California Science & Engineering Corporation

A DIVISION OF “CALSEC”

Technology Transfer from Defense-to-Medicine

BioAtom, Inc. of Costa Mesa, California is developing

O N C O S E N S O R^TM

                 World’s First Neutron Breast Cancer Detector designed to provide:

         ● Walk-in 3 minute Non-invasive diagnostics ● Direct chemical identification of malignancy

         ● No Intravenous fluid ● Portable and inexpensive ● Commercial use in animal clinics

            without the need for FDA permit would result in “Fast Track” FDA 510K for human use.

needle-less biopsy of breast tumor

Following a mammography test, O N C O S E N S O R^TM would illuminate the breast of a patient with fast neutrons from below (white inset).  A Patient inhales harmless oxygen or oxygen-rich carbogen.  Gamma rays from the breast tumor are analyzed by detectors (inverted V).  Operator pushes red button: “is tumor malignant?”  30 seconds to 3 minutes later, YES or NO or  MARGINAL, CHECK MORE would appear on the screen, as well as degree of malignancy on scale 1 - 100.  On average, 80% of ‘suspicious’ tumors are benign, but often calcified.

O N C O S E N S O R^TM is also designed to perform a test for Calcium levels in a tumor and display “Calcified”/“Non-Calcified” on screen.

Sensitivity of noninvasive molecular imaging probes - Mammograms, Ultrasound, MRI and Molecular Imaging – has reached 98%.  But Specificity, the ability to distinguish between cancerous and benign tumors, is only 50% to 70% at best, thus it misses 30% to 50% cancers, which is unacceptable. Only surgical biopsy has an acceptable specificity of 95%.  So, every suspected breast tumor must be punctured, even though only 20% end up being malignant.  We project ONCOSENSOR^TM’s specificity will be at least 95%.  ONCOSENSOR^TM is not an imager. It works in tandem with an imaging system, except in cases of palpable tumors.

CALSEC,  3100 Airway Ave. Suite 112, Costa Mesa CA Tel.: (714) 966-2986; E-mail: maglich@calseco.com; Website: www.calseco.com

FOR IMMEDIATE RELEASE

The Economic Report      Contact: Public Relations

 “THE ECONOMIC REPORT” FEATURES BIOATOM, INC.

December 10, 2009, Deerfield Beach, FL – The producers of The Economic Report are pleased to announce that BioAtom, Inc. is showcased in the episode highlighting Leading Developments in Diagnostic Technologies as part of the show’s Medical Minutes series, aired by CNN and Fox.

As new diagnostic technologies emerge for the detection of cancer, invasive procedures such as needle and surgical biopsies, as well as exposure to large amounts of radiation, may one day be a thing of the past. Leading developments in neutron cancer diagnostics by Costa Mesa, California-based BioAtom, Inc. provide hope that accurate, instantaneous, non-invasive alternatives, without intravenous fluid, are on the way.

The company’s O N C O S E N S O R^TM, a femto-technology probe, is scheduled to undergo in vivo evaluation at the Center for Functional Onco Imaging at UC Irvine, in collaboration with the Radiation Oncology Group at Long Beach Memorial Hospital.

The O N C O S E N S O R^TM was conceived, developed and patented by Dr. Anna Z. Radovic, a University of California, Irvine trained molecular biologist and international cancer researcher who was first to irradiate DNA nucleotides by neutrons, and Dr. Bogdan Maglich, the developer of the core technology that was originally used to detect bombs, who was elected one of the “50 Champions of Innovation” by Fast Company magazine.  It is a striking case of high technology transfer from defense to medicine.

“Our mission is to provide an early warning, walk-in, painless and instant cancer diagnosis aid that is a quantum leap.  It can operate in tandem with any one of the current imaging probes,” says Chief Technology Officer, Dr. Bogdan Maglich. “We hope to ultimately achieve needle-less biopsy. The method has the potential for the forewarning of stroke, Alzheimer’s and cardiovascular diseases,” says President and Chief Scientific Officer, Dr. Anna Radovic.

The five-minute segment, filmed on two locations in California, will educate viewers on the capabilities of O N C O S E N S O R^TM.  It includes interviews with co-inventors and with Prof. A. M. N. Syed, M. D., renowned specialist in Brachytherapy and the Director of Radiation Oncology and Endocurietherapy at the Cancer Institute at Long Beach Memorial Hospital, with Prof. O. Nalcioglu, Head, Division of Physics & Engineering/Rad Sci., Director of Functional Onco Imaging at UC Irvine and a major inventor in the field of NMR and X Ray imaging.

PLEASE FOLLOW INSTRUCTION UNDERNEATH TO SEE BIOATOM’S INTERVIEW FOR CNN & FOX

1. Go to http://www.filestogo.com

2. In the upper left hand corner, enter "bioatominc" for the User, and enter "video" for the Password and click on "Login".

3. Choose the "Download" tab at the top of the page.

4. Choose  the second presentation “bioatominc.mpg" and choose "Alternate Download Method", and on the next page, and right click on the box that says "Right Click  Here to Download", select “Save Target As.” This dialog will ask you where you would like to save the MPEG file to.  The Desktop is a good place, so the file can be easily found.

CALSEC,  3100 Airway Ave. Suite 112, Costa Mesa CA Tel.: (714) 966-2986; E-mail: maglich@calseco.com; Website: www.calseco.com

BIOATOM TEAM

Professor Dr. Bogdan Maglich, Chief Technology Officer of CSEC, is the inventor of Atometry and was recently elected one of “50 Champions of Innovation” worldwide.  An internationally renowned experimental particle physicist, Dr. Maglich, who was honored by two US Presidents, holds a Ph.D. from MIT, was Professor of Physics at Univ. of Pennsylvania. A Patentee on over a dozen inventions in nuclear instrumentation, he was Team Leader at a number of US national laboratories and international research centers, including Lawrence Berkeley National Lab, Brookhaven National Lab, CERN European Lab for Particle Physics, Air Force Weapons Lab, etc. 

Chris Druey, President Centurion Div. and Vice President CSEC, medical device and neutron radiology industrial engineer, former U.S. defense signal intelligence officer, has been instrumental in development and commercialization of both the imaging diagnostic technologies and neutron radiation-based drug and explosive sensors.

Professor Nisar Syed: M.D., F.R.C.S., former Chancellor and Vice- Chair of the American College of Radiation Oncology & Director of Radiation Oncology and Endocurietherapy at the Memorial Cancer Institute at Long Beach Memorial Hospital.  He holds 6 academic appointments including 3 Clinical Professorships in the Depts. of Radiation Oncology at the Univ. of Southern CA, UCI and the LA County Martin Luther King Jr., Drew Medical Center.

Professor Orhan Nalcioglu, UCI, Director Tu & Yuen Center for Functional Onco-Imaging; Head, Division of Physics & Engineering/Rad Sci, Electrical Engineering & Computer Science, The Henry Samueli School of Engineering. His research interests include Nuclear MRI & Spectroscopy, Digital Radiography & Computed Tomography.

Myron Karasik, Chief Financial Officer Pro-Tem, partner with TATUM
PARTNERS LLC., a business leader with 10 years executive experience.

EVALUATION BY MEMBERS OF MEDICAL COMMUNITY:

· “If O N C O S E N S O R^tm turned out to be what is proposed, for the clinical market it could have great potential. It could replace or be complimentary to mammograms if they can validate their claims. I don’t know that it would ever replace a need for biopsy but it could be an excellent screening device… I would enjoy meeting the Researcher for more discussions and see their presentation.”

· “This is an interesting technology that rests upon the finding that cancerous tumors contain broken DNA and less oxygen than the surrounding normal tissue.  The trend in medical science is to understand and control at the smallest possible scale.  OCT medical imaging is able to see tissue at a cellular level. This new technology aims to see tissue at the molecular level. Dr. Maglich’s original work was done for the detection of bombs inside containers. BioAtom wants to apply the technology to diagnosis cancer without biopsy. They also want to be able to monitor cancer treatments. . . If Dr. Radovic can present a PowerPoint and manage a company like Carolyn Fritz, BioAtom could be a winner. . . ”

DONALD BAILLARGEON, TELEVISION HOST OF “YOUR CANCER TODAY”:

· “What I find particularly fascinating about your work is that it is able to be done outside of the body, whereas before, or even current medicine, it has to be removed as a biopsy to see if it is malignant. You can make that decision just by aiming the rays at it... And you can make a decision outside of the body without surgery.” (two interviews at www.yourcancertoday.com, season 1 episode 3; season 2 episode 7)

NEW YORK PRESBYTERIAN HOSPITAL:

· “BioAtom’s technology is promising for healthcare but requires significant development before it is market ready. NYP is able to support the needed development.” (Profs Susan Pannullo, Director of Neuro-Oncology, Cornell Univ. Hospital, DeLaPaz, Director of Neuroradiology, Columbia Hospital)

CALSEC,  3100 Airway Ave. Suite 112, Costa Mesa CA Tel.: (714) 966-2986; E-mail: maglich@calseco.com; Website: www.calseco.com

EXECUTIVE SUMMARY

Background - Neutron Femto-Oximetry was first developed for explosive detection as ‘Fast Neutron Atometry’ at a cost of $44 million, supported by DOD and private capital, and the Principals of BioAtom, who hold IP for both defense and medical applications.

Business Model - Our business model is Varian Medical, a dual use operation which promotes security products in addition to medical technologies without suffering devaluation.  BioAtom has a second separate Division, Centurion for explosives & environmental detectors (EED) that would go public by the end 2010.  Both divisions utilize the same neutron diagnostic core technology, allowing there to be a Joint Technical Center sharing all facilities.  Such a combination is projected to provide a significant revenue base to advance the overall goals of the company by providing funds from the sale of EED equipment that was approved by NATO, US Army, and FBI from 2002-2005. 

Profitability - The Company’s policy is focused on bringing to the market within 3 months from the UCI evaluation trials, a simple, stand alone, manually aimed O N C O S E N S O R^TM 100 for veterinarian clinics.  Concurrently, we will seek an FDA Investigational Device Exemption (“IDE”) for medical researchers to test O N C O S E N S O R^TM OS-200 series on humans.  Its application will be focused on 3 types of near-surface palpable tumors: breast, head & neck, and prostate.  We anticipate commercialization of the OS-200s as Beta models already in Year 2 by leasing them to accredited research hospitals as an MTR device once a 510K has been granted by the FDA.

Return on Investment - From our manufacturing experience we project the “OS-100” unit fabrication cost of $90,000, to be sold at $180,000 plus a service contract and options.  Global market for the OS-200 is 1,000 units/year that is, $330-$400 million/year.  70% of it would be captured by BioAtom during first 5 years, provided an adequate capitalization is secured.  In light of the large markup, we anticipate an annual ROI of 30% (not counting the stock appreciation).

Marketing Advantages - O N C OS E N SO R^TM is a 5 times faster and 5 times more accurate analyzer of MTR, and at 5 times lower cost to the user that the present products.  1) Production: Sell 160 units in year 2 to 1600 in year 5, initial ROI 30%; 2) Maintain 200% markup per unit; 3) Capture 1%-10% of the

$5.4 billion world market for all cancer diagnostic equipment or annual revenues of $54-$540 million over 5 years; 4) Capture over 50% of world market for neutron cancer diagnostics (projected $540 million in year 5).

Next step - Evaluation of O N C O S E N S O R^TM by animal trials has been scheduled for a 3-5 month period beginning early 2010.  Trials will be conducted at the Center for Functional Onco Imaging at UCI which has decades of animal trials experience.  It will be supervised by its Director, Prof Orhan Nalcioglu.  The Center possesses 4 MRI’s, 2 of them continuously used for animals, plus numerous CT and PET devices.  The Animal trial Protocol for the “Evaluation of O N C O S E N S O R^TM” has been approved by the UCI Internal Review Board.  Based on our In Vitro measurements of animal tissue, we are certain to be able to detect 30% or greater hypoxia in a 1 cm DIA tumor.  The only question is how many minutes it would take.  Our simulations predict 10 min with 1 gamma detector, 1 min with 10 detectors.  By Spring of 2010, we project to have conclusive proof that neutrons can detect cancer, representing an event in the history of medicine that may change the entire medical diagnostic landscape.  It will trigger 3 parallel activities of BioAtom:

1) FDA Application.

2) Search for a strategic partner.

3) Commercial sales to Animal Hospitals.  BioAtom’s plan calls for selling or leasing a simple no-frills model of O N C O S E N S O R^TM, Model 100, to cancer diagnostic and treatment centers that do not require FDA approval.  There are 68 Animal Cancer Hospitals and about 20,000 general vet clinics nationwide.  Animal health is an annual market of $13 Billion in the USA.  Treatments are paid for by cash and without regulatory ceilings.

CALSEC,  3100 Airway Ave. Suite 112, Costa Mesa CA Tel.: (714) 966-2986; E-mail: maglich@calseco.com; Website: www.calseco.com

CENTURION DIVISION

AXIOR^™ Advanced Explosive Identification and Recognition

AXIOR^TM features a femto-sensor neutron based technology called GAMMUTRON^TM used in the identification and recognition of concealed explosives.

TERMINATING NEMESES THAT PLAGUE THE 21^st CENTURY!

CARBOMBS & IEDs

PRODUCTS

Car Bomb (VBIED) Detection “CAR BOMB CATCHER”

· Axior™ 700 series                                STEALTH LIFE SAVER

US Patent Pending, September 15th, 2009

IED’s – Improvised Explosive Devices

· IED Detection - Axior™ 800 series

GAMMUTRON^TM Consists of 5 separate inventions

CENTURION DIVISION 3100 Airway Ave, Suite 112; Costa Mesa, CA 92626; 714-966-2986;  Fax 714-549-6764; Website: www.calseco.com

UNIQUE FEATURES of Centurion’s GammuTron^TM

1. Chemically Specific identification of the presence of explosives.

2. 'Instant' - displays results online in 10's of seconds to 3 minutes, depending on size and distance.

3. 'Trans-Barrier' - operates through plastic, metal and up to 1" thick steel and other solid partitions.

4. Unmanned - requires no human intervention.  Operates remotely via fiber optic or wireless.

5. Safe Radiation during neutron illumination, emitting 1 -10% that of CT and X-Ray doses.

6. Near Zero Radiation to humans after neutron illumination - practically no residual radioactivity.  Gamma rays are emitted instantly, leaving little or no "activations" of the target material.

7. High Sensitivity: 97 - 99% (1-3% missing positives).

8. High Specificity: 97 - 99% (1- 3% missing positives).

Centurion's patented GAMMUTRON^TM (formerly FNA) is a "Femto-Technology" employed in cutting edge homeland security explosive identification systems.  Fast neutrons have a femto-meter wavelength, a millionth of a nanometer or the size of an atomic nucleus, allowing deeper penetration into matter.  Fast neutrons interact 'locally' with each single atomic nucleus in hidden substances, unaffected by molecular bonds.  Our proprietary algorithms ‘count’ atoms to synthesize the gamma spectrum data emitted by an irradiated specimen, outputting a precise empirical chemical formula or “Fingerprint” of the target.

DETECTING HIGH EXPLOSIVES

The majority of high explosives have higher densities than common materials.  Nitrogen content of explosives is in close proportion to oxygen content (31% ± 12 for N and 45% ±8 for O).  Centurion’s GammuTron^TM technology can exploit hidden materials imbedded in clutter or steel barriers to measure Oxygen, Nitrogen and Carbon content as well as perchlorate and chlorate salts used in more exotic explosives.  Deciphering chemical formula enables real time calculation of the Probability of Detection (POD) that other technologies fail to even publish about their systems.  Our high accuracy threshold (98% POD) virtually eliminates false alarms (positives and negatives); giving first responders an advanced tool they need to save human lives!

Scope of VBIEDs according to the Bureau of Alcohol, Tobacco, Firearms & Explosives

CENTURION DIVISION 3100 Airway Ave, Suite 112; Costa Mesa, CA 92626; 714-966-2986;  Fax 714-549-6764; Website: www.calseco.com

1000’s of People die each year due to Car Bombs…

AXIOR^™ 702 – “CAR BOMB  CATCHER”  ●  STEALTH  LIFE SAVER!

Axior^TM 700 series is a speed bump borne stealth, real time, noninvasive, dual role primary & secondary detector of large bombs (60 to 1000 Lbs) in car trunks and VBIEDs at airports, secure parking lots, military checkpoints, and high security installations.  The AXIOR^TM 702 employs a femto-technology that enables chemical specific identification of concealed explosives.

· Our system has been successfully tested by AENA, the airport security agency in Spain, Turkish Bomb squads and the FBI.  Car bombs can be detected within 10 - 30 seconds with an accuracy of 98%.

CENTURION DIVISION 3100 Airway Ave, Suite 112; Costa Mesa, CA 92626; 714-966-2986;  Fax 714-549-6764; Website: www.calseco.com

CALSEC  Products for Oil Industries

Petrochem Gammutron Products

1. GAMMUTRON  PETRO-100: Noninvasive crude oil origin identifier

Differentiates  online through steel pipe sweet Saudi from Bakersfield crude in 3 minutes by measuring neutron-induced sulfur gamma rays. TESTED in 2003

2. GAMMUTRON PETRO-200: Noninvasive water monitor in crude

Measures online through steel pipe percentage of water in ant crude in 3 minutes by measuring neutron-induced oxygen gamma rays. TESTED in 2003

3. GAMMUTRON PETRO-800: Remote online monitor of refractory wall thickness by measuring neutron induced gamma ray spectrum from the outside, while high temperature process running. FIRST PHASE TESTED JOINTLY WITH EXXONMOBIL IN 2005. CONCLUSION: REDESIGN WAS REQUIRED. (STOPPED AFTER HOSTILE TAKEOVER. Dr. Kevin McKinny, inventor, left HiEnergy for Texas. Patent Application pending; needs revival. Can be continued with or w/o McKinny – better with).

CENTURION DIVISION 3100 Airway Ave, Suite 112; Costa Mesa, CA 92626; 714-966-2986;  Fax 714-549-6764; Website: www.calseco.com