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 29, 2004

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

      For the transition period from February 28, 2003 to February 29, 2004

                          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 Folkstone Way, Cherry Hill, New Jersey 08034
                    (Address of Principal executive offices)

         Issuer's telephone number, including area code: (856)-428-7952
        Securities registered pursuant to section 12(b) of the Act: None
          Securities registered pursuant to section 12(g) of the Act:
                     Common Stock, par value $.01 per share

Check 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 |_|

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B 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-KSB or any amendment to
this Form 10-KSB. Registrant is in full conformance/compliance to all applicable
provisions of the Sarbanes-Oxley Act effective August 29, 2002 and SEC section
16 form 5 rules effective August 27, 2002 |X|

The issuer's revenues for its most recent fiscal year were: $ none

The aggregate market value of the voting stock and non-voting common equity held
by non-affiliates computed by the average bid and asked price of the common
equity of the Registrant, as of, May 10, 2004, ($0.62 per share) was: $
31,598,116. The number of shares outstanding of Registrant's common stock, as of
May 10, 2004, was 50,964,703. (See subsequent events Item 13) The issuer has no
other classes of common equity outstanding as of that date.

         Title of Each Class                       Number of Shares Outstanding

Common Stock, par value $.01 per share                     39,372,753**

Preferred Stock, par value $0.1 per share                      60*

<PAGE>

      * On Jauary18, 2004 registrant completed a $1.5 Million private placement
of Mediscience non-interest bearing convertible preferred, (60 shares) with
individual dollar investment at no less than $25,000 for each convertible into
100,000 shares of MTC common. valued at $.25 cents per share. On March 8, 2004,
MTC called and cancelled the 60 issued convertible preferred issuing on
conversion a total of six million shares. The private placement agreement by its
terms provided that MTC management can at any time and for any reason and
without notice to the investors convert all MTC CP shares issued into a total of
six Million MTC common or 100,000 shares on each of the 60 MTC CP shares.

      ** On February 18, 2004 registrants New Jersey certificate of
incorporation was amended to reflect present authorized shares as 200,000,000;
199,950,000 Common par value $.01 and 50,000 Preferred Stock, par value $0.01
per share approved by a majority of shareholders upon written authorization and
consent and a quorum of 39,372,753 shareholders entitled to vote as of the close
of business on January 16, 2004, (record date)

                      DOCUMENTS INCORPORATED BY REFERENCE:

All SEC 10-KSB, 8-K and 10-Q filings, SEC 14C filing, Registrant. filed its
"Definitive" Information Statement 14C after SEC review and compliance on
January 20, 2004, noticing, January 16, 2004 as the legal "Record Date" and
identifying those shareholders entitled to receive with a mailing to
shareholders of record on January 20, 2004. A copy of our letter to shareholders
and proposed agenda is included in for your information. See ITEM 4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS infra

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

8-K Report dtd February 20, 2004 Peter Katevatis Chairman/ CEO, of Registrant,
"announced the State of New York approval the formation of "MEDIPHOTONICS
DEVELOPMENT LLC" as of February 20, 2004. The LLC Company is a wholly owned New
York City, New York County, NY State subsidiary of Mediscience Technology
located at 101 31st Street New York, NY

8-K Report dtd February 18, 2004: "Change in Articles of Incorporation" On
February 17, 2004 the Board of Directors by unanimous written consent increased
the authorized common shares from 40,000,000 to 200,000,000. The number of
shares of the Corporation issued and entitled to vote thereon based on the
Corporations established record date of January 16, 2004 and shareholder notice
per its SEC 14C filing was 39,372,753. The amendment was duly adopted by written
consent of a majority of shareholders holding 23,316,168) in accordance with the
applicable provisions of Section 14A:5-6 Corporation, General, of the State of
New Jersey Statutes.

8-K dtd January 18, 2004 On Jauary17, 2004 registrant initiated and 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

<PAGE>

shares of MTC common. at $.25 cents per share). MTC will issue on conversion of
all MTC CP shares a total of six (6) million common shares. The private
placement agreement by its terms provide that MTC management can at any time and
for any reason and without notice to the investors convert all MTC CP shares
issued.

8-K filing 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

8-K filing dated: December 4, 2003 registrant secures exclusive World-Wide
license to US molecular imaging patent applications, expected to EXTEND CORE
technology additional 17+ years,

8-K Report dtd June 4, 2003 Michael Engelhart, President and COO of Registrant,
"announced the State of Delaware approval and formation of "PROSCREEN, LLC" as
of (June 3, 2003) and Photonics for Woman's Oncology LLC. as of (February 27,
2003. "Both LLC Company's are wholly owned subsidiaries of Mediscience
Technology. "PROSCREEN, LLC" its second LLC Company has a potential clinical
application for non-invasively diagnosing prostate cancers without removing
prostate tissues".

8-K Report w/exhibits dtd March 13, 2003 effective April 26, 2003 Mr. Sidney
Braginsky, former President COO and the Registrant agreed to the total and
immediate nullification and termination of his July 9, 2001 agreement with
Mediscience Technology Corp. together with all its terms and conditions,
including any claim for accruals in salary and/or expenses effective
retroactively as of July 9, 2001. Mr. Braginsky continues as an active Board
member.

8-K Report dtd March 13, 2003, On unanimous Board of Directors approval
Registrant appointed Michael Engelhart to the Mediscience Board of Directors
effective immediately.

8-K Report January22. 2003 On January 13, 2003 Registrant entered into an
agreement with THMGROUP of Ramsey NJ as exclusive advisor to explore
commercialization of Registrants technology applications. Terminated April 12,
2004 by THM GROUP. Michael Engelhart has assumed full time COO responsibilities
to commercialize Registrants technology applications

SC13G/A dated 2/14/02 filed by Allen & Co. indicating SHARE VOTING POWER of
3,041,500 (includes 1,041,500 shares of Common Stock underlying warrants
expiring 2003) Allen & Co. Allen&Co Warrants expired by their terms April 6,
2003

8-KA Report, Amendment of 8-K filed June 12, 2002 The new contract with the
Research Foundation City University of New York (RFCUNY) was effective upon
acceptance by Registrant on June 10th, 2002.

8-K Report, filed June 1, 2002 Registrant executed a new contract with the
Research Foundation City University of New York (RFCUNY), that supercedes all
prior agreements with (RFCUNY), restructures all MTC debt to RFCUNY and reduces
MTC royalty rate from 5% to 3.25%

SC13G/A dated 2/14/02 filed by Allen & Co. indicating SHARE VOTING POWER of
3,041,500 (includes 1,041,500 shares of Common Stock underlying warrants
expiring April 6, 2003) (as of April 6, 2003 voting power reduced to 2,000,000
shares)

<PAGE>

8-K Report, filed July 25, 2001, effective July 9, 2001 Registrant entered into
an employment agreement with Mr. Sidney Braginsky as President COO of the
Company

10-Q dated 7/12/2001 for Quarter ending 5/31/2001 Effective June 1, 2001 with
notice to the Board of Directors Dr. Castellana voluntarily terminated his
employment agreement and verbally waived all salary to that date. He felt that
he could not satisfy the Company's needs and choose to step aside.

8-K Report, filed 4/8/98, CUNY introduction/review Optical Biopsy-Optical
Mammography Photonics to detect Cancer, March 11, 1998. and

8-K Report, filed 11/23/99 Employment Agreement with. Frank S. Castellana, M.D.
as President and Chief Operating Officer of Mediscience Technology Corp are
incorporated by reference into Part 1 of this form.

8-K Report, filed 4/20/2000 Mediscience Technology and Sarnoff Research Corp.
letter of understanding of Sarnoff future equity participation incorporated by
reference into part 1 of this form

8-K Report, filed 5/15/2001, Retention of new auditors and payment to CUNY/RF
curing of debt and patent issues

                                MEDISCIENCE 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 29, 2004 and February 28, 2003

      Consolidated Statements of Operations for the years ended February 29,
2004, and February 28, 2003 and February 28, 2002

      Consolidated Statement of Stockholders Deficit for the years ended
February 29, 2004, and February 28, 2003 and February 28, 2002

<PAGE>

      Consolidated Statements of Cash Flows for the years ended February 29,
2004, and February 28, 2003 and February 28, 2002

      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

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 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
postings on its internet site MEDISCIENCETECH.com

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. The SEC changes to
Rule 10b-18, provide companies with a safe harbor from liability for stock
manipulation if they repurchase their common stock in the open market in
accordance with the rule's manner, time, price, and volume conditions. As
amended, Rule 10b-18 requires companies to disclose all repurchases - even those
occurring outside Rule 10b-18 - in tabular form in their quarterly and annual
reports. The tables will include, among other things, the total number of shares
repurchased, the average price paid per share, and the number of shares
repurchased as part of a publicly announced plan or program. The

<PAGE>

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 natural fluorescence between
cancerous and normal tissue. On December 1, 1988, registrant acquired all the
outstanding stock of Laser Diagnostic Instruments, Inc. ("LDI"), a wholly owned
subsidiary of the Company. The principle asset of LDI was the ownership of a
patent application entitled "Method and Apparatus for Detecting Cancerous Tissue
Using Visible Luminescence," which was subsequently granted as patent number
4,930,516 by the US Patent and Trademark Office on June 5, 1990. The "516"
claims were expanded from 9 to 59 on August 8, 1998 in a reexamination of that
patent initiated by the Company. Our research and development activities are
centered around and the expansion of this patent and its technology and other
patents either acquired subsequently by Mediscience or for which Mediscience is
the exclusive licensee.

Registrant contractually acquired two exclusive world-wide licenses for US
patent applications filed by The Research Foundation City University of New York
(RFCUNY). 1. "Stokes-Shift Fluorescence spectroscopy for detection of disease
and physiological state of specimen" and 2. "Three-dimensional Radiative
Transfer Tomography for Turbid Media." The work results from the Company's
continual 10-year+ University research funding relationship. President and Chief
Operating Officer Michael Engelhart. and CUNY inventor and Registrant founder
Dr. Robert Alfano state that "the Stokes-Shift patent, when issued, would extend
the Company's core technology in Optical Biopsy expanding, maintaining and
continuing IP leadership in the Optical Biopsy field. Registrant's claim of
priority right will run from the filing date of the US Provisional Patent filing
of February 5, 2003 Serial Number 60/444,869 thus providing Mediscience core
technology a twenty (20) year period of patent protection running to February 5,
2023". NOTE: SEE: Registrant SEC/EDGAR 8-k filing dated: December 4, 2003 See
Web Page: MEDISCIENCETECH.com; See (IEEE Journal of selected topics in Quantum
Electronics, March-April 2003 Vol. 9, Dr. Alfano page 148.

We have successfully conducted preclinical and clinical evaluations which
continue to support our belief that our proprietary technology, when fully
developed, will be useful in the screening and diagnosis of cancer. We also
believe that our technology, if successfully developed, will have substantial
commercial appeal due to its non-invasive character, its delivery of immediate,
real time results, its enhanced diagnostic sensitivity and specificity and its
appeal to physicians who can generate additional office revenues that currently
accrue to an off site pathology laboratory.

On January 6, 1997, the Company received approval from the FDA of its
Investigational Device Exemption application to initiate human Phase II clinical
trials with its CD Scan medical device for early stage detection of cancer. This
trial has not been initiated at that time because of the lack of funding.

On January 25, 1999 the FDA classified our Mediscience CD-Scan as a
non-significant risk device for human trial Phase I clinical investigation of
the biological basis of fluorescence as applied to medically significant female
OBGYN health issues. This pilot study is being conducted under a research
agreement with Yale University and CUNY under the direction of Dr. Frederick
Naftolin, Chairman OBGYN Dept. of Obstetrics and Gynecology.

<PAGE>

On December 11, 2003 the FDA, after review, qualified Registrant under MDUFMA
allowing both reduced or waived FDA fees for its 2004 medical device 510K or
other market approval submissions." and Company participation in expedited FDA
review through FDA clinical inspections conducted independently by third party
FDA approved "accredited" persons, directly employed by Mediscience.

Strategy

Our strategy is to commercialize early cancer detection devices based upon our
developed technology, completed proto-type's, and expertise in the area of
Fluorescent Imaging. In addition to acquiring and seeking additional
conventional direct investment into the Company the Company optionally may use
an Organizational Structure of wholly owned subsidiary LLC, each with its own
Intellectual Property supported application. Our key purpose is to maximize the
value of the Company's Intellectual Property. Our first LLC commercial effort
"MEDI-PHOTONICS DEVELOPMENT, a New York City New York State domiciled LLC" will
be in the area of early cancer detection for cervical cancer. To that end, the
company, possesses a working prototype and is in the process securing a
management team and is completing a plan in an attempt to secure a 510k
exemption from the FDA. The company is working on early cancer detection devices
in the areas of prostate, colon, esophagus, and skin cancer and is encouraged by
all results. With regard to the company's commercialization plan, the company is
in various stages of business development activity with potential distributors,
strategic partners, and other strategic investors. We believe that our
Technology will be broadly applicable in cancer screening and diagnosis; the
company is preparing to submit for 510k exemption, however presently, each
approved labeled indication is expected to require separate pre-marketing
approval (a "PMA"), which will be both time-consuming and costly. In using LLC's
we could carefully select and prioritize targeted diagnostic indications to
maximize the return on development and clinical investments. We regard our "516"
and other related patents (such as 5,131,398) as pioneering, blocking and
dominant in the area of cancer diagnosis using fluorescence spectroscopy both
in-vivo and in-vitro. e.g. State of Delaware approval and formation of
"PROSCREEN, LLC" (June 3, 2003) and PHOTONICS for Woman's Oncology LLC.
(February 27, 2003); New York State approved and formation of MEDI-PHOTONICS
DEVELOPMENT LLC (February 19, 2004) "All LLC Company's are wholly owned
subsidiaries of Mediscience

We intend to seek additional funding through present and new equity capital from
institutional and individual professional investor groups. Where the LLC serves
as a separate investment vehicle MDSC will license the requisite platform
technologies to, and assign, as its capital contribution, other segregated,
mission-critical assets to such LLC and in return, receive equity ownership in,
and an upfront license fee from that LLC entity. The licenses issued to a LLC
will be framed as exclusive, royalty-bearing, irrevocable, perpetual,
sub-licensable, worldwide licenses to make, have made, modify, use, market, sell
and distribute the platform technologies as part of or in connection with a
product, process, or machine for use in the niche markets identified by and
granted to each LLC. MDSC the parent company would enter into a management and
corporate services agreements with that LLC to provide certain administrative
and outsourced management services, in return for a management fee. These
services would include accounting, reporting, and financial back-office
services; legal services, including the defense of patent and other intellectual
property claims and rights against third parties that have infringed the
subsidiary LLC proprietary rights; financial and strategic advisory services;
representation in the process of in-licensing, out-licensing, and creating joint
ventures and

<PAGE>

alliances. MDSC will also continue to act as an intellectual property transfer
agent between all separately funded LLC's and CCNY.

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

Effective June 10, 2002 Registrant executed a new contract with the Research
Foundation City University of New York (RFCUNY), that supercedes all prior
agreements with (RFCUNY), restructures all MTC debt to RFCUNY and reduces MTC
royalty rate from 5% to 3.25% as to all patent/patent applications of a medical
nature in exchange for the following consideration to (RFCUNY): 1. Registrant's
cash payment of $85,045.00; 2. Registrant's issuance to RFCUNY of 283,228 SEC144
shares. 3. Registrant's issuing a five (5) year. Warrant to (RFCUNY) providing
(RFCUNY) the right to purchase six hundred thousand (600,000) SEC144 shares at
one dollar ($1.00) per share. The agreement protects Registrant by affirming
Registrant's ownership and/or exclusive license of all MEDICAL APPLICATIONS
embodied in Registrants patent list attached to the contract as exhibit A.
(RFCUNY) prior warrant to purchase five hundred thousand (500,000) shares of
Mediscience common Rule 144 shares at one dollar ($1.00) per share expired by
its terms on December 31, 2003. Total warrants presently in RFCUNY for
Mediscience common SEC 144 shares 600,000 expiring June 10, 2007

In addition, according to the terms of our research and licensing agreement with
the University, the Company must negotiate a minimum royalty Agreement within 5
years of the date of filing for all licensed patents "Attachment list Exhibit A"
for which product commercialization has not yet occurred. The Company has
negotiated with the Research Foundation and extended the period of exclusivity
for all intellectual property. The Company holds and totally owns certain
patents independent of CUNY e.g. "516 as reviewed and expanded by the US Patent
Office" that are not so affected which are seminal to its basic technology.

Effective May 31, 2002 Registrant executed and fully funded an agreement with
"The Institute for Ultra fast Spectroscopy and Lasers Center for Ultrafast
Photonics and Mediphotonics Laboratory of City University of New York". Term:
July 1, 2002 to June 30, 2003.at which time the agreement terminated by its
terms. (See Registrants 8-K filed June 1, 2002).

Registrants present agreement with CUNY executed May 7, 2004 controls and
provides for continual technical and research assistance to Registrant in
support of existing and anticipated FDA clinical trials in the United States,
and possibly CE approvals in Europe. The Company and the Research Foundation of
CUNY established a Project Agreement (See 8-K Dated May 6, 2004 See Item 13
subsequent events) at the Institute of Ultrafast Spectroscopy and Lasers
("IUSL") at the City College of New York. The objective of the project agreement
is to complete a commercially viable CD-Ratiometer by November 30, 2004 for
cancer detection and diagnosis of the cervix, mouth, esophagus, and colon. The
objective of the project agreement is the complete development of the Company's
fourth generation prototype products (CD Scan, CD Ratiometer and CD Map),
including the enhancement of fiberoptic attachments to enable devices to be used
with various types of

<PAGE>

endoscopes and core biopsy needles. Previously, the Company and CUNY have
conducted in-vitro preclinical evaluation of various tissues to determine the
most appropriate excitation and emission wavelengths for use with a device and
created the algorithms and computer software necessary for the accurate
performance of the instruments.

Since the February 2004 $1.5M private placement offering has been completed, the
principal issue of concern to the Company is the future need for financial
resources and liquidity required to maintain business momentum and to properly
leverage intellectual property assets through FDA clinicals / approvals into the
market place as products. The resolution of this issue is, and will continue to
be the highest priority of management. In the absence of the availability of
such financing on a timely basis, the Company could be forced to materially
curtail, limit or cease its operations.

Products and Technology

                          Our Technology - how it works

      Optical Biopsy is a novel approach based on optical spectroscopy to
diagnose the state of a tissue (in vivo or ex vivo) without removing the tissue
from the body. Mediscience possesses the foundations for Optical Biopsy by
developing technology based on UV-visible fluorescence, excitation, Raman,
time-resolved, diffuse reflectance, and most recently, Stokes shift
spectroscopies. Using the appropriate wavelengths, at this time, Optical Biopsy
can determine whether a tissue is malignant, dysplastic (pre-cancer) or benign;
in addition to whether it being invasive cancer. Seminal patents have been
issued over the years for various approaches to Optical Biopsy.

      The Optical Biopsy characterizes the fluorescence signatures from normal
and malignant tissue from multiple organ sites and developed algorithms to
distinguish malignant tissue from normal. The onset of carcinogenesis causes
molecular and structural changes in tissues. These molecular and structural
changes can be observed in the differences in the fluorescence spectra between
benign, precancerous and cancerous tissues. The important diagnostic
fluorophores found in human tissue include several amino acids, proteins and
other biomolecules (i.e. tryptophan, collagen, nicotinamide adenine dinucleotide
[NADH], elastin, flavins and porphyrins). Optical Biopsy offers some significant
improvements over classical methods. It does not require removal of tissue,
results are available in real time, and it is highly sensitive to changes
occurring on a sub millimeter size scale. Our instrumentation is lamp-based. It
does not require the use of lasers. The use of broad band UV-visible lamps as an
excitation source extends the capability of the technology by allowing the
instrumentation to probe multiple fluorophores. Our instrumentation permits
acquisition of emission, excitation, diffuse reflection, and, the recently
developed, Stokes shift spectra for enhanced diagnostic accuracy.

      Ex vivo studies have been performed on breast, cervical, oral cavity,
esophageal, colon and lung tissue. These studies have been performed in
collaboration with Memorial Sloan Kettering Cancer Center (MSKCC) - oral cavity,
breast; New York Eye and Ear Infirmary - oral cavity; Weill Medicine College of
Cornell University, New York Hospital and Columbia Presbyterian Hospital (now
New York - Presbyterian Hospital) - esophageal and digestive tract; St.
Vincent's hospital of Staten Island; and Hackensack University Medical Center.
An in vivo study were performed, in collaboration with MSKCC, on oral cancer
patients. In the ex vivo studies, the accuracy (sensitivity) of our fluorescence
methods varied from 87% to 97% and the specificity varied from 87% to 100%. The
results of our research are tabulated on the following

<PAGE>

page, and have been confirmed by researchers at other universities, who have
employed our type of technology.

      In an ex vivo study of the esophagus, fluorescence measurements were able
to differentiate between normal, Barrett's, dysplastic and adenocarcinoma tissue
specimens. In similar research, an animal study performed by CCNY and MSKCC,
using a rat esophageal model demonstrated that fluorescence could detect
precancerous changes in the rat esophagus prior to any visual indication of
malignancy. The 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. A preliminary study performed at the
IUSL, which focused on ex vivo breast cancer specimens, demonstrated that
fluorescence spectroscopy could identify different types of cancer. In this
study, spectral differences were observed between invasive carcinoma, mixed
invasive and in situ carcinoma, fibroadenoma and normal breast tissues. In this
study is shown that diffuse reflectance spectra reflected differences in
proteins and DNA from tissues with different disease states. A larger study,
involving a greater number of specimens with a more detailed histopathological
analysis should be implemented to confirm these results. Currently, three
generations of instrumentation have been developed, with the fourth generation,
commercial unit in process. We currently have instrumentation which may probe
the following organ sites: oral cavity, cervix, aerodigestive 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 a GI
tract endoscope.

<PAGE>

                   Table 1. Optical Biopsy Accuracy Statistics

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

<PAGE>

                                  The Products

We are developing three commercially viable products in the areas of cervical,
full spectrum GI and oral that employ our technology for cancer screening and
diagnosis and 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. We believe that the CD instruments have a great deal of
versatility and a broad range of potential alternative applications depending on
the preferred configuration of the fiber optic probe. For example, the fiber
optic probe can be configured as a Convenient hand held probe for easy-to-access
areas such as the oral cavity or the skin surface, or the optical fiber can be
fed down the working channel of a rigid or flexible endoscopes for assessment of
the upper or lower GI tract, through a cystoscope for study of the urinary
tract, a colposcope for gynecological evaluation or a laparoscope's for
evaluation of internal organs, and even through a core biopsy needle to
optically assess breast tumors or other deep tissue tumors, such as sometimes
occur in the pancreas, liver or prostate. The CD Scan product prototype is
oriented to medical research. It is designed to provide optical scanning
capability over a broad spectrum of optical wavelengths for evaluation of
tissue. We use the CD Scan whenever possible to help define the critical
scanning and emission wavelengths for our two other prototypes products.

On the other hand we are designing the CD Ratiometer as a simple, compact
instrument with user-friendly features and characteristics. It is being 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 a vision instrument that is being designed to optically
interrogate an area of tissue rather than selective individual points. Although
it is at an earlier stage of design than either the CD Scan or CD Ratiometer, it
is expected to report out similar results but in the form of a colored map on a
computer screen distinguishing normal areas from abnormal areas via color
differentiation. If we can successfully develop the CD Map, we expect it to 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.

Research and Product Development

The potential utility of native tissue fluorescence spectroscopy for in vivo
cancer detection in humans was first discovered by Professor Robert R. Alfano,
Distinguished Professor of Physics and Engineering at the City College of the
City University of New York ("CUNY") in the early 1980's. Subsequent to the
acquisition by the Company of LDI from Dr. Alfano in 1988, we developed a
research agreement with the Research Foundation of CUNY to provide us with
research and development services. In 1992, the Company, CUNY, and the Research
Foundation of CUNY established the Mediphotonics 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 devices. MPL has also conducted in vitro, pre-clinical testing of
various human tissue types such as breast, cervical, colon and the upper
aerodigestive tract, to develop the preferred optical


                                                                              12
<PAGE>

scanning and emission wavelengths that yield the most definitive information
about the native fluorescence characteristics of specific scanned tissue. The
insight gained from this work has been the principal source of knowledge for the
subsequently issued and pending patents which the Company either owns outright
or for which it possesses a world wide exclusive license, and which the Company
regards as pioneering, blocking and dominant in the area of cancer diagnosis
using fluorescence. The information derived from this work was also the source
for a number of scientific papers published in peer-review journals and for
presentations made at scientific symposia. 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.

The Company entered into a support contract with the Ultra-fast Spectroscopy and
Lasers Center for Ultrafast Photonics and Mediphotonics Laboratory of City
University of New York". Term: July 1, 2002 to June 30, 2003. The agreement
provides continual technical and research assistance to Registrant in support of
existing and anticipated clinical trials in the United States and India. See
Registrants 8-K filed June 1, 2002. and expired June 30, 2003

Clinical Development

Our CD 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 the
anticipated clinical utility of our technology and prototype CD products, we
have been able to develop important collaborative relationships with some of the
most highly regarded cancer center research hospitals in the United States to
assist in the clinical evaluation of our prototype products. 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

A Phase I clinical feasibility study of the upper aerodigestive 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. It was established in this 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. A Phase II clinical study in the upper
aerodigestive tract is scheduled to begin when funding is available.

Another planned, Phase I clinical study will 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 furnished by
Pentax Precision Instrument Corporation for monitoring Barrett's Esophagus. On
April 24, 1997, we entered into a clinical trial agreement and provided initial
funding for this clinical study. However, further progress on this study will
require additional funding which cannot be provided at this time due to resource
constraints. Barrett's Esophagus is a malady that is thought to be a possible
precursor to esophageal cancer in certain people. Barrett's patients are
routinely monitored because of the heightened risk that a small proportion of
them are predisposed to the development of esophageal cancer. The current
medical practice requires that multiple excisional biopsies be taken during
regularly scheduled follow-up appointments (typically annually) to monitor the
progression of the disease. The


                                                                              13
<PAGE>

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. It is hoped that endoscopic application of our technology
will provide gastroenterologists with the ability to better assess the condition
of Barrett's tissue without a need for painful multiple biopsies. It is also
hoped that this additional molecular information will provide the ability to
assess the relative risk of Barrett's patients to the development of esophageal
cancer allowing gastroenterologists to establish individual patient monitoring
schedules appropriate to their relative level of perceived risk. Dr. Basuk has
reported that his work shows that UV emission measurements can effectively
distinguish normal esophageal tissue from Barrett's or adenocarcinoma. Further,
preliminary data also 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 on a study of "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 successful treatment
depends on early detection, thus screening high-risk patients would be
appropriate. Mediscience 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). The greatest incidence of this
decease is seen in males over age 60, with the major risk factors being the use
of alcohol and tobacco.

Business Development and Marketing

More than 120,000 new cancer cases are diagnosed annually in the United States
according to the American Cancer Society. It is estimated by Theta Corporation,
a market research firm, that 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 care and treatment is estimated to cost $104 billion annually,
$35 billion of which is estimated to be the direct cost of the disease. 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.

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


                                                                              14
<PAGE>

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 plan to co-develop one
or more of our prototype CD products for specific cancer diagnostic applications
with one or more selected other companies. We have nurtured relationships with a
small number of highly qualified companies which have expressed interest in
working with us to co-develop one or more of our existing CD prototype products
or possible variations thereof in exchange for certain as yet undetermined
rights to commercially exploit a finished approved product in the marketplace or
a geographic segment thereof.

We have, in the past, and continue to presently encourage these 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 the 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 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 the key markets of the European Union during 2004-5. We will also
make a preliminary investigation of the potential for our products in Asia and
if the findings are positive, will develop a strategy for exploiting our
technology in that region as well.

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 executed a lease agreement,
dated January 19, 1997 with City College providing space as an "incubator" in
which prototypes of the products have been designed and


                                                                              15
<PAGE>

assembled by MPL staff working in concert with personnel from an engineering
design firm engaged by the Company. The lease has terminated by its terms and
our prototypes are completed.

We are negotiating a New York City lease agreement with City College providing
space for our Mediphotonics Development LLC as a New York Co. "incubator"
located at 101 East 31st Street New York City NY

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.

Competition

The development of minimally diagnostics for cancer detection is driven by a
critical need for more cost effective screening procedures with increased
sensitivity and specificity. In-vivo tissue auto fluorescence spectral analysis,
as pioneered by Mediscience Technology is a paradigm shift emerging diagnostic
technology with clear potential to favorably impact health care clinical
outcomes as well as economics. In spite of what we believe is a seminal and
dominant Mediscience intellectual property position (in the United States),
there is intense competitive activity in this area, with at least seven
companies to date conducting active research and development programs.

Competition in cancer detection is significant. Current screening systems are
dominated by the Pap smear and colposcopy, are well established and pervasive.
Improvements and new technologies for cervical cancer detection, include Digene
Corporation's Human Papilloma Virus testing and Cytyc Corporation's Thin-Prep.
In addition, there are other companies and institutions attempting to develop
products using forms of biophotonic technologies in cervical cancer detection
and they include Spectrx Inc, MD Anderson, University of Michigan to name a few.
Mediscience is and will continue to develop devices that are more accurate,
easier to use and/or less costly to administer too create and maintain
competitive advantage.

We are aware of other approaches to cancer screening based on X-ray, CT,
ultrasound, magnetic resonance and radionuclide imaging technologies; these,
however, are based on the detection of intra-tissue structural abnormalities and
are not ideally suited to the evaluation of tissue surface lesions. Our
proprietary approach based on imaging and analysis of autofluorescence native
spectra 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 standard.

While we believe that we have a dominant intellectual property position that
will ultimately permit us to achieve leadership in this important new area,
competition from both new and established firms will continue to be intense.
Many of these firms have greater resources than the


                                                                              16
<PAGE>

Company, 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.

Government Regulation (FDA) Matters

On December 11, 2003 the FDA, after its financial audit review and approval,
qualified the Company under MDUFMA allowing both reduced or waived FDA fees for
its 2004 medical device 510K market approval submissions." and Company
participation in expedited FDA review through FDA clinical inspections conducted
independently by third party FDA approved "accredited" persons, directly
employed by Mediscience.

      April 1, 2004 Robert G. Pinco Esquire joined the company's advisory
council. Mr. Pinco is co-chairman of the BioMedical/FDA Practice and head of the
firm's biotechnology group practice of Buchanan Ingersoll, a leading
international law firm with specialization in the biotechnology sector. As a
member of Mediscience's advisory council Mr. Pinco will counsel its management
team on matters pertaining to government regulatory approval for many of
Mediscience's new products and applications. Mr. Pinco has more than 25 years of
experience in the pharmaceutical sector. Mr. Pinco's professionalism and
expertise in effectively navigating new products through the FDA and Buchanan
Ingersoll's vast resources in the biotechnology sector are invaluable to
Mediscience as registrant prepare to introduce new medical screening and
diagnostic devices to the US marketplace. (See subsequent events Item 13)

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

We believe that the projected clinical indications for our native tissue
fluorescence spectroscopy devices (CD Scan, CD Ratiometer and CD Map) will cause
them to be classified as Class I or II medical devices because they display
substantial equivalency to a legally marketed as Class I or II device or a
pre-1976 Class III device. If we fail to meet Class I or II and do not qualify
for the 510-(k) process (market pre-notification) of regulatory compliance we
will be obliged to submit a full PMA to the FDA for its careful review and,
hopeful, approval.

FDA review and approval of PMA applications usually takes from 12 to 24 months
after they are submitted and considered "complete" (meaning that they are
sufficiently in compliance with filing requirements that the FDA will
substantively review the application) but sometimes can take longer and on rare
occasions can take less time. Additional delay often results from insufficient
clinical data to satisfactorily prove safety and effectiveness for the proposed
intended use of the device and it is not unusual for an applicant to be required
to produce additional data to satisfy an objection raised by the FDA in its
review process prior to granting a PMA.


                                                                              17
<PAGE>

Although we believe 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 governmental approvals or licenses,
which could delay or possibly preclude us from marketing our CD products. The
company is in the process of:

      Preparing and submitting pre-IDE Document

1. a. Draft protocol outline b. Manufacturing information c. Review previous
human experience d. Review preclinical testing e. Clinical and .non-clinical
development protocol; f. arrangement of pre-IDE meeting; g. preparing study
protocol; h. preparing and submitting the IDE

2. Introductory statement and general investigational plan; .investigation
brochure; protocol; Manufacturing and control; non-clinical testing information;
previous human experience; certifications

design of the case report form; design of the informed consent form;
identification of potential study sites; Preparing a 510(k) for submission to
the FDA

      NOTE: To the extent that we intend to market our CD products in foreign
      markets, we will be subject to foreign governmental regulations, as well
      as USA, with respect to the manufacture and sale of our medical device
      products. We cannot accurately estimate the cost and time that will be
      required in order to comply with such regulations.

Patents and Proprietary Rights

On April 14, 2003 registrant secured the exclusive world-wide license for US
patent application Stokes-Shift Fluorescence spectroscopy for detection of
disease and physiological state of specimen. The patent was also filed by
registrant under the Patent Cooperation Treaty ("PCT") (1970) for EU approval on
January 23, 2004. Inventor and founder Dr. Robert Alfano states that "the
patent, when issued, would extend the Company's core technology in Optical
Biopsy for an additional 17+ years, thus expanding, maintaining and continuing
our IP leadership in the Optical Biopsy field".(see Patent list infra.)

The Patent Cooperation Treaty makes it possible for registrant to seek patent
protection for its patent invention simultaneously in each of a large number of
countries by filing an "international" patent application. Such an application
may be filed by anyone who is a national or resident of a Contracting State e.g.
USA.

The application is then subjected to an "international search." . The said
search results in an "international search report," that is, a listing of the
citations of such published documents that might affect the patentability of the
invention claimed in the international application. The ISA also prepares a
written opinion on patentability. The report and the written opinion are
communicated by the ISA to the applicant who may decide to withdraw the
application, if the said report or opinion makes the granting of a patent
unlikely. If the international application is not withdrawn, it is, together
with the international search report, published by the International Bureau. The
written opinion is not published. The procedure under the PCT has great
advantages for Registrant,

(I) Registrant has up to 18 months more than he has in a procedure outside the
PCT to reflect on the desirability of seeking protection in foreign countries,
to appoint local patent agents in each


                                                                              18
<PAGE>

foreign country, to prepare the necessary translations and to pay the national
fees; he is assured that, if his international application is in the form
prescribed by the PCT, it cannot be rejected on formal grounds by any designated
Office during the national phase of the processing of the application; on the
basis of the international search report or the written opinion, he can evaluate
with reasonable probability the chances of his invention being patented; and
Registrant has the possibility during the international preliminary examination
to amend the international application to put it in order before processing by
the designated Offices;

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 27 U.S. patents, plus 1 in Japan, for a
total of 28, and has rights to exclusively license an additional 10 U.S. patents
pending. There can be no assurance, however, that the pending patent
applications will ultimately 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 thereunder 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

If the Company is successful in completing the development of its screening and
diagnostic technology, and this technology is subsequently incorporated into
medical devices that are used by health care providers for screening and
diagnostic testing for which the providers may 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.

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


                                                                              19
<PAGE>

mammograms. In 1997 the Company and General Electric Company ("GE") acting on
behalf of its Corporate Research and Development component signed a five-year
non-exclusive Collaborative Research Agreement to explore potential uses of our
optical imaging technology. To this date, no material activity has occurred
under this contract. which expired by its terms year 2002.

Significant Patents covered by the May 31, 2002 contract with the Research
Foundation City University of New York (RFCUNY), see 8-K filed June 1, 2002,
superceding all prior agreements with (RFCUNY). RFCUNY/Mediscience May 31, 2002
contract Attachment "A" MTC Licensed/Funded Patents: (See subsequent events Item
13 May 7, 2004 Project agreement re: other patent issues para: (a))

                                  ATTACHMENT A

                      Medical Diagnostic Optical technology

US Patent Pending "Stokes-Shift Fluorescence spectroscopy for detection of
disease and physiological state of specimen", also filed INTERNATIONAL PCT
APPLICATION

#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.


                                                                              20
<PAGE>

#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.

#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.


                                                                              21
<PAGE>

#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

Employees

As of February 29, 2004, the Company had three full-time employees in its New
York Subsidiary Mediphotonics LLC 101 31st Street New York City: Michael
Engelhart President COO, Peter Katevatis Chairman CEO, Dr. Stan Weiner MD and
one retained consultant, Dr. Robert R. Alfano. Neither the employees nor the
retained consultant is governed by any collective bargaining agreement; the
relations between the Company and its employees and retained consultant are
believed to be satisfactory at the present time. (See ITEM 13 subsequent events)
see 8-K dated March 13, 2003 -as of April 26, 2003 Michael Engelhart was
appointed President COO of Registrant.

As of February 28, 2003, the Company had two full-time employees: Sidney
Braginsky President COO, Peter Katevatis Chairman CEO and one retained
consultant, Dr. Robert R. Alfano.

On March 13, 2003, By unanimous Board of Directors approval Registrant appointed
Michael W. Engelhart as President and Chief Operating Officer effective April
26,2003 ( 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.

On March 13, 2003 effective April 26, 2003 Mr. Sidney Braginsky, former
President COO and the Registrant agreed to the total and immediate nullification
and termination of his July 9, 2001 agreement with Mediscience Technology Corp.
together with all its terms and conditions, including any claim for accruals in
salary and/or expenses effective retroactively as of July 9, 2001. Mr. Braginsky
continues as an active Board member available to provide compensated consulting
services to the Board and President COO Michael Engelhart as needed.


                                                                              22
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTIES

The New York corporate research and development office of Mediphotonics
Development LLC Registrants wholly owned New York State subsidiary LLC to be
located at 101 31st Street New York City subject to a lease agreement presently
negotiated with CUNY.

The Registrants corporate headquarters are located at 1235 Folkestone Way,
Cherry Hill, New Jersey, which is owned by Peter Katevatis, Chairman/CEO of the
Company. Seventy-five percent of such office space is occupied in accordance
with a written month to month lease arrangement dated July 25, 2002 with Mr.
Katevatis pursuant to which the Company is required to pay its proportionate
share of total occupancy costs, insurance, repairs, maintenance, utilities and
taxes.

ITEM 3. LEGAL PROCEEDINGS

The Company is not presently a party to any litigation, nor to the knowledge of
management is any litigation threatened against the Company which may materially
affect its operation.

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

During its fiscal year ending February 29, 2004, the following matters were
submitted to a vote of the Company's security holders. Pursuant to an SEC
approved Definitive 14C filing. All items were approved at a Board of Directors
and shareholders meeting by the majority of those entitled to vote (39,372,753)
with a quorum present on February 17, 2004 and implemented as directed by
appropriate Board of Director resolutions. The Definitive 14C document and
appendix is incorporated by reference hereto in its entirety, See EDGAR filings;
See Mediscience web MEDISCIENCETECH.com

              "NOTICE OF ACTION OF STOCKHOLDERS BY WRITTEN CONSENT"

Dear Stockholders:                                              January 20, 2004

A Mediscience Technology Corp. shareholders action based upon written
authorization and consent and constituting a quorum of shareholders entitled to
vote as of the close of business on January 16, 2004, the record date, will take
place on February 17, 2004 at 2:00 p.m., at a Board of Directors and
shareholders meeting at the offices of Cust, Dori & Benick CPA's 100 Main Street
Flemington NJ 08822. Notice is hereby given that we expect written consents in
lieu of a meeting from stockholders representing a majority of our outstanding
shares of common stock approving the following agenda items. There are
39,372,753 shares of our common stock outstanding each share is entitled to one
vote. During this meeting, we will discuss each item of business described in
the attached Definitive Information Statement SEC schedule 14C. Prior to the
mailing of the definitive Information Statement, certain of our officers and
directors and their affiliates, will collectively hold a majority of our
outstanding common stock, signed written consents approving the following agenda
items. As a result, the agenda items will be approved and neither a meeting of
our stockholders nor additional written consents will be necessary.

SEC 14C ALL 5 AGENDA PROPOSALS were approved by a majority of shareholders upon
written authorization and consent and a quorum of 39,372,753 shareholders
entitled to vote as of the close of business on January 16, 2004, (record date),
on February 17, 2004 at 2:00 p.m., at a Board of Directors and shareholders
meeting held at the offices of Cust, Dori & Benick CPA's 100 Main Street
Flemington NJ 08822. All 5 agenda items were duly adopted by written consent of
a majority


                                                                              23
<PAGE>

of shareholders holding 23,316,168) in accordance with the applicable provisions
of Section 14A:5-6 Corporation, General, of the State of New Jersey Statutes.

1. A Proposal to increase Mediscience authorized common shares from the present
forty million to two hundred million with the immediate amendment of the first
sentence the October 30, 1991 Mediscience New Jersey Certificate of
Incorporation Article III to reflect the new authorized common shares Amendment
to increase Registrants authorized stock to 200,000,000 (two hundred million
shares) from 40 million to be amended to read as follows:

"The aggregate number of shares which the Corporation shall have authority to
issue is 200,000,000 shares of capital stock, par value $.01 per share, of which
50,000 shares are designated Preferred Stock par value $.01 per share,, and
199,950,000 shares are designated Common Stock."

The present certificate of incorporation (NJ) dated October 30, 1991 provides
for authorized shares of forty (40,000,000) million common, Mediscience
presently has 39,372,753, issued and outstanding Common this is obviously
inadequate for present and future corporate purposes and obligations.

2. The Ratification of 2003 Consultants Stock Plan (option/warrant/award) (see
A-1)

3. The Adoption of the 1999 Board Approved Incentive Stock Plan (see B-1)

4. Elect seven (7) directors: Directors to be elected for the forthcoming year
and to serve until their successors shall be elected and shall qualify

5. Act upon a proposal to ratify the appointment of Parente Randolph LLP as the
Company's independent public accountants for 2004;

Future corporate action e.g. private placements, issuance of additional shares
for research and development in cancer technology, issuance of common shares
pursuant to either the Consultant or Incentive option plans, initiation
/completion of FDA clinical trials, repayment of debt and working capital will
cause future dilution to the holdings of the current Company stockholders and
may effect the market value at that time of the currently issued and outstanding
shares of common stock

Management anticipates that the company's certificate of Incorporation will be
so amended on or shortly after February 17, 2004

Each Item (1, 2, 34, 5) of business requires the affirmative vote of a majority
of the authorized and issued shares. Under NJ corporation Law and the bylaws of
the Company

Michael Engelhart President /COO                    Peter Katevatis Chairman/CEO

                            1999 INCENTIVE STOCK PLAN


                                                                              24
<PAGE>

Adopted and Board approved February 17, 2004: see Definitive 14C SEC NOTICE
Appendix A-1 incorporated by reference hereto in its entirety, see Mediscience
web site MEDISCIENCETECH.com

Presented to the Definitive 14C SEC NOTICE meeting and Majority of shareholders
entitled to vote, quorum present, approved the proposal on February 17, 2004 to
adopt the 1999 Incentive Stock Plan (the "Plan") previously approved by the
board of directors and referenced in SEC EDGAR 10-K filings 1999 thru 2003. The
Board of Directors believes stock options and other stock-based incentives play
an important role in retaining the services of outstanding personnel and in
encouraging such employees to have a greater financial investment in the Company
(although the Plan does not necessarily require them to hold for investment the
stock received under the Plan). The Board of Directors had approved the 1999
Incentive Stock Plan and directed that it be submitted to stockholders for
approval.

The proposed Plan is set forth in detail Appendix Definitive 14C A -1. Primary
aspects of the proposed Plan are as follows: The 1999 Plan actually consists of
six different plans:

..     o a plan which contemplates the grant of incentive stock options;

..     o a plan which contemplates the grant of non-qualified stock options
      (which we refer to as "supplemental stock options");

..     o a plan which contemplates the grant of stock appreciation rights;

..     o a plan which contemplates the grant of performance shares;

..     o a plan which contemplates the grant of stock options and other awards to
      directors; and

..     o a plan which contemplates the grant of stock options and other awards to
      members of any advisory board.

Approved by Company stockholders, the Plan became effective ApriI 1, 2003 and
will terminate on April 1, 2013, unless terminated earlier by the Board of
Directors or extended by the Board with the approval of the stockholders. The
Board may amend the Plan as it deems advisable but, if the Securities Exchange
Act of 1934 requires the Company to obtain stockholder approval, then such
approval will be sought. Unless approved by stockholders or as specifically
otherwise required by the Plan (for example, in the case of a stock split), no
adjustments or reduction of the exercise price of any outstanding incentive may
be made in the event of a decline in stock price, either by reducing the
exercise price of outstanding incentives or by canceling outstanding incentives
in connection with regranting incentives at a lower price to the same
individual. Options and/or option rights (see referenced SEC EDGAR 10-K-2003)
Co-Founders Alfano-Katevatis grandfathered and established option conversion and
assignment rights* below) not grandfathered are not assignable or transferable
except for limited circumstances upon a grantee's death, or pursuant to rules
that may be adopted by the Committee. The Committee may establish rules and
procedures to permit a grantee to defer recognition of income or gain for
incentives under the Plan.

* Peter Katevatis Pres/CEO and Dr. Alfano principal scientific advisor have
agreed to forbear any and all collection action against Mediscience for accrued
salary and related contractually entitled items including forgiveness of
interest in exchange for the option of converting such accrued debts into MTC
common stock on the basis of (0.25 cents), which is above the average High Bid
price on June 9 through the 12th 1998, which was 0.15 cents. Said option to be
unlimited in duration. Should MTC receive funding Katevatis and Alfano may elect
to receive all or part of such accrued debt in cash/shares. This right shall be
assignable in whole or in part without condition to any assignee or heirs and in
no way is intended to negate the corporate debt


                                                                              25
<PAGE>

accrued and owing to Katevatis/ Alfano. This offer by Katevatis/ Alfano was
unanimously accepted by the Board of Directors December 4,1998 and continues in
effect.

                              2003 CONSULTANTS PLAN

Adopted and Board approved February 17, 2004: 2003 CONSULTANTS STOCK OPTION,
STOCK WARRANT AND STOCK AWARD PLAN See Definitive 14C SEC NOTICE Appendix B-1
incorporated by reference hereto in its entirety, see Mediscience web site
MEDISCIENCETECH.com

On December 24, 2003, our Board of Directors adopted, subject to shareholder
approval, the Mediscience Technology Corp. 2003 Consultants Stock Option, Stock
Warrant and Stock Award Plan (the "2003 Consultants Plan"). The purpose of the
2003 Consultants Plan is to enable us to pay for certain consulting services
provided to us by individuals with our equity securities when it is in our best
interest to do so to preserve cash for other purposes, and to provide these
persons with an additional incentive to contribute to our success. A copy of the
2003 Consultants Plan is set forth as Definitive 14C SEC NOTICE Annex B-1 to the
information statement. Shareholders were urged to read the 2003 Consultants Plan
in its entirety. The plan was Presented to the Definitive 14C SEC NOTICE
meeting, quorum present, on February 17, 2004 and Majority of shareholders
entitled to vote approved the proposal to adopt the 1999 Incentive Stock Plan
(the "Plan")

                                     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 transaction

         Fiscal Period                            Common Stock
         -------------                            ------------

                                            High Bid        Low Bid

       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

       2003

1st Quarter         05/31/02                  0.13            0.10

2nd Quarter         08/31/02                  0.08            0.08

3rd Quarter         11/30/02                  0.08            0.07

4th Quarter         02/28/03                  0.26            0.24

      2002

1st Quarter         05/31/01                  0.26            0.18

2nd Quarter         08/31/01                  0.15            0.15

3rd Quarter         11/30/01                  0.10            0.09

4th Quarter         02/28/02                  0.11            0.10


                                                                              26
<PAGE>

(a) Holders: as of February 29, 2004 The approximate number of holders of record
of the Company's Common Stock 708 and Series A Preferred Stock 32

(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.

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


                                                                              27
<PAGE>

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 $4.4
million as of February 29, 2004, 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.

YEAR ENDING FEBRUARY 29, 2004 COMPARED TO YEAR ENDING FEBRUARY 28, 2003

The Company had no revenues during its fiscal year ending February 29, 2004
("its 2004 fiscal year"). The Company's primary focus was its continued
development of its light-based technology. General and administrative expenses
increased approximately $312,000 or 55% during the 2004 fiscal year as compared
to its 2003 fiscal year. This increase was comprised of the net increase and
decrease in several key operating expense categories. Salaries and wages
increased approximately $247,000 in the current fiscal year when compared to the
prior fiscal year. This increase is represented by almost a full year's salary
accrual for Michael Engelhart, the new Chief Operating Officer totaling


                                                                              28
<PAGE>

$102,500, along with the reversal of salary and fringe benefit accruals in the
prior year totaling $74,500 for the former Chief Operating Officer, Sidney
Braginsky, who resigned in the prior fiscal year and noncash compensation of
$70,000 relating to stock options. Travel and entertainment increased
approximately $48,000 in the current fiscal year when compared to the prior
fiscal year. The increase was primarily the result of increased activity
pursuing the establishment of Co-Promotional arrangements for the Marketing,
Distribution and Commercial Exploitation of its Cancer Detection Technology
along with the promotional activities of raising capital to support these
objectives. Professional fees increased approximately $27,000 in the current
fiscal year when compared to the prior fiscal year. The principal reason for the
current increase relates to annual professional fee costs, to include compliance
with Sarbanes - Oxley and increased accounting activities associated with
financial and developmental activities. Other reasons for an increase in general
and administrative expenses were the consulting costs of Michael Engelhart, the
new C.O.O., approximating $10,000, increased transfer fees and printing costs
approximating $8,000, along with an increase in occupancy costs of $6,000. A
reason for a decrease in general and administrative expenses was a decline in
secretarial and financial consulting costs approximating $35,000 during the
current fiscal year when compared to the prior fiscal year. The Company's
product development expense was approximately $26,300 for fiscal year 2004. This
was a decrease of approximately $6,100 or 19% when compared to the prior fiscal
year. During fiscal year 2004, approximately $11,700 in costs were associated
with the Institute for Ultrafast Spectroscopy and Lasers Center for Ultrafast
Photonics and Mediphotonics Laboratory of City College of New York. In addition,
the Company incurred approximately $14,600 of patent filing fees associated with
the Research Foundation of City College of New York during the current fiscal
year.

In the 2003 fiscal year, the Company recognized as income $16,000 on the
settlement of a $40,000 debt with the issuance of 160,000 shares of common stock
at its fair market value of $24,000. In addition, during fiscal year 2003, the
Company recognized as income $164,451 on the settlement of $283,484 debt with
the issuance of 283,228 shares of common stock with a fair market value of
$33,988 along with a payment of $85,045. No gains on the restructuring of
payables were recorded in the 2004 fiscal year. In the 2003 fiscal year, the
Company recognized an income tax benefit approximating $217,700 under the State
of New Jersey Technology Business Tax Certificate Program. The program allows
emerging technology and biotechnology companies to sell their unused state net
operating losses to corporate taxpayers in New Jersey. The proceeds have been
used to pay approximately $31,300 to an officer for prior loans to the Company
with the balance approximating $186,400 to be used for general operations. No
income tax benefit under this program was recorded in the 2004 fiscal year,
since the Company completed the program in fiscal year 2003.

YEAR ENDING FEBRUARY 28, 2003 COMPARED TO YEAR ENDING FEBRUARY 28, 2002

The Company had no revenues during its fiscal years ending February 28, 2003
("its 2003 fiscal year"). The Company's primary focus was the development of its
light-based technology. General


                                                                              29
<PAGE>

and administrative expenses increased approximately $1,300 or .2% during the
2003 fiscal year as compared to its 2002 fiscal year. This increase was
comprised of the net increase and decrease in several key operating expense
categories. Travel and entertainment increased approximately $42,500 in the
current fiscal year when compared to the prior fiscal year. The increase was
primarily the result of increased activity as a result of increased funds.
Another reason for an increase in general and administrative expenses was the
availability of funds to pay for increased general expenses such as insurance,
office expenses, repairs and maintenance and transfer fees all totaling $23,000.
Professional fees decreased approximately $22,300 in the current fiscal year
when compared to the prior fiscal year. The principal reason for the current
decrease was a decrease of annual professional fee costs. Another reason for a
decrease in general and administrative expenses was a decline in secretarial and
financial consulting costs approximating $48,000 during the current fiscal year
when compared to the prior fiscal year. The Company's product development
expense was approximately $32,400 for fiscal year 2003. In the prior fiscal year
product development costs were zero. During fiscal year 2003 approximately
$23,000 in costs were associated with the Institute for Ultra-fast Spectroscopy
and Lasers Center for Ultra-fast Photonics and Medi-photonics of City College of
New York. In addition, the Company incurred approximately $9,000 of other costs
associated with the Research Foundation of City College of New York during the
current fiscal year. In the 2003 fiscal year the Company recognized an income
tax benefit approximating $217,700 under the State of New Jersey Technology
Business Tax Certificate Program. The program allows emerging technology and
biotechnology companies to sell their unused state net operating losses to
corporate taxpayers in New Jersey. The proceeds have been used to pay
approximately $31,300 to an officer for prior loans to the Company with the
balance approximating $186,400 to be used for general operations. In the 2003
fiscal year the Company recognized as income a $16,000 gain on the settlement of
a $40,000 debt with the issuance of 160,000 shares of common stock of the
Company at its fair market value of $24,000. In addition, during fiscal year
2003, the Company recognized as income a $164,451 gain on the settlement of a
$283,484 debt with the issuance of 283,228 shares of common stock of the Company
with a fair market value of $70,807 along with a payment of $85,045. No gains on
the re-structuring of payables were recorded in the 2002 fiscal year. The
Company also issued a five-year option to purchase 600,000 shares of Common
Stock at a $1.00 per share.

YEAR ENDING FEBRUARY 28, 2002 COMPARED TO YEAR ENDING FEBRUARY 28, 2001

The Company had no revenues during its fiscal years ending February 28, 2002
("its 2002 fiscal year). The Company's primary focus was the development of its
light-based technology. General and administrative expenses decreased
approximately $46,300 or 7.5% during 2002 fiscal year as compared to its 2001
fiscal year. This decline was comprised of the net decrease and increase in
several key operating expense categories. Salaries, wages and benefits declined
approximately $202,000 in the current fiscal year. The decline was primarily the
result of a reversal of an accrual for wages approximating $169,000 of the
former President. Travel and entertainment declined approximately $39,000 in the
current fiscal year when compared to the prior fiscal year. The decline was
primarily the result of decreased activity as a result of decreased funds. The
decrease in general and administrative expenses were net of increases in
professional fees and costs for secretarial and financial consulting
Professional fees increased approximately $102,000 in the current fiscal year
when compared to the prior fiscal year. A principal reason for the current
increase was a change in estimate in the prior year for previously accrued
professional fees amounting to approximately $90,000 which was recognized as
income in the prior year. Another reason for the increase in general and
administrative expenses was the recognition of expense


                                                                              30
<PAGE>

associated with the issuance of stock and warrants for secretarial and financial
consulting costs approximating $83,000 during the current fiscal year. No costs
of this type were incurred in fiscal 2001.The Company's product development
expense was zero during the 2002 fiscal year. The Company had previously
conducted a number of research and development projects with the City College of
City University of New York. Due to a lack of resources, R&D activities at CUNY
have been temporarily suspended. In the 2002 fiscal year the Company recognized
as an income tax benefit approximating $241,900 under the State of New Jersey
Technology Business Tax Certificate Program. The program allows emerging
technology and biotechnology companies to sell their unused state net operating
losses to corporate taxpayers in New Jersey. The proceeds have been used to pay
approximately $73,500 to an officer for prior loans to the Company with the
balance approximating $168,400, to be used for general operations. In the 2001
fiscal year the Company recognized as income a $48,000 extraordinary gain on the
settlement of $65,000 debt with the issuance of 100,000 shares of common stock
at its fair market value of $17,000. No gains on the structuring of payables
were recorded in the 2002 fiscal year.

Liquidity and Capital Resources 2004

The Company has a deficiency in working capital as of February 29, 2004 of
approximately ($1,924,000) representing a decrease in the deficiency
approximating ($582,200) during the 2004 fiscal year. The deficiency is
primarily comprised of accruals for professional fees, consulting and general
obligations , and salaries and wages. Cash flows from financing activities was
$1,571,000 for the year ended February 29, 2004, which primarily related to
proceeds from a $1.5 million private placement of convertible preferred stock.
The proceeds will be used for the clinical development of certain prototypes,
regulatory, medical and scientific affairs, market research, and working
capital. The Company's ability to maintain its operations is largely dependent
upon obtaining regulatory approval for the commercialization of its 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. The Company intends to defray the costs of obtaining regulatory
approval for the commercialization of such technology by the establishment of
clinical trial arrangements with medical institutions, similar to its agreement
with Sloan Kettering Memorial Hospital. The Company intends 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. Management of the Company anticipates that substantial resources will
be committed to a continuation of its research and development efforts and to
finance government regulatory applications. While management believes that the
Company will obtain sufficient funds to satisfy its liquidity and capital
resources needs for the short term, 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. In the absence of the availability of
financing on a timely basis, the Company may be forced to materially curtail or
cease its operations. The Company's 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 its products; (iv) the amount of resources which the
Company devotes to clinical evaluation and the establishment of marketing and
sales capabilities; and (v) the Company's success in entering into, and cash
flows derived from, co-promotion arrangements. Liquidity and Capital Resources:
2003


                                                                              31
<PAGE>

The Company has a deficiency in working capital as of February 28, 2003 of
approximately ($2,506,200) representing an increase in the deficiency
approximating ($145,700) during the 2003 fiscal year. The deficiency is
primarily comprised of accruals for professional fees, research and development
costs, consulting and salaries and wages. The Company's ability to maintain its
operations is largely dependent upon obtaining regulatory approval for the
commercialization of its 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. The Company intends to defray
the costs of obtaining regulatory approval for the commercialization of such
technology by the establishment of clinical trial arrangements with medical
institutions, similar to its agreement with Sloan Kettering Memorial Hospital.
The Company intends 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. Management of the Company anticipates that
substantial resources will be committed to a continuation of its research and
development efforts and to finance government regulatory applications. While
management believes that the Company will obtain sufficient funds to satisfy its
liquidity and capital resources needs for the short term, 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. In the
absence of the availability of financing on a timely basis, the Company may be
forced to materially curtail or cease its operations. The Company's 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 its products; (iv) the amount of
resources which the Company devotes to clinical evaluation and the establishment
of marketing and sales capabilities; and (v) the Company's success in entering
into, and cash flows derived from, co-promotion arrangements.

The Company received benefits under the State of New Jersey Technology Business
Tax Certificate Program. The program allowed Registrant as a qualified emerging
technology and biotechnology businesses to sell its unused Net Operating Loss
(NOL) carryover to any New Jersey corporate taxpayer for no less than 75% of the
audited and allowable tax benefit through the sale of its New Jersey Net
Operating Loss carryover. Registrant entered into a three-year agreement on
favorable terms (83.3%) with purchaser NJ Public Service Electric and Gas Co. On
September 27, 2001 Peter Katevatis Esq. successfully re-negotiated this
percentage increasing it from 83.3% to 87.0%. On June 28, 2000, Registrant was
approved and receiving $237,556 in net proceeds. On November 16, 2001 our (2nd)
application for State fiscal year 2002 Registrant was approved and received
$241,867 in proceeds on January 3, 2002. The Company filed for tax benefits in
the fiscal year 2003 pursuant to its agreement with PS&G of NJ and received
$217,712 on December 20, 2002 on the same terms and conditions of 87.0%. This
completed the three-year contract relationship with Public Service Electric and
Gas Co. of NJ. and effectively used all of the Company's then available NOL. The
registrants existing relationship with Public Service Electric and Gas Co. of
NJ. will preserves future participation in the program as registrant develops
future NJ NOL On January 23, 2001 registrant paid the Research Foundation of
CUNY $175,000 thus satisfying all its immediate financial obligations and curing
all present patent issues with RF/CUNY. See 8-K filing dated May 10, 2001. City
University had agreed to accept receipts from the Company's tax sale to repay
the outstanding obligation over a three-year period. This agreed payment
structure to RF/CUNY has been fully paid.


                                                                              32
<PAGE>

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 ALONG 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 the Simple Choice product line, to complete
development of our products, obtain regulatory clearances or approvals, build
our marketing, sales, manufacturing and finance organizations, and conduct
further research and development. To date, we have engaged primarily in research
and development efforts. The further development and commercialization of our
products will require substantial development, regulatory, sales and marketing,
manufacturing and other expenditures.

IF WE CANNOT OBTAIN ADDITIONAL FUNDS WHEN NEEDED, WE WILL NOT BE ABLE TO
IMPLEMENT OUR BUSINESS PLAN.

We will require substantial additional capital to develop our products,
including completing product testing and clinical trials, obtaining all required
regulatory approvals and clearances, beginning and scaling up manufacturing, and
marketing our products. We have historically funded a significant portion of our
activities through private placements. We are seeking a collaborative partner
for our technology and are seeking targeted funding for our cervical cancer
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 product line and our cervical
cancer product, which are not being developed with a collaborative partner. 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 product. . 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


                                                                              33
<PAGE>

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 may be dilutive to stockholders, and debt financing,
if available, may involve restrictive covenants that would limit how we conduct
our business or finance our operations.

IF WE CANNOT OBTAIN ADDITIONAL FUNDS WHEN NEEDED, OR ACHIEVE PROFITABILITY WE
MAY NOT BE ABLE TO CONTINUE AS A GOING CONCERN.

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

OUR ABILITY TO SELL OUR PRODUCTS IS CONTROLLED BY GOVERNMENT REGULATIONS, AND WE
MAY NOT BE ABLE TO OBTAIN ANY NECESSARY CLEARANCES OR APPROVALS.

The design, manufacturing, labeling, distribution and marketing of medical
device products are subject to extensive and rigorous government regulation,
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
clearance or approval from the Food and Drug Administration, or FDA. 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
premarket approval, rather than a 510(k) pre-market notification submission 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


                                                                              34
<PAGE>

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 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 Europe and some other international
jurisdictions, we and our distributors and agents must obtain required
regulatory registrations or approvals. We must also comply with extensive
regulations regarding safety, efficacy and quality in those jurisdictions. We
may not be able to obtain the required regulatory registrations or approvals, or
we may be required to incur significant costs in obtaining or maintaining any
regulatory registrations or approvals we receive. Delays in obtaining any
registrations or approvals required to market our products, failure to receive
these registrations or approvals, or future loss of previously obtained
registrations or approvals would limit our ability to sell our products
internationally. For example, international regulatory bodies have adopted
various regulations governing product standards, packaging requirements,
labeling requirements, import restrictions, tariff regulations, duties and tax
requirements. These regulations vary from country to country. 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.

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 premarket clearance or premarket 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


                                                                              35
<PAGE>

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

We have been issued, or have rights to, 25 U.S. patents (including those under
license). In addition, we have filed for, or have rights to, 1 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. 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 product independently of any collaborative partner.
These activities require additional resources and capital that we will need to
secure. There is no assurance that we will be able to raise sufficient capital
or attract and retain skilled personnel to enable us to finish development,
launch and market these products. Thus, there can be no assurance that we will
be able to commercialize all, or any


                                                                              36
<PAGE>

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, 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


                                                                              37
<PAGE>

third-party payors, 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 payors for our products, or
adverse changes in relevant governmental policies or the policies of private
third-party payors 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 payors. Moreover, third-party payors are increasingly challenging
the prices charged for medical products and services, and some health care
providers are gradually adopting a managed care system in which the providers
contract to provide comprehensive health care services for a fixed cost per
person. Patients, hospitals and physicians may not be able to justify the use of
our products by the attendant cost savings and clinical benefits that we believe
will be derived from the use of our products, and therefore may not be able to
obtain third-party reimbursement.

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

OUR SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT AND RETAIN SCIENTIFIC, TECHNICAL,
MANAGERIAL AND FINANCE PERSONNEL.

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

WE ARE SIGNIFICANTLY INFLUENCED BY OUR DIRECTORS, EXECUTIVE OFFICERS AND THEIR
AFFILIATED ENTITIES.

Our directors, executive officers and entities affiliated with them beneficially
owned an aggregate of 30.5% of our outstanding common stock as of February 29,
2004 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.


                                                                              38
<PAGE>

ITEM 7 FINANCIALS, NOTES, SUPPLEMENTAL DATA AND AUDIT LETTER

<PAGE>

                          MEDISCIENCE TECHNOLOGY CORP.
                                AND SUBSIDIARIES

                                   ----------

                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                      FEBRUARY 29, 2004, FEBRUARY 28, 2003
                              AND FEBRUARY 28, 2002
                                        &
                        REPORT OF INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM

<PAGE>

                                TABLE OF CONTENTS

                                                                       PAGE

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM................  2

CONSOLIDATED FINANCIAL STATEMENTS:

     BALANCE SHEET.....................................................  4

     STATEMENT OF OPERATIONS...........................................  5

     STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT.....................  6

     STATEMENT OF CASH FLOWS...........................................  7

     NOTES TO FINANCIAL STATEMENTS.....................................  8


                                      -1-
<PAGE>

                        REPORT OF INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Mediscience Technology Corp.
Cherry Hill, New Jersey:

We have audited the accompanying consolidated balance sheet of Mediscience
Technology Corp. and subsidiaries (the "Company") as of February 29, 2004 and
February 28, 2003, and the related consolidated statements of operations,
changes in stockholders' deficit, and cash flows for each of the three years in
the period ended February 29, 2004. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these 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 audit 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 29, 2004 and February 28, 2003,
and the results of their operations and their cash flows for each of the three
years in the period ended February 29, 2004 in conformity with accounting
principles generally accepted in the United States of America.


                                      -2-
<PAGE>

The accompanying 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 plans in regard to these matters are 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/ Parente Randolph, LLC

Philadelphia, Pennsylvania
May 4, 2004


                                      -3-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

<TABLE>
<CAPTION>
                                                                                          2004               2003
                                                                                      ------------       ------------
<S>                                                                                   <C>                <C>
                                     ASSETS

CURRENT ASSETS:
       Cash                                                                           $  1,406,371       $    119,681
       Prepaid expenses                                                                      3,388             14,853
                                                                                      ------------       ------------

                 Total current assets                                                    1,409,759            134,534

EQUIPMENT, net of accumulated depreciation
       of $204,361 in 2004 and $204,106 in 2003                                                892              1,147

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

                                           TOTAL                                      $  1,412,451       $    137,481
                                                                                      ============       ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
       Current portion of officer and other loans                                     $    181,587       $     47,404
       Accounts payable                                                                     19,505             43,873
       Accrued liabilities                                                               3,132,686          2,549,413
                                                                                      ------------       ------------

                 Total current liabilities                                               3,333,778          2,640,690

OFFICER AND OTHER LOANS, net of current portion                                                 --            120,045
                                                                                      ------------       ------------

                           Total liabilities                                             3,333,778          2,760,735
                                                                                      ------------       ------------

STOCKHOLDERS' DEFICIT:
       Convertible preferred stock, $.01 par value, 50,000 shares
            authorized, 60 and 0 shares issued and outstanding
            in 2004 and 2003, respectively                                                       1                 --
       Common stock, $.01 par value, 199,950,000
            shares authorized, 39,372,753 and 37,582,139
            shares issued and outstanding in 2004 and 2003,
            respectively                                                                   393,727            375,821
       Additional paid-in capital                                                       20,076,019         18,467,426
       Accumulated deficit                                                             (22,391,074)       (21,466,501)
                                                                                      ------------       ------------

                           Total stockholders' deficit                                  (1,921,327)        (2,623,254)
                                                                                      ------------       ------------

                                           TOTAL                                      $  1,412,451       $    137,481
                                                                                      ============       ============
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      -4-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS
                               FOR THE YEARS ENDED
           FEBRUARY 29, 2004, FEBRUARY 28, 2003 AND FEBRUARY 28, 2002

<TABLE>
<CAPTION>
                                                             2004               2003               2002
                                                         ------------       ------------       ------------
<S>                                                      <C>                <C>                <C>
NET SALES                                                $         --       $         --       $         --

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

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

GENERAL AND ADMINISTRATIVE
  EXPENSE                                                     882,432            570,598            569,270

RESEARCH & DEVELOPMENT EXPENSE                                 26,265             32,383                 --
                                                         ------------       ------------       ------------

                       Total expense                          908,697            602,981            569,270
                                                         ------------       ------------       ------------

OTHER (INCOME) EXPENSE:
  Interest expense, net of interest income of
     $1,004 in 2004, $694 in 2003 and
     $453 in 2002                                              15,876             12,220              2,021
  Gain on restructuring of payables                                --           (180,451)                --
                                                         ------------       ------------       ------------

                       Total other (income) expense            15,876           (168,231)             2,021
                                                         ------------       ------------       ------------

LOSS BEFORE INCOME TAX BENEFIT                               (924,573)          (434,750)          (571,291)

INCOME TAX BENEFIT                                                 --            217,712            241,867
                                                         ------------       ------------       ------------

NET LOSS                                                 $   (924,573)      $   (217,038)      $   (329,424)
                                                         ============       ============       ============

BASIC AND DILUTED LOSS
  PER COMMON SHARE                                       $      (0.02)      $      (0.01)      $      (0.01)
                                                         ============       ============       ============

WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING                                       38,660,309         37,242,965         36,690,543
                                                         ============       ============       ============
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      -5-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES

           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
 FOR THE YEARS ENDED FEBRUARY 29, 2004, FEBRUARY 28, 2003 AND FEBRUARY 28, 2002

<TABLE>
<CAPTION>
                                                         PREFERRED STOCK        COMMON STOCK           ADDITIONAL
                                                        -----------------   ----------------------       PAID-IN       ACCUMULATED
                                                         SHARES   AMOUNT      SHARES       AMOUNT        CAPITAL         DEFICIT
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>       <C>      <C>           <C>         <C>             <C>
BALANCE, FEBRUARY 28, 2001                                2,074    $ 21     36,276,130    $ 362,761   $ 18,274,977    $ (20,920,039)

      Conversion of preferred stock                      (2,074)    (21)        20,740          208           (187)
      Issuance of stock - private placement                                    180,000        1,800         43,200
      Issuance of stock for services                                           400,000        4,000         72,000
      Issuance of stock for services                                            50,000          500         6,500
      Issuance of stock for services                                            50,000          500         4,000
      Net loss                                                                                                             (329,424)
                                                        -------     ---     ----------    ---------   ------------     ------------

BALANCE, FEBRUARY 28, 2002                                   --      --     36,976,870      369,769     18,400,490      (21,249,463)

      Issuance of stock for restructuring of payables                          283,228        2,832         31,156
      Issuance of stock for restructuring of payables                          160,000        1,600         22,400
      Issuance of stock for services                                           100,000        1,000         14,000
      Issuance of stock related to anti-dilution rights                         62,041          620           (620)
      Net loss                                                                                                             (217,038)
                                                        -------     ---     ----------    ---------   ------------     ------------

BALANCE, FEBRUARY 28, 2003                                   --      --     37,582,139      375,821     18,467,426      (21,466,501)

      Issuance of stock                                                        100,000        1,000         18,000
      Issuance of preferred stock - private placement        60       1                                  1,499,999
      Issuance of stock related to anti-dilution rights                      1,690,614       16,906        (16,906)
      Cash received for common stock to be
           issued                                                                                           37,500
      Noncash compensation                                                                                  70,000
      Net loss                                                                                                             (924,573)
                                                        -------     ---     ----------    ---------   ------------     ------------

BALANCE, FEBRUARY 29, 2004                                   60     $ 1     39,372,753    $ 393,727   $ 20,076,019     $(22,391,074)
                                                        =======     ===     ==========    =========   ============     ============
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      -6-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                               FOR THE YEARS ENDED
           FEBRUARY 29, 2004, FEBRUARY 28, 2003 AND FEBRUARY 28, 2002

<TABLE>
<CAPTION>
                                                                     2004            2003            2002
                                                                 -----------       ---------       ---------
<S>                                                              <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net loss                                                   $  (924,573)      $(217,038)      $(329,424)
      Adjustments to reconcile net loss to net cash
           (used in) provided by operating activities:
               Depreciation                                              255           1,417           3,511
               Common stock and warrants issued for legal
                    and other services                                    --          15,000          87,500
               Gain on restructuring of payables                          --        (180,451)             --
               Noncash compensation                                   70,000              --              --
               Changes in assets and liabilities:
                    Prepaid expenses                                  11,465         (14,853)             --
                    Other assets                                          --          (1,800)             --
                    Accounts payable                                 (24,368)         30,500          (1,570)
                    Accrued liabilities                              583,273         283,892         376,932
                                                                 -----------       ---------       ---------

                             Net cash (used in) provided by
                                 operating activities               (283,948)        (83,333)        136,949
                                                                 -----------       ---------       ---------

CASH FLOWS USED IN INVESTING ACTIVITIES,
      Purchases of equipment                                              --          (1,275)             --
                                                                 -----------       ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Issuance of common stock - warrants                             56,500              --              --
      Issuance of preferred stock - private placement              1,500,000              --              --
      Issuance of common stock - private placement                        --              --          45,000
      Proceeds from officer and other loans                           14,138         120,045              --
      Repayments of officer and other loans                               --         (31,307)        (73,518)
                                                                 -----------       ---------       ---------

                             Net cash provided by (used in)
                                 financing activities              1,570,638          88,738         (28,518)
                                                                 -----------       ---------       ---------

NET INCREASE IN CASH                                               1,286,690           4,130         108,431

CASH, BEGINNING                                                      119,681         115,551           7,120
                                                                 -----------       ---------       ---------

CASH, ENDING                                                     $ 1,406,371       $ 119,681       $ 115,551
                                                                 ===========       =========       =========

SUPPLEMENTAL SCHEDULE OF NONCASH
      FINANCING ACTIVITIES:
           Common stock issued for legal and other services      $        --       $  15,000       $  87,500
                                                                 ===========       =========       =========

           Common stock issued for restructuring
               of payables                                       $        --       $  57,988       $      --
                                                                 ===========       =========       =========

           Common stock issued - anti-dilutive rights            $    16,906       $     620       $      --
                                                                 ===========       =========       =========

           Noncash compensation - stock options                  $    70,000       $      --       $      --
                                                                 ===========       =========       =========
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      -7-
<PAGE>

                  MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

      NATURE OF OPERATIONS

      The consolidated financial statements include the accounts of Mediscience
      Technology Corp. ("Mediscience") and its wholly-owned inactive
      subsidiaries, Laser Diagnostic Instruments, Inc. ("Laser"), Photonics For
      Women's Oncology, LLC ("Photonics") and Mediphotonics Development, LLC
      ("Mediphotonics") (collectively 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.

      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.

                                      -8-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      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 $255, $1,417 and $3,511 in 2004, 2003 and 2002,
      respectively.

INCOME TAXES

      The Company follows the provisions of Statement of Financial Accounting
      Standards ("SFAS") No. 109, Accounting for Income Taxes, utilizing the
      liability method, and deferred taxes are determined based on the estimated
      future tax effects of differences between the financial statement and tax
      bases of assets and liabilities at currently enacted tax laws and rates.

RESEARCH AND DEVELOPMENT

      Research and development costs are charged to operations when incurred.
      The amounts charged to expense were $26,265, $32,383 and $0 in 2004, 2003
      and 2002, respectively.


                                      -9-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING FOR STOCK-BASED COMPENSATION

      At February 29, 2004, the Company had one stock-based employee
      compensation plan, which is described more fully in Note 8. The Company
      accounts for this plan under the intrinsic value recognition and
      measurement principles of APB Opinion No. 25, Accounting for Stock Issued
      to Employees, and related Interpretations. The Company reports stock-based
      compensation through the disclosure only requirements of SFAS No. 123,
      Accounting for Stock-Based Compensation, as amended by SFAS No. 148,
      Accounting for Stock-Based Compensation in Transition and Disclosure.

      The following table illustrates the effect on net loss and loss per common
      share if the Company applied the fair value recognition provisions of SFAS
      No. 123 to stock-based employee compensation. For purposes of applying
      SFAS No. 123, the estimated per share fair value of options granted during
      2004 and 2003 was $0.05 and $0.06, respectively. The fair value was
      estimated using the Black-Scholes option-pricing model with the following
      weighted average assumptions for 2004, 2003 and 2002: dividend yield of
      0.0%; volatility ranging between 1.0603 and 1.5625; risk-free interest
      rate of 3.0%; and expected lives ranging between 3 and 5 years.

<TABLE>
<CAPTION>
                                                              2004             2003             2002
                                                          -----------      -----------      -----------
<S>                                                       <C>              <C>              <C>
            Net loss, as reported                         $  (924,573)     $  (217,038)     $  (329,424)

            Deduct: Total stock-based employee
                compensation expense determined
                under fair value based method for all
                awards, net of related tax effects            (87,494)         (38,859)        (105,846)
                                                          -----------      -----------      -----------

            Pro forma net loss                            $(1,012,067)     $  (255,897)     $  (435,270)
                                                          ===========      ===========      ===========

            Basic and diluted loss per share:
                As reported                               $     (0.02)     $     (0.01)     $     (0.01)
                                                          ===========      ===========      ===========

                Pro forma                                 $     (0.03)     $     (0.01)     $     (0.01)
                                                          ===========      ===========      ===========
</TABLE>


                                      -10-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.    RELATED PARTY TRANSACTIONS

      Legal services rendered by Mr. Peter Katevatis, Chief Executive Officer
      and Chairman, (Note 8) amounted to $50,000 for each of the three years in
      the period ended February 29, 2004. These amounts are recorded in general
      and administrative expense.

      As part of Mr. Katevatis's 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's
      home. Expenses recognized were $19,637, $9,097 and $9,371 in 2004, 2003
      and 2002, respectively, and are recorded in general and administrative
      expense.

      During 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 2004, the Company incurred $9,000 for services of THM. On April 9,
      2004, THM terminated its agreement with the Company.

      See Note 8 for details regarding the Company's consulting agreement with
      one of its principal stockholders and Notes 3 and 4 for related party
      loans and accrued liabilities.

3.    OFFICER AND OTHER LOANS

      In fiscal 2000, the Company entered into two interest-bearing convertible
      notes. Both notes bear interest at the rate of 8.25% per annum and are
      convertible into common stock on the basis of $.25 per share. The
      conversion option is unlimited in duration. Both notes are demand
      instruments and the holder can demand and receive payment in full
      including interest. The principal balance of the notes was $30,000 at
      February 29, 2004 and February 28, 2003. Accrued interest at February 29,
      2004 and February 28, 2003 was $10,626 and $8,151, respectively. On March
      8, 2004, the notes plus accrued interest were converted into common stock
      of the Company (Note 10).

      At times, Mr. Katevatis advances funds to the Company to provide funding
      to pay operational expenses as they became due. These advances do not
      accrue interest. At February 29, 2004 and February 28, 2003, officer loans
      payable to Mr. Katevatis were $31,542 and $17,404, respectively.


                                      -11-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      On June 20, 2002, the Company entered into a $120,045 promissory note with
      the Olive Cox Sleeper Trust (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 is due and payable on the maturity date. There is a
      conversion feature that allows 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. Accrued interest at February 29, 2004 and February 28, 2003
      was $24,844 and $10,439, respectively. On March 8, 2004, the note plus
      accrued interest was converted into common stock of the Company (Note 10).

4.    ACCRUED LIABILITIES

       Accrued liabilities consist of the following:

                                                    2004            2003
                                                ----------      ----------

            Legal and professional fees         $  365,354      $  275,000
            Consulting and university fees       1,164,915       1,002,915
            Salaries and wages                   1,508,833       1,206,333
            Other                                   93,584          65,165
                                                ----------      ----------

                           Total                $3,132,686      $2,549,413
                                                ==========      ==========

      Accrued legal and professional fees include services rendered by Mr. Peter
      Katevatis. The amount of the accrual was $287,500 and $237,500 as of
      February 29, 2004 and February 28, 2003, 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 8), with respect to his consulting agreement of
      $1,121,318 and $959,318 as of February 29, 2004 and February 28, 2003,
      respectively.

      Accrued salaries and wages include amounts to Mr. Katevatis of $1,406,333
      and $1,206,333 as of February 29, 2004 and February 28, 2003,
      respectively, and $102,500 to Mr. Engelhart as of February 29, 2004 (Note
      8).


                                      -12-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.    INCOME TAXES

      Income tax benefit consists of the following:

                           2004          2003          2002
                         --------      --------      --------

            Current      $     --      $217,712      $241,867
                         ========      ========      ========

      In 2001, the Company became eligible to receive benefits under the State
      of New Jersey Technology Business Tax Certificate Program. This program
      allows emerging technology and biotechnology businesses to sell their
      unused state net operating losses (NOL) to any corporate taxpayer in the
      State of New Jersey for at least 75% of the tax benefits. The Company is
      eligible to sell a maximum of $713,987 and the amount sold and realized
      during the years ended February 28, 2003 and 2002 was $217,712 and
      $241,867, respectively. Proceeds from the sale of net operating losses are
      reported as income tax benefit in the consolidated statement of
      operations.

      The components of the net deferred income tax asset and liability as of
      February 29, 2004 and February 28, 2003 are as follows:

<TABLE>
<CAPTION>
                                                        2004              2003
                                                     -----------       -----------
<S>                                                  <C>               <C>
            Deferred income tax asset:
                Net operating loss carryforward      $ 4,372,289       $ 4,140,665
                Valuation allowance                   (4,372,289)       (4,140,665)
                                                     -----------       -----------

            Deferred income tax liability                     --                --
                                                     -----------       -----------

                                                     $        --       $        --
                                                     ===========       ===========
</TABLE>


                                      -13-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      As of February 29, 2004 and February 28, 2003, the Company had valuation
      allowances of $4,372,289 and $4,140,665, 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 29, 2004 and February 28, 2003, the Company has net operating
      loss carryforwards of approximately $12,607,000 and $12,051,000,
      respectively, for federal purposes and $1,446,000 and $729,000,
      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
                                      -------          -----           -----

           2005                    $   303,000                     $   303,000
           2006                        369,000                         369,000
           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        786,000        3,422,000
           2014                      1,128,000                       1,128,000
           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
                                   -----------     ----------      -----------

                   Total           $12,607,000     $1,446,000      $14,053,000
                                   ===========     ==========      ===========

(*)   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.


                                      -14-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.    RESTRUCTURING OF PAYABLES

      In June 2002, in connection with the Company's agreement with the Research
      Foundation of the City University of New York ("RFCUNY"), the Company
      issued 283,228 shares of common stock at its fair value of $.12 per share
      at the date of transfer to RFCUNY to settle a $70,807 payable, resulting
      in a gain on restructuring of payables of $36,820.

      In accordance with this agreement, the Company also granted warrants to
      RFCUNY to purchase 600,000 shares of the Company's common stock at a price
      of $1.00 per share (Note 8) to settle a $127,631 payable, which resulted
      in a gain on restructuring of payables of $127,631.

      In January 2003, the Company issued 160,000 shares of common stock at a
      value of $24,000 for accounting services provided to the Company to settle
      a $40,000 payable, which resulted in a gain on restructuring of payables
      of $16,000.

      These transactions resulted in a gain on restructuring of payables of
      $180,451 during the year ended February 28, 2003. The effect on basic and
      diluted earnings per share was $.005. There is no tax effect due to the
      net operating loss carryforward.

7.    LOSS PER COMMON SHARE

      SFAS No. 128, "Earnings Per Share" requires the presentation of basic
      earnings (loss) per share and diluted earnings (loss) per share. Basic
      loss per share is based on the average number of shares outstanding during
      the year. Diluted loss per share is the same as basic loss per share, as
      the inclusion of common stock equivalents would be antidilutive.


                                      -15-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.    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 (Note 4).

      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 three years ended February
      29, 2004.

      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 three years ended February 29,
      2004.

      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 (Note 4).

      On July 9, 2001, the Company entered into a three-year employment
      agreement with Mr. Sidney Braginsky. Pursuant to the terms of the
      agreement, Mr. Braginsky became the President and Chief Operating Officer
      of the Company and was to be paid $100,000 per annum. On April 26, 2003,
      Mr. Braginsky voluntarily terminated employment as President and Chief
      Operating Officer of the Company and waived all rights to any accrued
      compensation owed to him in respect to this agreement (Note 4).


                                      -16-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      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 4).

9.    STOCKHOLDERS' DEFICIT

      AUTHORIZED CAPITAL

      On February 17, 2004, the Company's stockholders approved to increase the
      authorized common shares of the Company from 40,000,000 to 199,950,000
      shares.

      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. The Board of Directors has
      designated 2,074 shares of preferred stock as series A preferred stock.
      During the fiscal year ended February 28, 2002, this stock was redeemed
      for 20,740 shares of common stock. 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 2002, the Company issued 180,000 shares of common stock at a price
      of $.25 per share for $45,000.


                                      -17-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      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 may be 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 has 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 (Note 10).

      COMMON STOCK ISSUED FOR SERVICES

      During 2002, the Company issued 500,000 shares of restricted common stock
      at a value of $87,500 for services provided to the Company. The
      transaction was recognized based on the fair value of shares issued. This
      amount was recorded as general and administrative expense in the
      consolidated statement of operations.

      During 2003 the Company issued 100,000 shares of restricted common stock
      at a value of $15,000 for services provided to the Company. The
      transaction was recognized based on the fair value of shares issued. This
      amount was recorded as general and administrative expense in the
      consolidated statement of operations.

      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 29, 2004.

      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.


                                      -18-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      Mr. Braginsky 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 150,000 shares and at an option price of $1.00 per share for the
      remaining 1,850,000 shares. Mr. Braginsky's ability to exercise these
      options is subject to a series of milestones described in his employment
      agreement. On April 26, 2003, Mr. Braginsky resigned from the Company and
      forfeited the stock options.

      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. Noncash compensation expense related to the grant of
      200,000 options amounted to $70,000 in 2004.

      Activity related to stock options during the three-year period ended
      February 29, 2004 is as follows:

<TABLE>
<CAPTION>
                                                                   EXERCISE           WEIGHTED
                                                                    PRICE              AVERAGE
                                                  SHARES            RANGE          EXERCISE PRICE
                                                  ------            -----          --------------
<S>                                             <C>               <C>                   <C>
        Outstanding, February 29, 2001                               $.32               $ .32
        Granted                                 2,000,000         $.25-$1.00            $ .94
        Forfeited                                (914,373)           $.32               $ .32
                                                ---------

        Outstanding, February 28, 2002                            $.25-$1.00            $ .94
        Granted                                        --
        Forfeited                              (2,000,000)        $.25-$1.00            $ .94
                                               ----------

        Outstanding, February 28, 2003                 --
        Granted                                 2,000,000         $.25-$1.00            $ .93
                                                ---------

        Outstanding, February 29, 2004                            $.25-$1.00            $ .94
</TABLE>

      As of February 29, 2004, 200,000 options at an exercise price of $.25, are
      exercisable.


                                      -19-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      STOCK WARRANTS

      Stock warrant activity during the three year period ended February 29,
      2004, was as follows:

                                                    SHARES           EXERCISE
                                                   AVAILABLE        PRICE RANGE

         Outstanding February 29, 2001                              $.25-$1.20
         Granted                                   2,250,000        $.25-$1.00
         Forfeited                                (1,978,746)
                                                  ----------

         Outstanding, February 28, 2002                             $.25-$1.20
         Granted                                     800,000        $.25-$1.20
         Forfeited                                (2,000,000)
                                                  ----------

         Outstanding, February 28, 2003                             $.25-$1.20
         Granted                                          --
         Exercised                                  (100,000)
         Forfeited                                (3,297,916)
                                                  ----------

         Outstanding, February 29, 2004              800,000        $.25-$1.00
                                                  ==========

      In connection with private placement offerings during fiscal 1997, 1996
      and 1995, the Company granted warrants to purchase 400,000, 1,025,000 and
      256,250 shares of common stock, respectively. The warrants expired in
      April 2003.

      During fiscal 1999 the Company borrowed funds from Mr. Tami Adelstein and
      issued a warrant to purchase 100,000 shares of the Company's common stock
      at $.25 per share. Also during 1999, the Company issued Mr. Adelstein
      200,000 warrants to purchase the Company's common stock at an exercise
      price of $.25 per share for $50,000. The warrants expired during fiscal
      2004.

      Also, during 2000 warrants were issued to purchase 566,666 shares of the
      Company's common stock at an exercise price of $.25 to $.75 per share for
      cash and services. The Company also granted the City College of New York a
      warrant to purchase 500,000 shares of the Company's common stock at an
      exercise price of $1.00, which expired during fiscal 2004.


                                      -20-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      During 2001 warrants were issued to purchase 50,000 shares of the
      Company's common stock at an exercise price of $.25 per share for services
      provided to the Company. The warrants expire in March 2004. Also during
      2001, the Company issued 150,000 shares of common stock and warrants to
      purchase 150,000 shares of the Company's common stock at an exercise price
      of $.25 per share for $37,500. The warrants expired in April 2003.

      During fiscal 2002, Mr. Sidney Braginsky in connection with his employment
      agreement, was issued a warrant to purchase up to 2,000,000 shares of the
      Company's common stock at an exercise price of $.25 per share for the
      first 150,000 shares and at an exercise price of $1.00 per share for the
      remaining 1,850,000 shares. Mr. Braginsky's ability to exercise these
      options and shares under the warrant is subject to a series of milestones
      described in his employment agreement. On April 26, 2003, Mr. Braginsky
      resigned as President and Chief Operating Officer of the Company. As a
      result of his resignation and the milestones not being attained as of that
      date, the warrants have been forfeited.

      Also during 2002, the Company issued 50,000 shares of common stock at a
      value of $7,000 and warrants to purchase 50,000 shares of the Company's
      common stock at an exercise price of $.25 per share for secretarial
      services provided to the Company. The warrants expired in April 2003.

      In connection with the Company's agreement with RFCUNY (Note 6), the
      Company granted options to RFCUNY to purchase 600,000 shares of the
      Company's common stock at an option price of $1.00 per share.

      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 2006.

      During fiscal 2004, Peter J. Katevatis, son of the Chairman and Chief
      Executive Officer, exercised a warrant acquired through a prior company
      private placement on May 20, 2000 to purchase 100,000 shares of the
      company's common stock for $19,000. The original exercise price of these
      warrant shares was $.25 per share which was modified to $.19 per share on
      March 5, 2003. The market value of Mediscience shares on March 5, 2003 was
      $.13 per share. This warrant otherwise expired by its terms on April 6,
      2003.


                                      -21-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      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 29, 2004 and February 28, 2003, Mr.
      Katevatis exercised his right and requested the Company issue 1,619,057
      and 44,312 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 29, 2004 and February 28, 2003, Dr. Alfano
      exercised his right and requested the Company issue 71,557 and 17,729
      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.

10.   SUBSEQUENT EVENTS

      DEBT CONVERTED TO COMMON STOCK

      On March 8, 2004, the Company converted $185,515 of loans payable and
      accrued interest into 1,460,000 shares of the Company's common stock (Note
      3).

      STOCK ISSUED FOR CASH

      During March 2004, Laurence Elgart exercised a warrant to purchase 50,000
      shares of the Company's common stock for $12,500. The exercise price of
      the warrant shares is $.25 per share.

      During March 2004, William Baker exercised a warrant to purchase 100,000
      shares of the Company's common stock for $37,500. The exercise price of
      the warrant shares is $.25 per share.

      ANTI-DILUTION RIGHTS

      In March 2004, the Company issued 1,595,450 shares of common stock to Mr.
      Katevatis and 375,400 shares of common stock to Mr. Alfano at its par
      value of $.01 per share, in accordance with their anti-dilution rights
      agreements with the Company.


                                      -22-
<PAGE>

MEDISCIENCE TECHNOLOGY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      PREFERRED STOCK CONVERTED TO COMMON SHARES

      In March 2004, 60 shares of convertible preferred stock were converted
      into 6,000,000 shares of the Company's common stock (Note 9).

      COMMON STOCK ISSUED FOR SERVICES

      During March 2004, the Company issued 1,400,000 shares of restricted
      common stock at a value of $840,000 for consulting services to be provided
      to the Company.

      During March 2004, the Company issued 200,000 shares of restricted common
      stock at a value of $120,000 for consulting services to be provided to the
      Company.

      During March 2004, the Company issued 325,000 shares of restricted common
      stock at a value of $195,000 for consulting services to be provided to the
      Company.


                                      -23-
<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

ITEM 8A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

      Under the supervision and with the participation of our management,
      including our Chief Executive Officer, we evaluated the effectiveness of
      the design and operation of our disclosure controls and procedures (as
      defined in Rule 13a-14(c) under the Exchange Act) as of a date ("the
      Evaluation Date") within 90 days prior to the filing date of this report.
      Based on that evaluation, the Chief Executive Officer concluded that, as
      of the Evaluation Date, our disclosure controls and procedures were
      effective in timely alerting them to the material information relating to
      the Company (or the Company's consolidated subsidiaries) required to be
      included in our periodic SEC filings.

(b) Changes in Internal Controls

      There were no significant changes in our internal controls during the
      period covered by this report or, to management's knowledge, in other
      factors that could significantly affect these controls subsequent to the
      date of their evaluation.

A control system, no matter how well-designed and operated, cannot provide
absolute assurance that the objectives of the controls system are met, and no
evaluation of internal controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been detected.

Subsequent to the date of their evaluation there have been no significant
changes in internal controls or in other factors that could significantly affect
theses controls.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16 (A) OF THE EXCHANGE ACT

Officers and Directors: corporate governance guidelines (Sarbanes-Oxley
compliance)

1. Directors should be of the highest ethical character and share the values of
Mediscience Technology as reflected in the corporate Credo.

2. Directors should have reputations, both personal and professional, consistent
with the image and reputation of Mediscience

3. Directors should be highly accomplished in their respective field, with
superior credentials and recognition.

4. In selecting Directors, the Board should generally seek active and former
officers/key employees of public companies and leaders of major complex
organizations, including scientific, government, educational and other
non-profit institutions.

5. At the same time, in recognition of the fact that the foundation of the
Company is in medical


                                                                              39
<PAGE>

science and technology, the Board should also seek some Directors who are
recognized as leaders in the fields of medicine or the biological sciences,

6. Each Director should have relevant expertise and experience, and be able to
offer advice and guidance to the chief executive officer, and chief operating
officer based on that expertise and experience.

7. The majority of Directors on the Board should be "independent," not only as
that term may be legally defined, but also without the appearance of any
conflict in serving as a Director. In addition, Directors should be independent
of any particular constituency and be able to represent all shareowners of the
Company.

8. Each Director should have the ability to exercise sound business judgment.

9. Directors should be selected so that the Board of Directors is a diverse
body, with diversity reflecting gender, ethnic background, country of
citizenship and professional experience.

The directors, executive officers and significant employees of the Company are:

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

Sidney Braginsky         62                            Director

Peter Katevatis Esq.     70                     Chairman of the Board,
                                                Chief Executive Officer

John M. Kennedy          67                Director chief financial officer

William Armstrong        87                            Director

Michael Engelhart        42                            Director
                                           President chief operating officer

Michael N. Kouvatas      77                            Director

John P. Matheu           82                            Director

Directors hold office until the next annual shareholders' meeting or until their
successors have been duly elected and qualified. Executive officers are
appointed and serve at the pleasure of the Board of Directors. On February 17,
2004 at a shareholders' meeting per a SEC filed Definitive 14C Notice document
and appendix incorporated by reference hereto in its entirety, (see EDGAR; See
Mediscience web site MEDISCIENCETECH.com) all directors were elected by a
majority of shareholders entitled to vote.

Sidney Braginsky, as of July 9, 2001 had assumed the role of President COO and
Board of Director Member of Mediscience Technology under milestone structured
equity compensation agreement. Effective April 26, 2003 Mr. Sidney Braginsky,
and Registrant agreed to the termination of his July 9, 2001 agreement effective
retroactively as of July 9, 2001. He continues as a Board member providing
consulting services to the Board and President COO Michael Engelhart as needed.


                                                                              40
<PAGE>

Mr. Braginsky was with OLYMPUS OPTICAL LTD for 27 years most recently as
President CEO of, the Olympus US subsidiary a multi-national corporation
headquartered in Tokyo Japan and a world leader in microscopes and endoscopes.
Mr. Braginsky is a present board member of, NOVEN Pharmaceuticals, REDOX
Pharmaceuticals, ELECTRO-OPTICAL SYSTEMS, Inc., ESTEK CARDIOLOGY, Chairman of
Double D Venture Funds LLC and Chairman of the Board of City College of New
York's Robert Chambers Laboratory

PETER KATEVATIS ESQ. founder, Chairman Chief Executive Officer, he has served as
Chairman of the Board of Directors and CEO since 1993 and continues in that
capacity. April 26, 2003 Michael Engelhart by contract became President, and
COO. Katevatis also served as President and Chief Executive Officer of the
Company from November, 1983 until the appointment of Herbert L. Hugill as
President CEO and served as director of the Company since 1981. From 1981 until
his election as President and Chief Executive Officer, Mr. Katevatis was a Vice
President of the Company. Mr. Katevatis was elected Treasurer of the Company in
January, 1996. Mr. Katevatis has been a practicing attorney in Philadelphia, PA
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 Police and Fireman Retirement Pension Fund and served as a member
of the State of New Jersey Investment Council from 1990 until December, 1992. He
is a member of the American Arbitration Association and also serves as an
arbitrator with the National Association of Security Dealers (NASDQ. He is a
member of the National District Attorney's Association. Mr. Katevatis is a
member of the New York Academy of Science

JOHN M. KENNEDY currently serves a Vice President and Secretary of the Company,
as well as being a director of the Company since 1982 and audit committee
chairman since 2000. Mr. Kennedy has served the Company as Vice President since
1983, as Treasurer from 1984 to January, 1996 and as secretary since 1986. Mr.
Kennedy is Chairman of the Board, Secretary-Treasurer and General Manager, of
Pepco Manufacturing Co., a sheet metal fabricator for the electronics industry
located in Somerdale, New Jersey. 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. Mr. Kennedy is a member and the Chairman of the
Mediscience Audit Committee

WILLIAM W. ARMSTRONG has served as a director of the Company since 1978 and
audit committee member since 2000. He has been in retirement since 1982
following a 36 year career as a research scientist with Pfizer Inc, a world wide
health care, personal care and specialty chemicals manufacturer headquartered in
New York City. Since his retirement, Mr. Armstrong has continued to serve as a
consultant to Pfizer concerning programs involved with disperse systems and
complex liquids his field of expertise. He has been awarded 14 patents concerned
in general with therapeutic agent dosage delivery systems. Mr. Armstrong is a
member of the Mediscience Audit Committee

MICHAEL ENGELHART effective April 26, 2003, Michael Engelhart has been appointed
President and Chief Operating Officer based on a three year milestone contract
with warrants expiring on April 28, 2006. Registrants 8-K dated January 22, 2003
is incorporated herein by reference, Registrants 8-K dated March 13, 2003 is
incorporated by reference.

JOHN P. MATHEU has served as a director of the Company since July 1996, and
audit committee member since 2000. Mr. Matheu is currently general partner and
co-founder of MATCO & Associates, a firm specializing in providing management
consulting services and


                                                                              41
<PAGE>

Identified market applications to decision makers in biopharmaceutical, medical
devices and health care firms. Previously, he was employed by Pfizer Inc. during
which time he held a wide range of management positions primarily in
distribution, marketing and sales. , He established and directed Pfizer's
generic drug division. Prior to that assignment he directed Pfizer Laboratories
800 person field sales force, its hospital marketing group and its training
department. He left Pfizer in 1984

Background information: Established the complete marketing operations
infrastructure for two startup companies, including pricing policy and
procedures. Built, directed and managed P&L in biotechnology company;
established, managed the development of a marketing strategy for a cancer
diagnostic and therapeutic product; established national marketing, distribution
system and specialized field force for pharmaceutical CO.; experience in
resolving marketing regulatory issues; directed the out-licensing of two
products to a marketing CO.; managed and directed 1200 person field force,
hospital marketing dept. and training department.

Michael N. Kouvatas has served as a Director of the Company since 1971. For the
past 10 years Mr. Kouvatas has been an attorney with offices in Haddonfield, New
Jersey and additionally is a principal in various food operations in the
Southern New Jersey area.

There are no family relationships among directors and, to the knowledge of the
Registrant there have been no legal proceedings or judgments during the past
five years which would be material to the evaluation of the ability and
integrity of any director as reflected in their certified questionnaires to
Registrant.

                             AUDIT COMMITTEE CHARTER

"The audit committee Chair John Kennedy, John Matheu and William Armstrong are
responsible for reviewing and considering actions of the Company's Board of
Directors in matters related to audit functions; selecting and terminating the
Company's independent accountants and auditors, reviewing with the Company's
independent accountants and auditors the scope and results of their audit,
reviewing the internal audits and the effectiveness of procedures. The members
of the audit committee who are directors are "independent" as required by the
SEC Rules and are financially literate with accounting and financial experience
appropriate for proper and competent oversight."

Mr. Kennedy, Mediscience audit committee chairman, has served as Audit committee
chairman on the 1st People Bank of New Jersey, Pepco Mfg Co. of NJ and has an
understanding of GAAP and financial statements as well as the ability to assess
proper accounting for estimates, accruals, and reserves He has experience in the
preparation, auditing, evaluating of financial statements as well as required
internal controls and the supervision experience for such auditing functions.

                                Board Committees

The Board of Directors has six structured standing committees: Audit Committee,
Committee on Corporate Governance, Compensation and Benefits Committee,
Executive Committee, Finance Committee, and Committee on Public Policy and
Social Responsibility. Members of the individual committees are named below:


                                                                              42
<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Committee on
                              Committee on                                                                    Public Policy
                               Corporate        Compensation and                                               and Social
          Audit                Governance           Benefits            Executive             Finance         Responsibility
          -----                ----------           --------            ---------             -------         --------------
<S>                        <C>                  <C>                  <C>                 <C>                  <C>
John Kennedy*                 John Kennedy*       John Kennedy*        John Kennedy        John Kennedy*      All directors

John Matheu                   John Matheu       William Armstrong    Michael Engelhart    Michael Kouvatas

WilliamArmstrong           William Armstrong    Sidney Braginsky     Peter Katevatis*    William Armstrong
</TABLE>

----------
(*)   Chairperson

      The Audit Committee, comprised of independent directors, is governed by a
Board approved charter that contains, the Committee's membership requirements
and responsibilities. The Audit Committee oversees Company accounting, financial
reporting process, internal controls and audits, consults with management, the
internal auditors and the independent public accountants on, matters related to
the annual audit, the published financial statements and the accounting
principles applied. The Audit Committee appoints, evaluates and retains the
Company's independent public accountants. It maintains direct responsibility for
the compensation, termination and oversight of the Company's independent public
accountants and evaluates the independent public accountants' qualifications,
performance and independence. It approves all services provided to the Company
by the independent public accountants and reviews all non-attest services to
ensure they are permitted under current law. The Committee monitors compliance
with the Foreign Corrupt Practices Act and Company's policies on ethical
business practices and reports to the Board. It will establish policies and
procedures for the pre-approval of services provided by the independent public
accountants. The Audit Committee will establish procedures for the receipt,
retention and treatment, on a confidential basis, of complaints received by the
Company, including the Board and the Audit Committee, regarding accounting,
internal accounting controls or auditing matters, and the confidential,
anonymous submissions by employees regarding questionable accounting or auditing
matters. The Audit Committee's Report is included infra. Its Charter is also
available on the Company's website. MEDEISCIENCETECH.com

      Financial Expert on Audit Committee: The Board has determined that John
Kennedy who currently is President CEO and Chief Financial Officer of PEPCO
Corporation, and who previously was the chairman of the audit committee of
Peoples Bank of NJ, is the audit committee financial expert. The Board made a
qualitative assessment of John Kennedy's level of knowledge and experience based
on a number of factors, including his education and experience.

      The Committee on Corporate Governance, is comprised of independent
directors, considers and makes recommendations on matters related to the
practices, policies and procedures of the Board and takes a leadership role in
shaping the corporate governance of the Company. As part of its duties, the
Committee assesses the size, structure and composition of the Board and Board
Committees. The Committee also acts as a screening and nominating committee for
candidates considered for election to the Board. In this capacity it concerns
itself with the composition of the Board with respect to depth of experience,
balance of professional interests, required expertise and other factors, and
evaluates prospective nominees identified by the Committee on its own initiative
or referred to it by other Board members, management, stockholders or external
sources.


                                                                              43
<PAGE>

      The Compensation and Benefits Committee, which is comprised of independent
directors, consults generally with management on matters concerning executive
compensation and on pension, savings and welfare benefit plans where Board or
stockholder action is or may be contemplated with respect to the adoption of or
amendments to such plans. It makes recommendations to the Board of Directors on
compensation generally, executive officer salaries, bonus awards and stock
option grants, special awards and supplemental compensation. The Committee makes
recommendations on organization, succession, the election of officers,
consultantships and similar matters.

      The Executive Committee acts for the Board of Directors when formal Board
action is required between meetings in connection with matters already approved
in principle by the full Board or to fulfill the formal duties of the Board.

      The Finance Committee, which is comprised of 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.

      The Committee on Public Policy and Social Responsibility, which is
comprised of independent directors, advises the Board of Directors and
management on Company policies and practices that pertain to the Company's
responsibilities as a global corporate citizen, its obligations as a Bio-Medical
company whose products and services affect health and quality of life around the
world.

Board and Board Committee Meetings

      In 2003, the Board of Directors met 2 times. Board committees met as
follows during 2003: Committee on Corporate Governance, 2 times; Audit Committee
4 times with auditors; Compensation and Benefits Committee, 1 time; Committee on
Public Policy and Social Responsibility, 0 time; and Finance Committee, 4. No
meetings of the Executive Committee were held in 2003. All incumbent directors
attended 90 percent of the meetings of the Board and of the committees on which
they served.

      The Chairpersons of the Audit Committee, the Committee on Corporate
Governance, and the Compensation and Benefits Committee will each participate in
any future executive session.

        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.


                                                                              44
<PAGE>

      Consistent with these considerations, the Board affirmatively has
determined that all directors are independent directors except Mr. Michael
Engelhart, and Peter Katevatis Esq. who are Company contracted employees. (see
below)

                        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 Scientific Advisory Board's 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 of the Company. He supervises
the research and development of the Company's cancer diagnostic technology and
is principal investigator at CCNY. Since 1972, he has been affiliated with the
Physics Department of CCNY. He presently directs the institute for Ultra fast
Spectroscopy and Lasers and the Photonics Engineering Laboratories at City
College. From 1964 to 1972, he was a member of the technical staff of General
Telephone & Electronics Laboratories. Dr. Alfano received an Alfred P. Sloan
Fellowship Research corporation Award and was made a Fellow of the American
Physical Society in 1976. In 1983 he received the Outstanding Italian-American
Award for Science. In May 1989, Dr. Alfano was elected a Fellow of the Optical
Society of America for his studies of ultra fast phenomena. He has been a
consultant to several major corporations including GTE, Clairol, Phillips Dental
and Hamamatsu Photonics. Dr. Alfano is on the advisory board of Photonics
Spectra Magazine. He is a reviewer for prestigious professional journals in the
fields of physics, optics, photobiology, photochemistry and biophysics. 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


                                                                              45
<PAGE>

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

Stephane Lubicz, M.D.

EDUCATION: 1965-1968 BS, Cum Laude, Free University of Brussels, Belgium.

M.D., Free University of Brussels, Belgium. PROFESSIONAL EXPERIENCE:
Pharmaceutical, Medical and Gynecologic Oncology

                      I. Pharmaceutical Industry Experience

(A) USA consultant to B. & A, Inc. The Company operates for the coordination and
organization of clinical trials in Mexico (and throughout Latin America). This
includes all Phase II, III trials and post marketing surveillance activities
through Phase IV Clinical trials).

(B) Medical director, Clinical Development Oncology Daiichi Pharmaceutical
Corporation, Montvale, NJ (08/2000-011/2002)

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

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

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

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

                             II. 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


                                                                              46
<PAGE>

Brooklyn, N.Y.1979-1981 Fellow, Gynecology Oncology, Department of Obstetrics,
Gynecology and Reproductive Sciences. Mount Sinai School of Medicine, New York,
N.Y. 1981-1982 Attending Physician, Department of Obstetrics and Gynecology,
Mount Sinai Hospital Medical Center of Chicago, Chicago, IL. 1981-1982.
Assistant Professor, Rush Medical College, Chicago, IL.1981-1982. Director of
Medical Education for Residents and Students, Rush Medical College, Chicago,
IL.1982-1984 Full-time Attending, Department of Obstetrics, Gynecology, and
Reproductive Science, The Mount Sinai Medical Center, New York, N.Y.1982-1984
Assistant Director, Division of Gynecologic- Oncology, Department of Obstetrics
& Gynecology, and Reproductive Science, The Mount Sinai Medical Center, New
York, N.Y.1982-1991 Instructor, Mount Sinai School of Medicine, New York, N.Y.
1982-1984 Assistant Attending, Department of 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.

PROFESSIONAL MEMBERSHIPS:

American College of Obstetricians and Gynecologists (ACOG). American Association
of French-Speaking Health Professionals (AAFSHP). Chicago Medical Society.
Society of Chicago Gynecologic Oncologists. American Society of Gynecologic
Laparoscopists.American Society of Clinical Oncology. Cancer Committee Board,
Department of Obstetrics and Gynecology, The City Hospital Center at Elmhurst,
N.Y.International Correspondence Society of Obstetricians and Gynecologists. New
York State Medical Society of Colposcopy and Cervical Pathology, Gynecologic
Laser Society. New York Gynecological Society Society of Surgical Oncology
(SSO). Drug Information Association America Association of Clinical Research The
Gynecologic Surgery Society The American College of Forensic Examiners The
Society of Pelvic Reconstructive Surgeons American Medical Association

OTHER PROFESSIONAL ACTIVITIES: Relevant Papers

7/94"Fluorescence spectroscopy in the diagnosis of gynecologic
malignancies."9/94"Fluorescence spectroscopy in the diagnosis of gynecologic
malignancies

Optical Fluorescence Spectroscopy in the Detection of Cervical Cancer.

Tang G.C., Pradhan, A., Lubicz S. and Alfano CCNY, New York Gynecologic Oncology
vol. 32, p. 128.

Fluorescence spectra from normal and tumor tissues of the gynecological tract.

She W., Liu C.H., Tang G.C., Lubicz S., Alfano CCNY

Ultraviolet Excited Fluorescence Spectra from non-malignant and Malignant
Tissues of the Gynecological Tract. Lubicz S, Alfano RR, Tang GC, Sha Glassman W
and Liu CH. CCNY

Raman, Fluorescence, and Time-Resolved Light Scattering as Optical Diagnostic
Techniques to Separate Diseased and Normal Biomedical Media.Liu CH,
Photochemical J and RR. Photobiology: Biol., vol. 16 (1992


                                                                              47
<PAGE>

Stanley L. Wiener, M.D., F.A.C.O.G

Chicago Medical School M.D Degree 1963. 1963-67 Bellevue University
Hospital-OB-GYN Residency and Chief Resident. 1969 Board Certification OBGYN and
Fellow American College of Gynecologists.

1967 to present: Senior Attending-Pascack Valley Hospital, Westwood New Jersey,

1984 to present Director Alternative Birthing Center Pascack Valley Hospital,
Westwood New Jersey,

1990-1996 Director, Division OB-GYN Pascack Valley Hospital, Westwood New
Jersey,

1993 to present: Attending-Pascack Valley Hospital, Westwood New Jersey,

1993 to present: Attending- Hackensack University, Hackensack, New Jersey

Committee Membership at Pascack Valley Hospital: Bio Ethics, Utilization Review,
Medical Executive Committee, Disease Related Group. Past Committee Memberships:
Operating Room and PRO of Bergen County

Societies: A.C.O.G. Bergen County Medical Society, Bellevue OB-GYN Society,

The Scientific Advisory Board is paid a fee of $1,000 for each meeting attended.
Additionally, certain members past and present have been granted an option of
unlimited duration to purchase 10,000 shares from the Company's Common Stock at
a price of $2.00 per share

Ronald Tygar

President and Chairman of RT Industries, a NASDAQ publically 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, manufacturing and distribution
operations.

Robert Pinco Esquire

Mr. Pinco is co-chairman of the BioMedical/FDA Practice and head of the firm's
biotechnology group practice of Buchanan Ingersoll, a leading international law
firm with specialization in the biotechnology sector. As a member of
Mediscience's advisory council, Mr. Pinco will counsel its management team on
matters pertaining to government regulatory approval for many of Mediscience's
new products and applications in the U.S. and Europe. Based in Washington, D.C.,
Mr. Pinco has more than 35 years of experience in the pharmaceutical sector. As
a former director of the Over-the-Counter Drug Review of the FDA, he directed a
massive review of more than 400,000 nonprescription drugs, the largest, most
complex project ever undertaken by that agency. He also held positions as White
House Associate Counsel; Associate General Counsel, Special Action Office for
Drug Abuse Prevention with the Drug Enforcement Administration (DEA); Assistant
U.S. Attorney for the District of Columbia and as a pharmacist. Mr. Pinco is an
Adjunct Associate Professor of Pharmacy Practices and Administrative Sciences at
University of Maryland. He is also a member of the University of Connecticut,
School of Pharmacy, Board of Advisors.

Jeremy Rosen DDS


                                                                              48
<PAGE>

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.

ITEM 10. EXECUTIVE COMPENSATION

The following sets forth a summary of compensation paid or accrued to the
executive officers of the Company for fiscal years ending February 29, 2004,
February, 28 2003, and February 28, 2002 whose compensation exceeded $100,000.

                           SUMMARY COMPENSATION TABLE

Name and                    Year ended                          Other Annual
Principal Position         Feb. 28 (29)         Salary          Compensation
------------------         ------------         ------          ------------

Peter Katevatis                2004            $200,000         $ 60,450 (1)
CEO Chairman                   2003            $200,000         $ 65,617 (1)
                               2002            $200,000         $ 61,977

Michael Engelhart              2004            $102,500
President COO
Sidney Braginsky               2003                  -0-              -0- (2)

(1) Includes yearly accrued payment to Mr. Katevatis of yearly legal retainer of
$50,000 February 28, 2004 February 29, 2003, February 28, 2002 , (fiscal years
2003 2002, 2001) respectively), partial contract benefits for fiscal year ending
2004 of automobile expense $774.00 and insurance $9,676; partial contract
benefits for fiscal year ending 2003 under his employment agreement of
automobile expense $6,779 and health insurance $8,838 Contract benefits for
fiscal year 2002 under his employment agreement were automobile expense $7,318,
auto insurance $705.00, and health insurance $3,954. See Notes to consolidated
Financial Statements.

(2). On March 13, 2003 Mr. Braginsky terminated his contract and waived all
salary and expenses including all accruals of salary and/or expenses incurred.

Option Exercises and Holdings

In April 1996, Messrs. Katevatis, Kouvatas, Kennedy and Armstrong, directors and
shareholders of the Company, collectively exercised options for 2,763,166 shares
of the Company's common stock at no cost in consideration for the cancellation
of the remaining 452,582 options held by these individuals. The exercise price
for these options was $0.25 per share and accordingly, the Company recorded
$690,792 as additional compensation expense. (IN OR OUT)

On January 26, 2004 the following individuals exercised their warrants; with
full payment to Registrant; the common stock was issued on March 8, 2004.

      William Baker five year Warrant dated November 15, 2001 price $.25 for
100,000 shares Registrants common Restricted SEC Rule 144. Registrant received
$25,000.00 as proceeds canceling the warrant


                                                                              49
<PAGE>

      Laurence Elgart five year Warrant dated November 15, 2001 Warrant price
$.25 for 50,000 shares Registrants common Restricted SEC Rule 144. Registrant
received $12,500.00 as proceeds canceling the warrant

The flowing table provides information regarding the number of shares covered by
both exercisable and non-exercisable stock options held by the Company's
executive officers at February 29, 2004. In addition the following table sets
forth the values for "in-the-money" options, which represent the positive spread
between the exercise price of the existing options and $0.60 which was the
closing price for the Company's Common Stock in the over-the-counter market on
February 29, 2004.

                        OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                                                       Percent of Total
                             Number of 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%                     $ .25                  4/23/06
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                     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
-------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                                       <C>
                                             Exercisable / Unexercisable               Exercisable / Unexercisable
-------------------------------------------------------------------------------------------------------------------------
       Michael Engelhart                         200,000 / 1,800,000                          $70,000 / $ --
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Company does not have any other contingent forms of compensation for
officers and directors, including any pension, retirement, stock bonus or other
compensation plan. No compensation has been paid to any individual for services
rendered as a director.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information at February 29, 2004 with
respect to (i) those persons known by the Company to be the owners of more than
5% of the Company's Common Stock, (ii) the ownership of the Company's Common
Stock by each director and (iii) the ownership of the Common Stock by all
elective officers and directors of the Company as a group. Except as otherwise
indicated, each of the stockholders named below has sole voting and investment
power with respect to the Shares of Common Stock beneficially owned by him:


                                                                              50
<PAGE>

<TABLE>
<CAPTION>
                                                         Amount of Beneficial                           Percentage of
Name and Address                                         Ownership/ 10-K 2004                               Class
----------------                                         --------------------                               -----
<S>                                              <C>                                                         <C>
Peter Katevatis
P.O. Box 598 08003
Woodcrest Cherry Hill NJ                            6,344,652 (1) (2) (3) (4) (5) (12) (15) (16)             17.0

John M. Kennedy
c/o Pepco Mfg.  Co.
100 Somerdale, NJ 08083                             2,677,933 (5) (6) (12)                                    7.5

William W. Armstrong
P.O Box 607
Tupper Lake, NY 2986                                  375,200 (5) (7) (12)                                    0.10

Michael Kouvatas
27 Kings Highway
East Haddonfield NJ 08033                             684,666 (5) (8) (12)                                    1.9

Michael Engelhart Pres/COO                       (See employment agreement) (10)
161 North Franklin Turnpike,
Ramsey NJ 07446

(Robert C. Miller)
c/o Allen &Company, Inc
711 Fifth Avenue
New York, NY 10022                                        See (14)                                            0.00

Dr. Robert R. Alfano
c/o City College of CUNY
Convent Avenue @ 138th Street
New York, NY 10031                                  1,485,557 (11) (16)                                       4.0

Sidney Braginsky                                                                                               -0-
6 Stoney Court Dix Hills NY 11746

John Matheu
215 Longhill Drive Short Hills NJ 07078                                                                        -0-

All directors and officers as a group:
  Feb. 29, 2004                                    10,461,508 (13)                                           30.5
                                               ------------------------------------------------------------------
</TABLE>

(1) Includes the issuance of a net of 398,167 restricted shares acquired by Mr.
Katevatis pursuant to the exercise of stock options described in footnotes (5)
and (12) below.

(2) Includes 824,500 restricted shares issued for past performance and services
rendered to the Company.

(3) Includes 552,664 restricted shares issued in consideration for contractual
reduction in salary.

(4) 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.

(5) On December 13, 1985 the Company granted stock options at an exercise price
of $0.25 per share to the following Officers and Directors in exchange for
cancellation of certain of the Company's accrued indebtedness to such persons,
portions of which were assigned as follows: Mr. Katevatis received options to
purchase 4,400,000 shares (2,200,000 of which were assigned by Mr. Katevatis to
Mr. Kennedy);


                                                                              51
<PAGE>

Winston Frost, a former Director, received options to purchase 476,000 shares,
238,000 of which were assigned by Mr. Frost to Mr. Armstrong; and Mr. Kouvatas
received options to purchase 560,000 shares.

(6) Includes the issuance of a net of 1,833,333 restricted shares acquired by
Mr. Kennedy pursuant to the exercise of stock options described in footnote (5)
and (12). Also includes 100,000 shares registered in the name of Mr. Kennedy
wife.

(7) Includes the issuance of a net of 65,000 restricted shares acquired by Mr.
Armstrong pursuant to the exercise of stock options described in footnotes (5)
and (12). Also included are 6,000 shares registered in the name of Mr.
Armstrong's wife.

(8) Includes the issuance of a net of 466,666 restricted shares acquired by Mr.
Kouvatas pursuant to the exercise of stock options describe in footnotes (5) and
(12). Also included are 14,000 shares owned by Mr. Kouvatas's wife; 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.

(9) Includes the issuance of a net of 65,000 restricted shares acquired by Mr.
Krum pursuant to the exercise of stock options on May 1, 1997; also includes
6000 shares registered in the name of his wife's IRA.

(10) See Engelhart employment agreement for terms 10-K 2003 incorporated herein
by reference thereto

(11) Includes 74,000 shares owned by Dr. Alfano's daughter and 74,000 shares
held by Dr. Alfano's wife in trust for their minor son.

(12) In April 1996, Messrs. Katevatis, Kouvatas, Kennedy and Armstrong,
directors and shareholders of the Company, collectively exercised options for
2,763,166 shares of the Company's common stock at no cost in consideration for
the cancellation of the remaining 452,582 options held by these individuals. The
exercise price for these options was $0.25 per share and accordingly, the
Company recorded $690,792 as additional compensation expense.

(13) Includes the shares described in notes (1), (6), (7), (8), (9) and (10)
above.

(14) Mr. Robert Miller a vice president and a director of Allen & Company,
Incorporated is not a director or officer of Registrant.

Excludes 3,041,500 shares beneficially owned by Allen & Company, Incorporated,
(included 1,041,500 warrants) reflected in Amendment No. 6 to their Schedule
SC13G/A dated 2/14/02 filed by Allen & Co. This Allen Warrant expired April 6,
2003 present benficial ownership reduced to 2,041,500. shares of common.

(15) On Dec.1 2001 with the unanimous approval of the Board of Directors the
Series A preferred was by agreement converted at the rate of ten (10) shares of
Mediscience Common for each share of preferred with a total issuance of 20,740
shares to the eight (8) holders. This transaction was valued at $1.00 per share
in the conversion. Peter Katevatis owned 122 shares of the Series "A" 1972
Preferred which he converted into 1,220 shares of Common Restricted per Rule 144
Sec Act of 1933.

(16) 10-Q October 14, 2003 In August of 2003 the company issued 1,619,057 shares
of common stock to Peter Katevatis, Chairman/ CEO and 71,557 shares of common
stock to Dr.Robert Alfano co-founders at par value of .01 per share in
accordance with their contractual anti-dilution rights with the company. The
anti-dilution rights are exercisable at their sole discretion and are for
established valuable consideration, and per auditor certified vested contractual
rights 17% Katevatis and 4% Dr. Robert Alfano anti-dilution rights. Katevatis
directed his 1,619,057 shares issued as follows: 1,000,000 Peter Katevatis as to
the


                                                                              52
<PAGE>

following parties he asserts no control and disclaims beneficial ownership.
300,000 Marie Sten, 219,057 Robert J. Katevatis, 100,000 Peter J. Katevatis

ITEM12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Payment of professional fees to firms affiliated with certain of our directors;

1. THM Group, LLC: Mediscience Director President COO Michael W. Engelhart. On
January 13, 2003 Registrant entered into an agreement appointing THM GROUP,
Ramsey NJ as exclusive advisor to explore options for the registrant to
commercialize its technology. On April 13, 2004 Registrant and Mr. Engelhart,
without prejudice to either party fully terminated the agreement and all its
terms. Mr. Engelhart continues to serve as President COO of registrant.

2. Peter Katevatis Esquire See ITEM 10 "Summary Compensation Table"

"(1) Includes the accrual of yearly payments to Mr. Katevatis of $50,000 for
legal services rendered during each of the fiscal years ending in February 2004,
2003 , 2002, 2001, 2000, 1999,1998 (fiscal years 2004, 2003, 2002, 2001 2000,
1999, 1998 respectively)". Katevatis has agreed to non-interest bearing accrual
of all such salary and legal accruals and has the unqualified right to elect to
receive all or part of such accrued debt in cash or Registrants common shares
(at 0.25 cents per share). This right is assignable in whole or in part without
condition to any assignee or heirs and in no way is intended to negate the
overall corporate debt (salary and legal) accrued and owing to Katevatis This
offer by Katevatis was unanimously accepted by the Board of Directors as in the
best interests of the Registrant and continues in effect.

On December 1, 1988, the Company acquired from Dr. Robert Alfano, a principal
stockholder of the Company and Chairman of the Scientific Advisory Board, all of
the issued and outstanding stock of Laser Diagnostic Instruments, Inc. whose
only asset was US patent number 4,930,516 (previously defined as "LDI") in
exchange for 1,500,000 shares of the Company's Common Stock. Additionally, LDI
is under an 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 patent number 4,930,516 to Michelle Alfano, Dr. Alfano's daughter.
In April, 1992 the Company entered into a five (5) year Consulting Agreement
with Dr. Alfano. By letter Agreement, dated August 5, 1995, the Company extended
his Employment Agreement to March 5, 2002 under the same terms and conditions.
Pursuant to the terms of such Consulting Agreement, Dr. Alfano is to be paid a
consulting fee of no less that $150,000 per annum in exchange for services to be
rendered for approximately fifty (50) days per annum in connection with the
Company's medical photonics business. The Consulting Agreement further provides
that Dr. Alfano is to be paid a bonus and fringe benefits in accordance with
policies and formulas applied to the key executives of the Company.

Peter Katevatis Pres/CEO and Dr. Alfano principal scientific advisor have agreed
to forbear any and all collection action against Mediscience for accrued salary
and related contractually entitled items including forgiveness of interest in
exchange for the option of converting such accrued debts into MTC common stock
on the basis of (0.25 cents), which is above the average High Bid price on June
9 through the 12th 1998, which was 0.15 cents. Said option to be unlimited in
duration. Should MTC receive funding Katevatis and Alfano may elect to receive
all or part of such accrued debt in cash or shares. This right shall be
assignable in whole or in part without condition to any assignee or heirs and in
no way is intended to negate the corporate debt accrued and owing to
Katevatis/Alfano. This offer by Katevatis/Alfano was unanimously accepted by the
Board of Directors December 4, 1998 and continues in effect. On August 18, 1999
the board of


                                                                              53
<PAGE>

directors unanimously extended Mr. Katevatis's existing contract expiration date
from March 5, 2002 to March 5, 2007, maintaining all other original contract
terms and conditions, in recognition of his personal financial investment in the
Company, the periodic voluntary non-assertion of his contractual anti-dilution
rights and other significant consideration to the Company. On August 18, 1999
Dr. Alfano agreed to extend his agreement, on the same original contract terms
and conditions, from its expiration date of March 5, 2002 to March 5, 2007.

ITEM 13. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees. The aggregate fees billed by Parente Randolph, LLC for professional
services rendered for the audit of the Company's annual consolidated financial
statements and for the review of the consolidated financial statements included
in the Company's Quarterly Reports on Form 10-QSB for the fiscal years ended
February 29, 2004 and February 28, 2003 were $35,250 and $26,946, respectively.

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

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

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 (7)

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


                                                                              54
<PAGE>

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)

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


                                                                              55
<PAGE>

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
Februar1, 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)


                                                                              56
<PAGE>

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.

(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, 195.

(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.


                                                                              57
<PAGE>

(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

(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, 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.


                                                                              58
<PAGE>

(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
"MEDIPHOTONICS DEVELOPMENT LLC" as of February 20, 2004. The LLC Company is a
wholly owned New York City, New York County, NY State subsidiary of Mediscience
Technology located at 101 31st Street New York, NY

(44) 8-K Report dated February 18, 2004: "Change in Articles of Incorporation"
On February 17, 2004 the Board of Directors by unanimous written consent
increased the authorized common shares from 40,000,000 to 200,000,000. The
number of shares of the Corporation issued and entitled to vote thereon based on
the Corporations established record date of January 16, 2004 and shareholder
notice per its SEC 14C filing was 39,372,753. The amendment was duly adopted by
written consent of a majority of shareholders holding 23,316,168 in accordance
with the applicable provisions of Section 14A:5-6 Corporation, General, of the
State of New Jersey Statutes.

(46) 8-K Report dated February 2, 2004 registrant initiated and 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). MTC will issue on conversion of all MTC CP shares a total of six (6)
million common shares.

(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


                                                                              59
<PAGE>

(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,

(49) 8-K Report dated June 4, 2003 Michael Engelhart, President and COO of
Registrant, "announced the State of Delaware approval and formation of
"PROSCREEN, LLC" as of (June 3, 2003) and Photonics for Woman's Oncology LLC. as
of (February 27, 2003. "Both LLC Company's are wholly owned subsidiaries of
Mediscience Technology. "PROSCREEN, LLC" its second LLC Company has a potential
clinical application for non-invasively diagnosing prostate cancers without
removing prostate tissues".


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