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<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 0.5in"><b>(2)</b></td><td><b>GOING CONCERN AND MANAGEMENT'S PLANS</b></td></tr></table>
<p style="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying financial statements are prepared
assuming the Company will continue as a going concern. As of September 30, 2018, the Company had an accumulated deficit of $131,790,623,
a stockholders' deficit of $772,444, and a working capital deficiency of $797,673. For the three months ended September
30, 2018, net loss totaled $401,142. The net cash used in operating activities for the three months ended September 30, 2018 totaled
$453,049. These matters raise substantial doubt about the Company's ability to continue as a going concern for a period
of twelve months from the date these financial statements are issued. The ability of the Company to continue as a going concern
is dependent upon increasing sales and obtaining additional capital and financing. While the Company believes in the viability
of its strategy to increase sales volume and in its ability to raise additional funds, there can be no assurances to that effect.
Finally, there can be no assurance that we will obtain FDA marketing or China FDA (CFDA) or other new international marketing
clearances, that the CTLM® will achieve market acceptance or that sufficient revenues will be generated from sales of the
CTLM® to allow us to operate profitably. If our majority shareholder Viable International Investments, LLC ("Viable")
fails to continue funding, the Company would be materially adversely affected and may have to cease operations due to a lack of
funding. These matters affect the Company's liquidity profile, and management's plans in those regards are discussed
in the paragraphs that follow.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the remainder of fiscal year 2019, we anticipate
that losses from operations will continue until we obtain marketing clearance through CFDA and begin to generate revenues through
the sales of CTLM® systems in China. These losses will be primarily due to an anticipated increase in marketing, manufacturing
and operational expenses associated with the international commercialization of the CTLM®, expenses associated with our CFDA
and FDA approval processes, and the costs associated with advanced product development activities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is currently focused on obtaining
marketing clearance of its CTLM® Breast Imaging System through the CFDA in China. The PMA process for U.S. marketing clearance
is expected to take much longer than the Chinese process. Sales in China are expected to commence in the second half of fiscal
2019. No sales in the U.S. are expected in fiscal 2019. The Company has received the CE Mark which would allow it to sell its
CTLM® System in the European Union and other countries that recognize the CE Mark; however, the Company does not expect material
sales in Europe until it received U.S. marketing clearance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company's ability to continue as a going concern
and its future success is dependent upon its ability to raise additional capital in the near term to: (1) satisfy its current
obligations, (2) continue its research and development efforts, and (3) successfully develop, market, and sell its products. The
Company believes that it will be able to complete the necessary steps in order to meet its cash flow requirements throughout fiscal
2019 and continue its development and commercialization efforts. However, there can be no assurance that IDSI will generate sufficient
revenue to provide positive cash flows from operations or that sufficient capital will be available, when required, to permit
the Company to realize its plans. The accompanying financial statements do not include any adjustments that might result from
the outcome of this uncertainty.</p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
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<td style="width: 0"></td><td style="width: 0.5in; text-align: left"><b>(3)</b></td><td style="text-align: justify"><b>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(a) Basis of presentation
and use of estimates</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The financial statements are prepared in accordance
with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The preparation of financial
statements in conformity with Generally Accepted Accounting Principles in the United States requires the Company 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. Such estimates
and assumptions also include the valuations of certain financial instruments, stock-based compensation, deferred tax assets, the
outcome of litigation and tax matters, and other matters that affect the statements of financial condition and related disclosures.
Actual results could differ materially from these estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These unaudited financial statements should be
read in conjunction with the Company’s audited financial statements for the year ended June 30, 2018, contained in
our General Form for Registration of Securities of Form 10 as filed with the Securities and Exchange Commission (the “Commission”) on
August 28, 2018, as amended on October 5, 2018. The results of operations for the three months ended September 30, 2018, are not
necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(b) Revenue recognition</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of July 1, 2018, the Company adopted Revenue
from Contracts with Customers (Topic 606) (“ASC 606”). The Company sells medical imaging products, parts, and services
where permitted to independent distributors and in certain unrepresented territories directly to end-users. The Company recognizes
revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred
upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for
transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in
customer incentives the Company offers to its customers and their customers. Any discounts, sales incentives or similar arrangements
with the customer are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from
revenue.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(c) Allowance for doubtful
accounts</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event that management determines that a
receivable becomes uncollectible, or events or circumstances change, which result in a temporary cessation of payments from the
distributor, we will make our best estimate of probable or potential losses in our accounts receivable balance using the allowance
method for each quarterly period. Management will review the receivables at the end of each fiscal year and the appropriate allowance
will be made based on current available evidence and historical experience.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our allowance for doubtful accounts was $-0- as
of September 30, 2018 and June 30, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(d) Cash and cash equivalents</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Holdings of highly liquid investments with original
maturities of three months or less and investment in money market funds are considered to be cash equivalents by the Company.
There were no cash equivalents at September 30, 2018 and June 30, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(e) Concentration of Risk</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial instruments that potentially
subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company places its cash and cash equivalents
with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit
Insurance Corporation limit of $250,000. At September 30, 2018 and June 30, 2018, the Company had $0 and $0 in excess of the federally
insured limit.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the three months ended September 30,
2018 and September 30, 2017, the Company had the following 10 percent or greater concentrations of revenue with its customers:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; white-space: nowrap"><b>September 30,<br />
2018</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>September 30,<br />
2017</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%; text-align: left">Xi’an IDI Laser Image</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 7%; text-align: right">100</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 7%; text-align: right">74</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">All other</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">0</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">26</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">100</td><td style="padding-bottom: 4pt; text-align: left">%</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">100</td><td style="padding-bottom: 4pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(f) Inventory</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inventories, consisting principally of raw materials,
work-in-process (including completed units under testing), finished goods and units placed on consignment, are carried at the
lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Raw materials consist
of purchased parts, components and supplies. Work-in-process includes completed units undergoing final inspection and testing.
The Company periodically reviews the value of items in inventory and records write-downs or write-offs based on its assessment
of slow moving or obsolete inventory. The Company maintains a reserve for obsolete inventory and generally makes inventory value
adjustments against the reserve.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(g) Property and equipment</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are stated at cost, less
accumulated depreciation and amortization. Depreciation and amortization are computed using straight-line methods over the estimated
useful lives of the related assets. Expenditures for renewals and betterments which increase the estimated useful life or capacity
of the asset are capitalized; expenditures for repairs and maintenance are expensed when incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(h) Research and development</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Research and development expenses consist principally
of expenditures for equipment and outside third-party consultants, raw materials which are used in testing and the development
of the Company's CTLM® device or other products and product software. The non-payroll related expenses include testing at
outside laboratories, parts associated with the design of initial components and tooling costs, and other costs which do not remain
with the developed CTLM® device.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(i) Net loss per share</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company relies on the guidance provided by
ASC 260, (“Earnings per Share”), which requires the reporting of both basic and diluted earnings per share. Basic
net loss per share is determined by dividing loss available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if options or other contracts
to issue common stock were exercised or converted into common stock, as long as the effect of their inclusion is not anti-dilutive.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company had 4,811,610 and 4,811,610 options
vested as of September 30, 2018 and June 30, 2018, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(j) Stock-based compensation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company relies on the guidance provided by
ASC 718, (“Share Based Payments”). ASC 718 requires companies to expense the value of employee stock options and similar
awards and applies to all outstanding and vested stock-based awards.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In computing the impact, the fair value of each
option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a
risk-free interest rate; volatility; and expected remaining lives of the awards. The assumptions used in calculating the fair
value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties
and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s
stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate
the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture
rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options
as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate,
or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different
from what we have recorded in the current period. For the three months ended September 30, 2018 and 2017, no stock options were
granted to employees and consultants. Stock options are being expensed pursuant to ASC 718.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value concepts were not changed significantly
in ASC 718; however, in adopting this Standard, companies were given the option to choose among alternative valuation models and
amortization assumptions. We elected to continue to use the Black-Scholes option pricing model and expense the options as compensation
over the requisite service period of the grant. We will reconsider use of the Black-Scholes model if additional information becomes
available in the future that indicates another model would be more appropriate, or if grants issued in future periods have characteristics
that cannot be reasonably estimated using this model. See (15) Stock Options.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(k) Long-lived assets</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company relies on the guidance provided by
ASC 360 (“Property, Plant & Equipment”). ASC 360 requires companies to write down to estimated fair value long-lived
assets that are impaired. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. In performing the review of recoverability, the Company estimates
the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future
cash flows is less than the carrying amount of the assets, an impairment loss is recognized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has determined that no impairment
losses need to be recognized through the three months ended September 30, 2018 and 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(l) Income taxes</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for income taxes pursuant
to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability
approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases
of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes
it is more likely than not that the net deferred asset will not be realized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company follows the provisions of the ASC
740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some
positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the
merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance
of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all
available evidence, management believes it is more likely than not that the position will be sustained upon examination, including
the resolution of appeals or litigation processes, if any.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Tax positions taken are not offset or aggregated
with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount
of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The
portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected
as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that
would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of
being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax positions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has adopted ASC 740-10-25 Definition
of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the
purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the
completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively
settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than
not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of the date
these financials were available to be issued, tax years ended June 30, 2015-2018 are still potentially subject to audit by the
taxing authorities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(m) Warranty reserve</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company warrants all products and parts supplied
for a period of 12 months from the date of installation or 15 months from the date the products was/were shipped from IDSI, whichever
occurs first. The table below reflects the warranty reserve established for the three months ended September 30, 2018 and the
fiscal year ended June 30, 2018. Although the Company tests its product in accordance with its quality programs and processes,
its warranty obligation is affected by product failure rates and service delivery costs incurred in correcting a product failure.
Based on the Company’s experience, the warranty reserve was estimated based on the replacement cost of the laser and certain
electronic parts. Should actual product failure rates or service costs differ from the Company’s estimates, which are based
on limited historical data, where applicable, revisions to the estimated warranty liability would be required. The following warranty
reserve balances are included in accounts payable and accrued expenses.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>September 30,<br /> 2018</b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>June 30,<br /> 2018</b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%; text-align: left">Warranty reserve</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">6,411</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">6,411</td><td style="width: 1%; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(n) Impact of recently issued
accounting pronouncements</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2016, the FASB issued ASU No. 2016-02,
“Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities
arising from a lease for both financing and operating leases. The ASU will also require new qualitative and quantitative disclosures
to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising
from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company
is currently evaluating ASU 2016-02 and its impact on its financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In July 2017, the FASB issued ASU No. 2017-11,
Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments
in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features)
with down round features. When determining whether certain financial instruments should be classified as liabilities or equity
instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to
an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As
a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as
a derivative liability at fair value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For freestanding equity classified financial instruments,
the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of
the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common
shareholders in basic EPS. For public business entities, the amendments in Part I of this Update are effective for fiscal years,
and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted including adoption
in an interim period. The Company has not elected to early adopt and is currently evaluating the impact the adoption of this
new standard will have on its financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="background-color: white">In June 2018, the FASB
issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment
Accounting.” ASU 2018-07 aligns accounting for share-based payments issued to nonemployees to that of employees under the
existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to
nonemployees under Subtopic 505-50, “Equity – Equity-based Payments to Nonemployees.” It is effective for annual
reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this new standard
will have on its financial statements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other accounting standards that have been issued
or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to
have a material impact on our financial statements upon adoption.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(o) Fair Value of Financial
Instruments</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The carrying values of cash and cash equivalents,
receivables, accounts payable, short-term debt and accrued liabilities approximated their fair values due to the short maturity
of these instruments. After a review of our accounts receivable, the Company has not recorded an allowance for doubtful accounts.
The fair value of the Company’s debt obligations is estimated based on the quoted market prices for the same or similar
issues or on current rates offered to the Company for debt of the same remaining maturities. At September 30, 2018 and June 30,
2018, the aggregate fair value of the Company’s debt obligations approximated its carrying value. The Company relies upon
the guidance of ASC 820 (“Fair Value Measurements and Disclosures”). ASC 820 defines fair value as the price that
would be received from selling an asset or paid to transfer a liability in an orderly, transaction between market participants
at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded
at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions
that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk
of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be
used to measure fair value:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Level 1 - Quoted prices in active markets for
identical assets or liabilities</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Level 2 - Observable inputs other than Level 1
prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent
transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived
principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Level 3 - Unobservable inputs to the valuation
methodology that are significant to the measurement of fair value of assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain
cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure
purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on
the lowest level input that is significant to the fair value measurement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(a) Basis of presentation
and use of estimates</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The financial statements are prepared in accordance
with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The preparation of financial
statements in conformity with Generally Accepted Accounting Principles in the United States requires the Company 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. Such estimates
and assumptions also include the valuations of certain financial instruments, stock-based compensation, deferred tax assets, the
outcome of litigation and tax matters, and other matters that affect the statements of financial condition and related disclosures.
Actual results could differ materially from these estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These unaudited financial statements should be
read in conjunction with the Company’s audited financial statements for the year ended June 30, 2018, contained in
our General Form for Registration of Securities of Form 10 as filed with the Securities and Exchange Commission (the “Commission”) on
August 28, 2018, as amended on October 5, 2018. The results of operations for the three months ended September 30, 2018, are not
necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(b) Revenue recognition</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of July 1, 2018, the Company adopted Revenue
from Contracts with Customers (Topic 606) (“ASC 606”). The Company sells medical imaging products, parts, and services
where permitted to independent distributors and in certain unrepresented territories directly to end-users. The Company recognizes
revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred
upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for
transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in
customer incentives the Company offers to its customers and their customers. Any discounts, sales incentives or similar arrangements
with the customer are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from
revenue.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(c) Allowance for doubtful
accounts</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event that management determines that a
receivable becomes uncollectible, or events or circumstances change, which result in a temporary cessation of payments from the
distributor, we will make our best estimate of probable or potential losses in our accounts receivable balance using the allowance
method for each quarterly period. Management will review the receivables at the end of each fiscal year and the appropriate allowance
will be made based on current available evidence and historical experience.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our allowance for doubtful accounts was $-0- as
of September 30, 2018 and June 30, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(d) Cash and cash equivalents</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Holdings of highly liquid investments with original
maturities of three months or less and investment in money market funds are considered to be cash equivalents by the Company.
There were no cash equivalents at September 30, 2018 and June 30, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(e) Concentration of Risk</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial instruments that potentially
subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company places its cash and cash equivalents
with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit
Insurance Corporation limit of $250,000. At September 30, 2018 and June 30, 2018, the Company had $0 and $0 in excess of the federally
insured limit.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the three months ended September 30,
2018 and September 30, 2017, the Company had the following 10 percent or greater concentrations of revenue with its customers:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; white-space: nowrap"><b>September 30,<br />
2018</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>September 30,<br />
2017</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%; text-align: left">Xi’an IDI Laser Image</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 7%; text-align: right">100</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 7%; text-align: right">74</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">All other</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">0</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">26</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">100</td><td style="padding-bottom: 4pt; text-align: left">%</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">100</td><td style="padding-bottom: 4pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(f) Inventory</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inventories, consisting principally of
raw materials, work-in-process (including completed units under testing), finished goods and units placed on consignment, are
carried at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Raw materials
consist of purchased parts, components and supplies. Work-in-process includes completed units undergoing final inspection and
testing. The Company periodically reviews the value of items in inventory and records write-downs or write-offs based on its assessment
of slow moving or obsolete inventory. The Company maintains a reserve for obsolete inventory and generally makes inventory value
adjustments against the reserve.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(g) Property and equipment</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are stated at cost,
less accumulated depreciation and amortization. Depreciation and amortization are computed using straight-line methods over the
estimated useful lives of the related assets. Expenditures for renewals and betterments which increase the estimated useful life
or capacity of the asset are capitalized; expenditures for repairs and maintenance are expensed when incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(h) Research and development</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Research and development expenses consist
principally of expenditures for equipment and outside third-party consultants, raw materials which are used in testing and the
development of the Company's CTLM® device or other products and product software. The non-payroll related expenses include
testing at outside laboratories, parts associated with the design of initial components and tooling costs, and other costs which
do not remain with the developed CTLM® device.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(i) Net loss per share</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company relies on the guidance provided by
ASC 260, (“Earnings per Share”), which requires the reporting of both basic and diluted earnings per share. Basic
net loss per share is determined by dividing loss available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if options or other contracts
to issue common stock were exercised or converted into common stock, as long as the effect of their inclusion is not anti-dilutive.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company had 4,811,610 and 4,811,610
options vested as of September 30, 2018 and June 30, 2018, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(j) Stock-based compensation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company relies on the guidance provided by
ASC 718, (“Share Based Payments”). ASC 718 requires companies to expense the value of employee stock options and similar
awards and applies to all outstanding and vested stock-based awards.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In computing the impact, the fair value of each
option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a
risk-free interest rate; volatility; and expected remaining lives of the awards. The assumptions used in calculating the fair
value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties
and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s
stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate
the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture
rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options
as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate,
or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different
from what we have recorded in the current period. For the three months ended September 30, 2018 and 2017, no stock options were
granted to employees and consultants. Stock options are being expensed pursuant to ASC 718.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value concepts were not changed
significantly in ASC 718; however, in adopting this Standard, companies were given the option to choose among alternative valuation
models and amortization assumptions. We elected to continue to use the Black-Scholes option pricing model and expense the options
as compensation over the requisite service period of the grant. We will reconsider use of the Black-Scholes model if additional
information becomes available in the future that indicates another model would be more appropriate, or if grants issued in future
periods have characteristics that cannot be reasonably estimated using this model. See (15) Stock Options.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(l) Income taxes</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for income taxes pursuant
to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability
approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases
of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes
it is more likely than not that the net deferred asset will not be realized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company follows the provisions of the ASC
740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some
positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the
merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance
of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all
available evidence, management believes it is more likely than not that the position will be sustained upon examination, including
the resolution of appeals or litigation processes, if any.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Tax positions taken are not offset or aggregated
with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount
of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The
portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected
as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that
would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of
being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax positions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has adopted ASC 740-10-25
Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled
for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled
upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively
settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than
not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of the date
these financials were available to be issued, tax years ended June 30, 2015-2018 are still potentially subject to audit by the
taxing authorities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(m) Warranty reserve</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company warrants all products and parts supplied
for a period of 12 months from the date of installation or 15 months from the date the products was/were shipped from IDSI, whichever
occurs first. The table below reflects the warranty reserve established for the three months ended September 30, 2018 and the
fiscal year ended June 30, 2018. Although the Company tests its product in accordance with its quality programs and processes,
its warranty obligation is affected by product failure rates and service delivery costs incurred in correcting a product failure.
Based on the Company’s experience, the warranty reserve was estimated based on the replacement cost of the laser and certain
electronic parts. Should actual product failure rates or service costs differ from the Company’s estimates, which are based
on limited historical data, where applicable, revisions to the estimated warranty liability would be required. The following warranty
reserve balances are included in accounts payable and accrued expenses.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>September 30,<br /> 2018</b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>June 30,<br /> 2018</b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%; text-align: left">Warranty reserve</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">6,411</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">6,411</td><td style="width: 1%; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(n) Impact of recently issued
accounting pronouncements</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2016, the FASB issued ASU No. 2016-02,
“Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities
arising from a lease for both financing and operating leases. The ASU will also require new qualitative and quantitative disclosures
to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising
from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company
is currently evaluating ASU 2016-02 and its impact on its financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In July 2017, the FASB issued ASU No. 2017-11,
Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments
in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features)
with down round features. When determining whether certain financial instruments should be classified as liabilities or equity
instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to
an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As
a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as
a derivative liability at fair value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For freestanding equity classified financial instruments,
the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of
the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common
shareholders in basic EPS. For public business entities, the amendments in Part I of this Update are effective for fiscal years,
and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted including adoption
in an interim period. The Company has not elected to early adopt and is currently evaluating the impact the adoption of this
new standard will have on its financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="background-color: white">In June 2018, the FASB
issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment
Accounting.” ASU 2018-07 aligns accounting for share-based payments issued to nonemployees to that of employees under the
existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to
nonemployees under Subtopic 505-50, “Equity – Equity-based Payments to Nonemployees.” It is effective for annual
reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this new standard
will have on its financial statements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other accounting standards that have been
issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected
to have a material impact on our financial statements upon adoption.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(o) Fair Value of Financial
Instruments</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The carrying values of cash and cash equivalents,
receivables, accounts payable, short-term debt and accrued liabilities approximated their fair values due to the short maturity
of these instruments. After a review of our accounts receivable, the Company has not recorded an allowance for doubtful accounts.
The fair value of the Company’s debt obligations is estimated based on the quoted market prices for the same or similar
issues or on current rates offered to the Company for debt of the same remaining maturities. At September 30, 2018 and June 30,
2018, the aggregate fair value of the Company’s debt obligations approximated its carrying value. The Company relies upon
the guidance of ASC 820 (“Fair Value Measurements and Disclosures”). ASC 820 defines fair value as the price that
would be received from selling an asset or paid to transfer a liability in an orderly, transaction between market participants
at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded
at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions
that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk
of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be
used to measure fair value:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Level 1 - Quoted prices in active markets for
identical assets or liabilities</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Level 2 - Observable inputs other than Level 1
prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent
transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived
principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Level 3 - Unobservable inputs to the valuation
methodology that are significant to the measurement of fair value of assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the extent that valuation is based on models
or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain
cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure
purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on
the lowest level input that is significant to the fair value measurement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; white-space: nowrap"><b>September 30,<br />
2018</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>September 30,<br />
2017</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%; text-align: left">Xi’an IDI Laser Image</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 7%; text-align: right">100</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 7%; text-align: right">74</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">All other</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">0</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">26</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">100</td><td style="padding-bottom: 4pt; text-align: left">%</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">100</td><td style="padding-bottom: 4pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>September 30,<br /> 2018</b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>June 30,<br /> 2018</b></td><td style="padding-bottom: 1.5pt; white-space: nowrap"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%; text-align: left">Warranty reserve</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">6,411</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">6,411</td><td style="width: 1%; text-align: left"> </td></tr>
</table>
1.00
1.00
0.74
0.00
0.26
1.00
6411
6411
4811610
4811610
5500000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 40.5pt"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.5in; text-align: left"><b>(6)</b></td><td style="text-align: justify"><b>ROYALTY RECEIVABLE</b></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 16, 2006, the Company entered into a Royalty
Agreement with Bioscan Inc. whereby the Company established a licensing relationship with Bioscan which granted Bioscan an exclusive
sublicensable, royalty-bearing license to make, use, offer for sale, import and otherwise develop and commercialize products in
its territory. Bioscan Inc. was subsequently purchased by TriFoil Imaging. During the three months ended September 30, 2018, there
was no royalty income, however the Company received a royalty payment of $7,251, leaving a remaining $14,502 balance of royalty
receivable.</p>
7251
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.5in; text-align: left"><b>(7)</b></td><td style="text-align: justify"><b>INVENTORIES</b></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Inventories consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><b> </b></td><td style="white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; white-space: nowrap"><b>September 30,</b></td><td style="white-space: nowrap"><b> </b></td><td style="white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; white-space: nowrap"><b>June 30,</b></td><td style="white-space: nowrap"><b> </b></td></tr>
<tr style="vertical-align: bottom">
<td><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2018</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2018</b></td><td style="padding-bottom: 1.5pt"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%; text-align: left">Raw materials consisting of purchased parts, components and supplies</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">387,866</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">415,262</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Work-in process including units undergoing final inspection and testing</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">52,500</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">52,500</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Finished goods</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total Inventory</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">455,366</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">482,762</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Inventory Reserve</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(455,366</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(482,762</td><td style="text-align: left; padding-bottom: 1.5pt">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt">Net Inventory</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Due to the age of the inventory, lack
of demand for parts and lack of sales the Company has booked a reserve for the entire value of its inventory as of June 30, 2018.
For the three months ended September 30, 2018, reduction of inventory represents items that were sold from inventory held. In
addition, the Company purchased approximately $63,000 of inventory parts which was recorded as cost of sales. The company sold
those parts to Xi’an (see note 5).</p>
482762
455366
482762
455366
15000
15000
52500
52500
415262
387866
63000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.5in; text-align: left"><b>(8)</b></td><td style="text-align: justify"><b>PROPERTY AND EQUIPMENT</b></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is a summary of property and equipment,
less accumulated depreciation:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; white-space: nowrap"><b>September 30,<br />
2018</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>June 30,<br />
2018</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>Useful life</b></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 60%; text-align: left">Furniture and Fixtures</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">261,011</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">261,011</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 15%; text-align: center">5 years</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Computers and Equipment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">370,704</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">370,704</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">5 years</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Third Party Software</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">10,291</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">10,291</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">5 years</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Clinical Equipment</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">5 years</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Total Property & Equipment</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">657,006</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">657,006</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Less: accumulated depreciation</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(631,777</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(629,828</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Total Property & Equipment - Net</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">25,229</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">27,178</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation expense for the three months September 30, 2018
and 2017 was $1,949 and $1,948 respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; white-space: nowrap"><b>September 30,<br />
2018</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>June 30,<br />
2018</b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td><td style="padding-bottom: 1.5pt; text-align: center; white-space: nowrap"><b> </b></td>
<td style="text-align: center; border-bottom: Black 1.5pt solid; white-space: nowrap"><b>Useful life</b></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 60%; text-align: left">Furniture and Fixtures</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">261,011</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">261,011</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 15%; text-align: center">5 years</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Computers and Equipment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">370,704</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">370,704</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">5 years</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Third Party Software</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">10,291</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">10,291</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">5 years</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Clinical Equipment</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">5 years</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Total Property & Equipment</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">657,006</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">657,006</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Less: accumulated depreciation</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(631,777</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(629,828</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Total Property & Equipment - Net</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">25,229</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">27,178</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
657006
657006
261011
370704
10291
15000
261011
370704
10291
15000
629828
631777
P5Y
P5Y
P5Y
P5Y
1949
1948
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.5in; text-align: left"><b>(9)</b></td><td style="text-align: justify"><b>ACCOUNTS PAYABLE AND ACCRUED EXPENSES</b></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of September 30, 2018, and June 30, 2018, accounts
payable and accrued expenses totaled $135,893 and $69,756 of which consists of accounts payable of $88,503 and $2,308, warranty
reserve of $6,411 and $6,411, and other accrued expenses of $40,979 and $61,037, respectively. During the year ended June 30,
2018 the Company settled various accounts payable and accrued expenses with vendors or wrote-off old accounts payables due to
the expiration of the statute of limitation resulting in write-offs of accounts payable and accrued expenses of $44,611. During
the year ended June 30, 2018, the Company issued restricted common shares for settlement of $20,000 of accrued salaries and $190,000
of accounts payable.</p>
61037
40979
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid"><b>Security</b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td style="text-align: center; border-bottom: Black 1.5pt solid"><b>Date <br /> Issued</b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>No. of<br /> Shares</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Amount</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td style="text-align: center; border-bottom: Black 1.5pt solid"><b>Date of <br /> Conversion</b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>No. of <br /> Shares <br /> Converted</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Amount <br /> Converted</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Balance<br /> 09/30/2018</b></td><td style="padding-bottom: 1.5pt"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 16%; text-align: left">Series M Cv Pfd</td><td style="width: 1%"> </td>
<td style="width: 11%; text-align: center">8/1/2014</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">250</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,500,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 11%; text-align: center">4/18/2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: center">6</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">60,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">11/21/2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">3</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">30,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">8/7/2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">241</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,410,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-0-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Series M Cv Pfd</td><td> </td>
<td style="text-align: center">8/31/2015</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">200</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,000,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">8/7/2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">200</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,000,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-0-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Series M Cv Pfd</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">4/22/2016</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">150</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,500,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">8/7/2018</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center">150</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,500,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-0-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">600</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,000,000</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt; text-align: center"> </td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,000,000</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-0-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Accrued Dividends</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-0-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-0-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Series L Cv Pfd</td><td> </td>
<td style="text-align: center">2/10/2010</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">35</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">350,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">1/6/2011</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">15</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">150,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">200,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Accrued Dividends</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">166,451</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">366,451</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"><td style="width: 0.5in; text-align: left"><b>(4)</b></td><td style="text-align: justify"><b>REVENUE</b></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes revenue
when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred
upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for
transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in
customer incentives the Company offers to its customers and their customers. Sales taxes and other similar taxes are excluded
from revenue.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 20pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The adoption of ASC 606 resulted in an immaterial
impact to specific financial statement line items of the Company’s unaudited Statements of Operations during the three months
ended September 30, 2018 and 2017</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of July 1, 2018, the Company
adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step
revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous
industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle
of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or
services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard
also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in
the prior accounting guidance. The Company adopted the standard using the modified retrospective method and the adoption did not
have a material impact on its financial statements. The Company expects that the impact to net income of the new standard will
be immaterial on an ongoing quarterly and annual basis. The comparative information has not been restated and continues to be
reported under the accounting standards in effect for those periods.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Information about the Company’s net sales
by reporting segment for the three months ended September 30, 2018 and 2017 is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the three months ended</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center; white-space: nowrap"> </td><td style="font-weight: bold; white-space: nowrap"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; white-space: nowrap">September 30,</td><td style="font-weight: bold; white-space: nowrap"> </td><td style="font-weight: bold; white-space: nowrap"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; white-space: nowrap">September 30,</td><td style="font-weight: bold; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%">Sales-parts</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">137,787</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">15,158</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Service revenue</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,375</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Net sales</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">137,787</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">20,533</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>(5)       DUE
FROM RELATED PARTY</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 22, 2018, the Board of Directors approved
the execution of two agreements with Xi’an IDI Laser Image Ltd. (“Xi’an”) of China, an affiliated Company
of IDSI. The agreements are a Know How Transfer Contract and a CTLM Know How Confidentiality Agreement. The contract, having a
term of 20 years, stipulates that Xi’an will pay IDSI a know how transfer fee of 25% of revenue for CTLM product sales in
their territory. The Company also sells inventory parts or acquires parts from third parties on behalf of Xi’an. For the
three months ended September 30, 2018 and 2017, such sales totaled $137,787 and $15,158, respectively. As of September 30, 2018
and June 30, 2018, the Company has receivables from related parties of $152,945 and $34,853, respectively as a result of sales
of inventory parts or acquisition of parts from third parties on behalf of Xi’an. On October 26, 2018, the Company received
a payment of $30,206 which settled all invoices prior to June 30, 2018. Xi’an and Viable have common ownership hence these
transactions are considered related party transactions.</p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"><td style="width: 0.5in; text-align: left"><b>(10)</b></td><td style="text-align: justify"><b>ACCRUED PAYROLL TAXES AND PENALTIES</b></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of September 30, 2018, and June 30, 2018, the
Company owes the IRS $314,019 and $314,019, respectively. Accrued payroll taxes represent unfunded payroll taxes, interest and
penalties commencing with the quarter ending March 31, 2010. As part of new management’s restructuring plan, the Company
received funds from an accredited investor to be able to make a payment to pay off the payroll tax portion of the amount owed
to the IRS. The Company engaged tax counsel to manage the settlement and payment. On June 27, 2018, the IRS provided counsel with
a payoff calculation table indicating that the balance of taxes due was $381,224. On June 29, 2018, Viable International Investments
LLC provided a bank check in that amount to counsel and they sent the check to the IRS with a letter requesting penalty and interest
abatement. The amount due at September 30, 2018 of $314,019 represents the interest and penalty. The Company has formally asked
the IRS to abate all remaining interest and penalties of $314,019. The IRS is considering the request.</p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"><td style="width: 0.5in; text-align: left"><b>(11)</b></td><td style="text-align: justify"><b>SHORT-TERM DEBT-RELATED PARTIES</b></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table is a summary of the outstanding
note balance as of September 30, 2018 and June 30, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; text-decoration: none">
<td style="font-weight: bold; border-bottom: Black 1.5pt solid; text-decoration: none; text-align: left">Noteholder</td><td style="font-weight: bold; padding-bottom: 1.5pt; text-decoration: none; text-align: center"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; text-decoration: none">Interest Rate</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-decoration: none; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-decoration: none; text-align: center"> </td>
<td style="text-align: center; border-bottom: Black 1.5pt solid; text-decoration: none"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; text-decoration: none"><b>Maturity</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; text-decoration: none"><b>Date</b></p></td><td style="font-weight: bold; padding-bottom: 1.5pt; text-decoration: none; text-align: center"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1.5pt solid; text-decoration: none; text-align: center">September 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-decoration: none; text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt; text-decoration: none; text-align: center"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; text-decoration: none">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-decoration: none; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Related parties debt:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 20%; text-align: left">Erhfort, LLC</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 17%; text-align: center">15%</td><td style="width: 1%; text-align: left"></td><td style="width: 1%"> </td>
<td style="width: 19%; text-align: center">8/8/2019</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 17%; text-align: right">100,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 17%; text-align: right">-0-</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Erhfort, LLC</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">15%</td><td style="text-align: left"></td><td> </td>
<td style="text-align: center">9/12/2019</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">100,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-0-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1.5pt">Qing Wang</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center">15%</td><td style="padding-bottom: 1.5pt; text-align: left"></td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">9/21/2019</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">100,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-0-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 4pt">Total Related Party Debt</td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt; text-align: center"> </td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="text-align: center; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">300,000</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-0-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Erhfort, LLC and Qing Wang both own common stock
in the Company hence are considered related parties. During the year ended June 30, 2018, the Company issued restricted common
shares to Viable as settlement of $200,000 of debt. On April 27, 2018, the Company paid Redwood Management $63,500 as settlement
of debt plus $1,000 late payment fee.</p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"><td style="width: 0.5in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>(13)</b></font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>COMMON
STOCK</b></font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
July 12, 2018, the majority shareholder of the Company, Viable International Investments, LLC delivered a written request to effect
a one-for-1000 reverse stock split in the form of a Written Consent of the Majority Shareholder of Imaging Diagnostic Systems,
Inc. The Board of Directors of the Corporation believed it to be in the best interest of the Corporation and recommended that
the stockholders approve a one-for-1000 reverse stock split of the Corporation’s issued and outstanding shares of Common
Stock and a decrease in the amount of shares of Common Stock authorized to be issued from 40,000,000,000 shares to 500,000,000
shares. After receiving stockholder approval by majority written consent, the Company filed amended and restated Articles of Incorporation
with the Florida Secretary of State on July 12, 2018 to record this action. The reverse stock split became effective July 27,
2018. The Company has retroactively adjusted its financial statements for the effect of the reverse stock split.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company has 500,000,000 of common shares no par value authorized and 2,000,000 of no par preferred shares authorized.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>During
the three months ended September 30, 2018, the Company issued a total of 87,044,089 shares of its common stock.</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
August 7, 2018, Viable exercised its right to convert the remaining 591 shares of its Series M Convertible Preferred Stock valued
at $5,910,000 into 87,044,089 shares of restricted common stock. The underlying Series M Convertible Preferred Stock held by Viable
was issued with a restrictive legend pursuant to Rule 144 because the shares were not registered. Any conversions to common stock
would also be issued with a restrictive legend pursuant to Rule 144.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>During
the year ended June 30, 2018, the Company issued a total of 11,822,730 shares of its common stock. </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
November 21, 2017, Viable exercised its right to convert three shares of its Series M Convertible Preferred Stock valued at $30,000
into 441,848 shares of restricted common stock.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>The
Company issued shares pursuant to subscription agreement as follows:</u></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
November 21, 2017, the Company sold 588,235 shares of restricted common stock to a non-affiliated accredited investor pursuant
to a Subscription Agreement for $300,000. The price per share was approximately $0.51 per share.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
April 23, 2018, the Company sold 588,235 shares of restricted common stock to a non-affiliated accredited investor pursuant to
a Subscription Agreement for $300,000. The price per share was approximately $0.51 per share.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
May 20, 2018, the Company sold 392,157 shares of restricted common stock to an accredited investor, pursuant to a subscription
agreement for $200,000. The shares, priced at $0.51 per share, were issued on June 30, 2018.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
June 28, 2018, the Company sold 1,372,549 shares of restricted common stock to an accredited investor, pursuant to a subscription
agreement for $700,000. The shares, priced at $0.51 per share, were issued on June 30, 2018.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>The
Company issued shares as settlement of Company debt as follows:</u></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
January 10, 2018, the Company issued 1,000,000 restricted common shares as settlement of $200,000 of Company debt. The price per
share was $0.20 per share.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
April 23, 2018, the Company issued 1,500,000 restricted common shares as settlement of $300,000 of Company debt. The price per
share was $0.20 per share.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
June 28, 2018, the Company issued 3,000,000 restricted common shares as settlement of $600,000 of Company debt. The price per
share was $0.20 per share.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
August 15, 2016, an accredited investor, loaned the Company the sum of $750,000 pursuant to a convertible promissory note. Pursuant
to a debt to equity agreement dated June 28, 2018, the investor converted the principal of $750,000 and interest of $213,750 into
1,889,706 shares of restricted common stock. The conversion price was $0.51 per share, based on the last cash sale price of the
Company’s common stock. The conversion feature per the agreement is based on the public market trading price; however, since
the Company is not an active trading company, the most recent cash price was used.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>The
Company issued shares as settlement of Accounts Payable and Accrued Expenses as follows:</u></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
January 10, 2018, the Company issued 100,000 restricted common shares as settlement of $20,000 accrued salaries. The price per
share was $0.20 per share.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
January 10, 2018, the Company issued 240,000 restricted common shares as settlement of $48,000 of accounts payable. The price
per share was $0.20 per share.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
April 23, 2018, the Company issued 710,000 restricted common shares as settlement of $142,000 of accounts payable. The price per
share was $0.20 per share.</font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the three months ended</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center; white-space: nowrap"> </td><td style="font-weight: bold; white-space: nowrap"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; white-space: nowrap">September 30,</td><td style="font-weight: bold; white-space: nowrap"> </td><td style="font-weight: bold; white-space: nowrap"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; white-space: nowrap">September 30,</td><td style="font-weight: bold; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%">Sales-parts</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">137,787</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">15,158</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Service revenue</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,375</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Net sales</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">137,787</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">20,533</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; text-decoration: none">
<td style="font-weight: bold; border-bottom: Black 1.5pt solid; text-decoration: none; text-align: left">Noteholder</td><td style="font-weight: bold; padding-bottom: 1.5pt; text-decoration: none; text-align: center"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; text-decoration: none">Interest Rate</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-decoration: none; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-decoration: none; text-align: center"> </td>
<td style="text-align: center; border-bottom: Black 1.5pt solid; text-decoration: none"><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; text-decoration: none"><b>Maturity</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; text-decoration: none"><b>Date</b></p></td><td style="font-weight: bold; padding-bottom: 1.5pt; text-decoration: none; text-align: center"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1.5pt solid; text-decoration: none; text-align: center">September 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-decoration: none; text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt; text-decoration: none; text-align: center"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid; text-decoration: none">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-decoration: none; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Related parties debt:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 20%; text-align: left">Erhfort, LLC</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 17%; text-align: center">15%</td><td style="width: 1%; text-align: left"></td><td style="width: 1%"> </td>
<td style="width: 19%; text-align: center">8/8/2019</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 17%; text-align: right">100,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 17%; text-align: right">-0-</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Erhfort, LLC</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">15%</td><td style="text-align: left"></td><td> </td>
<td style="text-align: center">9/12/2019</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">100,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-0-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1.5pt">Qing Wang</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center">15%</td><td style="padding-bottom: 1.5pt; text-align: left"></td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">9/21/2019</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">100,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-0-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 4pt">Total Related Party Debt</td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt; text-align: center"> </td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="text-align: center; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">300,000</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-0-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
137787
20533
137787
15158
5375
2
P20Y
0.25
137787
15158
30206
381224
314019
314019
Erhfort, LLC
Erhfort, LLC
Qing Wang
0.15
0.15
0.15
0.09
0.09
2019-08-08
2019-09-12
2019-09-21
200000
63500
1000
87044089
11822730
591
3
6
3
241
200
150
15
5910000
30000
60000
30000
2410000
2000000
1500000
6000000
150000
87044089
441848
2000000
1500000
6000000
350000
2500000
2017-04-18
2017-11-21
2018-08-07
2018-08-07
2018-08-07
2011-01-06
0
166451
-1679173
1679173
350000
35
15
250
200
150
3
591
6
10000
10000
474
150000
The private investor held 20 shares representing a principal value of $200,000. The remaining principal value of $200,000 is presented on the balance sheet as a current liability since it is mandatorily redeemable.
161914
166451
0
1679173
137787
15158
5375
63426
215
74361
20318
294818
217037
140330
156903
34656
18402
507
9162
1949
1948
472260
403452
-397899
-383134
15
3
3288
43955
-3243
-36021
-401142
-419155
-401142
4537
139285
-405679
-558440
-0.03
84688285
21774511
591
33597241
120641250
-5910000
5910000
-591
87044089
-80
-4537
-4537
100000
At the first closing, $2,400,000 was paid by Viable to purchase 250 shares of convertible preferred stock which provided a 78.9% voting and economic interest in the Company's capital stock representing a change in control of the Company.
2000000
1500000
30000
60000
441848
883696
87044089
3
3
49691
10909
118092
40158
11115
-1963
-2535
66137
109632
-22000
-51907
51957
7251
-453049
-367198
300000
128000
300000
300000
172000
-153049
-195198
2918
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"><td style="width: 0"></td><td style="width: 0.5in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>(14)</b></font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>STOCK
OPTIONS</b></font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
December 4, 2016, the Board of Directors adopted the Company’s 2016 Equity Incentive Plan (the “2016 Plan”)
which was subsequently approved and adopted by majority written consent in lieu of an annual meeting. The purpose of the 2016
Plan is to encourage and enable the officers, employees, directors and other key persons (including consultants) of the Company,
upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business, to acquire
a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s
welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby stimulating
their efforts on the Company’s behalf and strengthening their desire to remain with the Company.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
January 1, 2017, the Board granted options to purchase a total of 7,364,136 shares, all with an exercise price of $0.20 per share.
Options were granted to nine employees to purchase 5,498,555 shares and to six consultants to purchase 1,865,581 shares. On January
1, 2018, the Board granted options to purchase 5,000,000 shares all with an exercise price of $0.20 per share to four consultants.
On May 1, 2018, the Board granted options to purchase 500,000 shares all with an exercise price of $0.20 per share to an additional
consultant.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In
computing the impact of stock option grants, the fair value of each option is estimated on the date of grant based on the Black-Scholes
options-pricing model utilizing certain assumptions for a risk-free interest rate; volatility; and expected remaining lives of
the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best
estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors
change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different
in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those
shares expected to vest. The Company cannot assess its forfeiture rate at this time. During the three months ended September 30,
2018, the options issued above were valued using the Black-Scholes model but based on exercise price and fair value being the
same the options had zero value.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>As of<br /> September 30, <br />
2018</b></td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>As of<br /> June 30,<br />
2018</b></td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Expected volatility</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">0.00</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">0.00</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Expected term</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3 Years</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3 Years</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Risk-Free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2.79% to 3.08%</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2.79% to 3.08%</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Forfeiture rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Expected dividend rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
expected term is estimated as the numbers needed for the calculation will not be available until the underlying common stock is
quoted on an OTC market for a sufficient amount of time to obtain historical patterns and volatility.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
following table summarizes information about all of the stock options outstanding under the 2016 Plan at September 30, 2018 and
June 30, 2018:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Employees/Consultants</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Wtd. Avg.</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%">Outstanding at June 30, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">6,627,720</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.20</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,500,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">0.20</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt">Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(490,943</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Outstanding at June 30, 2018</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">11,636,781</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.20</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt">Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(294,566</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Outstanding at September 30, 2018</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">11,342,211</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.20</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">At
September 30, 20118, the Company has issued options pursuant to six different stock option plans, the most recent being the 2016
Plan. The previous five plans through and including the 2012 Non-Statutory Plan have a remaining total of options vested and exercisable
to purchase 13 shares at exercise prices from a high of $57,000 to a low of $350 per share. The tables below summarize information
about these five plans:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Employees/Consultants</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1.5pt solid; text-align: center">Wtd. Avg.</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%">Outstanding at June 30, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">65</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,070</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt">Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(52</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,770</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Outstanding at June 30, 2018</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">13</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,210</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"> </td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"> </td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.5pt">Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(0.11</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">11,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Outstanding at September 30, 2018</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">13</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,189</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; border-bottom: Black 1.5pt solid">Vested & Exercisable Stock Options</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1.5pt solid; text-align: center">September 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1.5pt solid; text-align: center">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Employee 2016 Equity Plan</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Director 2016 Equity Plan</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Employee Other Plans</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">13</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">13</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Directors and Consultants Other Plans</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">13</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">13</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>  </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company’s common stock, symbol IMDS, was quoted on OTCmarkets.com Pink until September 25, 2014 at which time
IDSI’s registration was revoked by the Securities and Exchange Commission (SEC) for failure to timely file its
Quarterly and Annual Reports. The last quoted price was $0.1. Because the Company was de-registered and OTC markets did not
provide a quote for IMDS, there is no public market for the Company’s shares. Given the exercise prices adjusted for
the reverse split, it is highly unlikely that any employee holding pre-2016 Plan options will exercise them. The Company has
sufficient authorized shares available for all outstanding option; however, if exercised, the shares will be issued with a
restrictive legend because the Company was not an SEC reporting company until October 2018. Further, given its recent return
to SEC reporting status, the Company is unable to file an S-8 Registration Statement to register shares issued because of
option exercise pursuant to various stock option agreements.</font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Employees/Consultants</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Wtd. Avg.</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%">Outstanding at June 30, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">6,627,720</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.20</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,500,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">0.20</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt">Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(490,943</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Outstanding at June 30, 2018</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">11,636,781</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.20</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt">Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(294,566</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Outstanding at September 30, 2018</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">11,342,211</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.20</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Employees/Consultants</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1.5pt solid; text-align: center">Wtd. Avg.</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%">Outstanding at June 30, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">65</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,070</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt">Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(52</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,770</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Outstanding at June 30, 2018</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">13</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,210</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"> </td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"> </td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.5pt">Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(0.11</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">11,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Outstanding at September 30, 2018</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">13</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,189</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; border-bottom: Black 1.5pt solid">Vested & Exercisable Stock Options</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1.5pt solid; text-align: center">September 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1.5pt solid; text-align: center">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Employee 2016 Equity Plan</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Director 2016 Equity Plan</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Employee Other Plans</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">13</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">13</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Directors and Consultants Other Plans</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">13</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">13</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
0.0000
0.0000
P3Y
P3Y
0.0308
0.0308
0.0279
0.0279
0.0000
0.0000
0.0000
0.0000
6627720
11636781
11342211
65
13
13
294566
0.11
490943
52
0.20
0.20
0.20
12070
1210
1189
0.20
0.20
11000
0.20
14770
13
13
13
13
7364136
5498555
1865581
500000
5000000
0.20
0.20
0.20
The previous five plans through and including the 2012 Non-Statutory Plan have a remaining total of options vested and exercisable to purchase 13 shares at exercise prices from a high of $57,000 to a low of $350 per share.
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.5in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>(16)</b></font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>SUBSEQUENT
EVENTS</b></font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
October 31, 2018, The Company extended its office and warehouse lease with Isco Properties, LLC (see footnote 14). The extension
is for 2 years from February 1, 2019 to January 31, 2021. The monthly base rent is $7,150 for the 1<sup>st</sup> year and $7,350
for the 2<sup>nd</sup> year. The rent commitment including sales tax for the two years is $184,092.</font></p>
The Company extended its office and warehouse lease with Isco Properties, LLC (see footnote 14). The extension is for 2 years from February 1, 2019 to January 31, 2021. The monthly base rent is $7,150 for the 1st year and $7,350 for the 2nd year. The rent commitment including sales tax for the two years is $184,092.
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"><td style="width: 0.5in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>(15)</b></font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>COMMITMENTS
AND CONTINGENCIES</b></font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company previously carried $3,000,000 in product liability insurance to cover both clinical sites and sales. As part of its cost
savings initiatives, the Company cancelled the policy as it had not had any adverse experiences after conducting more than 25,000
patient scans worldwide. The Company is now self-insuring the risk of product liability. The Company is about to begin a new series
of clinical trials in the U.S. and also to engage the services of a medical device contract manufacturer. Each hospital will have
their own requirements regarding product liability insurance and the Company will obtain such insurance when requested. The medical
device manufacturer has stated in their contract that they will require $2,000,000 product liability insurance before commencing
the manufacture of CTLM® systems.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">From
May 2010 to June 2012, claims were made by the IRS for payment of the Company’s accrued payroll taxes, interest and penalties,
which as of June 30, 2012 was $1,489,640. The Company engaged tax counsel to handle this matter and intends to fully satisfy its
payroll tax obligations. On August 4, 2014, Viable purchased 250 shares of convertible preferred stock for $2,500,000, which gave
them a 78.9% voting and economic interest in the Company’s capital stock representing a change in control of the Company.
New management’s tax counsel negotiated a new Installment Agreement which stipulated a lump sum payment of $250,000, which
was paid on September 4, 2014 and monthly installment payments of $20,000 beginning in September 2014 due on the 18<sup>th</sup>
of each month until the balance of payroll taxes, interest and penalties are paid in full.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During
fiscal 2018, as part of new management’s restructuring plan, the Company received funds from an accredited investor to pay
off the payroll tax portion of the amount owed to the IRS. The Company engaged tax counsel to manage the settlement and payment.
On June 27, 2018, the IRS provided counsel with a payoff calculation table indicating that the balance of taxes due was $381,224.
On June 29, 2018, Viable International Investments LLC provided a bank check in that amount to counsel and they sent the check
to the IRS with a letter requesting abatement of penalties and interest totaling $314,019. The IRS is considering the request.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company leases a commercial building from Isco Properties, LLC for its offices and warehouse in Fort Lauderdale, FL. The term
of the lease is five years beginning February 2014 with a monthly base rent beginning at $6,360 and increasing at a rate of 3%
per year. The total rent commitment for the five years is $405,031 of which $376,398 has been paid through September 30, 2018,
leaving a balance due of $28,633. Total rent expense for operating leases for offices and manufacturing facilities amounted to
$21,434 and $20,849 for the three months ended September 30, 2018 and 2017, respectively. On October 31, 2018, the Company extended
the lease for two years from February 1, 2019 to January 31, 2021 (see footnote 15). The monthly base rent is $7,150 for the 1<sup>st
</sup>year and $7,350 for the 2<sup>nd</sup> year. The rent commitment including sales tax for the two years is $184,092.<b>	</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
September 30, 2013, the Company’s lease with Fort Lauderdale Business Plaza Associates (the “Landlord”) for
the premises located at 5307 NW 35th Terrace, Fort Lauderdale, FL 33309 expired and we did not exercise our option to renew for
three more years. We continued to occupy the premises on a month to month basis giving us time to find a less expensive facility.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
landlord refused to repair or replace two roof top air conditioning units so we engaged counsel who advised that the Landlord
had violated Florida Statute 83.201 by failing to provide air conditioning which is deemed a utility in the State of Florida.
In 2013, we calculated the amount of rent due of $41,262 when we had no air conditioning for our offices and recorded that amount
as other income for the debt cancellation. Although the Company does not anticipate any further litigation we accrued $27,607
for rent, which our attorney determined is our maximum liability for rent when the air conditioning was functioning.</font></p>
3000000
2000000
25000
1489640
250
2500000
0.789
250000
20000
314019
The term of the lease is five years beginning February 2014 with a monthly base rent beginning at $6,360 and increasing at a rate of 3% per year. The total rent commitment for the five years is $405,031 of which $376,398 has been paid through September 30, 2018, leaving a balance due of $28,633.
The Company extended the lease for two years from February 1, 2019 to January 31, 2021 (see footnote 15). The monthly base rent is $7,150 for the 1st year and $7,350 for the 2nd year. The rent commitment including sales tax for the two years is $184,092.
21434
20849
41262
27607
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 0.5in"><b>(1)</b></td><td><b>ORGANIZATION AND NATURE OF BUSINESS</b></td></tr></table>
<p style="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Imaging Diagnostic Systems, Inc. ("the Company"
or "IDSI") is a medical technology company that has developed a new, non-invasive CT scanner called CTLM® that
uses a laser beam in place of ionizing X-ray for breast imaging. This technology is called Diffuse Optical Tomography. The CTLM®
will provide an adjunctive imaging modality to other methods of imaging the breast such as X-ray mammography, MRI and ultrasound.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(k) Long-lived assets</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company relies on the guidance provided by
ASC 360 (“Property, Plant & Equipment”). ASC 360 requires companies to write down to estimated fair value long-lived
assets that are impaired. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. In performing the review of recoverability, the Company estimates
the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future
cash flows is less than the carrying amount of the assets, an impairment loss is recognized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has determined that no impairment
losses need to be recognized through the three months ended September 30, 2018 and 2017.</p>
0
0
250000
0
0
10 percent or greater concentrations of revenue with its customers.
10 percent or greater concentrations of revenue with its customers.
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><b> </b></td><td style="white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; white-space: nowrap"><b>September 30,</b></td><td style="white-space: nowrap"><b> </b></td><td style="white-space: nowrap"><b> </b></td>
<td colspan="2" style="text-align: center; white-space: nowrap"><b>June 30,</b></td><td style="white-space: nowrap"><b> </b></td></tr>
<tr style="vertical-align: bottom">
<td><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2018</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2018</b></td><td style="padding-bottom: 1.5pt"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 80%; text-align: left">Raw materials consisting of purchased parts, components and supplies</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">387,866</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 7%; text-align: right">415,262</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Work-in process including units undergoing final inspection and testing</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">52,500</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">52,500</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Finished goods</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total Inventory</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">455,366</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">482,762</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Inventory Reserve</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(455,366</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(482,762</td><td style="text-align: left; padding-bottom: 1.5pt">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt">Net Inventory</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
2308
88503
190000
44611
20000
200000
392157
872787
588235
588235
300000
300000
0.51
0.51
0.51
0.51
0.20
0.20
0.20
0.20
0.20
0.20
392157
1372549
1000000
1500000
3000000
200000
700000
200000
300000
600000
2018-06-30
2018-06-30
100000
240000
710000
20000
48000
142000
An accredited investor, loaned the Company the sum of $750,000 pursuant to a convertible promissory note. Pursuant to a debt to equity agreement dated June 28, 2018, the investor converted the principal of $750,000 and interest of $213,750 into 1,889,706 shares of restricted common stock. The conversion price was $0.51 per share, based on the last cash sale price of the Company's common stock.
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"><td style="width: 0"></td><td style="width: 0.5in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b>(12)</b></font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>CONVERTIBLE
PREFERRED STOCK</b></font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
following schedule reflects the number of shares of preferred stock that have been issued, converted and are outstanding as of
September 30, 2018:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid"><b>Security</b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td style="text-align: center; border-bottom: Black 1.5pt solid"><b>Date <br /> Issued</b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>No. of<br /> Shares</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Amount</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td style="text-align: center; border-bottom: Black 1.5pt solid"><b>Date of <br /> Conversion</b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>No. of <br /> Shares <br /> Converted</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Amount <br /> Converted</b></td><td style="padding-bottom: 1.5pt"><b> </b></td><td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Balance<br /> 09/30/2018</b></td><td style="padding-bottom: 1.5pt"><b> </b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 16%; text-align: left">Series M Cv Pfd</td><td style="width: 1%"> </td>
<td style="width: 11%; text-align: center">8/1/2014</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">250</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,500,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 11%; text-align: center">4/18/2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: center">6</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">60,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">11/21/2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">3</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">30,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">8/7/2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">241</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,410,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-0-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Series M Cv Pfd</td><td> </td>
<td style="text-align: center">8/31/2015</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">200</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,000,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">8/7/2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">200</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,000,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-0-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Series M Cv Pfd</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">4/22/2016</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">150</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,500,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: center; padding-bottom: 1.5pt">8/7/2018</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center">150</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,500,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-0-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">600</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,000,000</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt; text-align: center"> </td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,000,000</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-0-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Accrued Dividends</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-0-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-0-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Series L Cv Pfd</td><td> </td>
<td style="text-align: center">2/10/2010</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">35</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">350,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center">1/6/2011</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: center">15</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">150,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">200,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Accrued Dividends</td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">166,451</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: center"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">366,451</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>  </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Series
L Convertible Preferred Stock</u></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
March 31, 2010, a private investor converted a $350,000 short-term promissory note into 35 shares of Series L Convertible Preferred
Stock. The original purchase price/stated value is $10,000 per share and dividends accrue at an annual rate of 9%. The preferred
stock is convertible into 474 shares of common stock for each share of preferred stock. On January 6, 2011, the private investor
converted 15 shares of Series L Convertible Preferred Stock representing a principal value of $150,000. After the conversion,
the private investor held 20 shares representing a principal value of $200,000. The remaining principal value of $200,000 is presented
on the balance sheet as a current liability since it is mandatorily redeemable. At September 30, 2018 and June 30, 2018, the balance
of cumulative dividends owed to the investor which is included in redemption value was $166,451 and $161,914, respectively. The
remaining principal value of $200,000 plus the cumulative dividend are presented on the balance sheet as a current liability of
$366,451 as of September 30, 2018 and $361,914 as of June 30, 2018.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Series
M Convertible Preferred Stock</u></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company, during the fiscal year ending June 30, 2015, sold Series M Convertible Preferred Stock to Viable International Investments,
LLC, a Florida limited liability company, ("Viable"). The original purchase price/stated value of each share of Series M Preferred
Stock was $10,000 and Viable was be entitled to receive cumulative dividends at the fixed rate of 9% of the stated value per share
per annum. The first tranche of the private placement sale of 250 shares of convertible preferred stock was made pursuant to a
Securities Purchase Agreement (the "Agreement") dated June 27, 2014 between the Company and Viable. The Agreement stipulated the
payment of a $100,000 non-refundable deposit which was paid on June 27, 2014 and applied to the purchase price on the first closing
date, August 4, 2014. At the first closing, $2,400,000 was paid by Viable to purchase 250 shares of convertible preferred stock
which provided a 78.9% voting and economic interest in the Company's capital stock representing a change in control of the Company.
<font style="background-color: white">Because of delays in restructuring the Company and executing its business plan, Viable was
unable to convert its Series M Convertible Preferred Stock into Common Stock according to its timeline. On June 1, 2016, Viable
presented the Company with a waiver that permanently waived its rights under Section 3 – Redemption at Holder's Option of
the Certificate of Designations of the Series M Preferred Stock. Therefore, the Company reclassified the Series M Preferred Shares
to permanent equity from temporary equity on June 1, 2016. </font></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Viable,
at its option, deviated from the stipulated payment schedules and purchased 200 Series M shares for $2,000,000 on August 31, 2015,
and 150 Series M shares for $1,500,000 on April 22, 2016, which completed all of the payments required pursuant to the Agreement.
The Series M dividends were payable at the Company's option in cash or common stock. Accordingly, after the reclassification
of Series M from temporary equity to permeant equity the Company has continued to accrue the dividend as a charge to retained
earnings and a credit to preferred stock Series M in permanent equity. Upon conversion of the remaining 591 Series M shares to
common stock on August 7, 2018, the accrued dividends were forfeited and reversed to retained earnings as the Company does not
have any further obligations for payment of such accrued dividends. At September 30, 2018 and June 30, 2018, the balance of cumulative
dividends owed to the investor which is included in redemption value was $0 and $1,679,173, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
November 21, 2017, Viable exercised its right to convert three shares of its Series M Convertible Preferred Stock valued at $30,000
into 441,848 shares of restricted common stock. Subsequent to the conversion, Viable sold a total of 392,157 restricted common
shares to three accredited investors in China and retained 49,691 restricted common shares for its portfolio. The underlying Series
M Convertible Preferred Stock held by Viable was issued with a restrictive legend pursuant to Rule 144 because the shares were
not registered. Any conversions to common stock would also be issued with a restrictive legend pursuant to Rule 144.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
April 18, 2017, Viable exercised its right to convert six shares of its Series M Convertible Preferred Stock valued at $60,000
into 883,696 shares of restricted common stock. Subsequent to the conversion, Viable sold a total of 872,787 restricted common
shares to three accredited investors in China and retained 10,909 restricted common shares for its portfolio. The underlying Series
M Convertible Preferred Stock held by Viable was issued with a</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">restricted
legend pursuant to Rule 144 because the shares were not registered. Any conversions to common stock would also be issued with
a restricted legend pursuant to Rule 144.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif; color: #222222; background-color: white">On
August 7, 2018, Viable converted its remaining 591 shares Series M Convertible Preferred Stock into 87,044,089 shares of
restricted common stock</font><font style="font: 10pt Times New Roman, Times, Serif">.</font></p>
The majority shareholder of the Company, Viable International Investments, LLC delivered a written request to effect a one-for-1000 reverse stock split in the form of a Written Consent of the Majority Shareholder of Imaging Diagnostic Systems, Inc. The Board of Directors of the Corporation believed it to be in the best interest of the Corporation and recommended that the stockholders approve a one-for-1000 reverse stock split of the Corporation's issued and outstanding shares of Common Stock and a decrease in the amount of shares of Common Stock authorized to be issued from 40,000,000,000 shares to 500,000,000 shares.
2000000
2000000
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>As of<br /> September 30, <br />
2018</b></td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>As of<br /> June 30,<br />
2018</b></td><td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Expected volatility</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">0.00</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">0.00</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Expected term</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3 Years</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3 Years</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Risk-Free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2.79% to 3.08%</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2.79% to 3.08%</font></td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Forfeiture rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Expected dividend rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td></tr>
</table>
30
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