Cancer is basically an uncontrolled growth of cells and expansion of tissues that can invade and destroy the function of adjoining and even distant organs. In contrast to infectious diseases which are entirely caused by outside agents such as viruses and bacteria, cancer is a disease that arises from genetic breakdown within our own cells. The problem with cancer from a treatment point of view is that it is not one disease but one of almost infinite variety.

According to the World Cancer Report, world cancer rates could further increase to 15 million new cases by the year 2020. According to a 2006 report by American Cancer Society, about 1,399,790 new cancer cases are expected to be diagnosed in 2006 in the United States. In the United States, cancer accounts for one of every four deaths. The National Institutes of Health estimates overall costs for cancer in 2005 at $210 billion, including $74.0 billion for direct medical costs.

According to the report published by BCC Research in 2005, the worldwide market for pharmacogenomics reached $1.24 billion in 2004 and is projected to rise at an average annual growth rate (AAGR) of 24.5% to reach $3.7 billion by 2009. Bioinformatics tools for discovery of single nucleotide polymorphisms, or SNPs reached sales of $200.7 million in 2004. They are projected to increase at an AAGR of 14.6% to reach $397.2 million in 2009.

Genotyping technologies are expected to grow at an AAGR of 26.5% to reach $1.7 billion or 44% of the total market. Within the genotyping market, platforms that utilize hybridization-based technologies will grow at an AAGR of 26.0% to reach $608.5 million by 2009. Diagnostics comprised 39.2% of the total market in 2004 and are projected to grow at an AAGR of 27.7% to increase its share to 44.6% in 2009.

The Company has developed and patented enabling technologies for maximizing extraction and analysis of nucleic acids and, as a result, for accessing the genetic information in tumor samples that are stored as formalin-fixed and paraffin-embedded, or FFPE specimens.

The Company is researching and developing diagnostic tests for cancer by identifying genetic profiles of tumors that are more aggressive and recur rapidly after surgery. The Company also is identifying genetic profiles of tumors that are more or less responsive to a particular chemotherapy.

The Company plans to expand its pharmacogenomic testing services business into major markets of the healthcare industry including outside of the United States.

The Company has developed technologies for the extraction of RNA from FFPE tissues which enables it to reliably recover RNA suitable for a variety of applications, such as gene expression research, development of diagnostics, and microarray platforms.

The Company developed and patented an extraction method (RGI-1) that allows reliable and consistent isolation of RNA from FFPE suitable for use in RT-PCR analysis. Using RGI-1, successful RT-PCR quantitation of gene expressions is possible from as little as a single 10-micron section of a paraffin block with over 90% reliability and excellent reproducibility.

RNA isolated by RGI-1, although suitable for RT-PCR, is suboptimal for gene expression microarrays due to yield of short fragment size RNA fragments. The Company developed an additional method, RGI-2, for the extraction of long fragments of RNA from FFPE tissue to enable the use of FFPE on platforms which rely on longer fragments to deliver optimal results.

This technology does not replace RGI-1, since it is less rapid and may contain a small amount of genomic DNA. Using this technology, the average length of RNA fragments recovered from FFPE is substantially increased. The RNA preparations obtained with RGI-2 produced similar results on gene expression microarrays as RNA isolated from fresh-frozen tissues.

For the nine months ended September 30, 2006, cost of revenues was $1.6 million and for the nine months ended September 30, 2005, cost of revenues was $1.5 million.

Research and development expenses were $862,797 for the nine months ended September 30, 2006, as compared to $572,770 for the nine month period ended September 30, 2005, an increase of $290,027 or 50.6%.

Interest income was $112,294 for the nine months ended September 30, 2006, compared with $44,296 for the same period in 2005, an increase of $67,998.

Interest expense was $43,947 for the nine month period ended September 30, 2006 and $42,066 for the same period in the preceding year.