ProUroVision is a technology that the company has licensed which provides significant enhancements to existing microwave thermal therapy for the treatment of BPH and cancer.

Current microwave thermal therapy treatment utilizes a catheter that is inserted into the patient’s urethra. The catheter contains an antenna that radiates microwave energy in an omni-directional, 360° pattern. The tissue of the prostate absorbs this energy and heat is inductively generated to increase the temperature above 45° C, which is necessary to cause necrosis of the tissue. After this tissue dies and is eliminated by the body, the enlargement of the prostate is reduced, restoring urine flow.

We believe that our unique and proprietary EIT technology will provide a significant enhancement to thermal therapy by allowing the clinician to accurately monitor the migration of heat within the prostate during the procedure. The clinician can be assured that sufficient, but not excessive, thermal energy is applied, thereby maximizing the procedure’s safety and therapeutic effectiveness. EIT is an imaging technology in which an image of the conductivity or resistivity of part of the body is inferred from surface electrical measurements. The heating that occurs during a thermal therapy procedure produces a change in the local conductivity or resistivity throughout the treatment volume. These local changes in the electrical properties of the tissue can be measured by a system of miniature electrodes placed on the patient’s body, and a rectal probe, all of which connect to an electronically controlled low-frequency power supply. Each individual electrode will receive a specific current and electronically measure all the possible induced voltages among the electrode array. An inversion algorithm is then employed to create a real-time image of the thermal pattern.

On July 27, 2005, we entered into a Memorandum of Understanding (the “MOU”) with Urologix, Inc. (“Urologix”) pursuant to which the parties will co-develop new products utilizing ProUroCare’s electrical impedance tomography (“EIT”) technology. The EIT technology is expected to be assembled into modules that will be compatible with and incorporated into Urologix’ existing thermal therapy systems. We are currently well into the first phase of what the parties expect will be several phases of research, testing and development over the next 18 to 24 months. ProUroCare and Urologix have agreed to equally share in the development costs of these phases. If the development of the modules is successful, the parties contemplate entering into definitive agreements pursuant to which Urologix would market the new products subject to a license agreement.

The EIT system will be assembled into modules that will be compatible with, and added on to, Urologix’ existing thermal therapy systems. The modules will include a low-frequency power supply, electrodes, a rectal probe, monitor and software containing the proprietary algorithms. This system will enable urologists to observe the real-time migration of heat through the prostate during treatment and adjust the amount of energy applied in order to protect the urethral tissue and adjacent organs. This information and increased energy efficiency will also help to minimize damage to healthy tissue.