Item 1.01 Entry into a Material Definitive Agreement.

Escalon Medical Corp. entered into material definitive agreements in connection with the sale of its Escalon Clinical Diagnostics business by its Drew Scientific, Inc. subsidaries to ERBA Diagnostics, Inc. as detailed on Item 2.01

Item 2.01 Completion of Acquisition or Disposition of Assets.

On October 3, 2012 Escalon Medical Corp. (the "Company") sold its Clinical Diagnostics Business to ERBA Diagnostics, Inc. The Escalon Clinical Diagnostics Business ("ECD') consists of Drew Scientific, Inc., and its wholly owned subsidiaries JAS Diagnostics, Inc. ("JAS") and Drew Scientific Limited Co. The sales price was $6,500,000 in cash. ECD develops and sells A1c and Hematology diagnostic instruments, reagents and chemistries. Drew was focused on providing instrumentation and consumables for the physician office labs, small hospital labs and veterinary research laboratories. Drew also supplies the reagent and other consumable materials needed to operate the instruments. JAS specializes in the manufacture of a broad range of liquid stable, diagnostics chemistry reagents used in IVD tests. Many of these reagents are single vial stable, which offer ease of use, increased speed of results and extended on-board stability. Escalon Clinical Diagnostics revenues from operations were $12,985,000, $13,708,000 and $18,077,000, in fiscal 2012, 2011, 2010, respectively. The sale of this business will have a material effect on earnings in subsequent periods.

Item 9.01 Financial Statements and Exhibits.

2.1 Stock Purchase Agreement
99.1 Press Release dated October 4, 2012

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