YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE BUYING SHARES. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY AND ADVERSELY AFFECTED, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.

Securities Regulatory Risk ( “SEC RISK”)

The securities industry is heavily regulated. The US Securities and Exchange Commission (The “SEC”) has the power to suspend trading of a security. The SEC may also permanently suspend a company’s ability to have its stock traded on the open market. The SEC can, and has frequently, suspended trading on a security without notice , without probable cause of wrongdoing, or due process of law. A security can be deleted and permanently suspended from trading by insignificant technical and unknowing violations of any one of the vast regulations that comprise the body of law the SEC enforces. Stockholders in a public company will lose their entire investment if the SEC suspends a security from trading. You will have no recourse under the law and your entire investment will be destroyed. We believe the “SEC regulatory risk factor” as the single largest and most dangerous business risk for any public investor.

GENERAL RISK FACTORS

This investment has a high degree of risk. Before you invest you should carefully consider the risks and uncertainties described below and the other information in this prospectus. If any of the following risks actually occur, our business, operating results and financial condition could be harmed and the value of our stock could go down. This means you could lose all or a part of your investment.
Risks Relating to Our Business:
We Have a History Of Losses Which May Continue, Which May Negatively Impact Our Ability to Achieve Our Business Objectives.
We cannot assure you that we can achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition inherent in the ongoing operations of a business enterprise. There can be no assurance that future operations will be profitable. Revenues and profits, if any, will depend upon various factors, including whether we will be able to continue expansion of our revenue. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.
If We Are Unable to Obtain Additional Funding Our Business Operations Will be Harmed and If We Do Obtain Additional Financing Our Then Existing Shareholders May Suffer Substantial Dilution.
We may require additional funds to sustain and expand our operational activities. We anticipate that if needed, we will require up to approximately $500,000 to fund our continued operations for the next twelve months, depending on revenue from operations. Additional capital will be required to effectively support the operations and to otherwise implement our overall business strategy. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing and development plans and possibly cease our operations. Any additional equity financing may involve substantial dilution to our then existing shareholders.
If We Are Unable to Retain the Services of Management, or If We Are Unable to Successfully Recruit Qualified Personnel Having Experience in Business, We May Not Be Able to Continue Our Operations.
Our success depends to a significant extent upon the continued service of our Chief Executive Officer. Loss of the services of our CEO could have a material adverse effect on our growth, revenues, and prospective business. In addition, in order to successfully implement and manage our business plan, we will be dependent upon, among other things, successfully recruiting qualified managerial personnel having experience in business. Competition for qualified individuals is intense. There can be no assurance that we will be able to find, attract and retain existing employees or that we will be able to find, attract and retain qualified personnel on acceptable terms.
Many Of Our Competitors Are Larger and Have Greater Financial and Other Resources Than We Do and Those Advantages Could Make It Difficult For Us to Compete With Them.
The mergers and acquisitions and business development industry is extremely competitive and includes several companies that have achieved substantially greater market shares than we have, and have longer operating histories, have larger customer bases, and have substantially greater financial, development and marketing resources than we do. If overall demand for our products should decrease it could have a materially adverse affect on our operating results.
Our Trademark and Other Intellectual Property Rights May not be Adequately Protected Outside the United States, Resulting in Loss of Revenue.
We believe that our trademarks, whether licensed or owned by us, and other proprietary rights are important to our success and our competitive position. In the course of our international expansion, we may, however, experience conflict with various third parties who acquire or claim ownership rights in certain trademarks. We cannot assure that the actions we have taken to establish and protect these trademarks and other proprietary rights will be adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products as a violation of the trademarks and proprietary rights of others. Also, we cannot assure you that others will not assert rights in, or ownership of, trademarks and other proprietary rights of ours or that we will be able to successfully resolve these types of conflicts to our satisfaction. In addition, the laws of certain foreign countries may not protect proprietary rights to the same extent, as do the laws of the United States.
Risks Relating to Our Current Financing Arrangement:

There Are a Large Number of Shares Underlying Our Secured Convertible Notes, and Warrants That May be Available for Future Sale and the Sale of These Shares May Depress the Market Price of Our Common Stock.
The number of shares of common stock issuable upon conversion of the outstanding secured convertible notes and series A convertible preferred stock may increase if the market price of our stock declines. All of the shares, including all of the shares issuable upon conversion of the notes and preferred stock and upon exercise of our warrants, may be sold without restriction. The sale of these shares may adversely affect the market price of our common stock.
The Continuously Adjustable Conversion Price Feature of Our Secured Convertible Notes Could Require Us to Issue a Substantially Greater Number of Shares, Which Will Cause Dilution to Our Existing Stockholders.
Our obligation to issue shares upon conversion of our secured convertible notes is essentially limitless. The number of shares of common stock issuable upon conversion of our secured convertible notes will increase if the market price of our stock declines, which will cause dilution to our existing stockholders.
The Continuously Adjustable Conversion Price feature of our Secured Convertible Notes May Encourage Investors to Make Short Sales in Our Common Stock, Which Could Have a Depressive Effect on the Price of Our Common Stock.
The secured convertible notes are convertible into shares of our common stock at a 40% discount to the trading price of the common stock prior to the conversion. The significant downward pressure on the price of the common stock as the selling stockholders convert and sell material amounts of common stock could encourage short sales by investors. This could place further downward pressure on the price of the common stock. The selling stockholders could sell common stock into the market in anticipation of covering the short sale by converting their securities, which could cause the further downward pressure on the stock price. In addition, not only the sale of shares issued upon conversion or exercise of secured convertible notes, and warrants, but also the mere perception that these sales could occur, may adversely affect the market price of the common stock.
The Issuance of Shares Upon Conversion of the Secured Convertible Notes and Exercise of Outstanding Warrants May Cause Immediate and Substantial Dilution to Our Existing Stockholders.
The issuance of shares upon conversion of the secured convertible notes and exercise of warrants may result in substantial dilution to the interests of other stockholders since the selling stockholders may ultimately convert and sell the full amount issuable on conversion. Although the selling stockholders may not convert their secured convertible notes and/or exercise their warrants if such conversion or exercise would cause them to own more than 4.9% of our outstanding common stock, this restriction does not prevent the selling stockholders from converting and/or exercising some of their holdings and then converting the rest of their holdings. In this way, the selling stockholders could sell more than this limit while never holding more than this limit. There is no upper limit on the number of shares that may be issued which will have the effect of further diluting the proportionate equity interest and voting power of holders of our common stock, including investors in this offering.
Based on our current market price and the potential decrease in our market price as a result of the issuance of shares upon conversion of the secured convertible notes, we have made a good faith estimate as to the amount of shares of common stock that we are required to register and allocate for conversion of the secured convertible notes and series A convertible preferred stock. In the event that our stock price decreases, the shares of common stock we have allocated for conversion of the secured convertible notes may not be adequate.
If We Are Required for any Reason to Repay Our Outstanding Secured Convertible Notes, We Would Be Required to Deplete Our Working Capital, If Available, Or Raise Additional Funds. Our Failure to Repay the Secured Convertible Notes, If Required, Could Result in Legal Action Against Us, Which Could Require the Sale of Substantial Assets.
If we were required to repay the secured convertible notes, we would be required to use our limited working capital and raise additional funds. If we were unable to repay the secured convertible notes when required, the note and stock holders could commence legal action against us and foreclose on all of our assets to recover the amounts due. Any such action would require us to curtail or cease operations.
Risks Relating to Our Common Stock:

Our Common Stock is Subject to the "Penny Stock" Rules of the SEC and the Trading Market in Our Securities is Limited, Which Makes Transactions in Our Stock Cumbersome and May Reduce the Value of an Investment in Our Stock.
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
1.

•that a broker or dealer approve a person's account for transactions in penny stocks; and
2.

•the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
1.

•obtain financial information and investment experience objectives of the person; and
2.

•make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:
1.

•sets forth the basis on which the broker or dealer made the suitability determination; and
2.

•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.
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.
INSIGHT MEDICAL GROUP STATEMENT OF RISKS

1.1Limited History with No Profitable Operations

The system has no history of profitable operations. There are no assurances that Insight Medical Group will be able to develop its markets successfully or that the concept will be received as intended, and that the business will be operated profitably. Accordingly, the projections may not materialize at all or may be materially less than we have stated.

1.2Dependence on Key and Professional Personnel

The Company's success depends to a significant extent on the efforts, knowledge, and skills of certain key management personnel. If any of their services were to become unavailable, it may have a material adverse affect on the Company and its ability to meet the projections outlined herein. Also, the Company relies on its ability to recruit and retain highly qualified management personnel. The extent to which the Company fails to attract and retain such individuals could have a material adverse effect on the Company (see Section 5).

1.3Dependence on Strategic Partners, Alliances and Sub-contractors

The diagnostics concept may depend on successful partnering with various parties. If a partner fails to deliver on its agreements or the Company fails to resolve any disputes or reach agreement, there will be a material adverse effect on the Company's business. At present, Insight Medical Group has formed no partnerships.

1.4 FDA approval and Convincing Medical Professionals to Request Tests

At present, the Company does not nor does the Company have immediate plans to operate a laboratory in the United States. However, Should the Company choose to operate a laboratory in the United States, the FDA would have jurisdiction but the Company does not require FDA approval because is an in-house-developed assay. In-house-developed assays are commonly know as home brews. Despite the informal name, home-brew assays are widely accepted as scientifically valid and are relied upon routinely throughout the healthcare system. They are regulated by the Centers for Medicare & Medicaid Services (CMS) under the Clinical Laboratory Improvement of 1988 (CLIA).

In August 1992, FDA issued a draft compliance policy guideline proposing to apply general medical device regulation to home-brew assays. The laboratory community objected, arguing that they were adequately regulated under CLIA, that FDA regulation would be duplicative, and that FDA lacked legal authority to regulate laboratory testing services. FDA withdrew its proposal, but insisted that it had authority to regulate home brews should it wish to do so.

In November 1997, however, CDRH published a final rule governing the use of ASRs in certain in vitro diagnostic products (IVDs) and in-house laboratory assays. The final rule was the culmination of a lengthy process in which FDA sought to determine how, if at all, it would regulate clinical laboratories that prepare in-house assays using ingredients purchased from third-party biological and chemical suppliers [96]. In the ASR regulation, FDA invoked the restricted-device authority in section 520(e) of the Federal Food, Drug, and Cosmetic Act (FD&C Act). It did so to impose certain restrictions on the sale, distribution, and use of ASRs when used as ingredients of home-brew assays and in certain IVDs.

As FDA made clear, the agency was not actively regulating the in-house tests and had determined that strong public health reasons existed for continuing this approach. In the final rule, FDA recognized that “the use of in-house-developed tests has contributed to enhanced standards of medical care in many circumstances, and that significant regulatory changes in this area could have negative effects on the public health.” The agency said that the laboratories would be responsible for both the quality and interpretation of results generated from those tests [97]. Thus, the final rule focused not on the in-house tests, but on the ASRs that are used in preparing such tests.

Furthermore, the company does not treat, cure, or diagnose any disease. We offer laboratory services to detect the presence or absence of advanced chromosomal imbalances within the nucleus of cells. The pathologist, doctor, or other licensed health-care practitioner makes a diagnosis to the patient. However in order to expand its marketing capabilities (for example: direct marketing of our services to consumers) within the USA the Company may wish to obtain FDA approval and undertake clinical trials to provide proof of the cancer diagnostic benefits associated with assessing chromosomal imbalance. There is the risk that the clinical trials may not show sufficient utility to obtain FDA approval. Furthermore, if in the future the Company is unable to convince sufficient medical professionals of the merits of the chromosomal imbalance test, it may materially impair the Company’s ability to succeed, which could result in the projections outlined herein not materializing at all or be negatively affected in a material way.

1.5Competition

The Company's competitors are only partially defined at the present, however, several large diagnostics companies could become interested in the market in which the Company plans to compete. Potential competitors could possess greater financial, technical, and marketing resources than the Company. The extent to which the competition offers better products or services than the Company, could have a material adverse effect on the business

1.6Time to Market

The Aneuploidy Theory of Cancer has been contemplated for nearly a century. There is the risk that a competitor with greater resources could develop a similar diagnostic device and achieve FDA approval in advance of the Company, which could have a material adverse effect on the business.

1.7Revenue Projections

The sales/revenue projections are provided by Management. Although Management has no reason to question the validity of the assumptions used in the projections, there is no guarantee that the projected results will be achieved.

The revenue models only cover the USA market. As part of our initial marketing strategy, we will market our services to the Carribean and Central and South America concurrently with our entry into the US Market. Our revenue projections do not include the sales figures from the international marketplace. We have no reasonably accurate data or management knowledge of these markets sufficient to create a good-faith model. However, we have selected these markets to offer our services into as part of our overall marketing strategy of entry into the USA marketplace as a means to establish and pre-existing customers and enhance marketplace credibility. The revenue projections, therefore, could easily be increased by a substantial amount should we meet with nominal success in the early international marketplace. However, if we fail in the international marketplace, the projections outlined herein will likely not materialize at all or be affected negatively in a material way. We are not willing to make good-faith projections on these international markets at this time due to the reasons stated. If we included our revenue expectations for our international markets, the revenue projections would be adjusted upward accordingly. However, Management is not prepared at this time to make good-faith estimates on these markets. We have therefore not included our international revenue expectations.

Assumptions used in the revenue models and projections are based on a gradual assumed increase of the Company’s share of the target market and a gradual assumed increase of the general acceptance of chromosomal imbalance testing within that market. For example, for our first target market for ‘indeterminates’, we assume, based on a good-faith estimate by Management, an initial Market Penetration of testing chromosomal imbalance at 5% increasing by 5% each year. Of this calculated amount, we assumed, based on Management’s good faith estimate, that the Company will represent 100% of this portion of the overall market. We assume the company will have 100% of the market because no competition exists within that market space. Therefore, the main limiting factor of our ability to penetrate the target market, in the example of ‘indeterminates’ , is the estimated percent of that market that will decide to use chromosomal imbalance testing.

The assumed and expected charge we have used in our revenue models for our ASCUS test to be $100 to properly classify an indeterminate Pap smear. We estimate $100 to be our price for prostate tests also. Management has chosen the figure of $100 as market-competitive and comparably priced to other tests in use today as per our conversations and research with industry veterans and therefore believes the amount to be reasonable and justified.

1.8Product Liability Potential

Although Management believes that the test methodology is a great improvement over existing test procedures, there is no “fool-proof” method of cancer detection. While we believe the situation will not occur, there is the potential that our product could provide false negative and false positive test results. In the event of a false positive result, the individual is incorrectly diagnosed to have cancer, while a false negative incorrectly diagnoses the individual to be without cancer. There is the risk that an erroneous test result may expose the Company to litigation. Although the Company will use its best efforts to obtain product liability insurance, there is the risk that the cost of such insurance may be prohibitively expensive or that the coverage will not be sufficient to cover a claim against the Company impairing continued operations.

2SALES PROJECTIONS

The following revenue projections are based on our best, good-faith estimate and rely heavy on a number of assumptions . Actual results may vary substantially from these projections, either higher or lower than expected. These projections are based on estimates of market share capture and our ability enter these markets successfully. If we are unable to achieve our marketing goals or fail to raise sufficient funding to expand the business we may not meet these projections.

2.1Prostate Cancer Diagnosis

Prostate tumors with an intermediate histological grade represent the majority of prostate tumors that cannot be determined by current clinical laboratory methods. We believe the measurement of chromosomal imbalance (aneuploidy) provides the only clinically useful prognostic information for patients with these intermediate grade tumors.

Our market research indicates that there are approximately 2 million men living with prostate cancer in the USA [94], with a growth rate of about 200,000 new cases per year. As a start up company with no operational history concerning the System, there are significant assumptions and risks associated with our ability to successfully introduce into the market.

2.2Entry into the competition-free ‘indeterminate’ Cervical cancer market

Currently, cervical cancer represents a larger market than prostate cancer with 55 million Pap smears collected in the USA annually [4]. The company’s first entry into this market space will be the competition free market of 2-5 million (and rising) “ASCUS” (indeterminate) Pap smears generated annually.

Based on scientific research and system testing, we believe measuring chromosomal imbalance in cervical smears is an independent predictor of biological outcome and will sort out the non-cancerous cells, precancerous cells, and cancerous cells in the ASCUS slide’s cell population. We are not aware of any method at present in clinical laboratories for deciding the status of an ASCUS slide. Based on the science and the system test results we believe that the system can quickly deliver comprehensive and accurate results for any ASCUS slide. Our estimates put the ASCUS market in the USA at $200-$500 million annually.

2.3Overall Cancer Diagnostic Marketplace

The worldwide market potential is unquantifiable. The ‘ Cancer Detection System’ is not limited to the cancers mentioned above. A wealth of scientific research and system testing lead us to believe that the system functions for any slide preparation and delivers rapid and accurate results in all suspected cancerous samples. It must be noted that our predictions only cover the USA market. As part of our initial marketing strategy, we will market our service to the Caribbean and Central and South America concurrently with our entry into the US Market. Our revenue projections do not include the sales figures from the international marketplace. The initial and concurrent marketing of our services to areas outside the USA are intended to establish early sales and credibility for our product. We believe the international market is larger and will be part of the company’s initial marketing efforts alongside the USA.

2.4Summary and Background for Revenue Modeling

Our revenue projection models originate from 1999-2000 and were originally based on population and cancer incidence rate from the latest data of 1997. Based on the fact both population and rates of incidence data have increased since 1997 and a reasonably small number of market penetration percentages were estimated by Management, we believe that the models are conservative. The revenue calculations would be higher if the most recent higher population data were used alongside the more recent higher rates of incidence [4]. The models and the data were reviewed in 2006 and determined by Management to be valid for the purposes of revenue modeling and projections. The rates of incidence data and the population data were not updated to the most recent data in order to purposely bias the revenue projections to the most reasonably conservative number output. The market percentage penetration numbers were arrived at based on careful consideration by management and advisors to Management at the time of the model’s creation as well as reconsideration of the entire model and data in 2006. Based on the input from the original models’ authors, Management’s expertise and industry knowledge, Management concluded the percentages chosen were both reasonable and in Management’s opinion, conservative. The actual results and percentage of market penetration may be higher or lower than Management’s estimates. We believe the revenue projection models consistent with industry projection modeling techniques and have found to reason to change the calculations or methodology used in the original 1999-2000 models. Based on our belief that the 1997 data creates conservative modeling numbers, we chose to retain the 1997 dataset in order to bias the revenue projections to a more conservative output for our planning purposes. If we updated the models to the 2005 dataset, and based on the fact the revenue projection are based on percentages of these base numbers, therefore the revenue projections would rise accordingly as the rates of incidence as well as population numbers have risen.
FORWARD-LOOKING INFORMATION
From time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Such forward-looking statements may be included in, but not limited to, press releases, oral statements made with the approval of an authorized executive officer. Words or phrases "will likely result", "are expected to", "will continue", "is anticipated", "estimate", "project or projected", or similar expressions are intended to identify "forward-looking statements". Such statements are qualified in their entirety by reference to and are accompanied by the above discussion of certain important factors that could cause actual results to differ materially from such forward-looking statements.