Overview of Current Operations

We are a publicly-traded distributor of life-saving and life-enhancing prescription drugs and diagnostics to several channels in the healthcare industry. We are also a software and technology developer of proprietary and patentable technologies for e-health and EMR applications. From time to time we employ several of our medical software technologies to leverage and add value to our prescription drug and diagnostics business. We are also a Wi-Fi PDA technology provider to the lodging industry. In the third quarter of 2008, we added modules to our medical and EMR applications that allow for the management of medical products distribution and reporting management. We are in the initial stages of marketing these new modules under the trade name Decision IT.

In February 2009 the Obama administration issued summary health industry cost saving initiatives as part of the national healthcare policy overhaul. An area of focus and an area of future proposed federal investment are to be in the area of electronic medical patient records and other medical electronic cost saving technologies.

Our proprietary MD@Hand and Practice Probe software technologies manage critical patient data (electronic medical records), enhance productivity (electronic cost saving technologies) and facilitate communication with other applications in the healthcare, medical practice and medical products distribution markets. As we have recently focused our business attention toward providing prescription drugs and medical diagnostics through several medical distribution channels, we are now updating our medical software technologies for future focus to the medical practice and medical insurance industries.

All of our business is transacted in the United States. We do not sell or ship for export.

During the next 12 months we plan to continue to focus our efforts on the following primary businesses:

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Providing medical communication devices based on networks of personal smart cell phones (Palm Pre, Apple iPhone). These products are believed to provide benefits of on demand medical information to private practice physicians, licensed medical service providers such as diagnostic testing laboratories, and most importantly, medical insurers;

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The distribution of medical diagnostic products primarily aimed at institutions that service patients with diabetic and asthma related diseases and ailments. Our current market focus for these products is the assisted living and long term care sector of the larger healthcare market, however we plan to expand into additional sectors where we can service certain chronic ambulatory disease states;

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Providing medical communication devices based on networks of smart cell phones (Palm Pre, Apple iPhone) and tablet computers with software that manages decision, control, audit and fulfillment for the medical products distribution markets. These products are believed to provide benefits of on demand medical information to medical products manufacturers as part of their financial management of distribution contracts;

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The distribution and fulfillment of prescriptions for ethical pharmaceuticals primarily aimed at the elderly (Part D) indigent and uninsured sectors of the greater medical service markets. Our first market focus for these products will be those Medicare, state Medicaid and Federally chartered clinics (and initiatives) where funding for pharmaceutical fulfillment enterprises exists;

Building electronic commerce networks based on tablet computers to the hotels, motels and single building, multi-unit apartment buildings with a desire to offer local advertising and electronic services to their tenants/guests.

Seasonality

The distribution of medical products and medical diagnostics in aggregate currently account for the overwhelming percentage of our revenues. Our experiences point to a business that displays certain seasonal trends. In each of the last three operating years our order intake was concentrated in the first five months of the calendar year and to an identifiable degree in the last two months of the calendar year. One explanation is that these months correspond with the beginning of a prescription drug plan years where new prescription drug cards are distributed by insurers to their insured (including Medicare beneficiaries) in January along with new plan formularies (price schedules).
This in turn trends to influence "stocking up" buying/ordering behavior on the part of the insured.

Results of Operations for the three months ended June 30, 2009 and 2008 compared.

The following tables summarize selected items from the statement of operations for the three months ended June 30, 2009 compared to the three months ended June 30, 2008.

INCOME:

                                     For the three months ended        Increase (Decrease)
                                              June 30,
                                        2009            2008              $              %

Revenue                           $    5,105,981  $     3,020,694        2,085,287         69%
Cost of Sales                          4,757,860        2,676,063        2,081,797         78%

Gross Profit                             348,121          344,631            3,490          1%

Gross Profit Percentage of Sales            6.8%            11.4%

Revenue

Our revenue for the three months ended June 30, 2009 was $5,105,981 compared to revenue of $3,020,694 in the three months ended June 30, 2008. This resulted in an increase in revenue of $2,085,287, or 69%, from the same period a year ago.
The increase in revenue over the three months ended June 30, 2008 was a result of our market focus toward direct sale and direct to patient sale of diabetic test strips and medical-surgical products into several prescription drug distribution channels.

Cost of sales/Gross profit percentage of sales

Our cost of sales for the three months ended June 30, 2008 was $4,757,860, an increase of $2,081,797, or 78% from $2,676,063 for the three months ended June 30, 2008. The increase in cost of sales during the current period was due to changes and decreases in the national Medicare reimbursement and the company's focus on increasing sales over the prior quarter in our direct to patient market sales.

EXPENSES:

                               For the Three Months Ended
                                        June 30,
                                  2009             2008        Increase / (Decrease)
                                 Amount           Amount            $           %
  Expenses:
   General & administrative $        94,303  $       64,558 $         29,745      46%
   Consulting services               17,373          28,442         (11,069)    (39%)
   Payroll expense                   69,389          79,815         (10,426)    (13%)
   Professional fees                 54,078          22,240           31,838     143%
   Depreciation                           -           9,063          (9,063)        -
    Total expenses                  235,143         204,118           31,025      15%

  Net operating income              112,978         140,513         (27,535)    (20%)

  Other income (expense):
   Financing costs                 (74,657)        (66,786)          (7,871)      12%
   Interest (expense)              (57,028)        (56,075)            (953)       2%
  Debt forgiveness                1,329,690               -                -        -
  Total other income              1,198,005       (122,861)        1,320,866   1,075%
  Net income                $     1,310,983  $       17,652 $      1,293,331   7,327%

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2009 were $94,303, an increase of $29,745, or 46%, from $64,588 for the three months ended June 30, 2008. We have focused our business development towards targeted market areas for our diabetic testing products, as a result of this focused agenda, we have been able to streamline overhead utilizing only those resources that directly attribute to our sales growth thereby allowing us to eliminate unnecessary general and administrative expenditures. General and Administrative expenses are expected to fluctuate for the remainder of Fiscal Year 2009 as a result of the company's renewed focus on its medical software technologies. It is the goal of management to continue efforts in limiting redundant overhead.
In addition due to the deteriorated economy management has foregone salaries.

Consulting Services

We have historically relied on outside consultants for assistance in business development and sales. As we are becoming more seasoned in our pharmaceutical product lines, we have been able to limit the amount of outside services required to build and maintain our market share, evidenced by our decrease in consulting services for the three months ended June 30, 2009. During this quarter we expended $17,373 for consulting services compared to $28,442 for the three months ended June 30, 2008, representing a decrease of 39% over the previous period. Consulting services expenses are expected to fluctuate for the remainder of Fiscal Year 2009 as a result of the company's renewed focus on its medical software technologies.

We currently staff five full-time positions. Each of which, assist in sales, marketing and administrative support. We have made tremendous efforts to maintain cash-flow through a reduction in salaries and wages. During the three months ended June 30, 2009 our payroll expense was comprised of cash totaling $9,389 and equity of $60,000 compared to $15,315 in cash and $64,500 in equity for the comparable period in 2008. As our sales continue to grow, we anticipate our payroll expense will also increase at a pro rata rate.

Professional Fees

Our professional fees consist of legal, accounting and expenses associated with being a fully reporting public company. Our fees for these services increased by $31,838 compared to the three months ended June 30, 2008 as a result of increased accounting and audit fees. We anticipate these fees to remain stable throughout the upcoming year.

Total Expenses

Our operating expenses increased $31,025 overall for the three months ended June 30, 2009 when compared to $204,118 for the three months ended June 30, 2008.
Our streamlined operational environment has allowed for the decrease in total operational costs.

Net Operating Income

We had net operating income in the amount of $112,978 for the three months ended June 30, 2009, versus a net operating income of $140,513 for the three months ended June 30, 2008. As we maintain our business focus toward building sales and minimizing unnecessary overhead, we are hopeful to continue with positive earnings results.

Financing Costs

Financing costs for the three months ended June 30, 2009 were $74,657, an increase of $7,871, or 12%, from $66,786 for the three months ended June 30, 2008. Our financing costs have increased substantially as a result of our revolving line of credit with Centurion Credit Resources LLC. This agreement allows us the necessary capital to finance and turn our inventory creating an ability to generate revenue we had not previously had due to our significant deficiencies in working capital. Interest payments are paid to Centurion in the form of cash, calculated by multiplying the company's outstanding balance of loans made by Centurion by 2% per month. A bonus of 20% of the company's margin on each transaction is also paid to Centurion. Shares of our common stock are paid to Centurion as a bonus on qualifying transactions. The ability to pay in shares allows us to build our own working capital through the gross profit received on each sale with the anticipation of limiting the necessity for future working capital financing.

Interest Expense

Our interest expense has remained fairly consistent at $54,280 with the comparable period one year ago. Until such time as we are able to pay down or convert our existing debt, we anticipate a continued expense of this amount throughout the upcoming year.

Net Income

We achieved net income for the three months ended June 30, 2009 in the amount $1,310,983, an increase of $1,293,331 from our previous year of $17,652. The increase in net income and our resulting profit was attributable to debt forgiveness.

The following tables summarize selected items from the statement of operations for the six months ended June 30, 2009 compared to the six months ended June 30, 2008.

INCOME:

                                    For the Six Months Ended      Increase (Decrease)
                                            June 30,
                                       2009           2008            $            %

Revenue                          $   10,164,716  $   5,818,076      4,346,640      75%
Cost of Sales                         9,540,057      5,025,946      4,514,111      90%

Gross Profit                            624,659        792,130      (167,471)    (21%)

Gross Profit Percentage of Sales           6.2%          13.6%         (7.4%)

Revenue

Our revenue for the six months ended June 30, 2009 was $10,164,716 compared to revenue of $5,818,076 in the six months ended June 30, 2008. This resulted in an increase in revenue of $4,346,640, or 75%, from the same period a year ago.
The increase in revenue over the three months ended June 30, 2008 was a result of our market focus toward direct sale and direct to patient sale of diabetic test strips and medical-surgical products into several prescription drug distribution channels.

Cost of sales/Gross profit percentage of sales

Our cost of sales for the six months ended June 30, 2009 was $9,540,057, an increase of $4,514,111, or 90% from $5,052,946 for the six months ended June 30, 2008. The increase in cost of sales during the current period was due to changes and decreases in the national Medicare reimbursement and the company's focus on increasing sales over the prior quarter in our direct to patient market sales.

Gross profit as a percentage of sales decreased from 13.6% for the six months ended June 30, 2008 to 6.2% for the six months ended June 30, 2009. The decrease in gross profit margin was caused by three market forces; (a) a change in our product mix whereby we increased our sales levels in medical surgical sales markets to extended care facilities, which historically have a lower profit margin, (b) a lowered reimbursement allowed by the federal Medicare program and private insurers, and (c) a deteriorated economy which has lowered our ability to "stock up" patients with our products.

EXPENSES:

                                For the Six Months Ended
                                        June 30,
                                   2009           2008        Increase / (Decrease)
                                  Amount         Amount            $           %

   Expenses:
    General & administrative $      136,994  $     125,304 $         11,690       9%
    Consulting services              49,757         93,735         (11,069)    (47%)
    Payroll expense                  81,547        200,335        (118,788)    (59%)
    Professional fees                60,014         67,596          (7,582)    (11%)
    Depreciation                          -          9,063          (9,063)        -
     Total expenses                 328,312        505,096        (176,784)    (35%)

   Net operating income             296,347        287,034            9,313       3%

   Other income (expense):
    Financing costs               (104,555)      (116,260)         (11,705)    (10%)
    Interest expense              (114,141)      (111,393)            2,748       2%
   Debt forgiveness               1,329.690              -        1,329,690        -
   Total other income             1,110,994      (227,653)        1,338,647     588%

   Net income                $    1,407,341  $      59,381 $      1,347,960   2,270%

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2009 were $136,994, an increase of $11,690, or 9%, from $125,304 for the six months ended June 30, 2008. We have focused our business development towards targeted market areas for our diabetic testing products, as a result of this focused agenda, we have been able to streamline overhead utilizing only those resources that directly attribute to our sales growth thereby allowing us to eliminate unnecessary general and administrative expenditures. General and Administrative expenses are expected to fluctuate for the remainder of Fiscal Year 2009 as a result of the company's renewed focus on its medical software technologies. It is the goal of management to continue efforts in limiting redundant overhead.
In addition due to the deteriorated economy management has foregone salaries.

Consulting Services

We have historically relied on outside consultants for assistance in business development and sales. As we are becoming more seasoned in our pharmaceutical product lines, we have been able to limit the amount of outside services required to build and maintain our market share, evidenced by our decrease in consulting services for the six months ended June 30, 2009. We expended $49,757 for consulting services compared to $93,735 during the same period in the previous year, representing a decrease of 47%. Consulting services expenses are expected to fluctuate for the remainder of Fiscal Year 2009 as a result of the company's renewed focus on its medical software technologies.

Payroll expense

During the six months ended June 30, 2009 our payroll expense was comprised of cash totaling $21,547 and equity of $60,000 compared to $33,760 in cash and $166,500 in equity for the comparable period in 2008. As our sales continue to grow, we anticipate our payroll expense will also increase at a pro rata rate.

Professional Fees

Our professional fees consist of legal, accounting and expenses associated with being a fully reporting public company. Our fees for these services decreased for the six month period by $7,582 from $67,596 in 2008 to $60,014 for the six month period ending June 30, 2009. We anticipate these fees to remain stable throughout the upcoming year.

Total Expenses

Our operating expenses decreased $176,784 or 35% overall for the six months ended June 30, 2009 when compared to the same period a year ago. The decrease was directly related to a reduction in our share-based payroll compensation expense in 2009.

Net Operating Income

We had net operating income in the amount of $296,347 for the six months ended June 30, 2009, versus a net operating income of $287,034 for the six months ended June 30, 2008. As we maintain our business focus toward building sales and minimizing unnecessary overhead, we are hopeful to continue with positive earnings results.

Financing Costs

Financing costs for the six months ended June 30, 2009 were $104,555, a decrease of $11,705, or 10%, from $116,260 for the six months ended June 30, 2008.
Financing costs result from our revolving line of credit with Centurion Credit Resources LLC. This agreement allows us the necessary capital to finance and turn our inventory creating an ability to generate revenue we had not previously had due to our significant deficiencies in working capital. Interest payments are paid to Centurion in the form of cash, calculated by multiplying the company's outstanding balance of loans made by Centurion by 2% per month. A bonus of 20% of the company's margin on each transaction is also paid to Centurion. Shares of our common stock are paid to Centurion as a bonus on qualifying transactions. The ability to pay in shares allows us to build our own working capital through the gross profit received on each sale with the anticipation of limiting the necessity for future working capital financing.

Interest Expense

Our interest expense has remained fairly consistent at $114,141 with the comparable period one year ago. Until such time as we are able to pay down or convert our existing debt, we anticipate a continued expense of this amount throughout the upcoming year.

Net Income

Our net income for the six months ended June 30, 2009, was $1,407,341 compared to $59,381 from our previous year. The increase in net income and our resulting profit was attributable to debt forgiveness.

A critical component of our operating plan impacting our continued existence is the ability to obtain additional capital through additional equity and/or debt financing. We do not anticipate generating sufficient positive internal operating cash flow until such time as we can deliver our medical software and technology products to market, complete additional financial service agreements with Centurion or others, all of which may take the next few years to fully realize. Liquidity issues are problems being experienced by many companies in the current economic climate. In the event we cannot obtain the necessary capital to pursue our strategic plan, we may be unable to grow our operations.

The following table summarizes our current assets, liabilities and working capital at June 30, 2009 compared to December 31, 2008.

                                                          Increase / (Decrease)
                        June 30, 2009  December 31, 2008      $           %

Current Assets          $    3,473,027   $     2,856,791      616,236   21.6%
Current Liabilities     $    3,216,380   $     4,190,141    (973,761)  (23.2%)
Working Capital Deficit  $     256,647   $   (1,333,188)

Internal and External Sources of Liquidity

MAG Entities Agreement

On February 7, 2005, we entered into agreements with Mercator Momentum Fund, LP and Monarch Pointe Fund, Ltd. (collectively, the "Purchasers") and Mercator Advisory Group, LLC ("MAG"). Under the terms of the agreement, we agreed to issue and sell to the Purchasers, and the Purchasers agreed to purchase from the Company, 20,000 shares of Series "C" Convertible Preferred Stock at $100.00 per share. Additionally, we issued 1,250,000 warrants to purchase share of our common stock at $1.60 per share, all of the warrants expired on February 7, 2008. To date, MAG has converted 2,140 shares of their Series "C" preferred into 1,372,901 shares of our restricted common stock. On October 8, 2008 the company received a letter from Kroll (BVI) Limited of the British Virgin Islands informing the company that the Monarch Pointe Fund, Ltd had lapsed into receivership. On February 11, 2009 the company received a call from the U.S. based agency identified in the Kroll (BVI) letter of October 8, 2008. This agent informed the company that the Mercater Momentum Fund, LP, the other Purchaser of the company's Preferred C stock, was itself a part of a separate receivership process. To date the company has not received any formal notification concerning the Mercater Momentun Fund, LP and an alleged receiver action. The company was advised by Kroll (BVI) to cease all communications with Mercator Advisory Group, LLC the former managing entity of both of the Mercator investing entities.

Pinnacle Investment Partners, LP Promissory Note

On March 24, 2004, we entered into a Secured Convertible Promissory Note with Pinnacle Investment Partners, LP for the principal amount of $700,000 with an interest rate of 12% per annum. On February 10, 2005 we entered into a note extension agreement whereby Pinnacle agreed to advance an additional $400,000 and extend the maturity until April 24, 2006. On July 1, 2006, we entered into a second extension of the note which matured on December 24, 2006. Through the period ending March 31, 2009 the company accrued interest at a default rate of 12% per annum on this Note. The Note is convertible at a rate of $0.30 per share and has been secured by 2,212,500 shares of our common stock which can be sold by the lender as a means to repay the balance due. Through July 31, 2006 Pinnacle sold 924,948 of the escrow shares valued at $406,215 which was applied to accrued interest and the principal balance of the note.

On August 2, 2006 the District Attorney in New York, NY announced the arrest of the principals of Pinnacle thereby changing the dynamic of the company's business relationship with Pinnacle and its principals. Since this date the company has not had contact with any of the Pinnacle fund management or attorney in fact. We have not delivered the shares called for under the July 1, 2006 extension after being advised by the fund management on July 31, 2006 to "stand still." On September 23, 2006 the company received a phone call from an attorney formerly associated with Pinnacle Investment Partners, LP and was advised that the fund had ceased operations, and was closed. We were also informed that of the two fund principals, one was deceased and the other incarcerated until at least August 2011.

Promissory Notes with Dennis Cantor and Novex International

On May 23, 2006, we entered into a promissory note with Dennis Cantor and Novex International for the principal amount of $255,000. Pursuant to the note we promised to pay Dennis Cantor and Novex International the sum of $255,000 together with interest at a rate of one half of one percent (0.5%) every ten days beginning on May 23, 2006 and running through the maturity date of June 30, 2006. In the case of a default in payment of principal, all overdue amounts under the note shall bear a penalty obligation at a rate of twelve percent (12%) per annum accruing from the maturity date. On July 1, 2006, we extended the note to July 31, 2007. We have made principal payments of $125,000. As of June 30, 2009, the remaining principal balance was $130,000. The term of this note has been extended indefinitely.

Convertible Loan Payment Agreement

On July 17, 2006, we entered into a convertible loan payment agreement with Wayne G. Knapp wherein Mr. Knapp agreed to loan the Company the sum of $200,000. . . .