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      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;&lt;b&gt;Note

      4. &amp;#160;&amp;#160;Supply Agreements&lt;/b&gt;&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;&lt;p style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 18pt; MARGIN: 0pt" id="PARA5854"&gt;

      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;Under

      a three-year agreement with Stryker expiring in April 2014,

      we are the exclusive supplier of Stryker-branded flexible

      video and fiber cystoscopes. These cystoscopes employ our

      patented EndoSheath technology, which are co-branded Stryker

      and Vision-Sciences. We also supply Stryker with flexible

      ureteroscopes under an agreement expiring in December 2015.

      Stryker has the exclusive rights to distribute products we

      manufacture, including cystoscopes, urology EndoSheath

      technology, and ureteroscopes, in North America, South

      America, Latin America, China, and Japan. Although Stryker

      was to receive the exclusive rights for the rest of the world

      in April 2012, we reached an agreement with Stryker to delay

      this launch indefinitely.&amp;#160;&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;&lt;p style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 18pt; MARGIN: 0pt" id="PARA5856"&gt;

      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;We

      also have a development and supply agreement with SpineView,

      Inc. (&amp;#8220;SpineView&amp;#8221;) under which we developed and

      supply a charge-coupled device (CCD) based video surgical

      endoscope for use with SpineView&amp;#8217;s products.&lt;/font&gt;

    &lt;/p&gt;&lt;br/&gt;&lt;p style="TEXT-ALIGN: justify; LINE-HEIGHT: 1.25; TEXT-INDENT: 18pt; MARGIN: 0pt" id="PARA5858"&gt;

      &lt;font style="FONT-FAMILY: Times New Roman, Times, serif; FONT-SIZE: 10pt"&gt;We

      received advances from Stryker for future orders and from

      SpineView for the initial stocking order of 50 SpineView

      surgical endoscope systems. All of the advances were fully

      utilized as of September 30, 2012. &lt;b&gt;&amp;#160;&lt;/b&gt;&lt;/font&gt;

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 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 210

 -SubTopic 10

 -Section 45

 -Paragraph 8

 -Subparagraph (b)

 -URI http://asc.fasb.org/extlink&amp;oid=28358313&amp;loc=d3e6935-107765



Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher SEC

 -Name Staff Accounting Bulletin (SAB)

 -Number Topic 13

 -Section A



Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 605

 -SubTopic 10

 -Section S99

 -Paragraph 1

 -Subparagraph (SAB TOPIC 13.A.3(b).Q1(c),(b).Q2,(c).Q3)

 -URI http://asc.fasb.org/extlink&amp;oid=27012821&amp;loc=d3e214044-122780



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