SensiVida Medical Technologies, Inc. - FORM 10-Q/A

Attached files

file	filename
EX-32 - SensiVida Medical Technologies, Inc.	v211702_ex32.htm
EX-31.1 - SensiVida Medical Technologies, Inc.	v211702_ex31-1.htm
EX-31.2 - SensiVida Medical Technologies, Inc.	v211702_ex31-2.htm
EX-10.3 - SensiVida Medical Technologies, Inc.	v211702_ex10-3.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 2

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934

For the quarterly period ended November 30, 2009

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

For the transition period from __________ to __________

Commission File Number 000-07405

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES.

(Exact name of registrant as specified in its charter)

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

77 Ridgeland Road
Henrietta, New York	14623
(Address of principal executive offices)	(Zip Code)

(585) 413-9080

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such short 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 ¨ No x

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

Large accelerated filer	¨	Accelerated filer ¨

Non-accelerated filer	¨	Smaller reporting company x
(Do not check if a smaller reporting company)

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

Yes ¨ No x

As of November 30, 2009, there were outstanding 15,865,612 shares of the registrant’s common stock, $.01 par value.

Explanatory Note

On January 19, 2010, SensiVida Medical Technologies, Inc., a New Jersey corporation (“SensiVida” or the "Company") filed its quarterly report on Form 10-Q. This Amendment No. 2 to the Form 10-Q for the quarter ended November 30, 2009, hereby amends and restates the prior Form 10-Q with certain modifications as a result of comments by the SEC. There are no changes to the financial statements or the Company's financial results for the quarter ended November 30, 2009, other than the addition of Note 12.

This Form 10-Q/A speaks as of the original filing date of the Form 10-Q and does not reflect events that may have occurred subsequent to the original filing date.

Item 1. Financial Statements.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

INDEX

		PAGE

PART 1.	Financial Information

Item 1.	Financial Statements

	Consolidated Balance Sheet as of November 30, 2009 (Unaudited) and February 28, 2009 (Audited)	3

	Consolidated Statement of Operations for the Nine and Three Months Ended November 30, 2009 (Unaudited) and November 30, 2008 (Unaudited)	4

	Consolidated Statement of Changes in Stockholders’Deficit for the Nine Months Ended November 30, 2009 (Unaudited)	5

	Consolidated Statement of Cash Flows for the Nine Months Ended November 30, 2009 (Unaudited) and November 30, 2008 (Unaudited)	6

	Notes to Consolidated Financial Statements	7-19

Item 2.	Management’s Discussion and Analysis	20-21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4T.	Controls and Procedures	22

PART 11.	Other Information	23

Item 1.	Legal Proceedings	23

Item 1A.	Risk Factors	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 3.	Defaults Upon Senior Securities	23

Item 4.	Submission of Matters to a Vote of Security Holders	23

Item 5.	Other Information	23

Item 6.	Exhibits	24

	Signatures	25

	Exhibit Index	26

	Exhibits

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

	November 30,			February 29,
	2009 (Unaudited)			2008 (Audited)
ASSETS

CURRENT ASSETS
Cash and Cash Equivalents	$	42,427		$	76,797
Prepaid Expenses and Other Current Assets		1,190			17,262
Total Current Assets		43,617			94,059

PROPERTY PLANT AND EQUIPMENT
Net of Accumulated Depreciation		-			-

OTHER ASSETS
Intellectual Property - Net of Accumulated Amortization of $140,428 and $-0-		2,668,136			-
Security Deposit		2,800			2,800
Deferred Costs		29,375			130,547

TOTAL ASSETS	$	2,743,928		$	227,406

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Convertible Debt, Net of Discount of $-0- and $86,036	$	451,500		$	1,570,464
Accounts Payable		273,181			73,895
Note Payable		49,828			-
Officer Loan		5,524			-
Loan Payable		50,000			-
Accrued Liabilities		2,183,316			4,140,431
Preferred Stock Subscribed		250,000			150,000
Total Current Liabilities		3,263,349			5,934,790

STOCKHOLDERS' DEFICIT
Convertible Preferred Stock, $.01 Par Value, 5,000 Shares Authorized; Issued and Outstanding -0- Shares November 30, 2009; -0- Shares February 28, 2009		-			-
Common Stock $.01Par Value, Authorized 19,995,000 Shares; Issued and Outstanding Shares - 15,865,612 Shares November 30, 2009; 7,123,241 Shares - February 28, 2009		158,655			71,232
Common Stock Subscribed		90,800			-
Additonal Paid-in Capital		34,107,103			27,784,596
Accumulated Deficit		(34,875,979	)		(33,563,212	)
Total Stockholders' Deficit		(519,421	)		(5,707,384	)

TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT	$	2,743,928		$	227,406

See Notes to Consolidated Financial Statements.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE AND THREE MONTHS ENDED NOVEMBER 30, 2009 AND 2008

(UNAUDITED)

	NINE MONTHS						THREE MONTHS
	2009			2008			2009			2008

Net Sales	$	-		$	-		$	-		$	-

Cost of Sales		-			-			-			-

Gross Profit		-			-			-			-

General and Administrative Expense		896,916			870,700			248,969			434,249

Product Development Expense		248,437			136,999			36,023			47,242

Total Expenses		1,145,353			1,007,699			284,992			481,491

Interest Income		74			4,203			18			951

Cancellation of Indebtedness		43,597			-			-			-

Interest Expense		(125,049	)		(141,058	)		(24,769	)		(50,573	)

Accretion of Interest on Convertible Debt		(86,036	)		(553,105	)		-			(170,199	)

Total Other Expense		(167,414	)		(689,960	)		(24,751	)		(219,821	)

Net Loss	$	(1,312,767	)	$	(1,697,659	)	$	(309,743	)	$	(701,312	)

Basic and Diluted Loss Per Common Share	$	(0.101	)	$	(0.251	)	$	(0.020	)	$	(0.103	)

Weighted Average Common Shares Outstanding		13,356,671			6,762,388			15,854,733			6,837,786

See Notes to Consolidated Financial Statements.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED NOVEMBER 30, 2009

(UNAUDITED)

												Common
	Preferred Stock				Common Stock					Additional Paid-		Stock		Accumulated
	Shares		Amount		Shares			Amount		In Capital		Subscribed		Deficit

BALANCE, FEBRUARY 28, 2009		-	$	-		7,123,241		$	71,232	$	27,784,596	$	-	$	(33,563,212	)

Common Stock Issued for Services		-		-		31,333			313		19,273		-		-

Common Stock Issued in Acquisition of SensiVida Medical Systems, Inc.		-		-		3,333,333			33,333		2,717,999		-		-

Common Stock Issued in Cancellation of Shareholder Debt		-		-		1,172,510			11,725		2,135,462		-		-

Receipt of Cash for Common Stock Subscribed		-		-		-			-		-		90,800		-

Cancellation of Fractional Shares as a Result of Reverse Stock Split		-		-		(27	)		-		-		-		-

Common Stock Issued for Future Services		-		-		50,000			500		37,000		-		-

Common Stock Issued in Conversion of Debt and Accrued Interest		-		-		4,155,222			41,552		1,412,773		-		-

Net Loss		-		-		-			-		-		-		(1,312,767	)

BALANCE, NOVEMBER 30, 2009		-	$	-		15,865,612		$	158,655	$	34,107,103	$	90,800	$	(34,875,979	)

See Notes to Consolidated Financial Statements.

SENSIVIDA MEDICAL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED NOVEMBER 30, 2009 AND 2008

(UNAUDITED)

	2009			2008

CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:
Net Loss	$	(1,312,767	)	$	(1,697,659	)
Accretion of Interest on Convertible Debt		86,036			553,105
Common Stock Issued for Services		19,586			220,256
Depreciation and Amortization		140,428			345
Amortization of Deferred Costs		138,672			140,937
Subtotal		(928,045	)		(783,016	)
Changes in Assets and Liabilities, Net of Acquisition
Decrease in Prepaid Expense and Other Current Assets		16,072			37,209
(Decrease) Increase in Accounts Payable		199,286			(56,581	)
Increase in Accrued Liabilities		437,517			253,812
Net Cash Used in Operating Activities		(275,170	)		(548,576	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in Loan Payable		50,000			-
Preferred Stock Subscribed		100,000			-
Common Stock Subscribed		90,800			-
Proceeds from Issuance of Convertible Debt		-			538,500
Net Cash Provided by Financing Activities		240,800			538,500

DECREASE IN CASH AND CASH EQUIVALENTS		(34,370	)		(10,076	)

CASH AND CASH EQUIVALENTS
Beginning Balance		76,797			123,582
Ending Balance	$	42,427		$	113,506

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Common Stock Issued in Acquisition of Intellectual Property and Other Liabilities	$	2,751,332		$	-
Discount on Debt Due to Beneficial Conversion Option	$	-		$	538,500
Common Stock Issued in Cancellation of Shareholder Debt	$	2,147,187		$	-
Common Stock Issued in Conversion of Debt and Accrued Interest	$	1,454,325		$	-
Common Stock Issued for Future Services	$	37,500		$	-
Common Stock Issued for Anti-Dilution Rights	$	-		$	5,349

See Notes to Consolidated Financial Statements.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

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

Nature of the Business

The consolidated financial statements include the accounts of SensiVida Medical Technologies, Inc. f/k/a Mediscience Technology Corp. (“SensiVida”) and its wholly-owned subsidiaries, Laser Diagnostic Instruments, Inc. (“Laser”), Photonics for Women’s Oncology, LLC (“Photonics”) and Mediphotonics Development, LLC (“Mediphotonics”), and Bioscopix, Inc. (“Bioscopix”), (collectively the “Company”). All significant intercompany transactions and balances have been eliminated in consolidation. All wholly-owned subsidiaries are currently inactive.

The Company has operated in one business segment and continues to be 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. Effective March 3, 2009, with the merger of SensiVida Medical Systems, Inc. into the Company’s wholly-owned subsidiary BioScopix, Inc. (Note 10), the Company’s technology will also focus on the automation of analysis and data acquisition for allergy testing, glucose monitoring, blood coagulation testing, new tuberculosis testing, and cholesterol monitoring.

The consolidated financial statements as of and for the three and nine month periods ended November 30, 2009 and 2008 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission. Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the accompanying disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included and have been prepared on a consistent basis using the accounting policies described in the Summary of Accounting Policies included in the Annual Report of Form 10-KSB for the fiscal years ended February 28, 2009. The interim operating results for the nine months ended November 30, 2009 may not necessarily be indicative of the operating results expected for the full year.

Management’s Plan

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

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

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

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

Use of Estimates

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

Equipment

Equipment is stated at cost. Depreciation is computed using the straight-line method over an estimated useful life of five years. Depreciation expense was $-0- and $345 for the nine months ended November 30, 2009 and 2008, respectively.

Intellectual Property

Intellectual Property is stated at cost. Amortization is computed using the straight-line method over an estimated useful life of fifteen years. Amortization expense was $140,428 and $0 for the nine months ended November 30, 2009 and 2008, respectively.

Income Taxes

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

Research and Development

Research and development costs are charged to operations when incurred. The amounts charged to expense were $248,437 and $136,999 for the nine months ended November 30, 2009 and 2008, respectively.

Loss per Common Share

In accordance with FASB ASC 260 (formerly SFAS No. 128), Earnings per Share, basic and diluted net income or loss per share was computed using net income or loss divided by the weighted average number of shares of common stock outstanding for the period presented. Because the Company reported a net loss for the nine months ended November 30, 2009 and 2008, common stock equivalents consisting of options and warrants were anti-dilutive; therefore, the basic and diluted net loss per share were the same.

Accounting for Stock-Based Compensation

In December 2004, the FASB issued FASB ASC 718 (formerly SFAS 123R), Share-Based Payment. This statement requires measurement of all employee stock-based compensation awards using a fair value method and the recording of such expense in the consolidated financial statements. In addition, the adoption of FASB ASC 718 (formerly SFAS 123R), requires additional accounting related to the income tax effects and additional disclosure regarding the cash flow effects resulting from share-based payment arrangements. There were no employee stock options issued during the nine months ended November 30, 2009 and 2008.

Concentration of Credit Risk Involving Cash

The Company may have deposits with major financial institutions which exceed Federal Deposit Insurance limits during the year.

Reclassifications

The February 28, 2009 financial statements have been reclassified to conform to the 2010 financial statement presentation.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

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

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB issued Accounting Standards Update No. 2009-01, The FASB Accounting Standards Codification, which establishes the Codification as the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. This standard is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of this standard changes the referencing of financial standards.

FASB ASC 820-10 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of this standard relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. This standard is effective for fiscal years beginning after November 15, 2007; however, it provides a one-year deferral of the effective date for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed in the financial statements at fair value at least annually. The Company adopted this standard for financial assets and financial liabilities and nonfinancial assets and nonfinancial liabilities disclosed or recognized at fair value on a recurring basis (at least annually) as of January 1, 2008. The Company adopted the standard for nonfinancial assets and nonfinancial liabilities on January 1, 2009. The adoption of this standard in each period did not have a material impact on its financial statements.

FASB ASC 805 establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. This standard also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. This standard was adopted by the Company beginning January 1, 2009 and will change the accounting for business combinations on a prospective basis.

FASB ASC 810-10 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements. The standard establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that does not result in deconsolidation and expands disclosures in the consolidated financial statements. This standard is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. This standard is not currently applicable to the Company.

FASB ASC 815-10 is effective January 1, 2009. This standard requires enhanced disclosures about derivative instruments and hedging activities to allow for a better understanding of their effects on an entity’s financial position, financial performance, and cash flows. Among other things, this standard requires disclosures of the fair values of derivative instruments and associated gains and losses in a tabular format. This standard is not currently applicable to the Company since the Company does not have derivative instruments or hedging activity.

FASB ASC 350-30 and 275-10 amend the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The adoption of this standard did not have any impact on the Company’s financial statements.

FASB ASC 260-10 provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company does not currently have any share-based awards that would qualify as participating securities. Therefore, application of this standard is not expected to have an effect on the Company’s financial reporting.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

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

FASB ASC 470-20 will be effective for financial statements issued for fiscal years beginning after December 15, 2008. This standard includes guidance that convertible debt instruments that may be settled in cash upon conversion, should be separated between the liability and equity components, with each component being accounted for in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. This standard is currently not applicable to the company.

FASB ASC 815-10 and 815-40 are effective for financial statements for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The standard addresses the determination of whether an instrument (or an embedded feature) is indexed to an entity’s own stock, which is the first part of the scope exception for the purpose of determining whether the instrument is classified as an equity instrument or accounted for as a derivative instrument which would be recognized either as an asset or liability and measured at fair value. The standard shall be applied to outstanding instruments as of the beginning of the fiscal year in which this standard is initially applied. Any debt discount that was recognized when the conversion option was initially bifurcated from the convertible debt instrument shall continue to be amortized. The cumulative effect of the change in accounting principles shall be recognized as an adjustment to the opening balance of retained earnings. The Company adopted this standard as of January 1, 2009, and was not required to reclassify any of it warrants as liabilities.

FASB ASC 825-10 requires disclosures about the fair value of financial instruments for interim reporting periods. This standard is effective for interim reporting periods ending after June 15, 2009. The adoption of this standard did not have a material impact on the Company’s financial statements.

FASB ASC 820-10 provides additional guidance for Fair Value Measurements when the volume and level of activity for the asset or liability has significantly decreased. This standard is effective for interim and annual reporting periods ending after June 15, 2009. The adoption of this standard did not have a material effect on its financial statements.

FASB ASC 320-10 amends the other-than-temporary impairment guidance for debt and equity securities. This standard is effective for interim and annual reporting periods ending after June 15, 2009. The adoption of this standard did not have a material effect on its financial statements.

FASB ASC 855-10 is effective for interim or annual financial periods ending after June 15, 2009 and establishes general standards of accounting and disclosure of events that occur after the balance sheet but before financial statements are issued or are available to be issued.

However, since the Company is a public entity, management is required to evaluate subsequent events through the date that financial statements are issued and disclose the date through which subsequent events have been evaluated, as well as the date the financial statements were issued. This standard was adopted for its interim period ending June 30, 2009. Subsequent events have been evaluated through the date the financial statements were issued.

As of November 30, 2009, the FASB has issued Accounting Standards Updates (ASU) through No. 2009-15. None of the ASUs have had an impact on the Company’s financial statements.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

As of November 30, 2009, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

NOTE 2 – RELATED PARTY TRANSACTIONS

Legal services rendered by Mr. Peter Katevatis amounted to $45,000 and $38,139 for the nine months ended November 30, 2009 and 2008, respectively. These amounts are recorded in general and administrative expense. Effective November 2008, Mr. Katevatis’ legal service agreement was amended to $60,000 per year.

As part of Mr. Katevatis’ prior employment agreement, the Company paid property taxes and certain operating expenses on the home of Mr. Katevatis in lieu of rent, since the Company’s operations were located in Mr. Katevatis’ home through November 2008. Expenses recognized were $-0- and $17,294 for the nine months ended November 30, 2009 and 2008, respectively, and are recorded in general and administrative expense. In December 2008, the Company leased an office in Henrietta, New York.

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

NOTE 3 – DEFERRED CHARGES

Expected future amortization of deferred charges is as follows:

Years Ending
February 28, 2010	$	16,875
February 28, 2011		12,500
	$	29,375

NOTE 4 – ACCRUED LIABILITIES

Accrued liabilities consist of the following:

	November 30, 2009		February 28, 2009
Legal and professional fees	$	264,248	$	182,826
Consulting and university fees		1,397,019		1,440,615
Salaries and wages		275,500		2,148,786
Accrued Interest		154,129		275,969
Expense Reimbursement and Other		92,420		92,235
Totals	$	2,183,316	$	4,140,431

Accrued legal and professional fees include services rendered by Mr. Peter Katevatis. The amount of the accrual was $55,000 and $46,901 as of November 30, 2009 and February 28, 2009, respectively (Note 2).

Accrued consulting and university fees include costs owed to Dr. Robert R. Alfano, a principal stockholder and former chairman of the Company’s Scientific Advisory Board (Note 7), with respect to his prior consulting agreement, of $1,397,019 as of November 30, 2009 and February 28, 2009,

Accrued expense reimbursements of $92,235 were due to Dr. Alfano at November 30, 2009 and February 28, 2009. The Company has accrued these costs in conjunction with Dr. Alfano’s prior consulting agreement.

Accrued salaries and wages include amounts due to Mr. Katevatis of $-0- and $2,110,286 as of November 30, 2009 and February 28, 2009, respectively.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

NOTE 4 – ACCRUED LIABILITIES (CONT.)

Mr. Katevatis and Dr. Robert Alfano have agreed to forebear any and all collection action for accrued fees and, in the case of Mr. Katevatis, his salary, including forgiveness of interest, in exchange for the option of converting any such accrued salary and fees into the Company’s common stock at $2.50 per share. The option is unlimited in duration. If the Company were to receive financing, either may elect to receive all or part of such accrued salary or fees in cash or common stock. As of November 30, 2009, accrued consulting fees and expenses amounted to $1,489,254 for Dr. Alfano.

On March 23, 2009 Mr. Katevatis exercised his option to convert all outstanding salary and fees accrued through November 3, 2008 totaling $2,147,187, along with the termination of his employment agreement and anti-dilution rights in exchange for 1,172,510, shares of the Company’s common stock.

Accrued salaries and wages include amounts due to Frank D. Benick, Chief Financial Officer, of $23,000 and $6,000, as of November 30, 2009 and February 28, 2009, respectively.

Accrued salaries and wages also include amounts due to Kamal Sarbadhikari, former Chief Executive Officer, and Jose Mir, Chief Technical Officer of $93,750 and $6,250 each as of November 30, 2009 and February 28, 2009, respectively.

Accrued salaries and wages include amounts due to David R. Smith, Chairman of the Board, of $65,000 and $20,000 as of November 30, 2009 and February 28, 2009, respectively.

NOTE 5 – CONVERTIBLE DEBT AND NOTE PAYABLE

Convertible Debt

On January 10, 2007, the Company commenced a Private Placement Offering for $2,000,000 of 12% convertible promissory notes (“the Notes”) in amounts of not less than $25,000. The Notes shall be due and payable, together with accrued and unpaid interest, on the earlier of April 15, 2008 for the first $1,000,000 tranche and April 15, 2009 for the second $1,000,000 tranche (of which $656,500 had been raised as of April 15, 2009) or three months after the completion of the initial public offering (“the IPO”) of the shares of BioScopix (now SensiVida Medical Technologies, Inc. as a result of the merger of BioScopix into Mediscience Technology Corp. and subsequent name changes of the Company to BioScopix and then SensiVida Medical Technologies, Inc. (SensiVida), after the merger of BioScopix and SensiVida Medical Technologies, Inc. Holders of the Notes may convert the notes into (i) cash in the amount of the principal and accrued and unpaid interest due and a warrant exercisable until April 15, 2009 to purchase shares of BioScopix (now SensiVida) in an amount equal to 50% of the principal of the Notes at an exercise price of 120% of the five day volume weighted average preceding the effective date of the IPO of SensiVida or (ii) shares of SensiVida at a price equal to 50% of the IPO price of the SensiVida shares of common stock in an amount equal to the principal and accrued and unpaid interest due on the Notes. In accordance with EITF 00-27 under option (ii), the carrying value of the Notes was reduced by the intrinsic value of the beneficial conversion option resulting in a carrying value of $-0-. On January 29, 2008, the Notes were modified to provide for two additional options. In addition to options (i) and (ii), holders of the notes may now also convert the notes into (iii) SensiVida stock with a six month lockup in the amount of principal and accrued interest and receive 50% warrant coverage at 75% of the SensiVida stock IPO price and (iv) combination of alternatives (ii) and (iii). The additional options did not require an adjustment to the value of the Notes.

As of May 31, 2009, the notes have been accreted to their maturity value. Accretion of discount on convertible debt amounted to $86,036 and $382,906 for the nine months ended November 30, 2009 and 2008, respectively.

Accrued interest payable on the notes as of November 30, 2009 and February 28, 2009 was $127,955 and $275,969, respectively. Interest expense for the nine months ended November 30, 2009 and 2008 was $114,642 and $141,058 respectively.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

NOTE 5 – CONVERTIBLE DEBT AND NOTE PAYABLE (CONT.)

Effective April 15, 2008, the first $1,000,000 tranche of the Notes were in default. Under the terms of the Notes, in the event of default, the entire principal and unpaid accrued interest is immediately due and payable. The January 29, 2008 modification of the Notes provided two additional options to the Note holders as compensation for the delay of the IPO which was expected to take place prior to April 15, 2009.

Effective April 15, 2009, the second tranche of the Notes in the amount of $656,500 were in default. Under the terms of the Notes, in the event of default, the entire principal and unpaid accrued interest is immediately due and payable.

On July 31, 2009, certain note holders converted the note and accrued interest thru July 31, 2009 into common stock of the Company at the net price of $.35 per share which represents 50% of the opening market value of the stock on this date. Principal of $1,205,000 and accrued interest of $249,326 were converted into 4,155,222 shares of the Company’s common stock.

As of May 19, 2010, one convertible note holder demanded repayment of principal of $50,000 with a subsequent demand for accrued interest approximating $17,588. As of June 1, 2010, both principal and interest had been satisfied. The remaining notes are in default.

Loan Payable

On September 1, 2009, the Company borrowed $50,000 from a shareholder. The loan calls for interest at 12%. The principal and accrued interest is convertible into the company’s common stock at $.66 per share after six months at the discretion of the note holder. Proceeds of the loan are to be used for the company’s patient allergy clinical trial and related clinical expenses.

Note Payable

On September 1, 2005, SensiVida Medical Systems, Inc. (SensiVida) issued a $50,000 convertible subordinated note to the order of Excell Partners, Inc. (Holder). Principal and accrued interest was due and payable in one installment on September 1, 2008, the maturity date. Interest was accruable at 2% per annum on the unpaid principal amount of the Note. Upon any default of this Note, the Holder has the right to convert the Note to Common Stock of SensiVida. The number of shares of Common Stock would be determined by dividing the outstanding principal and accrued interest to the date of conversion by the conversion price or fair market value paid in a most recent Qualified Transaction by SensiVida. The note was in default upon acquisition of SensiVida Medical Systems, Inc. (Note 10) and was amended as of December 1, 2009. Commencing January 1, 2010, interest will accrue on the balance at a rate of 8% compounded annually. The note has a maturity date of January 1, 2011. If the entire unpaid balance of the note is not paid when due, then the amount unpaid shall bear interest at the current rate plus 1% and such rate shall increase by an additional one percent each year until the note is paid in full. The amount drawn on the note at November 30, 2009 and February 28, 2009 was $49,828 and $-0-, respectively. Interest accrued on the note was $3,455 and $-0- as of November 30, 2009 and February 28, 2009, respectively.

NOTE 6 - PREFERRED STOCK SUBSCRIBED

During February 2009, a current shareholder advanced $150,000 plus an additional $100,000 received in March 2009 in exchange for 2,500 of Series A Preferred stock having a par value of $100 (the shares). Each Series A Preferred share is convertible into 150 shares of common stock for a total of 375,000 shares of common stock together with warrants to purchase up to 50,000 shares of common stock with an exercise price of $1.00. Because the Company did not have the required authorized Preferred Stock to execute this transaction, the Company has recorded the advances as a liability.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

NOTE 6 - PREFERRED STOCK SUBSCRIBED (CONT.)

On April 13, 2010, the Company and a current preferred stock subscriber mutually agreed to revised terms on a prior $250,000 unissued preferred stock subscription agreement. The new terms call for a “ratcheted” conversion to common stock, at a price of $0.35 from $0.66. In addition, accrued interest of $34,849 as of May 1, 2010, on the $250,000 subscription, the subscription, plus a 10% premium of $28,485 on the principal and accrued interest all totaling $313,334, are available at the option of subscriber to roll over the total into the Company’s current Series A subscription agreement. Also the $50,000 loan (see Note 5) plus accrued interest of $3,929 as of May 1, 2010 for a total of $53,929, can also be rolled over into the current Series A subscription agreement at the option of the subscriber. In addition, warrants to purchase 50,000 shares of common stock have been “ratcheted” downward from $0.66666 to $0.35, resulting in a proportional increase in the warrants to purchase 95,237 common shares.

NOTE 7 – INCOME TAXES

There is no income tax benefit for the losses for the three and nine months ended November 30, 2009 and 2008 because the Company has determined that the realization of the net deferred tax asset is not assured. The Company has created a valuation allowance for the entire amount of such. There was no change in unrecognized tax benefits during the period ended November 30, 2009 and there was no accrual for uncertain tax positions as of November 30, 2009.

NOTE 8– COMMITMENTS AND CONTINGENCIES

Dr. Robert R. Alfano

The Company had a consulting agreement (the “Agreement”) through March 2007 with Dr. Robert R. Alfano, a principal stockholder of the Company and prior Chairman of its Scientific Advisory Board. Pursuant to the terms of the Agreement, Dr. Alfano was paid a consulting fee of not less than $150,000 per annum in exchange for services to be rendered for approximately fifty days per annum in connection with the company’s medical photonics business. The Agreement further provided that Dr. Alfano was to be paid a bonus and fringe benefits in accordance with policies and formulas provided to key executives of the Company. The agreement expired on March 5, 2007.

In connection with the acquisition of patent rights to its cancer detection technology, the Company assumed an obligation to pay to Dr. Alfano’s daughter a royalty of one percent of the gross sales derived from any equipment made, leased or sold which utilizes the concepts described in the Company’s cancer detection patent. Since there has been no revenue, no amounts have been paid during the nine months ended November 30, 2009 and 2008.

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 nine months ended November 30, 2009 and November 30, 2008.

Employment Agreements

Mr. Peter Katevatis, a former Chief Executive Officer and Chairman and a stockholder of the Company, had an employment agreement. The prior agreement was renewed on March 5, 2007 which increased his salary from $200,000 to $250,000 per year. The agreement also provided for a bonus and fringe benefits in accordance with policies and formulas mutually agreed upon by Mr. Katevatis and the Board of Directors. The contract was due to expire on March 5, 2015. In November 2008, Mr. Katevatis terminated his employment agreement as Chief Executive Officer and Chairman along with his anti-dilution rights and exercised his option to convert all outstanding salary and fees accrued thru November 2008 in exchange for 1,172,510 shares of the Company’s common stock.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

NOTE 8– COMMITMENTS AND CONTINGENCIES (CONT.)

On November 15, 2005, the Company entered into a two year employment agreement with Frank D. Benick as Chief Financial Officer. Mr. Benick will be paid a monthly salary of $3,000 per month for the first two months, then increasing to $4,000 per month for the remaining term of the agreement and received an option to purchase 30,000 shares of common stock at $10.00 per share. This agreement has not been formally updated.

On November 5, 2008, the Company entered into a three (3) year employment contract with Kamal Sarbadhikari as Chief Executive Officer and Jose Mir as Chief Technical Officer. Mr. Sarbadhikari and Mr. Mir will each be paid a base salary of $150,000 per annum. On November 2, 2009, Mr. Kamal Sarbadhikari resigned for health reasons effective December 31, 2009. Jose Mir has been appointed interim President effective December 31, 2009.

On November 10, 2008, the Company entered into a three (3) year employment contract with David R. Smith as Chairman of the Board. Mr. Smith will be paid $60,000 per annum.

NOTE 9 – STOCKHOLDERS’ DEFICIT

Reverse Stock Split

The consolidated balance sheets, statements of changes in stockholders’ deficit, and related notes to consolidated financial statements have been adjusted to reflect a 10 for 1 reverse stock split that was effective May 18, 2009.

Preferred Stock

The Company is authorized to issue 5,000 shares of preferred stock, $.01 par value per share, which may be issued from time-to-time in one or more series, the terms of which may be designated by the Board of Directors without further action by stockholders. Any preferred stock issued will have preferences with respect to dividends, liquidation and other rights, but will not have preemptive rights.

Holders of series A preferred stock are entitled to a preference of $100 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.

Common Stock Issued for Services

During 2009, the company issued 31,333 restricted shares of its common stock with a value of $19,586 to a group of consultants in exchange for professional services, as per their agreements. The transactions were recognized based on the fair market value of the shares issued (the closing price of the Company’s common stock of the date of issuance or date of agreement).

Common Stock Issued In Acquisition of SensiVida Medical Systems, Inc.

On March 3, 2009, the Company (formerly known as Mediscience Technology Corp.) and SensiVida Medical Systems, Inc. completed a merger of the two companies, with Mediscience changing its name to SensiVida Medical Technologies, Inc. As consideration for the merger, the Company issued 3,333,333 shares of the Company’s common stock, valued at $2,751,000 to the three stockholders of SensiVida Medical Systems, Inc. as consideration for the transaction.

Common Stock Issued in Cancellation of Shareholder Debt

In March 2009, the Company issued 1,172,510 shares of its common stock to Mr. Katevatis in settlement of all his accrued fees and salary to include termination of his employment agreement as Chief Executive Officer and Chairman, along with cancellation of his anti-dilution rights.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

NOTE 9 – STOCKHOLDERS’ DEFICIT (CONT.)

Common Stock Issued for Future Services

During July 2009, the Company issued 50,000 restricted shares of its common stock with a value of $37,500 to a medical consultant in exchange for professional services, as per agreement. The transaction was recognized based on the fair market value of the shares issued (the closing price of the company’s common stock of the date of the issuance).

Common Stock Subscribed

In August 2009, the Company received $30,000 for 30,000 shares of the Company’s common stock. As of November 30, 2009, the shares have not yet been issued.

2003 Consultants Stock Plan

The Board of Directors previously adopted, subject to stockholder approval, a 2003 Consultants Stock Plan (“Consultants Plan”). The Consultants Plan was subsequently approved by the stockholders on February 17, 2004. The aggregate number of shares that may be issued under the options shall not exceed 700,000. No options were issued prior to stockholder approval and no options were outstanding under this plan as of November 30, 2009 and November 30, 2008.

1999 Incentive Stock Option Plan

The Board of Directors previously adopted, subject to stockholder approval, a 1999 Incentive Stock Option Plan (the “Plan”) for officers and employees of the Company. The stockholders subsequently approved the Plan on February 17, 2004. Accordingly awards issued under the Plan prior to February 17, 2004 were deemed not to be granted until that date. The aggregate number of shares that may be issued under the options shall not exceed 300,000.

Stock Options

Activity related to stock options during the nine months ended November 30, 2009 is as follows:

					Weighted
			Exercise		Average
	Shares		Price Range		Exercise Price
Outstanding, February 28, 2009		30,000	$	10.00	$	10.00
Granted		-
Exercised		-
Forfeited		-
Outstanding, November 30, 2009		30,000	$	10.00	$	10.00

Stock Warrants

Stock warrant activity during the nine months ended November 30, 2009 was as follows:

					Weighted
	Shares		Exercise		Average
	Available		Price Range		Exercise Price
Outstanding, February 28, 2009		399,933	$	1.00 - $ 30.00	$	8.01
Granted		127,500	$	.10 - $1.00
Exercised		-		-
Forfeited		-		-
Outstanding, November 30, 2009		527,433	$	1.00 - $ 30.00	$	6.92

In conjunction with the Preferred Stock Subscription, the Company granted warrants to purchase 50,000 shares of common stock at an exercise price of $1.00 per share. The warrants have a five year term.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

NOTE 9 – STOCKHOLDERS’ DEFICIT (CONT.)

Anti-Dilution Rights

The Company and Mr. Peter Katevatis had an anti-dilution rights agreement which provided that Mr. Katevatis’ ownership interest would at all times represent 17% of the issued and outstanding shares of the Company. The anti-dilution rights were exercisable at Mr. Katevatis’ sole discretion. In November 2008, Mr. Katevatis terminated his employment agreement as Chief Executive Officer and Chairman along with his anti-dilution rights and on March 23, 2009 exercised his option to convert all outstanding salary and fees accrued thru November 2008 in exchange for 1,172,510 shares of the Company’s common stock.

The Company and Dr. Robert Alfano had an anti-dilution rights agreement which provided that Dr. Alfano’s ownership interest would at all times represent 4% of the issued and outstanding shares of the Company. The anti-dilution rights were exercisable at Dr. Alfano’s sole discretion. As of February 28, 2007, the Company was obligated to issue an additional 1,400 shares to Dr. Alfano in connection with the anti-dilution rights. As a result of the completion of Dr. Alfano’s consulting agreement as of March 5, 2007, the anti-dilution rights terminated. Subsequent to March 5, 2007, Dr. Alfano was issued 6,400 shares of the Company’s common stock in connection with the anti-dilution rights of which 5,000 shares were issued in error. The Company has placed a stop order and requested the 5,000 shares be returned by Dr. Alfano for cancellation. Dr. Alfano’s anti-dilution rights are currently in the process of litigation along with amounts owed to him for consulting and related expenses.

NOTE 10 - ACQUISITION OF SENSIVIDA MEDICAL SYSTEMS, INC.

On November 5, 2008, Mediscience Technology Corp., a New Jersey corporation (“Mediscience”) entered into an agreement and plan of reorganization (the “Merger Agreement”) with SensiVida Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Mediscience (“Merger Sub”), and SensiVida Medical Systems, Inc., a Delaware corporation (“SensiVida”), pursuant to which Merger Sub will be merged into SensiVida and thereafter SensiVida will be merged with and into Mediscience (the “Merger”). As a condition precedent to completing the Merger, on January 29, 2009, BioScopix, Inc., a Delaware corporation and wholly-owned subsidiary of Mediscience, merged with and into Mediscience, with the surviving corporation changing its name to BioScopix, Inc. (such surviving corporation hereafter referred to as the “Company”).

On March 3, 2009, the Company and SensiVida completed the Merger and the Company changed its name to SensiVida Medical Technologies, Inc. As consideration for the Merger, the Company issued 3,333,333 shares of the company’s common stock, par value $.01 per share (the “Common Stock”) to the three stockholders of SensiVida as consideration for the transaction. In addition, the Company issued 1,172,510 shares of its Common Stock to Mr. Katevatis in settlement of all of his accrued claims and salary, to include termination of his employment agreement as Chief Executive Officer and Chairman, along with cancellation of his anti-dilution rights.

The merger will be accounted for under the acquisition method in accordance with SFAS 141(R), Business Combination. The merger of SensiVida Medical Systems, Inc. into the Company’s wholly-owned subsidiary BioScopix, Inc. will enable the Company to focus on the automation of analysis and data acquisition for allergy testing, glucose monitoring, blood coagulation testing, new tuberculosis testing, and cholesterol monitoring. The fair value of the consideration was approximately $2,751,000, the value of the 3,333,333 shares on March 3, 2009, which includes the assumption of various liabilities totaling approximately $58,000. The Company has completed its valuation of the identifiable assets acquired and liabilities assumed at their acquisition date fair values as follows:

Cash	$	558
Technology with Patents Pending Approval		2,808,563
Note Payable		(49,828	)
Accrued Expenses		(2,437	)
Officer Loan		(5,524	)
Net Value of Common Stock Issued	$	2,751,332

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

NOTE 10 - ACQUISITION OF SENSIVIDA MEDICAL SYSTEMS, INC. (CONT.)

The Company engaged the services of a valuation firm to estimate the fair value of SensiVida Medical Systems, Inc. Based on the valuation report, the acquisition date fair values of the assets acquired and the liabilities assumed ranged from $591,000 to $7,740,000. Due to the wide range in valuation amounts and uncertainty of realizing the probabilities employed in the valuation, the Company has used the fair value of the common stock issued, $2,751,000, as it approximates the fair value of the assets acquired and liabilities assumed.

The operating results of the acquired company have been included in the consolidated financials statements from the date of acquisition, effective as of March 1, 2009 for accounting purposes. The following table provides the unaudited proforma results of operations as if the acquisition had occurred as of March 1, 2008:

	Nine Months Ended			Three Months Ended
	November 30, 2008			November 30, 2008
Net Sales	$	-0-		$	-0-
Net Loss	$	(1,707,060	)	$	(707,850	)
Basic and Diluted Lose Per Common Share	$	(0.252	)	$	(0.103	)

NOTE 11 - SUBSEQUENT EVENTS

Amendment of Certificate of Incorporation

On March 1, 2010, the Board of Directors approved and on March 1, 2010, the holders of a majority of the voting capital stock approved an amendment to restate the Certificate of Incorporation to provide for the increase in the total number of authorized shares of the Company’s common and preferred stock.

The aggregate number of shares which the Company shall have authority to issue is 100,000,000, 89,000,000 of which shall be common stock, $.01 par value per share and 11,000,000 of which shall be preferred stock, $.01 par value per share. 10,000,000 shares of preferred stock are designated Series A, convertible preferred stock and 1,000,000 shares of preferred stock shall have all preferences and characteristics to be determined by the Company’s Board of Directors on a case-by-case basis, prior to issuance.

The Series A Preferred stock shall have the following relative rights, preferences and limitations:

a). The Series A Preferred stock shall bear interest at 12% per annum, such interest to accrue and be paid in cash at the end of three years from the date of issuance of the Series A Preferred stock or in shares of common stock if the holder of the Series A Preferred stock elects to convert the Series A Preferred stock.

b). The holders of the Series A Preferred stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available therefore, dividends, whether in cash or stock, in preference to the holders of common stock.

c). The holders of the Series A Preferred stock shall be entitled to a preference over holders of common stock with regard to distribution of assets in the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary.

SENSIVIDA MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009

NOTE 11 - SUBSEQUENT EVENTS (CONT.)

d). The shares of Series A Preferred stock shall not entitle the holder thereof to have any right to vote or to receive any notice of any meeting of the holders of the Company’s stock or to exercise any voting power.

e). The Series A Preferred stock may, at any time for a period of three years from the date of its issuance, at the option of the holders thereof, be converted into common stock at a price of $0.35 per share (as adjusted for subsequent stock dividends, stock splits, combinations, recapitalizations or the like).

Series A Convertible Preferred Stock Offering

Subsequent to the Company’s February 28, 2010 fiscal year end, the Company began an offering of a maximum of $10,000,000 of Series A Preferred stock at $1.00 per share. The Series A Preferred stock is convertible into shares of the Company’s common stock, par value $.01 per share at $0.35 per share for a period of three years from the date of issuance and bears interest at 12% per annum, such interest to accrue and be paid in cash at the end of three years from the date of issuance of the Series A Preferred stock or in shares of common stock if the investor elects to convert the Series A Preferred stock. The investor also will receive warrants to acquire shares of common stock in an amount equal to 50% of the number of shares of common stock into which the Series A Preferred stock converts. The exercise price of the warrant is also at $1.00 per share. Series A Preferred stock subscriptions to date have exceeded $1,000,000.

NOTE 12 - CORRECTION OF AN ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company has amended its quarterly report as a result of the review of its financial statements by its independent accounting firm. Originally the Company incorrectly classified the cancellation of certain related party debt as income of $1,209,179. Upon subsequent review, the cancellation of the debt was reclassified to additional paid in capital.

In addition, product development costs were increased $5,352 from $243,085 to $248,437, because various vendors had delayed their invoicing until after the quarterly report was filed. Interest expense was also corrected from $129,253 to $125,049 because of an error in duplicating an accrual of interest in the third quarter.

The above corrections resulted in reduction of income totaling $1,210,327 and the correction of reporting loss per share from $(0.008) to a loss of $(0.101) per share for the nine months ended November 30, 2009. Since the cancellation of debt was reclassified to additional paid in capital, the summary of corrections increased the shareholders deficit approximately $1,100.

The independent review of the financial statements also resulted in the reclassification within the balance sheet of $250,000 of preferred stock subscribed from the equity section to a current liability.

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operation

Results of Operations

Nine Months Ending November 30, 2009 Compared to

Nine Months Ending November 30, 2008

Revenues

We had no revenues during the nine months ending November 30, 2009 and November 30, 2008. Our focus was our continued development of our light-based technology. Effective March 3, 2009, with the merger of SensiVida Medical Systems, Inc. into the Company’s wholly-owned subsidiary BioScopix, Inc., the Company’s technology will primarily focus on the automation of analysis and data acquisition for allergy testing, glucose monitoring, blood coagulation testing, tuberculosis testing, and cholesterol monitoring.

General and Administrative Expense

General and administrative expenses increased approximately $26,000, or 3%, during the current nine month period ended November 30, 2009 as compared to the nine month period ended November 30, 2008. The increase was the net of increases and decreases in major expense components. Salaries, wages and related expenses approximating $310,000 increased approximately $82,000 over the prior year period, as a result of the employment agreements of the new CEO, CTO and Chairman of the Board. In addition, professional fees increased approximately $127,000 during the current nine month period, primarily due to the increased professional activities associated with the merger and related matters. Also, adding to the increase in general and administrative expense was approximately $140,000 of amortization costs associated with the Company’s intellectual property. As an offset to the increases, there was a decrease in financial service (bridge fees and related costs) totaling approximately $289,000 and a decrease in all other general and administrative expenses approximating $34,000 due to a curtailment of expenses from lack of funding.

Product Development Expense

Product development expense increased approximately $111,000, or 81%, during the current nine month period ended November 30, 2009 when compared to the prior nine month period ended November 30, 2008. The increase is due to allergy research being conducted in Rochester, NY, by the Company and its consultants.

Cancellation of Indebtedness

In addition, the Company has written off certain accrued consulting fees totaling $43,597 that had been outstanding for a number of years due to lack of completion of the engagement by the consultant.

Liquidity and Capital Resources

We had a deficiency in working capital as of November 30, 2009 of approximately $3,220,000 compared to a deficiency of approximately $5,841,000 at February 28, 2009 representing a decrease in the deficiency of approximately $2,621,000 for the current nine month period ended November 30, 2009. The decrease in the deficiency consisted of a decrease of approximately $50,000 in current assets, consisting of cash and prepaid expenses, and an offsetting decrease of approximately $2,671,000 in current liabilities. The principal reason for the decline in accrued liabilities is the cancellation of approximately $2,147,000 of obligations to Mr. Katevatis who terminated his employment agreement as Chief Executive Officer and Chairman along with his anti-dilution rights and exercised his option to convert an outstanding salary and fees accrued thru November 2008 in exchange for 1,172,510 shares of the Company’s common stock. In addition, certain note holders converted $1,205,000 of note principal and $249,326 of accrued interest into common stock of the Company. The current deficiency in working capital is primarily represented by accruals for professional fees, consulting, salaries and wages and convertible debt.

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

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

The preparation of financial statements requires management to make estimates and assumptions that affect amounts reported herein. The most significant of these involve the use of estimates. In each situation, management is required to make estimates about the effects of matters or future events that are inherently uncertain.

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and, as such, include amounts based on informed estimates and judgments of management, such as:

Ø	Determining accruals and contingencies;

Ø	Valuing options and other equity instruments;

Ø	Reviewing the realization/recoverability of deferred costs resulting from the issuance of common stock to acquire certain consulting services to be rendered in future periods.

Ø	Deferred tax valuation allowance.

Ø	Measurement of effects on business combinations.

The Company used what it believes are reasonable assumptions where applicable, established valuation techniques in making its estimates. Actual results could differ from those estimates.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not Applicable

Item 4T.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Office and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of November 30, 2009, the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of November 30, 2009, the end of the period covered by this report are not effective due to the existence of material weaknesses in our internal control over financial reporting, discussed below.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our system of internal control over financial reporting includes those policies and procedures that: pertain to the maintenance of records that, in reasonable detail,

i. We do not have an independent board of directors or audit committee to oversee our internal control over financial reporting.

ii. We have a limited number of personnel and as a result, there is limited segregation of duties amongst the Company's employees with respect to preparation and review of the Company's financial statements.

iii. We have limited ability to account for complex equity transactions, such that our controls relating to disclosure and related assertions in the financial statements in the area of non-routine transactions were not adequate.

iv. We have informal policies and procedures and we lack a formal budgeting process.

These material weaknesses may affect management's ability to effectively review and analyze elements of the financial statement closing process and prepare financial statements in accordance with generally accepted accounting principles.

Changes in Internal Control Over Financial Reporting

During the last fiscal quarter, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

In October 2009, a civil action was entered against the company by Dr. Robert Alfano. The litigation centers around payment for accrued consulting fees and expenses totaling approximately $1,490,000. In addition, Dr. Alfano is contesting the termination of his anti-dilution rights and the transfer of his former Mediscience Technology Corp. stock into SensiVida Medical Technologies, Inc. stock. The company filed a response to his action. The matter is pending.

Item 1A.

Risk Factors

Not Applicable

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

During November 2009, the company issued 15,000 restricted shares of its common stock with a value of $7,500 to a consultant in exchange for professional services as per an agreement. The transaction was recognized based on the fair market value of the services provided as per the agreement.

Item 3.

Defaults Upon Senior Securities

Effective April 15, 2008, the first $1,000,000 tranche of the Company’s 12% convertible promissory notes (the “Notes”) were in default. Under the terms of the Notes, in the event of default, the entire principal and unpaid accrued interest is immediately due and payable. The January 29, 2008 modification of the Notes provided two additional options to the Note holders as compensation for the delay of the secondary offering which is expected to take place prior to April 15, 2009.

Effective April 15, 2009, the second tranche of the Notes in the amount of $656,500 were also in default. Under the terms of the Notes, in the event of default, the entire principal and unpaid accrued interest is immediately due and payable.

On July 31, 2009, certain note holders converted the note and accrued interest thru July 31, 2009 into common stock of the company at the net price of $.35 per share. Principal of $1,205,000 and accrued interest of $249,326 were converted into 4,155,222 shares of the Company’s common stock.

The Company acquired a $50,000 convertible subordinated note as part of its recent acquisition of SensiVida Medical Systems, Inc. The note was in default upon acquisition and was amended as of December 1, 2009, commencing January 1, 2010. Interest will accrue on the balance as a rate of 8% compounded annually. The note has a maturity date of January 1, 2011. If the entire unpaid balance of the note is not paid when due, then the amount unpaid shall bear interest at the current rate plus 1% and such rate shall increase by an additional one percent each year until the note is paid in full.

Item 4.

Submission of Matters to a Vote of Security Holders

None

Item 5.

Other Information

None

Item 6.

Exhibits

10.1*

Notification that as of October 12, 2009, Peter Katevatis tendered his letter of resignation as a Director.

10.2*

Notification that as of November 2, 2009, Kamal Sarbadhikari tendered his letter of resignation as President and Director because of health reasons. Jose Mir, Chief Technology Officer and Director was appointed interim President effective December 31, 2009.

10.3

Review Report of Independent Registered Public Accounting Firm.

31.1

Certification of the President required by Rule 13a-14(a) or Rule 15d-14(a)

31.2

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

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

* Previously filed

SIGNATURES

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

	SENSIVIDA MEDICAL TECHNOLOGIES, INC.
	(Registrant)

February 16, 2011	By: /s/ Jose Mir


	Jose Mir
	President

February 16, 2011	By: /s/ Frank D. Benick


	Frank D. Benick, CPA
	Chief Financial Officer
	Principal Financial and Accounting Officer

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION

10.1*		Notification that as of October 12, 2009, Peter Katevatis tendered his letter of resignation as a Director.

10.2*		Notification that as of November 2, 2009, Kamal Sarbadhikari tendered his letter of resignation as President and Director because of health reasons. Jose Mir, Chief Technology Officer and Director was appointed interim President effective December 31, 2009.

10.3		Review Report of Independent Registered Public Accounting Firm.

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

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

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

* Previously filed

SensiVida Medical Technologies, Inc. - FORM 10-Q/A - February 16, 2011

Attached files

SensiVida Medical Technologies, Inc. Reports