The Small Business Research and Development Enhancement Act of 1992 requires the agencies of the Public Health Service, Department of Health and Human Services and certain other federal agencies to reserve 2.5% of their current fiscal year extramural budgets for research or research and development for an SBIR program. The legislation is intended to: expand and improve the SBIR program;emphasize increased private sector commercialization of technology developed through federal SBIR R&D;increase small business participation in Federal R&D, and foster and encourage participation of socially and economically disadvantaged small business concerns and women owned small business concerns in the SBIR program. The Small Business Innovation Research program consists of three phases. The objective of Phase I is to determine the scientific, technical, and commercial merit and feasibility of the proposed research or R&D efforts and the quality of performance of the small business concern, prior to providing further Federal support in Phase II. Phase II awards continue the research or R&D efforts initiated in Phase I. Funding shall be based on the results of Phase I and the scientific and technical merit and commercial potential of the Phase II proposal. The Phase III objective is for the small business concern to pursue with non-federal funds the commercialization of the results of the research or R&D funded in Phases I and II. The purpose of this Phase I contract is to support Acoustic MedSystems, Inc in the development of a catheter capable of targeting and delivering high intensity focused ultrasound (HIFU) ablative energy under magnetic resonance imaging (MRI) guidance. This would be attractive because MRI can identify pathology in target tissue, guide positioning of therapeutic devices, and guide thermal alterations during delivery of energy. This MRI-guided HIFU technology would enable novel approaches to therapy for cardiac rhythm disorders as well as ablation therapy for endocavitary tumors. The sponsoring government laboratory intends to use this MRI HIFU ablation catheter for the treatment of cardiac rhythm disorders, and offers to assist the awardee in packaging and testing their HIFU technology for operation in an MRI environment.