SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

       |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                                    EXCHANGE
             ACT OF 1934 for the fiscal year ended February 28, 2006

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

      For the transition period from February 28, 2004 to February 29, 2005

                          Commission File No. 33-51218

                          MEDISCIENCE TECHNOLOGY CORP.
             (Exact name of registrant as specified in its charter)

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

               1235 Folkestone Way Cherry Hill NJ            08034
        (Address of principal executive offices)          (Zip Code)

                                 (215) 485 0362
              (Registrant's telephone number, including area code)

                                     [None]
              (Former name, former address and former fiscal year,
                         if changed since last report)

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

<TABLE>
<CAPTION>
<S>                                       <C>

          Title of each class              Name of each exchange on which registered
---------------------------------------    -----------------------------------------
Common Stock, $.01 par value per share]                  NASDAQ OTCBB

</TABLE>

     Securities registered pursuant to Section 12(g) of the Act: [INSERT TITLE
OF CLASS] [None]

     Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes [X] No [ ]

     Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X]

<PAGE>

     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 [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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. Yes [ ] No [ X ]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. Large
accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

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

     *As of May 20, 2006, the aggregate market value of the registrant's common
            -------------------------------------------------------------------
stock held by non-affiliates of the registrant was $8,739,517 based on the
--------------------------------------------------------------------------
average bid and asking price as reported on the [National Association of
------------------------------------------------------------------------
Securities Dealers Automated Quotation System National Market System].
----------------------------------------------------------------------

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

                Class                          Outstanding at May 20, 2006
--------------------------------------         ---------------------------
Common Stock, $.01par value per share]              62,425,121 shares

                       DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<CAPTION>
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                               Document                           Parts Into Which Incorporated
-----------------------------------------------------------------------------------------------
<S>                                                              <C>
Annual Report to [Shareholders][Stockholders] for the Fiscal      Parts [I, II, and IV]
Year Ended February 28, 2006 (Annual Report)
-----------------------------------------------------------------------------------------------
Proxy Statement for the Annual Meeting of                         Part III
[Shareholders][Stockholders] to be held [MEETING DATE]
(Proxy Statement)
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</TABLE>

8-K report dated May 26, 2006 Registrant reports FDA approval as a
non-significant risk (NSR) device study and submitted protocol for a pilot study
for the C-D Ratiometer entitled "A Multicenter Pilot study to establish the
safety and parameters of efficacy of an Optical Biopsy Device (CDR) for Cancer
Detection of Cervix Preliminary to a Pivotal Study." (see FDA letter exhibit
99.1).

8-K report dated May 26, 2006. Registrants Syracuse University report assessment
of photonics-based ingestible PILL optical biopsy technology as (see report
Exhibit 99.1).

                                       2
<PAGE>

8-K report dated March 3, 2006. Registrant and Alfanix Technology, Ltd. (ATL)
announced an alliance to construct photonics devices for cancer diagnostics,
utilizing registrants Optical Biopsy IP.

8-K report dated May 18, 2006, filed with registrants ALFANIX March 3, 2006.
Agreement as exhibit 99.1.

8-K report dated April 3,2006. On March 29, 2006, the FDA approved as a
"Non-significant risk device study registrants multi-center pilot study to
establish the safety and parameters of efficacy of its proprietary Optical
Biopsy Device (CD-R) for cancer detection of the cervix preliminary to a pivotal
study."

8-K report dated May 6, 2006. Registrants Board of Directors, by a majority vote
at a telephonic Board Meeting May 2, 2006, removed John Matheu as a director of
registrant for cause.

8-K report dated September 11, 2005. Registrants agreement engaging Frank D.
Benick, CPA as Chief Financial Officer (CFO) of Registrant agreement and
"Exhibit A". Mr. Frank D. Benick's CV is filed as Exhibit 99.1.

8-K report dated March 14, 2005. Registrant engaged auditors Cogen Sklar, LLP,
registered and approved by the public company oversight board and is independent
per applicable Securities Acts (Item 4.01. Changes in Registrant's Certifying
Accountant).

8-K report dated February 26, 2005. Parente Randolph, LLC, our former
independent auditor firm, resigned effective February 28, 2005. (Item 4.01.
Changes in Registrant's Certifying Accountant.)

SB-2 SEC registration 333-117820 dated Dec. 21, 2004 for 8,075,000 shares. SEC
effective Jan. 12, 2005. On Mar. 8, 2004, per terms of a preferred stock private
placement offering concluded in February 2004, the Company converted 60 shares
of its preferred stock into 6,000,000 shares of its common stock.

8-K report dated November 25, 2005. Registrant identified potential board
members

8-K November 9, 2004. Registrants subsidiary Medi-Photonics, LLC, contracted
with Infotonics Technology Center, for funding and development of registrants
commercial "photonic pill" device's using UV light to remotely monitor the
health of various internal environments. Initial focus to detect cancer and
monitor body functions. Filed as Exhibit 99.1

                      DOCUMENTS INCORPORATED BY REFERENCE:

All SEC. 10-KSB, 8-K and 10-QSB filings, SEC approved 14C shareholder meeting
"Definitive" Information Statement filing, noticing, January 16, 2004 as the
legal "Record Date" to shareholders of record January 20, 2004 Letter to
shareholders summary and proposed agenda is included in for your information.
See ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS supra.

8-K Report dated February 18, 2004. "Change in Articles of Incorporation"
February 17, 2004. The Board of Directors increased authorized common shares
from 40,000,000 to 200,000,000. The amendment was adopted by written consent of
a majority of shareholders in accordance with Section 14A:5-6 Corporation,
General, of the State of NJ Statutes.

                                       3
<PAGE>

8-K dated January 18, 2004. On Jauary17, 2004, registrant completed a 1.5
million private placement of Mediscience non-interest bearing Convertible
Preferred, with individual dollar investment at no less than $25,000 for each of
60 shares each convertible into (100,000) shares of MTC common. at $.25 cents
per share).

                          MEDISCIENCE TECHNOLOGY CORP.
                          Annual Report on Form 10-KSB

Table of Contents

                                     PART I

Item 1. Description of Business

Item 2. Description of Properties (Technology and Products)

Item 3. Legal Proceedings

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

                                     PART II

Item 5. Market for Common Equity and Related Shareholder Matters

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

Item 7. Financial Statements

       Consolidated Balance Sheets- February 28, 2006 and February 28, 2005

      Consolidated Statements of Operations for the years ended February 28,
2006, and February 28, 2005 and February 29, 2004

      Consolidated Statements of Cash Flows for the years ended February 28,
2006, and February 28, 2005 and February 29, 2004

      Notes to Consolidated Financial Statements

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

Item 8A. Controls and Procedures

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons

Item 10. Executive Compensation

Item 11. Security Ownership of Certain Owners and Management

Item 12. Certain Relationships and Related Transactions

                                       4
<PAGE>

Item 13. Principal Accountant Fees and Services

Item 14. Exhibits and Reports on Form 8-K

Item 15. Subsequent Events


Item 1. DESCRIPTION OF BUSINESS

Introduction

This annual report on Form 10-KSB contains certain forward-looking " Safe
Harbor" statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E the Securities Act of 1934 and Item 16 related Risk Factors
incorporated herein. Actual events or results may differ materially from those
projected in the forward-looking statements as a result of the factors described
herein. Such forward-looking statements include, but are not limited to,
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. Mediscience is in full
compliance with SEC regulation FD "Full Disclosure" requirements, adopted August
10, 2000 (see SEC release No. 33-7881), by exclusive reporting of material
events (disclosures where it is reasonably foreseeable that the information will
result in trading in an issuer's securities), through periodic 8-K filings and
complementary postings on its internet site MEDISCIENCETECH.com e.g Sarbanes
Compliance.

Safe Harbor Information of importance to our shareholders: Effective October,
2003 SEC III: Rule 10b-18 Safe Harbor Changes are statutorily applicable to the
repurchase of a company's common stock in the open market. SEC Rule 10b-18
change is not presently applicable to registrant. The Company has no present or
future commitment or intentions to re-purchase any of its outstanding common
stock.

Background

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

Registrants business is to deploy commercially the Mediscience IP platform
technology of light spectroscopy to diagnose diseases: Non-invasively (where
excisional biopsies and x-rays are avoided, More reliable (where pathology is
verified) More rapidly: real time point of care diagnostics (where pathology
laboratory evaluation is supplanted). On December 1, 1988, registrant acquired
Laser Diagnostic Instruments, Inc. ("LDI"), a wholly owned subsidiary whose
principle asset was a patent "Method and Apparatus for Detecting Cancerous
Tissue Using Visible Luminescence," US patent number 4,930,516 June 5, 1990. On
August 8, 1998 in a US Patent Office re-examination. the "516" claims were
expanded from 9 to 59. Our research and development activities are centered
around this patent and 26 related patents acquired by Mediscience as either
owner or exclusive licensee. The fundamental process used by these patents is
the interpretation of optical imaging data gathered by exposing select areas of
tissue to various forms of electromagnetic radiation. Our work with co-founder

                                       5
<PAGE>

Dr Robert Alfano demonstrates that the use of fluorescence leaves a different
and distinct molecular "signature" on normal or cancerous tissue. That
signature, in turn, can be converted into a specific algorithm that can
distinguish malignant tissue from normal tissue." Our collective IP claims
inter-relate in the process of non-invasively detecting cancerous tissue within
the body. Registrant regards its related patent cluster as pioneering, blocking
and dominant in the area of cancer and physiological change diagnosis using its
IP fluorescence spectroscopy both in-vivo and in-vitro. Dr. Robert Alfano states
that the recent filings "the Stokes-Shift patent and "Phosphorescence and
fluorescence spectroscopy for detection cancer and pre-cancer from normal/benign
regions" when issued, would extend the Company's core IP technology in Optical
Biopsy expanding, maintaining and continuing registrants broad IP leadership in
the Optical Biopsy field. Registrant believes the Company's technology, if
successfully developed, will have enhanced diagnostic sensitivity and
specificity with substantial commercial appeal due to its: non-invasive nature
and delivery of immediate results.

Dr. Robert Alfano, co-founder of registrant formed ALFANIX LTD a New York State
for-profit company. (see 8-K dated March 3., 2006) under contract with
Registrant (see 8-K dated March 3., 2006 and 8KA dated May 18, 2006) to focus on
the enhanced development of the CDR unit and registrant's total IP photonic
platform applications and related technology on an as needed contract basis.
Alfanix is expected to initially introduce Registrants CD-R Units into Latin
America for testing on human subjects for: a) corroborating current adjunct
algorithms in our US Mar. 29, 2006 FDA approved pilot and develop specific
algorithms for the detection of Cancer in-vivo. The alliance will include the
identification of and subsequent training of medical teams composed of an
oncologist, pathologist and medical technician in the Dominican Republic to use
the CD-R system, expand the CD-R capability by obtaining specific algorithms in
women that selectively identify and distinguish in the Doctors office- cancer
dysphasia and benign in real time. All such work is expected to have application
in registrants IP platform, ALFANIX will initially determine what investigative
relationships are possible and report to MDSC for approval on possible steps and
costs. The ability to diagnose cancer in real time, offers the added benefit of
being able to provide life-saving treatment for cervical cancer that otherwise
might not be available.

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

The three main competitors in the optical biopsy pill market today are Given
Imaging, Olympus Optical LTD, and Smart Pill Corporation. Each company offers a
product supported by a different technical platform and with inherently
different capabilities. Given's PillCam involves recorded optical imaging and
analysis, Olympus Optical LTD's EndoCapsule involves real-time optical imaging,
transmission and analysis, and SmartPill involves chemical analysis of tissue as
opposed to optical imaging. Registrants and Infotonics, based on in depth market
and technology review (see 8-K Mar. 26, 2006) believe that a photonics technical
platform of optical biopsy (CPE) introduces a new, better and more market
promising concept into the emerging endoscopic ingestible pill market. (See
CITIGROUP/Smith Barney Analyst Report 10-1-2004 by Peter Bye. Page 20
Registrant-Info tonics).

                                       6
<PAGE>

On March 29, 2006 the FDA approved as a "Non-significant Risk Device Study,
Registrants multi-center pilot study approval adjunct to the PAP intended to
establish the safety and parameters of efficacy of the (CD-R) for cancer
detection of the cervix preliminary to a pivotal study. The CD-R unit will be
used to detect changes in the cervix using a non-invasive/minimally invasive and
painless optical technology with a disposable probe to identify anomalous
areas-suggesting to the Doctor that a PAP be taken from such suspected sites,
for a smarter PAP. The Purpose is to provide immediate real-time PAP reading in
the Doctors office with accuracy presently not available in the conventional PAP
approach. The intent of the CD-R technology is not to replace the PAP but rather
to be used conjointly in this way assisting and dramatically increasing the
accuracy of the readings.

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

Strategy

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

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

Registrant contract with the Research Foundation City University of New York
(RFCUNY) effective June 10, 2002 imposes registrant a royalty rate of 3.25% as
to those patent/patent applications of a medical nature not totally owned by
registrant. RFCUNY received the following consideration, issuance to RFCUNY of
283,228 SEC 144 shares and a five (5) year. Warrant to providing (RFCUNY) the
right to

                                       7
<PAGE>

purchase six hundred thousand (600,000) SEC restricted 144 shares of
registrant at one dollar ($1.00) per share expiring June 10 2007. The agreement
affirms Registrant's ownership and/or exclusive license of all MEDICAL
APPLICATIONS embodied in Registrants patent list attached to the contract as
exhibit A.

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


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                   Table 1. Optical Biopsy Accuracy Statistics

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Tissue Type     Number of
(in vitro)       Samples     Pathology          Sensitivity   Specificity   Year
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Breast              16       Cancer                87.5%                    1988
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                    15       Normal                                87%
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Breast              40       Cancer                92.5%                    1988
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                    47       Benign and Normal                     98%
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GYN                 22       Malignant             95%                      1992
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                    10       Non-Malignant                        100%
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GYN                 65       Cancer                 97%                     1994
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                    24       Normal                               87.5%
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Colon               35       Cancer                 94%                     1995
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                    39       Normal                                92%
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Breast              99       Cancer                 90%                     1995
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                    67       Normal                                90%
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Breast              97       Cancer                 95%                     1996
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                   127       Normal                                93%
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Esophagus           31       Cancer                 93%                     1998
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                    33       Normal                                93%
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Breast             103       Cancer                 90%                     1998
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                    63       Normal                                 90%
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Colon               11       Cancer                 95%                     1999
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                    11       Normal                                 95%
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<PAGE>

                                  The Products

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

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

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

The CD Map is being designed to optically interrogate an area of tissue rather
than selective individual points. It will be especially useful in assisting
cancer surgeons in clearly defining the surgical margins of tumors, real time,
during cancer surgery without the use of extrinsic dyes, drugs or other invasive
agents. It is at an earlier stage of design than the CD Scan or CD Ratiometer.
It is expected to report out similar results in the form of a colored map on a
computer screen distinguishing normal areas from abnormal areas via color
differentiation.

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

                        Research and Product Development

The utility of native tissue fluorescence spectroscopy for in vivo cancer
detection in humans was first discovered in the early 1980's by Dr. Robert
Alfano co-founder of registrant, and President of Alfanix: (see Alfano CV,
chairman of registrants scientific advisors). Dr. Alfano is a leading figure in
the field of photonics research and development and holds more than 76 patents
and has published more than 600 papers addressing the areas of ultra-fast
time-resolved spectroscopy, lasers, photonics, biomedical optics

                                       10
<PAGE>

and condensed matter physics. Director of the Institute for Ultrafast
Spectroscopy and Lasers at the CUNY, Director of New York State Center for
Advanced Technology (CAT) for Ultrafast Photonic Materials and Applications,
Director of the Department of Energy Center of Excellence on Laser Imaging and
Cancer Diagnostics, as a faculty member affiliated with the physics department
at CUNY since 1972. In 1992, registrant assisted in the establishment of the
Medi-photonics Laboratory ("MPL") at the City College of New York to provide
research and development services in the area of tissue spectroscopy and cancer
detection and other biological applications.

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

                              Clinical Development

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

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

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

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<PAGE>

Dr. Basuk reported his work supports registrants UV emission measurements which
can distinguish normal esophageal tissue from Barrett's or adenocarcinoma.
Preliminary data indicates that the combination of UV emission and Excitation
measurements can potentially separate Barrett's from dysplasia and cancer as
well as from normal tissues. On March 19, 1999 the NEW ENGLAND JOURNAL of
MEDICINE (Vol.340, No. 11) reported "Symptomatic Gastrosophageal Reflux as a
risk factor for esophageal Adenocarcinoma," concluding that there is a strong
and probable causal relation between gastrosophageal reflux and esophageal
adenocarcinoma. Esophageal adenocarcinoma is treatable but rarely curable,
mortality is high and any chance of successful treatment depends on early
detection, thus screening high-risk patients using registrants CD Ratiometer
with fiberoptic probe would be desirable. Registrants supporting experience in
Excitation of important tissue molecules shows improved diagnostic accuracy in
the range of 80 to 90 percent with measurement time of a few seconds
(real-time).

                       Business Development and Marketing

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

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

The excision biopsy requires a significant amount of surgical intervention to
collect an adequate tissue sample to make a proper diagnosis and staging
determinations. The process can sometimes expose the patient to unnecessary
risks, lengthy hospital stays, long recovery times, pain and discomfort and
significant health care expense. The Company's technology is believed to offer
the potential of a less physically invasive method to diagnose and stage a
variety of cancers without the excessive costs and potentially debilitating
effects of biopsy. The most widely practiced technique for definitive diagnosis
of breast cancer, the leading cause of death among American women between the
ages of 40 and 55, is open surgical biopsy (a specific type of biopsy) which is
done under a general anesthetic and typically results

                                       12
<PAGE>

in surgical excision of a golf ball-sized mass of breast tissue. About 800,000
such procedures are performed annually in the United States at an estimated
annual cost of between $2 billion and $4 billion. If the Company can
successfully adapt its technology to diagnose and stage breast cancers, it
believes it will save up to half the current cost by reducing and /or
eliminating extensive hospital stays and frequency of surgery as well as
impacting significantly the amount of patient discomfort for those patients
medically determined to have cancer, and eliminate most of the trauma for the
70% to 80% of the patients who are found not to have cancer.

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

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

We have, in the past, and continue to encourage any possible collaborations
especially with firms that have strong existing franchises in certain
specialized fields of diagnosis and treatment and who have established
reputations with prospective purchasers of diagnostic products and who have
proven selling, marketing and distribution capabilities. A select number of
these kinds of relationships, if we are successful in fostering them, are
expected to add value to the Company by leveraging our financial resource base
with development and licensing revenues that the Company can then use to help
fund the development of its own products. We also believe that a market for our
CD products will exist in Latin America, the European Union and possibly Asia.
We contemplate making a concerted effort to identify one or more possible
licensees to help develop our products or variations thereof for key markets
during 2006-7.

                                  Manufacturing

Our prototype products have been assembled to date by the staff of the MPL at
the City College of New York from components that are generally readily
available from one or more sources in the marketplace. We contemplate continuing
with this approach until the quantity of devices projected to be required makes
it appropriate and necessary to find a contract manufacturer. Although
additional design improvements will likely be required to refine the current
prototype products for commercial use, we still believe that the key components
will be available from one or more suppliers. We plan to outsource the
manufacture and assembly of our medical device products to contract
manufacturers when it is no longer feasible for the MPL to perform that service.

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

                                       13
<PAGE>

                                   Competition
                                      CD-R

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

Current screening systems are dominated by the Pap smear and colposcopy, as well
established and pervasive, and now the entry of Vaccines (Merck Glaxo).
Improvements and new technologies for cervical cancer detection include Digene
Corp. human papilloma Virus testing and Cytyc Corp's "Thin-Prep." There are
companies and institutions attempting to develop products using bio-photonic
technologies in cervical cancer detection including Spectrx Inc, MD Anderson,
and University of Michigan. Mediscience and its equity associates RFCUNY,
Alfanix and Infotonics will continue to develop devices that are more accurate,
easier to use and/or less costly to administer to maintain competitive
advantage.

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

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

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

                                       14
<PAGE>

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

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

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

Photonic Pill (CPE)

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

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

Scientists are able to create in vivo systems that can collect large quantities
of data and transmit that data to external systems while the device remains in
vivo to enable doctors to navigate through the body to collect visual chemical
or photonic data. The expectation is that such developments will allow doctors
to generate new tests and better analyze and diagnose disease in the upper GI
tract and other parts of the body through less invasive and disruptive methods
for the patient. The efforts of Infotonics, in conjunction with Mediscience
Technology Corporation and the City University of New York, to develop a
photonics biopsy pill based on a photonics platform that utilizes the inherent
molecular physical characteristics of normal, pre-cancerous, and cancerous
tissues exhibit when illuminated with light of specific frequencies, registrant
believes, represents the next step in diagnostic technology.

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

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

                                       15
<PAGE>

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

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

     o    The report concludes that the Photonic Biopsy Pill demonstrates great
          promise in providing a non-invasive, preliminary means of detecting in
          vivo pre-cancerous and cancerous tissues in the upper digestive tract.
     o    A number of important design issues remain to be addressed on the
          components and design of a miniaturized Photonic Biopsy Pill including
          the selection of a particular light emitter, light detector, power
          source, and position-detection system and casing design.
     o    The Photonic Biopsy Pill has the potential to become a market leader
          in diagnostic technology, perhaps the industry standard, as a new
          diagnostic device that physicians will embrace because it addresses
          real concerns of the current marketplace.
     o    The assessment process did not reveal any obvious IP barriers to
          commercializing the Photonic Biopsy Pill based on competitors'
          products in the market today.

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

OLYMPUS: camera pill is the ingestible EndoCapsule, available in Europe since
October. Unlike Given's PillCam, the EndoCapsule has not been approved by the
FDA. Little is known about the product. It transmits images via a "built-in
capsule antenna," which is capable of transmitting to the data recorder at a
rate of two images per second.

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

                       Government Regulation (FDA) Matters

The FDA classifies medical devices into one of three classes, Class I, II, or
III. This classification is based on the controls deemed necessary by the FDA to
reasonably insure the safety and effectiveness of the

                                       16
<PAGE>

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

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

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

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

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

                         Patents and Proprietary Rights

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

                                       17
<PAGE>

October 18, 2005 registrant 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 registrant believe that all recent filings plus
registrants achieved IP claims in totality inter-relate in the process of
non-invasively detecting cancerous tissue within the body and on issuance would
extend the Company's core IP technology 17+ yrs expanding, maintaining and
continuing registrants IP leadership in the Optical Biopsy field. Registrant
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:

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

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

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

                            Third Party Reimbursement

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

                                       18
<PAGE>

                    Other Technologies and other applications

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

                                   Our Patents

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

                                 ATTACHMENT "A"
                      Medical Diagnostic Optical Technology

US Patent disclosure US 60/725,670 "Phosphorescence and Fluorescence
Spectroscopy for Detection of Cancer and Pre-Cancer from Normal/Benign regions"
US Patent Pending "Stokes-Shift Fluorescence spectroscopy for detection of
disease and physiological state of specimen".

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

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

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

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

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

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

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

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

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

                                       19
<PAGE>

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

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

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

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

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

                      Optical Imaging for Medical Purposes

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

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

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

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

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

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

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

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

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

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

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

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

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.

                                       20
<PAGE>

                                    Employees

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

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

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

ITEM 2. DESCRIPTION OF PROPERTIES

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

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

ITEM 3. LEGAL PROCEEDINGS

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

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During its fiscal year ending February 28, 2006, no matters were Submitted, or
required to be submitted to a vote of the Company's security holders.


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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

                                       21
<PAGE>


         Fiscal Period                             Common Stock
         -------------                             ------------
                                                 bid           ask

2006

1st Quarter         05/31/05                    0.45           0.45

2nd Quarter         08/31/05                    0.40           0.42

3rd Quarter         11/30/05                    0.18           0.18

4th Quarter         02/28/06                    0.17           0.19

2005

1st Quarter         05/31/04                    0.50           0.45

2nd Quarter         08/31/04                    0.76           0.65

3rd Quarter         11/30/04                    0.62           0.61

4th Quarter         02/28/05                    0.69           0.60

2004

1st Quarter         05/31/03                    0.30           0.25

2nd Quarter         08/31/03                    0.31           0.16

3rd Quarter         11/30/03                    0.38           0.22

4th Quarter         02/29/04                    0.93           0.25

(a) Holders: as of February 28, 2006, the approximate number of all holders of
record of the Company's Common Stock 735 and Series A Preferred Stock -0-

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

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                           FORWARD-LOOKING STATEMENTS

This Discussion and Analysis of Financial Condition and Results of Operations
contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act, including but not limited to
our assumptions underlying our critical accounting determinations; efforts to
raise additional financing; and our commitment of resources. You should not
place undue reliance on these forward-looking statements. Actual results could
differ materially from those anticipated in these forward-looking statements as
a result of a number of factors, including our good faith assumptions being
incorrect. 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." All forward-looking statements included in
this report are based on information available to us on the date hereof, and we
assume no obligation to update any such forward-looking statements.

                                       22
<PAGE>

                    CRITICAL ACCOUNTING POLICIES & ESTIMATES

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

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

                                Use of Estimates

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

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

                                  Income Taxes

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

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

                                       23
<PAGE>

     Year Ending February 28, 2006 Compared to Year Ending February 28, 2005

Revenues

We had no revenues during our fiscal year ending February 28, 2006 ("2006 fiscal
year) and February 28, 2005 ("2005 fiscal year). Our primary focus was our
continued development of our light-based technology.

General and Administrative Expense

General and administrative expenses decreased approximately $43,000 or 2.2%
during the 2006 fiscal year as compared to our 2005 fiscal year. This decrease
is net of both increases and decreases in several key general and administrative
expense categories.

Included in the decrease in general and administrative expenses was a decrease
in professional fees approximating $267,000 during the 2006 fiscal year when
compared to the prior fiscal year. The principal reason for the decrease is
related to the legal and accounting costs associated with the registration of
our securities and the higher accounting and legal activities associated with
financial and development activities in the prior fiscal year. Included in the
decrease in general and administrative expenses is a decrease in salaries, wages
and administrative services approximating $46,000 during the 2006 fiscal year
when compared to the prior fiscal year. In the prior fiscal year, the Company
had employed a salaried consultant on a temporary basis for a six-month period
and non-salaried administrative aid for a longer period of time in the prior
fiscal year 2005. In the prior fiscal year, the Company made an inducement offer
to a creditor to convert all of its then outstanding notes. In March 2004, the
creditor accepted the offer to convert the principal amount of $150,045 plus
related accrued interest of $35,470 to 1,460,000 common shares. In connection
with the inducement offer and related conversion, the Company recognized a
non-cash expense of $58,555 during the 2005 fiscal year. No debt conversion
inducement expense was recognized during fiscal year end 2006. Included in
general and administrative expense is a decrease in advertising, travel, and
marketing approximating $27,000 during the 2006 fiscal year when compared to the
2005 fiscal year. This decrease was primarily the result of decreased activity
pursuing the establishment of co-promotional arrangements for the marketing,
distribution, and commercial exploitation of cancer detection technology, along
with the promotional activities of raising capital to support these objectives.

Included in the increase in general and administrative expenses is an increase
in consulting costs approximating $324,000 during the 2006 fiscal year when
compared to the prior fiscal year. The above increase was partly comprised of
approximately $795,000 of deferred costs amortized as an expense, as compared to
approximately $586,000 or deferred costs amortized as an expense in the prior
fiscal year, resulting in an increase of $209,000. The increase in consulting
costs was also complemented with an increase of $115,000 in other consulting
costs expended, all associated with corporate management, investor relations,
marketing opportunities, product development and corporate funding. Also
included in the increase in general and administrative expenses is an increase
in insurance costs approximating $16,000, which primarily represent insurance
costs associated with issuance of an officers and directors liability policy.
All other general and administrative costs increased approximately $15,000
during the 2006 fiscal year when compared to the 2005 fiscal year. This increase
is associated with the general increase in administrative activities of managing
the Company as it continues to develop and promote its light-based technology.

Research and Development Expense

Research and development expense decreased approximately $107,000 during the
2006 fiscal year when compared to the 2005 fiscal year. The principal reason for
the decrease was a decrease in research funding approximating $155,000 provided
by us through Medi-Photonics to the Research Foundation City University of New
York (RFCUNY) under a project agreement for research and development in the area
of optical biopsy for the development of a commercially viable CD-Ratiometer and
adjunctive technology. The decrease was also attributed to a decrease in
developmental payroll costs associated with Medi-Photonics approximating
$42,000, plus approximately $11,000 in miscellaneous research costs resulting in
a total decline of $208,000 in research and development costs. Included in the
increase in research and development is approximately $151,000 of deferred costs
amortized as an expense within fiscal year 2006, as compared to approximately
$50,000 of deferred

                                       24
<PAGE>

costs amortized as an expense in 2005, resulting in a net increase of
approximately $101,000 of deferred costs. During fiscal 2005, the Company thru
its subsidiary Medi-Photonics entered into a collaborative research and
development agreement with Infotonics Technology Center Inc., a consortium of
founding participants such as Corning Inc., Eastman Kodak Company and Xerox
Corporation. Infotonics and the Company will collaborate with one another in the
conduct of a research program involving the development of commercially viable,
miniature devices for the Company that will make use of ultraviolet light to
diagnose the health of living tissue, remotely monitoring the health/status of
various medical environments, e.g. the detection of various types of cancer and
the monitoring of body functions. The period of research under this agreement
will terminate upon completion of the research, currently estimated to be five
years. As consideration for Infotonics to carry out the research, and for all
rights Infotonics has in US Patent No. 6240312, BI, Application NO.09-178-275,
Filed October 23, 1998 issued May 29, 2001 "Remote controllable micro-scale
device for use in in-vivo medical diagnosis and/or treatment" the Company issued
Infotonics 1,000,000 shares of its common stock, having a fair market value of
$754,100.

2006 Liquidity and Capital Resources

We had a deficiency in working capital as of February 28, 2006 of approximately
$3,012,000 compared to a deficiency of approximately $2,180,000 at February 28,
2005 or an increase in the deficiency of approximately $832,000 for the 2006
fiscal year. The increase in the deficiency was comprised of a decrease of
approximately $797,000 in current assets primarily composed of cash, along with
an increase of approximately $35,000 in current liabilities which are primarily
composed of accrued liabilities and accounts payable. The deficiency in working
capital is primarily represented by accruals for professional fees, consulting,
salaries, and wages and other general obligations.

Cash flows from financing activities was a net increase approximating $343,000
for the year ended February 28, 2006, which was primarily related to the
proceeds from an ongoing private placement of common stock. The proceeds from
the private placement will be primarily used for the clinical development of
certain prototypes, regulatory, medical and scientific affairs, market research,
and working capital. During the year ended February 28, 2006, the Company
refunded approximately $31,500 to an officer, who advanced it to the Company in
a prior period.

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

                                       25
<PAGE>

Off-Balance Sheet Arrangements

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

                                  RISK FACTORS

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

WE DO NOT HAVE A LONG OPERATING HISTORY, WHICH MAKES IT DIFFICULT FOR YOU TO
EVALUATE OUR BUSINESS. Because limited historical information is available on
our revenue trends and operations, it will be difficult for you to evaluate our
business. Our prospects must be considered in light of the substantial risks,
expenses, uncertainties and difficulties encountered by entrants into the
medical device industry, which is characterized by increasing intense
competition and a high failure rate.

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

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

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

IF WE CANNOT OBTAIN ADDITIONAL FUNDS WHEN NEEDED, OR ACHIEVE PROFITABILITY WE
MAY NOT BE ABLE TO CONTINUE AS A GOING CONCERN. Our independent auditors have
included an explanatory paragraph in their audit report referring to our
recurring operating losses and a substantial doubt

                                       26
<PAGE>

about our ability to continue as a going concern. Absent additional funding from
private or public equity or debt financings, collaborative or other partnering
arrangements, or other sources and If we do not secure additional funding, we
will be unable to conduct all of our product development efforts as planned, and
we may need to cease operations or sell assets. In addition, the existence of
the explanatory paragraph in the audit report may in and of itself cause our
stock price to decline as certain investors may be restricted or precluded from
investing in companies that have received this notice in an audit report.

OUR ABILITY TO SELL OUR PRODUCTS IS CONTROLLED BY GOVERNMENT REGULATIONS, AND WE
MAY NOT BE ABLE TO OBTAIN ANY NECESSARY CLEARANCES OR APPROVALS. The design,
manufacturing, labeling, distribution and marketing of medical device products
are subject to extensive and rigorous government regulation including but not
limited to FDA which can be expensive and uncertain and can cause lengthy delays
before we can begin selling our products.

IN THE UNITED STATES, THE FOOD AND DRUG ADMINISTRATION'S ACTIONS COULD DELAY OR
PREVENT OUR ABILITY TO SELL OUR PRODUCTS, WHICH WOULD ADVERSELY AFFECT OUR
GROWTH AND STRATEGY PLANS. In order for us to market our products in the United
States, we must obtain continued clearance or approval from the Food and Drug
Administration. We cannot be sure: that we or any collaborative partners will
make timely filings with the FDA; that the FDA will act favorably or quickly on
these submissions; that we will not be required to submit additional information
or perform additional clinical studies; that we would not be required to submit
an application for PMA as described below; or that other significant
difficulties and costs will not be encountered to obtain FDA clearance or
approval. The pre-market approval process is more rigorous and lengthier than
the 510(k) clearance process for pre-market notifications; it can take several
years from initial filing and require the submission of extensive supporting
data and clinical information clinical study data.

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

IN FOREIGN COUNTRIES, INCLUDING LATIN and EUROPEAN COUNTRIES, WE ARE ALSO
SUBJECT TO GOVERNMENT REGULATION, WHICH COULD DELAY OR PREVENT OUR ABILITY TO
SELL OUR PRODUCTS IN THOSE JURISDICTIONS. In order for us to market our products
in Latin America or Europe and some other international jurisdictions, we and
our distributors and agents e.g. ALFANIX LTD must obtain required regulatory
registrations or approvals. We must also comply with extensive regulations
regarding safety, efficacy and quality in those jurisdictions. We may not be
able to obtain the required regulatory registrations or approvals, or we may be
required to incur significant costs in obtaining or maintaining any regulatory
registrations or approvals we receive. Delays in obtaining any registrations or
approvals required to market our products, failure to receive these
registrations or approvals, or future loss of previously obtained registrations
or approvals would limit our ability to sell our products internationally. For
example, international regulatory bodies have adopted various regulations
governing product standards, packaging requirements, labeling requirements,
import restrictions, tariff regulations, duties and tax requirements. These
regulations vary from country to country. For example In order to sell our
products in Europe, we must maintain ISO 9001 certification and CE mark
certification, which is an international symbol of quality and compliance with
applicable European medical device directives. Failure to receive or maintain
ISO 9001 certification or CE mark certification or other international
regulatory approvals would prevent us from selling in Europe and similar
requirements would prevent us from selling in Latin American countries.

                                       27
<PAGE>

EVEN IF WE OBTAIN CLEARANCE OR APPROVAL TO SELL OUR PRODUCTS, WE ARE SUBJECT TO
ONGOING REQUIREMENTS AND INSPECTIONS THAT COULD LEAD TO THE RESTRICTION,
SUSPENSION OR REVOCATION OF OUR CLEARANCE. We, as well as any collaborative
partners, will be required to adhere to applicable FDA regulations regarding
good manufacturing practice, which include testing, control, and documentation
requirements. We are subject to similar regulations in foreign countries.
Ongoing compliance with good manufacturing practice and other applicable
regulatory requirements will be strictly enforced in the United States through
periodic inspections by state and federal agencies, including the FDA, and in
international jurisdictions by comparable agencies. Failure to comply with these
regulatory requirements could result in, among other things, warning letters,
fines, injunctions, civil penalties, recall or seizure of products, total or
partial suspension of production, failure to obtain pre-market clearance or
pre-market approval for devices, withdrawal of approvals previously obtained,
and criminal prosecution. The restriction, suspension or revocation of
regulatory approvals or any other failure to comply with regulatory requirements
would limit our ability to operate and could increase our costs.

OUR SUCCESS LARGELY DEPENDS ON OUR ABILITY TO OBTAIN AND PROTECT THE PROPRIETARY
INFORMATION ON WHICH WE BASE OUR PRODUCTS. Our success depends in large part
upon our ability to establish and maintain the proprietary nature of our
technology through the patent process, as well as our ability to possibly
license from others patents and patent applications necessary to develop
products. If any of our patents are successfully challenged, invalidated or
circumvented, or our right or ability to manufacture our products were to be
limited, our ability to continue to manufacture and market our products could be
adversely affected. In addition to patents, we rely on trade secrets and
proprietary know-how, which we seek to protect, in part, through confidentiality
and proprietary information agreements. The other parties to these agreements
may breach these provisions, and we may not have adequate remedies for any
breach. Additionally, our trade secrets could otherwise become known to or be
independently developed by competitors.

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

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

WE ARE DEVELOPING OUR CURRENT PRODUCT LINE INDEPENDENTLY FROM ANY COLLABORATIVE
PARTNERS, WHICH MAY REQUIRE US TO ACCESS ADDITIONAL CAPITAL AND TO DEVELOP
ADDITIONAL SKILLS TO PRODUCE, MARKET AND DISTRIBUTE THESE PRODUCTS. We are also
currently seeking direct funding for and expect to commercialize our cervical
cancer detection products independently of any collaborative partner. These
activities require additional resources and capital that

                                       28
<PAGE>

we will need to secure. There is no assurance that we will be able to raise
sufficient capital or attract and retain skilled personnel to enable us to
finish development, launch and market these products. Thus, there can be no
assurance that we will be able to commercialize all, or any.

BECAUSE OUR PRODUCTS, WHICH USE DIFFERENT TECHNOLOGY OR APPLY TECHNOLOGY IN MORE
INNOVATIVE WAYS THAN OTHER MEDICAL DEVICES, ARE OR WILL BE NEW TO THE MARKET, WE
MAY NOT BE SUCCESSFUL IN LAUNCHING OUR PRODUCTS AND OUR OPERATIONS AND GROWTH
WOULD BE ADVERSELY AFFECTED. Our products are based on new methods of cervical
cancer detection. If our products do not achieve significant market acceptance,
our sales will be limited and our financial condition may suffer. Physicians and
individuals may not recommend or use our products unless they determine that
these products are an attractive alternative to current tests that have a long
history of safe and effective use. To date, our products have been used by only
a limited number of people, and few independent studies regarding our products
have been published. The lack of independent studies limits the ability of
doctors or consumers to compare our products to conventional products.

IF WE ARE UNABLE TO COMPETE EFFECTIVELY IN THE HIGHLY COMPETITIVE MEDICAL DEVICE
INDUSTRY, OUR FUTURE GROWTH AND OPERATING RESULTS WILL SUFFER. The medical
device industry in general and the markets in which we expect to offer products
in particular, are intensely competitive. Many of our competitors have
substantially greater financial, research, technical, and manufacturing,
marketing and distribution resources than we do and have greater name
recognition and lengthier operating histories in the health care industry. We
may not be able to effectively compete against these and other competitors. .
Further, if our products are not available at competitive prices, health care
administrators who are subject to increasing pressures to reduce costs may not
elect to purchase them. Accordingly, competition in this area is expected to
increase.

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

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

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

                                       29
<PAGE>

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

OUR SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT AND RETAIN SCIENTIFIC, TECHNICAL,
MANAGERIAL AND FINANCE PERSONNEL. Our ability to operate successfully and manage
our future growth depends in significant part upon the continued service of key
scientific, technical and managerial and finance personnel, as well as our
ability to attract and retain additional highly qualified personnel in these
fields. We may not be able to attract and retain key employees when necessary,
which would limit our operations and growth.

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

ITEM 7 Financial statements    AUDITORS PROVIDE


                                       31
<PAGE>




                          MEDISCIENCE TECHNOLOGY CORP.
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                           FEBRUARY 28, 2006 AND 2005

<PAGE>





                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES



                                    CONTENTS
                                    --------



                                                                        PAGE
                                                                      ---------


REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS                 1


CONSOLIDATED BALANCE SHEETS                                               2


CONSOLIDATED STATEMENTS OF OPERATIONS                                     3


CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT               4


CONSOLIDATED STATEMENTS OF CASH FLOWS                                     5


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                              6 - 17




<PAGE>



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





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


We have audited the accompanying consolidated balance sheets of Mediscience
Technology Corp. and subsidiaries (the "Company") as of February 28, 2006 and
2005, and the related consolidated statements of operations, changes in
stockholders' deficit and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Mediscience
Technology Corp. and subsidiaries as of February 28, 2006 and 2005, and the
results of its operations and cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States.

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


/s/ MORISON COGEN LLP

Bala Cynwyd, Pennsylvania
May 4, 2006


                                      -1-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           FEBRUARY 28, 2006 AND 2005
<TABLE>
<CAPTION>
                                                             2006            2005
                                                         ------------    ------------
<S>                                                             <C>             <C>
ASSETS

CURRENT ASSETS
  Cash                                                   $    136,635    $    934,212
  Prepaid expenses                                              4,031           3,848
                                                         ------------    ------------

TOTAL CURRENT ASSETS                                          140,666         938,060

EQUIPMENT - Net                                                 2,107             637

DEFERRED CHARGES                                            1,114,682       1,453,834

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

TOTAL ASSETS                                             $  1,259,255    $  2,394,331
                                                         ============    ============


        LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Current portion of officer and other loans             $         --    $     31,542
  Accounts payable                                             29,204          93,504
  Accrued liabilities                                       3,123,458       2,992,911
                                                         ------------    ------------

TOTAL CURRENT LIABILITIES                                   3,152,662       3,117,957
                                                         ------------    ------------

TOTAL LIABILITIES                                           3,152,662       3,117,957
                                                         ------------    ------------

STOCKHOLDERS' DEFICIT
  Convertible preferred stock - $.01 par value, 50,000
     shares authorized, -0- shares issued and
     outstanding in 2006 and 2005, respectively                    --              --
  Common Stock - $.01 par value; 199,950,000 shares
     authorized; 59,553,893 and
     56,124,210 shares issued
     and outstanding in 2006 and 2005, respectively           595,540         561,243

ADDITIONAL PAID-IN CAPITAL                                 24,462,292      23,217,702

COMMON STOCK SUBSCRIBED                                            --         250,000

ACCUMULATED DEFICIT                                       (26,951,239)    (24,752,571)
                                                         ------------    ------------

TOTAL STOCKHOLDERS' DEFICIT                                (1,893,407)       (723,626)
                                                         ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT              $  1,259,255    $  2,394,331
                                                         ============    ============
</TABLE>

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

                                      -2-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     YEARS ENDED FEBRUARY 28, 2006 AND 2005

                                                       2006            2005
                                                   ------------    ------------

SALES                                              $         --    $         --

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

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

GENERAL AND ADMINISTRATIVE EXPENSE                    1,890,356       1,933,453

RESEARCH AND DEVELOPMENT EXPENSE                        320,953         428,057
                                                   ------------    ------------

TOTAL EXPENSE                                         2,211,309       2,361,510
                                                   ------------    ------------

LOSS FROM OPERATIONS                                 (2,211,309)     (2,361,510)

OTHER EXPENSE
  Interest expense, net of interest income
   of $12,831 in 2006 and $3,679 in 2005                (12,641)            (13)
                                                   ------------    ------------

LOSS BEFORE INCOME TAX BENEFIT                       (2,198,668)     (2,361,497)

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

NET LOSS                                           $ (2,198,668)   $ (2,361,497)
                                                   ============    ============


BASIC AND DILUTED NET LOSS PER
  COMMON SHARE                                     $     (0.037)   $     (0.045)
                                                   ============    ============

BASIC AND DILUTED WEIGHTED AVERAGE
  NUMBER OF SHARES OUTSTANDING                       58,865,855      52,456,872
                                                   ============    ============

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

                                      -3-
<PAGE>
<TABLE>
<CAPTION>

                                   MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                                      YEARS ENDED FEBRUARY 28, 2006 AND 2005

                                            Preferred Stock             Common Stock
                                         ----------------------   ------------------------   Additional    Common
                                           Number                    Number                   Paid-in       Stock      Accumulated
                                         of Shares     Amount      of Shares     Amount       Capital     Subscribed     Deficit
                                         ---------   ----------   -----------  -----------  -----------   ----------   -----------
<S>                                            <C>  <C>           <C>         <C>          <C>           <C>          <C>
BALANCE AT FEBRUARY 29, 2004                    60   $        1    39,372,753  $   393,727  $20,076,019   $       --   $(22,391,074)

Conversion of preferred stock                  (60)          (1)    6,000,000       60,000      (59,999)          --            --
Issuance of stock -
  exercise of warrants                          --           --       150,000        1,500       (1,500)          --            --
Issuance of stock -
  future consulting services                    --           --     1,925,000       19,250    1,232,000           --            --
Issuance of stock -
  anti-dilution rights                          --           --     4,160,901       41,610      (41,610)          --            --
Issuance of stock -
  debt conversion                               --           --     1,460,000       14,600      229,470           --            --
Issuance of stock -
  past and future consulting services           --           --       200,000        2,000      116,000           --            --
Issuance of stock -
  secretarial and consulting services           --           --       155,556        1,556       90,222           --            --
Issuance of stock -
  collaborative research agreement              --           --     1,000,000       10,000      744,100           --            --
Issuance of stock - cash                        --           --     1,000,000       10,000      490,000           --            --
Issuance of stock in cancellation
  of promissory notes                           --           --       700,000        7,000      343,000           --            --
Cash received for common stock
  subscribed                                    --           --            --           --           --      250,000            --
Net loss for the year ended
  February 28, 2005                             --           --            --           --           --           --    (2,361,497)
                                         ---------   ----------   -----------  -----------  -----------   ----------   -----------

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

Issuance of stock previously subscribed         --           --       500,000        5,000      245,000     (250,000)           --
Issuance of stock -
  future consulting services                    --           --     1,366,000       13,660      618,380           --            --
Issuance of stock -
  anti-dilution rights                          --           --       715,449        7,155       (7,155)          --            --
Issuance of stock in cancellation
  of accrued expenses                           --           --        74,834          748       16,419           --            --
Issuance of stock - services                    --           --        23,400          234        4,446           --            --
Issuance of stock - cash                        --           --       750,000        7,500      367,500           --            --
Net loss for the year ended
   February 28, 2006                            --           --            --           --           --           --    (2,198,668)
                                         ---------   ----------   -----------  -----------  -----------   ----------   -----------

BALANCE AT FEBRUARY 28, 2006                    --   $       --    59,553,893  $   595,540  $24,462,292   $       --   $(26,951,239)
                                         =========   ==========   ===========  ===========  ===========   ==========   ===========
</TABLE>

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

                                      -4-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED FEBRUARY 28, 2006 AND 2005

                                                          2006         2005
                                                      -----------   -----------

CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                            $(2,198,668)  $(2,361,497)
  Adjustments to reconcile net loss
    to net cash used in operating activities
        Depreciation                                          600           255
        Amortization                                      971,192       671,200
               Common stock issued for other services       4,680        32,778
        Debt conversion inducement expense                     --        58,555
        (Increase) decrease in assets
         Prepaid expenses                                    (183)         (460)
        Increase (decrease) in liabilities
          Accounts payable                                (64,300)       73,999
          Accrued liabilities                             147,714       (46,989)
                                                      -----------   -----------

  Net cash used in operating activities                (1,138,965)   (1,572,159)
                                                      -----------   -----------

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

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of debt                               --       350,000
  Repayments of officer and other loans                   (31,542)           --
  Issuance of common stock for cash                       375,000       500,000
  Cash received for common stock subscribed                    --       250,000
                                                      -----------   -----------

  Net cash provided by financing activities               343,458     1,100,000
                                                      -----------   -----------

NET DECREASE IN CASH                                     (797,577)     (472,159)

CASH - BEGINNING OF YEAR                                  934,212     1,406,371
                                                      -----------   -----------

CASH - END OF YEAR                                    $   136,635   $   934,212
                                                      ===========   ===========

SUPPLEMENTAL SCHEDULE OF NON-CASH
 FINANCING ACTIVITIES:

    Common stock issued for deferred charges          $   632,040   $ 2,215,128
                                                      ===========   ===========

    Common stock issued for cancellation of debt      $    17,167   $        --
                                                      ===========   ===========

    Common stock issued - anti-dilutive rights        $     7,155   $    41,610
                                                      ===========   ===========

    Noncash compensation - stock options              $        --   $        --
                                                      ===========   ===========


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

                                      -5-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005




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

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

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

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

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

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

Equipment
---------
Equipment is stated at cost. Depreciation is computed using the straight-line
method over an estimated useful life of five years. Depreciation expense was
$600 and $255 in 2006 and 2005, respectively.

                                      -6-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005


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

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.
Under the liability method, 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 $320,953 and $428,057 in 2006 and 2005,
respectively.

Loss per Common Share
---------------------
In accordance with SFAS No. 128, "Earnings Per Share," basic and diluted net
loss per share is computed using net loss divided by the weighted average number
of shares of common stock outstanding for the period presented. Because the
Company reported a net loss for each of the years ended February 28, 2006 and
2005, common stock equivalents consisting of options and warrants were
anti-dilutive; therefore, the basic and diluted net loss per share for each of
these periods were the same.

Accounting for Stock-Based Compensation
---------------------------------------
The Company currently accounts for stock-based compensation in accordance with
SFAS No. 123, "Accounting for Stock-Based Compensation," which for employee
stock options permits the use of intrinsic value method described in APB Opinion
No. 25, Accounting for Stock Issued to Employees, and requires the Company to
disclose the pro forma effects for accounting for stock based compensation using
the fair value method as described in the optional accounting requirements of
SFAS No. 123. As permitted by SFAS No. 123, the Company accounts for stock-based
compensation under APB Opinion No. 25, under which the Company has recognized no
compensation expense for employee granted options.

Had compensation cost for the fiscal 2006 Company's stock option plan been
determined on the fair value of the Company's common stock at the dates of
awards under the fair value method of SFAS No. 123, the Company's 2006 net loss
and net loss per common share would have been increased to the pro forma amounts
indicated below. In 2006, the fair value amounts were estimated using the
Black-Scholes options pricing model with the following assumptions: no dividend
yield, expected volatility ranging between 1.060% and 1.5625%, risk-free
interest rate of 3% and expected option life ranging between two and five years.
There were no employee stock options issued during fiscal 2005.

                                                            2006
                                                        ----------

    Net loss:
    As reported                                         $2,198,668
    Pro forma                                           $2,210,668

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

                                      -7-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

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

In December 2004, the FASB issued SFAS No. 123 (revised 2004) (SFAS No. 123R),
Share-Based Payment, which addresses the accounting for share-based payment
transactions in which an enterprise receives employee services in exchange for
(a) equity instruments of the enterprise or (b) liabilities that are based on
the fair value of the enterprise's equity instruments or that may be settled by
the issuance of such equity instruments. SFAS No. 123R eliminates the ability to
account for share-based compensation transactions using the intrinsic value
method under APB Opinion No. 25, and requires instead that such transactions be
accounted for using a fair-value-based method. In January 2005, the SEC issued
SAB No. 107, which provides supplemental implementation guidance for SFAS No.
123R. SFAS No. 123R will be effective for the Company beginning in the first
quarter of its fiscal 2007. The Company's assessment of the estimated
stock-based compensation expense is affected by the Company's stock price as
well as assumptions regarding a number of complex variables and the related tax
impact. These variables include, but are not limited to, the Company's stock
price, volatility, and employee stock option exercise behaviors and the related
tax impact. The Company will recognize stock-based compensation expense on all
awards on a straight-line basis over the requisite service period using the
modified prospective method. Although the adoption of SFAS No. 123R is not
expected to have a material effect on the Company's results of operations,
future changes to various assumptions used to determine the fair value of awards
issued or the amount and type of equity awards granted create uncertainty as to
whether future stock-based compensation expense will be similar to the
historical SFAS No. 123 pro forma expense.

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


NOTE 2 - RELATED PARTY TRANSACTIONS

At times, Mr. Peter Katevatis, Chief Executive Officer and Chairman, advances
funds to the Company to provide funding to pay operational expenses as they
became due. These advances do not accrue interest. At February 28, 2006 and
2005, officer loans payable to Mr. Katevatis were $-0- and $31,542,
respectively.

Legal services rendered by Mr. Peter Katevatis amounted to $50,000 for each of
the two years ended February 28, 2006 and 2005. These amounts are recorded in
general and administrative expense.

As part of Mr. Katevatis' employment agreement, the Company pays property taxes
and certain operating expenses on the home of Mr. Katevatis in lieu of rent,
since the Company's operations are located in Mr. Katevatis' home. Expenses
recognized were $21,378 and $17,306 in 2006 and 2005, respectively, and are
recorded in general and administrative expense.

During fiscal 2004, the Company entered into an agreement with THM Group, LLC
("THM") to be the exclusive advisor to explore options for the Company to
commercialize its technology. Mr. Michael Engelhart, President and Chief
Operating Officer, is the President and Chief Executive Officer of THM. During
fiscal 2004, the Company incurred $9,000 for services of THM. On April 9, 2004,
THM terminated its agreement with the Company.

See Note 7 for details regarding the Company's consulting agreement with one of
its principal stockholders and Notes 4 and 5 for related party loans and accrued
liabilities.

                                      -8-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE 3 - DEFERRED CHARGES

In fiscal 2006 and 2005, the Company issued 1,366,000 and 3,225,000 fully vested
restricted shares of its common stock at fair market value to four and six
different consulting groups in exchange for a variety of services to be
rendered, over a period of 6 - 24 and 12 - 60 months, respectively, for matters
such as corporate management, marketing opportunities, product development and
research, corporate funding, investor relations and FDA clinical trials. These
costs have been capitalized and will be recognized ratably over the terms of the
agreements. Expected future amortization of deferred charges are as follows:

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

                 February 28, 2007                      $  445,021
                 February 29, 2008                         418,294
                 February 28, 2009                         150,820
                 February 28, 2010                         100,547
                                                        -----------

                                                        $1,114,682
                                                        ===========

NOTE 4 - OFFICER AND OTHER LOANS

In fiscal 2000, the Company entered into two interest-bearing convertible notes
with the Olive Cox Sleeper Trust (the "Trust") totaling $30,000. Both notes bore
interest at the rate of 8.25% per annum and were convertible into common stock
on the basis of $.25 per share. The conversion option was unlimited in duration.
Both notes were demand instruments and the holder could demand and receive
payment in full including interest. On March 8, 2004, the notes plus accrued
interest were converted into common stock of the Company (Note 8).

On June 20, 2002, the Company entered into a $120,045 promissory note with the
Trust with interest at 12% per annum. The note was amended on June 13, 2003 to
extend the maturity date to March 31, 2004 from February 20, 2004. The principal
amount of the note plus accrued interest was due and payable on the maturity
date. There was a conversion feature that allowed the Trust to convert the
principal and accrued interest on the note to common stock of the Company at the
rate of one share for each $.12 of principal and accrued interest at date of
conversion. On March 8, 2004, the note plus accrued interest was converted into
common stock of the Company. The conversion resulted in an inducement expense of
$58,555 for the year ended February 28, 2005.

NOTE 5 - ACCRUED LIABILITIES

Accrued liabilities consist of the following:

                                                2006         2005
                                             ----------   ----------

            Legal and professional fees      $  203,382   $  257,924
            Consulting and university fees    1,276,414    1,220,415
            Salaries and wages                1,542,667    1,412,333
            Other                               100,995      102,239
                                             ----------   ----------

                                             $3,123,458   $2,992,911
                                             ==========   ==========

                                      -9-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005


NOTE 5 - ACCRUED LIABILITIES (Continued)

Accrued legal and professional fees include services rendered by Mr. Peter
Katevatis. The amount of the accrual was $55,958 and $57,500 as of February 28,
2006 and 2005, respectively (Note 2).

Accrued consulting and university fees include costs owed to Dr. Robert R.
Alfano, a principal stockholder and chairman of the Company's Scientific
Advisory Board (Note 7), with respect to his consulting agreement of $1,232,818
and $1,170,818 as of February 28, 2006 and 2005, respectively.

Accrued salaries and wages include amounts due to Mr. Katevatis of $1,489,667
and $1,406,333 as of February 28, 2006 and 2005, respectively, and $42,500 and
$2,500 to Mr. Engelhart as of February 28, 2006 and 2005, respectively and
$10,500 to Mr. Frank D. Benick, Chief Financial Officer, as of February 28,
2006.

NOTE 6 - INCOME TAXES

There is no income tax benefit for operating losses for the years ended February
28, 2006 and 2005 due to the following:

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

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

The components of the net deferred income tax asset and liability as of February
28, 2006 and 2005 are as follows:

                                               2006           2005
                                           -----------    -----------

         Defered income tax asset:
         Net operating loss carryforward   $ 5,933,439    $ 5,200,870
         Valuation allowance                (5,933,439)    (5,200,870)
                                           -----------    -----------
         Deferred income tax liability              --             --
                                           -----------    -----------

                                           $        --    $        --
                                           ===========    ===========

                                      -10-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE 6 - INCOME TAXES (Continued)

As of February 28, 2006 and 2005, the Company has valuation allowances of
$5,933,439 and $5,200,870, respectively, which relates to federal and state net
operating loss carryforwards. The Company evaluates a variety of factors in
determining the amount of the valuation allowance, including the Company's
earnings history, the number of years the Company's operating losses can be
carried forward, the existence of taxable temporary differences, and near-term
earnings expectations. Future reversal of the valuation allowance will be
recognized either when the benefit is realized or when it has been determined
that it is more likely than not that the benefit will be realized through future
earnings. As of February 28, 2006 and 2005, the Company has net operating loss
carryforwards of approximately $16,391,000 and $14,620,000, respectively for
federal purposes and $6,069,000 and $3,871,000, respectively, for state
purposes, which may be used to reduce future income subject to income taxes.

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

                                 Federal             State               Total
                               -----------        -----------        -----------

2007                           $   307,000        $        --        $   307,000
2008                               370,000                 --            370,000
2009                               854,000                 --            854,000
2010                               615,000            129,000            744,000
2011                             1,136,000            315,000          1,451,000
2012                             1,556,000            216,000          1,772,000
2013                             2,636,000            850,000          3,486,000
2014                             1,128,000          2,361,000          3,489,000
2015                                    --          2,198,000          2,198,000
2019 (*)                           808,000                 --            808,000
2020 (*)                           943,000                 --            943,000
2021 (*)                           298,000                 --            298,000
2022 (*)                           316,000                 --            316,000
2023 (*)                           182,000                 --            182,000
2024 (*)                           786,000                 --            786,000
2025 (*)                         2,284,000                 --          2,284,000
2026 (*)                         2,172,000                 --          2,172,000
                               -----------        -----------        -----------

     Total                     $16,391,000        $ 6,069,000        $22,460,000
                               ===========        ===========        ===========

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


                                      -11-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE 7- COMMITMENTS AND CONTINGENCIES

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

In connection with the acquisition of patent rights to its cancer detection
technology, the Company assumed an obligation to pay to Dr. Alfano's daughter a
royalty of one percent of the gross sales derived from any equipment made,
leased or sold which utilizes the concepts described in the Company's cancer
detection patent. Since there has been no activity, no amounts have been paid
during the two years ended February 28, 2006.

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, 2006.

Employment Agreements
---------------------
Mr. Peter Katevatis, the Chief Executive Officer, Chairman and a stockholder of
the Company, has an employment agreement. The agreement states that Mr.
Katevatis is to be paid $200,000 per year. The agreement also provides for a
bonus and fringe benefits in accordance with policies and formulas mutually
agreed upon by Mr. Katevatis and the Board of Directors. The contract expires
March 5, 2007.

On April 23, 2003, the Company entered into a three-year employment agreement
with Mr. Michael Engelhart. Pursuant to the terms of the agreement, Mr.
Engelhart became the President and Chief Operating Officer of the Company and is
to be paid $120,000 per annum (Note 2).

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 receive an option
to purchase 300,000 shares of common stock at $1.00 per share (see Note 1 for
pro forma disclosure).

                                      -12-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005


NOTE 8 - STOCKHOLDERS' DEFICIT

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

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

Private Placements
------------------
      Common Stock
      ------------
      During fiscal 2005, the Company issued 1,000,000 shares of common stock at
      a price of $.50 per share for $500,000.

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

      Preferred Stock
      ---------------
      On February 1, 2004, the Company completed a $1.5 million private
      placement of convertible preferred shares to accredited investors, issuing
      60 shares of convertible preferred stock at $25,000 per share. The
      convertible preferred shares maybe converted into 100,000 shares of common
      stock at the sole discretion of the Company subsequent to February 17,
      2004. The securities were sold pursuant to an exemption under the
      Securities Act of 1933. The Company had agreed to file a registration
      statement within six months or sooner after February 17, 2004 covering the
      resale by the investors of the shares purchased. Such shares were
      converted into common stock of the Company in March 2004. The registration
      statement was filed in December 2004. There were no ramifications from the
      late filing.

Common Stock Issued for Services
--------------------------------
During August 2004, the Company issued 55,556 shares of its common stock at a
value of $32,878 for secretarial services provided to the Company. The
transaction was recognized based on the fair value of shares issued. This
non-cash expense was recorded as general and administrative expense in the
consolidated statement of operations.

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

                                      -13-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE 8 - STOCKHOLDERS' DEFICIT (Continued)

Stock Issued for Future Services
--------------------------------
During March and April 2004, the Company issued 1,925,000 restricted shares of
its common stock at a fair market value of $.65 per share to three consulting
groups in exchange for consulting services to be rendered over a 12 - 48 month
period.

During August 2004, the Company issued 300,000 restricted shares of its common
stock at a fair market value of $.59 per share to two consulting groups in
exchange for past services and services to be rendered over approximately a two
year period.

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

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

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

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

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

Common Stock Issued for Collaborative Research and Development Agreement
------------------------------------------------------------------------
On November 9, 2004, the Company, through its subsidiary MEDI, entered into a
collaborative research and development agreement with Infotonics Technology
Center Inc., a not-for-profit corporation, a consortium of founding
participants: Corning, Inc., Eastman Kodak Company and Xerox Corporation.
Infotonics and the Company will collaborate with one another in the conduct of a
research program involving the development of commercially viable miniature
devices for the Company that will make use of ultraviolet light to diagnose the
health of living tissue remotely monitoring the health/status of various medical
environments, e.g., the detection of various types of cancer and the monitoring
of body functions. Other markets from the research program would include
commercially viable miniature devices for sensing of biological and chemical
species like bacteria and pollutants. The period of research under this
agreement will terminate upon completion of the research, currently estimated to
be five years. The Agreement has certain rights including but not limited to
ownership, future development services, first right and right of first refusal
for manufacturing and indemnification.

As consideration for Infotonics to carry out the research, the Company issued to
Infotonics 1,000,000 shares of its common stock, having a fair market value of
$754,100, as determined by the actual average closing value per share for the
thirty day period (22 business days) three days prior to signing the agreement.
In addition, the Company granted a warrant exercisable at $3.00 per share for
1,000,000 shares of common stock, and will pay fees for specific research
services to be determined by Infotonics based upon detailed Statements of Work,
to be agreed upon as the research progresses.

                                      -14-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005


NOTE 8 - STOCKHOLDERS' DEFICIT (Continued)

2003 Consultants Stock Plan
---------------------------
The Board of Directors previously adopted, subject to stockholder approval, a
2003 Consultants Stock Plan ("Consultants Plan"). The Consultants Plan was
subsequently approved by the stockholders on February 17, 2004. The aggregate
number of shares that may be issued under the options shall not exceed 7
million. No options were issued prior to stockholder approval and no options
were outstanding under this plan as of February 28, 2006 and 2005.

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

In April 2003, Mr. Engelhart was granted options to purchase up to 2,000,000
shares of the Company's common stock at an option price of $.25 per share for
the first 200,000 shares and at an option price of $1.00 per share for the
remaining 1,800,000 shares. Mr. Engelhart's ability to exercise the 1,800,000
options is subject to a series of milestones described in his employment
agreement. Non-cash compensation expense related to the grant of 200,000 options
amounted to $70,000 in 2004. On April 23, 2006, Mr. Engelhart's employment
contract expired and he forfeited all of the stock options.

During August 2004, Allan Moses was granted an option to purchase up to 100,000
shares of the Company's restricted common stock at a price of $2.00 per share.
The option shall be exercisable from August 8, 2004 to August 8, 2006.

During August 2004, John Matheu, a Director of the Company, was granted options
to purchase up to 300,000 shares of the Company's restricted common stock at an
option price of $1.50 per share. Mr. Matheu's ability to exercise these options
is subject to a series of milestones described in his consulting agreement.

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

Activity related to stock options during the two years ended February 28, 2006
is as follows:

                                                                    Weighted
                                                    Exercise         Average
                                                     Price          Exercice
                                     Shares          Range           Price
                                 -------------   -------------   --------------

Outstanding, February 29, 2004       2,000,000    $.25 - $1.00   $        0.93
Granted                                400,000   $1.50 - $2.00   $        1.63
                                 -------------

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

Outstanding, February 28, 2006       2,700,000    $.25 - $2.00   $        1.04
                                 =============

                                      -15-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005


NOTE 8 - STOCKHOLDERS' DEFICIT (Continued)

During November 2005, Frank D. Benick, Chief Financial Officer of the Company,
was granted options to purchase up to 300,000 shares of the Company's restricted
common stock at an option price of $1.00 per share. This option shall be
exercisable from November 15, 2005 to November 15, 2010.

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

Stock Warrants
--------------
Stock warrant activity during the two year period ended February 28, 2006 was as
follows:

                                                                    Exercise
                                                   Shares             Price
                                                 Available            Range
                                               --------------   ----------------

     Outstanding, February 29, 2004                   800,000     $.25 - $1.00
     Granted                                        2,700,000    $1.00 - $3.00
     Exercised                                       (150,000)        $.25
     Forfeited                                             --
                                               --------------

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

     Outstanding, February 28, 2006                 4,600,000     $.25 - $3.00
                                               ==============

As of February 28, 2005, an additional $250,000 in private placement proceeds
had been received for common stock not yet issued. Once issued, stock warrants
were granted for 500,000 shares at $1.00.

In connection with the Company's agreement with RFCUNY, the Company granted a
warrant to RFCUNY to purchase 600,000 shares of the Company's common stock at a
price of $1.00 per share. The warrant expires on June 10, 2007.

In 2003, the Company issued 400,000 shares of common stock at a value of $76,000
and issued warrants to purchase 200,000 shares of the Company's common stock at
an exercise price of $.25 per share for financial advisory services. The
warrants expire in fiscal 2007.

During November 2004, the Company issued 1,000,000 shares of common stock at a
value of $754,100 and issued a warrant to purchase 1,000,000 shares of the
Company's common stock at an exercise price of $3.00 per share to Infotonics,
Inc. The warrants expire in November 2010.

In connection with its private placement offering during 2005, the Company
granted warrants to purchase 1,700,000 shares of common stock at $1.00 per
share. The warrants expire in August 2007.

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

                                      -16-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE 8 - STOCKHOLDERS' DEFICIT (Continued)

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

During March 2004, the Company issued 50,000 shares of its common stock to
Laurence Elgart to satisfy his exercise of the warrant in February 2004 for
$12,500.

During March 2004, the Company issued 100,000 shares of its common stock to
William Baker to satisfy his exercise of the warrant in February 2004 for
$25,000.

Anti-Dilution Rights
--------------------
The Company and Mr. Peter Katevatis have an anti-dilution rights agreement which
provides that Mr. Katevatis' ownership interest would at all times represent 17%
of the issued and outstanding shares of the Company. The anti-dilution rights
are exercisable at Mr. Katevatis' sole discretion. During the years ended
February 28, 2006 and 2005, Mr. Katevatis exercised his right and requested the
Company issue 579,173 and 3,533,599 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.

The Company and Dr. Robert Alfano have an anti-dilution rights agreement which
provides that Dr. Alfano's ownership interest would at all times represent 4% of
the issued and outstanding shares of the Company. The anti-dilution rights are
exercisable at Dr. Alfano's sole discretion. During the years ended February 28,
2006 and 2005, Dr. Alfano exercised his right and requested the Company issue
136,276 and 627,302 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.

Debt Conversion
---------------
On March 8, 2004, the Trust converted $185,515 of promissory notes and related
interest into 1,460,000 shares of the Company's common stock. (Note 4)

On January 23, 2005, the Trust converted $200,000 of promissory notes and
related interest into 400,000 shares of the Company's common stock.

On January 23, 2005, Linda L. Lawn converted $50,000 of promissory notes and
related interest into 100,000 shares of the Company's common stock.

On January 23, 2005, William Baker converted $50,000 of promissory notes and
related interest into 200,000 shares of the Company's common stock.

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

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

                                      -17-
<PAGE>

                          MEDISCIENCE TECHNOLOGY CORP.
                                AND SUBSIDIARIES
                                   ----------
                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                      FEBRUARY 28, 2006, FEBRUARY 28, 2005
                              AND FEBRUARY 29, 2004
                                        &
                        REPORT OF INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM

ITEM 8 Changes in and disagreements with accountants on accounting and Financial
Disclosure

Morison Cogen LLP (formerly, Cogen Sklar LLP) Auditor's report on registrant's
financial statements for each of the fiscal years ended February 28, 2006 and
2005 (collectively, the Prior Fiscal Periods) did not contain an adverse opinion
or disclaimer of opinion, nor were such reports qualified or modified as to
uncertainty, audit scope, or accounting principles, except that the Auditor's
report on the Registrant's financial statements for the fiscal years ended
February 28, 2006 and February 28, 2005 contains an explanatory paragraph
indicating that there was substantial doubt as to the registrant's ability to
continue as a going concern and in all respects agreeing with the Former Auditor
Parente Randolph LLC report on the registrant's financial statements for the
fiscal year ended February 29, 2004.

See 8-K report dated February 26, 2005 referenced herein Parente Randolph LLC
Our Former Independent Auditor Firm resigned effective February 28, 2005 Item
4.01 Changes in Registrant's Certifying Accountant.) The resignation of the
Former Auditor was accepted by the Registrant's Audit Committee on February 26,
2005. The Former Auditor's report on Registrant's financial statements for each
of the fiscal years ended February 29 , 2004 and 2003 (collectively, the Prior
Fiscal Periods) did not contain an adverse opinion or disclaimer of opinion, nor
were such reports qualified or modified as to uncertainty, audit scope, or
accounting principles, except that the Former Auditor's report on the
Registrant's financial statements for the fiscal year ended February 28, 2004
contained an explanatory paragraph indicating that there was substantial doubt
as to the Registrant's ability to continue as a going concern. During either of
the Prior Fiscal Periods or the period from January 12, 2005 effective date of
SEC registration SB-2 filing through date of resignation Feb 26, 2005 by Parente
Randoph (the


                                       32
<PAGE>

Interim Period), there were no disagreements between the Registrant and the
Former Auditor on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure (the Disagreements), which
Disagreements, if not resolved to the satisfaction of the Former Auditor, would
have caused the Former Auditor to make reference to the subject matter of the
Disagreements in connection with its report on the Registrant's financial
statements.
ITEM 8A. CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures

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

(b)  Change in Internal Control over Financial Reporting

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

        Mediscience Technology Corp. structures and governance procedures

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

All Board Committees

Corporate Governance Guidelines

Code of Ethics

EDGAR Filings

Governance and policy

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

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

Board/Committees/ Corporate Governance
--------------------------------------

Registrant within the provisions of Sarbanes-Oxley Act is a Non-Accelerated SEC
filer. As such, for fiscal years beginning on or after December 16, 2006
registrant must comply with S404 of the Sarbanes-Oxley Act of 2002. Management
is required to report on the Group's internal controls over financial reporting.
Work has

                                       33
<PAGE>

been carried out during 2004 and 2005 in preparation for reporting in accordance
with the Act and will continue to be progressed during the year e.g. retention
of CFO Frank Benick CPA

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

Corporate Governance policies and procedures applied
----------------------------------------------------

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

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

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

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

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

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

                                       34
<PAGE>

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

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

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

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

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


                                 Audit Committee

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

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

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

The principal activities of the Audit Committee during the year ended February
28, 2006 include consideration of the reports on the quarterly reports, interim
and annual accounts; Consideration of the proposed changes to US GAAP brought to
the attention of the committee by auditors and CFO Frank Benick; The Audit
Committee has responsibility for: Monitoring the integrity of the Company's
accounts, ensuring that they meet statutory and associated legal and regulatory
requirements and reviewing significant financial reporting judgments contained;
Monitoring announcements relating to the Company's financial performance;
Monitoring and reviewing the effectiveness of the Company's internal audit
function quarterly (10-Q) and annually (10-K); Making recommendations to the
Board, regarding the appointment, re-appointment and removal of the external
auditors, as appropriate; Approving the remuneration and terms of engagement of
the external auditors; Monitoring and reviewing the external auditors'
independence and the effectiveness of the audit process; developing policy for
and pre-approval of the external auditors to supply non-audit services;
Monitoring the effectiveness of internal financial controls; Reviewing the
operation of the risk management process; and Reviewing arrangements by which
staff may raise complaints against the Company regarding financial reporting or
other matters.

                                       35
<PAGE>

                          Code of Business Principles:

The Board of Directors has adopted a Code of Ethics for all officers and
directors which is available here and at MEDISCIENCETECH.com and is available on
request. It applies to all Executive, Officers and Directors. There have been no
waivers to any of the Code provisions nor any amendments made to the Code during
2005 or up to February 28, 2006 and/or the date of this 10-KSB 2006 SEC EDGAR
filing.

These systems, including but not limited to a review of registrants approach to
internal financial control, its processes, outcomes and disclosures; review of
the reports from the auditors past and present on their professional and
regulatory compliance in order to maintain independence and objectivity,
including the possible rotation of partners; all which accord with within the
provisions OF Sarbanes-Oxley Act"code" applicable to registrant as a
Non-Accelerated SEC filer have been in place for Fiscal year ending Feb 28, 2006
and 2005 involving the identification, evaluation and management of key risks
through business reviews by the Board; and the review by the Audit Committee of
internal financial controls and the management process. These systems are to be
reviewed annually by the Board.

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

The Chairman/CEO and Chief Financial Officer Frank Benick have evaluated the
effectiveness of the design and operation of registrants disclosure controls and
procedures as at February 28, 2006. Based upon, and as of the date of, that
evaluation, they concluded that the disclosure controls and procedures were
effective, in all material respects, to ensure that information required to be
disclosed in the SEC reports that MTC files and submits is recorded, processed,
summarized and reported as and when required. Management will continue to refine
the governance issues for compliance effectiveness in year 2006.


              Corporate Governance and Management's Responsibility


We, Peter Katevatis Chairman/CEO, John Kennedy Chairman Audit Committee, and
Frank Benick CPA Chief Financial Officer, the Sarbanes compliant management of
Mediscience Technology Corp., are responsible for the integrity and objectivity
of the accompanying financial statements and related information. We are also
responsible for ensuring that financial data is reported accurately and in a
manner that facilitates the understanding of this data. We maintain a
well-designed periodically reviewed system of internal accounting controls,
encourage open, strong and effective corporate governance from our employees,
consultants, executives. The Directors, continuously review business results and
strategic choices and focus on financial stewardship. Our accountants and CFO
monitor and critique our system of internal accounting controls designed to
provide reasonable assurance material assets are safeguarded and that
transactions and events are recorded properly. Our internal controls include
self-assessments and reviews. During 2004 the Company invested significant time
and cash resources (audit and legal review) addressing our internal control
system, and our compliance obligations as a non-accelerated SEC filer (see SEC
filed SB-2 130 pg. registration document effective Jan 12, 2005) in order to
ensure compliance with Section 404 of the Sarbanes-Oxley Act of 2002. We have
concluded that our internal control over financial reporting was effective as of
January 12, 2005 and continues so effective as of February 28, 2006. We have a
systematic certification program and a yearly sworn D&O questionnaire required
of all directors to ensure compliance with these policies at all employee
levels. Our Audit Committee of the Board of Directors is composed of (2)
independent directors with the financial knowledge and experience to provide
appropriate oversight. We review internal control matters and key accounting and
financial reporting issues with the Audit Committee on a regular basis including
a quarterly 10-Q review and discussion meeting. In addition, the independent
auditors, CFO and retained counsel may meet in private sessions with our Audit
Committee to discuss the results of their work including observations on the
adequacy of internal financial controls, the quality of financial reporting and
confirmation that they are properly discharging their responsibilities and other
relevant matters. Our Intent is to ensure that we maintain objectivity in our
business assessments, constructively challenge the approach to business
opportunities and issues and monitor our business results and the related
controls. Our consolidated financial statements and financial data that follow
have been prepared in conformity with accounting principles generally accepted
in the United States of America and include amounts that are based upon our best

                                       36
<PAGE>

judgments. We are committed to present and discuss results of operations in a
clear and transparent manner in order to provide timely, accurate and
understandable information to our shareholders,


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


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


/s/  Frank Benick, Chief Financial Officer


/s/  John Kennedy, Chairman Audit committee

                                    PART 111

ITEM 9 Directors, Executive Officers, Promoters and Control Persons

              Our directors and executive officers are as follows:

      Name                        Age        Position
      ----                        ---        --------

Frank D. Benick, CPA, CVA          57        Chief financial Officer

Peter Katevatis Esq.               72        Chairman of the Board, Treasurer
                                             Chief Executive Officer
John M. Kennedy                    68        Director, Vice President, Secretary

William Armstrong                  89        Director

Michael Engelhart                  43        Director,
                                             President, Chief Operating Officer*

Michael N. Kouvatas                78        Director

John P. Matheu                     83        Director *

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

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

Peter Katevatis has served as Chairman of the Board of Directors and Chief
Executive Officer since 1993 and as a director since 1981. As of April 24, 2006
he has also assumed the role of interim President. Prior thereto from November
1983 until March 1996 Katevatis served as our President and Chief Executive
Officer and from 1981 until his election as President and Chief Executive
Officer in November 1983, Mr. Katevatis served as a Vice President. Mr.
Katevatis was elected Treasurer of the Company in January 1996. Mr. Katevatis
has been a practicing attorney in Philadelphia, Pennsylvania and Marlton, New
Jersey, and is also licensed as an attorney in the State of New York and in the
District of Columbia. Mr. Katevatis was a trustee of the New Jersey State's

                                       37
<PAGE>

Police and Fireman Retirement Pension Fund from 1989 to 1996 and served as a
member of the State of New Jersey Investment Council from 1990 to December 1992.
Mr. Katevatis is a member of the American Arbitration Association, serves as an
arbitrator with the National Association of Security Dealers and is a member of
the National District Attorney's Association and the New York Academy of
Science.

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

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

Michael Engelhart has served as our President and Chief Operating Officer and as
a director since April 2003 (employment as President COO agreement April 23,
2003 to April 23, 2006 completed by its terms as of April 23, 2006). Mr.
Engelhart remains as a director.

John P. Matheu served as a director July 1996 to May 2, 2006 (see 8-K filed May
8, 2006) and as a member of the audit committee from 2000 to April 6, 2005

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

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

         Board Committees: see MEDISCIENCETECH.com for full descriptions

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

<TABLE>
<CAPTION>
                                                                                                                 Committee on
                            Committee on                                                                        Public Policy
                        Corporate Governance   Compensation and                                                   and Social
        Audit                                      Benefits             Executive              Finance          Responsibility
<S>                    <C>                   <C>                  <C>                   <C>                   <C>
John Kennedy*           John Kennedy*         John Kennedy*        John Kennedy*         John Kennedy*         All directors
Michael Kouvatas        Peter Katevatis       Michael Kouvatas     Michael Kouvatas*     William Armstrong
William Armstrong       William Armstrong     Peter Katevatis*     Peter Katevatis       Michael Kouvatas
 (*) Chairperson
</TABLE>

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

The Committee on Corporate Governance is comprised of three directors two of
which are independent. The Committee assesses the size, structure and
composition of the Board and Board Committees and acts as a

                                       38
<PAGE>

screening and nominating committee for candidates considered for election to the
Board. The Committee, Its Charter is available on the Company's website.
MEDISCIENCETECH.com

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

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

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

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

Board and Board Committee Meetings

Since March 1, 2005 the Board of Directors met 3 times. Sept 8, 2005, March 28,
2006, and May 2, 2006 with all above committee members present. All incumbent
directors attended 90 percent of the meetings of the Board and of the committees
on which they served.

Compensation Committee Interlocks and Insider Participation: NONE

Independence of Directors

The Board of Directors has determined that to be considered independent, an
outside director may not have a direct or indirect material relationship with
the Company. A material relationship is one which impairs or inhibits--or has
the potential to impair or inhibit--a director's exercise of critical and
disinterested judgment on behalf of the Company and its stockholders. In
determining whether a material relationship exists, the Board consults with the
Company's counsel to ensure that the Board's determinations are consistent with
all relevant securities and other laws, recent relevant cases and regulations
regarding the definition of "independent director," "business judgment"
including those set forth in listing standards of the New York Stock Exchange as
in effect from time to time. Consistent with these considerations, the Board
affirmatively has determined that as of February 28, 2006 all directors are
independent except Michael Engelhart, Peter Katevatis and William Armstrong.
(see below)

ITEM 10 Executive Compensation

The following sets forth information for the three most recently completed
fiscal years concerning the compensation of (i) the Chief Executive Officer and
(ii) all other executive officers who earned in excess of $100,000 in salary and
bonus in the fiscal year ended February 28, 2006.

                                       39
<PAGE>

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                                           Long Term Compensation

                                                                                      Securities            All Other
                                                            Annual Compensation      Underlying
                                                                       Salary $      Options (#)        Compensation ($)
<S>                                                          <C>      <C>              <C>                     <C>
              Name and Principal Position                    Year

Peter Katevatis, Chairman, Interim Pres. and Chief           2006     $200,000          --                $67,671 (1)
Executive Officer                                            2005     $200,000          --                $70,055 (1)
                                                             2004     $200,000          --                $60,450 (1)

                                                             2006     $120,000          --                 $9,134 (2)
Michael Engelhart, President and Chief Operating             2005     $120,000          --                 $4,030 (2)
Officer*                                                     2004     $105,500          --                     --
                                                                            --                                 --
</TABLE>

(1)  Includes annual retainer of $50,000 for the provision of legal services,
     automobile expense of $ 5,292 and health insurance of $12,379 for 2006
(1)  Includes annual retainer of $50,000 for the provision of legal services,
     automobile expense of $ 8,612 and health insurance of $12,043 for 2005
(1)  Includes annual retainer of $50,000 for the provision of legal services,
     automobile expense of $774 and insurance of $9,676 for 2004;

(2)  Includes automobile expense of $1,730 and health insurance of $7,404 for
     2006
(2)  Includes automobile expense of $710 and health insurance of $ 3,320 for
     2005 * his employment contract as Pres COO terminated by its terms April
     23, 2006

Employment Agreements

Peter Katevatis, our Chairman of the Board and Chief Executive Officer, has an
employment agreement with us ending March 5, 2007. The Agreement provides that
Mr. Katevatis will be compensated at an annual base salary of $200,000 (with an
annual cost of living increase of no less than 6%) with a discretionary annual
bonus in an amount to be determined in accordance with a formula to be agreed
upon by the Board of Directors and Mr. Katevatis. The agreement may be
terminated by us for cause upon ninety days notice and by Mr. Katevatis for any
reason, and by us without cause, upon sixty days notice. If Mr. Katevatis is
terminated by us without cause, he will be entitled to his base salary for the
balance of the term of the Agreement and 200% of his annual bonus paid for the
most recently ended fiscal year.

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

Change of Control

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

              OPTION GRANTS/Executive Officers IN LAST FISCAL YEAR

The following tables show the number of shares subject to exercisable and
un-exercisable stock options held by our executive officers as of February 28,
2006. The table also reflects the values of such options, which represent the
positive spread between the exercise price of such options and $0.18 which was
the closing price for our common stock on February 28, 2006 as reported by the
OTC Bulletin Board.

                                       40
<PAGE>
<TABLE>
<CAPTION>

                                Number Of
                                Securities         Percent of Total
                            Underlying Options    Options Granted to
          Name                   Granted              Employees          Exercise Price       Expiration Date
  ---------------------   ---------------------  --------------------   ------------------   ------------------
<S>                             <C>                      <C>                  <C>                 <C>
   Michael Engelhart*           1,800,000                100%                 $1.00               4/23/06

    Michael Engelhart            200,000                 100%                 $0.25               4/23/06

</TABLE>

*Mr. Engelhart was granted a three-year option totally expired by its terms
April 23, 2006 to purchase 200,000 shares of Common Stock at $0.25 per share
pursuant to a stock option agreement dated April 23, 2003. He was granted a
three-year option totally expired by its terms April 23, 2006 to purchase an
aggregate of 1,800,000 shares of Common Stock at $1.00 per share which shall
vest as to 600,000 shares when we have raised at least $5,000,000, $10,000,000
and $15,000,000, respectively, based upon our business plan, as to 380,000
shares when we have achieved certain critical milestones described in his
employment agreement, or a combination thereof, pursuant to a stock option
agreement dated April 23, 2003. Engelhart agreement of April 23, 2003
terminating by its terms on April 23, 2006 without the exercise or vesting of
any contract options.

The market price on April 23, 2003, the date of grant of the option was $0.10
per share, which represents the mean between the closing price of our Common
Stock on April 21, 2003 and the opening price on April 24, 2003 as reported on
the OTC Bulletin Board. Our shares did not trade on April 22, 2003 or April 23,
2003.

                     UNEXERCISED OPTIONS AT FISCAL YEAR-END

<TABLE>
<CAPTION>
                                              Number of Shares Underlying         Value of Unexercised In-The-Money
                 Name                       Unexercised Options at Year-End              Options at Year-End
       ---------------------------          -------------------------------       ---------------------------------
                                             Exercisable / Un-exercisable           Exercisable / Un-exercisable
                                            -------------------------------       ---------------------------------

<S>                                               <C>                                      <C>
          Michael Engelhart*                      200,000 / 1,800,000                         $ 0 / $ 0
</TABLE>

 * Engelhart agreement of April 23, 2003 terminating by its terms on April 23,
2006 without the exercise or vesting of any contract options. We do not have any
other form of compensation for officers and directors, including any pension,
retirement, stock bonus or other compensation plan.

                        Scientific/Medical Advisory Board

The Company established a Scientific Advisory Board in January, 1993 under the
chairmanship of Founder Professor Robert R. Alfano to provide critical review
and analysis of its research and product development programs in the area of
photonics (lasers and optics) and to serve as a source of information on new
product ideas, new technologies and current research activities. Its function
served the Company well during the formative stages of its research. Currently,
the Board consisting of Dr. Alfano and one other continuing member, is being
expanded to include increased representation from the medical arts, including
pathology, and will be staffed with medical specialists who are skilled in the
medical fields of primary interest to the Company. We believe that we will be
able to attract accomplished clinicians who will help guide us in clinical study
design aimed at gaining regulatory approval for 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.


The Chairman is Dr. Robert R. Alfano* distinguished Professor of Science and
Engineering and the Director of the IUSL at the City College of CUNY. He is
co-author of a number of patents concerning the Company's photonic technology.
and a *principal stockholder and co-founder of the Company. He is also founder
and President of Alfanix LTD a contract and equity associate of Registrant. He
supervises the research and

                                       41
<PAGE>

development of registrants cancer diagnostic technology and is principal
investigator at CCNY. He presently directs the institute for Ultra fast
Spectroscopy and Lasers and the Photonics Engineering Laboratories at City
College. . In May 1989, Dr. Alfano was elected a Fellow of the Optical Society
of America for his studies of ultra fast phenomena. He received his B.S. and
M.S. degrees in Physics from Farleigh Dickinson University in 1963 and 1964,
respectively. He received his Ph.D in Physics from New York University in 1972.
He directs scientists from CCNY and other institutions, including Memorial Sloan
Kettering Medical Center, New York Hospital-Cornell Medical School, Hackensack
University Medical Center and the Lawrence Livermore National Laboratory working
to set up hospital programs evaluating optical imaging research for diagnosis.
Dr. Alfano holds over 73 patents and has published over 600 papers. Dr. Alfano
is a contracted paid consultant. (See infra)

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

Stephane Lubicz, M.D. Chief Medical Operating Officer FDA
                      ------------------------------

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

I. Pharmaceutical Industry Experience (A) USA consultant to B. & A, Inc. The
Company operates for the coordination and organization of clinical trials in
Mexico (and throughout Latin America). This includes all Phase II, III trials
and post marketing surveillance activities through Phase IV Clinical trials).
(B) Medical director, Clinical Development Oncology Daiichi Pharmaceutical
Corporation, Montvale, NJ (08/2000-011/2002) (I) Phase III: Project Pancreas-
Global (US and Europe: Protocol Global project (Japan, USA + Mexico, EU) (II)
Phase II: completion and initiation of multiple Phase II studies: Solid tumors
and leukemia's, initiations and monitoring of sites and investigators for Phase
II (US, Canada, Mexico)

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

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

Clinical experience: 1969-1971 Rotating Externship, Brussels University
Hospitals, Brussels, Belgium. 1971-1972 Rotating Internship, Brussels University
Hospitals, Brussels, Belgium. 1972-1975 Residency, Obstetrics and Gynecology,
Brussels University Hospital and Affiliated Hospitals, Belgium. 1975-1979.
Residency, Obstetrics and Gynecology. The Jewish Hospital and Medical Center of
Brooklyn, N.Y.1979-1981 Fellow, Gynecology

                                       42
<PAGE>

Oncology, Department of Obstetrics, Gynecology and Reproductive Sciences. Mount
Sinai School of Medicine, New York, N.Y. 1981-1982 Attending Physician,
Department of Obstetrics and Gynecology, Mount Sinai Hospital Medical Center of
Chicago, Chicago, IL. 1981-1982. Assistant Professor, Rush Medical College,
Chicago, IL.1981-1982. Director of Medical Education for Residents and Students,
Rush Medical College, Chicago, IL.1982-1984 Full-time Attending, Department of
Obstetrics, Gynecology, and Reproductive Science, The Mount Sinai Medical
Center, New York, N.Y.1982-1984 Assistant Director, Division of Gynecologic-
Oncology, Department of Obstetrics & Gynecology, and Reproductive Science, The
Mount Sinai Medical Center, New York, N.Y.1982-1991 Instructor, Mount Sinai
School of Medicine, New York, N.Y. 1982-1984 Assistant Attending, Department of
Obstetrics and Gynecology, The City Hospital Center at Elmhurst, N.Y. 1982-1984
Assistant Director, Gynecologic Oncology, Dept of Obstetrics and Gynecology, The
City Hospital Center at Elmhurst, N.Y 1985 to 1994-Pres Attending, The Mount
Sinai Medical Center, New York, N.Y., LaGuardia Hospital, Queens, N.Y., Doctors
Hospital, New York, N.Y. St. Vincent Hospital, New York, Syosset Community
Hospital, L.I. St. Clare's Hospital, N.Y.C. 1995-1996 Director, Division of
Gyn/Oncology St.Vincent's Hospital, N.Y 07/00-11/02Director of Oncology,
Clinical development, Daiichi Pharma. Corp Montvale, New Jersey (Japan, Canada,
Mexico and Europe)

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

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

Ronald Tygar

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

Jeremy Rosen DDS

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

 Item 11 Security Ownership of Certain Beneficial Owners and Management

                             PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding beneficial
ownership of our Common Stock as of May 20, 2006 by (i) each person known by us
to own beneficially more than 5% of our outstanding Common Stock, (ii) each of
our directors and executive officers, and (iii) all directors and executive
officers as a group. Except as otherwise indicated, each of the stockholders
named below has sole voting and investment power with respect to such shares of
Common Stock:

<TABLE>
<CAPTION>

            Name and Address of                        Number of Shares             Percentage Beneficially
              Beneficial Owner                    Beneficially Owned 5-20-06                 Owned
--------------------------------------------     ---------------------------        -----------------------
<S>                                                     <C>                                        <C>
William W. Armstrong
P.O. Box 607
Tupper Lake, NY 12986                                     385,000 (1)                               .6%

                                       43
<PAGE>

Michael Engelhart*
161 North Franklin Turnpike Ramsey, NJ 07446                  -0- (2)                               -0-

Peter Katevatis
1235 Folkestone Way
Cherry Hill, NJ
08034                                                    9,816,343(3)                            15.7.0%

John M. Kennedy
802 Chestnut Avenue
Somerdale, NJ 08083                                      2,535,933(6)                               4.0%

Michael N. Kouvatas
27 Kings Highway
East Haddonfield, NJ 08033                                424,666 (4)                               .7%

John Matheu *
215 Longhill Drive
Short Hills, NJ 07078                                         -0- (5)                               -0-

All directors and executive officers as a                 13,161,942                              21.1%
group (7 persons)
</TABLE>

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

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

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

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

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

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

(6)  Includes the issuance of a net of 1,833,333 restricted shares acquired by
     Mr. Kennedy pursuant to the exercise of stock options On December 13, 1985.
     The Company granted stock options at an exercise price of $0.25 per share
     to the following Officers and Directors in exchange for cancellation of
     certain of the Company's accrued

                                       44
<PAGE>

     indebtedness to such persons, portions of which were assigned as follows:
     Mr. Katevatis received options to purchase 4,400,000 shares (2,200,000 of
     which were assigned by Mr. Katevatis to Mr. Kennedy); and also includes
     100,000 shares registered in the name of Mr. Kennedys wife.

                                      NOTES

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

ITEM 12   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Katevatis is paid $50,000 for legal services rendered to us during each
fiscal year. Mr. Katevatis received $50,000 for each of our fiscal years
commencing in 1998 through 2004.

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

Mr. Katevatis has agreed to forebear any and all collection action for accrued
salary and fees including forgiveness of interest in exchange for the option of
converting any such accrued salary and fees into our common stock at $0.25 per
share. If we receive financing, Mr. Katevatis may elect to receive all or part
of such accrued salary or fees in cash or common stock. As of February 28, 2006,
accrued salary and fees amounted to $ 1,489,667for Mr. Katevatis.

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

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

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

                                       45
<PAGE>

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

DURING THE LAST THREE YEARS, WE HAVE ISSUED THE FOLLOWING UNREGISTERED
SECURITIES.

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

Anti-dilution

The Company and Mr. Peter Katevatis have an anti-dilution rights agreement which
provides that Mr. Katevatis' ownership interest would at all times represent 17%
of the issued and outstanding shares of the Company. The anti-dilution rights
are exercisable at Mr. Katevatis' sole discretion. During the years ended
February 28, 2006, February 28, 2005, and February 29, 2004, Mr. Katevatis
exercised his right and requested the Company issue 579,173, 3,533,599 and
1,619,057 common shares respectively. Post February 28, 2006 Mr. Katevatis
exercised his right and requested the Company issue 399,895 common shares.

The Company and Dr. Robert Alfano have an anti-dilution rights agreement which
provides that Dr. Alfano's ownership interest would at all times represent 4% of
the issued and outstanding shares of the Company. The anti-dilution rights are
exercisable at Dr. Alfano's sole discretion. During the years ended February 28,
2006, February 28, 2005 and February 29, 2004, Dr. Alfano exercised his right
and requested the Company issue 136,276, 627,302 and 71,557 common shares,
respectively. Post February 28, 2006 Robert Alfano exercised his right and
requested the Company issue 75,797 common shares.

In February 2004, we issued and sold to accredited investors in a private
placement 60 shares of our convertible preferred stock which were converted into
an aggregate of 6,000,000 shares of Common Stock on March 8, 2004, for an
aggregate of $1,500,000 or $25,000 per share of our preferred stock.

On March 8, 2004, we issued 325,000 shares at $ .15 per share of Common Stock to
Dr. Jeremy Rosen as compensation for Dr. Rosen's medical/ FDA clinical advisory
services for a period from February 1, 2004 to February 1, 2005.

On March 8, 2004, we issued 1,400,000 shares of Common Stock at $.65 per share
to RT Consulting Services Inc. as compensation for RT Consulting Services Inc.'s
medical/FDA engineering, manufacturing, and financial advisory services from
February, 2004 to February, 2008.

On May 5, 2004, we issued 200,000 shares of Common Stock at $ .65 per share to
Chesterbrook Partners Inc. as compensation for Chesterbrook Partners Inc.'s
public relation and shareholder advisory services for our 2004 fiscal year
through February 28, 2005.

In August 2004, we (i) issued 100,000 shares of our Common Stock at $0.59 per
share, and (ii) granted a warrant to purchase 100,000 shares of Common Stock at
$2.00 per share, to Alan Moses under a consulting agreement pursuant to which
Mr. Moses provided us with website management and design services.

In August 2004, we issued 200,000 shares of Common Stock at $0.59 per share for
accounting services provided to us by Cust Dori and Benick CPA's.

In August 2004, we issued 55,556 shares of Common Stock at $0.59 per share for
secretarial services provided to us by Marie Sten.

On August 1, 2004, we granted an option to purchase 300,000 share of Common
Stock at $1.50 per share to Director John Matheu pursuant to a consulting
agreement with the Company

In November 2004, we issued (i) 1,000,000 shares of Common Stock at $0.75 per
share, and (ii) a six-year warrant to purchase 1,000,000 shares of Common Stock
at an exercise price of $3.00 per share to INFO TONICS IN connection with
INFOTONICS FUNDING OF REGISTRANTS INGESTIBLE PILL (CPE) COLLABORATIVE research
and development agreement.

                                       46
<PAGE>

November 29, 2005 agreement with Jeremy Rosen DDS for his active participation
and oversight responsibility for a period of two years beginning December 2,
2005 to December 2, 2007 to include achieving FDA clinical submission in
furthering an FDA Phase I approved Aero-digestive/Lucoplakia Cancer study begun
by Dr. Stimpson Schantz at Sloan Kettering NYC for dental application potential
in screening patients for Lucoplakia. Registrant issued as full compensation to
Dr Rosen for the two year period 375,000 common restricted rule 144 shares
valued at the closing price of $ .18 per share.

February 8, 2006 agreement with William Armstrong, Director, for his active
participation with Dr Jeremy Rosen DDS for the period beginning February 6, 2006
to December 2, 2007 in achieving FDA clinical submission in furthering an FDA
Phase I approved Aero-digestive/Lucoplakia Cancer study begun by Dr Stimpson
Schantz at Sloan Kettering NYC for dental application potential in screening
patients for Lucoplakia up to FDA clinical submission by registrant. Registrant
issued as full compensation to Mr. Armstrong for the two year period 80,000
common restricted rule 144 shares valued at the closing price February 8, 2006
of $.25 cents per share.

April 1, 2006 agreement with Maurice Altshuler for investment of one hundred
thousand ($100,000) dollars registrant issued 666,666 of Mediscience Technology
Corp common shares all restricted per SEC Rule 144, $0.01 par value valued @ $
..15 cents each and a five year Warrant expiring by its terms on April 1, 2011 to
purchase 666,666 Mediscience Technology Corp common shares legend restricted per
SEC Rule 144 at twenty five cents ($.25). a share.

ITEM 13 Principle Accountant Fees and Services

Fees for professional services provided by Morison Cogen LLP and Parente
Randolph independent auditors in each of the last three fiscal years, in each of
the following categories were:

Accounting Fee Disclosure:


                                         10-k/10-q          SB-2 Other

               Fiscal year 2006           42,539               -0-

               Fiscal year 2005           32,580              37,420

               Fiscal year 2004           35,250               -0-

Audit fees include fees associated with the annual audit and 10-Q reviews
required. Audit-related fees principally relate to the successful Reg. D Private
Placement Memorandum $1.5 Million raise and the filing of an MTC SB-2
registration document deemed SEC effective Jan 12, 2005.


ITEM 14. EXHIBITS,  LISTS AND  REPORTS ON FORM 8-K


(a) Exhibits.

10.01 Employment Agreement dated May 1, 1992 between the registrant and Peter
Katevatis.

10.02 Consulting Agreement dated April 21, 1992 between the Registrant and Dr.
Robert R. Alfano (2)

10.03 Extension Agreement between the Registrant and City College of the City of
New York (3)

10.04 Research Proposal to Registrant submitted jointly by the City

College of the City University of New York and the Research Foundation of the
City University of New York (4)

                                       47
<PAGE>

10.07 Agreement dated December 1, 1988 by and among the Registrant, Laser
Diagnosis and Robert Alfano, as amended and modified on October 24, 1988

10.08 Research Agreement between the Research Foundations of the City University
of New York and the Registrant dated as of June 1, 1992 (9)

10.10 License Agreement between Virginia Commonwealth University and the
Registrant (10)

10.11 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 (11)

10.12 Amendment No. 3 to Agreement between the Registrant and City College of
The City University of New York

10.13 Research Agreement effective July 1, 1994 between the Registrant and
Sloan-Kettering Institute for Cancer Research (12)

10.14 License Agreement between Yale University and the Registrant dated May 4,
1993

10.15 License Agreement between Yale University and the Registrant dated
November 30, 1993

10.16 Research Agreement effective July 1, 1994 between tar Registrant and the
Trustees of Columbia University in the City of New York (13)

10.17 Research Agreement effective July 1, 1994 between Registrant and the Free
University, Amsterdam N.V. (14)

10.18 Microbial Detection protocol dated August 15, 1994 between and the
Registrant and Merck & Co. (15)

10.19 Collaborative Research Agreement effective September 23, 1994 between The
Registrant and General Electric Company (16)

10.20 SBIR Grant Award effective September 30, 1994 between the Registrant and
the National Institutes of Health (17)

10.21 Award/Contract effective September 30, 1994 between the Registrant and the
U.S. Army Medical Research Acquisition Activity (18)

10.22 Clinical Trial Agreement effective December 1, 1994 between the Registrant
and the General Hospital Corporation, d.b.a. Massachusetts General Hospital (19)

10.23 Investment Banking Agreement effective August 8, 1995 between the
Registrant and Allen & Company Incorporated (20)

10.24 Employment Agreement between the Registrant and H.L Hugill effective
January 18, 1996 (21) 10.25 Collaborative Research Agreement effective June 15,
1996 between the Registrant, Mallinckrodt Medical Inc. and the Research
Foundation of the City University of New York (22)

10.26 Investigational Device Exemption dated January 3, 1997 by the U.S. Food
and Drug Administration (FDA) (23)

10.27 Employment Agreement Extension effective January 17, 1997 between the
Registrant and H.L.Hugill (24)

10.28 Research Agreement effective April 21, 1997 among the Registrant, General
Electric Co, and the Research Foundation of the City University of New York (25)

                                       48
<PAGE>

10.29 Employment Agreement between the Registrant and Dr. Frank S. Castellana
dated November 17, 1999

10.30 Employment agreement between the Registrant and Sidney Braginsky dated
July 9, 2003

10.31 Braginsky Affadavit agreement with Registrant terminating his agreement of
July 9, 2001 effective as of July 9, 2001

10.32 Employment agreement between Registrant and Michael Engelhart dated April
26, 2003

10.33 Mediphotonics Development LLC New York formation dated February 20, 2004

10.34 Project agreement RFCUNY and Mediphotonics Development LLC dated May 7,
2004

10.35 Consultant Agreement between registrant and R&T consulting Inc dated
February 1, 2004

10.36 Consultant Agreement between registrant and Dr. Jeremy Rosen DDS dated
February 1, 2004

10.37 Consultant Agreement between registrant and Chesterbrook Partners Inc
dated February 1, 2004

10.38 Consultant Agreement between registrant and Dr.Stan Weiner dated May 20,
2004

10-39 Consultant Agreement between registrant and Robert Pinco Esq. dated April
14, 2004

(b) Reports on Form 8-K

See Exhibit 10.25 Collaborative Research Agreement effective June 15, 1996
between the Registrant, Mallinckrodt Medical Inc. and the Research Foundation of
the City University of New York. (22)

See Exhibit 10.26 Investigational Device Exemption granted January 6, 1997 by
the U.S. Food and Drug Administration (FDA) (23)

See Exhibit 10.27 Employment Agreement effective January 17, 1997 between the
Registrant and H.L.Hugill Hugill (24)

See Exhibit 10.28 Research Agreement effective April 21, 1997 with General
Electric Company and the Research Foundation of the City University of New York
(25)

See Exhibit 10.29 Employment Agreement dated November 17, 1999 between
Registrant and Dr. Frank S. Castellana (32) See Exhibit 10-30 Form 8-K dtd June
4, 2003

(1) Filed as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1993

(2) Filed as Exhibit 10.2 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1993

(3) Filed as Exhibit 10.3 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1993

(4) Filed as Exhibit 10.1 to registrant's Annual Report 10-K for the fiscal Year
ended February 28, 1989 and incorporated by reference thereto.

(5) Filed as Exhibit 10.3 to Registrant's registration Statement on Form S-1
Filed on July 5, 1991 and incorporated herein by reference thereto.

                                       49
<PAGE>

(6) Filed as Exhibit 10.3 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1987 and incorporated by reference thereto.

(7) Filed as Exhibit 10.5 to Registrant's Registration Statement on Form S-1
Filed on July 5, 1991 and incorporated herein by reference thereto.

(8) Filed as Exhibit 10.8 to Registrant's Registration Statement on Form S-1
Filed on August 24, 1992 and incorporated by reference hereto.

(9) Filed as Exhibit 10.9 to Registrant's Registration Statement on Form S-1
Filed on August 24, 1992 and incorporated herein by reference hereto.

(10) Filed as Exhibit 10.10 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1993.

(11) Filed as exhibit 10.11 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1993.

(12) Filed as Exhibit 10.13 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1995.

(13) Filed as Exhibit 10.16 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1995.

(14) Filed as Exhibit 10.17 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1995.

(15) Filed as Exhibit 10.18 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1995.

(16) Filed as Exhibit 10.19 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1995.

(17) Filed as Exhibit 10.20 to Registrant's Annual Report on Form 10-K for the
Fiscal year ended February 28, 1995.

(18) Filed as Exhibit 10.21 to Registrant's Annual Report on Form 10-K for the
Fiscal year February 28, 1995.

(19) Filed as Exhibit 10.22 to Registrants Annual Report on Form 10-K for the
Fiscal year February 28, 1995.

(20) Filed as Exhibit A to Registrant's current report on Form 10-K dated
September 23, 1995.

(21) Filed as Exhibit A to Registrant's current report on Form 10-K dated April
23, 1996.

(22) Filed as Exhibit A to Registrant's current report on Form 8-K dated June
15, 1996.

(23) Filed as Exhibit A to Registrant's current report on Form 8-K dated January
6, 1997.

(24) Filed as Exhibit A to Registrant's current report on Form 8-K dated Jan 13,
1997

(25) Filed as Exhibit A to Registrants current report on Form 8-K dated January
28, 1997

(26) Filed as Exhibit A to Registrant's current report on Form 8-K dated April
21, 1997.

(27) Filed as Exhibit A to Registrant's current report on Form 8-K dated May
16.1997

                                       50
<PAGE>

(28) Filed as Exhibit A to Registrant's current report on Form 8-K dated Oat 21,
1997

(29) Filed as Exhibit A to Registrant's current report on Form SEC13G dated Feb
12, 1998

(30) Filed as Exhibit A to Registrant's current report on Form 8-K dated April
8, 1998

(31) Filed as Exhibit A to Registrant's current report on Form 8-K dated May 29,
1998

(32) Filed as exhibit A to Registrant's current report on Form 8-K dated Nov 23
1999

(33) Filed as exhibits A, B, C, D, and E to Registrant's current report dated
March 13, 2003.

(34) Filed as Exhibit A to Registrant's current report dated March 13, 2003,

(35) Filed as exhibit A to Registrant's current report dated January22. 2003.

(36) Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

(37) Certification of Chief Operating Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

(38) Certification of Chief Financial Officer/Audit Committee Chairman pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.

(39) Certification of Chief Executive Officer pursuant to 18 U.S.C. SECTION
1350, Section 906 of the Sarbanes-Oxley Act of 2002.

(40) Certification of Chief Operations Officer pursuant to 18 U.S.C. SECTION
1350, Section 906 of the Sarbanes-Oxley Act of 2002.

(41) Certification of Chief Financial Officer/Audit Committee Chairman pursuant
to18 U.S.C. SECTION 1350, Section 906 of the Sarbanes-Oxley Act of 2002.

(42) 8-K Report, dated May 6, 2004 Registrant executed a Project Agreement with
the Research Foundation City University of New York (RFCUNY), effective May 7,
2004

(43) 8-K Report dated February 20, 2004 Peter Katevatis Chairman/ CEO, of
Registrant, "announced the State of New York approval the formation of
subsidiary "MEDIPHOTONICS DEVELOPMENT LLC" as of February 20, 2004.

(44) 8-K Report dated February 18, 2004: "Change in Articles of Incorporation"
February 17, 2004 the Board of Directors by unanimous written consent increased
authorized common shares from 40,000,000 to 200,000,000. per Section 14A:5-6
Corporation, General, of the State of New Jersey Statutes.

(46) 8-K Report dated February 2, 2004 registrant completed 1.5 Million private
placement of Mediscience non-interest bearing Convertible Preferred, with
individual dollar investment at no less than $25,000 for each of 60 shares each
convertible into (100,000 shares of MTC common. at $.25 cents per share). On
conversion of all CP shares a six (6) million common shares. will be issued.

(47) 8-K Report dated: December 4, 2003 Mediscience Technology Corp. qualified
by FDA for reduced or waived fees and expedited 3rd Party review process on its
medical device 510K submissions

(48) 8-k Report dated: December 4, 2003 registrant secures exclusive World-Wide
license to US molecular imaging patent applications, expected to extend core
technology additional 17+ years,

                                       51
<PAGE>

(49) 8-K Report dated June 4, 2003 registrant "announced the State of Delaware
approval and formation of subsidiaries "PROSCREEN, LLC" as of (June 3, 2003) and
Photonics for Woman's Oncology LLC. as of (February 27, 2003.

(50) 8-K report dated February 26, 2005 registrant announced notice of
resignation from Parente Randolph LLC effective February 28, 2005. (Item 4.01
Changes in Registrant's Certifying Accountant.)

(51) 8-K report dated March 14, 2005 registrant announced it engaged auditors
Cogan Sklar LLP for professional auditing services 10-K for the year ended
February 28, 2005. (Item 4.01 Changes in Registrant's Certifying Accountant).

(52) 8-K report dated Nov. 17, 2003--Registrant agreement dated April 1, 2005
with (RF-CUNY) to modify and integrate the Company's CD-Ratiometer(TM) and
CD-Map(TM) to couple a micro-endscope for molecular fluorescence measurements of
breast ducts. Agreement filed as Exhibit 99.1

(53) 8-K Report dated January 27, 2005 registrant announced its consultant
research and development agreement dated January 21, 2005 by and between the
Registrant and Dr. Julian Kim of the Cleveland Clinic.

(54) Registrant announced SB-2 SEC registration 333-117820 declared effective
January 12, 2005 dated December 21, 2004 for 8,075,000 shares. On March 8, 2004,
the Company converted 60 shares of its preferred stock into 6,000,000 shares of
its common stock.

(55) 8-KA Report dated December 9, 2004 amended and restated employment
agreement dated December 9, 2004 between registrant and Michael Engelhart to
clarify the original intent with respect to the original employment agreement
and the instruments issued to eliminate ambiguities, inconsistencies.

(56) 8-K December 9, 2004 Medi-Photonics Development LLC its New York Subsidiary
announced on December 8, 2004 the completion of deveplopment of its optical
biopsy "CANCER DIAGNOSTIC RATIOMETER"(TM) and submission to the FDA of pre-IDE
briefing materials

(57) 8-K November 9, 2004 Agreement between Mediscience Technology Corp. New
York subsidiary Medi-Photonics LLC and Infotonics Technology Center, for the
development of ("The MTC Compact Photonic Explorer (CPE) project, a four-year
multidisciplinary/multi-institutional effort to develop miniature devices that
use light to remotely monitor the health of various environments. The text of
this agreement is filed as Exhibit 99.1

(58), Code of Ethics

(59) Corporate Governance and Management Responsibilities

(60) EXHIBITS from Item 27 SB-2 effective Jan 12, 2005 Incorporated by reference
hereto

(61) 8-K On April 3, 2006 Mediscience Technology, Corp. (OTCBB:MDSC.OB)
announced The Food and Drug Administration on March 29, 2006 approved as a
"Non-significant risk device study the Company's multi-center pilot study to
establish the safety and parameters of efficacy of its proprietary Optical
Biopsy Device (CD-R) for cancer detection of the cervix preliminary to a pivotal
study"

(62) 8-KA AMENDED on May 18, 2006 Alfanix agreement filed as 99.1

Exhibit
Number      Description
------      -----------

3.1         Restated Certificate of Incorporation, dated December 9, 2004.

3.2         By-laws

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<PAGE>

4.1 Letter Agreement, dated November 15, 2001 between us and Chesterbrook
Partners Inc. (incorporated herein by reference to Exhibit 4.1 to our
Registration Statement on Form S-3, dated July 30, 2004 ("Form S-3")).

4.2 Stock Purchase Warrant, dated November 15 2001, issued by us to Chesterbrook
Partners Inc. to purchase 100,000 shares at an exercise price of $0.25
(incorporated herein by reference to Exhibit 4.2 to the Form S-3)

4.3 Stock Purchase Warrant, dated November 15, 2001, issued by us to
Chesterbrook Partners Inc. to purchase 50,000 shares at an exercise price of
$0.25 (incorporated herein by reference to Exhibit 4.3 to the Form S-3)

4.4 Stock Purchase Warrant, dated November 15 2001, issued by us to Chesterbrook
Partners Inc. to purchase 50,000 shares at an exercise price of $0.25
(incorporated herein by reference to Exhibit 4.4 to the Form S-3)

4.5 Assignment of Stock Purchase Warrant, dated December 3, 2001 and June 21,
2002, to purchase 100,000 shares at an exercise price of $0.25 from Chesterbrook
Partners Inc. to William Baker (incorporated herein by reference to Exhibit 4.5
to the Form S-3)

4.6 Assignment of Stock Purchase Warrant dated December 21, 2001, to purchase
50,000 shares at an exercise price of $0.25 from Chesterbrook Partners Inc. to
Lawrence B. Elgart (incorporated herein by reference to Exhibit 4.6 to the Form
S-3)

4.7 Consulting Agreement, dated April 1, 2004, between us and Chesterbrook
Partners Inc. (incorporated hereinby reference to Exhibit 4.7 to the Form S-3)

4.8 Consulting Agreement, dated February 1, 2004, between us and Jeremy Rosen
(incorporated herein by reference to Exhibit 4.8 to the Form S-3)

4.9 Consulting Agreement, dated February 1, 2004, between us and Consulting
Services Inc. (incorporated herein by reference to Exhibit 4.9 to the Form S-3)

4.10 Form of Subscription Agreement between us an each of the Selling
Shareholders which participated in the Private Placement (incorporated herein by
reference to Exhibit 4.10 to the Form S-3)

5    Opinion of Peter B. Hirshfield, Esq.

10.1 Agreement, dated as of June 10, 2002, between us and RFCUNY

10.2 Project Agreement, dated as of May 1, 2004, between Medi-Photonics and
RFCUNY (incorporated herein by reference to Exhibit 10.3 to our Quarterly Report
for the quarter ended May 31, 2004 on Form 10-QSB/A ("Form 10-QSB/A"))

10.3 Consulting Agreement between us and John Matheu, dated August 1, 2004

10.4 Consulting Agreement between us and Robert Alfano, dated April 21 1992,
(incorporated herein by reference to Exhibit 10.2 to our Annual Report on Form
10-K for the year ended February 28, 1993)

10.5 Employment Agreement between us and Peter Katevatis, dated March 5, 1992

10.6 Amended and Restated Employment Agreement between us and Michael Engelhart,
dated December 9, 2004 (incorporated herein by reference to Exhibit 99.1 to our
Current Report on Form 8-K, dated December 10, 2004 ("December 2004 Form 8-K"))

10.7 Nonqualified Stock Option Agreement, dated as of April 23, 2003, between us
and Michael Engelhart (incorporated herein by referred to Exhibit 99.1 to our
December 2004 Form 8-K)

10.8 Incentive Stock Option Agreement, dated December 9, 2004, between us and
Michael Engelhart (incorporated herein by reference to Exhibit 99.1 to our
December 2004 Form 8-K)

                                       53
<PAGE>

10.9 Anti-Dilution Agreement between us and Peter Katevatis, dated July 19, 2004
(incorporated herein by reference to Exhibit 10.1 to Form 10-QSB/A)

10.10 Anti-Dilution Agreement between us and Robert Alfano, dated July 19, 2004
(incorporated herein by reference to Exhibit 10.2 to Form10-QSB/A)

10.11 Agreement between us and Peter Katevatis, dated October 1, 2004
(incorporated herein by reference to Exhibit 10.2 to our Quarterly Report for
the quarter ended August 31, 2004 on Form 10-QSB ("Form 10-QSB"))

10.12 Agreement between us and Robert Alfano, dated October 1, 2004
(incorporated herein by reference to Exhibit 10.1 to Form 10-QSB)

10.13 Lease Agreement between us and Peter Katevatis, dated July 25, 2002

10.14 1999 Incentive Stock Option Plan (incorporated herein by reference to
Appendix B-1 to our Definitive Proxy Statement on Schedule 14C as filed with the
SEC on January 23, 2004 ("Schedule 14C")) 10.15 2003 Consultants Stock Option,
Stock Warrant and Stock Award Plan (incorporated herein by reference to Appendix
B-1 to the Schedule 14C)

10.15 Collaborative Research and Development Agreement, dated November 11, 2004,
by and between Infotonics Technology Center Inc., Medi-Photonics and us
(incorporated herein by reference to Exhibit 99.1 to our Current Report on Form
8-K, dated November 12, 2004)

10. 16       Alfanix agreement dated March 3, 2006 with Registrant
10. 17       Syracuse University report March 31, 2006
10. 18       FDA approval letter of March 29,2006

ITEM 15 SUBSEQUENT EVENTS

March 4, 2006 per Registrant /Alfanix m Ltd. (private company) agreement dated
March 3, 2006 (see 8-KA dated May 18, 2006 exhibit 99.1) registrant issued
500,000 common restricted rule 144 shares valued at the closing price March 4,
2006 at $ 0.17 in exchange of 10,000 shares plus a 3 year warrant (expires March
3, 2009 to purchase 240,000 Alfanix common at $2.00 per share " Alfanix will
contractually assist Mediscience, on a best effort basis, in supervising the
construction of FDA-required CD-R units, and improving the present algorithms by
testing the CD-R unit and developing algorithms in the Dominican Republic, and
other jointly approved Latin American Countries (e.g. Ecuador and Mexico) as
sampling zones for the examination of women with cervical cancer on registrant
approved budgets.


March 15, 2006 per agreement with Chesterbrook Partners extending advisory
relationship to February 29, 2007 registrant issued 272,000 of Mediscience
Technology Corp common shares all restricted per SEC Rule 144, $0.01 par value
valued @ $ 0.16 each. May 16 2006 registrant issued an additional 100,000 of
Mediscience Technology Corp common shares all restricted per SEC Rule 144, $0.01
par value valued @ $ 0.16 each. as agreed to consideration for through February
29, 2007 properly reflecting 372,000 Shares of registrant as SEC restricted Rule
144 Common. This issuance of May 11, 2006 of 100,000 shares corrected the shares
that were to be issued March 15, 2006.

March 29, 2006 Registrant received FDA approval as a non-significant risk (NSR)
device study, its submitted protocol for a pilot study for the C-D Ratiometer
entitled "A Multicenter Pilot study to establish the Safety and Parameters of
Efficacy of an Optical Biopsy Device (CDR) for Cancer Detection of Cervix
Preliminary to a Pivotal Study."

April 1, 2006 agreement with William Baker to issue registrants common shares
restricted Rule 144, $ 0.01 par value in (5) five separate monthly transactions
of $20,000 each totaling one hundred thousand ($100,000) dollars starting May 1,
2006 ending September 1, 2006. Purchase price based on the Market closing offer
on the

                                       54
<PAGE>

business day preceding the 1st day of the month, but in no event more than $.15
cents per share. All shares of unregistered MTC common received by Mr. Baker
carry one conditional warrant per share to purchase one additional share at
twenty five cents ($.25) of registrants common shares restricted per Rule 144.
All said warrants expire by their terms on September 1, 2011. It is an agreed
and absolute Condition Precedent to the exercise of any of said warrants that
registrant has received a total of $100,000 on or before September 1, 2006. On
May 10, 2006 Mr. Baker was issued 266,000 of registrants common shares
restricted Rule 144, $0.01 par value for May and June payments of $20,000 valued
@ $.15 cents each.

April 1, 2006 agreement with Maurice Altshuler to issue registrants common
shares restricted Rule 144, $0.01 par value in exchange of one hundred thousand
($100,000) dollars, purchase price based on $.15 cents per share. All shares of
unregistered MTC common received by Mr. Altshuler carry one conditional warrant
per share to purchase one additional share at twenty five cents ($.25) of
registrants common shares restricted per Rule 144. All said warrants expire by
their terms on April 1, 2011. On May 10, 2006 Mr. Altshuler was issued 666,666
of registrants common shares restricted Rule 144, $0.01 par value, valued @ $.15
cents each.

April 14, 2006 Stephane Lubicz, M.D. Chief Medical Operating Officer FDA per his
agreement dated April 1, 2005 received 93,000 shares of registrants common
valued at $ 0.15 in exchange of services related to FDA oversight.

April 23, 2006 Michael Engelharts three year employment agreement April 23, 2003
to April 23, 2006 ended (his employment contract is part of and an attachment to
Registrants SEC 10-K 2003 page 44 herein incorporated by reference. CEO,
Chairman Katevatis assumed the interim role of President April 24, 2006 and Dr
Stefane Lubitcz assumed the title of Chief Medical Operations Officer (CMOO) as
of February 28, 2006 consistent with his on-going FDA responsibilities (See 8-K
filed April 9, 2005 "Registrant has engaged Dr.Lubicz as an consultant for
protocol development for hospital work, oversee/ review the FDA protocol
write-up and assemble doctors and hospitals for the required FDA clinicals
Exhibit 99.1)

May 18, 2006 US patent disclosure 60/725,670 filed Sept 29, 2005
"Phosphorescence and Fluorescence Spectroscopy for Detection of Cancer and
Pre-Cancer from Normal/Benign regions" contractually acquired by Registrant from
RFCUNY and Dr Alfano inventor.

May 22, 2006 Registrant in support of its present FDA approved March 29, 2006
pilot clinicals entered into a month to month CD-Ratiometer (CDR) agreement
beginning June 1, 2006 with IUSL /CUNY CAT staff for specific tasks to be
performed e.g. on-going product design review, software enhancements, product
functionality, and up-grading of manual materials in accordance with FDA
criteria. Registrant's monthly costs will be supplemented with matching funds
from the NY state CAT.

June 10, 2006 Registrant and a New York Investment Group executed an agreement
seeking a minimum of $5 million and a maximum of $10,000,000 on terms favorable
to registrant's shareholders and providing for a "firm commitment public
offering" by Registrants wholly owned subsidiary for its Ingestible Diagnostic
Pill presently under joint development with its equity partner Infotonics
Research of Rochester NY - the "Compact Photonic Explorer" (CPE). The
Underwriting Agreement and related agreements shall contain such other terms and
conditions as are customarily contained in agreements of such character.

                                       55


<PAGE>

                        POWER OF ATTORNEY AND SIGNATURES

We the directors are also responsible for the maintenance of MTC's system of
internal financial controls: designed to give reasonable assurance that proper
procedures exist for the maintenance of adequate accounting records,
safeguarding assets of MTC and preventing and detecting fraud and other
irregularities. The Company has identified and documented minimum internal
financial control Standards as a non-accelerated SEC filer, working with our
accountants and auditor to continue to review "Corporate Governance" for
improvement. Project budgets are prepared with oversight of our CFO Frank Benick
submitted to the Chairman/CEO Peter Katevatis and approved by the directors. MTC
operates a system of regular daily reporting between the executive officers
including revised project budget forecasts. Business risks are identified and
monitored on a regular basis. The Company operates a monthly internal reporting
function with our accountants and CFO to implement the adequacy and compliance
of internal financial controls and systems. This monthly internal accounting
provides independent document access and preparation of our 10-Q'report to the
Auditor quarterly and 10-KSB annually with conferencing the Audit Committee and
the auditor to review the operation and effectiveness of our internal financial
controls on a quarterly and annual basis

We, the undersigned officers and directors of Mediscience Technology Corp.
hereby severally constitute and appoint Peter Katevatis Esq., our true and
lawful attorney, with full power to sign for us and in our names in the
capacities indicated below, any amendments to this report on form 10-KSB, and
generally to do all things in our names and on our behalf in such capacities to
enable Mediscience Technology Corp. to comply with the provisions of the
Securities Exchange Act of 1934, as amended, and all the requirements of the
Securities and Exchange Commission.

Pursuant to the requirements of section 13 or 15(d) of the Securities and
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 date indicated.


 SIGNATURE          June 14, 2006                     TITLE

ss/ Peter Katevatis                    Director, Board Chairman/CEO, Treasurer
-------------------------
Peter Katevatis, Esq.

ss/ William Armstrong                  Director
-------------------------
William Armstrong

ss/ John Kennedy                       Director, Secretary
-------------------------
John Kennedy

ss/ Michael Kouvatas                   Director
-------------------------
Michael N. Kouvatas, Esq.

ss/ Michael Engelhart                  Director
-------------------------
Michael Engelhart

ss/ Frank D. Benick                    Chief Financial Officer
------------------------
Frank D. Benick, CPA, CVA