Forward-Looking Statements

This Prospectus and the documents incorporated by reference herein contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend that such forward-looking statements be subject to the safe harbors created thereby. All statements, other than statements of historical fact, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “should,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included and incorporated by reference in this Prospectus that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. See the section entitled “Risk Factors” herein for more information. You should consider these factors and other cautionary statements made in this Prospectus and in the documents we incorporate by reference as being applicable to all related forward-looking statements wherever they appear in the Prospectus and in the documents incorporated by reference. We do not assume any obligation to update any forward-looking statements, except as may be required under applicable law.

Our prior chairman and chief executive officer entered into a settlement with the Securities and Exchange Commission in 2013 that has affected and may materially adversely affect the Company in the future. Our former chairman and chief executive officer settled civil charges made by the Securities and Exchange Commission against him for, among other matters, allegedly making materially misleading statements in Company presentations and conference calls regarding our application with the federal Food and Drug Administration (“FDA”). In order to avoid a similar order against the Company for that alleged conduct, the Company entered into an agreement with the Securities and Exchange Commission in April 2014 pursuant to which the agency agreed not to proceed against the Company if it complies with applicable laws and certain conditions in the agreement for a period of approximately three years. If the Company breaches this agreement, the Securities and Exchange Commission can assert claims against the Company that could among other things disqualify the Company from using the private placement exemption afforded by Rule 506 of Regulation D of the Securities Act of 1933, as amended, possibly causing the Company to cease being in business.

We filed a voluntary petition for Chapter 11 bankruptcy with the United States federal bankruptcy court in 2012, causing us to incur substantial expenses and consequences. While the bankruptcy proceeding enabled the Company to enter into a plan of reorganization that reduced its outstanding debts and dilutive equity, the Company still has significant liabilities and outstanding common stock as it emerges from bankruptcy. Prior to filing for bankruptcy, the Company ceased filing public reports with the Securities and Exchange Commission in August 2012, and resumed filing public reports in 2016. The Company’s credit rating suffered from the bankruptcy filing, as well. There is no assurance that the Company will be able to raise sufficient additional capital or financing to continue as a going concern. There is no assurance that it will be profitable or self-sustaining, or that its common stock will publicly trade again or appreciate in value.

We have incurred substantial operating deficits since inception and may continue to incur losses in the future . To date, our revenue from component and equipment sales has not been adequate to cover research and development costs for proprietary products under development, marketing costs, operating and overhead costs, and substantial costs incurred in ongoing litigation. Revenue from our old business model of selling nonproprietary medical equipment and components has declined in recent fiscal quarters, and no sales of our proprietary 3D medical imaging product currently under development have yet been made, since it is still in the prototype phase and has not been approved by the FDA for sale or use. We do not have sufficient cash flow from our current operations to enable us to maintain or grow our business. We must raise additional capital in the future to continue to operate our businesses. Failure to secure adequate capital will hinder our growth and may jeopardize us as a going concern.

If we do not generate significant additional revenue we will continue to receive a going concern qualification in our audit . Our financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustments that might result if we are unable to continue as a going concern. We do not generate sufficient revenue and have negative cash flow from operations, which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, an additional cash infusion. We are actively seeking new investors.

We have not completed the development of our proprietary 3D medical imaging technology . Research and development projects are inherently speculative and subject to cost overruns. We cannot assure that we will be able to complete the development of our real time 3D diagnostic medical imaging technology, that it will be approved by the FDA for sale and use, or that, once developed, our diagnostic medical imaging devices can be sold profitably. We may not develop any new products or services for sale from our research and development efforts.

If we are required by the FDA to conduct clinical trials for our 3D medical imaging technology and device, the additional cost and time incurred before we receive approval from the Food and Drug Administration for the commercial sale and use of our device could be substantial and adversely affect our business, financial condition and operating results . On October 28, 2010, we received a letter from the FDA responding to our 501(k) application for clearance of our 3D medical imaging technology and device. In our application to the Food and Drug Administration we stated that our medical device is substantially equivalent to devices marketed in interstate commerce prior to May 28, 1976 and therefore should be approved for commercial sale and use as a Class II device, without the necessity for clinical trials. The FDA responded by rejecting our position that our medical device is substantially equivalent to such prior devices, citing several deficiencies in our submission. We plan to re-file our application to the Food and Drug Administration in the near future to again seek Class II approval, in which we will endeavor to address the deficiencies. We have engaged special outside counsel to assist us with the preparation and submission of our next filing with the FDA. While we disagree with the FDA’s position and we plan to re-file our application with additional information supporting our application for clearance, we cannot assure you that such approval will be obtained or that we may not ultimately be required to file our application under Class III where clinical trials would be required, significantly delaying or preventing our device from being approved for commercial sale and use.

Our business may be adversely affected by competition . The diagnostic medical imaging industry is characterized by intense competition. We are subject to competition from other firms, many of which have greater financial resources, more recognition, more management experience, and longer operating histories than we have. We cannot assure that we will be able to compete successfully or profitably in the diagnostic medical imaging business.

We may not achieve any revenues . We plan to implement a business model that calls for us to sell medical diagnostic imaging devices based on our proprietary technology. We will incur substantial operating losses until such time, if at all, as we are able to generate revenues from the sale of these products. We cannot assure you that businesses and customers will adopt our products and technology in the volume that we project, or that businesses and customers will agree to pay the prices that we propose to charge. In the event our customers resist paying prices at the rate we propose, our financial condition and results of operations will be materially and adversely affected.

If products utilizing our medical diagnostic imaging technology are determined to be unsafe, our business will be adversely affected . As medical diagnostic imaging has become an ever-more important and prominent part of everyday life, dramatic growth in the use of medical diagnostic imaging devices has given rise to occasional questions about safety. In the event that our products are deemed unsafe, we could face substantial liability and our financial condition and results of operations will be materially and adversely affected.

Our failure to achieve brand recognition could have an adverse effect on our business . We believe that establishing and maintaining brand recognition for our medical diagnostic imaging technology will be a critical aspect of our efforts to attract and expand our customer base. Promotion and enhancement of the I3 brand will depend largely on our success in providing high quality products and services. In order to attract and retain customers and to promote the I3 brand in response to competitive pressures, we may find it necessary to increase substantially our financial commitment to creating and maintaining the I3 brand. We cannot assure that we will obtain brand recognition for I3. Our failure to provide high quality products and services or to obtain and maintain brand recognition could have a material adverse effect on our business, results of operations, and financial condition.

We must adapt quickly to changes in technology . Medical diagnostic imaging is a rapidly evolving technology. We must keep abreast of this technological evolution. To do so, we must continually improve the performance, features and reliability of our medical imaging equipment and related products. If we fail to maintain a competitive level of technological expertise, then we will not be able to compete in our market.

Our inability to respond timely to technological advances could have an adverse effect on our business . We must be able to respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. We can offer no assurance that we will be able to successfully use new technologies effectively or adapt our products in a timely manner to a competitive standard. If we are unable to adapt in a timely manner to changing technology, market conditions or customer requirements, then we may not be able to compete in our market.

We cannot assure you that we will achieve profitability . We cannot assure you that we will be able to operate profitably in the future. Profitability, if any, will depend in part upon our ability to successfully develop, obtain FDA approval for, and market our proprietary medical diagnostic imaging technology, and other products and services. We may not be able to successfully transition from our current stage of business to a stabilized operation having sufficient revenues to cover expenses. While attempting to make this transition, we will be subject to all the risks inherent in a development stage business, including the needs to adequately service and expand our customer base and to maintain and enhance our current services. Our future profitability will be affected by all the risk factors described in this Memorandum or inherent in our business and circumstances.

We are exposed to various possible claims relating to our business and our insurance may not fully protect us. We cannot assure you that we will not incur uninsured liabilities and losses as a result of the conduct of our business. We generally do not maintain theft or casualty insurance and have modest liability and property insurance coverage, along with workmen’s compensation and related insurance. However, should uninsured losses occur, our shareholders could lose their invested capital.

We may face additional litigation in the future . We have had a substantial amount of litigation. All legal proceedings are expensive and time-consuming, and may divert management’s attention from our proposed business. Additionally, any such proceedings that result in an adverse resolution to us would impair our ability to continue in business if judgment holders were to seek to liquidate our business through levy and execution. We have incurred and may continue to incur substantial legal fees and costs in connection with past and possibly future litigation. If we fail in our payment schedule, or fail in our defense to future pending actions, or become subject to a levy and execution on our assets and business, we could be forced to liquidate or to file for bankruptcy and be unable to continue in our business. As a result, prospective purchasers of our Shares face the risk of total loss of their investment.

We have only two independent directors . Currently, the only members of our board of directors are Dane Medley, Xavier Aguilera, Richard Klug, and Alan Lu. Only two of these directors, Richard Klug and Alan Lu, are considered an “independent director.” Therefore, decisions of the board of directors are not made by persons who are considered independent directors, since a majority of our directors would not be considered to be independent.

The loss of the services of any of our management or key executives could adversely affect our business . Our success is substantially dependent on the performance of our executive officers and key employees. The loss of an officer or director of I3 could have a material adverse impact on us. We are generally dependent upon our executive officers, Dane Medley and Xavier Aguilera, for the direction, management and daily supervision of our operations.

Our ability to protect our intellectual property is uncertain . One of our two patent registrations has lapsed for failure to timely pay maintenance fees. The Company filed a petition with the U.S. Patent and Trademark Office (“USPTO”) to accept late maintenance fees. The USPTO denied the petition. Thus, we do not know what value the patent registrations will continue to have to the Company. In addition, we have applied to the USPTO to register “Imaging3™” as a service mark and as a trademark. There are no assurances that these applications will be approved and the registrations granted or that any other person will not challenge the registration or attempt to infringe upon our marks. If we are unable to protect our rights to our trademarks or if such marks infringe on the rights of others, our business would be materially adversely affected.

We may not be able to withstand fluctuations in our industry because our business is not diverse . Because of the limited financial resources that we have, it is unlikely that we will be able to diversify our operations. Our probable inability to diversify our activities into more than one area will subject us to economic fluctuations within a particular business or industry and therefore increase the risks associated with our operations.

Our medical diagnostic imaging devices are subject to government regulation . Under the Medical Device Amendments of 1976 to the Federal Food, Drug and Cosmetic Act, all medical devices are classified by the Food and Drug Administration into one of three classes. A Class I device is subject only to certain controls, such as labeling requirements and manufacturing practices; a Class II device must comply with certain performance standards established by the FDA; and a Class III device must obtain pre-market approval from the FDA prior to commercial marketing. We must receive Class II approval to market our real time 3D medical diagnostic imaging devices. We cannot be certain when, if ever, we will receive this approval. In the absence of FDA approval, we will not be able to market or sell our proprietary diagnostic medical imaging device, resulting in a material adverse impact to our potential operating results and financial condition. Other laws and regulations may be adopted in the future that address the manufacture, sale and use of medical diagnostic imaging devices that could adversely affect our business.

Our business is generally subject to government regulation . We are subject to regulations applicable to businesses generally. The adoption of any additional laws or regulations may decrease the growth of our business, decrease the demand for services and increase our cost of doing business. Changes in tax laws also could have a significant adverse effect on our operating results and financial condition.

If we issue additional shares of our stock, Shareholders will experience dilution in their ownership of us. We are authorized to issue up to 1,000,000,000 shares of common stock, no par value and 1,000,000 shares of preferred stock, no par value. We have the right to raise additional capital or incur indebtedness from third parties to finance our business. Our board of directors has the authority, without the consent of any of our stockholders, to cause us to issue more shares of our common stock and preferred stock. Consequently, shareholders may experience more dilution in their ownership of us in the future. We may also issue net profits interests in Imaging3™. The issuance of additional shares of capital stock or net profits interests by us would dilute our shareholders’ ownership in us.

Our current chairman and chief executive officer has voting control of I3 . We have issued a special series of voting preferred stock to the current chief executive officer conferring upon him majority voting power. The new special series of voting stock is not convertible into shares of our common stock. The issuance of the new special series of voting stock enables our management to exercise significant control over all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. This concentration of voting ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock, if it resumes public trading. This concentration of ownership may not be in the best interests of all of our shareholders.

We cannot assure that we will pay dividends . We do not currently anticipate declaring and paying dividends to our shareholders in the near future. It is our current intention to apply net earnings, if any, in the foreseeable future to increasing our capital base and marketing. Prospective investors seeking or needing dividend income or liquidity should therefore not purchase shares of our common stock. We cannot assure that we will ever have sufficient earnings to declare and pay dividends to the holders of our common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors.

Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline. If our stockholders sell substantial amounts of our common stock in the public market, or upon the expiration of any statutory holding period under Rule 144, or securities issued upon the exercise of outstanding options or warrants, it could create a circumstance commonly referred to as an “overhang” and in anticipation of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. Rule 144 is not presently available to us and we cannot assure you when, if ever, it will be available.

Our common stock is subject to the “Penny Stock” rules of the Securities and Exchange Commission and may be difficult to sell. Our shares of common stock are “penny stocks” because they are not be registered on a national securities exchange or listed on an automated quotation system sponsored by a registered national securities association, pursuant to Rule 3a51-1(a) under the Exchange Act. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks and that the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Securities and Exchange Commission relating to the penny stock market, which sets forth the basis on which the broker or dealer made the suitability determination and that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock, assuming they will be eligible for quotation on a public market. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

The market for penny stocks has suffered in recent years from patterns of fraud and abuse. Stockholders should be aware that, according to Securities and Exchange Commission Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include:

Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our shares of common stock. The occurrence of these patterns or practices could increase the volatility of our share price, if any.

An investment in our common stock is speculative . Due to the speculative nature our business, the investment in the Shares offered hereby may result in a total loss to the investor. Investors should be able to financially bear the loss of their entire investment. Investment should, therefore, be limited to that portion of discretionary funds not needed for normal living purposes or for reserves for disability and retirement.

Investors should be aware of the long-term nature of an investment in us . Each investor will be required to represent that the securities purchased are for their own account, for investment purposes only and not with a view toward resale or distribution. The securities offered hereby may not be negotiated, assigned, or transferred without an opinion of counsel acceptable to us that transfer may be made without registration under the securities laws of the United States and applicable state laws. The securities offered hereby are restricted securities under the applicable securities laws of the United States or of the various states unless an exemption from registration is available. Therefore, the securities offered hereby may have to be held for an indefinite period of time. Investors who do not wish, or who are not financially able to remain as investors for a substantial and indefinite period of time are advised against investment in the shares offered hereby.