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Medical International Technology Inc. Files SEC form 10-Q, Quarterly Report
August 14th 2012


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

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Business Development

Expanding the product line:

Medical International Technology Inc. has been considerably expanding financial resources in R&D in the last 5 years, having spent several millions of dollars. MIT already has 5 products for the human market and 9 products for the animal market. The company will soon be unveiling two new additions to its human product line and one for its animal line.

MIT's patented technology has received approval in several countries worldwide. These three new products are no exception.

The Company is refocusing its efforts and will target FDA approval for 2 of its latest product lines: first, the home use injector for diabetics and other treatments requiring daily injections, and second, product targeting physicians in their clinics for vaccination and other biological injection medications. FDA approval for these 2 products will help the company's credibility all over the world.


MIT products pipeline is already defined for 2012/2013; the realization of these new products design will be achieved by new finance to MIT and or a partnership with Medical and Pharmaceutical Companies.

New products for human diabetes, dentistry and poultry applications and their market potentials:

Diabetes
The International Diabetes Federation states that the diagnosis rate of diabetes has increased over the last two decades from 30 million to 246 million people with a disproportionate ratio coming from the United States, India, and China.

MIT is targeting this huge market with their newly developed Med-Jet model MIT-P-I within the next 8 to 10 month. "With our successful Chinese joint venture, MIT intends to introduce this new product in China first; thereafter we will have enough production capacity to sell all over the world." The Med-Jet MIT-P-I is designed to be safe, precise, accurate, effective, easy to use and friendly to the environment.

Dentistry
According to the World Health Organization (WHO) statistics, last updated October 26, 2004, the number of dentists in the world was numbered in the millions. There are 234,104 registered Dentist in the USA, 18,861 in Canada, 50,920 in China and it is estimated that 400,000 will be needed in these three countries by 2030. Statistics show there are an estimated average of 6 to 10 dentists for every 10,000 people in Europe.

It is estimated that 150,000 U.S. dentists could administer about 250 million doses of local Anaesthetics per year for the gums, for a total market of about $3.5 billion.

MIT is targeting this lucrative market with their Med-Jet model MIT-H-VI within the next 12 to 16 month. MIT intends to introduce this new product in North America first; other countries will follow shortly after. In dental offices, painful needle injections are enough to make even the most rational person skip dental visits. The Med-Jet MIT-H-VI will finally bring an end to traumatic dental visits.

Poultry Vaccinations
MIT's newly designed Agro-Jet model MIT-XII will help prevent the spread of deadly diseases by providing a needle-free alternative to the vaccination of billions of day-old baby chicks yearly. This high speed vaccinator will be able to inject thousands of birds per hour safely, precisely, accurately, effectively, with ease of use and friendly to the environment.

Projected Sales and Market Breakdown

Based on the actual financial crisis and market situation worldwide, the Company has revised its total sales forecast and believes it will grow revenues gradually to $25,000,000 within the next three to five years. The following information will outline market expectations by category and timeframe:

Human applications:

Our initial target market for the first year is cosmetic Dermatology, Plastic surgery, and General Practitioner for single and mass injections, using Med-Jet models MIT MBX and MIT-H-III. The second year, in addition to the previous models, the introduction of model MESO-JET a new product for the injections on the face for all cosmetic dermatology procedures, in the third and forth and fifth year we will introduce MIT-H-IV-1 and MIT-H-IV-5 will target private clinics and hospitals, also the injector for Diabetics, MIT P-I, and the Dental injector, MIT-H-VI, will be introduced and will drastically increase sales to achieve its forecast.

Animal applications:

Our initial target market for the first year is the pork, cattle, and poultry markets, using our existing and newly redesigned products for mass animal vaccination. The second year in addition to the previous models, MIT will introduce and market its day-old baby chicken injector, a highly-requested product by farmers around the world. During the third year, MIT will present 2 more new products expected to drastically increase sales to achieve its forecast.


China joint venture

The creation of MIT China in June of 2009 has given MIT a unique advantage to expand its production operations and increase its sales and profits in the multi-billion dollar worldwide needle-free injector market. Furthermore, MIT China venture will help MIT supply large production volumes in lesser time, which will attract large medical and pharmaceutical partners.

The introduction of our Agro-Jet needle-free injector for animal application is going very well; our veterinary staff is doing an excellent job training our distributors in various regions. These efforts will result in sales growth for the coming months and years.

During the third quarter of fiscal year 2011, MIT China purchased 151,000 sq. ft. of land and began construction of our first building in Taizhou (China Medical City). This first building of 40,000 sq. ft. when finalized will be used for the production of injectors for the Chinese market only.

Work in progress at MIT China for the construction of its 40,000 sq. ft. building, the first stage (the offices) has been completed, and our first move of all our employees to Taishou was conducted in the beginning of August 2012. The other part of the construction is scheduled to be complete by December 2012, our managements and engineers are working hard to plan the purchasing of the equipment and tools necessary for the assembly and production of some of our Agro-Jet and Med-Jet products. The production facility should be able to supply a large number of injectors and disposables to the Chinese market.

Per the recent discussions and understanding of our general manager, Ethan Sun, with our Joint Venture partner, our plan of sales and expansion into the Chinese market is progressing and MIT China agreed and sold 9% of their joint venture for an investment of 18,000,000 RMB (US$3,000,000). MIT China now has 46.41%, we have 44.59%, and Taizhou Amazon Investment Center has 9% ownership in such venture.

We have recently supplied a CDC (Centre of Disease Control) vaccination clinic in China with one Med-Jet model MIT H-III, and requested an MIT China nurse to be present at the clinic at all times for training, supervision of the proper usage and procedures of our Med-Jet for vaccination., the results are very good so far and we expect more uses of our Med-Jet H-III from many of the CDC clinics and hospitals across China in fiscal year 2013.

We are proceeding positively with our SFDA for our new Med-Jet model H-4. We expect our certification in 2013 fiscal year.

Our Model Med-Jet H-4 will target all vaccination clinics, hospitals, all CDC Centers and many other departments that have needs for any biologic injections.

Our objective is to ensure that our injectors become an indispensable and environmentally friendly product for doctors, dentists, veterinarians and home users around the world.

We will continue providing a safe and effective means to help prevent the spread of deadly diseases to both humans and animals through the use of the Med-Jet� and Agro-Jet� needle-free injection system.

Results of Operations

Results of Operations for the three months ended June 30, 2012 and 2011

For the nine-month period ended June 30, 2012, the Company experienced a net loss from operations of $31,108, which was primarily due to selling, general and administrative expenses of $664,266. Gross profits for the period were $633,158.

For the six-month period ended June 30, 2011, the Company experienced a net loss from operations of $221,655, which was primarily due to selling, general and administrative expenses of $412,243. Gross profits for the period were $190,588.

The reduced net loss between the comparable quarters was due to increased sales as the Company continues to push its products into the market along with reduced research and development costs. Sales for the nine-month period ending June 30, 2012 were $828, 644 compared to sales of $290,503 for the same period last year. Gross profits for the period ending June 30, 2012 represented 76% of sales, where gross profits for the same period last year represented 65% of sales.


Liquidity and Capital Resources

For the nine-month period ending June 30, 2012, the Company's cash position, including access to cash through a revolving line of credit, decreased to $10,889. Net cash used in operating activities was $141,484. Cash used by financing activities was $92,195 which was primarily a result of decreases in amounts due to related parties of $152,723. Cash used by investing activities was $64,410, which was a result of acquisitions of new patent rights and tooling and machinery. The effect of exchange rates on cash increased cash balances by $4,232.

For the nine-month period ending June 30, 2011, the Company's cash position increased to $25,477. Net cash used in operating activities was $444,057. Financing activities provided $588,9323 which was primarily as a result of increases in cash received of $491,581 from issuance of common stock. Cash used by investing activities was $108,204, which was additional capital invested in the MIT China joint venture and acquisitions of new patent rights and tooling and machinery. The effect of exchange rates on cash decreased cash balances by $11,185.

Plan of Operations

MIT intends to concentrate its activities in the medical and veterinary sectors, in particular, in the field of equipment and instrumentation. The Company's strategy is to build good, reliable and cost effective products, seek and establish strategic alliances with different pharmaceutical companies and manufacturers to ensure good distribution channels for its products.

MIT promotes and sells products in over 30 countries including the United States of America. MIT is exerting every effort and using its resources to promote its products and to open markets for its technology. As we continue to market our products, we hope to gain broader acceptance of the needle-free injection technology. MIT is continually researching and developing its products to the market needs.

We will continue to seek additional funding to expand operations, develop sales revenue, conduct presentation to medical and pharmaceutical companies, achieve sales to a volume sufficient to sustain operations and yield a good return to our shareholders.

Product Development

Per our previous fillings for FDA approval for our needle-free injector, the MED-JET is designed specifically for human mass inoculations. The MED-JET is capable of delivering many types of medications such as vaccines, insulin and other types of injectables. Its low-pressure technology offers an advantage to alternative high pressure systems that can cause blowbacks and expose medical workers and patients alike to microscopic traces of blood.

According to the International Sharps Injury Prevention Society (http://www.isips.org), it has been estimated that one out of every seven workers is accidentally struck by a contaminated sharp point each and every year. The Center for Disease Control (CDC:
http://www.cdc.gov/niosh/2000-108.html#5) estimates that there are 600,000 to 800,000 needle stick injuries per year in the U.S. alone, and many are not reported. More than 20 types of infectious agents have been transmitted through needlesticks, including hepatitis B and C, tuberculosis, syphilis, malaria, herpes, diphtheria, gonorrhea, typhus and Rocky Mountain spotted fever. The MED-JET will eliminate this risk to health care professionals and create a safer workplace. Other advantages include its light weight (0.5 kg) and an excellent medication absorption rate. Additionally, the system has the ability to increase or decrease the volume and pressure of injection. This technology is unique to MIT's MED-JET MBX Injector. The system is designed to inject up to 600 individuals an hour.

The approval process can be expensive and may take an extended period of time. There can be no assurance that this system will receive approval from the FDA or if approved gain broad acceptance by the medical community or individual patients.


During the last quarter of 2011 we signed with an outside consultant to help MIT with the FDA approval process and to expedite the approval. This work is proceeding and few more tests must be done in order to file complete documentations to FDA, and we are expecting to complete these tests within the second quarter of 2013.

On December 15, 2005, we received full certification granted under the International Organization for Standardization, as well as the Canadian Medical Device Conformity Assessment System for devices to be licensed by HEALTH CANADA. These certifications allow MIT to currently market the Med-Jet Needle-Free Injector for human use in all countries other than the U.S. The Med-Jet injector has been submitted for FDA approval which, if accepted, will allow MIT to sell the Med-Jet in the United States, making it a truly worldwide system.

MIT's Needle-Free Injection System, designed specifically to allow fast, accurate and safe injections, is rapidly moving toward establishing itself as a valuable instrument in the fight against disease in both humans and animals. Spurred on by growing fears of a worldwide epidemic that could match or even exceed the deadly flu pandemic of 1918 which killed millions of people, the MIT team is focusing its efforts to make its Needle-Free Injection System available to the world.

Now that MIT is able to sell its Med-Jet in all countries other than the U.S., it is working to complete two FDA filings. The first of these will be for use of the Med-Jet for injecting anesthesia in a variety of situations. The second, and most significant in light of the news coming out of Asia concerning the spread of Influenza A (H1N1) to humans, will be the Med-Jet-H III and H-4, for mass vaccination in case of a pandemic, such as Avian Influenza, Polio, Tuberculosis, Malaria or HIV.

MIT will increasingly promote its Agro-Jet and our new Avian-Jet needle-free injector designed specifically for poultry vaccination. Having the same benefits as Med-Jet, Agro-Jet and Avian-Jet will become a valuable instrument in the fight against Avian Flu via its ability to mass inoculate animals at over 1000 injections per hour.

Off Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.