UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[Mark One]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to______

Commission file number: 000-26028

IMAGING DIAGNOSTIC SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Florida		22-2671269
(State of Incorporation)		(IRS Employer Ident. No.)

618 E South St, Suite 500, Orlando, FL		32801
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number: (954) 581-9800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐	Smaller reporting company ☒
Non-accelerated filer ☐		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes ☒ No ☐

The number of shares outstanding of the issuer’s common stock as of September 30, 2024: 123,156,941 shares of common stock, no par value.

	IMAGING DIAGNOSTIC SYSTEMS, INC.
		Page

	Part I - Financial Information	1

Item 1.	Financial Statements	1

	Balance Sheets – March 31, 2024 (Unaudited) and June 30, 2023	1

	Statements of Operations – (Unaudited) Three and nine months ended March 31, 2024 and 2023	2

	Statements of Changes in Stockholders’ Deficit – (Unaudited) Three and nine months ended March 31, 2024 and 2023	3

	Statements of Cash Flows - (Unaudited) nine months ended March 31, 2024 and 2023	4

	Notes to Unaudited Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

	Financial Condition and Results	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	28

	Part II - Other Information	29

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	29

Signatures		30

Part I - Financial Information

Item 1. Financial Statements

IMAGING DIAGNOSTIC SYSTEMS, INC.

Balance Sheets

	(unaudited)
	March 31, 2024			June 30, 2023

Assets
Current assets:
Cash	$	281		$	1,088
Royalty receivable		-			10,610
Due from related party, net of allowance		33			-
Prepaid expenses and deposits		10,053			10,053

Total current assets		10,367			21,751

Total assets	$	10,367		$	21,751


Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	1,006,354		$	946,069
Accrued payroll taxes and penalties		314,019			314,019
Promissory notes, related parties		773,142			763,649
PPP loan payable		72,930			72,930

Total current liabilities		2,166,445			2,096,667

Commitment and Contingencies (Note 16)

Temporary equity
Convertible Preferred Series L		465,488			451,939

Total temporary equity		465,488			451,939

Stockholders’ Deficit:

Preferred stock, no par, 2,000,000 shares authorized Convertible preferred stock, Series M, 600 designated 0 shares issued and outstanding at March 31, 2024 and June 30, 2023		-			-
Common stock, no par value, 500,000,000 shares authorized, 123,156,941 and 123,156,941 shares issued and outstanding March 31, 2024 and June 30, 2023, respectively		133,346,959			133,346,959
Accumulated Deficit		(135,968,525	)		(135,873,814	)

Total stockholders’ deficit		(2,621,566	)		(2,526,855	)

Total liabilities and stockholders’ deficit	$	10,367		$	21,751

See accompanying notes to the unaudited financial statements

IMAGING DIAGNOSTIC SYSTEMS, INC.

Statements of Operations

(unaudited)

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023

Total Revenue	$	-		$	-		$	-		$	-

Cost of Sales		-			-			-			-

Gross Profit		-			-			-			-

Operating Expenses:
General and administrative		2,553			15,223			9,814			76,983
Sales and marketing		126			124			706			630
Consulting expenses (including share-based compensation)		6,400			5,888			9,060			148,704
Total Operating Expenses		9,079			21,235			19,580			226,317

Operating Loss		(9,079	)		(21,235	)		(19,580	)		(226,317	)

Other Expense

Interest expense		(20,379	)		(20,155	)		(61,582	)		(61,359	)
Total Other Expense		(20,379	)		(20,155	)		(61,582	)		(61,359	)
Net Loss		(29,458	)		(41,390	)		(81,162	)		(287,676	)

Preferred Stock Dividends		(4,475	)		(4,438	)		(13,549	)		(13,512	)
Net Loss Available to Common Stockholders		(33,933	)		(45,828	)	$	(94,711	)	$	(301,188	)

Net Loss per common share:
Basic and diluted	$	-		$	-		$	-		$	-
Weighted average number of common shares outstanding:
Basic and diluted		123,156,941			123,156,941			123,156,941			123,156,941

See accompanying notes to the unaudited financial statements

IMAGING DIAGNOSTIC SYSTEMS, INC.

Statements of Changes in Stockholders’ Deficit

For the nine months ended March 31, 2024 and 2023

(unaudited)

	Common Stock							Total
	Number of				Accumulated			Stockholders’
	Shares		Amount		Deficit			Deficit

Balance at June 30, 2023		123,156,941	$	133,346,959	$	(135,873,814	)	$	(2,526,855	)

Cumulative Dividend on Series L CV Preferred		-		-		(4,537	)		(4,537	)

Net loss		-		-		(25,845	)		(25,845	)

Balance at September 30, 2023		123,156,941	$	133,346,959	$	(135,904,196	)	$	(2,557,237	)

Cumulative Dividend on Series L CV Preferred		-		-		(4,537	)		(4,537	)

Net loss		-		-		(25,859	)		(25,859	)

Balance at December 31, 2023		123,156,941	$	133,346,959	$	(135,934,592	)	$	(2,587,633	)

Cumulative Dividend on Series L CV Preferred		-		-		(4,475	)		(4,475	)

Net loss		-		-		(29,458	)		(29,458	)

Balance at March 31, 2024		123,156,941	$	133,346,959	$	(135,968,525	)	$	(2,621,566	)


Balance at June 30, 2022		123,156,941	$	133,236,117	$	(135,482,996	)	$	(2,246,879	)

Cumulative Dividend on Series L CV Preferred		-		-		(4,537	)		(4,537	)

Net loss		-		-		(117,325	)		(117,325	)

Balance at September 30, 2022		123,156,941	$	133,236,117	$	(135,604,858	)	$	(2,368,741	)

Cumulative Dividend on Series L CV Preferred		-		-		(4,537	)		(4,537	)

Stock options expense		-		60,699		-			60,699

Net loss		-		-		(128,961	)		(128,961	)

Balance at December 31, 2022 #		123,156,941	$	133,296,816	$	(135,738,356	)	$	(2,441,540	)

Cumulative Dividend on Series L CV Preferred		-		-		(4,438	)		(4,438	)

Net loss		-		-		(41,390	)		(41,390	)

Balance at March 31, 2023		123,156,941	$	133,296,816	$	(135,784,184	)	$	(2,487,368	)

See accompanying notes to the unaudited financial statements

IMAGING DIAGNOSTIC SYSTEMS, INC.

Statements of Cash Flows

(unaudited)

	Nine Months Ended			Nine Months Ended
	March 31, 2024			March 31, 2023

Net loss	$	(81,162	)	$	(287,676	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock option expense		-			60,699

Changes in assets and liabilities:
Decrease in royalty receivable		10,610			-
Increase in due from related party		(33	)		-
Decrease in prepaid expenses		-			206
Increase in accounts payable and accrued expenses		60,285			147,272
Total adjustments		70,862			208,177

Net cash used in operating activities		(10,300	)		(79,499	)

Cash flows from financing activities:
Proceeds from promissory notes, related party		9,493			79,009
Net cash provided by financing activities		9,493			79,009

Net (Decrease) in cash and cash equivalents		(807	)		(490	)

Cash at the beginning of year		1,088			613

Cash at end of the period	$	281		$	123

Supplemental Disclosure of cash flow information:
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

Non-cash investing and financing activities:
Promissory notes issued in exchange for settlement of accounts payable	$	-		$	3,669

See accompanying notes to the unaudited financial statements

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(1) ORGANIZATION AND NATURE OF BUSINESS

Imaging Diagnostic Systems, Inc. (the “Company” or “IDSI”) was a medical technology company that developed a new, non-invasive CT scanner called CTLM® that used a laser beam in place of ionizing X-ray for breast imaging. This technology is called Diffuse Optical Tomography. The CTLM® provided an adjunctive imaging modality to other methods of imaging the breast such as X-ray mammography, MRI and ultrasound.

In the fourth quarter of fiscal 2023, the Company terminated its CTLM® business due to the lack of financing and the absence of a realistic prospect of achieving profitability after accumulating huge operating losses for many years. Since the beginning of fiscal 2024 the Company has been focused on seeking new business opportunities to replace its failed legacy business through a reverse merger transaction. While the Company has considered several opportunities, it has yet to enter into any definitive agreement and remains a shell company.

On July 7, 2023, the Company entered into a non-binding letter of intent (“LOI”) with Bright New Vision Inc. (“BNV”) regarding a proposed reverse merger transaction. Under the terms of the LOI, upon closing, BNV shareholders would own approximately 82% of IDSI’s issued and outstanding common stock, and all of IDSI’s directors and officers would be BNV affiliates. The LOI contemplated closing the transaction on or before December 31, 2023. However, because BNV did not take any further action beyond the LOI, the proposed reverse merger will not proceed.

(2) GOING CONCERN AND MANAGEMENT’S PLANS

The accompanying financial statements are prepared assuming the Company will continue as a going concern. As of March 31, 2024, the Company had an accumulated deficit of $135,968,525, a stockholders’ deficit of $2,621,566 and a working capital deficiency of $2,156,078. For the nine months ended March 31, 2024, net loss totaled $81,162. The net cash used in operating activities for the nine months ended March 31, 2024 totaled $10,300. These matters, along with the Company’s lack of any viable business or material financing, raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date these financial statements are issued. The ability of the Company to continue as a going concern is dependent upon acquiring a new business through a reverse merger transaction and generating sales and obtaining additional capital and financing. While the Company believes in the viability of its strategy to acquire a profitable business and raise the necessary financing, there can be no assurances to that effect.

The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation and use of estimates

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The unaudited interim financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading. The preparation of financial statements in conformity with Generally Accepted Accounting Principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions also include the valuations of certain financial instruments, stock-based compensation, deferred tax assets, the outcome of litigation and tax matters, and other matters that affect the statements of financial condition and related disclosures. Actual results could differ materially from these estimates.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the fiscal year ended June 30, 2023, contained in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the “Commission”) on September 30, 2024. The results of operations for the nine months ended March 31, 2024, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2024.

(b) Revenue recognition

The Company follows Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The Company sells medical imaging products, parts, and services where permitted to independent distributors and in certain unrepresented territories directly to end-users. The Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Any discounts, sales incentives or similar arrangements with the customer are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from revenue.

The Company also receives royalties pursuant to a licensing relationship with Trifoil Imaging. Revenue is recognized in the reporting periods in which royalties are due to the Company. During the nine months ended March 31, 2024 and 2023, there was no income from royalties.

In the event that management determines that a receivable becomes uncollectible, or events or circumstances change, which result in a temporary cessation of payments from the distributor, we will make our best estimate of probable or potential losses in our accounts receivable balance using the allowance method for each quarterly period. Management will review the receivables at the end of each fiscal year and the appropriate allowance will be made based on current available evidence and historical experience.

Our allowance for doubtful accounts was $850 as of March 31, 2024 and June 30, 2023. These amounts consist of other receivables that have been fully reserved.

(d) Cash and cash equivalents

Holdings of highly liquid investments with original maturities of three months or less and investment in money market funds are considered to be cash equivalents by the Company. There were no cash equivalents at March 31, 2024 and June 30, 2023.

(e) Concentration of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit of $250,000. March 31, 2024 and June 30, 2023, the Company did not have cash balances in excess of the federally insured limit.

The Company did not have any revenue for the nine months ended March 31, 2024 and 2023.

(f) Inventory

Inventories, consisting principally of raw materials, work-in-process (including completed units under testing), finished goods and units placed on consignment, are carried at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Raw materials consist of purchased parts, components and supplies. Work-in-process includes completed units undergoing final inspection and testing. The Company periodically reviews the value of items in inventory and records write-downs or write-offs based on its assessment of obsolete inventory. The Company maintains an allowance for obsolete inventory and generally makes inventory value adjustments against the allowance.

(g) Property and equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using straight-line methods over the estimated useful lives of the related assets. Expenditures for renewals and betterments which increase the estimated useful life or capacity of the asset are capitalized; expenditures for repairs and maintenance are expensed when incurred.

(h) Research and development

Research and development expenses consist principally of expenditures for equipment and outside third-party consultants, raw materials which are used in testing and the development of the Company’s CTLM® device or other products and product software. The non-payroll related expenses include testing at outside laboratories, parts associated with the design of initial components and tooling costs, and other costs which do not remain with the developed CTLM® device.

(i) Net loss per share

The Company relies on the guidance provided by ASC 260, (“Earnings per Share”), which requires the reporting of both basic and diluted earnings per share. Basic net loss per share is determined by dividing loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock, as long as the effect of their inclusion is not anti-dilutive.

The Company had 3,485,000 and 5,075,000 options vested as of March 31, 2024 and June 30, 2023, respectively and 630,290 and 630,290 options not yet vested as of March 31, 2024 and June 30, 2023, respectively.

The Company had 20 shares of Series L Convertible Preferred Stock outstanding, with each share convertible into 474 shares of common stock as of March 31, 2024 and June 30, 2023.

(j) Stock-based compensation

We follow ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.

The Company has elected to use the Black-Scholes-Merton, or BSM, option-pricing model to estimate the fair value of its options and similar awards, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of outstanding and vested stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what we have recorded in the current period. No stock options were granted during nine months ended March 31, 2024 and 2023. Stock options are being expensed pursuant to ASC 718.

The fair value concepts were not changed significantly in ASC 718; however, in adopting this Standard, companies were given the option to choose among alternative valuation models and amortization assumptions. We elected to continue to use the Black-Scholes option pricing model and expense the options as compensation over the requisite vesting period of the grant. We will reconsider use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model. See Note (15) Stock Options.

(k) Long-lived assets

The Company relies on the guidance provided by ASC 360 (“Property, Plant & Equipment”). ASC 360 requires companies to write down to estimated fair value long-lived assets that are impaired. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In performing the review of recoverability, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the assets, an impairment loss is recognized.

The Company has determined that no impairment losses need to be recognized through the nine months ended March 31, 2024 and 2023.

(l) Income taxes

The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax positions.

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of the date these financials were available to be issued, tax years ended June 30, 2021 to 2024 are still potentially subject to audit by the taxing authorities.

(m) Allowance for Warranties

The Company warrants all products and parts supplied for a period of 12 months from the date of installation or 15 months from the date the products were shipped from IDSI, whichever occurs first. Although the Company tests its product in accordance with its quality programs and processes, its warranty obligation is affected by product failure rates and service delivery costs incurred in correcting a product failure. Based on the Company’s experience, the allowance for warranties was estimated based on the replacement cost of the laser and certain electronic parts. Should actual product failure rates or service costs differ from the Company’s estimates, which are based on limited historical data, where applicable, revisions to the estimated warranty liability would be required. The Company had no allowance for warranties balance as of March 31, 2024 or June 30, 2023.

(n) Impact of recently issued accounting pronouncements

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

(o) Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, receivables, accounts payable, short-term debt and accrued liabilities approximated their fair values due to the short maturity of these instruments. After a review of our accounts receivable, the Company has not recorded an allowance for doubtful accounts. The fair value of the Company’s debt obligations is estimated based on the quoted market prices for the same or similar issues or on current rates offered to the Company for debt of the same remaining maturities. At March 31, 2024 and June 30, 2023, the aggregate fair value of the Company’s debt obligations approximated its carrying value. The Company relies upon the guidance of ASC 820 (“Fair Value Measurements and Disclosures”). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly, transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

(4) RELATED PARTY TRANSACTIONS

Related party revenues

On March 22, 2018, the Board of Directors approved the execution of two agreements with Xi’an of China, an affiliated Company of IDSI. The agreements are a Know How Transfer Contract and a CTLM® Know How Confidentiality Agreement. The contract, having a term of 20 years, stipulates that Xi’an will pay IDSI a know how transfer fee of 25% of revenue for CTLM® product sales in their territory. There were no such sales during the nine months ended March 31, 2024 and 2023.

Related party fees

Erhfort, LLC earned consulting fees of $5,000 and $51,000 for the nine-month period ended March 31, 2024 and 2023, respectively. Erhfort, LLC regularly reviews the Company’s operations and reports to IDSI’s CEO who lives in China. Erhfort, LLC is a related party because it owns Company common stock directly and indirectly.

David Fong, who served as the Company’s CFO through August 10, 2022 and as a consultant on an as needed basis thereafter, earned consulting fees of $1,800 and $32,545 for the nine-month period ended March 31, 2024 and 2023, respectively. These fees were assigned to his affiliated business, Fong & Associates, LLC.

Related party payables and accrued expenses

As of March 31, 2024 and June 30, 2023, the amount of interest on related party notes due to Erhfort, LLC, which is included in accounts payable, is $298,027 and $239,260, respectively.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(4) RELATED PARTY TRANSACTIONS (Continued)

As of March 31, 2024 and June 30, 2023, the amount of consulting fees due to Erhfort, LLC, which is included in accounts payable, is $209,000 and $204,000, respectively.

As March 31, 2024 and June 30, 2023, the amount of consulting fees due to Fong & Associates, LLC, which is included in accounts payable and accrued expenses, is $328,370 and $331,070, respectively.

As of March 31, 2024 and June 30, 2023, the amount of reimbursable expenses due to Fong & Associates, LLC, which is included in accounts payable, is $1,501 and $6,809, respectively.

As of March 31, 2024 and June 30, 2023, the amount of interest on related party notes due to JM One Holdings, LLC, which is included in accrued expenses, is $14,121 and $11,860, respectively. JM One Holdings, LLC is an entity affiliated with David Fong.

Related party debt

As of March 31, 2024 and June 30, 2023, the amount in promissory notes due to related parties are $773,142 and $763,649, respectively (See Note 11).

(5) ROYALTY RECEIVABLE

On June 16, 2006, the Company entered into a Royalty Agreement with Bioscan Inc. whereby the Company established a licensing relationship with Bioscan which granted Bioscan an exclusive sublicensable, royalty-bearing license to make, use, offer for sale, import and otherwise develop and commercialize products in its territory. Bioscan Inc. was subsequently purchased by TriFoil Imaging. During the nine months ended March 31, 2024 and 2023, there was no royalty income. As of March 31, 2024 and June 30, 2023, the Company had royalty receivable balances of $0 and $10,610, respectively.

(6) INVENTORIES

Inventories consisted of the following:

	March 31, 2024		June 30, 2023

Raw materials consisting of purchased parts, components and supplies	$	-	$	92,587
Finished goods		-		7,500
Total Inventory	$	-	$	100,087
Allowance for Obsolete Inventory		-		(100,087	)
Net Inventory	$	-	$	-

Due to the age of the inventory, lack of demand for parts and lack of sales the Company recorded a 100% allowance for all inventory during the year ended June 30, 2017. On October 16, 2023, the Company abandoned all inventory.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(7) PREPAID EXPENSES AND DEPOSITS

The following is a summary of prepaid expenses:

	March 31, 2024		June 30, 2023

Prepaid Software	$	-	$	-
Rent Security Deposits		53		53
Consulting Retainers		10,000		10,000
Total Prepaid expenses and Deposits	$	10,053	$	10,053

(8) PROPERTY AND EQUIPMENT

The following is a summary of property and equipment, less accumulated depreciation:

	March 31, 2024		June 30, 2023			Useful life

Computers and Equipment	$	-	$	12,612		5 years
Third Party Software		-		10,291		5 years
Clinical Equipment		-		15,000		5 years
Total Property & Equipment	$	-	$	37,903
Less: accumulated depreciation		-		(37,903	)
Total Property & Equipment - Net	$	-	$	-

Depreciation expense for the nine months ended March 31, 2024 and 2023 was $0. On October 16, 2023, the Company abandoned all remaining fully depreciated fixed assets due to its status as a shell company and a lack of operational activities.

(9) ACCOUNTS PAYABLE AND ACCRUED EXPENSES

As of March 31, 2024 and June 30, 2023, accounts payable and accrued expenses totaled $1,006,354 and $946,069 respectively, which consists of accounts payable of $980,303 and $932,723 and other accrued expenses of $26,051 and $13,346, respectively.

The Company received $10,000 in connection with the LOI with Bright New Vision Inc. entered into on July 7, 2023 (Note 1). This amount was recorded as an accrued expense upon receipt and represents the initial financial commitment for anticipated expenses related to the proposed reverse merger transaction.

(10) ACCRUED PAYROLL TAXES AND PENALTIES

As of March 31, 2024 and June 30, 2023, the Company owed the IRS $314,019. Accrued payroll taxes represent outstanding interest and penalties based on prior management’s failure to pay payroll taxes commencing with the quarter ending March 31, 2010. As part of new management’s restructuring plan, the Company received funds from an accredited investor to be able to make a payment to pay off the payroll tax portion of the amount owed to the IRS. The Company engaged tax counsel to manage the settlement and payment. On June 27, 2018, the IRS provided counsel with a payoff calculation table indicating that the balance of taxes due was $381,224. On June 29, 2018, Viable International Investments LLC provided a bank check in that amount to counsel and they sent the check to the IRS with a letter requesting penalty and interest abatement. The amount due at March 31, 2024 of $314,019 represents the interest and penalties. The Company has formally asked the IRS to abate all remaining interest and penalties of $314,019. The Company had a telephone conference on April 18, 2019 with the office of appeals and is waiting for further communications from the appeals officer. As of March 31, 2024, the Company’s tax counsel is in the process of reviewing recent IRS correspondence to determine appeals status and will work towards final resolutions with the IRS on all outstanding liabilities. The Company has decided to wait until all resolutions are final before making any adjustments to the balance of $314,019 owed to the IRS.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(11) PROMISSORY NOTES – RELATED PARTIES

The following table is a summary of the outstanding note balances as of March 31, 2024 and June 30, 2023.

Noteholder	Interest Rate	Maturity Date	March 31, 2024		June 30, 2023
Related Party Notes:
Erhfort, LLC	15%	9/30/24	$	100,000	$	100,000
Erhfort, LLC	15%	9/30/24		100,000		100,000
JM One Holdings, LLC	15%	9/30/24		20,000		20,000
Erhfort, LLC	15%	9/30/24		100,000		100,000
Erhfort, LLC	15%	9/30/24		100,000		100,000
Erhfort, LLC	15%	9/30/24		100,000		100,000
Erhfort, LLC	15%	9/30/24		10,000		10,000
Erhfort, LLC	15%	9/30/24		10,000		10,000
Erhfort, LLC	0%	On Demand		2,260		2,260
Erhfort, LLC	0%	On Demand		3,669		3,669
Erhfort, LLC	0%	On Demand		1,620		1,620
Erhfort, LLC	0%	On Demand		1,100		1,100
Viable International Investments, LLC	0%	On Demand		7,865		7,865
Viable International Investments, LLC	0%	On Demand		5,000		5,000
Viable International Investments, LLC	0%	On Demand		5,000		5,000
Viable International Investments, LLC	0%	On Demand		5,000		5,000
Viable International Investments, LLC	0%	On Demand		5,000		5,000
Viable International Investments, LLC	0%	On Demand		3,000		3,000
Viable International Investments, LLC	0%	On Demand		15,000		15,000
Viable International Investments, LLC	0%	On Demand		30,000		30,000
Viable International Investments, LLC	0%	On Demand		10,000		10,000
Viable International Investments, LLC	0%	On Demand		10,000		10,000
Viable International Investments, LLC	0%	On Demand		10,000		10,000
Viable International Investments, LLC	0%	On Demand		5,000		5,000
Viable International Investments, LLC	0%	On Demand		10,000		10,000
Viable International Investments, LLC	0%	On Demand		8,847		8,847
Viable International Investments, LLC	0%	On Demand		12,768		12,768
Viable International Investments, LLC	0%	On Demand		9,988		9,988
Viable International Investments, LLC	0%	On Demand		7,968		7,968
Viable International Investments, LLC	0%	On Demand		6,968		6,968
Viable International Investments, LLC	0%	On Demand		7,786		7,786
Viable International Investments, LLC	0%	On Demand		5,368		5,368
Viable International Investments, LLC	0%	On Demand		5,488		5,488
Viable International Investments, LLC	0%	On Demand		11,568		11,568
Viable International Investments, LLC	0%	On Demand		6,975		6,975
Viable International Investments, LLC	0%	On Demand		411		-
Viable International Investments, LLC	0%	On Demand		1,232		-
Viable International Investments, LLC	0%	On Demand		1,570		-
Viable International Investments, LLC	0%	On Demand		1,570		-
Viable International Investments, LLC	0%	On Demand		1,570		-
Viable International Investments, LLC	0%	On Demand		1,570		-
Viable International Investments, LLC	0%	On Demand		1,570		-
Xi’an IDI	0%	On Demand		10,411		10,411
Total Related Party Notes			$	773,142	$	763,649

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(11) PROMISSORY NOTES – RELATED PARTIES (Continued)

Erhfort, LLC and Viable International Investments, LLC own Company common stock directly and indirectly. JM One Holdings, LLC is an entity affiliated with the Company’s former CFO. Hence, these debts are considered related party debt. Xi’an IDI is affiliated with IDSI due to a licensing agreement.

During the nine months ended March 31, 2024, the Company received loan proceeds of $9,493 from Viable International Investments, LLC with an annual interest rate of 0%. During the nine months ended March 31, 2023, the Company received loan proceeds of $76,749 from Viable International Investments, LLC and $2,260 from Erhfort, LLC with an annual interest rate of 0%. The Company also converted $3,669 of accounts payables into a loan from Erhfort, LLC with an annual interest rate of 0%, with no gain or loss recorded.

(12) PPP LOAN

The following table is a summary of the outstanding loan balances as of March, 31 2024 and June 30, 2023.

Noteholder	Interest Rate		Maturity Date	March 31, 2024			June 30, 2023
Truist Bank		1%	In Default	$	72,930		$	72,930
Total					72,930			72,930
Current Portion of Loan					(72,930	)		(72,930	)
Total Long-term Loan				$	-		$	-

On May 9, 2020, the Company entered into a loan with Truist Bank, a lender pursuant to the Paycheck Protection Program of the CARES Act as administered by the SBA in the amount of $79,600. The loan, in the form of a promissory note, had an original maturity date of May 1, 2025. No additional collateral or guarantees were provided by the Company for the loan. The PPP loan provides for customary events of default. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, rent payments, mortgage interest and covered utilities during the 24-week period beginning on the date of loan disbursement. The Company is required to repay the entire amount of outstanding principal, along with accrued interest, as the Company is not eligible for forgiveness. The Company began to make payments, beginning October 2021, including interest accruing at an annual interest rate of 1.0% beginning on the date of disbursement. On May 17, 2022, the Company received a default and demand letter from Truist Bank in regards to the PPP loan due to non-payment. As such the remaining balance of the PPP loan became due immediately. As of March 31, 2024 and June 30, 2023, the Company recorded an accrued interest balance related to the PPP Loan of $1,481 and $926, respectively. The accrued interest is included in accounts payable and accrued expenses on the balance sheet.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(13) CONVERTIBLE PREFERRED STOCK

The following schedule reflects the number of shares of preferred stock that have been issued as of March 31, 2024:

Security	Date Issued	No. of Shares		Amount		Date of Conversion	No. of Shares Converted		Amount Converted		Balance 3/31/2024
Series L Cv Pfd	3/31/2010		35	$	350,000	1/6/2011		15	$	150,000	$	200,000
Dividends												265,488
						Total redemption value					$	465,488
Total Series M Cv Pfd	Various		600	$	6,000,000	1/6/2011		600	$	6,000,000	$	-0-
Dividends												-0-
						Total redemption value					$	-0-

Series L Convertible Preferred Stock

On March 31, 2010, a private investor converted a $350,000 short-term promissory note into 35 shares of Series L Convertible Preferred Stock. The original purchase price/stated value is $10,000 per share and dividends accrue at an annual rate of 9%. The preferred stock is convertible into 474 shares of common stock for each share of preferred stock. On January 6, 2011, the private investor converted 15 shares of Series L Convertible Preferred Stock representing a principal value of $150,000. After the conversion, the private investor held 20 shares representing a principal value of $200,000. The remaining principal value of $200,000 is presented on the balance sheet as temporary equity, as the holder has the option to redeem for cash at any time. At March 31, 2024 and June 30, 2023, there were 20 shares of Series L Convertible Preferred Stock outstanding. At March 31, 2024 and June 30, 2023, the balance of cumulative dividends owed to the investor which is included in redemption value was $264,488 and $251,939, respectively. The total presented on the balance sheet as temporary equity is $465,488 as of March 31, 2024 and $451,939 as of June 30, 2023.

Series M Convertible Preferred Stock

The Company had previously sold 600 Series M Convertible Preferred Stock to Viable International Investments, LLC, a Florida limited liability company, (“Viable”). Each share of the Series M Preferred Stock was convertible into 147,283 shares of Common Stock. In the event of a liquidation, the holders of the Series M Preferred Stock would have been entitled to receive, prior to any distribution of assets to holders of Common Stock or other class of capital stock or other equity securities of the Corporation, $10,000 per share of Series M Preferred Stock held plus accrued but unpaid dividends. The holders of the Series M Preferred Stock would have had identical voting rights as any holder of Common Stock and would have voted together, not as separate classes. The original purchase price/stated value of each share of Series M Preferred Stock was $10,000 and Viable was be entitled to receive cumulative dividends at the fixed rate of 9% of the stated value per share per annum. On November 21, 2017, Viable converted 3 shares of its Series M Preferred Stock to 441,878 shares of restricted common stock. On April 18, 2017, Viable converted 6 shares of its Series M Preferred Stock to 883,696 shares of restricted common stock, and on August 7, 2018, Viable converted its remaining 591 shares of Series M Preferred Stock into 87,044,089 shares of restricted common stock. At March 31, 2024 and June 30, 2023, there were 0 shares Series M Preferred Stock outstanding. At March 31, 2024 and June 30, 2023, the balance of Series M Preferred Stock was $0.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(14) COMMON STOCK

The Company has 500,000,000 of common shares no par value authorized and 2,000,000 of no par preferred shares authorized.

The Company did not issue any shares of common or preferred stock during the nine months ended March 31, 2024 and 2023.

(15) STOCK OPTIONS

On December 4, 2016, the Board of Directors adopted the Company’s 2016 Equity Incentive Plan (the “2016 Plan”) which was subsequently approved and adopted by majority written consent in lieu of an annual meeting. The purpose of the 2016 Plan is to encourage and enable the officers, employees, directors and other key persons (including consultants) of the Company, upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business, to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.

In computing the impact of stock option grants, the fair value of each option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a risk-free interest rate; volatility of a comparable company; and expected remaining lives of the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future.

In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. The Company cannot assess its forfeiture rate at this time due to the lack of historical data.

	As of March 31, 2024		As of June 30, 2023
Expected volatility		20% to 44%		20% to 44%
Expected term		0.09 to 2.08 Years		0.5 to 2.83 Years
Risk-Free interest rate		0.05% to 1.55%		0.05% to 2.49%
Forfeiture rate		0.00%		0.00%
Expected dividend rate		0.00%		0.00%

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(15) STOCK OPTIONS (Continued)

At March 31, 2024, the Company has unvested and vested options under the 2016 Plan with exercise prices that range from a low of $.20 per share to a high of $.51 per share. The following table summarizes information about all of the stock options granted, exercised, expired and cancelled under the 2016 Plan at March 31, 2024 and June 30, 2023:

Employees/Consultants	Options			Wtd. Avg. Exercise Price			Wtd. Avg. Remaining Term	Aggregate Intrinsic Value
Outstanding at June 30, 2022		11,205,290		$	0.30		1.39 Years	$	-
Granted		-		$	-
Expired		(5,500,000	)	$	(0.20	)
Exercised		-		$	-
Cancelled		-		$	-
Outstanding at June 30, 2023		5,705,290		$	0.40		1.50 Years	$	-
Granted		-		$	-
Expired		(1,590,000	)	$	(0.20	)
Exercised		-		$	-
Cancelled		-		$	-
Outstanding at March 31, 2024		4,115,290		$	0.48		1.13 Years	$	-

The following table summarizes information about vested and unvested options under the 2016 Plan at March 31, 2024 and June 30, 2023. For the nine months ended March 31, 2024 and 2023 the Company recognized expenses for options that vested of $0 and $60,699, respectively:

Employees/Consultants	Unvested			Vested and Exercisable			Total
Outstanding at June 30, 2022		1,505,290			9,700,000			11,205,290
Granted		-			-			-
Vested and Exercisable		(875,000	)		875,000			-
Cancelled		-			-			-
Expired		-			(5,500,000	)		(5,500,000	)
Outstanding at June 30, 2023		630,290			5,075,000			5,705,290
Granted		-			-			-
Vested and Exercisable		-			-			-
Cancelled		-			-			-
Expired		-			(1,590,000	)		(1,590,000	)
Outstanding at March 31, 2024		630,290			3,485,000			4,115,290

Unvested options will be expensed under the Black-Scholes options-pricing model when they vest. As March 31, 2024 remaining options to be expensed when vested over the next year are estimated to be $68,185.

At March 31, 2024, the Company has issued options pursuant to six different stock option plans, the most recent being the 2016 Plan. All the options for the previous five plans through and including the 2012 Non-Statutory Plan have expired.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(15) STOCK OPTIONS (Continued)

The tables below summarize information about these five plans:

Employees/Consultants	Options			Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Term		Aggregate Intrinsic Value
Outstanding at June 30, 2022		12		$	350		0.11 Years	$	-
Granted		-		$	-
Exercised		-		$	-
Cancelled		(12	)	$	(350)
Outstanding at June 30, 2023		-		$	-		-	$	-
Granted		-		$	-
Exercised		-		$	-
Cancelled		-		$	-
Outstanding at March 31, 2024		-		$	-		-	$	-

Vested & Exercisable Stock Options	March 31, 2024		June 30, 2023
Employee 2016 Equity Plan		-		-
Director 2016 Equity Plan		-		-
Employee Other Plans		-		-
Directors and Consultants Other Plans		-		-
Total		-		-

The table below summarizes information about all stock options outstanding as of March 31, 2024:

	Outstanding Options						Vested Options
Range of Exercise price	Number Outstanding at March 31, 2024		Weighted Averaged Exercise Price		Weighted Averaged Remaining Life (Years)		Number Exercisable at March 31, 2024		Weighted Averaged Exercise Price		Weighted Averaged Remaining Life (Years)
$0.20 - $0.51		4,115,290	$	0.48		1.13		3,485,000	$	0.48		1.02
Total Outstanding options		4,115,290	$	0.48		1.13		3,485,000	$	0.48		1.02

The Company’s common stock, symbol IMDS, was quoted on OTCmarkets.com Pink until September 25, 2014 at which time IDSI’s registration was revoked by the Securities and Exchange Commission (SEC) for failure to timely file its Quarterly and Annual Reports. The last quoted price was $0.1. Because the Company was de-registered and OTC markets did not provide a quote for IMDS, there is no public market for the Company’s shares. Given the exercise prices adjusted for the reverse split, it is highly unlikely that any employee holding pre-2016 Plan options will exercise them. The Company has sufficient authorized shares available for all outstanding option; however, if exercised, the shares will be issued with a restrictive legend because the Company was not an SEC reporting company until October 2018. Further, given its recent return to SEC reporting status, the Company is unable to file an S-8 Registration Statement to register shares issued because of option exercise pursuant to various stock option agreements.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(16) COMMITMENTS AND CONTINGENCIES

From May 2010 to June 2012, claims were made by the IRS for payment of the Company’s accrued payroll taxes, interest and penalties, which as of June 30, 2012 was $1,489,640. The Company engaged tax counsel to handle this matter and intends to fully satisfy its payroll tax obligations. On August 4, 2014, the Company’s majority shareholder Viable International Investments LLC (“Viable”) Viable purchased 250 shares of convertible preferred stock for $2,500,000, which gave them a 78.9% voting and economic interest in the Company’s capital stock representing a change in control of the Company. New management’s tax counsel negotiated a new Installment Agreement which stipulated a lump sum payment of $250,000, which was paid on September 4, 2014 and monthly installment payments of $20,000 beginning in September 2014 due on the 18^th of each month until the balance of payroll taxes, interest and penalties are paid in full (Note 10).

During fiscal 2018, as part of new management’s restructuring plan, the Company received funds from an accredited investor to pay off the payroll tax portion of the amount owed to the IRS. The Company engaged tax counsel to manage the settlement and payment. On June 27, 2018, the IRS provided counsel with a payoff calculation table indicating that the balance of taxes due was $381,224. On June 29, 2018, Viable provided a bank check in that amount to counsel and they sent the check to the IRS with a letter requesting abatement of penalties and interest totaling $314,019. As of March 31, 2024, the Company’s tax counsel is in the process of reviewing the relevant IRS correspondence to determine appeals status and will work towards final resolutions with the IRS on all outstanding liabilities. The Company has decided to wait until all resolutions are final before making any adjustments to the balance of $314,019 owed to the IRS.

On October 23, 2019, the Company entered into a consulting agreement (“the Agreement”) effective as of November 1, 2019, with Dr. Huabei Jiang to serve as IDSI’s Chief Scientific Consultant. Pursuant to the Agreement, Dr. Jiang agreed to focus on improving the technical performance and image quality of IDSI’s CTLM® breast imaging device. Per the Agreement, the goal of the initial project was to complete image quality improvement by November 1, 2020. A payment of $500,000 was due upon satisfactory completion of the project; however, it was never completed. On August 22, 2024, the parties formally terminated the Agreement with no amounts due to Dr. Jiang.

IMAGING DIAGNOSTIC SYSTEMS, INC

Notes to Unaudited Financial Statements

March 31, 2024

(17) SUBSEQUENT EVENTS

On April 13, 2024, the Company received loan proceeds of $1,570 from Viable International Investments, LLC. Interest is 0% and the principal is payable on demand.

On May 16, 2024, the Company received loan proceeds of $1,570 from Viable International Investments, LLC. Interest is 0% and the principal is payable on demand.

On June 12, 2024, the Company received loan proceeds of $1,570 from Viable International Investments, LLC. Interest is 0% and the principal is payable on demand.

On July 9, 2024, the Company received loan proceeds of $6,830 from Viable International Investments, LLC. Interest is 0% and the principal is payable on demand.

On July 24, 2024, the Company received loan proceeds of $27,091 from Viable International Investments, LLC. Interest is 0% and the principal is payable on demand.

On August 16, 2024, the Company received loan proceeds of $22,724 from Viable International Investments, LLC. Interest is 0% and the principal is payable on demand.

On September 18, 2024, the Company received loan proceeds of $69,965 from Viable International Investments, LLC. Interest is 0% and the principal is payable on demand.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q for the period ended March 31, 2024, contains “forward-looking statements” within the meaning of the federal securities laws and use terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “projects”, “potential,” or “continue,” or the negative or other comparable terminology regarding beliefs, plans, expectations, or intentions regarding the future. These forward-looking statements involve substantial risks and uncertainties, and actual results could differ materially from those discussed and anticipated in such statements These forward-looking statements represent our expectations, beliefs, plans, intentions or strategies concerning future events, including, but not limited to: our ability to consummate a merger transaction to bring a new business into the Company; our future financial performance; the continuation of historical trends; the sufficiency of our resources in funding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. These risks, uncertainties and other factors include but are not limited to: the risks of limited management, labor and financial resources; technological changes and competition; our ability to establish and maintain adequate internal controls; changes in general economic conditions; legal claims and regulatory changes; our ability to develop and maintain a market in our securities; and our ability to obtain financing, if and when needed, on terms that are acceptable. There are also many known and unknown risks, uncertainties and other factors, including, but not limited to, the risk factors detailed from time to time in our Securities and Exchange Commission filings that may cause these assumptions to prove incorrect and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those described above and in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed on September 30, 2024. All forward-looking statements and risk factors included in this Form 10-Q report and in the Form 10-K report are made as of the date of the relevant disclosure document based on information available to us as of the date thereof, and we assume no obligation to update any forward-looking statements or risk factors. The occurrence of any of the events described as risk factors or other future events could have a material adverse effect on our business, results of operations and financial position. Since our common stock is considered a “penny stock,” we are ineligible to rely on the safe harbor for forward-looking statements provided in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). You are cautioned not to place undue reliance on these forward-looking statements.

OVERVIEW

We are currently a “shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating company. We were incorporated in the State of Nevada in December 1993. Our current business office is located at 618 E South St, Suite 500, Orlando, FL 32801. Our Internet website address is www.imds.com. The information contained in, or that can be accessed through, our website is not part of this Form 10-Q quarterly report.

HISTORICAL ACTIVITES

Imaging Diagnostic Systems, Inc. (the “Company” or “IDSI”) was a medical technology company that developed a new, non-invasive CT scanner called Computed Tomography Laser Mammography (CTLM®) that used a laser beam in place of ionizing X-ray for breast imaging. This technology is called Diffuse Optical Tomography. The CTLM® provided an adjunctive imaging modality to other methods of imaging the breast such as X-ray mammography, MRI and ultrasound.

In the fourth quarter of fiscal 2023, the Company terminated its CTLM® business due to the lack of financing and the absence of a realistic prospect of achieving profitability after accumulating huge operating losses for many years. Since the beginning of fiscal 2024 the Company has been focused on seeking new business opportunities to replace its failed legacy business through a reverse merger transaction. Entering into a reverse merger transaction would likely involve very substantial dilution to the existing shareholders. It would, however, provide an opportunity to return some value to our shareholders. While the Company has considered several opportunities, it has yet to enter into any definitive agreement and remains a shell company.

Since inception in December 1993 as a Florida corporation and subsequently its reverse merger with Alkan Corp., a New Jersey Corporation on April 14, 1994, we continued operations and changed our state of incorporation from New Jersey to Florida, effective July 1, 1995. On August 28, 2018, we filed a Form 10 registration statement to register issued and outstanding shares held by our shareholders and to become a fully reporting company under the Securities Exchange Act of 1934 (the “Exchange Act”). Our registration became effective on October 29, 2018.

As of the date of this quarterly report on Form 10-Q for the nine months ended March 31, 2024, we have had no revenues from our operations and have incurred net losses applicable to common shareholders since inception through March 31, 2024 of $135,968,525 after discounts and dividends on preferred stock. We incurred net losses applicable to common shareholders of $94,711 for the nine months ended March 31, 2024 and $301,188 for the nine months ended March 31, 2023.

Since 2016, we have financed our operations through loans by Viable International Investments LLC (“Viable”), a subsidiary of Sanya Wanbo (Viable) Investments, Ltd. Co. and its affiliates and the private placement of common stock to Viable affiliates and independent Chinese investors. We do not have any formal financing arrangements with Viable and its affiliates and there can be no assurance that we will continue to receive funding from Viable or another source.

Our financial statements have been prepared assuming that we will continue as a going concern. For the quarter ended March 31, 2024, we have incurred recurring operating losses and will have to obtain additional capital to sustain operations. These conditions raise substantial doubt about our ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2 “Going Concern and Management’s Plans”, in the Notes to the Financial Statements. The accompanying financial statements for the quarter ended March 31, 2024, do not include any adjustments to reflect the possible effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

CURRENT BUSINESS

We have had no material business operations since July 1, 2023. We are currently seeking potential assets, property, or businesses to acquire, in a business combination, by reorganization, merger, or acquisition. As of the date of this Annual Report, we have not entered into any binding agreement with any party regarding acquisition opportunities for us. We hope to continue to engage in discussions with other operating businesses regarding potential acquisition opportunities. There is no assurance that any nonbinding term sheet will result in a definitive purchase transaction nor can we assure you that we will be able to successfully acquire any company or business in the near future.

We are not currently engaged in any substantive business activity except the search for potential assets, property or businesses to acquire, and we have no current plans to engage in any other activity in the foreseeable future unless and until we complete any such acquisition. In our present form, we are deemed to be a “shell company” seeking to acquire or merge with a business or company. We do not intend to restrict our search for business opportunities to any particular business or industry, and the areas in which we will seek out business opportunities may include all lawful businesses. We recognize that the number of suitable potential business ventures that may be available to us will be extremely limited, and may be restricted to businesses or entities that desire to become a publicly-held company while avoiding what many may deem to be the adverse factors related to an initial public offering (“IPO”) as a method of “going public.” The most prevalent of these factors include the substantial time requirements, legal and accounting costs, the inability to obtain an underwriter who is willing to publicly offer and sell securities on behalf of the particular entity, the lack of or the inability to obtain the required financial statements for such an undertaking, state limitations on the amount of dilution to public investors in comparison to the stockholders of any such entity, along with other conditions or requirements imposed by various federal and state securities laws, rules and regulations and federal and state agencies that implement them.

The analysis of new business opportunities will be undertaken by or under the supervision of the Company’s officers and directors. We have unrestricted flexibility in seeking, analyzing, and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, we will consider the following kinds of factors:

	●	Potential for growth, indicated by new technology, anticipated market expansion, or new products;

	●	Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;

	●	Strength and diversity of management, either in place or scheduled for recruitment;

	●	Capital requirements and anticipated availability of required funds from operations, through the sale of additional securities, through joint ventures or similar arrangements, or from other sources;

	●	The extent to which the business opportunity can be advanced;

	●	The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and

●

Other relevant factors.

In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available acquisition opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We may not discover or adequately evaluate adverse facts about the business to be acquired. In evaluating a prospective business combination, we will conduct as extensive a due diligence review of potential targets as possible given the lack of information that may be available regarding private companies, our limited personnel, and financial resources.

We expect that our due diligence will encompass, among other things, meetings with the target business’s incumbent management and inspection of its facilities, as necessary, as well as a review of financial and other information, which is made available to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage. Our lack of funds and the lack of full-time management will likely make it impracticable to conduct a complete and exhaustive investigation and analysis of a target business before we consummate a business combination. Management decisions, therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like which, if we had more funds available to us, would be desirable. We will be particularly dependent in making decisions upon information provided by the promoters, owners, sponsors, or others associated with the target business seeking our participation.

The time and costs required to select and evaluate a target business and to structure and complete a business combination cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the indemnification and evaluation of a prospective business combination that is not ultimately completed will result in a loss to us.

Additionally, we are in a highly competitive market for a small number of business opportunities, which could reduce the likelihood of consummating a successful business combination. We are, and will continue to be, an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise, and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.

CRITICAL ACCOUNTING POLICIES

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions also include the valuations of certain financial instruments, stock-based compensation, deferred tax assets, the outcome of litigation and tax matters, and other matters that affect the statements of financial condition and related disclosures. Actual results could differ materially from these estimates.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:

Stock-Based Compensation

We rely on the guidance provided by ASC 718, (“Share Based Payments”). ASC 718 requires companies to expense the value of employee stock options and similar awards and applies to all outstanding and vested stock-based awards.

In computing the impact, the fair value of each option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a risk-free interest rate; volatility; and expected remaining lives of the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, we analyzed its historical forfeiture rate, the remaining lives of unvested options, and the amount of vested options as a percentage of total options outstanding. If our actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what we have recorded in the current period. During the nine months ended March 31, 2024 and 2023, no stock options were granted to employees or consultants. Those options are being expensed pursuant to ASC 718.

The fair value concepts were not changed significantly in ASC 718; however, in adopting this Standard, companies were given the option to choose among alternative valuation models and amortization assumptions. We elected to continue to use the Black-Scholes option pricing model and expense the options as compensation over the requisite service period of the grant. We will reconsider use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model.

RESULTS OF OPERATIONS

Sales and Cost of Sales

Revenues during the three months ended March 31, 2024 and 2023 were $0.

The Cost of Sales during the three months ended March 31, 2024 and 2023 was $0.

Revenues during the nine months ended March 31, 2024 and 2023 were $0.

The Cost of Sales during the nine months ended March 31, 2024 and 2023 was $0.

During the three and nine months ended March 31, 2024 and 2023, the Company did not engage in any operational activities aimed at generating revenue.

GENERAL AND ADMINISTRATIVE

Our general and administrative expenses include travel/subsistence related to general and administrative activities, property and casualty insurance, professional fees associated with our corporate and securities attorneys and independent auditors, corporate governance expenses, stockholder expenses, utilities, maintenance, telephones, office supplies and sales and property taxes.

General and administrative expenses during the three months ended March 31, 2024, were $2,553, representing a decrease of $12,670 or 83% from $15,223 during the three months ended March 31, 2023.

The general and administrative decrease of $12,669 is due primarily to less legal and filing fees during the three months ended March 31, 2024, as the Company did not timely file the 2024 second quarter Form 10-Q.

General and administrative expenses during the nine months ended March 31, 2024, were 9,814, representing a decrease of $67,169 or 87% from $76,983 during the nine months ended March 31, 2023.

The general and administrative decrease of $67,169 is due to having less legal and filing fees during the nine months ended March 31, 2024, as the Company did not timely file the fiscal 2023 Form 10-K or the 2024 first and second quarter Form 10-Q.

SALARIES AND WAGES

Our salaries and wages expenses include compensation, related benefits, payroll taxes and other payroll fees for all employees.

Salaries and wages expense during the three months ended March 31, 2024 and 2023 was $0.

Salaries and wages expense during the nine months ended March 31, 2024 and 2023 was $0.

The lack of salaries and wages is due to the Company’s decision to furlough all employees on May 1, 2020 in response to the COVID-19 crisis. Some of these individuals have worked as independent contractors on an as-needed basis. Payments made to contractors are included in consulting expenses.

RESEARCH AND DEVELOPMENT

We incur research and development expenses to develop significant enhancements to our sole product, the CTLM®. These expenses consist primarily of clinical costs, costs of materials and components to make product enhancements, new product research costs, and costs associated with servicing clinical collaboration sites.

Research and development were $0 for the three and nine months ended March 31, 2024 and 2023.

Research and development costs of $0 was due to the lack of business activity during the three and nine months ended March 31, 2024 and 2023.

SALES AND MARKETING

Our sales and marketing expenses consist primarily of expenses associated with advertising and promotion, representative office expense, trade shows, conferences, promotional and training costs related to marketing the CTLM®, commissions, travel/subsistence, patent maintenance fees, consulting, certification expenses, and product liability insurance.

Sales and marketing expenses during the three months ended March 31, 2024, were $126, representing an increase of $2 or 2% from $124 during the three months ended March 31, 2023.

Sales and marketing expenses during the nine months ended March 31, 2024, were $706, representing an increase of $76 or 12% from $630 during the nine months ended March 31, 2023.

All sales and marketing expenses during both the three and nine months ended March 31, 2024 and 2023 were related to fees for maintaining our website. The difference relates to variations in website related fees between the two periods.

CONSULTING EXPENSES

Our consulting expenses consists of all consulting fees paid as well as share-based compensation issued to our consultants. Our share-based compensation expense consists of vested stock options expensed under the Black-Scholes options pricing model.

Consulting expenses for the three months ended March 31, 2024, were $6,400, representing an increase of $512 or 9% from $5,888 during the three months ended March 31, 2023.

The increase in consulting expenses during the three months ended March 31, 2024 is due to a consulting fee of $5,000 to paid to Erhfort, LLC.

Consulting expenses for the nine months ended March 31, 2024, were $9,060, representing a decrease of $139,644 or 94% from $148,704 during the nine months ended March 31, 2023.

The decrease in consulting expenses is due to reduced activity during the nine months ended March 31, 2024. During the nine months ended March 31, 2023, Erhfort, LLC received $8,500 per month in consulting fees through December 2023. Fong & Associates, LLC received $8,500 in July 2022, but transitioned to as needed basis thereafter. Erhfort, LLC received consulting fees of $5,000, and Fong & Associates, LLC received only a nominal amount during the three and nine months ended March 31, 2024. Stock option expenses also decreased during the three and nine months ended March 31, 2024, due to a greater portion of options having already vested in prior periods.

AGGREGATE OPERATING EXPENSES

Total operating expenses (general and administrative, salaries and wages, research and development, sales and marketing, depreciation and amortization, and stock options) and cost of sales during the three months ended March 31, 2024, were $9,079, representing a decrease of $12,156 or 57% from $21,235 when compared to the operating expenses and cost of sales during the three months ended March 31, 2023. The decrease in operating expenses is primarily due to a decrease in general and administrative expenses during the three months ended March 31, 2024.

Depreciation and amortization during the three months ended March 31, 2024 and 2023, was $0. All fixed assets are fully depreciated.

Interest expense during the three months ended March 31, 2024, was $20,379, representing an increase of $224 or 1% from $20,155 during the three months ended March 31, 2023. Although the amount of outstanding debt at March 31, 2024 was higher, the more recent debt were 0% interest loans, which is why the amount of interest expense was similar.

Total operating expenses (general and administrative, salaries and wages, research and development, sales and marketing, depreciation and amortization, and stock options) and cost of sales during the nine months ended March 31, 2024, were $19,580, representing a decrease of $185,502 or 90% from $205,082 when compared to the operating expenses and cost of sales during the nine months ended March 31, 2023. The decrease in operating expenses is primarily due to a decrease in consulting fees and general and administrative expenses during the nine months ended March 31, 2024.

Depreciation and amortization during the nine months ended March 31, 2024 and 2023, was $0. All fixed assets are fully depreciated.

Interest expense during the nine months ended March 31, 2024, was $61,582, representing an increase of $223 or less than 1% from $61,359 during the nine months ended March 31, 2023. Although the amount of outstanding debt at March 31, 2024 was higher, the more recent debt were 0% interest loans, which is why the amount of interest expense was similar.

BALANCE SHEET DATA

Our combined cash and cash equivalents totaled $281 at March 31, 2024 and $1,088 at June 30, 2023.

Our inventory, which consists of raw materials, work in process (including completed units under testing), and finished goods totaled $0 at March 31, 2024 and $100,087 at June 30, 2023. Raw materials used for research and development or other purposes are expensed and not included in inventory. The net inventory is $0 at March 31, 2024 and June 30, 2023 because the Company has recorded an allowance for obsolete inventory for the entire value of the inventory due to lack of demand for parts and lack of sales. On October 16, 2023, the Company abandoned all remaining inventory.

Our property and equipment, net, totaled $0 at March 31, 2024 and June 30, 2023. On October 16, 2023, the Company abandoned all remaining fully depreciated fixed assets.

Our current liabilities, which consist of accounts payable, accrued payroll taxes and penalties, short term debt, and current portion of long-term debt, totaled $2,166,445 at March 31, 2024 and $2,096,667 at June 30, 2023. Accounts payable and accrued expenses totaled $1,006,354 at March 31, 2024 and $946,069 at June 30, 2023. Accrued payroll taxes and penalties totaled $314,019 at March 31, 2024 and June 30, 2023. Promissory notes totaled $773,142 at March 31, 2024 and $763,649 at June 30, 2023. The current portion of long-term debt was $72,930 at March 31, 2024 and $72,930 at June 30, 2023. Current liabilities increased primarily due to accounts payable and accrued expenses increasing by $50,285 and promissory notes increasing by $9,493.

Our temporary equity, which consists of Convertible Preferred Series L (including accrued dividends), totaled $465,488 at March 31, 2024 and $451,939 at June 30, 2023. The increase of $13,549 is due to dividends for the nine months ended March 31, 2024 that are being included in the total redemption value.

LIQUIDITY AND CAPITAL RESOURCES

Due to the failure of our legacy business, we are a shell company focused on seeking new business opportunities through a reverse merger transaction (a “Merger”). Our continued existence is dependent upon our ability to resolve our liquidity problems, principally by obtaining additional debt and/or equity financing and entering into a Merger. While Viable has financed our operations since 2016, we do not have any formal financing arrangements with Viable and its affiliates and there can be no assurance that we will continue to receive funding from Viable or another source,. In the event that we are unable to obtain adequate debt or equity financing or are unable to obtain such financing on terms and conditions acceptable to us, we may have to cease or severely curtail our operations. This would materially impact our ability to continue as a going concern.

We have financed our operating and research and development activities through multiple private placements of common stock as well as short term loans from related parties. During the nine months ended March 31, 2024, we received $9,493 through short-term related party loans. During the nine months ended March 31, 2023, we received $79,009 through short-term related party loans. We also converted $3,669 of accounts payables to a short-term related party loan during the nine months ended March 31, 2023.

Net cash used in operating activities was $10,300 for the nine months ended March 31, 2024, compared to net cash used in operating activities and product development of the CTLM® and related software development of $79,499 during the nine months ended March 31, 2023. At March 31, 2024, we had negative working capital of $2,156,078 compared to negative working capital of $2,074,916 at June 30, 2023.

If additional funds are raised by issuing equity securities, including in connection with a Merger, dilution to existing stockholders will result and future investors may be granted rights superior to those of existing stockholders.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Under the supervision and participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer, or the persons performing similar functions, concluded that our disclosure controls and procedures were effective as of March 31, 2024.

There have been no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal year that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

At this time, there are no material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

Item 1A. Risk Factors.

Our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed on September 30, 2024, includes a detailed discussion of our risk factors. The risks described in our Form 10-K Report are not the only risks facing IDSI. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. For the nine months ended March 31, 2024, there were no material changes in risk factors as previously disclosed in our Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. (Mine Safety Disclosures)

Not Applicable

Item 5. Other Information

None

Item 6. Exhibits

31.1		Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: September 30, 2024	Imaging Diagnostic Systems, Inc.

	By:	/s/ Rongbin Wang
		Rongbin Wang
		Chief Financial Officer
		(PRINCIPAL ACCOUNTING OFFICER)

		/s/ Lun Li
		Lun Li
		Chief Executive Officer (PRINCIPAL EXECUTIVE OFFICER)

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