1. SCIENTIFIC INNOVATIONS, INC. Scientific Innovations, Inc. Joseph Brondo President and CEO Prepared by Kenneth C. Ehrhardt Scientific Innovations, Inc. Joseph Brondo President and CEO Prepared by Kenneth C. Ehrhardt OVERVIEW SCIENTIFIC INNOVATIONS INC. “MGRIDS” TECHNOLOGY OVERVIEW SCIENTIFIC INNOVATIONS INC. “MGRIDS” TECHNOLOGY SCIENTIFIC SCIENTIFIC Innovations Innovations Inc. Inc.

2. SCIENTIFIC INNOVATIONS, INC. CAPABILITIES AND BUSINESS FOCUS AREAS Scientific Innovations, Inc. has developed a unique, patented and specific technology capable of identifying threats from a variety of sources. This technology, known as MGRIDS, can be specifically configured to identify: ExplosivesNuclear or Radioactive Drugsmaterials (dirty bombs) Other contrabandMedical Scanning Our business can be divided into 8 distinct areas based on the specific application of the technology. These areas of focus are: Shipping ContainerAirline baggage and cargo Passenger scanningVehicle scanning Border securityIED Detection Mobile ScanningFull body medical scanning

3. SCIENTIFIC INNOVATIONS, INC. SPECIFIC BUSINESS AREAS Shipping Containers – these are ocean containers entering the U.S. from various ports from around the world. (Also applicable to rail) Airline Baggage and Cargo – located in airports to provide rapid scanning and positive identification of all non-passenger cargo. Passenger Scanning – provides a positive, safe and thorough method to scan people for a variety of contraband materials. Vehicle Scanning – provides the opportunity to identify threats aboard moving vehicles. Border Security – can be established at either fixed or open terrain border locations. IED Detection – utilizing an open field scanning approach, this sector will focus on the identification of randomly placed IED’s. Mobile Scanning – focused on the development of individual units that can be temporarily positioned at any location. Full Body Medical - develop opportunities for medical end uses.

4. SCIENTIFIC INNOVATIONS, INC. WHAT IS MGRIDS MGRIDS - Mono-Energetic Gamma Resonance Imaging and Detection System is the newest and Only technology capable of Simultaneously Detecting and Specifically Identifying multiple threats from contraband stored in varying container types regardless of size or shape up to 300 meters away MGRIDS IS – The Solution To Legislated Inspection Critical Features: 1.Simultaneous inspection, detection and identification of Explosives, Nuclear materials and Drugs based on their unique chemical make up 2.High throughput scanning capability with > 95% accuracy 3.Proven technology with intellectual property covered by 36 current US and International patents 4.Fully automated decision making with element specific 3-D imaging 5.Testing is non-destructive, non-invasive and safe

5. SCIENTIFIC INNOVATIONS, INC. MGRIDS - CAPABILITY Open architecture allows for specific designs for each unique application Open architecture allows for specific designs for each unique application Detection configurations can be designed for portal, standoff, transportable and remote sensing – up to a distance of 300 meters from the source Detection configurations can be designed for portal, standoff, transportable and remote sensing – up to a distance of 300 meters from the source Target design can be done in a manner that is very specific for the detection a given element or very broad so as to encompass detecting many different elements depending on the application Target design can be done in a manner that is very specific for the detection a given element or very broad so as to encompass detecting many different elements depending on the application 3-D tomographic imaging of total contents with simultaneous analysis by element yielding unique threat identity, quantity and location 3-D tomographic imaging of total contents with simultaneous analysis by element yielding unique threat identity, quantity and location Configurable for multiple discrete scanning stations powered by one proton accelerator Configurable for multiple discrete scanning stations powered by one proton accelerator Fully automated decision capability with minimal operator interpretation and threat identification training Fully automated decision capability with minimal operator interpretation and threat identification training

6. SCIENTIFIC INNOVATIONS, INC. MGRIDS – MARKET ANALYSIS Public Law 110-161 requires that by the end of 2010 100% of all incoming containers must be scanned for potential threatsPublic Law 110-161 requires that by the end of 2010 100% of all incoming containers must be scanned for potential threats September 30, 2006 U.S. Congress passed H.R. 4954 authorizing a $3.4 billion port security billSeptember 30, 2006 U.S. Congress passed H.R. 4954 authorizing a $3.4 billion port security bill  The bill authorizes $400 million per year spending through 2011 for direct grants to ports to be spent on equipment and training All current detection systems rely on x-ray technology or other latent chemical analysis that DO NOT yield specific threat identificationAll current detection systems rely on x-ray technology or other latent chemical analysis that DO NOT yield specific threat identification ONLY MGRIDS can identify the unique threat(s) and determine the quantity and locationONLY MGRIDS can identify the unique threat(s) and determine the quantity and location

7. SCIENTIFIC INNOVATIONS, INC. MGRIDS – Market Analysis U.S. only locations for MGRIDS units Additional revenue potential:  MGRIDS sales outside the U.S.  After-market parts, training, services

8. SCIENTIFIC INNOVATIONS, INC. MGRIDS: POTENTIAL USERS AND APPLICATIONS Force Protection (DoD) Military Bases Counter-terrorism Explosives Detection in Vehicles Mine detection in the field Warhead/Rocket QC (DoD) Crack & Void Detection Mixture Quality Medical Research Neutron Capture Therapy Whole Body Composition Environmental Cleanup (DoD) ) Unexploded Ordnance Detection Mine Field Clearance US Customs (DHS) Border Control Seaports Buildings Explosives, Nuclear Material or Drug Detection in Vehicles and Containers MGRIDS Technology Department of Transportation (DoT Department of Transportation (DoT) FAA Explosives Detection in Cargo Checked baggage inspection Scanning trucks/vehicles Warhead/Rocket QC (DoD) Crack & Void Detection Mixture Quality Private Sector Stadium or arena protection

9. SCIENTIFIC INNOVATIONS, INC. Government and Private Funding 19901992 2000 1998 1996 1994 1988 FAA $12M DARPA $10M FAA $3M BNL $1M More than $27M invested by US government for R&D to date. Private Funds provided by Scientific Innovations Inc. Private Funds provided by EDO Corporation ( ITT ) Private Funds provided by Grumman Aerospace Corporation Private Funds provided by Northrop Grumman Co. Private Funds provided by Advanced Energy Systems Private Funds provided by General Atomics Manhattan Project and BAA04-02) Government and Private Funds from 1985 to present 2012 Congressional Authorizations $15M

10. Government Involvement Department of Energy Laboratories Department of Energy Laboratories Department of Defense Laboratories Department of Defense Laboratories Department of Homeland Security Department of Homeland Security Defense Advanced Research Projects Agency Defense Advanced Research Projects Agency Department of Transportation Department of Transportation Transportation Security Administration Transportation Security Administration Air Force Technical Assistance Command Air Force Technical Assistance Command U.S. Customs U.S. Customs Coast Guard Coast Guard Pentagon Pentagon Naval Surface Warfare Centers (Dahlgren, Yorktown, Indian Head, EOD) Naval Surface Warfare Centers (Dahlgren, Yorktown, Indian Head, EOD) Naval Research Laboratory, Office of Naval Research Naval Research Laboratory, Office of Naval Research SCIENTIFIC INNOVATIONS, INC.

11. CURRENT STATUS OF THE MGRIDS PROGRAM MGRIDS is ready to move into the commercial development stageMGRIDS is ready to move into the commercial development stage Intellectual property is protected with additional patent applications on file, being processed or ready to submitIntellectual property is protected with additional patent applications on file, being processed or ready to submit Proof of concept completed and documentedProof of concept completed and documented In Less Than 1 Year of securing funds, 1 MGRIDS demonstration unit can be readied and commercial units can be manufactured for specific end usesIn Less Than 1 Year of securing funds, 1 MGRIDS demonstration unit can be readied and commercial units can be manufactured for specific end uses Within 1 Year, SII will Initiate customer demonstrations and begin taking ordersWithin 1 Year, SII will Initiate customer demonstrations and begin taking orders SII is seeking funds to make MGRIDS a viable and valuable commercial product.SII is seeking funds to make MGRIDS a viable and valuable commercial product.

12. SCIENTIFIC INNOVATIONS, INC. MGRIDS – OPERATION AND PUBLIC SAFETY The proton accelerator produces low energy x-rays that are managed at the accelerator and controlled by shielding at the sourceThe proton accelerator produces low energy x-rays that are managed at the accelerator and controlled by shielding at the source Protected and highly collimated proton beamProtected and highly collimated proton beam Radiation dose required to analyze Nitrogen (N) in the human body is 0.026 mrem - about 1/40 of the exposure from a dental x-rayRadiation dose required to analyze Nitrogen (N) in the human body is 0.026 mrem - about 1/40 of the exposure from a dental x-ray Dose to a stowaway or operator would be considerably lower than that noted aboveDose to a stowaway or operator would be considerably lower than that noted above Target produces only gamma radiation, no neutrons, therefore no induced radioactivity of surrounding objectsTarget produces only gamma radiation, no neutrons, therefore no induced radioactivity of surrounding objects The gamma flux is up to three orders of magnitude lower than any current commercial competitive system e.g.VACIS, CT systems and other “soft x-ray” systems.The gamma flux is up to three orders of magnitude lower than any current commercial competitive system e.g.VACIS, CT systems and other “soft x-ray” systems.

13. SCIENTIFIC INNOVATIONS, INC. The proton accelerator generates a proton beam that hits the target that then produces a gamma beam field MGRIDS – SYSTEM AND MAIN COMPONENTS The produced gamma beams interact with the object of interest creating a unique signal signature that is received by the detectors. Inspected Object Detectors Proton Accelerator Target Gamma Beams

14. SCIENTIFIC INNOVATIONS, INC. MGRIDS – MULTIPLICITY OF INSPECTION STATIONS Single system can feed four inspection stations simultaneously at one location Single system can feed four inspection stations simultaneously at one location Single system can feed three inspection locations alternately

15. SCIENTIFIC INNOVATIONS, INC. MGRIDS – POTENTIAL FIELD DEPLOYMENT

16. SCIENTIFIC INNOVATIONS, INC. MGRIDS – POTENTIAL FIELD DEPLOYMENT StackedContainersDetectorsResonance Gamma GammaBeam 36’ 8’ 18’ Target 21’ Simultaneous inspection of 4-40’ containersSimultaneous inspection of 4-40’ containers A 2 container stack will double the throughputA 2 container stack will double the throughput Scan time <4 minutesScan time <4 minutes (Times extrapolated from experiments)(Times extrapolated from experiments)

17. SCIENTIFIC INNOVATIONS, INC. MGRID – PROOF-OF-PRINCIPLE EXPLOSIVES IDENTIFICATION Nitrogenous and andnon-nitrogenous objects placed in a beam. Experiments carried out by Nahal Soreq Group Images: Out of resonance – X-ray like image - Showing all materials In resonance – Highlights only materials with Nitrogen - Explosives

18. SCIENTIFIC INNOVATIONS, INC. MGRIDS – DEMONSTRATION OF LD-3 CONTAINER Six explosives (A to F) were hidden in a LD-3 container loaded with a mixed cargo. NRC Nahal Soreq group carried out these experiments using resonance detectors for nitrogen detection. Two images are created simultaneously. The upper image shows a regular gamma transmission radiograph. The lower image shows nitrogen image that clearly identifies the explosives. Note: No data enhancement or cleanup – raw data only A B C D E F

19. SCIENTIFIC INNOVATIONS, INC. MGRIDS - ADVANTAGES In a two dimensional plot simultaneous registration of the total density and the nitrogen density separates the explosives from other common materials. Notice the completely distinct and separated region for drugs. This plot provides for the fully automatic identification of explosives and/or drugs. Capability to detect additional elements e.g. U 235, Pu 239, Th 232

20. SCIENTIFIC INNOVATIONS, INC. NITROGEN DENSITY VS TOTAL EXPLOSIVE DENSITY

21. SCIENTIFIC INNOVATIONS, INC. 5 YEAR REVINUE SUMMARY

22. SCIENTIFIC INNOVATIONS, INC. Scientific Innovations, Inc. 1.New York corporation incorporated in 1985 under the laws of the State of New York headquartered on Long Island a.Incorporated for the purposes of research and development of Non-Intrusive medical imaging and detection systems for diagnostics and treatment of disease b.Evolved into the research development of a unique and superior system of detecting and imaging terrorist threats i.All types of explosive materials (liquid and solid) ii.Chemical warfare agents and chemical weapons iii.Radioactive or nuclear materials (SNM) Nuclear weapons (shielded and unshielded) iv.Drugs, contraband and new emerging threats 2.The Company maintains a WEB site for its technologies and products at www.scientificinnovations.org.www.scientificinnovations.org