Imagin Medical : 2022 - 06 Q3 MDA FINAL

IMAGIN MEDICAL INC.

MANAGEMENT DISCUSSION & ANALYSIS

For the Nine Months Ended June 30, 2022

Directors and Officers as of August 29, 2022

Directors:	Chris Bleck
	Ken Daignault
d	Jim Hutchens
	Kayvon Namvar
	Kevin Slawin
Officers:	President & C.E.O. - Jim Hutchens
	C.F.O. & Secretary - John Vacha
Contact Names:	Jim Hutchens
	John Vacha
Telephone Number:	833-246-2446

Form 51-102-F1

IMAGIN MEDICAL INC.

MANAGEMENT DISCUSSION & ANALYSIS

For the Nine Months Ended June 30, 2022

1.1 Date of This ReportAugust 29, 2022

This Management's Discussion & Analysis ("MD&A") of Imagin Medical Inc. for the nine months ended June 30, 2022 has been prepared based on information available to us as of May 25, 2022. This discussion should be read in conjunction with the Condensed Interim Consolidated Financial Statements of the Company and notes attached thereto for the nine months ended June 30, 2022 included herewith, all of which are available at the SEDAR website at www.sedar.com.

This MD&A includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical facts, that address activities and events or developments that the Company expects, are forward- looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include product development timing, government regulatory approvals, hospital reimbursement, continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Reported currency is stated in Canadian dollars.

1.2 Overall PerformanceDescription of Business

Imagin Medical Inc. is incorporated in the Province of British Columbia. On February 9, 2016, the Company completed the acquisition of BSS Life Sciences Inc. ("BSS"). BSS holds the intellectual property rights to a proprietary imaging technology developed for extremely accurate visualization of cancers. In connection with the acquisition, the Company changed its name to Imagin Medical Inc. and now focuses on research, development and commercialization in the device/instrumentation medical technology industry.

On December 23, 2021, the shareholders approved the plan of pursuant to Division 5 of Part 9 of the British Columbia Business Corporations Act whereby the Company will continue from the jurisdiction of the BCBCA and become domesticated in Delaware

pursuant to the General Corporation Law of the State of Delaware. As of the date of this report, the Company is still in the process of completing this transition.

License Agreement

By way of a Licence Agreement dated May 20, 2015, BSS was granted an exclusive, nontransferable, royalty-bearing license by Lawrence Livermore National Security, LLC (LLNS), to use LLNS's patents and intellectual property rights to manufacture and sell products and services pertaining to in vivo imaging applications.

Under the License Agreement, BSS must:

• complete a commercial prototype by December 31, 2016 (first prototype completed);
• complete submissions for United States Food and Drug Administration ("FDA") approval by March 31, 2023;
• achieve first commercial sales ("FCS") in the United States within one year of achieving the FDA approval; and
• achieve gross cumulative sales revenues from the sales of licensed products of at least $10,000,000 within the first three years of achieving FCS.

The sales requirements may be amended and/or extended at the written request of BSS to LLNS, based upon legitimate business reasons specified in reasonable detail in such written request.

BSS must pay certain fees to LLNS for the licence, being (all amounts are in US dollars):

1. a nonrefundable issue fee of $100,000 payable as follows:
2. • $10,000 upon the date of execution of the Agreement (June 22, 2015; paid);
   • $30,000 by November 22, 2015 (paid);
   • $30,000 by January 22, 2016 (paid); and
   • $30,000 by March 22, 2016 (paid).
3. an earned royalty of 3% of net sales, subject to minimum annual royalties of:

		Calendar year				Minimum				Due date
					annual royalty
	2017		$5,000				February 28, 2017 (paid)
	2018		$10,000				February 28, 2018 (paid)
	2019		$10,000				February 28, 2019 (paid)
	2020		$5,000				February 28, 2020 (paid)
	2021		$5,000				February 28, 2021 (paid)
	2022		$5,000				February 28, 2022 (paid)
	2023		$5,000				February 28, 2023
		2024 and thereafter		$25,000				February 28, 2024

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1. a nonrefundable U.S. Maintenance Patent Fee of $45,000 to be paid as follows:
2. • $15,000 on or before February 28, 2016 (paid);
   • $15,000 on or before February 28, 2019 (paid); and
   • $15,000 on or before February 28, 2023

The Technology

Imagin Medical is a surgical imaging company focused on establishing a new standard of care in visualizing cancer during minimally invasive surgeries (MIS). The Company's first product, the i/Blue Imaging™ System, is based on advanced optics and light sensors and employs patented ultrasensitive imaging technology. The Company believes the i/Blue System, with easy-to-use imaging options, will significantly improve surgeons' ability to visualize cancerous cells for more accurate resection. The Company's initial focus is bladder cancer.

The i/Blue Imaging System is a device external to the body that attaches to an endoscope to emit both white and blue light during MIS. When used in combination with contrast agents, cancerous cells, including premalignant lesions and tumor tissue along the margins, begin to fluoresce within an hour or less. The i/Blue Imaging System provides the option to display, in real-time, the white and blue light images side-by-side. This advancement eliminates the surgeon's need to switch back and forth between the white and blue light images when locating and then resecting the cancer as needed with current technology.

Imagin's i/Blue Imaging System is comprised of two key, state-of-the-art components:

• The i/Blue Control Unit: contains a dual wave-length light source, a two- channel camera control unit, data recorder and power supply modules that allow simultaneous displays of white and blue light illumination in the interior of the bladder.
• Dual View Camera Handpiece: includes sophisticated optical filters that split the image into white and blue light channels, allowing simultaneous display of corresponding images on the surgical monitor. This patented technology compatible with most endoscopes on the market today and offers multiple real- time viewing options/images that better enable the surgeon to visualize and resect the cancer.

Benefits of the i/Blue Imaging System

• Simultaneous side-by-side white and blue light images
• No toggling back and forth between images
• Shows cancer in context within the bladder
• Enables surgeons to better visualize cancerous cells for more accurate resection
• Compatible with most endoscopes on the market
• Appropriate for physicians' offices
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Future Development - Disruptive Technology /Multiple Markets

Imagin intends to build on the i/Blue technology, which currently works with hexaminolevulinate hydrochloride (HAL), and adapt it to other U.S. Food and Drug Administration (FDA) approved contrast agents, such as Indocyanine green (ICG). These additional products will expand Imagin's market potential, facilitating entry into multiple endoscopic procedures, such as laparoscopic (general and gynecology), colorectal and thoracic.

Imagin is actively pursuing opportunities to acquire or distribute additional products such as disposable scopes, cancer biopsy devices and other products to complement its portfolio.

The Strategy

Imagin Medical will differentiate the bladder cancer imaging market by improving surgical technique that will lead to improved resections. This will be accomplished by the providing white and blue light images simultaneously, side-by-side on the monitor. Additionally, Imagin will be the low-cost producer and allow the company to make solid margin and price the i/Blue System at a significant discount from current products.

Imagin will continue to strengthen relationships with urologists and key opinion leaders, as well as engage in market development activities through virtual meeting, events, and demonstrations over the coming months. Imagin demonstrated the pre-production units in private meetings at the American Urology Association (AUA) Annual Meeting in May 12- 14, in New Orleans. We met with more than ten key opinion leaders.

It remains Imagin's plan to differentiate the MIS surgical imaging market by focusing on state-of-the-art,easy-to-use, practical and cost-effective cancer visualization systems.

Once the i/Blue Imaging System is commercially available for urological indications, Imagin will focus on expanding the product platform from bladder cancer to laparoscopic (abdominal), thoracic and other minimally invasive procedures. The Company will partner with manufacturers of contrast agents that are already FDA-approved or in their final phase (Phase III) of FDA approval.

Imagin plans to add complementary products to expand its product portfolio. Because the i/Blue technology is adaptable to most endoscopes currently on the market, the Company will be of strategic interest to existing dominant endoscope manufacturers.

The Company will continue to plan for commercialization via initial marketing programs, future participation in trade shows and focus groups with key opinion leaders, along with the development of physician champions to establish three Centers of Excellence.

Intellectual Property

The Company, through its wholly owned subsidiary (BSS Life Sciences) has secured an exclusive license from Lawrence Livermore National Security, LLC (LLNS) to commercialize the technology invented by Dr. Stavros Demos. This license agreement includes three issued patents and one pending patent application on technology related to exclusive spectroscopic imaging for cancer and other medical applications. These include:

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