Delaware		3841		13-3986004
(State or other jurisdiction of incorporation or organization)		(Primary standard industrial classification code number)		(I.R.S. Employer Identification Number)

Valerie A. Price, Esq. Dreier LLP 499 Park Avenue New York, New York 10022 (212) 328-6144 (phone) (212) 652-3789 (facsimile)		David C. Peck, Esq. Greenberg Traurig, LLP 200 Park Avenue New York, New York 10166 (212) 801-9200 (phone) (212) 801-6400 (facsimile)

Title of Each Class of			Proposed Maximum Aggregate			Amount of
Securities to be Registered			Offering Price(1)			Registration Fee
Common stock, par value $0.001 per share			$33,000,000			$3,884.10

(1)	Estimated solely for purposes of determining the registration fee pursuant to Rule 457(o) under the Securities Act.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer and sale is not permitted.

		Per Share				Total
Public offering price		$				$
Underwriting discounts and commissions		$				$
Proceeds, before expenses, to Electro-Optical Sciences, Inc.		$				$

Ladenburg Thalmann & Co. Inc.	Stanford Group Company

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Prospectus Summary			1
Risk Factors			7
Special Note Regarding Forward-Looking Statements			29
Use of Proceeds			30
Dividend Policy			30
Capitalization			31
Dilution			32
Selected Financial Data			34
Management’s Discussion and Analysis of Financial Condition and Results of Operations			36
Our Business			44
Management			65
Related Party Transactions			75
Principal Stockholders			77
Description of Capital Stock			79
Shares Eligible for Future Sale			83
Material US Federal Income and Estate Tax Considerations for Non-US Holders			85
Underwriting			88
Legal Matters			90
Experts			90
Where You Can Find More Information			91
Index to Financial Statements			F-1

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	•	we may not be able to obtain regulatory approvals for MelaFind®, or the approved indication may be narrower than we seek;
	•	MelaFind® may not prove to be safe and effective in clinical trials;
	•	physicians may not receive any reimbursement from third-party payors, or the level of reimbursement may be insufficient to support widespread adoption of MelaFind®;
	•	we may experience delays in our development program;
	•	any products that are approved may not be accepted in the marketplace by physicians or patients;
	•	we may not have adequate financial or other resources to complete the development and commercialization of MelaFind® or other products;
	•	we may not be able to manufacture our products in commercial quantities or at an acceptable cost; and
	•	rapid technological change may make our technology and products obsolete.

	•	MelaFind® may not be safe or effective to the FDA’s satisfaction;
	•	the data from our pre-clinical studies and clinical trials may be insufficient to support approval;
	•	the manufacturing process or facilities we use may not meet applicable requirements; and

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	•	changes in FDA approval policies or adoption of new regulations may require additional data.

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	MelaFind® may not be commercially viable if we fail to obtain an adequate level of reimbursement by Medicare and other third party payors. The markets for MelaFind® may also be limited by the indications for which its use may be reimbursed.

	Any adverse results in our clinical trials, or difficulties in conducting our clinical trials, could have a material adverse effect on our business.

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	We have incurred losses for a number of years, and anticipate that we will incur continued losses for the foreseeable future.

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	We expect to operate in a highly competitive market, we may face competition from large, well-established medical device manufacturers with significant resources, and we may not be able to compete effectively.

	•	significantly greater name recognition;
	•	established relations with healthcare professionals, customers and third-party payors;
	•	established distribution networks;
	•	additional lines of products, and the ability to offer rebates, higher discounts or incentives to gain a competitive advantage;
	•	greater experience in conducting research and development, manufacturing, clinical trials, obtaining regulatory approval for products, and marketing approved products; and
	•	greater financial and human resources for product development, sales and marketing, and patent litigation.

	Technological breakthroughs in the diagnosis or treatment of melanoma could render MelaFind® obsolete.

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	We depend on clinical investigators and clinical sites to enroll patients in our clinical trials and other third parties to manage the trials and to perform related data collection and analysis, and, as a result, we may face costs and delays that are outside of our control.

	•	the FDA, an Institutional Review Board (IRB), or other regulatory authorities place our clinical trial on hold;
	•	patients do not enroll in clinical trials at the rate we expect;
	•	patient follow-up is not at the rate we expect;
	•	IRBs and third-party clinical investigators delay or reject our trial protocol;
	•	third-party organizations do not perform data collection and analysis in a timely or accurate manner;
	•	regulatory inspections of our clinical trials or manufacturing facilities, among other things, require us to undertake corrective action or suspend or terminate our clinical trials, or invalidate our clinical trials;
	•	changes in governmental regulations or administrative actions; and
	•	the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness.

	If MelaFind® is approved for reimbursement, we anticipate experiencing significant pressures on pricing.

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	MelaFind® may never achieve market acceptance even if we obtain regulatory approvals.

	•	perceived effectiveness of MelaFind®;
	•	convenience of use;
	•	cost of the use of MelaFind®;
	•	availability and adequacy of third-party coverage or reimbursement;
	•	approved indications and product labeling;
	•	publicity concerning MelaFind® or competitive products;
	•	potential advantages over alternative diagnostic methodologies;
	•	introduction and acceptance of competing products or technologies; and
	•	extent and success of our sales, marketing and distribution efforts.

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	We may be unable to complete the development and commercialization of MelaFind® or other products without additional funding.

	•	the schedule, costs, and results of our clinical trials;
	•	the success of our research and development efforts;
	•	the costs and timing of regulatory approval;
	•	reimbursement amounts for the use of MelaFind® that we are able to obtain from Medicare and third party payors, or the amount of direct payments we are able to obtain from patients and/or physicians utilizing MelaFind®;
	•	the cost of commercialization activities, including product marketing and building a domestic direct sales force;
	•	the emergence of competing or complementary technological developments;
	•	the costs of filing, prosecuting, defending and enforcing any patent claims and other rights, including litigation costs and the results of such litigation;
	•	the costs involved in defending any patent infringement actions brought against us by third parties; and
	•	our ability to establish and maintain any collaborative, licensing or other arrangements, and the terms and timing of any such arrangements.

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	If we are unable to establish sales, marketing and distribution capabilities or enter into and maintain arrangements with third parties to sell, market and distribute MelaFind®, our business may be harmed.

	We have limited manufacturing capabilities and manufacturing personnel, and if our manufacturing capabilities are insufficient to produce an adequate supply of MelaFind®, our growth could be limited and our business could be harmed.

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	Our manufacturing operations are dependent upon third-party suppliers, making us vulnerable to supply problems and price fluctuations, which could harm our business. We anticipate contracting for final device assembly and integration, but no contract for such services on a commercial basis has yet been procured.

	•	suppliers may make errors in manufacturing components that could negatively affect the effectiveness or safety of our products, or cause delays in shipment of our products;
	•	we may not be able to obtain adequate supply in a timely manner or on commercially reasonable terms;
	•	we may have difficulty locating and qualifying alternative suppliers for our sole-source suppliers;
	•	switching components may require product redesign and submission to the FDA of a PMA supplement or possibly a separate PMA, either of which could significantly delay production;
	•	our suppliers manufacture products for a range of customers, and fluctuations in demand for the products these suppliers manufacture for others may affect their ability to deliver components to us in a timely manner; and
	•	our suppliers may encounter financial hardships unrelated to our demand for components, which could inhibit their ability to fulfill our orders and meet our requirements.

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	We will not be able to sell MelaFind® unless and until its design is verified and validated in accordance with current good manufacturing practices as set forth in the US medical device Quality System Regulation.

	Assuming that MelaFind® is approved by regulatory authorities, if we or our suppliers fail to comply with ongoing regulatory requirements, or if we experience unanticipated problems with MelaFind®, it could be subject to restrictions or withdrawal from the market.

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	•	warning letters;
	•	fines and civil penalties;
	•	unanticipated expenditures;
	•	delays in approving or refusal to approve MelaFind®;
	•	withdrawal of approval by the FDA or other regulatory bodies;
	•	product recall or seizure;
	•	interruption of production;
	•	operating restrictions;
	•	injunctions; and
	•	criminal prosecution.

	We are involved in a heavily regulated sector, and our ability to remain viable will depend on favorable government decisions at various points by various agencies.

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	•	billing for services;
	•	quality of medical equipment and services;
	•	confidentiality, maintenance and security issues associated with medical records and individually identifiable health information;
	•	false claims; and
	•	labeling products.

	We must comply with complex statutes prohibiting fraud and abuse, and both we and physicians utilizing MelaFind® could be subject to significant penalties for noncompliance.

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	The application of the privacy provisions of HIPAA is uncertain.

We may become subject to claims of infringement or misappropriation of the intellectual property rights of others, which could prohibit us from shipping affected products, require us to obtain licenses from third parties or to develop non-infringing alternatives, and subject us to substantial monetary damages and injunctive relief. Our patents may also be subject to challenge on validity grounds, and our patent applications may be rejected.

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	New product development in the medical device industry is both costly and labor intensive with very low success rates for successful commercialization; if we cannot successfully develop or obtain future products, our growth would be delayed.

	We face the risk of product liability claims and may not be able to obtain or maintain adequate insurance.

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	We may be adversely affected by a data center failure.

	We may be adversely affected by breaches of online security.

	We are dependent upon telecommunications and the internet.

	We will be obligated to comply with Federal Communications Commission regulations for radio transmissions used by our products.

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	All of our operations are conducted at a single location. Any disruption at our facility could increase our expenses.

	We may be liable for contamination or other harm caused by materials that we handle, and changes in environmental regulations could cause us to incur additional expense.

	Failure to obtain and maintain regulatory approval in foreign jurisdictions will prevent us from marketing abroad.

	Our success will depend on our ability to attract and retain our personnel.

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	Our financial results for future periods may be adversely affected by changes required by financial and accounting regulatory agencies.

	Our financial results for future periods will be affected by the attainment of milestones.

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	If we fail to maintain the adequacy of our internal controls, our ability to provide accurate financial statements could be impaired and any failure to maintain our internal controls and provide accurate financial statements could cause our stock price to decrease substantially.

	An active trading market for our common stock may not develop.

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	Our stock price will be volatile, meaning purchasers of our common stock could incur substantial losses.

	•	results of our research and development efforts and our clinical trials;
	•	the timing of regulatory approval for our products;
	•	failure of any of our products, if approved, to achieve commercial success;
	•	the announcement of new products or product enhancements by us or our competitors;
	•	regulatory developments in the US and foreign countries;
	•	ability to manufacture our products to commercial standards;
	•	developments concerning our clinical collaborators, suppliers or marketing partners;
	•	changes in financial estimates or recommendations by securities analysts;
	•	public concern over our products;
	•	developments or disputes concerning patents or other intellectual property rights;
	•	product liability claims and litigation against us or our competitors;
	•	the departure of key personnel;
	•	the strength of our balance sheet;
	•	variations in our financial results or those of companies that are perceived to be similar to us;
	•	changes in the structure of and third-party reimbursement in the US and other countries;
	•	changes in accounting principles or practices;
	•	general economic, industry and market conditions; and
	•	future sales of our common stock.

	We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

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	Concentration of ownership among our directors, executive officers, and principal stockholders may prevent new investors from influencing significant corporate decisions.

	•	approximately 6,386,000 shares of common stock will be eligible for sale in the public market, beginning 270 days after the effective date of this prospectus, unless the lock-up period is otherwise extended pursuant to its terms; and
	•	the remaining approximately 128,000 shares of common stock will become eligible for sale in the public market after October 26, 2005.

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	Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable and could also limit the market price of our stock.

	•	set limitations on the removal of directors;
	•	limit who may call a special meeting of stockholders;
	•	establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon at stockholder meetings;
	•	do not permit cumulative voting in the election of our directors, which would otherwise permit less than a majority of stockholders to elect directors;
	•	prohibit stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; and
	•	provide our board of directors the ability to designate the terms of and issue a new series of preferred stock without stockholder approval.

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	•	60% ($17.4 million) to fund our research and development activities, including our clinical studies;
	•	22% ($6.4 million) to develop our sales and marketing capabilities; and
	•	18% ($5.2 million) for general corporate purposes, including working capital, and capital expenditures made in the ordinary course of business.

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	•	on an actual basis; and
	•	on a pro forma as adjusted basis to reflect the conversion of all our outstanding shares of convertible preferred stock into shares of common stock immediately prior to completion of this offering, the assumed conversion of 2,610,643 warrants to purchase the company’s common stock to be exchanged for a total of 1,305,321 shares of the company’s common stock based on an exchange ratio of one share of our common stock for every two shares of our common stock purchasable under the warrants to occur prior to the closing of this offering and the receipt of the estimated net proceeds from the sale of 3,000,000 shares of our common stock in this offering at the assumed initial public offering price of $11.00 per share, the mid-point of our filing range, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

			As of June 30, 2005
							Pro Forma(1)
							As Adjusted
			Actual				(unaudited)
			(In thousands, except share
			and per share data)
Redeemable Convertible Preferred Stock:
Redeemable Preferred Stock Series B convertible; 992,986 shares designated (liquidation preference $2.26 per share); issued and outstanding 992,986 shares at December 31, 2003 and 2004 and June 30, 2005 and 0 shares at June 30, 2005, pro forma as adjusted			$	2,244				—
Redeemable Preferred Stock Series C convertible 5,744,340 shares designated (liquidation preference $2.26 per share); issued and outstanding 907,077 shares at December 31, 2003 and 5,414,779 shares at December 31, 2004 and June 30, 2005 and 0 shares at June 30, 2005, pro forma as adjusted				7,183				—
Stockholders’ (Deficiency) Equity:
Preferred stock — $.10 par value; authorized 16,936,704 shares:
	Series A Convertible Preferred Stock, 199,380 shares designated (liquidation preference $5.00 per share); issued and outstanding 198,000 shares at December 31, 2003 and 2004 and June 30, 2005 and 0 shares at June 30, 2005, pro forma as adjusted			972				—
Common stock — $.001 par value; authorized 30,000,000 shares; issued and outstanding 1,684,760 shares at December 31, 2003 and 1,809,758 shares at December 31, 2004 and June 30, 2005 and 9,513,164 shares at June 30, 2005, pro forma as adjusted				2				10
Additional paid-in capital				10,210				49,601
Deferred compensation				(143	)			(143	)
Accumulated deficit				(16,716	)			(16,716	)
Stockholders’ (Deficiency) Equity				(5,675	)			32,752
Total Capitalization			$	3,752				32,752

	•	899,875 shares of common stock issuable as of the date of this prospectus upon the exercise of outstanding stock options under our 2003 Stock Incentive Plan and our 1996 Stock Option Plan,

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		respectively, at a weighted average exercise price of approximately $0.64 per share”;
	•	up to 1,000,000 shares of common stock reserved for future grants under our 2005 Stock Incentive Plan;
	•	75,000 shares of common stock issuable upon exercise of outstanding warrants to purchase our common stock at an exercise price of $7.00 per share;
	•	73,280 shares of common stock issuable upon exercise of outstanding warrants to purchase our Series C preferred stock (assuming conversion of our Series C preferred stock) at an exercise price of $4.52 per share; and
	•	225,000 shares of common stock issuable upon exercise of warrants to be issued to the underwriters upon completion of this offering at an exercise price equal to 125% of the public offering price per share.

(1)	Excludes the impact of 125,000 options that vest upon consummation of the offering, which will have no effect on total stockholders’ equity but will require an expense of $1,301,570 to be recorded if such options vested at the assumed initial public offering price of $11.00 per share, which is the mid-point of our filing range.

Assumed initial public offering price per share		$	11.00
Net tangible book value per share as of June 30, 2005		$	(3.14	)
Pro forma net tangible book value per share as of June 30, 2005		$	0.58
Increase in pro forma net tangible book value per share attributable to new investors		$	2.86
Pro forma net tangible book value per share after the offering		$	3.44
Dilution per share to new investors		$	7.56

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																		Average
		Shares Purchased								Total Consideration								Consideration
		Number				Percent				Amount				Percent				Per Share
Existing Investors			6,513,164				68.5	%		$	20,033,573				37.8	%		$	3.08
New Investors			3,000,000				31.5				33,000,000				62.2				11.00
Total			9,513,164				100.0	%		$	53,033,573				100.0	%

	•	The pro forma as adjusted percentage of shares of our common stock held by existing stockholders will decrease to approximately 65.4% of the total number of pro forma as adjusted shares of our common stock outstanding after this offering; and
	•	The pro forma as adjusted number of shares of our common stock held by new public investors will increase to 3,450,000, or approximately 34.6% of the total pro forma as adjusted number of shares of our common stock outstanding after this offering.

	•	899,875 shares of common stock issuable as of the date of this prospectus upon the exercise of outstanding stock options under our 2003 Stock Incentive Plan and our 1996 Stock Option Plan, respectively, at a weighted average exercise price of approximately $0.64 per share;
	•	up to 1,000,000 shares of common stock reserved for future grants under our 2005 Stock Incentive Plan;
	•	75,000 shares of common stock issuable upon exercise of outstanding warrants to purchase common stock at an exercise price of $7.00 per share;
	•	73,280 shares of common stock issuable upon exercise of outstanding warrants to purchase our Series C preferred stock (assuming conversion of our Series C preferred stock) at an exercise price of $4.52 per share; and
	•	225,000 shares of common stock issuable upon exercise of warrants to be issued to the underwriters upon completion of this offering at an exercise price equal to 125% of the public offering price per share.

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																						Six Months Ended
		Year Ended December 31,																				June 30,
		2000				2001				2002				2003				2004				2004				2005
																						(unaudited)
		(In thousands, except share and per share data)
Statements of Operations Data:
Revenue from grants		$	210			$	290			$	547			$	—			$	—			$	—			$	—
Cost of grant revenue			248				193				564				—				—				—				—
General and administrative expenses			1,061				2,563				511				1,034				1,234				639				996
Research and development			726				144				404				828				1,892				693				1,546
Operating loss from continuing operations			(1,825	)			(2,610	)			(932	)			(1,862	)			(3,126	)			(1,332	)			(2,542	)
Interest (income)/expense			(79	)			(85	)			8				76				67				82				(63	)
Loss from continuing operations			(1,746	)			(2,525	)			(940	)			(1,938	)			(3,193	)			(1,414	)			(2,479	)
Loss from discontinued operations			(534	)			(343	)			(201	)			(12	)			(426	)			(102	)			(330	)
Net loss			(2,280	)			(2,868	)			(1,141	)			(1,950	)			(3,619	)			(1,516	)			(2,809	)
Preferred stock deemed dividends			85				213				214				322				676				243				719
Preferred stock accretion			143				180				180				25				323				25				842
Stock distribution of preferred Series B shares			—				—				—				102				—				—				—
Net loss attributable to common stockholders		$	(2,508	)		$	(3,261	)		$	(1,535	)		$	(2,399	)		$	(4,618	)		$	(1,784	)		$	(4,370	)
Net loss per share, basic and diluted:
Continuing operations		$	(1.29	)		$	(1.90	)		$	(0.87	)		$	(1.48	)		$	(2.37	)		$	(0.98	)		$	(2.23	)
Discontinued operations			(0.35	)			(0.23	)			(0.13	)			(0.01	)			(0.24	)			(0.06	)			(0.18	)
Basic and diluted net loss per common share		$	$(1.64	)		$	(2.13	)		$	(1.00	)		$	(1.49	)		$	(2.61	)		$	(1.04	)		$	(2.41	)
Basic and diluted weighted average number of shares outstanding			1,529,471				1,534,760				1,534,760				1,614,897				1,766,608				1,722,743				1,809,758
Pro forma basic and diluted net loss per common share (unaudited)(1)																		$	(0.91	)						$	(0.43	)
Pro forma basic and diluted weighted average number of common shares outstanding (unaudited)(1)																			3,967,024								6,513,164

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(1)

Pro forma basic and diluted net loss per common share reflects the effect of the assumed conversion of the company’s preferred stock, as if this offering had occurred at the date of original issuance, into 3,398,105 shares of our common stock for the year ended December 31, 2004 and six months ended June 30, 2005 which will occur upon closing of this offering. Additionally, it is assumed that 2,610,643 warrants to purchase the Company’s common stock will be exchanged for a total of 1,305,321 shares of the company’s common stock based on an exchange ratio of one share of our common stock for every two shares of our common stock purchaseable under the warrants and will occur prior to the closing of this offering. The net loss attributable to our common stockholders used in the computation of basic and diluted net loss per share for the unaudited pro forma net loss attributable to common stockholders has been adjusted to reverse the accretion on our preferred stock and also excludes the preferred stock dividends for the respective period.

		As of December 31,																				As of June 30,
		2000				2001				2002				2003				2004				2004				2005
																						(unaudited)
		(In thousands, except share and per share data)
Balance Sheet Data:
Total current assets		$	3,513			$	867			$	111			$	217			$	6,813			$	877			$	4,726
Total assets			3,814				1,131				344				432				7,096				1,086				4,997
Total liabilities			211				247				529				650				691				1,571				1,246
Redeemable convertible preferred stock			2,058				2,155				2,244				4,067				8,585				5,167				9,427
Accumulated deficit			(4,148	)			(7,197	)			(8,518	)			(10,288	)			(13,907	)			(11,804	)			(16,716	)
Total stockholders’ (deficiency)/equity			(498	)			(3,408	)			(4,657	)			(4,285	)			(2,180	)			(5,652	)			(5,675	)

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	•	professional service fees;
	•	contract clinical service fees;
	•	fees paid to contract manufacturers in conjunction with the production of clinical components or materials; and
	•	fees paid to third party data collection organizations and investigators in conjunction with the clinical trials.

	Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004 (Unaudited)

	Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

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	Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

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	•	the schedule, costs, and results of our clinical trials;
	•	the success of our research and development efforts;
	•	the costs and timing of regulatory approval;
	•	reimbursement amounts for the use of MelaFind® that we are able to obtain from Medicare and third party payors, or the amount of direct payments we are able to obtain from patients and/or physicians utilizing MelaFind®;
	•	the cost of commercialization activities, including product marketing and building a domestic direct sales force;
	•	the emergence of competing or complementary technological developments;
	•	the costs of filing, prosecuting, defending and enforcing any patent claims and other rights, including litigation costs and the results of such litigation;
	•	the costs involved in defending any patent infringement actions brought against us by third parties; and
	•	our ability to establish and maintain any collaborative, licensing or other arrangements, and the terms and timing of any such arrangements.

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							Less than												More than
Contractual Obligations			Total				1 Year				1-3 Years				4-5 Years				5 Years
Operating Leases			$	1,114			$	205			$	634			$	275				—
	Total		$	1,114			$	205			$	634			$	275				—

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	•	a hand-held imaging device, which employs high precision optics and multi-spectral illumination (multiple colors of light including near infra-red);
	•	our proprietary database of pigmented skin lesions, which we believe to be the largest in the US;
	•	our lesion classifiers, which are sophisticated mathematical algorithms that extract lesion feature information and classify lesions; and
	•	a central server in our offices that is intended to perform quality control functions and provide reports to the physician and in commercial use, will be connected to physicians’ offices via the internet.

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	•	Pursue the timely FDA approval of MelaFind®: We have entered into a binding Protocol Agreement with the FDA for the conduct of the pivotal trial of MelaFind®. Management estimates that the study will commence in early 2006 at over 20 US clinical study sites, and anticipates PMA approval to commercialize MelaFind® in 2007.
	•	Establish MelaFind® as the leading technology for assisting in the detection of melanoma: We have invested considerable capital and expertise into developing our core technology platform, which is protected by six US patents. We will continue to refine and optimize this technology to ensure that MelaFind® is the leading system for assisting in the detection of melanoma.
	•	Obtain third party payor reimbursement to support our recurring revenue pricing model: We intend to offer MelaFind® on a per patient basis, creating a recurring revenue stream. To do so, we will seek to obtain third party reimbursement as well as private pay alternatives. We are working with experts to create an evidence-based medicine evaluation model consistent with those used to support positive coverage decisions by CMS and private payors for similar products. The value drivers in the model include the cost savings associated with early detection (approximately $168,000 per patient) and fewer biopsies. We believe that the use of MelaFind® could result in substantial savings to the US healthcare system.
	•	Commercialize MelaFind® using multiple sales and marketing strategies: Our internal sales and marketing effort will focus initially on “high volume/key opinion leader” dermatologists with specialties in the diagnosis and treatment of melanoma. To enter the larger US markets of general dermatologists, plastic surgeons, and primary care physicians, and for international markets, we intend to establish partnerships with pharmaceutical and/or diagnostic device companies with an established presence in these markets. While we believe obtaining a positive coverage decision from CMS may take an additional 18 to 36 months following PMA approval, and obtaining a positive coverage decision from private payors, managed care organizations and state Medicare administrative contractors may take at least 6 to 12 months following PMA approval, we intend to commence sales of MelaFind® immediately upon receiving PMA approval for physicians to offer MelaFind® to their patients on a self-pay basis.

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	•	an illuminator that shines 10 different specific wavelengths of light, including near infra-red bands;
	•	a lens system composed of nine elements that creates images of the light reflected from the lesions;
	•	a photon (light) sensor; and
	•	an image processor employing proprietary algorithms to extract many discrete characteristics or features from the images.

	Our proprietary database of pigmented skin lesions, which includes in vivo MelaFind® images and corresponding histological results of over 5,000 biopsied lesions from over 3,500 patients, which we believe to be the largest such database in the US and a substantial barrier to competition.
	Our lesion classifiers, which are sophisticated mathematical algorithms that analyze the MelaFind® images and extract lesion feature information from the images; the features are used to classify the lesions as either suspicious for melanoma or not suspicious for melanoma.
	A central server located in our offices, which is intended to perform quality control functions and provide diagnostic reports to the physician.

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48

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		Training Study								Blinded Test
		Sensitivity				Specificity				Sensitivity				Specificity
MelaFind® Lesion Classifier A-1			100	%			45.6	%			80.8	%			44.3	%
MelaFind® Lesion Classifier B			96.3	%			21.9	%			80.8	%			25.5	%
Study Dermatologists			N/A				N/A				96.2	%			17.3	%

		Training Study								Blinded Test
		Sensitivity				Specificity				Sensitivity				Specificity
MelaFind® Lesion Classifier A-3			100	%			28.5	%			100	%			25.7	%
Study Dermatologists			N/A				N/A				96.2	%			17.3	%

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		Training Study								Blinded Test
		Sensitivity				Specificity				Sensitivity				Specificity
MelaFind® Lesion Classifier A-3			100	%			43.8	%			100	%			44.2	%
Study Dermatologists			N/A				N/A				95.0	%			28.3	%

		Training Study								Blinded Test
		Sensitivity				Specificity				Sensitivity				Specificity
MelaFind® Lesion Classifier A-3			100	%			43.8	%			100	%			44.2	%
MelaFind® Lesion Classifier A-4			100	%			48.9	%			100	%			48.1	%
Study Dermatologists			N/A				N/A				95.0	%			28.3	%

		Training Study								Blinded Test
		Sensitivity				Specificity				Sensitivity				Specificity
MelaFind® Lesion Classifier A-4			100	%			53.2	%			100	%			48.4	%
MelaFind® Lesion Classifier B			100	%			38.0	%			96.4	%			32.9	%
Study Dermatologists			N/A				N/A				96.4	%			28.4	%

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		Sensitivity				Specificity
MelaFind® Lesion Classifier A-4			82.1	%			37.2	%
MelaFind® Lesion Classifier B			96.4	%			21.0	%
MelaFind® Lesion Classifier C-4			92.9	%			35.7	%
Study Dermatologists			92.9	%			23.0	%

	Conclusion

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53

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54

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55

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56

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Patent #		Title		Issued				Expiration
6,081,612		Systems and Methods for the Multispectral Imaging and			06/27/00				02/27/17
		Characterization of Skin Tissue
6,208,749		Systems and Methods for the Multispectral Imaging and			03/27/01				02/27/17
		Characterization of Skin Tissue
6,307,957		Multispectral Imaging and Characterization of Biological Tissue			10/23/01				02/27/17
6,626,558		Apparatus for Uniform Illumination of an Object			09/30/03				08/31/21
6,657,798		Method for Optimizing the Number of Good Assemblies			12/02/03				02/10/23
		Manufacturable From a Number of Parts
6,710,947		Method for Assembling Lens Elements			03/23/04				02/27/23

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	•	MelaFind® may not be safe or effective to the FDA’s satisfaction;
	•	the data from our pre-clinical studies and clinical trials may be insufficient to support approval;
	•	the manufacturing process or facilities we use may not meet applicable requirements; and
	•	changes in FDA approval policies or adoption of new regulations may require additional data.

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	•	the FDA, other regulatory authorities, or an IRB do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold;
	•	patients do not enroll in clinical trials at the rate we expect;
	•	physicians do not comply with trial protocols;
	•	patient follow-up is not at the rate we expect;
	•	patients experience adverse events;
	•	IRBs and third-party clinical investigators may delay or reject our trial protocol;
	•	third-party clinical investigators decline to participate in a trial or do not perform a trial on our anticipated schedule or consistent with the clinical trial protocol, GCPs or other FDA requirements;

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	•	third-party organizations do not perform data collection and analysis in a timely or accurate manner;
	•	regulatory inspections of our clinical trials or manufacturing facilities may, among other things, require us to undertake corrective action or suspend or terminate our clinical trials, or invalidate our clinical trials;
	•	changes in governmental regulations or administrative actions; and
	•	the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness.

	•	establishment registration and device listing;
	•	QSR, which requires manufacturers to follow design, testing, control, documentation and other quality assurance procedures;
	•	labeling regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling;
	•	medical device reporting regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; and
	•	corrections and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FD&C Act that may present a risk to health.

	•	warning letters;
	•	fines and civil penalties;
	•	unanticipated expenditures;
	•	delays in approving or refusal to approve our applications, including supplements;
	•	withdrawal of FDA approval;
	•	product recall or seizure;
	•	interruption of production;
	•	operating restrictions;

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	•	injunctions; and
	•	criminal prosecution.

	•	the anti-kickback statute prohibits certain business practices and relationships that might affect the provision and cost of healthcare services reimbursable under Medicare, Medicaid and other federal healthcare programs, including the payment or receipt of remuneration for the referral of patients whose care will be paid by Medicare or other federal healthcare programs;
	•	the physician self-referral prohibition, commonly referred to as the Stark Law, which prohibits referrals by physicians of Medicare or Medicaid patients to providers of a broad range of designated healthcare services in which the physicians or their immediate family members have ownership interests or with which they have certain other financial arrangements;
	•	the anti-inducement law, which prohibits providers from offering anything to a Medicare or Medicaid beneficiary to induce that beneficiary to use items or services covered by either program;
	•	the Civil False Claims Act, which prohibits any person from knowingly presenting or causing to be presented false or fraudulent claims for payment by the federal government, including the Medicare and Medicaid programs; and
	•	the Civil Monetary Penalties Law, which authorizes HHS to impose civil penalties administratively for fraudulent or abusive acts.

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Name		Age				Position
Joseph V. Gulfo, M.D.			42			Director, President and Chief Executive Officer
Karen Krumeich			51			Vice President, Finance, Chief Financial Officer and Treasurer
Jon I. Klippel			50			Vice President, Marketing and Sales
William R. Bronner			59			Vice President, Legal Counsel and Compliance
Breaux Castleman(1)(2)			64			Director, Chairman of the Board of Directors
Sidney Braginsky(1)			68			Director
George C. Chryssis(1)			58			Director
Martin D. Cleary(2)(3)(4)			59			Director Elect
Dan W. Lufkin(2)(3)			73			Director
Gerald Wagner, Ph.D.			62			Director

(1)	Member of Compensation Committee
(2)	Member of Nominating and Governance Committee
(3)	Member of Audit Committee
(4)	Director elected to serve effective as of the completion of this offering

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	•	the integrity of our financial statements;
	•	our independent registered public accounting firm’s qualifications and independence; and
	•	the performance of our independent auditors.

	•	reviewing and recommending compensation of our executive officers;
	•	administering our stock incentive plans; and
	•	reviewing and recommending incentive compensation and equity plans.

	•	identifies and recommends nominees for election to our board of directors;
	•	develops and recommends our corporate governance principles; and
	•	oversees the evaluation of our board of directors and management.

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	•	our research and development programs;
	•	the design and implementation of our clinical trials;
	•	market opportunities from a clinical perspective;
	•	new technologies relevant to our research and development programs; and
	•	scientific and technical issues relevant to our business.

Name		Professional Affiliation
Jeffrey P. Callen, M.D.		Professor and Chief of the Division of Dermatology, University of Louisville School of Medicine; Member of the Board of Directors of the American Board of Dermatology, Inc.
Armand B. Cognetta, Jr., M.D.		Dermatologist in private practice with Dermatology Associates of Tallahasee; Member, American Academy of Dermatology; former President of Florida Society of Dermatology; former President of Dermatology Photography Society.
Robert Friedman, M.D.		Clinical Assistant Professor, Department of Dermatology, New York University School of Medicine; Past Director, American Cancer Society, New York City Division, and Member, Professional Education Committee; American Academy of Dermatology: Member, Skin Cancer/ Melanoma Committee, Past Chairman, Industry Liaison Committee.

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Name		Professional Affiliation
Martin C. Mihm, Jr., M.D., Chairman		Professor and Chief of Dermatopathology at Harvard Medical School; Chief of Dermatopathology at Massachusetts General Hospital; Co-Director of the Pigmented Skin Lesion Clinic at Massachusetts General Hospital; Co-Chairman of the Melanoma Pathology Program of the World Health Organization; Co-Director of the Rare Tumor Institute of the World Health Organization; member of the editorial and advisory board of the American Journal of Dermatopathology and the International Journal of Surgical Pathology; Member of the American Academy of Dermatology; New England Pathology Society; American Society of Dermatopathology; American Society of Clinical Oncology; and College of American Pathologists.
Harold S. Rabinovitz, M.D.		Dermatologist in private practice with Skin and Cancer Associates in Plantation, Florida; Voluntary Professor of Dermatology at the University of Miami-School of Medicine; Associate Editor of the Journal of Dermatologic Surgery; member of the Board of Directors of the South Florida Dermatology Foundation.
Darrell S. Rigel, M.D.		Clinical Professor of Dermatology, New York University Medical Center; Secretary and Treasurer of the American Dermatological Association; Past President, American Academy of Dermatology; Member, Board of Directors of the American Cancer Society New York City Division and Chairman of its Subcommittee on Skin Cancer.
Arthur J. Sober, M.D.		Professor of Dermatology, Harvard Medical School; Director of Dermatology Clinical Investigation Unit, Massachusetts General Hospital; Member, American Joint Commission on Cancer.

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															Long Term
							Annual Compensation								Compensation
															Securities
															Underlying				All Other
Name and Principal Position			Year				Salary ($)				Bonus ($)				Options				Compensation
Joseph V. Gulfo, M.D.				2004			$	173,656				—				81,753	(1)		$	19,880	(1)
	President and Chief			2003				—				—				—				—
	Executive Officer			2002				—				—				—				—
Marek Elbaum, Ph.D.				2004				173,549				—				10,000				—
	Founder and former Chief Science			2003				81,085				—				29,071				—
	and Technology Officer			2002				30,204				—				—				—
William Bronner				2004				132,612				—				37,000				—
	Vice President, Legal Counsel			2003				106,255				—				32,161				—
	and Compliance			2002				26,444				—				1,875				—
Karen Krumeich(2)				2004				—				—				60,000				—
	Vice President Finance, Chief			2003				—				—				—				—
	Financial Officer			2002				—				—				—				—
Jon I. Klippel(3)				2004				9,346				—				45,000				—
	Vice President Marketing			2003				—				—				—				—
	and Sales			2002				—				—				—				—

(1)	Dr. Gulfo has been granted another stock option which is not reflected in this table because the number of shares purchasable under the option can only be calculated at the time of PMA approval of MelaFind®. The number of shares granted under this option is equal to that number of shares of our common stock equal to four percent of our fully-diluted capital stock at that time of PMA approval of MelaFind® minus 81,753 shares of our common stock. The exercise price of this option is $0.46 per share.
(2)	Ms. Krumeich’s employment with us began in January 2005 at an annual salary of $165,000.
(3)	Mr. Klippel’s employment with us began in December 2004 at an annual salary of $135,000.

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																		Potential Realizable
																		Value of Assumed
																		Annual Rates of Stock
		Number of				% of Total Options												Price Appreciation for
		Securities				Granted to				Exercise or Base								Option Term(2)
		Underlying				Employees in				Price Per				Expiration
Name		Options Granted				Fiscal Year				Share(1)				Date				5%				10%
Joseph V. Gulfo, M.D.(3)			75,227				11.07	%		$	0.46				2/02/09			$	1,021,515			$	1,298,088
			6,526				0.09				0.46				2/02/09				88,617				112,610
Marek Elbaum, Ph.D.(4)			10,000				1.47				0.46				2/02/09				135,791				172,556
Karen Krumeich			60,000				8.82				0.46				12/17/09				814,746				1,035,337
William R. Bronner			17,000				2.50				0.46				2/02/09				230,845				293,345
			20,000				2.94				0.46				12/17/09				271,582				345,112
Jon I. Klippel			45,000				6.62				0.46				12/17/09				611,059				776,502

(1)	Exercise price is equal to the fair market value on the date of grant as determined by our board of directors.
(2)	The dollar amounts under these columns are the result of calculations at rates set by the SEC and, therefore, are not intended to forecast possible future appreciation, if any, in the price of the underlying common stock. The potential realizable values are calculated using an assumed initial public offering price of $11.00 per share, the mid-point of our filing range, and assuming that the market price appreciates from this price at the indicated rate for the entire term of each option and that each option is exercised and sold on the last day of its term at the assumed appreciated price. Actual gains, if any, on stock option exercises depend on the future performance of the common stock and overall stock market conditions. The amounts reflected in the following table may not necessarily be achieved.
(3)	Dr. Gulfo has been granted another stock option which is not reflected in this table because the number of shares purchasable under the option can only be calculated at the time of PMA approval of MelaFind®. The number of shares granted under this option is equal to that number of shares of our common stock equal to four percent of our fully-diluted capital stock at that time of PMA approval of MelaFind® minus 81,753 shares of our common stock.

(4)	Formerly our Chief Science and Technology Officer.

	Aggregated Option Exercises in 2004 and Year-End Option Values

		Number of Unexercised
		Securities Underlying								Value of Unexercised
		Options at								In-the-Money Options at
		December 31, 2004								December 31, 2004(1)
Name		Exercisable				Unexercisable				Exercisable				Unexercisable
Joseph V. Gulfo, M.D.(2)			71,535				10,218			$	753,979			$	107,698
Marek Elbaum, Ph.D.(3)			14,070				25,000			$	140,700			$	264,400
Karen Krumeich			0				60,000			$	—			$	632,400
William R. Bronner			49,160				21,875			$	500,940			$	229,469
Jon I. Klippel			0				45,000			$	—			$	474,300

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(1)	There was no public trading market for our common stock as of December 31, 2004. Accordingly, as permitted by the rules of the SEC, we have calculated the value of unexercised in-the-money options assuming an initial public offering price of $11.00 per share, the mid-point of our filing range, less the aggregate exercise price, without taking into account any taxes that might be payable in connection with the transaction.
(2)	Dr. Gulfo has been granted another stock option which is not reflected in this table because the number of shares purchasable under the option can only be calculated at the time of PMA approval of MelaFind®. The number of shares granted under this option is equal to that number of shares of our common stock equal to four percent of our fully-diluted capital stock at that time of PMA approval of MelaFind® minus 81,753 shares of our common stock.
(3)	Formerly our Chief Science and Technology Officer.

	2005 Stock Incentive Plan

	2003 Stock Incentive Plan

	1996 Stock Option Plan

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	Employment Agreement with Joseph V. Gulfo, M.D.

	Consulting Agreement with Breaux Castleman

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	Consulting Agreement with Marek Elbaum, Ph.D.

	Consulting Agreement with Robert Friedman, M.D.

	Consulting Agreement with Gerald Wagner, Ph.D.

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	•	each person or group of affiliated persons known to us to beneficially own more than 5% of our common stock;
	•	each named executive officer;
	•	each of our directors; and
	•	all of our executive officers and directors as a group.

			Number of
			Shares of Common
			Stock Beneficially								Percentage of Shares
			Owned								Beneficially Owned
							Options and
							Warrants
							Exercisable
							Within 60				Before the				After the
Name of Beneficial Owner			Shares				Days				Offering				Offering
Named Executive Officers
Joseph V. Gulfo, M.D.				—				81,753				1.2	%			*
Marek Elbaum, Ph.D.(1)				462,500				14,070				7.3				5.0	%
Karen Krumeich				—				60,000				*				*
William R. Bronner				4,850				70,285				1.1				*
Jon I. Klippel				—				45,000				*				*
Directors
Breaux Castleman				91,570				6,168				1.5				1.0
Sidney Braginsky(2)				51,500				5,000				*				*
George C. Chryssis(3)				94,717				12,500				1.6				1.1
Dan W. Lufkin(4)				356,231				29,187				5.9				4.0
Gerald Wagner, Ph.D.				—				—				—				—
All directors and named executive
	officers as a group (all 10 persons)			1,061,368				323,963				20.3	%			14.1	%
Holders of more than 5%
Patricia and Stanley Brilliant(5)				349,532				2,342				5.4				3.7
S. Donald Sussman(6)				917,767				11,693				14.2				9.8
Eric Dobkin(7)				351,523				7,015				5.5				3.8

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*	Less than one percent.

(1)	Marek Elbaum, Ph.D. resigned as a director and our Chief Science and Technology Officer effective as of May 31, 2005.
(2)	Includes 51,500 shares of common stock held by Double D Venture Fund, LLC, an investment fund with which Mr. Braginsky is affiliated. Mr. Braginsky expressly disclaims ownership of these shares except to the extent of his pecuniary interest in Double D Venture Fund, LLC
(3)	Includes 94,717 shares of common stock held by Arcadian Venture Partners, L.P., an investment fund with which Mr. Chryssis is affiliated. Mr. Chryssis expressly disclaims ownership of these shares except to the extent of his pecuniary interest in Arcadian Venture Partners, L.P.
(4)	Includes 140,570 shares of common stock held by trusts the beneficiaries of which are family members of Mr. Lufkin and 5,840 shares of common stock issuable upon exercise of Series C preferred stock warrants. Mr. Lufkin expressly disclaims ownership of the shares held by these trusts.
(5)	Patricia and Stanley Brilliant are husband and wife. Their business address is: 180 East End Avenue, Apt. 4A, New York, NY 10128.
(6)	The business address of S. Donald Sussman is: 2 American Lane, Greenwich, CT 06836.
(7)	The business address of Eric Dobkin is: 160 Old Church Lane, Pound Ridge, NY 10576.

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	•	the transaction is approved by the board of directors before the date the interested stockholder attained that status;
	•	upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or
	•	on or after the date the business combination is approved by the board of directors and authorized at a meeting of stockholders, by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

	•	any merger or consolidation involving the corporation and the interested stockholder;
	•	any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;
	•	subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
	•	any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or
	•	the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

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	•	Vacancies Filled by the Board. Vacancies on our board of directors may be filled by a majority of the remaining directors (even if they constitute less than a quorum), or by a sole remaining director.
	•	Removal of Directors. None of our directors may be removed other than for cause.
	•	Stockholder Meetings. Only our board of directors, the chairman of our board of directors or our chief executive officer may call special meetings of stockholders. Stockholders cannot call special meetings of stockholders.
	•	No Action by Written Consent. Stockholders may take action only at an annual or special meeting of stockholders. Stockholders may not act by written consent.
	•	Requirements for Advance Notification of Stockholder Proposals and Director Nominations. Stockholders must comply with advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors. In general, these provisions will provide that notice of intent to nominate a director or raise matters at such meetings must be received in writing by us not less than 90 nor more than 120 days prior to the anniversary of the date of the proxy statement for the previous year’s annual meeting of stockholders, and must contain certain information concerning the person to be nominated or the matters to be brought before the meeting and concerning the stockholder submitting the proposal.
	•	No Cumulative Voting. There is no cumulative voting in the election of directors.
	•	“Blank Check” Preferred Stock. We will be authorized to issue, without any further vote or action by the stockholders, up to 10,000,000 shares of preferred stock in one or more classes or series and, with respect to each such class or series, to fix the number of shares constituting the class or series and the designation of the class or series, the voting powers (if any) of the shares of the class or series, and the preferences and relative, participating, optional and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of such class or series.
	•	Regulatory Approval. We are also required to obtain the approval of certain regulatory agencies, such as the NASD, for certain transactions that could result in a change of control. See “Our Business — Regulation.”

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	•	beginning on the effective date of this prospectus, in addition to the shares sold in the offering, approximately 1,306,000 shares of our restricted shares will be eligible for sale subject to the volume, manner of sale and other limitations under Rule 144;
	•	beginning 270 days after the effective date, approximately 6,386,000 shares of our restricted shares will be eligible for sale subject to the volume, manner of sale and other limitations under Rule 144; and
	•	beginning 270 days after the effective date, approximately 3,026,000 shares of our restricted shares will be eligible for sale as unrestricted shares under Rule 144(k).

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	•	one percent of the number of shares of common stock then outstanding, which will equal approximately 95,136 shares immediately after the offering; or
	•	the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

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	•	an individual who is a citizen or resident of the US;
	•	a corporation or partnership (including any entity treated as a corporation or partnership for US federal income tax purposes) created or organized in or under the laws of the US or any State thereof or the District of Columbia, other than a partnership treated as foreign under US Treasury regulations;
	•	an estate whose income is includible in gross income for US federal income tax purposes regardless of its source; or
	•	a trust (1) if a US court is able to exercise primary supervision over the administration of the trust and one or more US persons have authority to control all substantial decisions of the trust, or (2) that has a valid election in effect under applicable Treasury regulations to be treated as a US person.

	•	US federal gift tax consequences, US state or local or non-US tax consequences;
	•	specific facts and circumstances that may be relevant to a particular non-US holder’s tax position, including, if the non-US holder is a partnership or trust that the US tax consequences of holding and disposing of our common stock may be affected by certain determinations made at the partner or beneficiary level;
	•	the tax consequences for the stockholders, partners or beneficiaries of a non-US holder;
	•	special tax rules that may apply to particular non-US holders, such as financial institutions, insurance companies, tax-exempt organizations, hybrid entities, US expatriates, broker-dealers, and traders in securities; or
	•	special tax rules that may apply to a non-US holder that holds our common stock as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment.

85

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	•	the gain is effectively connected with a non-US holder’s conduct of a trade or business in the US or, alternatively, if an income tax treaty applies, is attributable to a permanent establishment maintained by the non-US holder in the US; in these cases, the gain will be taxed on a net income basis at the regular graduated rates and in the manner applicable to US persons, unless an applicable treaty provides otherwise, and, if the non-US holder is a foreign corporation, the branch profits tax described above may also apply;
	•	the non-US holder is an individual who holds our common stock as a capital asset, is present in the US for 183 days or more in the taxable year of the disposition and meets other requirements; in this case, the non-US holder will be subject to a 30% tax on the gain derived from the disposition; or
	•	we are or have been a US real property holding corporation (USRPHC) for US federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-US holder held our common stock; in this case, the non-US holder may be subject to US federal income tax on its net gain derived from the disposition of our common stock at regular graduated rates. Generally, a corporation is a USRPHC if the fair market value of its US real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. If we are, or were to become, a USRPHC, gain realized upon disposition of our common stock by a non-US holder that did not directly or indirectly own more than 5% of our common stock during the shorter of the five-year period ending on the date of disposition or the period that the non-US holder held our common stock generally would not be subject to US federal income tax, provided that our common stock is “regularly traded on an established securities market” within the meaning of Section 897(c)(3) of the Code. We believe that we are not currently, and we do not anticipate becoming in the future, a USRPHC.

86

---

 

87

---

 

Underwriters		Number of Shares
Ladenburg Thalmann & Co. Inc.
Stanford Group Company
Total			3,000,000

		No Exercise				Full Exercise
Per Share		$				$
Total		$				$

88

---

 

	•	Over-allotment transactions involve sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any short position by either exercising their over-allotment option and/or purchasing shares in the open market.
	•	Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specific maximum.
	•	Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares

89

---

 

		than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
	•	Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

90

---

 

91

---

 

Financial Statements:
Report of Independent Registered Public Accounting Firm				F-2
	Balance sheets as of December 31, 2004 and 2003 and June 30, 2005 (unaudited)			F-3
	Statements of operations for the years ended December 31, 2004, 2003 and 2002 and six months ended June 30, 2004 and 2005 (unaudited)			F-4
	Statements of changes in stockholders’ (deficiency) equity for the years ended December 31, 2004, 2003 and 2002 and six months ended June 30, 2005 (unaudited)			F-5
	Statements of cash flows for the years ended December 31, 2004, 2003 and 2002 and six months ended June 30, 2004 and 2005 (unaudited)			F-6
	Notes to financial statements			F-7

F-1

---

 

F-2

---

 

				December				December								Pro-Forma
				31, 2003				31, 2004
												June 30,				June 30,
												2005				2005
				(audited)				(audited)				(unaudited)				(unaudited)
																(Note 1)
ASSETS
Current Assets:
	Cash and cash equivalents			$	116,691			$	108,705			$	176,208			$	176,208
	Marketable securities				—				6,594,751				3,617,713				3,617,713
	Accounts receivable, net				16,679				7,128				—				—
	Inventories				72,865				69,755				—				—
	Prepaid expenses and other current assets				10,697				32,844				23,550				23,550
	Assets held for sale				—				—				156,677				156,677
	Deferred registration costs				—				—				752,042				752,042
		Total Current Assets			216,932				6,813,183				4,726,190				4,726,190
Property and equipment, net					18,418				89,306				154,510				154,510
Patents and trademarks, net					178,157				163,459				86,517				86,517
Other assets					18,248				30,201				30,201				30,201
		Total Assets		$	431,755			$	7,096,149			$	4,997,418			$	4,997,418
LIABILITIES AND STOCKHOLDERS’ (DEFICIENCY) EQUITY
Current Liabilities:
	Accounts payable (includes related parties of $2,000 as of December 31, 2004, and $79,645 as of June 30, 2005)			$	211,810			$	338,821			$	233,504			$	233,504
	Accrued expenses				363,270				228,583				339,283				339,283
	Accrued registration costs				—				—				672,873				672,873
	Deferred revenues				—				106,335				—				—
	Notes payable — stockholders and employees				48,000				—				—				—
	Notes payable — other				15,000				—				—				—
	Other current liabilities				11,976				17,284				—				—
		Total Current Liabilities			650,056				691,023				1,245,660				1,245,660
REDEEMABLE CONVERTIBLE PREFERRED STOCK
	Redeemable preferred stock Series B convertible 992,986 shares designated (liquidation preference $2.26 per share); issued and outstanding 992,986 shares at December 31, 2003 and 2004 and June 30, 2005 and 0 shares at June 30, 2005, pro forma				2,244,147				2,244,147				2,244,147				—
	Redeemable preferred stock Series C convertible 5,744,340 shares designated (liquidation preference $2.26 per share); issued and outstanding 907,077 shares at December 31, 2003 and 5,414,779 shares at December 31, 2004 and June 30, 2005 and 0 shares at June 30, 2005, pro forma				1,822,950				6,340,666				7,182,925				—
COMMITMENTS AND CONTINGENCIES
Stockholders’ (Deficiency) Equity:
	Preferred stock — $.10 par value; authorized 16,936,704 shares:
	Series A convertible preferred stock, 199,380 shares designated — (liquidation preference $5.00 per share); issued and outstanding 198,000 shares at December 31, 2003 and 2004 and June 30, 2005 and 0 shares at June 30, 2005, pro forma				972,311				972,311				972,311				—
	Common stock — $.001 par value; authorized 30,000,000 shares; issued and outstanding 1,684,760 shares at December 31, 2003 and 1,809,758 shares at December 31, 2004 and June 30, 2005 and 6,513,164 shares at June 30, 2005, pro forma				1,685				1,810				1,810				6,513
	Additional paid-in capital				5,119,923				10,981,455				10,209,995				20,604,675
	Notes receivable for stock subscriptions				(69,000	)			(69,000	)			—				—
	Deferred compensation				(22,500	)			(159,300	)			(143,370	)			(143,370	)
	Accumulated deficit				(10,287,817	)			(13,906,963	)			(16,716,060	)			(16,716,060	)
		Stockholders’ (Deficiency) Equity			(4,285,398	)			(2,179,687	)			(5,675,314	)			3,751,758
		Total Liabilities and Stockholders’ (Deficiency) Equity		$	431,755			$	7,096,149			$	4,997,418			$	4,997,418

F-3

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			Year Ended												Six Months Ended
			December 31,				December 31,				December 31,				June 30,				June 30,
			2002				2003				2004				2004				2005
			(audited)				(audited)				(audited)				(unaudited)				(unaudited)
Revenue from grants			$	547,290			$	—			$	—			$	—			$	—
Operating expenses:
	Cost of grant revenue			563,598				—				—				—				—
	General and administrative expenses			511,225				1,034,397				1,234,210				639,079				995,931
	Research and development			404,331				828,239				1,891,551				693,052				1,545,824
Operating loss from continuing operations				(931,864	)			(1,862,636	)			(3,125,761	)			(1,332,131	)			(2,541,755	)
Interest income				(2,189	)			(1,373	)			(27,935	)			(543	)			(62,769	)
Interest expense				10,117				76,923				94,976				82,340				—
				7,928				75,550				67,041				81,797				(62,769	)
Loss from continuing operations				(939,792	)			(1,938,186	)			(3,192,802	)			(1,413,928	)			(2,478,986	)
Loss from discontinued operations				(201,259	)			(11,917	)			(426,344	)			(101,853	)			(330,111	)
Net loss				(1,141,051	)			(1,950,103	)			(3,619,146	)			(1,515,781	)			(2,809,097	)
Less:
	Preferred stock deemed dividends			214,245				321,830				676,218				242,693				719,064
	Preferred stock accretion			180,009				25,228				322,800				25,228				842,260
Stock distribution of preferred Series B shares				—				101,700				—				—
Net Loss Attributable to Common Stockholders			$	(1,535,305	)		$	(2,398,861	)		$	(4,618,164	)		$	(1,783,702	)		$	(4,370,421	)
Net loss per share, basic and diluted:
Continuing operations				(0.87	)			(1.48	)			(2.37	)			(0.98	)			(2.23	)
Discontinued operations				(0.13	)			(0.01	)			(0.24	)			(0.06	)			(0.18	)
Basic and diluted net loss per common share			$	(1.00	)		$	(1.49	)		$	(2.61	)		$	(1.04	)		$	(2.41	)
Basic and diluted weighted average number of shares outstanding				1,534,760				1,614,897				1,766,608				1,722,743				1,809,758
Pro forma basic and diluted net loss per common share (unaudited)											$	(0.91	)						$	(0.43	)
Pro forma basic and diluted weighted average number of common shares outstanding (unaudited)												3,967,024								6,513,164

F-4

---

 

		Convertible
		Preferred Stock
		Series A								Common Stock								Additional																Total
																		Paid-In				Notes				Deferred				Accumulated				Stockholders’
		Shares				Amount				Shares				Amount				Capital				Receivable				Compensation				Deficit				(Deficiency)
Balance at January 1, 2002			198,000			$	972,311				1,534,760			$	1,535			$	2,932,174							$	(117,000	)		$	(7,196,663	)		$	(3,407,643	)
Amortization of deferred compensation																											72,000								72,000
Net loss																															(1,141,051	)			(1,141,051	)
Preferred stock accretion																			(180,009	)															(180,009	)
Balance at December 31, 2002			198,000			$	972,311				1,534,760			$	1,535			$	2,752,165				—			$	(45,000	)		$	(8,337,714	)		$	(4,656,703	)
Preferred stock accretion																			(25,228	)															(25,228	)
Amortization of deferred compensation																											22,500								22,500
Issuance of common stock in exchange for notes receivable											150,000				150				68,850				(69,000	)											—
Adjustment for reduction to liquidation value of Series B preferred stock																			2,329,000																2,329,000
Stock distribution of preferred Series B shares																			(101,700	)															(101,700	)
Common stock options issued for consulting fees																			96,836																96,836
Net loss																															(1,950,103	)			(1,950,103	)
Balance at December 31, 2003			198,000			$	972,311				1,684,760			$	1,685			$	5,119,923			$	(69,000	)		$	(22,500	)		$	(10,287,817	)		$	(4,285,398	)
Sale of common stock											124,998				125				137,375																137,500
Deferred compensation-stock option awards to employees																			159,300								(159,300	)							—
Issuance of options to non-employee directors																			150,450																150,450
Preferred stock accretion																			(322,800	)															(322,800	)
Warrants issued in connection with preferred Series C stock																			3,158,948																3,158,948
Beneficial conversion feature in connection with preferred Series C stock																			2,385,063																2,385,063
Issuance of options to consultants																			72,800																72,800
Issuance of warrants to consultant																			120,396																120,396
Amortization of deferred compensation																											22,500								22,500
Net loss																															(3,619,146	)			(3,619,146	)
Balance at December 31, 2004			198,000			$	972,311				1,809,758			$	1,810			$	10,981,455			$	(69,000	)		$	(159,300	)		$	(13,906,963	)		$	(2,179,687	)
Preferred stock accretion																			(842,260	)															(842,260	)
Value of options vesting on attainment of milestone																			70,800																70,800
Retirement of note receivable																							69,000												69,000
Amortization of deferred compensation																											15,930								15,930
Net loss																															(2,809,097	)			(2,809,097	)
Balance at June 30, 2005 (unaudited)			198,000			$	972,311				1,809,758			$	1,810			$	10,209,995			$	—			$	(143,370	)		$	(16,716,060	)		$	(5,675,314	)

F-5

---

 

						Year Ended												Six Months Ended
						December 31,				December 31,				December 31,				June 30,				June 30,
						2002				2003				2004				2004				2005
						(audited)				(audited)				(audited)				(unaudited)				(unaudited)
Cash flows from operating activities:
	Loss from continuing operations					$	(939,792	)		$	(1,938,186	)		$	(3,192,802	)		$	(1,413,928	)		$	(2,478,986	)
	Loss from discontinued operations						(201,259	)			(11,917	)			(426,344	)			(101,853	)			(330,111	)
		Net loss				$	(1,141,051	)		$	(1,950,103	)		$	(3,619,146	)		$	(1,515,781	)		$	(2,809,097	)
	Adjustments to reconcile net loss to net cash used in operating activities:
			Allowance for doubtful accounts				—				(13,288	)			(9,000	)			—				(1,000	)
			Depreciation and amortization				33,329				30,987				35,860				14,578				25,098
			Noncash compensation and amortization of deferred compensation				72,000				22,500				172,950				11,250				86,730
			Common stock options and warrant issued for consulting fees				—				96,836				193,196				—				—
			Retirement of stock subscription receivable for consulting services				—				—				—				—				34,500
			Amortization of discount on marketable securities				—				—				(10,001	)			—				(30,072	)
			Imputed interest expense attributable to preferred Series C				—				45,000				—				—				—
			Imputed interest expense on bridge loan				—				—				80,000				80,000				—
			Changes in operating assets and liabilities:
				(Increase) decrease in receivables			(3,326	)			53,585				20,662				(64,794	)			8,128
				Decrease (increase) in inventories			67,279				(39,296	)			3,110				(8,826	)			(16,122	)
				Decrease (increase) in prepaid expenses and other current assets			6,060				(3,464	)			(36,211	)			(4,768	)			9,293
				Deferred registration costs			—				—				—				—				(79,169	)
				Increase (decrease) in accounts payable and accrued expenses			237,660				137,414				(7,676	)			(76,936	)			5,382
				(Decrease) increase in deferred revenues			—				(57,300	)			106,335				10,000				(106,335	)
				Increase (decrease) in other current liabilities			44,373				(21,879	)			5,308				(11,976	)			(17,284	)
				Net cash used in operating activities			(683,676	)			(1,699,008	)			(3,064,613	)			(1,567,253	)			(2,889,948	)
Cash flows from investing activities:
	Patent costs						—				(5,986	)			(3,166	)			(2,712	)			(2,822	)
	Purchases of property and equipment						—				(2,432	)			(88,884	)			(6,050	)			(81,337	)
	Redemption (purchase) of marketable securities						518,050				—				(6,584,750	)			—				3,007,110
				Net cash provided by (used in) investing activities			518,050				(8,418	)			(6,676,800	)			(8,762	)			2,922,951
Cash flows from financing activities:
	Proceeds from issuance of Series C preferred stock						—				1,500,000				9,171,480				1,100,000				—
	Expenses related to Series C preferred stock offering						—				(252,278	)			(447,553	)			—				—
	Proceeds from (repayment of) notes payable to stockholders						—				48,000				(48,000	)			—				—
	Proceeds from issuance of notes payable						—				520,000				920,000				920,000				—
	Proceeds from sale of common stock						—				—				137,500				137,500				—
	Payment for stock subscription receivable														—				—				34,500
				Net cash provided by financing activities			—				1,815,722				9,733,427				2,157,500				34,500
Net (decrease) increase in cash and cash equivalents							(165,626	)			108,296				(7,986	)			581,485				67,503
Cash and cash equivalents at beginning of period							174,021				8,395				116,691				116,691				108,705
Cash and cash equivalents at end of period						$	8,395			$	116,691			$	108,705			$	698,176			$	176,208
Supplemental Cash Flow Information:
Cash paid for interest						$	—			$	24,378			$	14,976			$	—			$	—
Supplemental Schedule of Noncash Financing Activities:
Notes payable exchanged for Series C preferred stock						$	—			$	505,000			$	1,015,000			$	—			$	—
Notes receivable received for common stock						$	—			$	69,000			$	—			$	—			$	—
Preferred stock accretion						$	180,009			$	25,228			$	322,800			$	25,228			$	842,260
Reduction to liquidation value Series B preferred stock										$	2,329,000
Beneficial conversion feature in connection with Series C preferred stock														$	2,385,063
Fair value of warrants issued in connection with Series C preferred stock														$	3,158,948
Accrued registration costs																						$	672,873
Reclassification of inventories and patents to assets held for sale																						$	156,677

F-6

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1.	PRINCIPAL BUSINESS ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

F-7

---

 

F-8

---

 

F-9

---

 

		December 31,												June 30,
		2002				2003				2004				2004				2005
Net loss attributable to common stockholders, as reported		$	(1,535	)		$	(2,399	)		$	(4,618	)		$	(1,784	)		$	(4,370	)
Add: stock-based employee compensation included in reported net loss, net of income tax effect			72				23				173				11				87
Deduct: stock-based employee compensation expense determined under fair-value-based method, net of related tax effect			(75	)			(65	)			(186	)			(8	)			(90	)
Pro forma net loss		$	(1,538	)		$	(2,441	)		$	(4,631	)			(1,781	)		$	(4,373	)
Basic and diluted loss per share, as reported		$	(1.00	)		$	(1.49	)		$	(2.61	)		$	(1.04	)		$	(2.41	)
Basic and diluted loss per share, pro forma		$	(1.00	)		$	(1.51	)		$	(2.62	)		$	(1.04	)		$	(2.42	)

		December 31,												June 30,
		2002				2003				2004				2004				2005
Expected volatility			1	%			1	%			60	%			60	%			—
Risk-free interest rate			4.52	%			4.52	%			3.17	%			3.39	%
			to				to				to
			5.43	%			5.43	%			3.94	%
Expected option life (in years)			10				10				5				5
Expected dividend yield			0	%			0	%			0	%			0	%

F-10

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F-11

---

 

2.	MARKETABLE SECURITIES:

		December 31, 2004												June 30, 2005
		Gross												Gross
		Unrealized				Fair				Amortized				Unrealized				Fair				Amortized
		Loss				Value				Cost				Loss				Value				Cost
Corporate commercial paper		$	—			$	2,500			$	2,500			$	—			$	—			$	—
Corporate debt			(10	)			2,497				2,507				(2	)			2,024				2,026
United States Treasury note			(8	)			1,580				1,588				(7	)			1,585				1,592
		$	(18	)		$	6,577			$	6,595			$	(9	)		$	3,609			$	3,618

3.	PROPERTY AND EQUIPMENT:

		December 31,
										June 30,				Estimated
		2003				2004				2005				Useful Life
Leasehold improvements		$	23			$	32			$	65				5-10 years
Laboratory and research equipment			61				119				119				5 years
Office furniture and equipment			113				135				184				5 years
			197				286				368
Less accumulated depreciation and amortization			179				197				213
		$	18				89			$	155

F-12

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4.	PATENTS:

Year ended December 31,
	2005		$	14
	2006			10
	2007			10
	2008			10
	2009			10
Thereafter				40
			$	94

5.	NOTES PAYABLE-STOCKHOLDERS:

6.	COMMITMENTS AND CONTINGENCIES:

Year ended December 31,
	2005		$	205
	2006			204
	2007			213
	2008			217
	2009			170
Thereafter				105
			$	1,114

F-13

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7.	EMPLOYEE BENEFIT PLAN:

8.	STOCKHOLDERS’ (DEFICIENCY) EQUITY AND REDEEMABLE PREFERRED STOCK:

F-14

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F-15

---

 

9.	STOCK OPTIONS AND WARRANTS:

F-16

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						Weighted-
						Average
						Exercise
		Warrants				Price
Outstanding at January 1, 2002			10,505			$	10.00
Expired			(9,815	)			10.00
Outstanding at December 31, 2002			690			$	10.00
Granted			369,303				12.72
Outstanding at December 31, 2003			369,993				12.70
Granted			2,389,620				12.60
Expired			(690	)			10.00
Outstanding at December 31, 2004			2,758,923			$	12.61

F-17

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						Weighted-
						average
		Number				Exercise
		of Shares				Price
Outstanding at January 1, 2002			128,050			$	2.28
Granted			14,531				1.00
Outstanding at December 31, 2002			142,581				2.16
Granted			158,565				.94
Expired/ Forfeited			(10,468	)			.96
Outstanding at December 31, 2003			290,678				1.12
Granted			679,525				.46
Expired/ Forfeited			(5,000	)			1.00
Outstanding at December 31, 2004			965,203				.66
Expired/ Forfeited			(65,328	)			.89
Outstanding at June 30, 2005			899,875			$	.64
Options exercisable at December 31, 2004			428,729			$	.89
Options exercisable at June 30, 2005			446,675				.82

		Options Outstanding
														Options Exercisable
						Weighted-
						average				Weighted-								Weighted-
						Remaining				average								average
Range of		Number				Contractual				Exercise				Number				Exercise
Exercise Prices		Outstanding				Life				Price				Exercisable				Price
$.01-$.46			694,525				4.7 years			$	.46				173,989			$	.46
$.47-$1.00			265,678				6.5 years				1.00				249,740				1.00
$1.01-$10.00			5,000				.4 years				10.00				5,000				10.00
$.01-$10.00			965,203				5.7 years			$	.66				428,729			$	.89

F-18

---

 

F-19

---

 

F-20

---

 

Ladenburg Thalmann & Co. Inc.	Stanford Group Company

---

 

ITEM 13.	Other Expenses of Issuance and Distribution.

Securities and Exchange Commission registration fee			$	3,884
NASD filing fee				4,640
NASDAQ National Market filing fee				5,000
Accounting fees and expenses				275,000
Legal fees and expenses				585,000
One percent nonaccountable underwriters expense				330,000
Printing and engraving expenses				270,000
Blue sky fees and expenses				10,000
Transfer agent and registrar fees and expenses				15,000
Miscellaneous				191,476
	Total		$	1,690,000

*	To be completed by amendment.

ITEM 14.	Indemnification of Directors and Officers.

II-1

---

 

Exhibit Document		Number
Underwriting Agreement			1.1	*
Registrant’s Third Amended and Restated Certificate of Incorporation			3.1
Registrant’s Second Amended and Restated Bylaws			3.3
Second Amended and Restated Investors’ Rights Agreement dated October 26, 2004			4.2
Form of Indemnification Agreement			10.1	*

*	To be filed by amendment.

ITEM 15.	Recent Sales of Unregistered Securities.

	•	On June 20, 2003, we sold 75,000 shares of our common stock at a price of $0.46 per share to Dr. Robert Friedman, a former member of our board of directors, and 75,000 shares of our common stock at a price of $0.46 per share to Breaux Castleman, a member of our board of directors, and the chairman of our board.
	•	On June 20, 2003, we issued an aggregate of 45,000 shares of our Series B preferred stock to the 149 Series B preferred stock investors who originally purchased our Series B preferred stock in 2000 in consideration of certain amendments to their investment agreements.
	•	On June 20, 2003, we issued a warrant to purchase up to 24,890 shares of our Series C preferred stock at an exercise price of $2.26 per share to Koji Miyazaki, one of our Series C preferred stock investors.
	•	On June 20, 2003, we also issued a warrant to Dr. Marek Elbaum, a former member of our board of directors and former Chief Science and Technology Officer, to purchase up to 25,000 shares of our common stock at per share exercise price of $13.00.
	•	From June 20, 2003 through October 26, 2004, we issued an aggregate of 5,414,779 shares of our Series C preferred stock to 73 accredited investors for an aggregate consideration of $12,191,480.
	•	From June 20, 2003 through October 26, 2004, we issued warrants to purchase up to an aggregate of 2,610,643 shares of our common stock with an exercise price of $13.00 per share to certain purchasers of our Series C preferred stock.
	•	On February 2, 2004, we issued a warrant to purchase up to 121,681 shares of our Series C preferred stock with an exercise price $2.26 per share to Health Partners I, LLC.
	•	In May 2004, we issued 125,000 shares of our common stock at a per share purchase price of $0.46 to accredited investors who loaned an aggregate of $1,000,000 to the company, which loans were evidenced by convertible promissory notes, all of which converted into shares of our Series C preferred stock on October 26, 2004.
	•	On December 10, 2004, we issued a warrant to Allen & Company LLC to purchase up to 75,000 shares of our common stock at an exercise price of $7.00 per share in consideration of Allen & Company’s agreement to provide certain advisory services to us.
	•	From January 1, 2002 to May 15, 2005 we granted options to purchase 852,621 shares of our common stock to employees, directors and consultants under our 1996 Plan and 2003 Plan.

II-2

---

 

ITEM 16.	Exhibits and Financial Statement Schedules.

Number				Exhibit Title
	1	.1*		Form of Underwriting Agreement.
	3	.1**		Third Amended and Restated Certificate of Incorporation.
	3	.2		Form of Amended and Restated Certificate of Incorporation of Registrant to be effective upon closing of the offering.
	3	.3**		Second Amended and Restated Bylaws of the Registrant as currently in effect.
	3	.4*		Form of Amended and Restated Bylaws of the Registrant to be effective upon closing of the offering.
	4	.1*		Specimen Stock Certificate.
	4	.2**		Second Amended and Restated Investor’s Rights Agreement dated as of October 26, 2004 by and among the Registrant and the parties listed therein.
	5	.1*		Opinion of Dreier LLP.
	10	.1*		Form of Indemnification Agreement for directors and executive officers.
	10	.2**		1996 Stock Option Plan.
	10	.3**		2003 Stock Incentive Plan, as amended.
	10	.4		2005 Stock Incentive Plan.
	10	.5**		Employment Agreement dated as of January 5, 2004 between the Registrant and Joseph V. Gulfo.
	10	.6**		Consulting Agreement dated as of May 31, 2005 between the Registrant and Marek Elbaum.
	10	.7**		Lease Agreement dated as of December 16, 1998, by and between the Registrant and Bridge Street Properties LLC, for office space located at One Bridge Street, Irvington, New York.
	10	.8**		First Amendment to the Lease Agreement dated as of May 17, 2001 by and between the Registrant and Bridge Street Properties LLC.
	10	.9**		Second Amendment to the Lease Agreement dated as of June 19, 2003 by and between the Registrant and Bridge Street Properties LLC.
	10	.10**		Lease Agreement dated as of November 23, 2004, by and between the Registrant and Bridge Street Properties LLC, for office space located at 3 West Main Street, Irvington, New York.
	10	.11		Consulting Agreement dated as of June 1, 2005 between the Registrant and Gerald Wagner Consulting, LLC.
	10	.12		Consulting Agreement dated as of June 20, 2003 between the Registrant and Breaux Castleman, as amended.
	10	.13		Consulting Agreement dated as of June 1, 2005 between the Registrant and Robert Friedman, M.D.
	10	.14*		Task Order Agreement dated as of July 13, 2005 between the Registrant and Battelle Memorial Institute.
	10	.15		Third Amendment dated as of June 6, 2005, by and between the Registrant and Bridge Street Properties LLC, for office space located at 1 Bridge Street, Irvington, New York.
	14	.1		Code of Business Conduct and Ethics.

II-3

---

 

Number				Exhibit Title
	23	.1		Consent of Eisner LLP, Independent Registered Public Accounting Firm.
	23	.2*		Consent of Counsel (included in Exhibit 5.1).
	24	.1**		Power of Attorney.

*	To be filed by amendment.

**	Previously filed.

(b)		Financial statement schedules are omitted because the information called for is not required or is shown either in the financial statements or the notes thereto.

ITEM 17.	Undertakings.

	(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
	(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4

---

 

	ELECTRO-OPTICAL SCIENCES, INC.

	By:	/s/ Joseph V. Gulfo

	Joseph V. Gulfo
	President and Chief Executive Officer

Name				Title		Date
Principal Executive Officer:
/s/ Joseph V. Gulfo   Joseph V. Gulfo				President , Chief Executive Officer and Director		July 15, 2005
Principal Financial Officer and Principal Accounting Officer:
/s/ Karen Krumeich   Karen Krumeich				Vice President, Finance and Chief Financial Officer		July 15, 2005
Additional Directors:
*   Breaux Castleman				Director, Chairman of the Board of Directors		July 15, 2005
*   Sidney Braginsky				Director		July 15, 2005
*   George C. Chryssis				Director		July 15, 2005
*   Dan W. Lufkin				Director		July 15, 2005
*   Gerald Wagner				Director		July 15, 2005
*By:		/s/ Joseph V. Gulfo   Joseph V. Gulfo Attorney-in-fact

II-5

---

 

Number				Exhibit Title
	1	.1*		Form of Underwriting Agreement.
	3	.1**		Third Amended and Restated Certificate of Incorporation.
	3	.2		Form of Amended and Restated Certificate of Incorporation of Registrant to be effective upon closing of the offering.
	3	.3**		Second Amended and Restated Bylaws of the Registrant as currently in effect.
	3	.4*		Form of Amended and Restated Bylaws of the Registrant to be effective upon closing of the offering.
	4	.1*		Specimen Stock Certificate.
	4	.2**		Second Amended and Restated Investor’s Rights Agreement dated as of October 26, 2004 by and among the Registrant and the parties listed therein.
	5	.1*		Opinion of Dreier LLP.
	10	.1*		Form of Indemnification Agreement for directors and executive officers.
	10	.2**		1996 Stock Option Plan.
	10	.3**		2003 Stock Incentive Plan, as amended.
	10	.4		2005 Stock Incentive Plan.
	10	.5**		Employment Agreement dated as of January 5, 2004 between the Registrant and Joseph V. Gulfo.
	10	.6**		Consulting Agreement dated as of May 31, 2005 between the Registrant and Marek Elbaum.
	10	.7**		Lease Agreement dated as of December 16, 1998, by and between the Registrant and Bridge Street Properties LLC, for office space located at One Bridge Street, Irvington, New York.
	10	.8**		First Amendment to the Lease Agreement dated as of May 17, 2001 by and between the Registrant and Bridge Street Properties LLC.
	10	.9**		Second Amendment to the Lease Agreement dated as of June 19, 2003 by and between the Registrant and Bridge Street Properties LLC.
	10	.10**		Lease Agreement dated as of November 23, 2004, by and between the Registrant and Bridge Street Properties LLC, for office space located at 3 West Main Street, Irvington, New York.
	10	.11		Consulting Agreement dated as of June 1, 2005 between the Registrant and Gerald Wagner Consulting, LLC.
	10	.12		Consulting Agreement dated as of June 20, 2003 between the Registrant and Breaux Castleman, as amended.
	10	.13		Consulting Agreement dated as of June 1, 2005 between the Registrant and Robert Friedman, M.D.
	10	.14*		Task Order Agreement dated as of July 13, 2005 between the Registrant and Battelle Memorial Institute.
	10	.15		Third Amendment dated as of June 6, 2005, by and between the Registrant and Bridge Street Properties LLC, for office space located at 1 Bridge Street, Irvington, New York.
	14	.1		Code of Business Conduct and Ethics.
	23	.1		Consent of Eisner LLP, Independent Registered Public Accounting Firm.
	23	.2*		Consent of Counsel (included in Exhibit 5.1).
	24	.1**		Power of Attorney.

	*	To be filed by amendment.

**	Previously filed.

                                                                     EXHIBIT 3.2

                           FOURTH AMENDED AND RESTATED
                         CERTIFICATE OF INCORPORATION OF
                         ELECTRO-OPTICAL SCIENCES, INC.

      Electro-Optical Sciences, Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), certifies that:

      A. The name of the Corporation is Electro-Optical Sciences, Inc. The
Corporation's original Certificate of Incorporation was filed with the Secretary
of State of the State of Delaware on September 3, 1997.

      B. The Corporation's Amended and Restated Certificate of Incorporation was
filed with the Secretary of State of the State of Delaware on June 19, 2003.

      C. The Corporation's Second Amended and Restated Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware on
April 7, 2004.

      D. The Corporation's Third Amended and Restated Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware on
October 26, 2004.

      E. This Fourth Amended and Restated Certificate of Incorporation of the
Corporation was duly adopted in accordance with Sections 242 and 245 of the
General Corporation Law of the State of Delaware (the "DGCL"), and restates,
integrates and further amends the provisions of the Corporation's Third Amended
and Restated Certificate of Incorporation as follows:

                                    ARTICLE I

      The name of the Corporation is Electro-Optical Sciences, Inc.

                                   ARTICLE II

      The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the DGCL.

      The address of the Corporation's registered office in the State of
Delaware is c/o United Corporate Services, Inc., 15 East North Street, in the
City of Dover, County of Kent, State of Delaware. The name of the registered
agent at such address is United Corporate Services, Inc.

                                   ARTICLE III

      The total number of shares of stock that the corporation shall have
authority to issue is 40,000,000 consisting of 30,000,000 shares of Common
Stock, $0.001 par value per share, and 10,000,000 shares of Preferred Stock,
$0.10 par value per share.


                                        1


            The Preferred Stock may be issued in one or more series at such time
or times and for such consideration or considerations as the Board of Directors
of the Corporation may determine. Each series shall be so designated as to
distinguish the shares thereof from the shares of all other series and classes.
Except as to the relative preferences, powers, qualifications, rights and
privileges which may be determined by the Board of Directors of the Corporation
as described below, all shares of Preferred Stock shall be identical. Except as
and to the extent otherwise specified herein, different series of Preferred
Stock shall not be construed to constitute different classes of shares for the
purpose of voting by class.

            The Board of Directors of the Corporation is expressly authorized by
a vote of all of the members of the Board of Directors then in office, subject
to the limitations prescribed by law and the provisions of this Fourth Amended
and Restated Certificate of Incorporation, as amended from time to time, to
provide by adopting a vote or votes, a certificate of which shall be filed in
accordance with the DGCL, for the issue of the Preferred Stock in one or more
classes or series, each with the designations, rights and privileges that shall
be stated in the vote or votes creating such classes or series. The authority of
the Board of Directors of the Corporation with respect to each such class or
series of Preferred Stock shall include, without limitation of the foregoing,
the right to determine and fix:

            (a) The distinctive designation of such class or series and the
      number of shares to constitute such class or series;

            (b) The rate at which dividends on the shares of such class or
      series shall be declared and paid, or set aside for payment, whether
      dividends at the rate so determined shall be cumulative, and whether the
      shares of such class or series shall be entitled to any participating or
      other dividends in addition to dividends at the rate so determined, and if
      so on what terms;

            (c) The right, if any, of the Corporation to redeem shares of the
      particular class or series and, if redeemable, the price, terms and manner
      of such redemption;

            (d) The special and relative rights and preferences, if any, and the
      amount or amounts per share, which the shares of such class or series
      shall be entitled to receive upon any voluntary or involuntary
      liquidation, dissolution or winding up of the Corporation;

            (e) The terms and conditions, if any, upon shares of such class or
      series shall be convertible into, or exchangeable for, shares of stock, or
      any other class or classes, including the price or prices or the rate or
      rates of conversion or exchange and the terms of adjustment, if any;

            (f) The obligation, if any, of the Corporation to retire or purchase
      shares of such class or series pursuant to a sinking fund or fund of a
      similar nature or otherwise, and the terms and conditions of such
      obligation;

            (g) The voting rights, if any, including special voting rights with
      respect to the election of directors and matters adversely affecting any
      such class or series;


                                       2


            (h) The limitations, if any, on the issuance of additional shares of
      such class or series or any shares of any other class or series of
      Preferred Stock; and

            (i) Any other preferences, powers, qualifications, special or
      relative rights and privileges thereof that the Board of Directors of the
      Corporation may deem advisable and that are not inconsistent with law and
      the provisions of this Fourth Amended and Restated Certificate of
      Incorporation.

                                   ARTICLE IV

      The Corporation reserves the right to amend, alter, change, or repeal any
provision contained in this Fourth Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon the stockholders herein are granted subject to this right.

                                    ARTICLE V

      The Corporation is to have perpetual existence.

                                   ARTICLE VI

      1. The number of directors which constitutes the whole Board of Directors
of the Corporation shall be designated in the Bylaws of the Corporation.

      Any director may be removed from office by the stockholders of the
Corporation only for cause. Vacancies occurring on the Board of Directors for
any reason and newly created directorships resulting from an increase in the
authorized number of directors may be filled only by vote of a majority of the
remaining members of the Board of Directors, although less than a quorum, or by
a sole remaining director, at any meeting of the Board of Directors. A person so
elected by the Board of Directors to fill a vacancy or newly created
directorship shall hold office until his or her successor shall have been duly
elected and qualified.

      2. Elections of directors need not be by written ballot unless the Bylaws
of the Corporation shall so provide.


                                   ARTICLE VII

      In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors of the Corporation is expressly authorized to make,
alter, amend or repeal the Bylaws of the Corporation.

                                  ARTICLE VIII

      No action shall be taken by the stockholders of the Corporation except at
an annual or special meeting of the stockholders called in accordance with the
Bylaws and no action shall be taken by the stockholders by written consent.


                                       3


                                   ARTICLE IX

      1. To the fullest extent permitted by the Delaware General Corporation Law
as the same exists or as may hereafter be amended, a director of the Corporation
shall not be personally liable to the Corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director.

      2. The Corporation may indemnify to the fullest extent permitted by law
any person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or investigative, by reason of the fact
that he, his testator or intestate is or was a director, officer or employee of
the Corporation or any predecessor of the Corporation or serves or served at any
other enterprise as a director, officer or employee at the request of the
Corporation or any predecessor to the Corporation.

      3. Neither any amendment nor repeal of this Article IX, nor the adoption
of any provision of this Fourth Amended and Restated Certificate of
Incorporation inconsistent with this Article IX, shall eliminate or reduce the
effect of this Article IX, in respect of any matter occurring, or any action or
proceeding accruing or arising or that, but for this Article IX, would accrue or
arise, prior to such amendment, repeal or adoption of an inconsistent provision.

                                    ARTICLE X

      Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside of the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.


                                       4



      IN WITNESS WHEREOF, the undersigned has executed this Fourth Amended and
Restated Certificate of Incorporation this ____ day of ________, 2005.

                                         By:
                                                --------------------
                                               Joseph V. Gulfo, M.D.
                                               Chief Executive Officer


                                       5

                                                                    EXHIBIT 10.4

                         ELECTRO-OPTICAL SCIENCES, INC.
                            2005 STOCK INCENTIVE PLAN

      1. Purpose. The purpose of the Electro-Optical Sciences, Inc. 2005 Stock
Incentive Plan (the "Plan") is to establish a flexible vehicle through which
Electro-Optical Sciences, Inc. (the "Company"), may offer equity-based
compensation incentives to key employees and other persons (including, without
limitation, directors, officers, consultants and scientific collaborators)
employed or engaged by the Company and/or its subsidiaries (collectively,
"Eligible Persons") to attract, motivate, reward and retain such Eligible
Persons and to further align the interests of such Eligible Persons with those
of the stockholders of the Company.

      2. Types of Awards. Awards under the Plan may be in the form of (a)
options to purchase shares of the Company's common stock, no par value per share
(the "Common Stock") granted pursuant to Section 6 below, including options
intended to qualify as "incentive stock options" ("ISOs") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
options which do not qualify as ISOs, and (b) stock awards granted pursuant to
Section 7 below (collectively, "Awards").

      3. Administration.

            (a) Compensation Committee. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee"). The Compensation Committee shall be comprised of
independent outside directors.

            (b) Authority of Compensation Committee. Subject to the limitations
of the Plan, the Compensation Committee, acting in its sole and absolute
discretion, shall have full power and authority to administer the Plan,
including, without limitation, the power to (i) determine the eligibility and
the particular persons to whom awards shall be made under the Plan, (ii) grant
awards to such persons and prescribe the terms and conditions of such awards,
(iii) construe, interpret and apply the provisions of the Plan and of any
agreement or other instrument evidencing an award granted under the Plan, (iv)
cancel, modify or waive the Company's rights with respect to, or modify,
discontinue, suspend or terminate any or all outstanding Awards held by
Participants, subject to any required consent under Paragraph 11, (v) prescribe,
amend and rescind rules and regulations relating to the Plan, including rules
governing its own operations, (vi) amend the Plan in any respect, including,
without limitation, to correct any defect, supply any omission and reconcile any
inconsistency in the Plan, (vii) amend any outstanding Award in any respect,
including, without limitation, to accelerate the time or times at which the
Award becomes vested or exercisable, (viii) carry out any responsibility or duty
specifically reserved to the Compensation Committee under the Plan, and (ix)
make any and all determinations and interpretations and take such other actions
as may be necessary or desirable in order to carry out the provisions, intent
and purposes of the Plan.

            All decisions of the Compensation Committee, shall be reasonable and
made in good faith and shall be conclusive and binding on all Participants in
the Plan.



            (c) Procedures. A majority of the members of the Compensation
Committee shall constitute a quorum. The Compensation Committee may act by the
vote of a majority of its members present at a meeting at which there is a
quorum or by unanimous written consent. Members of the Compensation Committee
shall abstain from participating in and deciding matters which directly affect
their individual ownership interest under the Plan.

            (d) Indemnification. The Company shall indemnify and hold harmless
each member of the Compensation Committee and any employee or director of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan is delegated from and against any loss, cost,
liability (including any sum paid in settlement of a claim with the approval of
the Board of Directors of the Company (the "Board"), damage and expense
(including legal and other expenses incident thereto) arising out of or incurred
in connection with the Plan, unless and except to the extent attributable to
such person's fraud or willful misconduct.

            (e) Compliance with Code Section 162(m). In the event the Company
becomes a "publicly-held corporation" as defined in Code Section 162(m)(2), the
Company may establish a Compensation Committee of outside directors meeting the
requirements of CoDe Section 162(m)(2) to (i) approve Awards that might
reasonably be anticipated to result in the payment of employee remuneration that
would otherwise exceed the limit on employee remuneration deductible for income
tax purposes by the Company pursuant to Code Section 162(m); and (ii) administer
the Plan. In such event, Awards under the Plan shall be granted upon
satisfaction of the conditions to such grants provided pursuant to Code
Section 162(m) and any Treasury Regulations promulgated thereunder.

      4. Share Limitations. Subject to adjustment pursuant to Section 9 below,
the maximum number of shares of Common Stock that may be issued under the Plan
is 1,000,000. The number of shares authorized for issuance under this Plan and
all other share amounts set forth in this Plan reflect the 1-for-2 reverse split
of the Company's Common Stock authorized by the Board of Directors of the
Company on May 13, 2005. In determining the number of shares that remain
issuable under the Plan at any time after the date the Plan is adopted, the
following shares will be deemed not to have been issued (and will be deemed to
remain available for issuance) under the Plan: (i) shares remaining under an
Award made under the Plan that terminates or is canceled without having been
exercised or earned in full; (ii) shares subject to an award under the Plan
where cash is delivered to the holder of the Award in lieu of such shares; (iii)
shares of restricted stock awarded under the Plan that are forfeited in
accordance with the terms of the applicable Award; and (iv) shares that are
withheld in order to pay the purchase price of shares acquired upon the exercise
of Awards granted under the Plan or to satisfy the tax withholding obligations
associated with such exercise. The number of shares of Common Stock issued in
connection with an award under the Plan will be determined net of any
previously-owned shares tendered by the holder of the Award in payment of the
exercise price or of applicable withholding taxes. The number of shares
available for grant and issuance under the Plan shall automatically be increased
on the first day of each of January 2006 and January 2007 by the lesser of: (i)
three percent (3%) of the number of shares of Common Stock issued and
outstanding on the preceding December 31, and (ii) a lesser number of shares of
Common Stock determined by the Board of Directors of the Company.


                                       2


      5. Eligibility. Awards under the Plan may be made to any Eligible Person
as the Compensation Committee may select. Each such person to whom an Award is
granted under the Plan is referred to herein as a "Participant".

      6. Stock Options. Subject to the provisions of the Plan, the Compensation
Committee may grant options to eligible personnel upon such terms and conditions
as the Compensation Committee deems appropriate. Each option granted under the
Plan shall be designated as either statutory or non-statutory and each option
designated as a statutory option shall be further designated as qualified or
non-qualified. The terms and conditions of any option shall be evidenced by a
written option agreement or other instrument approved for this purpose by the
Compensation Committee ("Option Agreement").

            (a) Date of Grant. Except as may be otherwise provided in an Option
Agreement, the date of grant of an option under this Plan shall be the date as
of which the Compensation Committee approves the grant.

            (b) Exercise Price. The exercise price per share of Common Stock
covered by an option granted under the Plan may not be less than the Fair Market
Value (as defined below) per share of the Common Stock at the time of grant (or,
in the case of an ISO granted to a Participant who, at the time the option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or a "subsidiary" of the Company within
the meaning of Section 424 of the Code, 110% of the Fair Market Value per
share).

            (c) Option Term. No option granted under the Plan may be exercisable
(if at all) more than ten years after the date the option is granted (or, in the
case of an ISO granted to a ten percent stockholder described in Section 422 of
the Code, five years after the date the option is granted).

            (d) Vesting and Exercise of Options. The Compensation Committee, in
its sole discretion, may establish such vesting and other conditions and
restrictions on the exercise of an option and/or upon the issuance of Common
Stock in connection with the exercise of an option as it deems appropriate.
Subject to satisfaction of applicable withholding requirements, once vested and
exercisable, an option may be exercised by delivering a written notice (the
"Notice") to the Secretary of the Company. The Notice shall state: (i) that the
Participant elects to exercise the option; (ii) the number of shares with
respect to which the option is being exercised (the "Option Shares"); (iii) the
method of payment for the Option Shares; (iv) the date upon which the
Participant desires to consummate the purchase of the Option Shares (which date
must be prior to the termination of such option); and (v) any additional
provisions consistent with the Plan as the Compensation Committee may from time
to time require. The exercise date of an option shall be the date on which the
Company receives the Notice from the Participant. The Compensation Committee,
acting in its sole discretion, may permit the exercise price to be paid in whole
or in part in cash or by check, by means of a cashless exercise procedure to the
extent permitted by law, in the form of unrestricted shares of Common Stock (to
the extent of the Fair Market Value thereof) or, subject to applicable law, by
any other form of consideration deemed appropriate.

            (e) Rights as a Stockholder. No shares of Common Stock shall be
issued in respect of the exercise of an option until full payment of the
exercise price and the applicable tax withholding obligation with respect to
such exercise has been made or provided for. The holder


                                       3


of an option shall have no rights as a stockholder with respect to any shares
covered by the option until the option is validly exercised, the exercise price
is paid fully and applicable withholding obligations are satisfied.

            (f) Termination of Employment or other Service. Unless otherwise
determined by the Compensation Committee at grant or, if no rights of the
Participant are reduced, thereafter, and subject to earlier termination in
accordance with the provisions hereof, the following rules apply with regard to
options held by a Participant at the time of his or her termination of
employment or other service with the Company and its subsidiaries.

                  (i) Termination by Reason of Death or Disability. If a
Participant's employment or other service terminates by reason of death or
Disability (as defined below), then (1) any portion of an option held by the
Participant which is not then exercisable shall thereupon terminate, and (2) any
portion of an option held by the Participant which is then exercisable shall
remain exercisable by the Participant (or beneficiary) for a period of one year
following such termination of employment or other service or, if sooner, until
the expiration of the term of the option, and, to the extent not exercised
within such period, shall thereupon terminate. For purposes of the Plan, the
term Disability shall mean, unless the Compensation Committee determines
otherwise at the time of grant, the inability of a person to perform the
essential functions of his or her position, with or without reasonable
accommodation, by reason of a physical or mental incapacity or illness which is
expected to result in death or to be of indefinite duration of not less than 12
months.

                  (ii) Termination for Cause. If a Participant's employment or
other service is terminated by the Company or any of its subsidiaries for Cause
(as defined below), then any option held by the Participant, whether or not then
exercisable, shall immediately terminate and cease to be exercisable. For
purposes of the Plan, a termination for "Cause" means (1) in the case where
there is no employment, consulting or similar service agreement between the
Participant and the Company or any of its subsidiaries or where such an
agreement exists but does not define "cause" (or words of like import), a
termination classified by the Company or any of its subsidiaries, as a
termination due to the Participant's (i) commission of, or entry of a plea of
guilty or no contest to any felony, fraud, misappropriation, embezzlement or
other crime of moral turpitude; (ii) commission of, or entry of a plea of guilty
or no contest to any crime or offense involving money or property of the
Company; (iii) dishonesty or fraud; or (iv) insubordination, willful misconduct,
refusal to perform services or materially unsatisfactory performance of duties,
or (2) in the case where there is an employment, consulting or similar service
agreement between the Participant and the Company or any of its subsidiaries
that defines "cause" (or words of like import), a termination that is or would
be deemed for "cause" (or words of like import) under such agreement.

                  (iii) Other Termination. If a Participant's employment or
other service terminates for any reason (other than death, Disability or Cause)
or no reason, then (1) any portion of an option held by the Participant which is
not then exercisable shall thereupon terminate, and (2) any portion of an option
held by the Participant which is then exercisable shall remain exercisable
during the ninety (90) day period following such termination or, if sooner,
until the expiration of the term of the option and, to the extent not exercised
within such period, shall thereupon terminate.


                                       4


            (g) Nontransferability. No option shall be assignable or
transferable except upon the Participant's death to a beneficiary designated by
the Participant in a manner prescribed or approved for this purpose by the
Compensation Committee or, if no designated beneficiary shall survive the
Participant, pursuant to the Participant's will or by the laws of descent and
distribution. During a Participant's lifetime, options may be exercised only by
the Participant or the Participant's guardian or legal representative.
Notwithstanding the foregoing, the Compensation Committee may permit the inter
vivos transfer of a Participant's options (other than options designated as
ISOs) by gift to such persons and on such terms and conditions as the
Compensation Committee deems appropriate.

      7. Stock Awards. Subject to the provisions of the Plan, the Compensation
Committee may grant stock awards to eligible Participants upon such terms and
conditions as the Compensation Committee deems appropriate. The terms and
conditions of any stock award shall be evidenced by a written stock award
agreement or other instrument approved for this purpose by the Compensation
Committee. A stock award may take the form of the issuance and transfer to the
recipient of shares of Common Stock or a grant of stock units representing a
right to receive shares of Common Stock in the future and, in either case, may
be subject to designated vesting conditions and transfer restrictions.

            (a) Purchase Price. The purchase price payable for shares of Common
Stock transferred pursuant to a stock award must be at least equal to their Fair
Market Value on the date of the grant.

            (b) Stock Certificates for Non-Vested Stock. Shares of Common Stock
issued pursuant to a non-vested stock award may be evidenced by book entries on
the Company's stock transfer records pending satisfaction of the applicable
vesting conditions. If a stock certificate for shares is issued before the stock
award vests, the certificate will bear an appropriate legend to reflect the
nature of the conditions and restrictions applicable to the shares, and the
Company may require that any or all such stock certificates be held in custody
by the Company until the applicable conditions are satisfied and other
restrictions lapse. The Compensation Committee may establish such other
conditions as it deems appropriate in connection with the issuance of
certificates for shares issued pursuant to non-vested stock awards, including,
without limitation, a requirement that the recipient deliver a duly signed stock
power, endorsed in blank, for the shares covered by the award.

            (c) Stock Certificates for Vested Stock. The recipient of a vested
stock award will be entitled to receive a certificate, free and clear of
conditions and restrictions (except as may be imposed in order to comply with
applicable law or the terms of any stockholders' agreement), for vested shares
covered by the award, subject, however, to the payment or satisfaction of
withholding tax obligations in accordance with Section 10.

            (d) Rights as a Stockholder. Unless otherwise determined by the
Compensation Committee, (i) the recipient of a stock award will be entitled to
receive dividend payments, if any (or, in the case of an award of stock units,
dividend equivalent payments), on or with respect to the shares that remain
covered by the award (which the Compensation Committee may specify are payable
on a deferred basis and are forfeitable to the same extent as the underlying
award), (ii) the recipient of a non-vested stock award may exercise voting
rights if and to the extent that shares of Common Stock have been issued to him
pursuant to the award, and (iii) the


                                       5


recipient will have no other rights as a stockholder with respect to such shares
unless and until the shares are issued to him free of all conditions and
restrictions under the Plan.

            (e) Termination of Employment or other Service Before Vesting;
Forfeiture. Unless the Compensation Committee determines otherwise, a non-vested
stock award will be forfeited upon the termination of a recipient's employment
or other service with the Company and its subsidiaries. If a non-vested stock
award is forfeited, any certificate representing shares subject to such award
will be canceled on the books of the Company and the recipient will be entitled
to receive from the Company an amount equal to any cash purchase price paid by
him for such shares. If an award of stock units is forfeited, the recipient will
have no further right to receive the shares of Common Stock represented by such
units.

            (f) Nontransferability. With respect to any stock Award, unless and
until all applicable vesting conditions, if any, are satisfied and vested shares
are issued, neither the stock Award nor any shares of Common Stock issued
pursuant to the Award may be sold, assigned, transferred, disposed of, pledged
or otherwise hypothecated other than to the Company in accordance with the terms
of the Award or the Plan. Any attempt to do any of the foregoing before such
time shall be null and void and, unless the Compensation Committee determines
otherwise, shall result in the immediate forfeiture of the shares or the Award,
as the case may be.

      8. Fair Market Value. For purposes of the Plan, the Fair Market Value of a
share of Common Stock, as of any date shall mean, unless otherwise required by
other applicable law, the closing sale price per share of Common Stock as
published by the principal national securities exchange on which the Common
Stock is traded on such date or, if there is no sale of Common Stock on such
date, the average of the bid and asked prices on such exchange at the close of
trading on such date, or if shares of the Common Stock are not listed on a
national securities exchange on such date, the closing price or, if none, the
average of the bid and asked prices in the over-the-counter market at the close
of trading on such date, or if the Common Stock is not traded on a national
securities exchange or the over-the-counter market, the Compensation Committee
shall determine its Fair Market Value in such a manner as it deems appropriate
(such determination will be made in good faith as required by Section 422(c)(1)
of the Code, may be based on the advice of an independent investment banker or
appraiser recognized to be an expert in making such valuations and will take
into consideration the factors listed in 26 C.F.R.Section 20.2031.2).

      9. Capital Changes; Acquisition Events.

            (a) Capital Changes. The maximum number and class of shares that may
be issued under the Plan, the number and class of shares covered by each
outstanding Award and, if applicable, the exercise price per share shall all be
adjusted proportionately or as otherwise appropriate to reflect any increase or
decrease in the number of issued shares of Common Stock resulting from a
split-up or consolidation of shares or any like capital adjustment, or the
payment of any stock dividend, and/or to reflect a change in the character or
class of shares covered by the Plan arising from a readjustment or
recapitalization of the Company's capital stock.

            (b) Acquisition Events. In the event of a merger, consolidation,
mandatory share exchange or other similar business combination of the Company
with or into any other entity ("Successor Entity") or any transaction in which a
Successor Entity acquires all the issued and outstanding capital stock of the
Company, or all or substantially all the assets of the Company


                                       6


(each, an "Acquisition Event"), outstanding options may be assumed or an
equivalent option may be substituted by the Successor Entity or a parent of the
Successor Entity. If and to the extent that outstanding options are not assumed
or replaced with substantially equivalent options in connection with an
Acquisition Event, then each Participant shall have the right to exercise in
full all of his or her outstanding options, whether or not such options are
otherwise vested or exercisable, but contingent upon the occurrence of the
Acquisition Event, for a period of at least twenty (20) days prior to the
consummation of the Acquisition Event, in which case the Company shall notify
the Participant in writing or electronically that his or her options shall
become fully exercisable at least thirty (30) days prior to the consummation of
the Acquisition Event, and any outstanding options which are not exercised prior
to the consummation of the Acquisition Event shall thereupon terminate.
Notwithstanding the preceding sentence, if and to the extent outstanding options
are not assumed or replaced with substantially equivalent options in connection
with an Acquisition Event, the Compensation Committee, acting in its sole
discretion and without the consent of any Participant, may provide for the
cancellation of any outstanding options in exchange for payment in cash or other
property of the Fair Market Value of the shares of Common Stock covered by such
options (whether or not otherwise vested or exercisable), reduced by the
exercise price thereof (and any applicable withholdings thereon). The
Compensation Committee, acting in its sole discretion, may accelerate vesting of
non-vested stock awards, provide for cash settlement and/or make such other
adjustments to the terms of any outstanding stock award as it deems appropriate
in the context of an Acquisition Event.

            (c) Fractional Shares. In the event of any adjustment in the number
of shares covered by any option pursuant to the provisions hereof, any
fractional shares resulting from such adjustment shall be disregarded, and each
such option shall cover only the number of full shares resulting from the
adjustment.

            (d) Determinations Final. All adjustments under this Section 9 shall
be made by the Compensation Committee, and its determination as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive.

      10. Tax Withholding. As a condition to the exercise of any Award or the
delivery of any shares of Common Stock pursuant to any Award or the lapse of
restrictions on any Award, or in connection with any other event that gives rise
to a federal or other governmental tax withholding obligation on the part of the
Company or any of its subsidiaries relating to an Award (including, without
limitation, an income tax deferral arrangement pursuant to which employment tax
is payable currently), the Company and/or the subsidiary may (a) deduct or
withhold (or cause to be deducted or withheld) from any payment or distribution
to an award recipient whether or not pursuant to the Plan or (b) require the
recipient to remit cash (through payroll deduction or otherwise), in each case
in an amount sufficient in the opinion of the Company to satisfy such
withholding obligation. If the event giving rise to the withholding obligation
involves a transfer of shares of Common Stock, then, at the sole discretion of
the Compensation Committee, the recipient may satisfy the withholding obligation
described under this Section by electing to have the Company withhold shares of
Common Stock or by tendering previously-owned shares of Common Stock, in each
case having a Fair Market Value equal to the amount of tax to be withheld (or by
any other mechanism as may be required or appropriate to conform with local tax
and other rules); provided, however, that no shares may be withheld if and to
the extent that such withholding would result in the recognition of additional
accounting expense by the Company.


                                       7


      11. Amendment and Termination. The Board may amend or terminate the Plan,
provided, however, that no such action may adversely affect the rights of the
holder of any outstanding Award in a material way without the written consent of
the holder. Except as otherwise provided in Section 9, any amendment which would
increase the number of shares of Common Stock which may be issued under the Plan
or modify the class of persons eligible to receive Awards under the Plan shall
be subject to the approval of the Company's stockholders if and to the extent
that such approval is necessary or desirable to comply with applicable law or
exchange or listing requirements. The Board or the Compensation Committee may
amend the terms of any agreement or certificate made or issued hereunder at any
time and from time to time, provided, however, that any amendment which would
adversely affect the rights of the holder in a material way may not be made
without his or her written consent.

      12. No Rights Conferred. Nothing contained in the Plan or in any Option
Agreement shall confer upon any recipient of an Award any right with respect to
the continuation of his employment or other service with the Company or its
subsidiaries or interfere in any way with the right of the Company and its
subsidiaries at any time to terminate such employment or other service or to
increase or decrease, or otherwise adjust, the other terms and conditions of the
recipient's employment or other service.

      13. Compliance with Law.

            (a) Compliance with Securities Laws. No Awards shall be granted and
no shares of Common Stock shall be issued or delivered pursuant to the Plan,
unless the issuance and delivery of such shares complies with applicable law,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the requirements of any stock
exchange or market upon which the Common Stock may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

            The Compensation Committee in its discretion may, as a condition to
the delivery of any shares pursuant to any Award granted under the Plan, require
the applicable Participant (i) to represent in writing that the shares received
pursuant to such Award are being acquired for investment and not with a view to
distribution and (ii) to make such other representations and warranties as are
deemed reasonably appropriate by the Compensation Committee. Stock certificates
representing shares acquired under the Plan that have not been registered under
the Securities Act shall, if required by the Compensation Committee, bear such
legends as may be required by the applicable Option Agreement, if any.

            (b) No Right to an Award or Grant. Neither the adoption of the Plan
nor any action of the Compensation Committee shall be deemed to give an
employee, director or consultant any right to be granted an Award to purchase
Common Stock, receive an Award under the Plan except as may be evidenced by an
Option Agreement duly executed on behalf of the Company, and then only to the
extent of and on the terms and conditions expressly set forth in the Option
Agreement. The Plan will be unfunded. The Company will not be required to
establish any special or separate fund or to make any other segregation of funds
or assets to assure the payment of any Award.

            (c) No Restriction of Corporate Action. Nothing contained in the
Plan or in any Option Agreement will be construed to prevent the Company or any
Subsidiary or Affiliate of


                                       8


the Company from taking any corporate action which is deemed by the Company or
by its Subsidiaries and Affiliates to be appropriate or in its best interest,
whether such action would have an adverse effect on the Plan or any Award made
under the Plan. No Participant or beneficiary of a Participant will have any
claim against the Company or any affiliate as a result of any corporate action.

      14. Transfer Orders; Placement of Legends. All certificates for shares of
Common Stock delivered under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Company may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange or market upon which the Common Stock may then be listed, and
any applicable federal or state securities law. The Company may cause a legend
or legends to be placed on any such certificates to make appropriate reference
to such restrictions.

      15. Decisions and Determinations to be Final. All decisions and
determinations made by the Compensation Committee pursuant to the provisions
hereof shall be final, binding and conclusive.

      16. Governing Law. All rights and obligations under the Plan and each
Option Agreement or instrument shall be governed by and construed in accordance
with the laws of the State of New York, without regard to its principles of
conflict of laws.

      17. Term of the Plan. The Plan shall become effective on the date of its
adoption by the Board, subject to the approval of the Company's stockholders
within 12 months of such date. Unless sooner terminated by the Compensation
Committee, the Plan shall terminate on the tenth anniversary of the date of its
adoption by the Board. The rights of any person with respect to an Award granted
under the Plan that is outstanding at the time of the termination of the Plan
shall not be affected solely by reason of the termination of the Plan and shall
continue in accordance with the terms of the Award (as then in effect or
thereafter amended) and the Plan.

      18. Supersession. This Plan supersedes the Electro-Optical Sciences, Inc.
2003 Stock Incentive Plan, as amended, (the "Prior Plan). Although options may
be outstanding under the Prior Plan, no Awards will be granted under the Prior
Plan after December 31, 2004.

      19. Code Section 409A Compliance. This Plan is intended to provide for
statutory and non-statutory stock option benefits that are not deemed to be
deferred compensation and thus are not subject to the provisions of Code
Section 409A. If the Plan is deemed to be subject to Code Section 409A, however,
the Company may modify the Plan and any Awards granted under the Plan to comply
with Code Section 409A guidance; provided, however, that the present value of
Awards granted to Participants after such modification shall not be less than
the present value of the Awards granted to Participants prior to the
modification.

      20. Section 16 Compliance. It is intended that the Plan and any Award made
to a Participant subject to Section 16 of the Exchange Act meet all of the
requirements of Rule 16b-3. If any provisions of the Plan or any Award would
disqualify the Plan or the Award, or would otherwise not comply with Rule 16b-3,
such provision or Award will be construed or deemed amended to conform to Rule
16b-3.

      21. Related Agreements: Lock-Up.

            (a) As a condition to the issuance of shares of Common Stock
pursuant to a stock


                                       9


award or upon exercise of an option granted pursuant to the Plan, the recipient
shall, at the request of the Board, be required to become a party to any
stockholders' or similar agreement(s) to which the Company and some or all of
its stockholders may from time to time be party.

            (b) As a condition to the issuance of shares of Common Stock
pursuant to a stock award or upon exercise of an option granted pursuant to the
Plan, the recipient shall, at the request of the Compensation Committee, agree
that he or she will not, without the prior written consent of the managing
underwriter, if any, for any public offering of the Company's securities, during
the period commencing. on the date of the final prospectus relating to such
public offering and ending on the date specified by the Company and the managing
underwriter (such period not to exceed one hundred eighty (180) days), (i) lend,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (whether such shares or any such securities are
then owned by the recipient or are thereafter acquired), or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the securities of the recipient (and the shares or
securities of every other person subject to the foregoing restriction) until the
end of such period.


                                       10

                                                                   EXHIBIT 10.11

                              CONSULTING AGREEMENT

This Agreement is made as of June 1, 2005 (the "Effective Date"), between
Electro-Optical Sciences, Inc, a Delaware corporation (the "COMPANY") and Gerald
Wagner Consulting LLC (the "CONSULTANT").

The Consultant and the Company are parties to a certain Consulting Agreement
dated as of March 17, 2005 (the "Prior Agreement.") Services rendered by the
Consultant thereunder have primarily related to facilitation of the
restructuring of the Company so as to enable it to make appropriate arrangements
for the completion of developmental engineering of its MelaFind device. The
arrangements have been effectuated with an appropriate third party, and the
internal restructuring is now sufficiently along, so as to enable the parties to
the Prior Agreement to revise their relationship so as to provide for the
provision of services of an anticipated longer duration period. Accordingly, the
parties agree as follows:

1.    Services. The Field of Interest for consulting hereunder is the continued
direction of the Company's MelaFind product development effort and the
implementation of the manufacturing process once production of clinical trial
prototypes becomes feasible.

The Consultant will make himself available in person at the Company's offices or
other locations as agreed upon during the term of this Agreement, as reasonably
requested by the Company

2.    Consideration. In consideration for the services provided by Consultant
under the terms of this Agreement, Consultant shall be compensated as set forth
below.

      2.1   The Company will pay the Consultant an amount of one hundred fifty
thousand dollars ($150,000.00), payable ratably over the course of the project
at such intervals as Consultant and the Company may agree upon. This amount is
considered to approximate the aggregate amount achieved by adding together $2000
for each full day to be spent on the project by Consultant. As a bonus,
Consultant will be granted 50,000 non-qualified stock options to purchase
Company's common stock at its then fair market value immediately after the
effective date of an Initial Public Offering on Registration Statement Form S-1.
The fair market value shall be deemed to be the price at which the Initial
Public Offering became effective.

      2.2   The parties shall assess the progress of the project at a point
approximately halfway through the anticipated term. Provided that the
anticipated delivery date for the first twenty-five (25) MelaFind clinical trial
prototypes meeting the then-established Company specifications for such clinical
trial prototypes is still during the first quarter of calendar year 2006,
Consultant shall become entitled to an adjustment of the amount



paid, if necessary, so that the revised amount equals $2,000 per day for each
full day actually spent and to be spent on the project by Consultant.

      2.3   Reasonable expenses of the Consultant incurred at the request of the
Company (including travel expenses incurred in connection with Company-related
business) will be reimbursed promptly by the Company, subject to customary
verification, in accordance with the Company's standard expense reimbursement
and travel policy.

3.    Term. The term of this Agreement will begin on the Effective Date of this
Agreement and will end three months following the initiation of the pivotal
clinical trial for MelaFind. The parties anticipate that the pivotal clinical
trial will commence in the first quarter of 2006. The parties will negotiate
over an appropriate extension of the term of this agreement starting
approximately 30 days before the anticipated end of the term.

4.    Certain Other Contracts.

      4.1   The Consultant will not disclose to the Company any information that
the Consultant is obligated to keep secret pursuant to an existing
confidentiality agreement with a third party, and nothing in this Agreement will
impose any obligation on the Consultant to the contrary.

      4.2   The consulting work performed hereunder will not be conducted on
time that is required to be devoted to any other third party. The Consultant
shall not use the funding, resources and facilities of any other third party to
perform consulting work hereunder and shall not perform the consulting work
hereunder in any manner that would give any third party rights to the product of
such work.

      4.3   The Consultant has disclosed and, during the Term, will disclose to
the Chief Executive Officer of the Company any conflicts between this Agreement
and any other agreements binding the Consultant.

5.    Exclusive Services during the Term. The Consultant agrees that during the
Term of this Agreement he will not, exclusive of any research obligations to any
third party, directly or indirectly (i) provide any services to any other
business or commercial entity in the Field of Interest, (ii) participate in the
formation of any business or commercial entity in the Field of Interest or (iii)
solicit or hire away any employee or consultant of the Company. Consultant shall
disclose on Exhibit A attached hereto all other consulting agreements in the
Field of Interest to which Consultant is currently a party.

6.    Direction of Projects and Inventions to the Company. Subject to the
Consultant's obligations and confidentiality obligations to third parties,
during the Term of this Agreement, the Consultant will use his best efforts to
disclose to the Chief Executive Officer of the Company, on a confidential basis,
technology and product opportunities which come to the attention of the
Consultant in the Field of Interest, and any invention, improvement, discovery,
process, formula or method or other intellectual property



relating to or useful in, the Field of Interest (collectively "New
Discoveries"), whether or not patentable or copyrightable, to the extent the New
Discoveries do not arise from any research undertaken by the Consultant as an
employee of any third party.

7.    Inventions Discovered by the Consultant While Performing Services
Hereunder.

      7.1   The Consultant will promptly and fully disclose to the Chief
Executive Officer of the Company any invention, improvement, discovery, process,
formula, technique, method, trade mark, trade secret, mask work, or other
intellectual property, whether or not patentable, whether or not copyrightable
(collectively, "Invention") made, conceived, developed, or first reduced to
practice by the Consultant, either alone or jointly with others, while
performing services hereunder. All such Inventions are work made for hire to the
extent allowed by law and, in addition, Consultant hereby assigns to the Company
all of his right, title and interest in and to any such Inventions. The
Consultant will execute any documents necessary to perfect the assignment of
such Inventions to the Company and to enable the Company to apply for, obtain,
and enforce patents or copyrights in any and all countries on such Inventions.
The Consultant hereby irrevocably designates the Secretary of the Company as his
agent and attorney-in-fact to execute and file any such document and to do all
lawful acts necessary to apply for and obtain patents and copyrights, and to
enforce the Company's rights under this paragraph. This Section 7 will survive
the termination of this Agreement.

      7.2   If any part of the Invention is based on, incorporates, or is an
improvement or derivative of, or cannot be reasonably and fully made, used,
reproduced, distributed and otherwise practiced or exploited without using,
infringing or violating technology or intellectual property rights owned or
licensed by Consultant and not assigned hereunder, Consultant hereby grants
Company a perpetual, irrevocable, worldwide royalty-free, non-exclusive, right
and license, with right to sublicense, to exploit and exercise all such
technology and intellectual property rights in support of Company's exercise or
exploitation of the Inventions, other work performed hereunder, or any assigned
rights (including any modifications, improvements and derivatives of any of
them).

8.    Confidentiality.

      8.1   The Consultant acknowledges that, during the course of performing
his services hereunder, the Company will be disclosing information to the
Consultant, and the Consultant will be developing information related to the
Field of Interest, Inventions, projects, products, potential customers,
personnel, business plans, and finances, as well as other commercially valuable
information (collectively "Confidential Information"). The Consultant
acknowledges that the Company's business is extremely competitive, dependent in
part upon the maintenance of secrecy, and that any disclosure of the
Confidential Information would result in serious harm to the Company.

      8.2   The Consultant agrees that the Confidential Information will be used
by the Consultant only in connection with consulting activities hereunder, and
will not be used in any way that is detrimental to the Company.



      8.3   The Consultant agrees not to disclose, directly or indirectly, the
Confidential Information to any third person or entity, other than
representatives or agents of the Company. The Consultant will treat all such
information as confidential and proprietary property of the Company.

      8.4   The term "Confidential Information" does not include information
that was: (i) publicly known and made generally available in the public domain
prior to the time of disclosure by the disclosing party; (ii) becomes publicly
known and made generally available after disclosure by the disclosing party to
the receiving party through no action or inaction of the receiving party; (iii)
is already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party's files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party's obligations of
confidentiality; and (v) is independently developed by the receiving party
without use of or reference to the disclosing party's Confidential Information,
as shown by documents and other competent evidence in the receiving party's
possession.

      8.5   The Consultant may disclose any Confidential Information that is
required to be disclosed by law, government regulation or court order. If
disclosure is required, the Consultant will give the Company advance notice so
that the Company may seek a protective order or take other action reasonable in
light of the circumstances.

      8.6   Upon termination of this Agreement, the Consultant will promptly
return to the Company all materials containing Confidential Information as well
as data, records, reports and other property, furnished by the Company to the
Consultant or produced by the Consultant in connection with services rendered
hereunder, together with all copies of any of the foregoing. Notwithstanding
such return, the Consultant shall continue to be bound by the terms of the
confidentiality provisions contained in this Section 8 for a period of three
years after the termination of this Agreement.

9.    Use of Name. It is understood that the name of the Consultant and
Consultant's affiliation with any third party will appear in disclosure
documents required by securities laws, and in other regulatory and
administrative filings in the ordinary course of the Company's business. The
above-described uses will be deemed to be noncommercial uses. The name of the
Consultant or any third party will not be used for any commercial purpose
without the Consultant's consent.

10.   No Conflict: Valid and Binding. The Consultant represents that neither the
execution of this Agreement nor the performance of the Consultant's obligations
under this Agreement (as modified to the extent required by Section 4) will
result in a violation or breach of any other agreement by which the Consultant
is bound. The Company represents that this Agreement has been duly authorized
and executed and is a valid and legally binding obligation of the Company,
subject to no conflicting agreements.



11.   Notices. Any notice provided under this Agreement shall be in writing and
shall be deemed to have been effectively given (i) upon receipt when delivered
personally, (ii) one day after sending when sent by private express mail service
(such as Federal Express), or (iii) 5 days after sending when sent by regular
mail to the following address:

      In the case of the Company:

      Electro-Optical Sciences, Inc
      One Bridge Street, Suite 15
      Irvington, NY 10553
      In the case of the Consultant:

      Name:       Gerald Wagner Consulting LLC
      Address:    970 Route 9W
                  Upper Grandview, NY 10960

      SSN:        02-0662378

or to other such address as may have been designated by the Company or the
Consultant by notice to the other given as provided herein.

12.   Independent Contractor: Withholding. The Consultant will at all times be
an independent contractor, and as such will not have authority to bind the
Company. Consultant will not act as an agent nor shall he be deemed to be an
employee of the Company for the purposes of any employee benefit program,
unemployment benefits, or otherwise. The Consultant recognizes that no amount
will be withheld from his compensation for payment of any federal, state, or
local taxes and that the Consultant has sole responsibility to pay such taxes,
if any, and file such returns as shall be required by applicable laws and
regulations. Consultant shall not enter into any agreements or incur any
obligations on behalf of the Company.

13.   Assignment. Due to the personal nature of the services to be rendered by
the Consultant, the Consultant may not assign this Agreement. The Company may
assign all rights and liabilities under this Agreement to a subsidiary or an
affiliate or to a successor to all or a substantial part of its business and
assets without the consent of the Consultant. Subject to the foregoing, this
Agreement will inure to the benefit of and be binding upon each of the heirs,
assigns and successors of the respective parties.

14.   Severability. If any provision of this Agreement shall be declared
invalid, illegal or unenforceable, such provision shall be severed and the
remaining provisions shall continue in full force and effect.

15.   Remedies. The Consultant acknowledges that the Company would have no
adequate remedy at law to enforce Sections 5, 7 and 8 hereof. In the event of a
violation by the Consultant of such Sections, the Company shall have the right
to obtain injunctive



or other similar relief, as well as any other relevant damages, without the
requirement of posting bond or other similar measures.

16.   Governing Law; Entire Agreement; Amendment. This Agreement shall be
governed by the laws of the State of New York applicable to agreements made and
to be performed within such State, represents the entire understanding of the
parties. It supersedes the Prior Agreement except with respect to matters
(payment for subsequent invoices, confidentiality, and the like) which by their
nature should survive the termination of that agreement. It may only be amended
in writing.

IN WITNESS WHEREOF, this Agreement may be executed in counterparts, each of
which shall constitute an original and all of which together shall constitute
one instrument, effective as of the date first above written.

Electro-Optical Sciences, Inc:             Consultant: Gerald Wagner

By:   /s/ William R. Bronner               Signature: /s/ Gerald Wagner
Its:  Vice President



                                    EXHIBIT A

                               OTHER RELATIONSHIPS

                                      NONE

                                                                   EXHIBIT 10.12

                              CONSULTING AGREEMENT

Agreement dated and effective as of June 20, 2003, between Electro-Optical
Sciences, a Delaware corporation with its office at 1 Bridge Street, Suite 15,
Irvington, New York 10533 ("EOS" or the "Company") and Breaux Castleman, with an
address at , California ("Consultant"), hereinafter referred to as the
"Agreement."

EOS and Consultant hereby agree as follows:

1     The term of this agreement shall be two years.

2     EOS will grant Consultant a stock award by executing contemporaneously
      with this Agreement a Restricted Stock Purchase Agreement substantially in
      the form of Exhibit A hereto. the award will allow Consultant to purchase
      150,000 shares of EOS common stock @ $0.23 / share, 75,000 shares of which
      will vest immediately, and the remaining 75,000 shares of which will vest
      after 1 year of service.

3     Services will be provided as the Chief Executive Officer shall direct and
      as Consultant shall reasonably find acceptable, within his areas of
      expertise. Consultant shall report to the Chief Executive Officer, with
      ultimate responsibility to the Board of Directors. For these services,
      Consultant will receive $8,000 per month, plus reasonable travel expenses.

4     Consultant is not and shall not become the agent of EOS, and has and shall
      have no authority, express or implied, to act as an agent of EOS or to
      enter into any agreement or take any action on behalf of EOS. Nothing
      contained herein shall constitute an employment agreement. Nothing
      contained herein is intended to restrict Consultant's ability to provide
      services to others.

5     Consultant shall continue to be obligated under the confidentiality
      agreement previously entered into, and Consultant shall execute the
      standard EOS invention disclosure agreement, a copy of which is attached
      as Exhibit B hereto. Termination of this agreement shall not affect
      Consultant's obligations under these agreements.

6     This agreement is to be governed by the substantive laws of the State of
      New York without regard to any provisions relating to the conflict of
      laws.

Electro-Optical Sciences, Inc:         Consultant: Breaux Castleman

By: /s/ William R. Bronner                 Signature: /s/Breaux Castleman
Its: Vice President

                                                                   EXHIBIT 10.13

                              CONSULTING AGREEMENT

This Agreement is made as of June 1, 2005 (the "Effective Date"), between
Electro-Optical Sciences, Inc, a Delaware corporation (the "COMPANY") and Robert
Friedman, M.D. (the "CONSULTANT").

Consultant is retiring as a voting member of the Board of Directors. Consultant
is willing to continue to provide assistance to the Company. The Company wishes
to retain the Consultant in a consulting capacity. Accordingly, the parties
agree as follows:

1.    Services. The Field of Interest for consulting includes three areas: (1)
as Medical Advisor to the Board, (2) as Liaison to the Scientific and Medical
Advisory Committee, and (3) in connection with the clinical testing of
MelaFind(R), a melanoma diagnostic device. The Consultant will make himself
available in person at the Company's offices or other locations as agreed upon
during the term of this Agreement, as reasonably requested by the Company,
subject to his need to satisfy other professional commitments, for up to thirty
days.

2.    Consideration. In consideration for the services provided by Consultant
under the terms of this Agreement, Consultant shall be compensated at a rate of
$5,000 per day of services rendered to the Company, or a proportionately smaller
amount for less than 8 hours of services. Reasonable expenses of the Consultant
incurred at the request of the Company (including travel expenses incurred in
connection with Company-related business) will be reimbursed promptly by the
Company, subject to customary verification, in accordance with the Company's
standard expense reimbursement and travel policy.

3.    Term. The term of this Agreement will begin on the Effective Date of this
Agreement and will end on the one-year anniversary of this Agreement or upon
earlier termination (the "Term"). The Term will be renewed for successive
one-year periods, unless either party provides written notice at least thirty
(30) days prior to the end of the Term that such party does not wish to renew
this Agreement.

4.    Exclusive Services during the Term. The Consultant agrees that during the
Term of this Agreement he will not, exclusive of any research obligations to any
third party, directly or indirectly (i) provide any services to any other
business or commercial entity in the Field of Interest, (ii) participate in the
formation of any business or commercial entity in the Field of Interest or (iii)
solicit or hire away any employee or consultant of the Company. Consultant shall
disclose on Exhibit A attached hereto all other consulting agreements in the
Field of Interest to which Consultant is currently a party.

5.    Direction of Projects and Inventions to the Company. Subject to the
Consultant's obligations and confidentiality obligations to third parties,
during the Term of this Agreement, the Consultant will use his best efforts to
disclose to the Chief Executive Officer of the Company, on a confidential basis,
technology and product opportunities



which come to the attention of the Consultant in the Field of Interest, and any
invention, improvement, discovery, process, formula or method or other
intellectual property relating to or useful in, the Field of Interest
(collectively "New Discoveries"), whether or not patentable or copyrightable, to
the extent the New Discoveries do not arise from any research undertaken by the
Consultant as an employee of any third party.

6.    Inventions Discovered by the Consultant While Performing Services
Hereunder.

      6.1   The Consultant will promptly and fully disclose to the Chief
Executive Officer of the Company any invention, improvement, discovery, process,
formula, technique, method, trade mark, trade secret, mask work, or other
intellectual property, whether or not patentable, whether or not copyrightable
(collectively, "Invention") made, conceived, developed, or first reduced to
practice by the Consultant, either alone or jointly with others, while
performing services hereunder. All such Inventions are work made for hire to the
extent allowed by law and, in addition, Consultant hereby assigns to the Company
all of his right, title and interest in and to any such Inventions. The
Consultant will execute any documents necessary to perfect the assignment of
such Inventions to the Company and to enable the Company to apply for, obtain,
and enforce patents or copyrights in any and all countries on such Inventions.
The Consultant hereby irrevocably designates the Secretary of the Company as his
agent and attorney-in-fact to execute and file any such document and to do all
lawful acts necessary to apply for and obtain patents and copyrights, and to
enforce the Company's rights under this paragraph. This Section 7 will survive
the termination of this Agreement.

      6.2   If any part of the Invention is based on, incorporates, or is an
improvement or derivative of, or cannot be reasonably and fully made, used,
reproduced, distributed and otherwise practiced or exploited without using,
infringing or violating technology or intellectual property rights owned or
licensed by Consultant and not assigned hereunder, Consultant hereby grants
Company a perpetual, irrevocable, worldwide royalty-free, non-exclusive, right
and license, with right to sublicense, to exploit and exercise all such
technology and intellectual property rights in support of Company's exercise or
exploitation of the Inventions, other work performed hereunder, or any assigned
rights (including any modifications, improvements and derivatives of any of
them).

7.    Confidentiality.

      7.1   The Consultant acknowledges that, during the course of performing
his services hereunder, the Company will be disclosing information to the
Consultant, and the Consultant will be developing information related to the
Field of Interest, Inventions, projects, products, potential customers,
personnel, business plans, and finances, as well as other commercially valuable
information (collectively "Confidential Information"). The Consultant
acknowledges that the Company's business is extremely competitive, dependent in
part upon the maintenance of secrecy, and that any disclosure of the
Confidential Information would result in serious harm to the Company.



      7.2   The Consultant agrees that the Confidential Information will be used
by the Consultant only in connection with consulting activities hereunder, and
will not be used in any way that is detrimental to the Company.

      7.3   The Consultant agrees not to disclose, directly or indirectly, the
Confidential Information to any third person or entity, other than
representatives or agents of the Company. The Consultant will treat all such
information as confidential and proprietary property of the Company.

      7.4   The term "Confidential Information" does not include information
that was: (i) publicly known and made generally available in the public domain
prior to the time of disclosure by the disclosing party; (ii) becomes publicly
known and made generally available after disclosure by the disclosing party to
the receiving party through no action or inaction of the receiving party; (iii)
is already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party's files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party's obligations of
confidentiality; and (v) is independently developed by the receiving party
without use of or reference to the disclosing party's Confidential Information,
as shown by documents and other competent evidence in the receiving party's
possession.

      7.5   The Consultant may disclose any Confidential Information that is
required to be disclosed by law, government regulation or court order. If
disclosure is required, the Consultant will give the Company advance notice so
that the Company may seek a protective order or take other action reasonable in
light of the circumstances.

      7.6   Upon termination of this Agreement, the Consultant will promptly
return to the Company all materials containing Confidential Information as well
as data, records, reports and other property, furnished by the Company to the
Consultant or produced by the Consultant in connection with services rendered
hereunder, together with all copies of any of the foregoing. Alternatively,
Consultant may destroy all Confidential Information and certify to the Company
that he has done so. Notwithstanding such return or destruction, the Consultant
shall continue to be bound by the terms of the confidentiality provisions
contained in this Section 8 for a period of three years after the termination of
this Agreement.

8.    Use of Name. It is understood that the name of the Consultant and
Consultant's affiliation with any third party will appear in disclosure
documents required by securities laws, and in other regulatory and
administrative filings in the ordinary course of the Company's business. The
above-described uses will be deemed to be noncommercial uses. The name of the
Consultant or any third party will not be used for any commercial purpose
without the Consultant's consent.

9.    No Conflict: Valid and Binding. The Consultant represents that neither the
execution of this Agreement nor the performance of the Consultant's obligations
under this Agreement (as modified to the extent required by Section 4) will
result in a violation



or breach of any other agreement by which the Consultant is bound. The Company
represents that this Agreement has been duly authorized and executed and is a
valid and legally binding obligation of the Company, subject to no conflicting
agreements.

10.   Notices. Any notice provided under this Agreement shall be in writing and
shall be deemed to have been effectively given (i) upon receipt when delivered
personally, (ii) one day after sending when sent by private express mail service
(such as Federal Express), or (iii) 5 days after sending when sent by regular
mail to the following address:

      In the case of the Company:

      Electro-Optical Sciences, Inc
      One Bridge Street, Suite 15
      Irvington, NY 10553

      In the case of the Consultant:

      Name:    Robert Friedman, M. D.
      Address: 56 Old Aspetong Road
               Katonah, NY 10536

or to other such address as may have been designated by the Company or the
Consultant by notice to the other given as provided herein.

11.   Independent Contractor: Withholding. The Consultant will at all times be
an independent contractor, and as such will not have authority to bind the
Company. Consultant will not act as an agent nor shall he be deemed to be an
employee of the Company for the purposes of any employee benefit program,
unemployment benefits, or otherwise. The Consultant recognizes that no amount
will be withheld from his compensation for payment of any federal, state, or
local taxes and that the Consultant has sole responsibility to pay such taxes,
if any, and file such returns as shall be required by applicable laws and
regulations. Consultant shall not enter into any agreements or incur any
obligations on behalf of the Company.

12.   Assignment. Due to the personal nature of the services to be rendered by
the Consultant, the Consultant may not assign this Agreement. The Company may
assign all rights and liabilities under this Agreement to a subsidiary or an
affiliate or to a successor to all or a substantial part of its business and
assets without the consent of the Consultant. Subject to the foregoing, this
Agreement will inure to the benefit of and be binding upon each of the heirs,
assigns and successors of the respective parties.

13.   Indemnification. The Company hereby indemnifies Contractor to the fullest
extent possible against any third-party claim of any type, excluding only claims
of intentional misconduct, arising with respect to any services performed
hereunder.



14.   If any provision of this Agreement shall be declared invalid, illegal or
unenforceable, such provision shall be severed and the remaining provisions
shall continue in full force and effect.

15.   Remedies. The Consultant acknowledges that the Company would have no
adequate remedy at law to enforce Sections 5, 7 and 8 hereof. In the event of a
violation by the Consultant of such Sections, the Company shall have the right
to obtain injunctive or other similar relief, as well as any other relevant
damages, without the requirement of posting bond or other similar measures.

16.   Governing Law; Entire Agreement; Amendment. This Agreement shall be
governed by the laws of the State of New York applicable to agreements made and
to be performed within such State, represents the entire understanding of the
parties, supersedes all prior agreements between the parties, and may only be
amended in writing.

IN WITNESS WHEREOF, this Agreement may be executed in counterparts, each of
which shall constitute an original and all of which together shall constitute
one instrument, effective as of the date first above written.

Electro-Optical Sciences, Inc:              Consultant: Robert Friedman

By:  /s/ William R. Bronner                 Signature: /s/ Robert Friedman
Its: Vice President



                                    EXHIBIT A

                               OTHER RELATIONSHIPS

                                      NONE

                                                                   Exhibit 10.15



            THIRD AMENDMENT TO ELECTRO-OPTICAL SCIENCES, INC. LEASE



This amendment is made the 6th day of June, 2005, by and between Bridge Street
Properties, LLC, a New York Limited Liability Company having an office at One
Bridge Street, Irvington, New York 10533, and Electro-Optical Sciences, Inc., a
Corporation having an office at One Bridge Street, Irvington, New York 10533.

                                  Witnesseth:

     Whereas, Owner (Bridge Street Properties, LLC) and Tenant (Electro-Optical
Sciences, Inc.) entered into a lease dated December 16th, 1998 of certain
premises located at One Bridge Street, Irvington, New York and

     Whereas, the term of the lease set forth therein is three years commencing
upon, December 16, 1998 and ending upon December 15, 2001 and

     Now, Therefore, the parties hereto agree as follows:

     1.   The term set forth herein will be four years and commence July 1,
          2005, and end on June 30, 2009.

     2.   The rate to be paid monthly/yearly will be as follows:

                                      Yearly            Monthly
                                      ------            -------
          7/1/05 - 6/30/06         $100,386.00         $8,365.50
          7/1/06 - 6/30/07         $103,397.58         $8,616.47
          7/1/07 - 6/30/08         $106,499.51         $8,874.96
          7/1/08 - 6/30/09         $109,694.49         $9,141.21

     3.   Clause #81, Termination Option, shall be removed.

     4.   New HVAC system shall be installed. The system will include 2
          thermostatically controlled air dampeners.

     5.   A $5,100 electric upgrade to be completed as per the specifications
          discussed with Andy Lyons.

     6.   Security Deposit will increase to $17,232.94 equal to last two months
          rent.

     7.   Continuation of Lease Provisions: Except as amended herein, all other
          terms and conditions of the Lease shall remain in full force and
          effect for the duration of the Lease.


/s/ William Thompson                        /s/ William Bronner
_____________________________________        __________________________________
Bridge Street Properties, LLC                Electro-Optical Science, Inc.



Managing Member                              Vice President
_____________________________________        __________________________________
Title                                        Title


                                       1

                                                                    EXHIBIT 14.1

                         ELECTRO-OPTICAL SCIENCES, INC.

                       CODE OF BUSINESS CONDUCT AND ETHICS

This Code of Business Conduct and Ethics (the "Code") sets forth legal and
ethical standards of conduct for directors, officers and employees of
Electro-Optical Sciences, Inc. (the "Company"). This Code is intended to deter
wrongdoing and to promote the conduct of all Company business in accordance with
high standards of integrity and in compliance with all applicable laws and
regulations. This Code applies to the Company and all of its subsidiaries (as in
existence from time to time) and other business entities controlled by it
worldwide. All references to employees herein shall be deemed to include
officers and directors unless the context specifically only relates to
employees.

If you have any questions regarding this Code or its application to you in any
situation, you should contact your immediate supervisor or the Company's Chief
Financial Officer (the "CFO").

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

The Company requires that all employees comply with all laws, rules and
regulations applicable to the Company wherever it does business. You are
expected to use good judgment and common sense in seeking to comply with all
applicable laws, rules and regulations and to ask for advice when you are
uncertain about them.

If you become aware of the violation of any law, rule or regulation by the
Company, whether by its officers, employees, directors, or any third party doing
business on behalf of the Company, it is your responsibility to promptly report
the matter to your immediate supervisor or the CFO. While it is the Company's
desire to address matters internally, nothing in this Code should discourage you
from reporting any illegal activity, including any violation of the securities
laws, antitrust laws, environmental laws or any other Federal, state or foreign
law, rule or regulation, to the appropriate regulatory authority. The Company
shall not discharge, demote, suspend, threaten, harass or in any other manner
discriminate or retaliate against an employee because he or she reports any such
violation, unless it is determined that the report was made with knowledge that
it was false. This Code should not be construed to prohibit you from testifying,
participating or otherwise assisting in any state or Federal administrative,
judicial or legislative proceeding or investigation.

CONFLICTS OF INTEREST

Employees must act in the best interests of the Company. You must refrain from
engaging in any activity or having a personal interest that presents a "conflict
of interest." A conflict of interest occurs when your personal interest
interferes, or appears to interfere, with the interests of the Company. A
conflict of interest can arise whenever you, as an employee, take action or have
an interest that prevents you from performing your Company duties and
responsibilities honestly, objectively and effectively. No

                                        1


employee shall use his or her position with the Company to influence a
transaction with a supplier or customer in which such person has any personal
interest, other than a financial interest representing less than one percent
(1%) of the outstanding shares of a publicly-held company.

OUTSIDE EMPLOYMENT STATEMENT

Each employee agrees to devote his or her full business time, attention, skill
and effort exclusively to the performance of the duties that the Company may
assign.

In general, outside work activities are not permitted when they:

      -     Prevent the employee from fully performing work for which he or she
            is employed at the Company, including overtime assignments for
            non-exempt employees;

      -     Involve performing services as a consultant, employee, officer,
            director, advisor or in any other capacity for, or have a financial
            interest in, a competitor of the Company, other than services
            performed at the request of the Company and other than a financial
            interest representing less than one percent (1%) of the outstanding
            shares of a publicly-held company; and

      -     Violate provisions of applicable state or Federal law or the
            Company's policies or rules.

REPORTING POTENTIAL CONFLICTS

It is your responsibility to disclose any material transaction or relationship
that reasonably could be expected to give rise to a conflict of interest to the
CFO. Approval will not be given unless the relationship will not interfere with
the employee's duties and will not damage the Company's reputation.

INSIDER TRADING

Employees who have material non-public information about the Company or other
companies, including our suppliers and customers, as a result of their
relationship with the Company are prohibited by law and Company policy from
trading in securities of the Company or such other companies, as well as from
communicating such information to others who might trade on the basis of that
information. To help ensure that you do not engage in prohibited insider trading
and avoid even the appearance of an improper transaction, the Company has
adopted an Insider Trading Policy, which employees are required to sign at the
start of their employment.

If you are uncertain about the constraints on your purchase or sale of any
Company securities or the securities of any other company that you are familiar
with by virtue of your relationship with the Company, you should consult with
the CFO before making any such purchase or sale.

                                        2


CONFIDENTIALITY

Employees must maintain the confidentiality of information entrusted to them by
the Company or other companies, including our suppliers and customers, except
when disclosure is authorized by a supervisor or legally mandated. Unauthorized
disclosure of any confidential information is prohibited. Additionally,
employees should take appropriate precautions to ensure that confidential or
sensitive business information, whether it is proprietary to the Company or
another company, is not communicated within the Company except to employees who
have a need to know such information to perform their responsibilities for the
Company.

Employees (other than the Company's authorized spokespersons) must not discuss
internal Company matters with, or disseminate internal Company information to,
anyone outside the Company, except as required in the performance of their
Company duties and after an appropriate confidentiality agreement is in place.
This prohibition applies particularly to inquiries concerning the Company from
the media, market professionals (such as securities analysts, institutional
investors, investment advisers, brokers and dealers) and security holders. All
responses to inquiries on behalf of the Company must be made only by the
Company's authorized spokespersons. If you receive any inquiries of this nature,
you must decline to comment and refer the inquirer to your supervisor or to one
of the Company's authorized spokespersons.

All employees at the start of their employment with the Company are required to
sign an Employee Invention, Non-Disclosure and Non-Compete Agreement (the
"Confidentiality Agreement"). Please keep in mind that the Confidentiality
Agreement is binding and enforceable. Employees unsure about the confidential
nature of specific information must ask their immediate supervisor or the CFO.
Employees will be subject to appropriate disciplinary action, up to and
including termination, for knowingly or unknowingly revealing information of a
confidential nature.

You also must abide by any lawful obligations that you have to your former
employer. These obligations may include restrictions on the use and disclosure
of confidential information, restrictions on the solicitation of former
colleagues to work at the Company and non-competition obligations.

ETHICAL STANDARDS

The Company intends to establish and maintain an outstanding reputation for
conducting its business activities. As an employee you are obligated to uphold
that reputation in every business activity. Employees should endeavor to deal
honestly, ethically and fairly with the Company's suppliers, customers,
competitors and employees. Statements regarding the Company's products and
services must not be untrue, misleading, deceptive or fraudulent. You must not
take unfair advantage of anyone through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts or any other
unfair-dealing practice. If you are ever in doubt as to whether an activity
meets our

                                       3


ethical standards or compromises the Company's reputation, please discuss it
with your immediate supervisor or the CFO.

PROTECTION AND PROPER USE OF CORPORATE ASSETS

Employees should seek to protect the Company's assets. Theft, carelessness and
waste have a direct impact on the Company's financial performance. Employees
must use the Company's assets and services solely for legitimate business
purposes of the Company and not for any personal benefit or the personal benefit
of anyone else.

Employees must advance the Company's legitimate interests when the opportunity
to do so arises. You must not take for yourself personal opportunities that are
discovered through your position with the Company or the use of property or
information of the Company.

GIFTS AND GRATUITIES

The use of Company funds or assets for gifts, gratuities or other favors to
employees or government officials is prohibited, except to the extent such gifts
are in compliance with applicable law, nominal in amount and not given in
consideration or expectation of any action by the recipient.

Employees must not accept, or permit any member of his or her immediate family
to accept, any gifts, gratuities or other favors from any customer, supplier or
other person doing or seeking to do business with the Company, other than items
of nominal value. Any gifts that are not of nominal value should be returned
immediately and reported to your immediate supervisor or the CFO. If immediate
return is not practical, they should be given to the Company for charitable
disposition or such other disposition as the Company believes appropriate in its
sole discretion.

Common sense and moderation should prevail in business entertainment engaged in
on behalf of the Company. Employees should provide, or accept, business
entertainment to or from anyone doing business with the Company only if the
entertainment is infrequent, modest and intended to serve legitimate business
goals.

Bribes and kickbacks are criminal acts, strictly prohibited by law. You must not
offer, give, solicit or receive any form of bribe or kickback anywhere in the
world.

ACCURACY OF BOOKS AND RECORDS AND PUBLIC REPORTS

Employees must honestly and accurately report all business transactions. You are
responsible for the accuracy of your records and reports. Accurate information
is essential to the Company's ability to meet legal and regulatory obligations.

All Company books, records and accounts shall be maintained in accordance with
all applicable regulations and standards and accurately reflect the true nature
of the

                                        4


transactions they record. The financial statements of the Company shall conform
to generally accepted accounting rules and the Company's accounting policies. No
undisclosed or unrecorded account or fund shall be established for any purpose.
No false or misleading entries shall be made in the Company's books or records
for any reason, and no disbursement of corporate funds or other corporate
property shall be made without adequate supporting documentation.

It is the policy of the Company to provide full, fair, accurate, timely and
understandable disclosure in reports and documents filed with, or submitted to,
the Securities and Exchange Commission (the "SEC") and in other public
communications.

CONCERNS REGARDING ACCOUNTING OR AUDITING MATTERS

Employees with concerns regarding questionable accounting or auditing matters or
complaints regarding accounting, internal accounting controls or auditing
matters may confidentially, and anonymously if they wish, submit such concerns
or complaints in writing to the CFO. See "Reporting and Compliance Procedures."
All such concerns and complaints will be forwarded to the Audit Committee of the
Board of Directors, unless they are determined to be without merit by the
Company's Chief Executive Officer (the "CEO") and CFO of the Company. In any
event, a record of all complaints and concerns received will be provided to the
Audit Committee each fiscal quarter. All reports filed regarding questionable
accounting or auditing matters will be automatically directed to the Chairperson
of the Audit Committee.

The Audit Committee will evaluate the merits of any concerns or complaints
received by it and authorize such follow-up actions, if any, as it deems
necessary or appropriate to address the substance of the concern or complaint.

The Company will not discipline, discriminate against or retaliate against any
employee who reports a complaint or concern, unless it is determined that the
report was made with knowledge that it was false.

DEALINGS WITH INDEPENDENT AUDITORS

No employee, officer or director shall, directly or indirectly, make or cause to
be made a materially false or misleading statement to an accountant in
connection with (or omit to state, or cause another person to omit to state, any
material fact necessary in order to make statements made, in light of the
circumstances under which such statements were made, not misleading to, an
accountant in connection with) any audit, review or examination of the Company's
financial statements or the preparation or filing of any document or report with
the SEC. No employee, officer or director shall, directly or indirectly, take
any action to coerce, manipulate, mislead or fraudulently influence any
independent public or certified public accountant engaged in the performance of
an audit or review of the Company's financial statements.

                                        5


WAIVERS OF THIS CODE OF BUSINESS CONDUCT AND ETHICS

While some of the policies contained in this Code must be strictly adhered to
and no exceptions can be allowed, in other cases exceptions may be possible. Any
employee who believes that an exception to any of these policies is appropriate
in his or her case should first contact his or her immediate supervisor. If the
supervisor agrees that an exception is appropriate, the approval of the CFO must
be obtained. The CFO shall be responsible for maintaining a complete record of
all requests for exceptions to any of these policies and the disposition of such
requests.

REPORTING AND COMPLIANCE PROCEDURES

Every employee has the responsibility to ask questions, seek guidance, report
suspected violations and express concerns regarding compliance with this Code.
Any employee who knows or believes that any other employee or representative of
the Company has engaged or is engaging in Company-related conduct that violates
applicable law or this Code should report such information to his or her
immediate supervisor or to the CFO, as described below. You may report such
conduct openly or anonymously without fear of retaliation. The Company will not
discipline, discriminate against or retaliate against any employee who reports
such conduct, unless it is determined that the report was made with knowledge
that it was false, or who cooperates in any investigation or inquiry regarding
such conduct. Any supervisor who receives a report of a violation of this Code
must immediately inform the CFO.

You may report violations of this Code, on a confidential or anonymous basis, by
contacting the CFO or Audit Committee Chairperson by fax, mail or e-mail. While
we prefer that you identify yourself when reporting violations so that we may
follow up with you, as necessary, for additional information, you may do so
anonymously if you wish.

Once information regarding an alleged violation of this Code has been received,
the receiver of such information, the CFO or Audit Committee Chairperson) shall,
as appropriate, (a) evaluate such information, (b) if the alleged violation
involves an executive officer or a director, inform the CEO and Board of
Directors of the alleged violation, (c) determine whether it is necessary to
conduct an informal inquiry or a formal investigation and, if so, initiate such
inquiry or investigation, and (d) report the results of any such inquiry or
investigation, together with a recommendation as to disposition of the matter,
to the CEO for action, or if the alleged violation involves an executive officer
or a director, report the results of any such inquiry or investigation to the
Board of Directors or a committee thereof. Employees are expected to cooperate
fully with any inquiry or investigation by the Company regarding an alleged
violation of this Code. Failure to cooperate with any such inquiry or
investigation may result in disciplinary action, up to and including discharge.

The Company shall determine whether violations of this Code have occurred and,
if so, shall determine the disciplinary measures to be taken against any
employee who has violated this Code. In the event that the alleged violation
involves an executive officer or

                                        6


a director, the CEO and the Board of Directors, respectively, shall determine
whether a violation of this Code has occurred and, if so, shall determine the
disciplinary measures to be taken against such executive officer or director.

Failure to comply with the standards outlined in this Code will result in
disciplinary action, up to and including termination. Certain violations of this
Code may require the Company to refer the matter to the appropriate governmental
or regulatory authorities for investigation or prosecution. Moreover, any
supervisor who directs or approves of any conduct in violation of this Code, or
who has knowledge of such conduct and does not immediately report it, also will
be subject to disciplinary action, up to and including termination.

DISSEMINATION AND AMENDMENT

This Code shall be distributed to each new employee, officer and director of the
Company upon commencement of his or her employment or other relationship with
the Company and shall also be distributed annually to each employee, officer and
director of the Company, and each employee, officer and director shall certify
that he or she has received, read and understood the Code and has complied with
its terms.

The Company reserves the right to amend, alter or terminate this Code at any
time for any reason.

Adopted by the Board of Directors of Electro-Optical Sciences, Inc. on May 13,
2005

                                       7

                                                                    Exhibit 23.1


The following consent is in the form that will be signed upon the effectiveness
of the one-for-two reverse common stock split described in Note 1 to the
financial statements.


/s/ Eisner LLP


New York, New York
July 15, 2005


CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated May 31, 2005 in the Registration Statement on Form S-1
(No.333-125517) and related Prospectus of Electro-Optical Sciences, Inc.


Eisner LLP
New York, New York