UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB/A

(Amendment No. 2)

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005

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

For the transition period from              to             

Commission file number: 033-17264-NY

IMMUNOCELLULAR THERAPEUTICS, LTD.

(Name of small business issuer in its charter)

Delaware	11-2856146
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

1999 Avenue of the Stars Los Angeles, California	90048
(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number: (310) 789-1213

Securities registered under Section 12(b) of the Act: None.

Securities registered under Section 12(g) of the Act: None.

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  ¨

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  x

Issuer’s revenues for its fiscal year ended December 31, 2005: $0

Aggregate market value of the common stock held by non-affiliates of the Issuer as of March 14, 2006 was approximately $2,630,824.

There were 9,371,724 shares of the Company’s common stock outstanding on March 14, 2006.

Transitional Small Business Disclosure Format:    Yes  ¨    No  x

EXPLANATORY NOTE

In response to comments received from the Staff of the Securities and Exchange Commission (“SEC”), ImmunoCellular Therapeutics, Ltd. (which changed its name from Optical Molecular Imaging, Inc. in November 2006) is filing this Form 10-KSB/A (Amendment No. 2) to include the audited financial statements of Patco Industries, Ltd. In accordance with the rules of the SEC, the complete text of Item 7, “Financial Statements” of Part II of our Form 10-KSB and the accompanying financial statements have been set forth in this Form 10-KSB/A (Amendment No. 2), including those portions of that text and the accompanying financial statements that have not been amended from that set forth in our original Form 10-KSB, as amended by our Form 10-KSB/A (Amendment No. 1).

Except for the revised disclosures in Item 7, we have not undertaken in this Form 10-KSB/A (Amendment No. 2), to modify or update any other disclosures in our original report on Form 10-KSB, and this Form 10-KSB/A (Amendment No. 2) does not reflect any events occurring after the date of filing of the original Form 10-KSB.

2

T ABLE OF CONTENTS

EXPLANATORY NOTE		2
PART II
ITEM 7.	FINANCIAL STATEMENTS	4
PART III
ITEM 13.	EXHIBITS	4

3

ITEM 7. FINANCIAL STATEMENTS

The financial statements and notes thereto and the related reports of Stonefield Josephson, Inc. for each of Patco Industries, Ltd. (“Patco”) and Spectral Molecular Imaging, Inc., which merged with Patco are attached to this Annual Report beginning at page F-1 and are incorporated herein by reference. Patco changed its name to Optical Molecular Imaging, Inc. in January 2006 and to ImmunoCellular Therapeutics, Ltd. in November 2006.

ITEM 13. EXHIBITS

Exhibit No.	Description
2.1	Agreement and Plan of Reorganization dated as of May 5, 2005 among the Registrant, Patco Industries Subsidiary, Inc., William C. Patridge, and Spectral Molecular Imaging, Inc., as amended on June 30, 2005, September 26, 2005 and January 20, 2006. (1)
3.1	Amended and Restated Certificate of Incorporation of the Registrant. (2)
3.2	Amended and Restated Bylaws of the Registrant. (2)
4.1	Form of Warrant issued in January 2006 to purchase shares of the common stock of Spectral Molecular Imaging, Inc. and assumed by the Registrant. (2)
4.2	Form of Subscription Agreement containing registration rights issued by Spectral Molecular Imaging, Inc. in January 2006 and assumed by the Registrant. (2)
10.1	Assignment and License Agreement dated as of November 1, 2004 among Spectral Molecular Imaging, Inc., ChromoDynamics, Inc., Dr. Daniel Farkas and certain other individuals specified in said agreement.* (2)
10.2	Amendment No. 1 dated as of November 2, 2004 to the Assignment and License Agreement dated as of November 1, 2004 among Spectral Molecular Imaging, Inc., ChromoDynamics, Inc., Dr. Daniel Farkas and certain other individuals specified in said agreement.* (2)
10.3	Amendment No. 2 dated as of October 20, 2005 to the Assignment and License Agreement dated as of November 1, 2004 among Spectral Molecular Imaging, Inc., ChromoDynamics, Inc., Dr. Daniel Farkas and certain other individuals specified in said agreement.* (2)
10.4	License Agreement dated as of September 29, 2005 between Spectral Molecular Imaging, Inc. and Carnegie Mellon University.* (2)
10.5	Amendment No. 1 dated November 9, 2005 to the License Agreement dated as of September 29, 2005 between Spectral Molecular Imaging, Inc. and Carnegie Mellon University. (2)
10.6	2006 Equity Incentive Plan of the Registrant. (2)

4

Exhibit No.	Description
10.7	Form of Stock Option Agreement for the Registrant’s 2006 Equity Incentive Plan. (2)
10.8	Employment Agreement with Dr. Daniel L. Farkas dated April 22, 2005. (2)
10.9	Employment Agreement with David Wohlberg dated April 22, 2005. (2)
10.10	Employment Agreement with C. Kirk Peacock dated May 16, 2005. (2)
21.1	List of the Registrant’s subsidiaries. (2)
31.1	Certification of the Registrant’s Principal Executive Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
31.2	Certification of the Registrant’s Principal Financial Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
32.1	Certification of the Registrant’s Principal Executive Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of the Registrant’s Principal Financial Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

* Certain portions of the exhibit have been omitted based upon a request for confidential treatment filed by us with the SEC. The omitted portions of the exhibit have been separately filed by us with the SEC.

** Filed with this Annual Report on Form 10-KSB/A. (Amendment No. 2)

(1) Previously filed by us on January 26, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(2) Previously filed by us on February 6, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

5

SIGNATURES

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

Date: January 17, 2007	ImmunoCellular Therapeutics, Ltd.
	By:	/s/ David Wohlberg
		David Wohlberg
		President and Chief Operating Officer

6

OPTICAL MOLECULAR IMAGING, INC.

(a Development Stage Company)

Index to Consolidated Financial Statements

For the Period from Inception of Operations (February 24, 2004) to December 31, 2005

	Page
Financial Statements:
Spectral Molecular Imaging, Inc.
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Statements of Operations	F-4
Statements of Shareholders Deficit	F-5
Statements of Cash Flows	F-6
Notes to Financial Statements	F-7
Patco Industries, Ltd.
Report of Independent Registered Public Accounting Firm	F-15
Balance Sheets	F-16
Statements of Operations	F-17
Statements of Cash Flows	F-18
Statements of Stockholders’ Equity	F-19
Notes to Financial Statements	F-20
Pro Forma Optical Molecular Imaging
Unaudited Pro Forma Financial Information	F-24
Unaudited Pro Forma Balance Sheets	F-25
Unaudited Pro Forma Statement of Operations 2004	F-26
Unaudited Pro Forma Statement of Operations 2005	F-27
Notes to Unaudited Pro Forma Statements	F-28

F - 1

Report of Independent Registered Public Accounting Firm

Board of Directors

Spectral Molecular Imaging, Inc.

Los Angeles, CA

We have audited the accompanying balance sheets of Spectral Molecular Imaging, Inc. (a development stage company) as of December 31, 2005 and 2004 and the related statements of operations, shareholders deficit and cash flows for the year ended December 31, 2005 and period from inception (February 25, 2004) to December 31, 2004 and for the period from inception of operations (February 25, 2004) to December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Spectral Molecular Imaging, Inc. as of December 31, 2005 and 2004 and the results of its operations and its cash flows for the year ended December 31, 2005 and period from inception (February 25, 2004) to December 31, 2004 and for the period from inception of operations (February 25, 2004) to December 31, 2005 in conformity with U.S. generally accepted accounting principles.

As set forth in Note 1 to the accompanying financial statements, the company has not yet recognized revenue and has an accumulated operating loss of $257,745. Management’s plans are also disclosed in Note 1. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to the financial statements that might be necessary should the Company be unable to continue as a going concern.

/s/ Stonefield Josephson, Inc.

CERTIFIED PUBLIC ACCOUNTANTS

Santa Monica, California

March 23, 2006

F - 2

Spectral Molecular Imaging, Inc.

(A Development Stage Company)

Balance Sheets

	December 31, 2004			December 31, 2005
Assets
Current assets:
Cash	$	101		$	30,538
Restricted Cash		—			1,325,000
Other assets		247			1,200
Total current assets		348			1,356,738
Property and equipment, net		—			40,000
Other assets		—			2,500
Total assets	$	348		$	1,399,239
Liability and Shareholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	—		$	15,143
Accounts payable – shareholders		101			—
Subscription payable		—			1,325,000
Accrued liabilities		11,741			38,834
Total current liabilities		11,842			1,378,977
Other liabilities		—			—
Commitments and contingencies		—			—
Shareholders’ equity (deficit):
Common stock, $0.001 par value; 129,000,000 shares authorized; 6,450,000 shares and 7,146,600 shares issued and outstanding as of December 31, 2004 and 2005, respectively		—			7,147
Additional paid in capital		247			270,860
Deficit accumulated during the development stage		(11,741	)		(257,745	)
Total shareholders’ equity (deficit)		(11,494	)		20,262
Total liabilities and shareholders’ equity (deficit)	$	348		$	1,399,239

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

F - 3

Spectral Molecular Imaging, Inc.

(A Development Stage Company)

Statements of Operations

	February 25, 2004 (Inception) to December 31, 2004			For the Year Ended December 31, 2005			February 25, 2004 (Inception) to December 31, 2005
Revenues	$	—		$	—		$	—
Expenses:
In process research and development		5,522			152,760			158,282
Merger costs		—			39,118			39,118
General and administrative		6,219			54,126			60,345
Total expenses		11,741			246,004			257,745
Loss before income taxes		(11,741	)		(246,004	)		(257,745	)
Income taxes		—			—			—
Net loss	$	(11,741	)	$	(246,004	)	$	(257,745	)
Weighted average number of shares:
Basic and diluted		6,450,000			6,867,620			6,675,539
Earnings (loss) per share:
Basic and diluted	$	(0.00	)	$	(0.04	)	$	(0.04	)

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

F - 4

Spectral Molecular Imaging, Inc.

(A Development Stage Company)

Statements of Shareholders’ Equity (Deficit)

	Common Stock			Additional Paid - In Capital		Deficit Accumulated During the Development Stage			Total
	Shares	Amount
Initial capitalization at $0.00002 per share	6,256,500	$	97	$	—	$	—		$	97
Common stock issued for cash during 2004 at $0.00078 per share	193,500		150		—		—			150
Net loss	—		—		—		(11,741	)		(11,741	)
Balance at December 31, 2004	6,450,000		247		—		(11,741	)		(11,494	)
Common stock issued for cash during 2005 at $0.19 per share	387,000		6,590		68,410		—			75,000
Common stock issued for cash during 2005 at $0.32 per share	154,800		155		49,845		—			50,000
Common stock issued for in process research and development during 2005 at $0.99 per share	154,800		155		152,605		—			152,760
Net loss	—		—		—		(246,004	)		(246,004	)
Balance at December 31, 2005	7,146,600	$	7,147	$	270,860	$	(257,745	)	$	20,262

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

F - 5

Spectral Molecular Imaging, Inc.

(A Development Stage Company)

Statements of Cash Flows

	February 25, 2004 (Inception) to December 31, 2004			For the Year Ended December 31, 2005			February 25, 2004 (Inception) to December 31, 2005
Cash flows from operating activities:
Net loss	$	(11,741	)	$	(246,004	)	$	(257,745	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		—			—			—
Common stock issued services		—			152,760			152,760
Changes in assets and liabilities:
Other assets		—			(3,700	)		(3,700	)
Accounts payable		—			15,142			15,142
Accrued liabilities		11,741			27,093			38,834
Net cash used in operating activities		—			(54,709	)		(54,709	)
Cash flows from investing activities:
Purchase of property and equipment		—			(40,000	)		(40,000	)
Cash flows from financing activities:
Advances from shareholders		101			(101	)		—
Proceeds from issuance of common stock		—			125,247			125,247
Net cash provided by financing activities		101			125,146			125,247
(Decrease) increase in cash		101			30,437			30,538
Cash at beginning of period		—			101			—
Cash at end of period	$	101		$	30,538		$	30,538
Supplemental cash flows disclosures:
Interest expense paid	$	—		$	—		$	—
Income taxes paid	$	—		$	—		$	—

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

F - 6

Spectral Molecular Imaging, Inc.

(A Development Stage Company)

Notes to Financial Statements

For the Period From February 25, 2004 (Date of Inception) to December 31, 2005

1. Nature of Organization and Development Stage Operations

Spectral Molecular Imaging, Inc. (the Company or SMI) is a Nevada corporation that was incorporated and commenced operations on February 25, 2004. The Company is a development stage company that will seek to develop imaging devices with medical diagnostic applications based upon SMI’s technology related to spectral optical imaging.

Going Concern

To date, the Company has relied primarily upon selling equity securities and borrowings from a prospective shareholder to generate the funds needed to finance its operations. Currently, the Company does not have sufficient cash on hand to sustain operations and is seeking to obtain additional capital from investors. As of December 31, 2005, current liabilities exceed current assets by $22,259. Unless the Company raises significant amounts of cash in the near future, the Company will not be able to continue as a going concern. Subsequent to December 31, 2005, the Company raised $1,400,000 (before offering expenses) in a private placement (Note 8).

Stock Split

All common stock share numbers and per share information for the Company have been restated to reflect the 6,450-for-1 stock split which took place in January 2006 in connection with the Company’s private placement (Note 8).

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents – The Company considers all highly liquid debt instruments with an original maturity of 90 days or less to be cash equivalents. The Company had no cash equivalents at December 31, 2004 and December 31, 2005.

Restricted Cash and Offsetting Liability – The Company has received cash in connection its private placement (Note 8), which is fully refundable until the private placement closes. Accordingly, the Company has classified the cash received as Restricted Cash and Subscription Payable in the accompanying balance sheets. The Company had zero and $1,325,000 cash equivalents at December 31, 2004 and December 31, 2005, respectively.

Property and Equipment - Property and equipment are stated at cost and depreciated using the straight-line methods based on the estimated useful lives (generally three to five years) of the related assets. Management continuously monitors and evaluates the realizability of recorded long-lived assets to determine whether their carrying values have been impaired. The Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the nondiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Any impairment loss is measured by comparing the fair value of the asset to its carrying amount.

Patent Costs - Costs incurred to reimburse Chromo Dynamics, Inc. (CDI) for patent related costs, as provided for in the agreement between CDI and certain individuals and the Company (Note 4), were expensed as in process research and development expense.

F - 7

Research and Development Costs – Research and development expenses consist of costs incurred for direct research and are expensed as incurred.

Stock-based Compensation — The Company accounts for stock-based compensation using the intrinsic value method in accordance with APB No. 25, Accounting for Stock Issued to Employees (“APB 25”). Under APB 25, when stock options are issued with an exercise price equal to the market price of the underlying stock price on the date of grant, no compensation expense is recognized. The Company continues to follow the disclosure-only provisions of SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS 123”), as amended by SFAS No. 148, which requires the disclosure of proforma net income and earnings per share as if the Company had applied the fair value recognition provisions of SFAS 123.

The following table illustrates the effect on net loss if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation:

	February 25, 2004 (Inception) to December 31, 2004			For the Year Ended December 31, 2005			February 25, 2004 (Inception) to December 31, 2005
Net loss as reported	$	(11,741	)	$	(246,006	)	$	(257,745	)
Deduct: Total employee stock-based compensation expense determined under the fair value method		—			23,405			23,405
Pro forma net loss	$	(11,741	)	$	(269,411	)	$	(281,150	)

Fair value was estimated at the date of grant using the Black-Scholes pricing model, with the following weighted average assumptions:

	Year Ended December 31, 2005
Risk-free interest rate	3.625	%
Expected dividend yield	None
Expected life	3.0 years
Expected volatility	100.0	%

The risk-free interest rate used in the Black-Scholes valuation method is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. We have not declared or paid any dividends and do not currently expect to do so in the future. The expected term of options represents the period that our stock-based awards are expected to be outstanding and was determined based on projected holding periods for the remaining unexercised shares. Consideration was given to the contractual terms of our stock-based awards, vesting schedules and expectations of future employee behavior. Expected volatility is based on market prices of traded options for comparable entities within our industry.

The Company’s stock price volatility and option lives involve management’s best estimates, both of which impact the fair value of the option calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the life of the option.

No tax benefits were attributed to the stock-based compensation expense because a valuation allowance was maintained for substantially all net deferred tax assets.

F - 8

Income Taxes - Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes, if any. Deferred taxes represent the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Fair Value of Financial Instruments - The carrying amounts reported in the balance sheets for cash, accounts payable and accounts payable – shareholder approximate their fair values.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions about the future outcome of current transactions which may affect the reporting and disclosure of these transactions. Accordingly, actual results could differ from those estimates used in the preparation of these financial statements.

Basic and Diluted Loss per Common Share – Basic and diluted loss per common share are computed based on the weighted average number of common shares outstanding. Common share equivalents (which consist of options and warrants) are excluded from the computation of diluted loss per share since the effect would be antidilutive. Common share equivalents which could potentially dilute basic earnings per share in the future, and which were excluded from the computation of diluted loss per share, totaled zero shares and 330,000 shares at December 31, 2004 and 2005, respectively.

Recently Issued Accounting Standards - In December 2004, the Financial Accounting Standards Board (FASB) revised and issued SFAS 123, Share-Based Payment (SFAS 123(R)). SFAS 123(R) eliminates the alternative of using the APB 25 intrinsic value method of accounting for stock options. This revised statement will require recognition of the cost of employee services received in exchange for awards of equity instruments based on the fair value of the award at the grant date. This cost is required to be recognized over the vesting period of the award. The stock-based compensation table in Note 2 illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation. SFAS 123(R) applies to all awards granted, modified, repurchased, or cancelled after June 30, 2005. The Company will adopt SFAS 123(R) effective January 1, 2006, using the modified prospective method. The adoption of this statement is anticipated to have no effect on the Company’s compensation expense for share-based payments in 2005.

3. Property and Equipment

	December 31, 2004			December 31, 2005
Research equipment	$	—		$	40,000
Computer and office equipment		—			—
		—			40,000
Less: accumulated depreciation		(—	)		(—	)
Property and equipment, net	$	—		$	40,000

As of December 31, 2005, no equipment had been placed into service. Depreciation expense was zero for the period from February 25, 2004 (date of inception) to December 31, 2005.

4. Related-Party Transactions

CDI Agreement

In November 2004, the Company entered into an assignment and license agreement (the “CDI Agreement”) with ChromoDynamics, Inc. (“CDI”), Dr. Daniel Farkas, who is the Chairman, Chief Scientist, and a principal shareholder of SMI, and certain other individuals. Under this agreement Dr. Farkas and the other individuals assigned an invention in the spectral imaging field to the Company and

F - 9

CDI granted an exclusive worldwide sublicense to SMI of rights under United States Patents Nos. 5,796,512 issued in 1998 to Carnegie Mellon University to use the optical imaging technology covered by such patents for medical imaging clinical applications. In September 2005, the Company reached an agreement with Carnegie Mellon University to receive a direct license of the technology from that institution in lieu of the sublicense from CDI. Under the CDI Agreement, the Company will pay Dr. Farkas and the other individuals a royalty based on the Company’s sales of products incorporating their technology.

In April 2005, the Company purchased from CDI $40,000 of research equipment.

Patent Costs

At December 31, 2004 and 2005, the Company was indebted to CDI for patent development costs incurred per the CDI Agreement totaling $8,800 and $0, respectively (Note 4), which are included in accrued expenses on the accompanying balance sheets.

Legal Costs

At December 31, 2004 and 2005, the Company was indebted to a shareholder for legal services for $2,941 and $38,834, respectively, which are included in accrued expenses on the accompanying balance sheets.

Legal services provided by a shareholder for the period from February 25, 2004 (date of inception) to December 31, 2005 was approximately $70,000.

Other Liabilities

At December 31, 2004 and 2005, the Company was indebted to a shareholder for $101 and $0, respectively, which is included in accounts payable – shareholder on the accompanying balance sheets.

Rent

From February 25, 2004 (date of inception) to December 31, 2005, the Company used on a rent-free basis office space of a shareholder. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein.

5. Commitments and Contingencies:

Operating Lease

The Company currently is utilizing a portion of the office space of a related party at no cost and without a lease agreement so that either party may terminate this arrangement at any time. Total rent expense was zero for the periods from February 25, 2004 (date of inception) to December 31, 2005.

Employment Contracts

The Company has entered into an employment agreement with David Wohlberg, effective as of April 22, 2005, pursuant to which Mr. Wohlberg has agreed to serve as the Company’s President and Chief Operating Officer. The term of the agreement runs until April 30, 2006. Mr. Wohlberg will receive a monthly salary of $2,000, commencing only after the Company has raised at least $1,500,000 of equity capital (if the Company raises a cumulative amount of equity of at least $4,500,000, Mr. Wohlberg thereafter will receive a salary of $5,000 per month). Mr. Wohlberg has received a grant of options to purchase approximately 150,000 shares of the Company’s common stock at an exercise price of approximately $0.35 per share. The options vest in four equal amounts, quarterly over the term of the agreement, in advance. The Company has agreed to indemnify Mr. Wohlberg for all claims arising out of his performance as President and Chief Operating Officer, other than those arising from Mr. Wohlberg’s

F - 10

breach of the agreement or his gross negligence or willful misconduct. Mr. Wohlberg may terminate the agreement if the Company materially breaches the agreement and fails to correct the breach within 15 days following written notice from Mr. Wohlberg. The Company has the ability to terminate the agreement in the event of Mr. Wohlberg’s disability or for “cause,” as defined in the agreement. Mr. Wohlberg will spend the majority of his business time on the Company’s business.

On May 16, 2005, the Company entered into an employment agreement with Kirk Peacock, pursuant to which Mr. Peacock agreed to serve as the Company’s Chief Financial Officer on a part-time basis. The term of the agreement is one year. The Company has the ability to terminate the agreement in the event of Mr. Peacock’s disability or for “cause,” as defined in the agreement. Mr. Peacock may terminate the agreement if the Company materially breaches the agreement and fails to correct the breach within 15 days following written notice from Mr. Peacock. For his services provided pursuant to the agreement, the Company has granted to Mr. Peacock options to purchase approximately 50,000 shares of the Company’s Common Stock at an exercise price of approximately $0.35 per share. The options vest and become exercisable monthly over the one-year term of the agreement. The Company has agreed to indemnify Mr. Peacock for all claims arising out of his performance as Chief Financial Officer, other than those arising from his gross negligence or willful misconduct.

On April 22, 2005, the Company entered into an agreement with Dr. Daniel L. Farkas, pursuant to which Dr. Farkas agreed to serve as the Company’s Chairman of the Board and Chief Scientist on a part-time basis. The term of the agreement is one year. The Company has the ability to terminate the agreement in the event of Dr. Farkas’s disability or for “cause,” as defined in the agreement. Dr. Farkas may terminate the agreement if the Company materially breaches the agreement and fails to correct the breach within 15 days following written notice from Dr. Farkas. For his services provided pursuant to the agreement, the Company has granted to Dr. Farkas options to purchase approximately 10,000 shares of the Company’s Common Stock at an exercise price of approximately $0.35 per share. The options vest and become exercisable monthly over the one-year term of the agreement. The Company has agreed to indemnify Dr. Farkas for all claims arising out of his performance as Chairman of the Board and Chief Scientist, other than those arising from his gross negligence or willful misconduct.

On September 1, 2005, the Company entered into an agreement with Dr. Gregory Bearman, pursuant to which Dr. Bearman agreed to serve as the Company’s Chief Scientist on a part-time basis. The term of the agreement is one year. Dr. Bearman will receive a monthly salary of $1,000, and at such time as the Company has raised a total of at least $2,000,000 of equity capital, Dr. Bearman thereafter will receive a salary of approximately $2,500 per month. The Company has the ability to terminate the agreement in the event of Dr. Bearman’s disability or for “cause,” as defined in the agreement. Dr. Bearman may terminate the agreement if the Company materially breaches the agreement and fails to correct the breach within 15 days following written notice from Dr. Bearman. For his services provided pursuant to the agreement, the Company has granted to Dr. Bearman options to purchase approximately 75,000 shares of the Company’s Common Stock at an exercise price of approximately $0.35 per share. The option vests in four equal amounts, quarterly over the term of the agreement, in advance. The Company has agreed to indemnify Dr. Bearman for all claims arising out of his performance as and Chief Scientist, other than those arising from his gross negligence or willful misconduct.

6. Shareholders’ Equity (Deficit)

Equity Investment

In April 2005, three individuals purchased a total of 541,800 shares of the Company’s common stock for an aggregate purchase price of $125,000.

In September 2005, the Company issued 154,800 shares of the Company’s common stock in connection with a licensing agreement valued at $152,760.

F - 11

Stock Options

In February 2005, the Company adopted an Equity Incentive Plan (“Plan”). Pursuant to the Plan, a committee appointed by the Board of Directors may grant, at its discretion, qualified or nonqualified stock options, stock appreciation rights and may grant or sell restricted stock to key individuals, including employees, nonemployee directors, consultants and advisors. Option prices for qualified incentive stock options (which may only be granted to employees) issued under the plan may not be less than 100% of the fair market value of the common stock on the date the option is granted (unless the option is granted to a person who, at the time of grant, owns more than 10% of the total combined voting power of all classes of stock of the Company; in which case the option price may not be less than 110% of the fair market value of the common stock on the date the option is granted). Option prices for nonqualified stock options issued under the plan are at the discretion of the committee and may be equal to, greater or less than fair market value of the common stock on the date the option is granted. The options vest over periods determined by the Board of Directors and are exercisable no later than ten years from date of grant (unless they are qualified incentive stock options granted to a person owning more than 10% of the total combined voting power of all classes of stock of the Company, in which case the options are exercisable no later than five years from date of grant.) As of December 31, 2005, the Company has reserved 1,000,000 shares of common stock for issuance under the plan and options to purchase approximately 330,000 common shares have been granted under the stock option plan.

The following table summarizes stock option activity for the Company stock option plan during the year ended December 31, 2005:

	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (Thousands)
Outstanding December 31, 2004	—	$	—
Granted	330,000	$	0.32
Exercised	—	$	—
Forfeited or expired	—	$	—
Outstanding December 31, 2005	330,000	$	0.32	5.8	$	—
Vested or expected to vest at December 31, 2005	199,832	$	0.32	5.8	$	—

F - 12

A summary of the status of unvested employee stock options as of December 31, 2005 and changes during the year then ended, is presented below:

	Options	Weighted Average Grant Date Fair Value Per Share
Unvested at December 31, 2004	—	$	—
Granted	330,000	$	0.32
Vested	199,832	$	0.32
Forfeited	—	$	—
Unvested at December 31, 2005	130,168	$	0.34

As of December 31, 2005, the total remaining unrecognized compensation cost related to unvested stock options amounted to $59,854, which will be amortized over the weighted-average remaining requisite service period of less than one year.

Warrants

The Company paid a finders fee in March 2005 to two individuals in the form of warrants to purchase shares of the Company’s common stock at $0.15 per share. The number of shares covered by the finders fee warrants was based upon the number of units purchased in a future private offering by investors introduced to the Company by the finders and will total approximately 150,000 shares to each finder if such investors purchase $1,500,000 of units (Note 8). If the number of units purchased by investors introduced to the Company by the finders is less than $1,500,000 of units, the number of shares covered by the finders fee warrant shall be reduced pro rata, and an approximately pro rata increase in such fee (payable in warrants or cash) will be paid if such investors purchase more than $1,500,000 of units. The shares of Company’s common stock issuable upon exercise of any of the finders fee warrants will be registered but will be subject to a lock-up provision restricting the quantities and times at which such shares may be sold. The finders will be entitled under certain circumstances to additional compensation in the event investors who they introduce to the Company purchase units and subsequently make further investments in the Company.

7. Income Taxes

Deferred taxes represent the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Temporary differences result primarily from the recording of tax benefits of net operating loss carryforwards and start-up costs that will be amortized for tax purposes once the Company begins doing business as defined by the Internal Revenue Code.

As of December 31, 2005, the Company has an insufficient history to support the likelihood of ultimate realization of the benefit associated with the deferred tax asset. Accordingly, a valuation allowance has been established for the full amount of the net deferred tax asset.

F - 13

Deferred taxes consisted of the following:

	December 31, 2004			December 31, 2005
Net operating loss carryforwards and other assets	$	4,700		$	103,100
Less valuation allowance		(4,700	)		(103,100	)
Net deferred tax asset	$	—		$	—

At December 31, 2004 and December 31, 2005, the Company had approximately $4,700 and $103,100, respectively, of net operating loss carryforwards. The utilization of the carryforwards is dependent upon the Company’s ability to generate sufficient taxable income during the carryforward period.

8. Subsequent Events

Reorganization

The Company entered an Agreement and Plan of Reorganization (the “Agreement”) dated as of May 5, 2005 with Patco Industries, Ltd., a Delaware corporation (“Patco”) pursuant to which, on the terms and subject to the conditions of the Agreement, Patco agreed to acquire the Company as a wholly-owned subsidiary. The acquisition will be accomplished through the merger (the “Merger”) of a newly formed subsidiary of Patco with and into the Company, with the Company as the surviving corporation and with Patco to issue shares of Patco common stock to the stockholders of the Company. Pursuant to the Agreement, Patco effected a reverse stock split of approximately .00434 for one of the outstanding shares of Patco common stock so that Patco had approximately 825,000 shares of Patco common stock issued and outstanding immediately prior to the Merger.

Upon the effectiveness of the Merger, each share of the Company’s common stock issued and outstanding immediately prior to the Merger shall be converted into one share of Patco common stock and each outstanding option or warrant to purchase the Company’s common stock, whether or not then exercisable, shall be converted into an option or warrant to purchase one share of Patco common stock at a price equal to the exercise price in effect immediately prior to the Merger.

The merger was completed on January 31, 2006.

Private Placement

On January 30, 2006, the Company raised $1,400,000 (before offering expenses) from the sale of 1,400,000 of its units, each unit after the Company’s stock split consisting of one share of common stock and one warrant, to accredited investors in a private placement. Under its prior agreement with two individuals, the Company granted warrants to purchase 300,000 shares of its common stock for services rendered by those individuals who located investors to make investments in the private placement.

F - 14

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Patco Industries, Ltd.

We have audited the accompanying balance sheet of Patco Industries, Ltd. as of December 31, 2004 and December 31, 2005, and the related statements of operations and stockholders’ deficit and cash flows for the three years then ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Patco Industries, Ltd. as of December 31, 2004 and December 31, 2005, and the results of its operations and its cash flows for the three years in the period then ended in conformity with U.S. generally accepted accounting principles.

As set forth in Note 2 to the accompanying financial statements, the Company has not yet commenced operations and there are no other sources of financing to sustain its operations. Management’s plans are also discussed in Note 2. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to the financial statements that might be necessary should the Company be unable to continue as a going concern. As set forth in Note 2 to the accompanying financial statements, in January 2006 the Company completed a reverse merger with Spectral Molecular Imaging, Inc. which was accounted for as the acquirer, thereby ending the Company’s existence for accounting purposes.

/s/ STONEFIELD JOSEPHSON INC.

CERTIFIED PUBLIC ACCOUNTANTS

Santa Monica, California

January 8, 2007

F - 15

Patco Industries, Ltd.

Balance Sheet

(Amounts expressed in United States dollars unless otherwise stated)

	December 31,
	2005			2004
ASSETS
Total Assets	$	—		$	—
LIABILITIES & STOCKHOLDERS’ EQUITY
Total Liabilities	$	—		$	—
Stockholders’ Equity:
Common Stock – 300,000,000 shares authorized; 825,124 issued and outstanding in 2005 and 775,120 issued and outstanding in 2004		190			179
Accumulated deficit		(190	)		(179	)
Total Stockholders’ Equity		—			—
Total Liabilities & Stockholders’ Equity	$	—		$	—

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

F - 16

Patco Industries, Ltd.

Statement of Operations

(Amounts expressed in United States dollars unless otherwise stated)

	For The Years Ended December 31,
	2005		2004		2003
Other Income (Expense):
Write off of organizational costs	$	—	$	—	$	—
Forgiveness of demand note and accrued interest		—		—		—
Forgiveness of accrued professional fees payable		—		—		—
Total other income (expense)		—		—		—
Net loss	$	—	$	—	$	—
Basic and diluted loss per common share	$	—	$	—	$	—
Basic and diluted weighted average shares outstanding		800,139		775,120		775,120

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

F - 17

Patco Industries, Ltd.

Statement of Cash Flows

(Amounts expressed in United States dollars unless otherwise stated)

	For The Years Ended December 31,
	2005		2004		2003
Cash flows from operations:
Net loss	$	—	$	—	$	—
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Write off of organizational costs		—		—		—
Forgiveness of demand note and accrued interest		—		—		—
Forgiveness of accrued professional fees payable		—		—		—
Net cash provided by (used in) operations		—		—		—
Cash flows from investing—		—		—		—
Cash flows from financing—		—		—		—
Increase (decrease) in cash		—		—		—
Cash, beginning balance		—		—		—
Cash, ending balance	$	—	$	—	$	—

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

F - 18

Patco Industries, Ltd.

Statement of Stockholders’ Equity

(Amounts expressed in United States dollars unless otherwise stated)

	Common Stock			Accumulated Deficit
	Shares	Amount					Total
December 31, 2002	775,120	$	179	$	(179	)		—
Net loss	—		—		—			—
December 31, 2003	775,120		179		(179	)		—
Net loss	—		—		—			—
December 31, 2004	775,120		179		(179	)		—
Issuance of common stock in connection with reorganization	50,004		11		(11	)		—
Net loss	—		—		—			—
December 31, 2005	825,124	$	190	$	(190	)	$	—

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

F - 19

Patco Industries, Ltd.

Notes to Financial Statements

December 31, 2005

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES

Description of Business

The Company has no operations and does not carry on business. It was incorporated in Delaware on March 20, 1987 under the name Redwing Ventures, Inc., and changed its name to Patco Industries, Ltd. on June 16, 1989.

Reorganization

The Company has entered into an Agreement and Plan of Reorganization (the “Agreement”) dated May 5, 2005 with Spectral Molecular Imaging, Inc., a Nevada corporation (“Spectral”), as amended effective as of June 30, 2005, pursuant to which, on the terms and subject to the conditions of the Agreement, the Company will acquire Spectral as a wholly-owned subsidiary. The acquisition will be accomplished through the merger (the “Merger”) of a newly formed subsidiary of the Company with and into Spectral, with Spectral as the surviving corporation and to issue shares of Company common stock to the stockholders of Spectral. It is anticipated that prior to the Merger, the Company will effect a reverse stock split of approximately .00434 for one of the outstanding shares of Company Common Stock so that the Company will have 825,000 shares of Company Common Stock issued and outstanding immediately prior to the Merger.

Upon the effectiveness of the Merger, each share of Spectral Common Stock issued and outstanding immediately prior to the Merger shall be converted into one share of Company Common Stock and each outstanding option or warrant to purchase Spectral Common Stock, whether or not then exercisable, shall be converted into an option or warrant to purchase one share of Company Common Stock at a price equal to the exercise price in effect immediately prior to the Merger.

Completion of the merger is subject to certain closing conditions, including Spectral completing a financing of a minimum of $850,000, which may be increased by Spectral in its sole discretion to up to $2,000,000, in gross offering proceeds from the sale of Spectral equity securities.

On January 30, 2006, Spectral raised $1,400,000 (before offering expenses) from the sale of 1,400,000 of its units, each unit after Spectral’s stock split consisting of one share of common stock and one warrant, to accredited investors in a private placement. The Merger was completed on January 31, 2006 and the Company no longer exists for accounting purposes.

Stock Split

All common stock share numbers and per share information for the Company have been restated to reflect a reverse stock split of .004340217 for 1 on January 30, 2006 in connection with the Company’s Merger.

Estimates

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

F - 20

Cash and cash equivalents

The Company does not maintain a cash balance. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

Loss per share

Net loss per share is provided in accordance with Statement of Financial Accounting Standards No. 128 (SFAS #128) “Earnings Per Share”. Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. The Company had no dilutive common stock equivalents, such as stock options or warrants as of December 31, 2005.

Segment reporting

The Company follows Statement of Financial Accounting Standards No. 130, “Disclosures About Segments of an Enterprise and Related Information”. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

Dividends

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid or declared since inception.

Income taxes

The Company follows Statement of Financial Accounting Standard No. 109, “Accounting for Income Taxes” (“SFAS No. 109”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

Recent pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) revised and issued SFAS 123, Share-Based Payment (SFAS 123(R)). SFAS 123(R) eliminates the alternative of using the APB 25 intrinsic value method of accounting for stock options. This revised statement will require recognition of the cost of employee services received in exchange for awards of equity instruments based on the fair value of the award at the grant date. This cost is required to be recognized over the vesting period of the award. SFAS 123(R) applies to all awards granted, modified, repurchased, or cancelled after June 30, 2005. The Company will adopt SFAS 123(R) effective January 1, 2006, using the modified prospective method. The adoption of this statement is anticipated to have no effect on the Company’s compensation expense for share-based payments in 2005 since no awards of equity instruments were made.

F - 21

In July, 2006, the FASB issued Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109” (“FIN 48”), which is a change in accounting for income taxes. FIN 48 provides guidance on the threshold for recognizing the financial statement effects of a tax position. This interpretation is effective for fiscal years beginning after December 15, 2006. We do not expect the adoption of FIN 48 to have a material effect on our financial statements or results of operations.

In September 2006, the Financial Accounting Standards Board, or FASB, issued SFAS No. 157, Fair Value Measurements, or SFAS 157, which provides guidance on how to measure assets and liabilities that use fair value. This statement clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS 157 will apply whenever another generally accepted accounting principles requires, or permits, assets or liabilities to be measured at fair value but does not expand the use of fair value to any new circumstances. This statement will also require additional disclosures in both annual and quarterly reports. SFAS 157 is effective for fiscal years beginning after November 2007, and will be adopted by us beginning January 1, 2008. We are currently evaluating the potential impact this statement may have on our financial statements, but do not believe the impact of adoption will be material.

In September 2006, the SEC staff issued Staff Accounting Bulletin, or SAB, No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, or SAB 108. SAB 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of determining whether the current year’s financial statements are materially misstated. SAB 108 is effective for fiscal years ending after November 15, 2006. We will initially apply the provisions of SAB 108 in connection with the preparation of our annual financial statements for the year ending December 31, 2006. We have evaluated the potential impact that SAB 108 may have on our financial statements and do not believe the impact of the application of this guidance will be material.

NOTE 2 - GOING CONCERN

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company is a shell corporation with no operations or income. On January 31, 2006, the Company completed its Plan of Reorganization with Spectral Molecular Imaging, Inc., and the Company no longer exists for accounting purposes.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.

NOTE 3 - INCOME TAXES

The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS No. 109”), which requires use of the liability method. SFAS No. 109 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:

U.S. federal statutory rate	(34.0)%
Valuation reserve	34.0%
Total	—  %

As of December 31, 2005, the Company has a net operating loss carryforward of $190 for tax purposes, which will be available to offset future taxable income. If not used, this carryforward will expire in 2022. The deferred tax asset relating to the operating loss carryforward has been fully reserved.

F - 22

NOTE 4 - FIXED ASSETS

The Company does not own or lease fixed assets. There were no fixed asset additions or deletions during the year ended December 31, 2005. The Company recorded no depreciation expense for the year ended December 31, 2005.

NOTE 5 - RELATED PARTY TRANSACTIONS

The Company does not lease or rent any property. The Company’s office services are provided without charge by its current Chief Executive Officer. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein.

NOTE 6 - STOCKHOLDERS’ EQUITY

There were 825,124 shares of common stock outstanding on December 31, 2005. On July 1, 2005, the Company issued 50,004 shares of common stock to William Patridge, its Chief Executive Officer. The shares were issued in connection with the Agreement and Plan of Reorganization described in Note 1 and Mr. Patridge’s agreement to fund certain expenses of the Company incurred in connection with the transaction contemplated by the foregoing Agreement and Plan of Reorganization.

NOTE 7 - WARRANTS AND OPTIONS

There are no warrants or options outstanding to acquire any additional shares of common stock.

F - 23

Optical Molecular Imaging, Inc.

(formerly known as Patco Industries, Ltd.)

Selected Unaudited Pro Forma Financial Information

The following unaudited pro forma condensed combined financial information of Spectral Molecular Imaging, Inc. (“Spectral”) and Optical Molecular Imaging, Inc. (formerly know as Patco Industries, Ltd. and referred to herein as “Optical”), which we refer to as “Optical Pro Forma” has been prepared to demonstrate how these companies or businesses might have looked if (1) the reverse stock split of Optical’s common shares, (2) the Spectral and Optical merger, and (3) the $1,400,000 private placement offering of Spectral’s common stock had been completed as of the date or at the beginning of the period presented.

We have prepared the pro forma financial information using the reverse merger purchase method of accounting, resulting in Spectral being deemed the acquirer for accounting purposes. We expect that we will have no material reorganization and restructuring expenses or potential synergies resulting from the merger and no opportunities to earn more revenue as a result of the transaction.

The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not attempt to predict or suggest future results. The pro forma information also does not attempt to show how the combined company would actually have performed had the companies been combined throughout these periods. If the companies had actually been combined in prior periods, these companies and businesses might have performed differently. You should not rely on pro forma financial information as an indication of the results that would have been achieved if the merger had taken place earlier or the future results that the combined company will experience after completion of the transaction.

You should read these unaudited pro forma condensed combined financial statements in conjunction with the historical financial statements of Spectral and Optical.

F - 24

Pro Forma Optical Molecular Imaging

Unaudited Pro Forma Condensed Combined Balance Sheets

As of December 31, 2005

	Optical Historical(1)			Spectral Historical(2)			Pro Forma Adjustments(3)			Financing Adjustments(4)			Optical Pro Forma
	(unaudited)
Assets
Current assets:
Cash	$	—		$	30,538		$	—		$	1,400,000		$	1,430,538
Restricted Cash		—			1,325,000			—			(1,325,000	)		—
Other assets		—			1,200			—			—			1,250
Total current assets		—			1,356,738			—			75,000			1,431,738
Property and equipment, net		—			40,000			—			—			40,000
Other assets		—			2,500			—			—			2,500
Total assets	$	—		$	1,399,238		$	—		$	75,000		$	1,474,238
Liability and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—		$	15,142		$	—		$	—		$	15,142
Accounts payable – shareholders		—			—			—			—			—
Subscription payable		—			1,325,000			—			(1,325,000	)		—
Accrued liabilities		—			38,834			—			—			38,834
Total current liabilities		—			1,378,976			—			(1,325,000	)		53,976
Other liabilities		—			—			—			—			—
Commitments and contingencies		—			—			—			—			—
Shareholders’ equity:
Common stock		190			7,147			(190	)		1,400			8,547
Additional paid in capital		—			270,860			—			1,398,600			1,669,460
Deficit accumulated during the development stage		(190	)		(257,745	)		190			—			(257,745	)
Total shareholders’ equity		—			20,262			—			1,400,000			1,477,950
Total liabilities and shareholders’ equity	$	—		$	1,399,238		$	—		$	75,000		$	1,474,238

F - 25

Pro Forma Optical Molecular Imaging

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2004

	Optical Historical(5)			Spectral Historical(6)			Pro Forma Adjustments		Financing Adjustments		Optical Pro Forma
Revenues	$	—		$	—		$	—	$	—	$	—
Expenses:
In process research and development		—			5,522			—		—		5,522
General and administrative		—			6,219			—		—		6,219
Total expenses		—			11,741			—		—		11,741
Loss before income taxes		—			(11,741	)		—		—		(11,741	)
Income taxes		—			—			—		—		—
Net loss	$	—		$	(11,741	)	$	—	$	—	$	(11,741	)
Weighted average number of shares:
Basic and diluted		774,961	(7)									9,321,561	(8)
Earnings (loss) per share:
Basic and diluted	$	—									$	—

F - 26

Pro Forma Optical Molecular Imaging

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2005

	Optical Historical(9)			Spectral Historical(10)			Pro Forma Adjustments		Financing Adjustments		Optical Pro Forma
	(unaudited)
Revenues	$	—		$	—		$	—	$	—	$	—
Expenses:
In process research and development		—			152,760			—		—		152,760
Merger costs		—			39,118			—		—		39,118
General and administrative		—			54,126			—		—		54,126
Total expenses		—			246,004			—		—		246,004
Loss before income taxes		—			(246,004	)		—		—		(246,004	)
Income taxes		—			—			—		—		—
Net loss	$	—		$	(246,004	)	$	—	$	—	$	(246,004	)
Weighted average number of shares:
Basic and diluted		791,628	(11)									9,338,228	(12)
Earnings (loss) per share:
Basic and diluted	$	—									$	(0.03	)

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Pro Forma Optical Molecular Imaging

Notes to the Unaudited Condensed Combined Pro Forma Financial Statements

1. This column represents the historical financial position of Optical as of December 31, 2005.

2. This column represents the historical financial position of Spectral as of December 31, 2005.

3. These adjustments reflect the elimination of Optical’s shareholders’ equity accounts.

4. These adjustments represent the issuance of $1,400,000 of Spectral common stock in January 2006.

5. This column represents the results of operations of Optical for the year ended December 31, 2004.

6. This column represents the results of operations of Spectral for the period from February 25, 2004 (date of inception) to December 31, 2004.

7. Optical effected an approximately 0.00434 for 1 reverse stock split of its common stock, which resulted in its having approximately 774,961 weighted average number of shares outstanding.

8. Pro forma per share data are based on the number of shares of Spectral common stock that would have been outstanding had the merger with Optical and the $1,400,000 private placement by Spectral taken place. Optical issued 8,546,600 shares in connection with the Spectral.

9. This column represents the results of operations of Optical for the year ended December 31, 2005.

10. This column represents the results of operations of Spectral for the year ended December 31, 2005.

11. Optical effected an approximately 0.00434 for 1 reverse stock split of its common stock, which will resulted in its having approximately 791,628 weighted average number of shares outstanding.

12. Pro forma per share data are based on the number of shares of Spectral common stock that would have been outstanding had the merger with Optical and the $1,400,000 private placement by Spectral taken place. Optical issued 8,546,600 shares in connection with the Spectral.

F - 28

Exhibit Index

Exhibit No.	Description
2.1	Agreement and Plan of Reorganization dated as of May 5, 2005 among the Registrant, Patco Industries Subsidiary, Inc., William C. Patridge, and Spectral Molecular Imaging, Inc., as amended on June 30, 2005, September 26, 2005 and January 20, 2006. (1)
3.1	Amended and Restated Certificate of Incorporation of the Registrant. (2)
3.2	Amended and Restated Bylaws of the Registrant. (2)
4.1	Form of Warrant issued in January 2006 to purchase shares of the common stock of Spectral Molecular Imaging, Inc. and assumed by the Registrant. (2)
4.2	Form of Subscription Agreement containing registration rights issued by Spectral Molecular Imaging, Inc. in January 2006 and assumed by the Registrant. (2)
10.1	Assignment and License Agreement dated as of November 1, 2004 among Spectral Molecular Imaging, Inc., ChromoDynamics, Inc., Dr. Daniel Farkas and certain other individuals specified in said agreement.* (2)
10.2	Amendment No. 1 dated as of November 2, 2004 to the Assignment and License Agreement dated as of November 1, 2004 among Spectral Molecular Imaging, Inc., ChromoDynamics, Inc., Dr. Daniel Farkas and certain other individuals specified in said agreement.* (2)
10.3	Amendment No. 2 dated as of October 20, 2005 to the Assignment and License Agreement dated as of November 1, 2004 among Spectral Molecular Imaging, Inc., ChromoDynamics, Inc., Dr. Daniel Farkas and certain other individuals specified in said agreement.* (2)
10.4	License Agreement dated as of September 29, 2005 between Spectral Molecular Imaging, Inc. and Carnegie Mellon University.* (2)
10.5	Amendment No. 1 dated November 9, 2005 to the License Agreement dated as of September 29, 2005 between Spectral Molecular Imaging, Inc. and Carnegie Mellon University. (2)
10.6	2006 Equity Incentive Plan of the Registrant. (2)
10.7	Form of Stock Option Agreement for the Registrant’s 2006 Equity Incentive Plan. (2)
10.8	Employment Agreement with Dr. Daniel L. Farkas dated April 22, 2005. (2)

Ex - 1

Exhibit No.	Description
10.9	Employment Agreement with David Wohlberg dated April 22, 2005. (2)
10.10	Employment Agreement with C. Kirk Peacock dated May 16, 2005. (2)
21.1	List of the Registrant’s subsidiaries. (2)
31.1	Certification of the Registrant’s Principal Executive Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
31.2	Certification of the Registrant’s Principal Financial Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
32.1	Certification of the Registrant’s Principal Executive Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of the Registrant’s Principal Financial Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

* Certain portions of the exhibit have been omitted based upon a request for confidential treatment filed by us with the SEC. The omitted portions of the exhibit have been separately filed by us with the SEC.

** Filed with this Annual Report on Form 10-KSB/A (Amendment No. 2).

(1) Previously filed by us on January 26, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(2) Previously filed by us on February 6, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

Ex - 2