the
$50,000 loan (see Note 5) plus accrued interest of $3,929 as of May 1, 2010 for
a total of $53,929, can also be rolled over into the current Series A
subscription agreement at the option of the subscriber.  In addition,
warrants to purchase 50,000 shares of common stock have been “ratcheted”
downward from $0.66666 to $0.35, resulting in a proportional increase in the
warrants to purchase 95,237 common shares.
  38
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
7 – INCOME TAXES
 
 There is
no income tax benefit for operating losses for the years ended February 28, 2010
and 2009 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 ASC 740 (formerly known as FASB 109), “Accounting for Income
Taxes.”  The valuation allowance is necessary because,
according to criteria established by this topic, 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,
2010 and February 28, 2009 are as follows:
  2010
                            
                            
                            2009Deferred
      income tax asset:Net
      operating loss carryforward
                            
                            $
                            7,230,294
                            
                            
                            $
                            7,389,208Valuation
      allowance
                            
                            
                            7,230,294
                            
                            
                            
                            7,389,208-
                            
                            
                            
                            -Deferred
      income tax liability
                            
                            
                            -
                            
                            
                            
                            -Totals
                            
                            $
                            
                            
                            
                            $
                            -
  As of
February 28, 2010 and 2009, the Company has valuation allowances of $7,230,294
and $7,389,208 respectively, which relate to federal and state net operating
loss carryforwards.  The change in the total valuation allowance for
the years ended February 28, 2010 and 2009 was a (decrease) and increase of
($158,914) and $294,338, respectively.  There were no temporary
differences for the years ended February 28, 2010 and 2009. 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, 2010 and 2009, the Company has net operating loss carryforwards of
approximately $19,414,000 and $19,796,000, respectively for federal purposes and
$10,656,000 and 11,087,000, 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
                                  
                                  
                                  State2011
                                  
                                  $
                                  1,136,000
                                  
                                  
                                  $
                                  850,0002012
                                  
                                  
                                  1,556,000
                                  
                                  
                                  
                                  2,358,0002013
                                  
                                  
                                  2,636,000
                                  
                                  
                                  
                                  2,197,0002014
                                  
                                  
                                  1,128,000
                                  
                                  
                                  
                                  1,399,0002015
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2,159,0002016
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,433,0002017
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -2018
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -2019
      (*)
                                  
                                  
                                  808,000
                                  
                                  
                                  
                                  -2020
      (*)
                                  
                                  
                                  943,000
                                  
                                  
                                  
                                  -2021
      (*)
                                  
                                  
                                  298,000
                                  
                                  
                                  
                                  -2022
      (*)
                                  
                                  
                                  316,000
                                  
                                  
                                  
                                  -2023
      (*)
                                  
                                  
                                  182,000
                                  
                                  
                                  
                                  -2024
      (*)
                                  
                                  
                                  790,000
                                  
                                  
                                  
                                  -2025
      (*)
                                  
                                  
                                  2,284,000
                                  
                                  
                                  
                                  -2026
      (*)
                                  
                                  
                                  2,156,000
                                  
                                  
                                  
                                  -2027
      (*)
                                  
                                  
                                  1,388,000
                                  
                                  
                                  
                                  -2028
      (*)
                                  
                                  
                                  2,096,000
                                  
                                  
                                  
                                  -2029
      (*)
                                  
                                  
                                  1,435,000
                                  
                                  
                                  
                                  -2030
      (*)
                                  
                                  
                                  262,000
                                  
                                  
                                  
                                  260,000Totals
                                  
                                  $
                                  19,414,000
                                  
                                  
                                  $
                                  10,656,000
  39
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
7 – INCOME TAXES (CONT.)
 
 (*)   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.
 
 The
Company’s policy is to record interest and penalties associated with
unrecognized tax benefits as additional income taxes in the statement of
operations.  As of March 1, 2009, the Company had no unrecognized tax
benefits, and accordingly, the Company has not recognized any interest or
penalties during the year ended February 28, 2010 related to unrecognized tax
benefits.  The Company did not accrue for interest or penalties as of
February 28, 2010.  The Company does not have an accrual for uncertain
tax positions as of February 28, 2010.
 
 The
Company files U.S. income tax returns and multiple state income tax
returns.  With few exceptions, the U.S. and state income tax returns
filed for the tax years ending on February 28, 2007 and thereafter are subject
to examination by the relevant taxing authorities.
 
 NOTE
8– COMMITMENTS AND CONTINGENCIES
 
 Dr. Robert R.
Alfano
 The
Company had a consulting agreement (the “Agreement”) through March 2007 with Dr.
Robert R. Alfano, a principal stockholder of the Company and prior Chairman of
its Scientific Advisory Board.  Pursuant to the terms of the
Agreement, Dr. Alfano was paid a consulting fee of not less than $150,000 per
annum in exchange for services to be rendered for approximately fifty days per
annum in connection with the company’s medical photonics
business.  The Agreement further provided that Dr. Alfano was to be
paid a bonus and fringe benefits in accordance with policies and formulas
provided to key executives of the Company.  The agreement expired on
March 5, 2007.
 
 In
October 2009, a civil action was entered against the Company by Dr. Robert
Alfano, alleging that he is owed $1,487,053 in consulting fees and
expenses.  The Company had accrued the consulting fees in conjunction
with a consulting agreement (Note 4).  In addition, Dr. Alfano is
contesting the termination of his anti-dilution rights and claims the Company
owes him 132,000 shares of common stock (Note 9).  The Company does
not believe the case has merit and has filed a Motion to Dismiss.  The
Company intends to vigorously defend these claims.
 
 In
connection with the acquisition of patent rights to its cancer detection
technology, the Company assumed an obligation to pay to Dr. Alfano’s daughter a
royalty of one percent of the gross sales derived from any equipment made,
leased or sold which utilizes the concepts described in the Company’s cancer
detection patent.  Since there has been no revenue, no amounts have
been paid during the two years ended February 28, 2010 and 2009.
 
 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, 2010 and February 28, 2009.
 
 Employment
Agreements
 Mr. Peter
Katevatis, the Chief Executive Officer, Chairman and a stockholder of the
Company, had an employment agreement.  The prior agreement was renewed
on March 5, 2007 which increased his salary from $200,000 to $250,000 per year.
The agreement also provided for a bonus and fringe benefits in accordance with
policies and formulas mutually agreed upon by Mr. Katevatis and the Board of
Directors.  The contract was due to expire on March 5,
2015.  In November 2008, Mr. Katevatis terminated his employment
agreement as Chief Executive Officer and Chairman along with his anti-dilution
rights and exercised his option to convert all outstanding salary and fees
accrued thru November 2008 in exchange for 1,172,510 shares of the Company’s
common stock.
  40
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
8– COMMITMENTS AND CONTINGENCIES (CONT.)
 
 On
November 15, 2005, the Company entered into a two year employment agreement with
Frank D. Benick as Chief Financial Officer.  Mr. Benick will be paid a
monthly salary of $3,000 per month for the first two months, then increasing to
$4,000 per month for the remaining term of the agreement and received an option
to purchase 30,000 shares of common stock at $10.00 per share.  This
agreement has not been formally updated. Mr. Benick’s employment is continuing
under the terms of the expired agreement.
 
 On
November 5, 2008, the Company entered into a three (3) year employment contracts
with Kamal Sarbadhikari as Chief Executive Officer and Jose Mir as Chief
Technical Officer.  Mr. Sarbadhikari and Mr. Mir will each be paid a
base salary of $150,000 per annum.  On November 2, 2009, Mr. Kamal
Sarbadhikari resigned for health reasons effective December 31,
2009.  Jose Mir has been appointed interim President effective
December 31, 2009.
 
 On
November 10, 2008, the Company entered into a three (3) year employment contract
with David R. Smith as Chairman of the Board.  Mr. Smith will be paid
$60,000 per annum.
 
 NOTE
9 – STOCKHOLDERS’ DEFICIT
 
 Reverse Stock
Split
 The
consolidated balance sheets, statements of changes in stockholders’ deficit, and
related notes to consolidated financial statements have been adjusted to reflect
a 10 for 1 reverse stock split that was effective May 18, 2009.
 
 Preferred
Stock
 The
Company is authorized to issue 5,000 shares of preferred stock, $.01 par value
per share, which may be issued from time-to-time in one or more series, the
terms of which may be designated by the Board of Directors without further
action by stockholders.  Any preferred stock issued will have
preferences with respect to dividends, liquidation and other rights, but will
not have preemptive rights.
 
 Subsequent
to February 28, 2010, the Company amended its Certificate of Incorporation to
provide for 10,000,000 shares of Series A convertible preferred stock and
1,000,000 shares of preferred stock with preferences and characteristics to be
determined by the board of Directors.  See Note 11 - Subsequent
Events.
 
 Common Stock Issued for
Services
 During
November 2008, the Company issued 314,651 restricted shares of its common stock
with a value of $220,256 to a group of financial consultants in exchange for
professional services and fund raising efforts, as per their
agreement.  The transaction was recognized based on the fair market
value of the shares issued (the closing price of the Company’s common stock of
the date of issuance).
 
 During
2009, the Company issued 46,333 restricted shares of its common stock with a
value of $30,620 to a group of consultants in exchange for professional
services, as per their agreements.  The transactions were recognized
based on the fair market value of the shares issued (the closing price of the
Company’s common stock of the date of issuance).
 
 Common Stock Issued for
Future Services
 During
February 2009, the Company issued 30,000 restricted shares of its common stock
with a value of $30,000 to a consulting firm in exchange for public and investor
relations consulting services to be rendered over a one year
period.  The transaction was recognized based on the fair value of
shares issued.
  41
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
9 – STOCKHOLDERS’ DEFICIT (CONT.)
 
 During
July 2009, the Company issued 50,000 restricted shares of its common stock with
a value of $37,500 to a medical consultant in exchange for professional
services, as per agreement.  The transaction was recognized based on
the fair market value of the shares issued (the closing price of the company’s
common stock of the date of the agreement).
 
 During
February 2010, the Company issued 100,000 restricted shares of its common stock
with a value of $40,000 to a financial consultant in exchange for professional
services.  The transaction was recognized based on the fair market
value of the shares issued (the closing price of the Company’s common stock on
the date of issuance).
 
 Common Stock Issued in
Acquisition of SensiVida Medical Systems, Inc.
 On March
3, 2009, the Company (formerly known as Mediscience Technology Corp.) and
SensiVida Medical Systems, Inc. completed a merger of the two companies, with
Mediscience changing its name to SensiVida Medical Technologies,
Inc.  As consideration for the merger, the Company issued 3,333,333
shares of the Company’s common stock, valued at $2,751,000 to the three
stockholders of SensiVida Medical Systems, Inc. as consideration for
transaction.
 
 Common Stock Issued in
Cancellation of Shareholder Debt
 In March
2009, the Company issued 1,172,510 shares of its common stock to Mr. Katevatis
in settlement of all his accrued fees and salary to include termination of his
employment agreement as Chief Executive Officer and Chairman, along with
cancellation of his anti-dilution rights.
 
 On July
31, 2009, the company issued 4,155,222 shares of its common stock to certain
note holders who converted principal of $1,205,000 and accrued interest of
$249,326 into common stock of the company at a net price of $0.35 per
share.
 
 Common Stock
Subscribed
 In August
2009, the Company received $30,000 for 30,000 shares of the Company’s common
stock.  As of February 28, 2010, the shares have not yet been
issued.
 
 In
December 2009, the Company received $110,800 for 221,600 shares of the company’s
common stock.  As of February 28, 2010, the shares have not yet been
issued.
 
 2003 Consultants Stock
Plan
 The Board
of Directors previously adopted, subject to stockholder approval, a 2003
Consultants Stock Plan (“Consultants Plan”).  The Consultants Plan was
subsequently approved by the stockholders on February 17, 2004.  The
aggregate number of shares that may be issued under the options shall not exceed
700,000.  No options were issued prior to stockholder approval and no
options were outstanding under this plan as of February 28, 2010 and
2009.
 
 1999 Incentive Stock Option
Plan
 The Board
of Directors previously adopted, subject to stockholder approval, a 1999
Incentive Stock Option Plan (the “Plan”) for officers and employees of the
Company.  The stockholders subsequently approved the Plan on February
17, 2004.  Accordingly awards issued under the Plan prior to February
17, 2004 were deemed not to be granted until that date.  The aggregate
number of shares that may be issued under the options shall not exceed
300,000.
  42
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
9 – STOCKHOLDERS’ DEFICIT (CONT.)
 
 Stock
Options
 Activity
related to stock options during the two years ended February 28, 2010 and 2009
is as follows:
 
 WeightedExercise
                              
                              
                              Avg. ExerciseShares
                              
                              
                              Price Range
                              
                              
                              PriceOutstanding,
      February 29, 2008
                              
                              
                              70,000
                              
                              
                              $10.00
      - $20.00
                              
                              
                              $
                              15.00Granted
                              
                              
                              -Exercised
                              
                              
                              -Forfeited
                              
                              
                              (40,000
                              )Outstanding,
      February 28, 2009
                              
                              
                              30,000
                              
                              
                              
                              $10.00
                              
                              
                              $
                              10.00Granted
                              
                              
                              -Exercised
                              
                              
                              -Forfeited
                              
                              
                              -Outstanding,
      February 28, 2010
                              
                              
                              30,000
                              
                              
                              
                              $10.00
                              
                              
                              $
                              10.00
 
 Stock
Warrants
 Stock
warrant activity during the two years ended February 28, 2010 and 2009 was as
follows:
 
 Shares
                                    
                                    
                                    
                                    
                                    
                                    WeightedCurrently
                                    
                                    
                                    Exercise
                                    
                                    
                                    Avg. ExerciseExercisable
                                    
                                    
                                    Price Range
                                    
                                    
                                    PriceOutstanding,
      February 29, 2008
                                    
                                    
                                    659,933
                                    
                                    
                                    $2.50
      - $30.00
                                    
                                    
                                    $
                                    9.00Granted
                                    
                                    
                                    100,000
                                    
                                    
                                    $1.00Exercised
                                    
                                    
                                    (15,000
                                    )
                                    
                                    $2.50Forfeited
                                    
                                    
                                    (345,000
                                    )
                                    
                                    $2.50
      - $10.00Outstanding,
      February 28, 2009
                                    
                                    
                                    399,933
                                    
                                    
                                    $2.50
      - $30.00
                                    
                                    
                                    $
                                    9.00Granted
                                    
                                    
                                    195,800
                                    
                                    
                                    $.60 - $1.00Exercised
                                    
                                    
                                    -
                                    
                                    
                                    -Forfeited
                                    
                                    
                                    -
                                    
                                    
                                    -Outstanding,
      February 28, 2010
                                    
                                    
                                    595,733
                                    
                                    
                                    $.60 - $30.00
                                    
                                    
                                    $
                                    6.32
 
 Weighted
average remaining life of warrants approximates 2.29 years at February 28,
2010.
 
 Anti-Dilution
Rights
 The
Company and Mr. Peter Katevatis had an anti-dilution rights agreement which
provided that Mr. Katevatis’ ownership interest would at all times represent 17%
of the issued and outstanding shares of the Company.  The
anti-dilution rights were exercisable at Mr. Katevatis’ sole
discretion.  During the years ended February 28, 2010 and February 28,
2009, Mr. Katevatis exercised his right and requested the Company issue -0- and
53,491 common shares respectively.  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.  In
November 2008, Mr. Katevatis terminated his employment agreement as Chief
Executive Officer and Chairman along with his anti-dilution rights and on March
23, 2009 exercised his option to convert all outstanding salary and fees accrued
thru November 2008 in exchange for 1,172,510 shares of the Company’s common
stock.
  43
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
9 – STOCKHOLDERS’ DEFICIT (CONT.)
 
 The
Company and Dr. Robert Alfano had an anti-dilution rights agreement which
provided that Dr. Alfano’s ownership interest would at all times represent 4% of
the issued and outstanding shares of the Company.  The anti-dilution
rights were exercisable at Dr. Alfano’s sole discretion.  As of
February 28, 2007, the Company was obligated to issue an additional 1,400 shares
to Dr. Alfano in connection with the anti-dilution rights.   As a
result of the completion of Dr. Alfano’s consulting agreement as of March 5,
2007, the anti-dilution rights terminated.  Subsequent to March 5,
2007, Dr. Alfano was issued 6,400 shares of the Company’s common stock in
connection with the anti-dilution rights of which 5,000 shares were issued in
error.  The Company has placed a stop order and requested the 5,000
shares be returned by Dr. Alfano for cancellation.  Dr. Alfano’s
anti-dilution rights are currently in the process of litigation along with
amounts owed to him for consulting and related expenses.
 
 NOTE
10 – ACQUISITION OF SENSIVIDA MEDICAL SYSTEMS, INC.
 
 On
November 5, 2008, Mediscience Technology Corp., a New Jersey corporation
(“Mediscience”) entered into an agreement and plan of reorganization (the
“Merger Agreement”) with SensiVida Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Mediscience (“Merger Sub”), and SensiVida Medical
Systems, Inc., a Delaware corporation (“SensiVida”), pursuant to which Merger
Sub will be merged into SensiVida and thereafter SensiVida will be merged with
and into Mediscience (the “Merger”).  As a condition precedent to
completing the Merger, on January 29, 2009, BioScopix, Inc., a Delaware
corporation and wholly-owned subsidiary of Mediscience, merged with and into
Mediscience, with the surviving corporation changing its name to BioScopix, Inc.
(such surviving corporation hereafter referred to as the
“Company”).
 
 On March
3, 2009, the Company and SensiVida completed the Merger and the Company changed
its name to SensiVida Medical Technologies, Inc.  As consideration for
the Merger, the Company issued 3,333,333 shares of the company’s common stock,
par value $.01 per share (the “Common Stock”) to the three stockholders of
SensiVida as consideration for the transaction.  In addition, the
Company issued 1,172,510 shares of its Common Stock to Mr. Katevatis in
settlement of all of his accrued claims and salary, to include termination of
his employment agreement as Chief Executive Officer and Chairman, along with
cancellation of his anti-dilution rights.
 
 The
merger will be accounted for under the acquisition method in accordance with
SFAS 141(R), Business Combination.  The merger of SensiVida Medical
Systems, Inc. into the Company’s wholly-owned subsidiary BioScopix, Inc. will
enable the Company to focus on the automation of analysis and data acquisition
for allergy testing, glucose monitoring, blood coagulation testing, new
tuberculosis testing, and cholesterol monitoring.  The fair value of
the consideration was approximately $2,751,000, the value of the 3,333,333
shares on March 3, 2009, which includes the assumption of various liabilities
totaling approximately $58,000.  The Company has completed its
valuation of the identifiable assets acquired and liabilities assumed at their
acquisition date fair values as follows:
 
 Cash
                          
                          $
                          558Technology
      with Patents Pending Approval
                          
                          
                          2,808,563Note
      Payable
                          
                          
                          (49,828
                          )Accrued
      Expenses
                          
                          
                          (2,437
                          )Officer
      Loan
                          
                          
                          (5,524
                          )$
                          2,751,332
 
 The
Company engaged the services of a valuation firm to estimate the fair value of
SensiVida Medical Systems, Inc.  Based on the valuation report, the
acquisition date fair values of the assets acquired and the liabilities assumed
ranged from $591,000 to $7,740,000.  Due to the wide range in
valuation amounts and uncertainty of realizing the probabilities employed in the
valuation, the Company has used the fair value of the common stock issued,
$2,751,000, as it approximates the fair value of the assets acquired and
liabilities assumed.
  44
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
10 – ACQUISITION OF SENSIVIDA MEDICAL SYSTEMS, INC. (CONT.)
 
 The
operating results of the acquired Company has been included in the consolidated
financial statements from the date of acquisition, effective on March 1, 2009
for accounting purposes.  The following table provides the unaudited
proforma results of operations as if the acquisition had occurred as of March 1,
2008.
 
 Year EndedFebruary 28, 2009Net
      Sales
                        
                        $
                        -0-Net
      Loss
                        
                        $
                        (2,195,967
                        )Basic
      and Diluted Loss for Common Share
                        
                        $
                        (0.321
                        )
 
 On March
19, 2009, the Company’s Board of Directors, the holders of a majority of the
Company’s voting capital stock, approved an amendment to the Company’s Restated
Certificate of Incorporation to provide for the reduction of the total number of
authorized, issued and outstanding shares of the Company’s common stock, par
value $.01 per share (“Common Stock”) and its preferred stock, par value $.01
per share (“Preferred Stock”), by exchanging each ten (10) shares of such
authorized, issued and outstanding shares of Common Stock and Preferred Stock
for one (1) share of Common Stock or Preferred Stock, respectively (such
exchange, the “Reverse Split”).  The Reverse Split became effective on
May 18, 2009.  All references to number of shares and per share
amounts in the consolidated financial statements and notes have been adjusted to
give retroactive effect to the reverse stock split.
 
 NOTE
11 – SUBSEQUENT EVENTS
 
 Amendment of Certificate of
Incorporation
 On March
1, 2010, the Board of Directors approved and on March 1, 2010, the holders of a
majority of the voting capital stock approved an amendment to restate the
Certificate of Incorporation to provide for the increase in the total number of
authorized shares of the Company’s common and preferred stock.
 
 The
aggregate number of shares which the Company shall have authority to issue is
100,000,000, 89,000,000 of which shall be common stock, $.01 par value per share
and 11,000,000 of which shall be preferred stock, $.01 par value per
share.  10,000,000 shares of preferred stock are designated Series A,
convertible preferred stock and 1,000,000 shares of preferred stock shall have
all preferences and characteristics to be determined by the Company’s Board of
Directors on a case-by-case basis, prior to issuance.
 
 The
Series A Preferred stock shall have the following relative rights, preferences
and limitations:
 
 a).   The
Series A Preferred stock shall bear interest at 12% per annum, such interest to
accrue and be paid in cash at the end of three years from the date of issuance
of the Series A Preferred stock or in shares of common stock if the holder of
the Series A Preferred stock elects to convert the Series A Preferred
stock.
 
 b).   The
holders of the Series A Preferred stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available
therefore, dividends, whether in cash or stock, in preference to the holders of
common stock.
 
 c).    The
holders of the Series A Preferred stock shall be entitled to a preference over
holders of common stock with regard to distribution of assets in the event of
any liquidation, dissolution or winding-up of the Company, whether voluntary or
involuntary.
  45
  SENSIVIDA MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 FEBRUARY 28, 2010 AND
2009
 
 NOTE
11 – SUBSEQUENT EVENTS (CONT.)
 
 d).   The
shares of Series A Preferred stock shall not entitle the holder thereof to have
any right to vote or to receive any notice of any meeting of the holders of the
Company’s stock or to exercise any voting power.
 
 e).    The
Series A Preferred stock  may, at any time for a period of three years
from the date of its issuance, at the option of the holders thereof, be
converted into common stock at a price of $0.35 per share (as adjusted for
subsequent stock dividends, stock splits, combinations, recapitalizations or the
like).
 
 Series A Convertible
Preferred Stock Offering
 Subsequent
to the Company’s February 28, 2010 fiscal year end, the Company began an
offering of a maximum of $10,000,000 of Series A Preferred stock at $1.00 per
share.  The Series A Preferred stock is convertible into shares of the
Company’s common stock, par value $.01 per share at $0.35 per share for a period
of three years from the date of issuance and bears interest at 12% per annum,
such interest to accrue and be paid in cash at the end of three years from the
date of issuance of the Series A Preferred stock or in shares of common stock if
the investor elects to convert the Series A Preferred stock.  The
investor also will receive warrants to acquire shares of common stock in an
amount equal to 50% of the number of shares of common stock into which the
Series A Preferred stock converts.  The exercise price of the warrant
is also at $1.00 per share.  Series A Preferred stock subscriptions to
date have exceeded $1,400,000.
  46
 Item 9.
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
 
 None.
 
 Item 9A(T).
              Controls
      and Procedures
 
 Evaluation
of disclosure controls and procedures
 
 Our Chief
Executive Officer and Chief Financial Officer evaluated the effectiveness of our
disclosure controls and procedures as of the end of the period covered by this
report. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures as
of the end of the period covered by this report are not effective due to the
existence of material weaknesses in our internal control over financial
reporting, discussed below.
 
 Management's
Report on Internal Control Over Financial Reporting
 
 Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for the Company. Internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.
 
 Our
system of internal control over financial reporting includes those policies and
procedures that: pertain to the maintenance of records that, in reasonable
detail,
 
 i.  accurately
and fairly reflect the transactions and dispositions of the assets of the
Company;
 
 ii.
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and
 
 iii.
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's assets that could
have a material effect on the financial statements.
 
 Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
 
 Management
performed an assessment of the effectiveness of our internal control over
financial reporting  as of February 28, 2010 based upon criteria in
Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO"). Based on this assessment,
management has concluded that the Company's internal control over financial
reporting was not effective as of February 28, 2010 because of the
material weaknesses described below.
 
 A
material weakness and significant deficiency are defined as a control
deficiency, or combination of control deficiencies, that adversely affects an
entity’s ability to initiate, authorize, record, process or report financial
data reliably in accordance with generally accepted accounting principles such
that there is more than a remote likelihood that a material misstatement (with
respect to material weaknesses) of the entity’s financial statements or a
misstatement that is more than inconsequential (with respect to a significant
deficiency) will not be prevented or detected by the entity’s internal controls
over financial reporting.
 
 i. We do
not have an independent board of directors or audit committee to oversee our
internal control over financial reporting.
  47
  ii. We
have a limited number of personnel and as a result, there is limited segregation
of duties amongst the company's employees with respect to preparation and review
of the Company's financial statements.
 
 iii. We
have limited ability to account for complex equity transactions, such that
our controls relating to disclosure and related assertions in the financial
statements in the area of non-routine transactions
 were not
adequate.
 
 iv. We
have informal policies and procedures and we lack a formal budgeting
process.
 
 These
material weaknesses may affect management's ability to effectively review
and analyze elements of the financial statement closing process and prepare
financial statements in accordance with generally accepted
 accounting
principles.
 
 This
annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by
the Company's registered public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission that permit the Company to
provide only management's report in this annual report.
 
 Changes
in internal control over financial reporting
 
 During
the last fiscal quarter, there was no change in our internal control over
financial reporting that has materially affected, or is reasonably likely
to materially affect, our internal control over financial
reporting.
 
 Item 9B.
              Other
      Information
 
 None
 
 PART
III
 
 Item 10.
              Directors,
      Executive Officers and Corporate
Governance
 
 Board
of Directors
 
 The
following table sets forth the name, age, position and term of directorship, as
applicable, of each of our SeniVida Directors and executive
officers.
  Name (1)
                
                Age
                
                Position(s)David
      R. Smith
                
                67
                
                Chairman
      of the BoardJose
      Mir
                
                59
                
                President,
      CTO and DirectorEdward
      Cabrera
                
                
                
                DirectorFrank
      Benick CPA
                
                61
                
                Chief
      Financial Officer
 
 (1) Kamal
Sarbadhikari resigned as President, CEO and a director in December
2009.
 
 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.
  48
  The Company’s Bylaws provided that the
Board of Directors shall consist of not more than 15 and not less than seven
members.  As a result of the recent changes to the composition of the
Board of Directors following the Company’s completion of its merger with
SensiVida Medical Systems, Inc. and name change on March 3, 2009 and reverse
stock split on May 18, 2009, there are currently two vacancies that exist on the
Board of Directors.  At this time, the current members of the Board of
Directors are evaluating the Company’s options at this time, including
identifying prospective candidates for appointment to the Board as well as
amending the Bylaws to reduce the size of the Board of Directors.  The
Company will make prompt public disclosure of any actions relating to the
composition of its Board of Directors.
 
 Our
Board of Directors has one separate, standing committee, the Executive
Committee, consisting of directors Mir, Cabrera and Smith.  The
Executive Committee has been delegated all power and authority of the Board of
Directors acts 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.  During the
fiscal year ending February 28, 2010, the Executive Committee met four
times.
 
 The Board
of Directors does not have a separate, standing audit committee at this
time.  Pursuant to Section 3(a)(58) of the Exchange Act, the full
Board of Directors performs the functions of an audit committee for the
Company.  During the year ended February 28, 2010, the Board of
Directors met five times. Each member of the Board attended at least 75% of the
meetings of the Board and committees on which he served.  Although all
of the members of the Board of Directors are financial literate under listing
standards of national securities exchanges such as the NYSE, none of the members
of the Board of Directors qualifies as an “audit committee financial expert” as
such term is defined under Item 407(d)(5) of Regulation S-K.  John
Kennedy, a former member of the Board of Directors until his resignation was
accepted effective as of May 18, 2009, previously qualified as an “audit
committee financial expert.”  Although the Board of Directors believes
that it is appropriate and desirable for the Board to have an “audit committee
financial expert,” the Board believes that based upon the limited size and
operations of the Company at this time, it is appropriate for the Company to not
have an “audit committee financial expert.”
 
 Directors
and Executive Officer Biographies
 
 David R.
Smith, Chairman of the Board.  Mr. Smith is a founding member of
Infotonics Technology Center Inc. and served as its President, Chief Executive
Officer and Chairman of the Board from 2002 to 2008.  Mr. Smith also
previously served as the Chairman of the Board for OIDA (Optoelectronics
Industry Development Association). His professional memberships include the
Institute of Electrical and Electronics Engineers (IEEE Senior Member) and
American Society for Quality.  Mr. Smith has a MS in Electrical
Engineering from the University of Rochester and a BS in Electrical Engineering
from the University of Massachusetts.   He began his Eastman
Kodak career in 1965 as an electrical engineer. He has had many diverse
assignments in Kodak Apparatus Division and Kodak Park Engineering with
increasing levels of responsibility in design engineering, technology
development, process improvement and systems engineering. In 1985 he was
appointed Director of Automatic Machine Systems Technology, now known as
Manufacturing Systems Technology Division (“MSTD”). MSTD is a corporate
technical resource that develops manufacturing process technology, designs high
performance manufacturing systems and installs these systems in new and existing
factories around the world.  Effective in June 1997, Mr. Smith was
then appointed Director, Production Systems Engineering & Technology
Organization, Eastman Kodak Research & Development. The organization
concentrated on process R&D for discrete products, encompassing media
converting, packaging and high volume equipment manufacturing. Mr. Smith
remained the R&D Technical Director, Advanced Production &
Commercialization Technology Platform until he just recently
retired.
 
 Jose Mir,
President and CTO.  Mr. Mir started his career at the Eastman
Kodak Company, pioneering new technologies that enabled some of the world's
earliest digital imaging products. He evangelized and co-founded a corporate
worldwide innovation initiative that after five years was able to drive
significant growth beyond Kodak's traditional product lines. Mr. Mir had profit
and loss statement responsibilities for a $16 million business that
commercialized four radically new digital products- two of them won industry
awards for technical excellence. After leaving Kodak, he started and led
Infotonics Technology Center's Innovation initiative, responsible for founding
two new start-ups. Most recently, he founded SensiVida Medical Systems Inc. and
served as its President/CTO for three years. Mr. Mir is a prolific inventor, has
won several professional awards, and has served on boards for companies and
universities.
  49
 
 Edward Cabrera,
Director.  Mr. Cabrera has worked on Wall Street for over 20 years,
including his current position as Head of Investment Banking at Jesup &
Lamont Securities Corporation where he has been employed since July 2005, at J.
Giordano Securities Group from March 2004 until July 2005 and with Merrill Lynch
as Managing Director and Head of Latin America from May 1993 until December
2002.  Since 2003, Mr. Cabrera has focused on providing advisory
services and capital market access for emerging growth companies. Mr. Cabrera
was selected for the 2000 Millenium edition of Who’s Who In Finance and in 1999
was named to the All-America team by Institutional Investor.  Mr.
Cabrera received his Bachelor of Science from the University of Florida in
Engineering and Material Sciences where he graduated with honors and received
his MBA in 1987 from Harvard Business School.  Jesup & Lamont
provides various financing assistance and M&A advisory services to the
Company for a range of success fees.
 
 Frank D.
Benick, Chief Financial Officer.  Mr. Benick has served as our Chief
Financial Officer since November 2005. He has been a partner at the
accounting firm of Cust, Dori,& Benick since 1983.
 
 There are
no family relationships between any of our directors, executive officers, or
advisors.
 
 Nominating
Procedures
 
 During the fiscal year ended February
28, 2010, there were not any material changes to the procedures by which
security holders may recommend nominees to the Company’s Board of
Directors.
 
 Directors'
Fees
 
 No
compensation has been paid to any individual for services rendered as a
director.
 
 Compliance
with Section 16(a) of the Securities Exchange Act
 
 In connection with the completion of
the Company’s merger with SensiVida Medical Systems, Inc. on March 3, 2009,
David R. Smith, Kamal Sarbadhikari, Jose Mir and Ed. Cabrera were appointed to
the Board of Directors but have not yet filed initial statements of beneficial
ownership on Form 3.  On March 3, 2009, Messrs. Sarbadhikari and Mir
each were issued 1,420,454 shares of the Company’s common stock as their pro
rata share of the merger consideration and statements of changes in beneficial
ownership on Forms 4 have not been filed to report these
transactions.  Also on March 3, 2009, Mr. Peter Katevatis, the former
Chairman of the Board and Chief Executive Officer of the Company, was issued
1,172,510 shares of the Company’s common stock in consideration for his waiver
of certain accrued salary and other claims and a Form 4 reporting this
transaction has not been filed.
 
 Code
of Ethics
 
 We
have adopted a Code of Ethics for all officers and directors which is filed as
Exhibit 14.1 to this Annual Report on Form 10-K. We will provide a copy of our
Code of Ethics to any person, without charge, upon written request to the
Company. There have been no waivers to any of the Code of Ethics provisions nor
any amendments made to the Code of Ethics during the year ended February 28,
2010.
  50
 
 Item 11.
              Executive
      Compensation
 
 Compensation
paid to Jose Mir, our President since the voluntary termination in December 2009
by Kamal Sarbadhikari, our former President and CEO, as of February 28, 2010, is
set forth in the Summary Compensation Table below. No other executive officer's
compensation exceeded $100,000 in the fiscal years ended February 28, 2010 and
February 29, 2009, respectively.
  SUMMARY
COMPENSATION TABLE
 
 All
      OtherCompensation
                              
                              
                              TotalName
      and Principal Position
                              
                              Year
                              
                              Salary
      ($)
                              
                              
                              ($)
                              
                              
                              ($)Kamal
      Sarbadhikari
                              
                              2010
                              
                              $
                              125,000
                              
                              
                              $
                              -0-
                              
                              
                              $
                              125,000Former
      Pres. andChief
      Executive Officer (PEO)Jose
      Mir
                              
                              2010
                              
                              $
                              150,000
                              
                              
                              $
                              -0-
                              
                              
                              $
                              150,000PresidentDavid
      R. Smith
                              
                              2010
                              
                              $
                              60,000
                              
                              
                              $
                              -0-
                              
                              
                              $
                              60,000ChairmanFrank
      D. Benick
                              
                              2010
                              
                              $
                              48,000
                              
                              
                              $
                              -0-
                              
                              
                              $
                              48,000Chief
      Financial Officer
 
 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.
  51


Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters





The following table sets forth, as of
June 14, 2010, 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 15,980,612 shares outstanding, which reflects the
10-to-one reverse stock split of the Company’s securities effected on May 18,
2009 (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).





Name
                      
                      Shares Owned
                      
                      
                      Percentage OwnershipDirectors
      and Executive Officers:Jose
      Mir
                      
                      
                      1,420,454
                      
                      
                      
                      8.9
                      %Edward
      Cabrera
                      
                      
                      122,713
                      
                      
                      
                      .8
                      %Frank
      D. Benick
                      
                      
                      14,187
                      
                      
                      
                      *David
      R. Smith
                      
                      
                      —
                      
                      
                      
                      —All
      Directors and ExecutiveOfficers
      as a group:
                      
                      
                      1,557,354
                      
                      
                      
                      9.7
                      %5%
      Stockholders:Cormac
      O'Connell
                      
                      
                      2,679,032
                      
                      
                      
                      16.8
                      %Peter
      Katevatis
                      
                      
                      2,061,719
                      
                      
                      
                      12.9
                      %Kamal
      Sarbadhikari
                      
                      
                      1,420,454
                      
                      
                      
                      8.9
                      %William
      M. Baker
                      
                      
                      1,564,134
                      
                      
                      
                      9.8
                      %





*
Beneficial ownership of less than 1% is omitted.





(1)
            Includes
      895,240 shares of common stock issuable upon conversion of shares of
      Series A convertible preferred stock and warrants to purchase up to
      447,620 shares of common stock issuable in connection with the issuance of
      shares of Series A convertible preferred
stock.





Item
      13.
              Certain
      Relationships and Related Transactions, and Director
      Independence





Related
Person Transactions





None.




52




Director
Independence





The Company is not subject to any
independence standards of a national securities exchange or national securities
association dealer quotation system.  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.  To determine whether a material
relationship exists, the Board consults with the company's counsel. This ensures
that the Board's determinations are consistent with:





1.
            All
      relevant securities and other laws;
and


2.
            Recent
      relevant cases and regulations regarding the definition of (independent
      director/business judgment) including those set forth in the listing
      standards of the New York Stock Exchange as in effect from time to
      time.





Based on
the foregoing criteria, the Board of Directors has determined that David R.
Smith, our Chairman of the Board, is the only member of the Board of Directors
that is independent.




Item
      14.
            Principal
      Accounting Fees and
Services





Audit
Fees





The
aggregate fees billed for each of the fiscal years ended February 28, 2010 and
February 28, 2009 for professional services rendered by the principal
accountant for the audit of our annual financial statements and reviews of the
quarterly financial statements was $60,000 and
$45,000, respectively.





Audit
Related Fees





Provisions
and services of $28,500 related to Acquisition of Sensivida Medical Systems,
Inc. as of December 31, 2008.





Tax
Fees





None.





All
Other Fees





None.





PART
IV




Item
      15.
              Exhibits,
      Financial Statement
Schedules





(a)
            The
      Financial Statements filed as part of this annual report on Form 10-K are
      filed under Part II, Item 8 beginning on page
  18.





(b)
            The
      Exhibits filed as part of this annual report on Form 10-K are listed in
      the Exhibit Index beginning on page
32.





(c)
            Not
      applicable.


53


SIGNATURES





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





SENSIVIDA
      MEDICAL TECHNOLOGIES, INC.Date:
      June 16, 2010
              By:
              /s/ Jose MirJose
      MirPresident





Pursuant
to the requirements of the Securities Exchange Act of 1934, 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 16, 2010
                
                /s/ Jose MirJose
      MirPresident
      andDirector(Principal
      Executive Officer)Date:
      June 16, 2010
                
                /s/ David R. SmithDavid
      R. SmithChairman
      of the BoardDate:
      June 16, 2010
                
                /s/ Edward CabreraEdward
      CabreraDirectorDate:
      June 16, 2010
                
                /s/ Frank D. BenickFrank
      D. Benick, CPAChief
      Financial Officer(Principal
      Financial and AccountingOfficer)


54





Exhibit Index




2.1
              Agreement
      and Plan of Merger of BioScopix, Inc., a Delaware corporation, into
      MediScience Technology Corp., a New Jersey corporation, dated as of
      November 5, 2008.*
 
 2.2
              Agreement
      and Plan of Reorganization by and Among BioScopix, Inc., a New Jersey
      corporation (successor by merger to MediScience Technology Corp.),
      SensiVida Acquisition Corp., a Delaware corporation, and SensiVida Medical
      Systems, Inc., a Delaware corporation, dated as of November 5,
      2008.*
 
 2.3
              Certificate
      of Ownership and Merger merging SensiVida Medical Systems, Inc. with and
      into BioScopix, Inc., with the surviving corporation changing its name to
      SensiVida Medical Technologies,
Inc.*
 
 3.1
              Restated
      Certificate of Incorporation, dated December 9, 2004
  *
 
 3.2
              By-laws
      *
 
 4.1
              Form
      of common stock certificate *
 
 4.2
              Anti-Dilution  Agreement  between
      the registrant  and Peter  Katevatis, dated July 19,
      2004 *
 
 10.1
              Employment
      Agreement dated May 1, 1992 between the registrant and Peter Katevatis
      *
 
 10.2
              Summary
      of amendment to Employment Agreement between the registrant and Peter
      Katevatis **
 
 10.3
              1999
      Incentive Stock Option Plan *
 
 10.4
              2003
      Consultants Stock Option, Stock Warrant and Stock Award Plan
    *
 
 10.5
              Letter  Agreement  between  Memorial  Hospital  for  Cancer  and
      Allied Diseases  and the  registrant  dated
      March 30, 1993  amending  Clinical Trial Agreement
      dated June 1, 1992 *
 
 10.6
              Clinical  Trial  Agreement  effective  December  1,  1994  between  the
      registrant and the General Hospital
      Corporation,  d.b.a.  Massachusetts General Hospital
      *
 
 10.7
              Investigational
      Device Exemption dated January 3, 1997 by the U.S. Food and Drug
      Administration *
 
 10.8
              Consultant
      Agreement between registrant and Chesterbrook Partners Inc. dated April 1,
      2004 *
 
 10.9
              SMC  agreement,  dated
      May 18,  2007,  between
      the  registrant  and Dr. Fredrick Naftolin
      *
 
 10.10
              Agreement,  dated
      June 25, 2007,  between the registrant and Infotonics Technology
      Center Inc. *
 
 10.11
              Agreement,  dated
      March 3, 2008,  between the registrant and Infotonics Technology
      Center Inc. *
 
 10.12
              Term
      Sheet dated by and between the registrant and William M. Baker relating to
      the issuance of shares of Series B Convertible Preferred Stock of the
      registrant.*
 
 21.1
              Subsidiaries
      of the registrant *
 
 31.1
              Certification
      of the Chief Executive Officer required by Rule 13a-14(a) or Rule
      15d-14(a) **




55




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





32.1
            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 and incorporated herein by reference


** Filed
herewith


56