The National Center for Health Statistics reported that more than 50.0 million general surgical procedures were performed in 2003. Standard and Poor\\\'s Equity Research estimates that about 13-15% of the surgeries involved complex non-healing acute and chronic wounds, which may be considered appropriate candidates for advanced electrotherapy procedures, representing approximately $2.5 billion to $2.7 billion market opportunity in the U.S. MarketResearch.com supports this data, stating that the financial impact of chronic wound care in the U.S. alone equals $2.8 billion in annual spending on treatment of an estimated 3.0-5.0 million chronic wounds. According to U.S. healthcare statistics, the average cost of treating a wound ulcer is $5,000 to $25,000, depending on the severity and patient\\\'s response to treatment.

More than 8.1 million reconstructive and plastic surgery procedures for a total cost in excess of $9.0 billion were performed in 2003, according to statistics released by the American Society of Plastic Surgeons, or ASPS, up 32% from nearly 6.6 million procedures in 2002. The 35-50 age group made up 40% of all plastic surgery with liposuction being their most popular procedure. According to ASPS, procedures being done in an office-based surgical facility rose to 56%, with only 28% of procedures being conducted in a hospital. This trend reflects the safety of many procedures and the expertise of board-certified plastic surgeons to conduct them in their accredited office-based surgical facilities.

The Company’s first generation of the SofPulse device consists of a unit that houses the PEMF signal generator and a swing arm that positions the applicator over the target area. The unit is self-contained, and is supplied with a portable cart and swing arm assembly that enables it to be transported easily. Both the generator and the applicator easily disengage from the cart and arm for situations where space is limited or where the patient is in an awkward position. The Company is currently marketing the first generation of the SofPulse device for use in the wound care and plastic surgery markets.

The Company’s SofPulse II is a smaller and lighter version of the swing arm applicator used in the first generation of the SofPulse device, eliminating the need for the swing arm. This version is a conformable, flexible ring, ranging in diameter from four to ten inches, and weighing only ounces, that plugs into the same signal generator used in the Company’s first generation of SofPulse device. This product is also currently being marketed for use in the wound care and plastic surgery markets and can be used in situations where space is limited.

The Comapny’s Podiatric Boot utilizes an applicator that is ergonomically designed to position around the foot and lower calf and plugs into the same signal generator used in the Company’s first generation of SofPulse device. The Company expects to market this product to the wound care market, particularly to podiatrists.

The Company has developed a battery-operated, disposable version of the SofPulse device that weighs ounces and can be incorporated into or onto post surgical compression garments, including garments that are placed on virtually all plastic surgery patients immediately following surgery. These \\\"smart\\\" compression garments will be activated at the time the garments are placed on the patient. This new technology will cycle on and off automatically throughout the day for up to 30 days. The Company anticipates receiving the first 200 of these \\\"smart\\\" compression garments in March of 2005. The Company is marketing this product to the plastic surgery market.

Rental income were $174,446 for the six months ended September 30, 2004, an increase of $122,048 or 233%, from $52,398 for the six months ended September 30, 2003.

Cost of revenues for the six months ended September 30, 2004 was $52,660 or 30% of sales, as compared to $32,548 or 62% of sales for the six months ended September 30, 2003.

Selling, general and administrative expenses increased $335,096 or 412% to $416,510 for the six months ended September 30, 2004 from $81,414 for the same period in 2003.