GUIDED THERAPEUTICS INC (Form: 8-K, Received: 01/26/2017 11:30:59)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 22, 2017

GUIDED THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation)	0-22179 (Commission File Number)	58-2029543 (IRS Employer Identification No.)

5835 Peachtree Corners East, Suite D Norcross, Georgia (Address of principal executive offices)			30092 (Zip Code)

Registrant’s telephone number, including area code: (770) 242-8723

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

	[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On January 22, 2017, the Company entered into a license agreement with Shandong Yaohua Medical Instrument Corporation (“SMI”) pursuant to which the Company granted SMI an exclusive global license to manufacture the Company’s LuViva Advanced Cervical Cancer device and related disposables (subject to a carve-out for manufacture in Turkey) and exclusive distribution rights in the Peoples Republic of China, Macau, Hong Kong and Taiwan. In exchange for the license, SMI will pay a $1.0 million licensing fee, payable in five installments through October 2017, as well as a royalty on each disposable sold in the territories. SMI will also underwrite the cost of securing approval of LuViva with the Chinese Food and Drug Administration.

Pursuant to the SMI agreement, SMI must become capable of manufacturing LuViva in accordance with ISO 13485 for medical devices by the second anniversary of the SMI agreement. During 2017, SMI must purchase no fewer than ten devices (with up to two devices pushed to 2018 if there is a delay in obtaining Chinese FDA approval). In the three years following Chinese FDA approval, SMI must purchase a minimum of 3,500 devices (500 in the first year, 1,000 in the second, and 2,000 in the third). As manufacturer of the devices and disposables, SMI will be obligated to sell each to the Company at costs no higher than the Company’s current costs.

As partial consideration for, and as a condition to, the license, and to further align the strategic interests of the parties, the Company agreed to issue $1.0 million in shares of its common stock to SMI, in five installments through October 2017, at a price per share equal to the lesser of the average closing price for the five days prior to issuance and $1.25.

In order to facilitate the SMI agreement, immediately prior to its execution the Company entered into an agreement with Shenghuo Medical, LLC, regarding the Company’s previous license to Shenghuo, originally granted in June 2016, to manufacture, sell and distribute the LuViva in Asia. Under the terms of the new agreement, Shenghuo agreed to relinquish its manufacturing license and its distribution rights in SMI’s territories, and to waive its rights under the original Shenghuo agreement, all for as long as SMI performs under the SMI agreement. As consideration, the Company has agreed to split with Shenghuo the licensing fees and net royalties from SMI that the Company will receive under the SMI agreement. Should the SMI agreement be terminated, the Company has agreed to re-issue the original license to Shenghuo under the original terms. Two of the Company’s directors, Mark Faupel and Richard Blumberg, are managing members of Shenghuo.

The above descriptions are qualified in their entirety by reference to the SMI agreement and the Shenghuo agreement, attached as Exhibits 10.1 and 10.2, respectively, to this current report and incorporated herein by reference. A press release further describing the agreements is attached at Exhibit 99.1 and is incorporated herein by reference.

This current report on Form 8-K is neither an offer to sell nor the solicitation of an offer to buy any securities. The securities described above have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act.

Item 3.02 Unregistered Sales of Equity Securities

The information set forth under Item 1.01 is incorporated by reference into this Item 3.02. The issuance of the securities described under Item 1.01 pursuant to the SMI agreement has been conducted as a private placement to “accredited investors” (as that term is defined under Rule 501 of Regulation D), and is exempt from registration under the Securities Act of 1933 in reliance upon Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving a public offering.

Item 5.05 Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.

The information set forth under Item 1.01 is incorporated by reference into this Item 5.05. On January 15, 2017, each of the disinterested directors on the Company’s Board of Directors, having considered the interests of Dr. Faupel and Mr. Blumberg and having approved the agreement, effectively waived the conflict-of-interest provisions of the Company’s code of ethics.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Number	Exhibit
10.1 *	Agreement, dated January 22, 2017, between the Company and Shandong Yaohua Medical Instrument Corporation
10.2	Agreement, dated January 22, 2017, between the Company and Shenghuo Medical, LLC
99.1	Press Release, dated January 25, 2017

* Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission as part of an application for confidential treatment pursuant to Rule 24B-2 promulgated under the Securities Exchange Act of 1934

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GUIDED THERAPEUTICS, INC.

	/s/ Gene S. Cartwright, Ph.D.
	By: Gene S. Cartwright, Ph.D.
	President and Chief Executive Officer
Date: January 26, 2017

EXHIBIT INDEX

Number	Exhibit
10.1*	Agreement, dated January 22, 2017, between the Company and Shandong Yaohua Medical Instrument Corporation
10.2	Agreement, dated January 22, 2017, between the Company and Shenghuo Medical, LLC
99.1	Press Release, dated January 25, 2017

* Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission as part of an application for confidential treatment pursuant to Rule 24B-2 promulgated under the Securities Exchange Act of 1934

Exhibit 10.1

AGREEMENT BETWEEN SHANDONG YAOHUA MEDICAL INSTRUMENT

CORPORATION AND GUIDED THERAPEUTICS, INC.

CONFIDENTIAL, FINAL 22 JANUARY 2017

This agreement is dated 22 January, 2017 and is between Guided Therapeutics, Inc., a Georgia, United States of America corporation (“GTI”), located at 5835 Peachtree Corners East, Suite D, Norcross, GA 30092, USA and Shandong Yaohua Medical Instrument Corporation, located at No. 5 Zhuijian Street, High-Tech Development Zone, Laiwu Shandong, People’s Republic of China (“SMI”).

WHEREAS GTI has developed a platform technology for the early detection of disease that leads to cancer;

WHEREAS GTI’s first non-invasive cancer detection product is the LuViva® Advanced Cervical Scan device (the “Device”) and the related disposable cervical guides (the “Disposables” and, with the Device, “LuViva). LuViva is in use in Canada, Latin America, Europe, Turkey, Asia and Africa. GTI owns the worldwide manufacturing, distribution and intellectual property (“IP”) rights to LuViva. LuViva is designed to:

Determine the true likelihood of treatable cervical disease that may lead to cancer in women aged 16 years and over who have been screened for cervical cancer and have an abnormal result.

Be used as a screening tool both in the developed and developing world where the Papanicolaou test and/or the Human Papillomavirus Virus tests are not widely available.

WHEREAS GTI asserts that they have the rights to license the global manufacturing rights, excepting the Disposable Cervical guides for the Republic of Turkey, for LuViva, and the distribution rights and sales rights for LuViva in the Peoples Republic of China, Macau, Hong Kong and Taiwan (hereinafter collectively referred to as the “Jurisdictions”);

WHEREAS SMI is a medical device company in China with an established distribution and sales capability and has indicated a capability and willingness to manufacture for the global market, and distribute and sell LuViva in the Jurisdictions,

WHEREAS under this agreement between the Parties, SMI is granted exclusive rights by GTI for global manufacture as the optimum way to achieve economies in global manufacturing and exclusive commercialization, both distribution and sales, of LuViva within the Jurisdictions (“Global Manufacturing License”)

CONFIDENTIAL TREATMENT REQUESTED BY GUIDED THERAPEUTICS, INC. – CONFIDENTIAL PORTIONS OF THIS DOCUMENT, MARKED BY *****, HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

IT IS HEREBY AGREED AS FOLLOWS between SMI and GTI that SMI is granted exclusive manufacturing rights, excepting the Disposable Cervical Guides for the Republic of Turkey, and exclusive distribution rights and sales rights for LuViva in the Jurisdictions, subject to the following terms and conditions.

Payments by SMI and Transfer of Stock to SMI :

Payment Instructions:

1. GTI shall provide payment instructions to SMI for SMI payments to GTI within 5 business days of signing this Agreement.

2. SMI shall provide disbursement instructions to GTI for distribution of GTI stock within 15 business days of signing of this Agreement.

3. Both Parties will undertake to ensure that the payment or disbursement instructions are mutually satisfactory and compliant with all applicable regulations.

SMI shall make payments to GTI based on the following schedule

$50,000 due within 15 business days of signing this Agreement

$200,000 due on or before 20 February 2017*

$250,000 due on or before 30 April 2017

$250,000 due on or before 30 July 2017

$250,000 due on or before 30 October 2017

*To be paid to GTI providing that GTI provides all documents and data, including manufacturing transfer plan, product production, guidance documents, product quality standards, relevant patent certificates, fixed costs of products, personnel data, etc. as reasonably required by SMI within 10 business days after GTI receives the initial payment of USD $50,000. During the first quarter of 2017, GTI and SMI will agree on the plan and schedule for transfer of manufacturing.

GTI shall issue shares of its common stock to SMI or as directed by SMI with each of the five payments equal in value to the amount of the payment (e.g $50,000, $200,000 or $250,000) within 30 days after receipt of payments. The number of shares issued will be calculated at the lesser of the end of day per share price for the average of five consecutive days preceding the payment or $1.25 per share. The shares of stock shall be transferred to SMI or as directed by SMI within 30 days of SMI’s payment.

2017 Orders :

Subject to purchase orders from SMI to GTI, the schedule of minimum orders for 2017 shown in the table below will be maintained in order to maintain Jurisdiction sales and distribution rights.

2017

Number of LuViva Devices

Price Per Device

(by air, CIF BEIJING; by sea CIF QINGDAO

Anticipated Use

By 31 March

$*****

- Chinese FDA Sample (1)

- Clinical Samples (2)

- Transfer Manufacturing Sample (1)

- Seed outside PRC Market (1)

By 31 December

$*****

- Seed PRC Commercial Market (4)*

- Sales outside of PRC (1)

*If Chinese Food and Drug Administration (CFDA) approval is delayed, then these four device orders can be moved to Q1 2018. If SMI needs to order single use Cervical Guides or other supplies directly from GTI instead of manufacturing them in China, the prices shall be pursuant to the published price list for international distributors adjusted by a 10% discount. For clinical trials, GTI agrees to supply 200 Cervical Guides at no cost.

If additional orders are placed by SMI to GTI prior to SMI having established its own manufacturing facility, the devices will be priced as follows:

Quantity	Price (by air, CIF BEIJING; by sea CIF QINGDAO)
11 – 20	$*****
21 – 40	$*****
41 and greater	International distributor list price

3. Minimum Sales : People’s Republic of China (Beginning first full calendar year following CFDA approval). It is expected that full or partial manufacturing will occur in China, so that minimum orders will not necessarily occur, unless agreed by both parties. Notwithstanding the foregoing, SMI will be responsible for minimum royalty payments based on the minimum sales of LuViva products as shown in the Table below.

Full year following CFDA Approval	Number of machines placed or sold	Number of tests per day	Days per week	Weeks per year
1	500	30	5	48
2	1000	30	5	48
3	2000	30	5	48

4. Cost of CFDA Approval : SMI shall underwrite the entire cost of securing approval of LuViva with Chinese FDA.

5. Manufacturing :

SMI, shall arrange, at its sole cost, for a manufacturer in China to build tooling to support manufacture.

The price payable by GTI for each Device and each packet of Disposables supplied by the manufacturer for resale by GTI outside of the Territories will be no higher than the then current internal costs to GTI for manufacturing the Device and the then current price paid by GTI to its current supplier of Disposables.

In the event that this is not possible, the Parties agree to discuss the following options:

SMI retains the right to manufacture for China, Hong Kong, Macau and Taiwan, where SMI has distribution and sales rights.

SMI elects to manufacture just the Cervical Guides which is anticipated to be able to be at a lower price in China

SMI buys the devices and Cervical Guides, or just the devices from GTI

Other options that may be identified and available to find a mutually satisfactory solution.

If SMI fails to achieve manufacturing capabilities for either the Devices and Disposables in accordance with ISO 13485 for medical devices by 24 months after the date hereof, SMI shall no longer have any rights to manufacture, distribute or sell LuViva.

6. Technical Assistance for Manufacturing and Sales :

Both GTI and SMI recognize the need for technical assistance to set up manufacturing and to establish sales protocols and marketing materials. To that end, both parties pledge cooperation in helping to establish the manufacturing and sales in China.

GTI shall provide the Curricula Vitae or Resume (personal data) of the inventor of the LuViva technology to SMI

SMI shall send over its manufacturing expert to GTI at SMI’s expense to learn the manufacturing process. GTI will be responsible for all in-country (US) expenses.

GTI shall send over its technical expert within 10 days of a request or as soon as reasonably possible from SMI to SMI at GTI’s expense to assist with the establishment of the manufacturing and sales protocols in China. SMI will be responsible for all in-country (China) expenses.

GTI shall provide technical support and training for product upgrades consistent with the technical support provided to other international distributors of LuViva.

7. Royalties :

For each single-use Cervical Guide chip sold by SMI in the Jurisdictions, SMI shall transfer funds to the Escrow Agent at a rate of $***** per chip..in the amount equaling the number of chips sold. Funds shall be transferred monthly.

The Parties agree to reassess these royalty amounts at the end of the second year of commercial sales in China to determine if an adjustment to the royalty amounts, up or down, is warranted. Any adjustments to the royalty amounts must be mutually agreeable.

8. Commercialization : If within 18 months of this License’s Effective Date, SMI fails to achieve commercialization of LuViva (as defined below) in China. SMI shall no longer have any rights to manufacture, distribute or sell LuViva.

Commercialization of LuViva is defined as SMI achieving all of the following:

Filing an application with the CFDA for approval of LuViva

Any assembly or manufacture of the Device or Disposables that begins in China

Purchase of at least 10 Devices and associated Disposables for clinical evaluations and regulatory use and or sales in the Jurisdictions, according to the schedule described in Section 2. above.

9. Best Efforts : The Rights described herein must be maintained by diligent development and commercial efforts. SMI agrees to use its best efforts to maximize the royalty payments contemplated herein. Both parties agree to conduct quarterly reviews to mark progress and agree on forecasts for orders.

10. Breach or Failure to Perform : Under the following circumstances, SMI shall forfeit this License and shall no longer have any rights to manufacture, distribute or sell LuViva in the Jurisdictions if SMI is unable to cure in a timely manner:

A material breach of any of SMI’s obligations set forth in this section.

Failure to achieve CFDA approval within 30 months from the date of this agreement.

In the event of Breach or Failure to Perform,

GTI shall provide written notification of the breach or failure to perform.

SMI shall be given a 45 day period in which to cure the breach or failure to perform.

If the breach or failure to perform is not cured, SMI shall return to GTI, at SMI’s cost, all samples, data, hardware, software, regulatory documents, bench and clinical test results and all other information pertaining to LuViva in the Jurisdictions

11. Notices and Communications : All notices and other communications required by this Agreement will be effective upon deposit in the mail, postage prepaid and addressed to the parties at their respective addresses set forth below until such notice that a different person or address shall have been designated:

If to SMI:

No. 5 Zhuijian Street, High-Tech Development Zone, Laiwu Shandong, People’s Republic of China

If to GTI:

5835 Peachtree Corners East, Suite D,

Norcross, GA 30092, USA

12. Relationship of Parties : The Parties to this Agreement are and shall remain independent contractors and nothing herein shall be construed to create a partnership, agency or joint venture between the parties. Each party shall be responsible for wages, hours and conditions of employment of its personnel during the term of, and under this Agreement.

13. Dispute Resolution : In the event a dispute arises out of or in connection with this Agreement, the parties will attempt to resolve the dispute through friendly consultation. If the dispute is not resolved within a reasonable period then any or all outstanding issues may be submitted to mediation in accordance within any statutory rules of mediation. If mediation is not successful in resolving he entire dispute or is unavailable, any outstanding issues will be submitted to final and binding arbitration in accordance with the laws of the State of Georgia, United States of America. The arbitrator’s award will be final, and judgment may be entered upon it by any Court having jurisdiction within the State of Georgia, United States of America. Each party shall choose one (1) arbitrator and the two (2) chosen arbitrators shall select a third arbitrator, who shall be the Chairman of the Arbitration Panel. As soon as the mediation process has been unsuccessful, either party may select an arbitrator by sending the name of the arbitrator, in writing, to the other party. The party receiving the name of the said arbitrator shall, within fifteen (15) days of receipt, select their arbitrator and shall send their selection, in writing, to the other party. Should that party fail to select their arbitrator within fifteen (15) days of receipt of the name of the first party’s arbitrator, the initial party may seek Court appointment of the receiving party’s arbitrator and the latter shall be responsible for the initial party’s reasonable attorney’s fees and costs in connection with the Court appointment. If the two (2) appointed arbitrators fail to select the third arbitrator within thirty (30) days from the appointment of the second arbitrator, either party, or the parties jointly, may seek Court appointment of the third arbitrator.

14. Applicable Law : All questions concerning the validity, operation, interpretation and construction of this Agreement will be governed by and determined in accordance with the laws of the State of Georgia, United States of America.

15. Waivers of Breach : No waiver by either Party of any breach of any provision shall constitute a waiver of any other breach of that provision or any other provision hereof.

16. Warrants and Representations : Each Party represents and warrants that the terms of this Agreement are not inconsistent with any other contractual or legal obligations it may have or with the policies of any institution or company with which such Party is associated.

17. Interpretation : The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event of an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any the provisions of this agreement.

18. Assignment : SMI may not assign this Agreement in whole or in part, other than manufacturing, without GTI’s consent, that shall not be unreasonably be withheld. SMI may outsource all or parts of the manufacturing at their discretion, provided that SMI is able to maintain and verify that the quality of the manufacturing maintains CFDA, ISO 14485 and other regulatory standards that GTI may rely upon in sourcing LuViva.

19. Effective Agreement : This Agreement may be signed by the parties via facsimile or electronic signatures. This Agreement will constitute an effective Agreement when signed by both Parties.

20. Entire Agreement : This Agreement, sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges all prior discussions between them; and neither party shall be bound by any conditions, definitions, warranties, understandings or representations with respect to such subject matter other than as expressly provided herein. This Agreement may not be modified or altered except in writing by an instrument duly executed by authorized officers of both parties.

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed by their duly authorized officers as of the _22___ day of January, 2017.

GTI

/s/ Gene Cartwright___________________________

Gene Cartwright

Chief Executive Officer, Guided Therapeutics Inc.

SMI

/s/ Yaohua Li__________________________________

Yaohua Li

Chairman, Shandong Yaohua Medical Instrument Corporation

Exhibit 10.2

GUIDED THERAPEUTICS-SHENGHUO MEDICAL AGREEMENT

22 Jan 2017

This Agreement is between Guided Therapeutics, Inc. (“GTI”), a Georgia corporation with the address of 5835 Peachtree Corners East, Suite D, Norcross, GA 30092, and Shenghuo Medical LLC, a privately held U.S. limited liability company with the address of 175 Strafford Ave., Wayne, PA 19087 (“Shenghuo”).

WHEREAS, GTI has developed a platform technology for the early detection of disease that leads to cancer;

WHEREAS GTI’s first non-invasive cancer detection product is the LuViva® Advanced Cervical Scan device (the “Device”) and the related disposable cervical guides (the “Disposables” and, with the Device, “LuViva”).LuViva is in use in Canada, Latin America, Europe, Turkey, Asia and Africa and is under premarket application (PMA) review by the U.S. Food and Drug Administration. GTI owns the worldwide manufacturing, distribution and intellectual property (“IP”) rights to LuViva. LuViva is designed to:

A. Determine the true likelihood of treatable cervical disease that may lead to cancer in women aged 16 years and over who have been screened for cervical cancer and have an abnormal result.

B. Be used as a screening tool both in the developed and developing world where the Pap and/or HPV tests are not widely available.

WHEREAS GTI previously has granted an exclusive license (“Original License”) to manufacture, sell and distribute LuViva in Peoples Republic of China (“China”), Macau and Hong Kong, Taiwan, Brunei Darussalam, Cambodia, Laos, Myanmar, Philippines, Singapore, Thailand, and Vietnam (the “Jurisdictions”) to Shenghuo pursuant to that certain License Agreement, dated June 5, 2016, between GTI and Shenghuo (the “Original Agreement”);

WHEREAS Shandong Yaohua Medical Instrument Co. Ltd (“SMI”) is a medical device manufacturing and sales company located at No. 5 Zhujiang Street, High-Tech Development Zone, Laiwu Shandong, Peoples Republic of China;

WHEREAS GTI and Shenghuo have determined that the optimum way to achieve commercialization of LuViva within China, Macau, Hong Kong and Taiwan (the “Territories”) is for Shenghuo to relinquish the Original License as it applies to the exclusive rights to manufacture LuViva and to the sale and distribution of LuViva in the Territories, so that GTI can grant SMI a new license for the exclusive rights to manufacture LuViva and to sell and distribute LuViva in the Territories (the “SMI License” and the agreement between GTI and SMI providing for the grant of the SMI License, the “SMI Agreement”);

IT IS HEREBY AGREED AS FOLLOWS between GTI and Shenghuo:

1. Shenghuo agrees to (i) relinquish the Original License to facilitate the SMI Agreement, whereby SMI will acquires the SMI License, and (ii) except as expressly provided herein, permanently waive all of its rights under the Original Agreement. Notwithstanding the foregoing, Shenghuo shall retain the rights under the Original License to sell and distribute LuViva in those Jurisdictions that are not Territories. If SMI makes combined payments to GTI and Shenghuo totaling $500,000 or more, the condition in the Original License requiring Shenghuo to enter into an agreement with an established commercial partner that invests at least $500,000 in Shenghuo to commercialize LuViva in China shall be deemed satisfied.

2. GTI agrees as follows:

A. All Up-Front Payments and Royalty Payments (including the payments for minimum royalties) due from SMI to GTI under the SMI Agreement shall be divided equally into two different accounts, one controlled by GTI and one controlled by Shenghuo, to be equally divided by an escrow agent, or other manner as agreed to by GTI, SMI as set forth in the SMI agreement. Notwithstanding the foregoing, funds from SMI destined for Shenghuo must be deposited directly into a separate account that does not allow GTI discretionary control over said funds. “Up-Front Payments” means the $1,000,000 in cash payable by SMI to GTI in four installments of $250,000 (with an advance of $50,000 on the first installment) through October 30, 2017, pursuant to the SMI Agreement. “Royalty Payments” means the royalty payments payable by SMI to GTI pursuant to the SMI Agreement for each Disposable sold by SMI, net of the costs of the RFID chip constituting part of each such Disposable and net of per-Disposable payments to Three Bridges LLC pursuant to the Business Development Service Agreement, dated November 11, 2016, between GTI and Three Bridges LLC. If (i) SMI fails to equally divide and pay the Up-Front Payments as provided herein, and (ii) upon subsequent written request from Shenghuo, GTI fails to terminate the SMI License as a result of such SMI failure, then GTI shall immediately pay to Shenghuo an amount in cash such that the total amount of all Up-Front Payments actually made by SMI (regardless of the actual payee) is split equally between GTI and SMI.

B. If, pursuant to the terms of the SMI Agreement, GTI terminates the SMI License, GTI shall re-grant the Original License to Shenghuo, on the same terms as the original grant of the Original License (except that to the extent that milestones set forth in the Original Agreement have been met by SMI, then those milestones shall be deemed as having been satisfied by Shenghuo), and Shenghuo’s waiver of its rights under the Original Agreement shall be rescinded.

C. If GTI and SMI do not execute the SMI Agreement within 72 hours of the signing this Agreement, then GTI shall re-grant the Original License to Shenghuo, on the same terms as the original grant of the Original License (except that to the extent that milestones set forth in the Original Agreement, and this Agreement shall be deemed terminated and of no further force and effect, and Shenghuo’s waiver of its rights under the Original Agreement shall be rescinded).

D. Up Front Payment Schedule – Each of the Up Front Payments from SMI shall be divided in the following manner:

Payment Date	Total Amount	Amount to GTI	Amount to Shenghuo*
10 days after SMI Agreement signed	$50,000	$48,000	$2,000
20 February 2017	$200,000	$146,000	$54,000
30 April 2017	$250,000	$98,000	$152,000
30 July 2017	$250,000	$98,000	$152,000
30 October 2017	$250,000	$98,000	$152,000

*Includes all finder’s fees including the 2% fee for the initial $50,000 payment made by SMI to GTI in connection with their letter of intent.

Late payments, if delayed by GTI, shall be subject to a one percent (1%) monthly late fee.

E. Shenghuo shall sell to GTI, and GTI shall buy back, by the earlier of April 30, 2017 and the time a purchase order is received by SMI, the five (5) LuViva devices previously sold to Shenghuo for a total of $92,500 (i.e., exactly what Shenghuo paid GTI for them as part of the Original License terms).

F. GTI reaffirms its obligations under the Original Agreement with regard to the note and warrant agreements provided therein and the four percent (4%) finders’ fee on any funds that go to GTI as a result of direct introductions made by Shenghuo. In instances whereby Shenghuo is the initial finder or co-finder, but an intermediary or co-finder has introduced the person or entity that contributes the funds to GTI and receives a fee greater than two percent (2%), the finder’s fee to Shenghuo shall be reduced to two percent (2%), with such consideration to include all funds collected by GTI in connection with the SMI agreements, with the exception of royalties resulting from product sales. Shenghuo will invoice GTI for its commissions and payment will be due within 30 days of the invoice, or at Shenghuo’s option, paid out of the payments from SMI under the SMI Agreement. If invoiced, finder’s fees shall be paid within ten (10) business days of receipt of invoice by GTI and late payments will be assessed at one percent (1%) late charge per month.

G. GTI shall not amend the SMI Agreement in any way that adversely affects Shenghuo without Shenghuo’s approval.

H. The parties shall cooperate in good faith to facilitate GTI’s full enforcement of SMI’s obligations under the SMI Agreement, and GTI shall inform Shenghuo in advance of any waiver by GTI of SMI’s performance under the SMI Agreement.

3. Miscellaneous

A. All notices and other communication required by this Agreement or permitted to be given under this Agreement will be effective upon deposit in the mail, postage prepaid and addressed to the parties at their respective addresses set forth below unless by such notice a different person or address shall have been designated.

If to GTI:

Gene Cartwright, President and CEO

5835 Peachtree Corners East, Suite D,

Norcross, GA 30092

If to Shenghuo:

Richard Blumberg, Esq., Managing Member

Michael Antonoplos, Managing Member

Shenghuo Medical, LLC

C/O Mark S. Pearlstein, Esq.

175 Strafford Ave., Suite One

Wayne, PA 19087

610-687-7757; 206-330-7030

610-687-7737 (facsimile)

Michael J. Antonoplos, Managing Member

Shenghuo Medical, LLC

175 Strafford Avenue, Suite One

Wayne, PA 19087

B. The Parties to this Agreement are and shall remain independent contractors and nothing herein shall be construed to create a partnership, agency or joint venture between the parties. Each party shall be responsible for wages, hours and conditions of employment of its personnel during the term of, and under, this Agreement.

C. In the event a dispute arises out of or in connection with this Agreement, the parties will attempt to resolve the dispute through friendly consultation. If the dispute is not resolved within a reasonable period then any or all outstanding issues may be submitted to mediation in accordance within any statutory rules of mediation. If mediation is not successful in resolving the entire dispute or is unavailable, any outstanding issues will be submitted to final and binding arbitration in accordance with the laws of the State of Georgia The arbitrator’s award will be final, and judgment may be entered upon it by any Court having jurisdiction within the Commonwealth of Pennsylvania or State of Georgia, as applicable. Each party shall choose one (1) arbitrator and the two (2) chosen arbitrators shall select a third arbitrator, who shall be the Chairman of the Arbitration Panel. As soon as the mediation process has been unsuccessful, either party may select an arbitrator by sending the name of the arbitrator, in writing, to the other party. The party receiving the name of the said arbitrator shall, within fifteen (15) days of receipt, select their arbitrator and shall send their selection, in writing, to the other party. Should that party fail to select their arbitrator within fifteen (15) days of receipt of the name of the first party’s arbitrator, the initial party may seek Court appointment of the receiving party’s arbitrator and the latter shall be responsible for the initial party’s reasonable attorney’s fees and costs in connection with the Court appointment. If the two (2) appointed arbitrators fail to select the third arbitrator within thirty (30) days from the appointment of the second arbitrator, either party, or the parties jointly, may seek Court appointment of the third arbitrator.

D. All questions concerning the validity, operation, interpretation and construction of this Agreement will be governed by and determined in accordance with the laws of the State of Georgia.

E. No waiver by either party of any breach of any provision hereof shall constitute a waiver of any other breach of that provision or any other provision thereof.

F. Subject to the receipt of necessary consents disclosed to the other party, each party represents and warrants that the terms of this Agreement are not inconsistent with any other contractual or legal obligations it may have or with the policies of any institution or company with which such party is associated.

G. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event of an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

H. This Agreement may be signed by the parties in counterparts and via facsimile or electronic signatures, which signatures, taken as a whole, shall constitute an effective Agreement.

I. This Agreement, sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges all prior discussions between them; and neither party shall be bound by any conditions, definitions, warranties, understandings or representations with respect to such subject matter other than as expressly provided herein. This Agreement may not be modified or altered except in writing by an instrument duly executed by authorized officers of both parties.

J. Nothing herein expressed or implied is intended or should be construed to confer upon or give to any person other than the parties hereto and their successors or assigns any rights or remedies under, or by reason of this Agreement.

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed by their duly authorized officers as of the 22 ^nd day of January, 2017.

For GTI:

/s/ Gene Cartwright		Date : January 22, 2017
Gene Cartwright, President and CEO



For Shenghuo:

/s/ Richard Blumberg,		Date : January 22, 2017
Richarl Blumberg, Managing Member

/s/ Michael Antonoplos		Date : January 22, 2017
Michael Antonoplos, Managing Member

Exhibit 99.1


		5835 Peachtree Corners East, Suite D
		Norcross, GA 30092

Guided Therapeutics Enters into LuViva® Advanced Cervical Scan

Manufacturing and License Agreement for China

Deal includes equity investment in Guided Therapeutics and commitment to fund all manufacturing

start up, regulatory and distribution costs in China

NORCROSS GA (January 25, 2017) -- Guided Therapeutics, Inc. (OTCQB: GTHP), the maker of a rapid and painless testing platform based on its patented biophotonic technology, announced today that it has reached agreement with Shandong Yaohua Medical Instrument Corporation in China for exclusive distribution, sales and manufacturing rights of the LuViva® Advanced Cervical Scan for China, Taiwan, Hong Kong and Macau.

In addition to a previous payment of $50,000 made by Shandong Yaohua, the terms of the license agreement include a licensing fee by Shandong Yaohua of $1,000,000, the purchase of a minimum of ten LuViva® Advance Cervical Scan devices in 2017 and royalties for disposables based on minimum orders once Chinese Food and Drug Administration (CFDA) approval is obtained. To further align the strategic interests of the parties, Guided Therapeutics has agreed to issue $1,000,000 in shares of its common stock to Shandong Yaohua.

Shandong Yaohua will conduct the necessary clinical trials and apply to the CFDA for approval to market LuViva in China. Once approved, Shandong Yaohua will provide for the distribution and sale of LuViva within China with its established distribution and sales network.

China is potentially the world’s largest market for cervical cancer screening with over 390 million women in the recommended ages for screening. The incidence of cervical cancer in China is currently the highest in the world and increasing. Increased screening for cervical cancer is key to mitigating the losses associated with this disease.

Under the terms of the agreement, Shandong Yaohua will establish manufacturing lines for LuViva within its existing medical device manufacturing facilities, which will enable Shandong Yaohua to supply Guided Therapeutics with LuViva products.With increased volume of production, advanced manufacturing processes and competitive labor rates, the Company expects that Shandong Yaohua will be able to lower the costs for the LuViva device and disposables for the global market. Worldwide, the market for cervical cancer screening and diagnostics, as currently practiced using cytology (Pap test) for primary screening, is estimated at $6 billion and is projected to grow to almost $9 billion by 2020. There are about 2.6 billion women aged 15 years and older who are at risk of developin g cervical cancer worldwide.

“We are pleased to be partnering with Shandong Yaohua to bring LuViva to China and improve early detection in a market where cervical cancer, often found too late, is the second leading killer among women’s cancers,” said Gene Cartwright, CEO and President of Guided Therapeutics. “The agreement also opens up the possibility to bring efficiencies to our manufacturing processes as well as opening up additional markets in East Asia.”

“LuViva is the ideal product to address this critical women’s health concern, which is a national priority for eradication in China,” said Li Yaohua, Chairman of Shandong Yaohua. “The combination of early detection and immediate results makes the LuViva appealing to the healthcare professional as well as the patient and her family.”

The Company currently anticipates interim device and disposable sales for clinical study and demonstration purposes. In Hong Kong, the Company believes the time to commercial sales is quicker, with device registration, rather than approval required.

About Shandong Yaohua Medical Instrument Corporation

Shandong Yaohua Medical Instrument Corporation, traded on the Chinese National Equities Exchange and Quotations as 833141, is the maker and distributor of medical devices and disposables for urine analysis, urine test strips, vacuum blood collection tubes and other medical products. They manufacture, distribute and sell to the domestic market in China, the Middle East and Eastern Asia. Shandong Yaohua Medical Instrument Corporation is located in the high-tech development zone of Shandong Province, Laiwu City. Shandong Yaohua owns 86,600 square meters facilities (including building and yard). The building area is approximately 20,000 square meters.

About LuViva ^® Advanced Cervical Scan

LuViva is a technologically advanced diagnostic device that scans the cervix with light and uses spectroscopy to measure how light interacts with the cervical tissue. Spectroscopy identifies chemical and structural indicators of precancer that may be below the surface of the cervix or misdiagnosed as benign. This technique is called biophotonics. Unlike Pap, HPV tests or biopsies, LuViva does not require laboratory analysis or a tissue sample, and is designed to provide results immediately, which may result in eliminating costly, painful and unnecessary additional testing. LuViva is intended for use with women who have undergone initial screening and are called back for follow up with a colposcopy examination, which in many cases, involves taking a biopsy of the cervix. It has also been used in clinical studies in Turkey and Nigeria as a means to screen women for cervical cancer where the availability of infrastructure necessary for Pap and HPV testing is restricted. The device is used in conjunction with the LuViva ^® Cervical Guide single-use patient interface and calibration disposable.

About Guided Therapeutics

Guided Therapeutics, Inc. (OTCQB: GTHP) is the maker of a rapid and painless testing platform based on its patented biophotonic technology that utilizes light for the early detection of disease at the cellular level. The Company’s first product is the LuViva® Advanced Cervical Scan, a non-invasive device used to detect cervical disease instantly and at the point of care. In a multi-center clinical trial with women at risk for cervical disease, the technology was able to detect cervical cancer up to two years earlier than conventional modalities, according to published reports. For more information, visit: www.guidedinc.com.

The Guided Therapeutics LuViva ^® Advanced Cervical Scan is an investigational device and is limited by federal law to investigational use in the U.S. LuViva, the wave logo and "Early detection, better outcomes" are registered trademarks owned by Guided Therapeutics, Inc.

Forward-Looking Statements Disclaimer: A number of the matters and subject areas discussed in this news release that are not historical or current facts deal with potential future circumstances and developments. The discussion of such matters and subject areas is qualified by the inherent risks and uncertainties surrounding future expectations generally and also may materially differ from Guided Therapeutics’ actual future experience involving any of or more of such matters and subject areas. Such risks and uncertainties include those related to the early stage of commercialization of products, the uncertainty of market acceptance of products, the uncertainty of development or effectiveness of distribution channels, the intense competition in the medical device industry, the sufficiency of capital raised in prior financings and the ability to realize their expected benefits, the uncertainty of future capital to develop products or continue as a going concern, the uncertainty of regulatory approval of products, and the dependence on licensed intellectual property, as well as those that are more fully described from time to time under the heading “Risk Factors” in Guided Therapeutics’ reports filed with the SEC, including Guided Therapeutics’ Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and subsequent filings.

Contact:

Bill Wells

Guided Therapeutics

770-242-8723