DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements:

DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Lucid, Inc., operating as Caliber Imaging & Diagnostics, or Caliber I.D., (the “Company” or “Lucid”), is a medical device company that develops, manufactures, markets and sells point-of-care cellular imaging systems. The Company’s patented and FDA-cleared VivaScope® technology provides physicians with real-time images of the epidermis and superficial dermis of the skin, as well as other epithelial tissues at a cellular level that can be interpreted by the physician at the bedside and/or transferred securely to a pathologist on VivaNet®, the Company’s HIPAA-compliant private telepathology network for remote diagnosis. With sensitivity and specificity that can rival the current “gold standard”, clinical histopathology, but without all of the associated costs of a traditional biopsy, the Company’s platform imaging technology has the potential to significantly improve patient outcomes while simultaneously reducing costs. The Company sells its products in the United States and numerous foreign countries and is headquartered in Rochester, New York.

The Company’s unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of such information. All such adjustments are of a normal recurring nature. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. This unaudited interim financial information should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. The year-end balance sheet data was derived and condensed from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results for any subsequent period or for the entire fiscal year ending December 31, 2014.