United States Securities and Exchange CommissionWashington, D.C. 20549

FORM 10-QSB



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
        THE SECURITIES EXCHANGE ACT OF 1934For
        the quarterly period ended December 31st,
    2006          | 
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|  |                                                                                                                                                                        | 
|o | TRANSITION REPORT
          PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE ACTFor
    the transition period from ____________ to_______________. | 



Commission file number: 000-33191

VISUALMED CLINICAL SOLUTIONS CORP.

(Exact name of small business issuer as specified in its charter)

|NEVADA                          |  | 88-0436055                  
|------------------------------- |  | ----------------------------
|(State of other jurisdiction of |  | (IRS Employer Identification
|incorporation or organization)  |  | Number)                     

1035 Laurier Street West 
Montreal, Quebec 
Canada
H2V 2L1(Address of principal executive
offices)

(514) 274-1115
(Issuers telephone number)

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YesxNoo

Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Nox

APPLICABLE ONLY TO CORPORATE ISSUERS

As of February 9, 2007 the issuer had 47,553,345 outstanding shares of common stock.

Transitional Small Business Disclosure Format (Check
one): YesoNox

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|ITEM 1. - Financial Statements                 |  |      
|---------------------------------------------- |  | -----
|                                              
|VisualMED Clinical Solutions Corp.             |  |      
|(A Development Stage Company)                  |  |      
|                                              
|                                               |  | Index
|Consolidated Balance Sheets                    |  | F1  
|Consolidated Statements of Operations          |  | F2  
|Consolidated Statements of Cash Flows          |  | F3  
|Consolidated Notes to the Financial Statements |  | F4  



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|VisualMED Clinical Solutions Corp. 
(A Development Stage Company) 
Consolidated Balance Sheets
(expressed in U.S. dollars)
(unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------



|                                                                            | December 31, |   | June 30,
|--------------------------------------------------------------------------- | ------------ | - | --------
|                                                                            | 2006         |   | 2006    
|                                                                            | $            |   | $       
|Assets                                                                      |              |   |         
|                                                                           
|Current Assets                                                              |              |   |         
|                                                                           
|Cash                                                                        | 16,587       |   |         
|Accounts receivable                                                         | 15,000       |   |         
|Advances to related parties (Note 3)                                        | 26,338       |   |         
|Prepaid expenses (Note 4)                                                   | 22,520       |   |         
|Inventory                                                                   | 13,587       |   |         
|Other assets                                                                | 8,073        |   |         
|Total Current Assets                                                        | 102,105      |   |         
|                                                                           
|Property and Equipment (Note 5)                                             | 62,538       |   |         
|Total Assets                                                                | 164,643      |   |         
|                                                                           
|Liabilities and Stockholders Deficit                                       |              |   |         
|                                                                           
|Current Liabilities                                                         |              |   |         
|                                                                           
|Accounts payable                                                            | 691,332      |   |         
|Accrued liabilities (Note 6)                                                | 121,796      |   |         
|Advances from related parties (Note 7)                                      | 29,647       |   |         
|Current portion of capital lease obligation                                 | 3,969        |   |         
|Deferred revenue                                                            | 262,167      |   |         
|Total Current Liabilities                                                   | 1,108,911    |   |         
|                                                                           
|Capital Lease Obligation                                                    | 1,056        |   |         
|Total Liabilities                                                           | 1,109,967    |   |         
|                                                                           
|Contingencies and Commitments (Notes 1 and 12)                              |              |   |         
|                                                                           
|Stockholders Deficit                                                       |              |   |         
|Preferred Stock, (Note 8)                                                   |              |   |         
|Authorized: 15,000,000 shares, Series A 10% Cumulative; par value $0.00001; |              |   |         
|No shares issued and outstanding                                            |             |   |         
|Authorized:10,000,000 shares, Undesignated; par value $0.00001;             |              |   |         
|No shares issued and outstanding                                            |             |   |         
|Common Stock, (Note 9)                                                      |              |   |         
|Authorized: 100,000,000 shares, par value $0.00001;                         |              |   |         
|Issued and outstanding: 47,164,345 shares (2006 - 46,028,345 shares)        | 472          |   |         
|Additional Paid-in Capital                                                  | 16,975,908   |   |         
|Accumulated Other Comprehensive Loss                                        | (25,125      | ) |         
|Deficit Accumulated During the Development Stage                            | (17,896,579  | ) |         
|Total Stockholders Deficit                                                 | (945,324     | ) |         
|Total Liabilities and Stockholders Deficit                                 | 164,643      |   |         

(The accompanying notes are an integral part of these consolidated financial statements)

F-1

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|VisualMED Clinical Solutions Corp.(A Development Stage Company)Consolidated Statements of Operations(expressed in U.S. dollars)(unaudited)
|------------------------------------------------------------------------------------------------------------------------------------------

|                                         | Accumulated from    |   | For the      |            | For the     
|---------------------------------------- | ------------------- | - | ------------ | ---------- | ------------
|                                         | September 7, 1999   |   | Three Months |            | Six Months  
|                                         | (Date of Inception) |   | Ended        |            | Ended       
|                                         | to December 31,     |   | December 31, |            | December 31,
|                                         | 2006                |   | 2006         |            | 2005        
|                                         | $                   |   | $            |            | $           
|                                        
|Revenue                                  | 327,070             |   |              | 9,374      |             
|Cost of sales                            | 183,526             |   |              | 4,059      |             
|Gross Profit                             | 143,544             |   |              | 5,315      |             
|                                        
|Expenses                                 |                     |   |              |            |             
|Customer service                         | 1,488,486           |   |              | 301,243    |             
|Amortization                             | 43,988              |   |              | 8,419      |             
|Development costs                        | 1,940,994           |   |              | 153,578    |             
|General and administration               | 4,317,923           |   |              | 1,393,312  |             
|Sales and marketing                      | 5,361,443           |   |              | 696,311    |             
|                                        
|Total Expenses                           | 13,152,834          |   |              | 2,552,863  |             
|                                        
|Net Loss From Operations                 | (13,009,290         | ) |              | (2,547,548 | )           
|                                        
|Other Income (Expenses)                  |                     |   |              |            |             
|Interest                                 | (38,600             | ) |              | (351       | )           
|Financing costs                          | (4,514,285          | ) |              |           |             
|Foreign exchange gain (loss)             | 47,673              |   |              | (89,836    | )           
|Gain on forgiveness of interest          | 7,655               |   |              |           |             
|Gain on forgiveness of debt              | 12,689              |   |              |           |             
|                                        
|Net Loss Before Discontinued Operations  | (17,494,158         | ) |              | (2,637,735 | )           
|                                        
|Discontinued Operations                  | (402,421            | ) |              |           |             
|                                        
|Net Loss                                 | (17,896,579         | ) |              | (2,637,735 | )           
|                                        
|Other Comprehensive Income (Loss)        |                     |   |              |            |             
|Foreign currency translation adjustments | (25,125             | ) |              | 90,784     |             
|                                        
|Comprehensive Loss                       | (17,921,704         | ) |              | (2,546,951 | )           
|                                        
|Net Loss Per Share  Basic and Diluted   |                     |   |              | (0.06      | )           
|                                        
|Weighted Average Shares Outstanding      |                     |   |              | 46,896,000 |             

(The accompanying notes are an integral part of these consolidated financial statements)

F-2

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|VisualMED Clinical Solutions Corp.(A Development Stage Company)Consolidated Statements of Cash Flows(expressed in U.S. dollars)(unaudited)
|------------------------------------------------------------------------------------------------------------------------------------------

|                                                                            | For the      |   | For the     
|--------------------------------------------------------------------------- | ------------ | - | ------------
|                                                                            | Six Months   |   | Six Months  
|                                                                            | Ended        |   | Ended       
|                                                                            | December 31, |   | December 31,
|                                                                            | 2006         |   | 2005        
|                                                                            | $            |   | $           
|Operating Activities                                                        |              |   |             
|Net loss                                                                    | (4,114,744   | ) |             
|Adjustments to reconcile net loss to net cash used in operating activities: |              |   |             
|Amortization                                                                | 16,474       |   |             
|Stock-based compensation                                                    | 3,083,789    |   |             
|Changes in operating assets and liabilities                                 |              |   |             
|Accounts receivable                                                         | (12,450      | ) |             
|Advances to related parties                                                 | 4,625        |   |             
|Prepaid expenses                                                            | 226,498      |   |             
|Inventory                                                                   |             |   |             
|Other assets                                                                | 7,526        |   |             
|Accounts payable and accrued liabilities                                    | 440,241      |   |             
|Due to related parties                                                      | 29,647       |   |             
|Deferred revenue                                                            | 244,875      |   |             
|Net Cash Used In Operating Activities                                       | (73,519      | ) |             
|Investing Activities                                                        |              |   |             
|Purchase of property and equipment                                          | (11,705      | ) |             
|Net Cash Used In Investing Activities                                       | (11,705      | ) |             
|Financing Activities                                                        |              |   |             
|Proceeds from the sale of common stock                                      | 4,910        |   |             
|Repayment of capital lease obligation                                       | (1,892       | ) |             
|Proceeds from notes payable                                                 |             |   |             
|Net Cash Provided By Financing Activities                                   | 3,018        |   |             
|Effect of Exchange Rate Changes on Cash                                     | 87,817       |   |             
|Increase (Decrease) in Cash                                                 | 5,611        |   |             
|Cash  Beginning of Period                                                  | 10,976       |   |             
|Cash  End of Period                                                        | 16,587       |   |             
|                                                                           
|Non-Cash Financing Activities                                               |              |   |             
|Common stock issued for settlement of notes payable and accrued interest    |             |   |             
|                                                                           
|Supplemental Disclosures                                                    |              |   |             
|Interest paid                                                               | 538          |   |             
|Income taxes paid                                                           |             |   |             

(The accompanying notes are an integral part of these consolidated financial statements)

F-3

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|VisualMED Clinical Solutions Corp.
(A Development Stage Company) Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars) 
(Unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------

1.      Nature of Operation and Continuance of Business

The Company
    was incorporated in the State of Nevada on September 7, 1999. The Company
    changed its name to VisualMed Clinical Solutions Corporation on November
    30, 2004. The Companys majority shareholder is Visual Healthcare Corporation
    which is a Nevada Corporation, based in Montreal, Canada.

The Companys
    business plan involves the distribution of medical software. The Company
    is primarily involved in activities related to the distribution of medical
    software and is considered to be a development stage company. At December
    31, 2006, the Company had a working capital deficiency of $1,006,806
    and has incurred losses of $17,896,579 since inception. The ability of
    the Company to emerge from the development stage with respect to any planned
    principal business activity is dependent upon its successful efforts to raise
    additional equity financing and then attain profitable operations. Management
    has plans to seek additional capital through equity and/or debt offerings.
    There is no guarantee that the Company will be able to complete any of the
    above objectives. These financial statements do not include any adjustments
    to the recoverability and classification of recorded asset amounts and classification
    of liabilities that may be necessary should the Company be unable to continue
    as a going concern. These factors raise substantial doubt regarding the Companys
    ability to continue as a going concern.

2.      Summary of Significant Accounting Principles

a)      Basis of Presentation and Fiscal Year

These consolidated
    financials statements and related notes are presented in accordance with
    accounting principles generally accepted in the United States, and are expressed
    in US dollars. The Company has not produced significant revenues from its
    principal business and is a development stage company as defined by Statement
    of Financial Accounting Standard (SFAS) No. 7 Accounting
    and Reporting by Development Stage Enterprises.
    These financial statements include the accounts of the Company and its wholly-owned
    subsidiary, VisualMed Clinical Systems Marketing Inc., a company incorporated
    and based in Quebec, Canada. All intercompany transactions and balances have
    been eliminated. The Companys fiscal year-end is June 30.

b)      Interim Financial Statements

These interim
    unaudited financial statements have been prepared on the same basis as the
    annual financial statements and in the opinion of management, reflect all
    adjustments, which include only normal recurring adjustments, necessary to
    present fairly the Companys financial position, results of operations
    and cash flows for the periods shown. The results of operations for such
    periods are not necessarily indicative of the results expected for a full
    year or for any future period. The financial statements and related notes
    should be read in conjunction with the audited financial statements and notes
    thereto included in Form 10-KSB for the year ended June 30, 2006.

c)      Use of Estimates

The preparation
    of financial statements in accordance with United States generally accepted
    accounting principles requires management to make estimates and assumptions
    that affect the reported amounts of assets and liabilities at the date of
    the financial statements and the reported amounts of revenue and expenses
    in the reporting period. The Company regularly evaluates estimates and assumptions
    related to allowances for doubtful accounts, sales returns and allowances,
    inventory reserves, stock-based compensation expense, deferred income tax
    asset valuations and loss contingencies. The Company bases its estimates
    and assumptions on current facts, historical experience and various other
    factors that it believes to be reasonable under the circumstances, the results
    of which form the basis for making judgments about the carrying values of
    assets and liabilities and the accrual of costs and expenses that are not
    readily apparent from other sources. The actual results experienced by the
    Company may differ materially and adversely from the Companys estimates.
    To the extent there are material differences between the estimates and the
    actual results, future results of operations will be affected.



F-4

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|VisualMED Clinical Solutions Corp.
(A Development Stage Company) Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)
(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------

2.      Summary of Significant Accounting Principles (continued)

d)      Cash and Cash Equivalents

The Company
    considers all highly liquid instruments with a maturity of three months or
    less at the time of issuance to be cash equivalents.

e)      Property and Equipment

Property
    and equipment is stated at cost, less accumulated amortization, and consists
    of office furniture, computer hardware and software, leasehold improvements
    and assets under capital lease. Amortization of office furniture is computed
    using the straight-line method over five years. Amortization of computer
    hardware and software is computed using the straight-line method over three
    years. Amortization of leasehold improvements is computed using the straight-line
    method over five years. Amortization
    of assets under capital lease is computed using the straight-line method
    over the term of the lease.

f)      Long-Lived Assets

In accordance
    with SFAS No. 144, Accounting for
    the Impairment or Disposal of Long-Lived Assets,
    the carrying value of intangible assets and other long-lived assets is reviewed
    on a regular basis for the existence of facts or circumstances that may suggest
    impairment. The Company recognizes impairment when the sum of the expected
    undiscounted future cash flows is less than the carrying amount of the asset.
    Impairment losses, if any, are measured as the excess of the carrying amount
    of the asset over its estimated fair value.

g)      Foreign Currency Transactions

The Company's
    functional and reporting currency is the United States dollar. The functional
    currency of the Companys subsidiary is the Canadian dollar. The financial
    statements of the subsidiary are translated to United States dollars in accordance
    with SFAS No. 52 Foreign Currency
    Translation using period-end rates
    of exchange for assets and liabilities, and average rates of exchange for
    the period for revenues and expenses. Translation gains (losses) are recorded
    in accumulated other comprehensive income (loss) as a component of stockholders equity.
    Foreign currency transaction gains and losses are included in current operations.

h)      Development Costs

Costs related
    to the enhancement of existing medical software modules are expensed as incurred
    until technological feasibility in the form of a working model has been established.
    The time period between the establishment of technological feasibility and
    completion of product development is expected to be short, therefore the
    Company has not capitalized any product development costs during the period.

i)      Basic and Diluted Net Income (Loss) Per Share

The Company
    computes net income (loss) per share in accordance with SFAS No. 128,"Earnings
    per Share"which requires presentation
    of both basic and diluted earnings per share (EPS) on the face of the income
    statement. Basic EPS is computed by dividing net income (loss) available
    to common shareholders (numerator) by the weighted average number of shares
    outstanding (denominator) during the period. Diluted EPS gives effect to
    all dilutive potential common shares outstanding during the period including
    stock options, using the treasury stock method, and convertible preferred
    stock, using the if-converted method. In computing diluted EPS, the average
    stock price for the period is used in determining the number of shares assumed
    to be purchased from the exercise of stock options or warrants. Diluted EPS
    and the weighted average number of common shares exclude all dilutive potential
    shares since their effect is anti dilutive. Shares underlying these securities
    totaled approximately 1,586,000 as of December 31, 2006.



F-5

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|VisualMED Clinical Solutions Corp. 
(A Development Stage Company) Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------

2.      Summary of Significant Accounting Principles (continued)

j)      Financial Instruments and Concentrations

The carrying
    value of cash, accounts receivable, advances to related parties, other assets,
    accounts payable, accrued liabilities and capital lease obligation approximate
    fair value due to the relatively short maturity of these instruments. Financial
    instruments which potentially subject the Company to a concentration of credit
    risk consist primarily of cash. The Company deposits cash with a high quality
    financial institution. For the six month period ended December 31, 2006,
    revenue from one customer represented 55% (2005  0%) of total revenue
    and from a second customer represented 45% (2005  100%) of total revenue.

k)      Inventory

Inventory
    consists of computer hardware and software acquired for specific revenue
    contracts and also includes related support and implementation costs. Inventory
    is stated at the lower of cost or net realizable value.

l)      Revenue Recognition

The Company
    recognizes revenue related to sales and licensing of medical software in
    accordance with Statement of Position No. 97-2, Software
    Revenue Recognition (SOP
    97-2), as amended by Statement of Position No. 98-9, Software
    Revenue Recognition with Respect to Certain Arrangements.
    Pursuant to SOP 97-2 and Staff Accounting Bulletin No. 104 Revenue
    Recognition, revenue will only
    be recognized when the price is fixed or determinable, persuasive evidence
    of an arrangement exists, the service is performed, and collectibility is
    reasonably assured. The Companys revenue contracts are accounted for
    in conformity with Accounting Research Bulletin No. 45 Long-Term
    Construction-Type Contracts, using
    the relevant guidance in SOP 81-1 Accounting
    for Performance of Construction-Type and Certain Production-Type Contracts,
    unless specified criteria for separate accounting for any service element
    are met. The Company also follows the guidance in Emerging Issues Task Force
    (EITF) Issue No. 00-21 Revenue
    Arrangements with Multiple Deliverables relating
    to the separability of deliverables included in an arrangement into different
    units of accounting and the allocation of an arrangements consideration
    to those units of accounting. It does not address when revenue should be
    recognized for the units of accounting. The Company received $23,750
    during the six month period ended December 31, 2006 for annual license renewal
    fees. At December 31, 2006, the balance of deferred revenue, which relates
    to the unearned portion received of annual license fees, is $14,167.
    During the period ended December 31, 2006, the Company also received $248,000,
    representing advances paid to the Company in relation to a contract. This
    amount is record in deferred revenue. Incremental direct costs related to
    contract acquisition and origination, which result in deferred revenue, are
    expensed as incurred. Any allowance for doubtful accounts is based on the
    Companys detailed assessment of the collectibility of specific customer
    accounts. Any significant customer accounts that are not expected to be collected
    are excluded from revenues. To date, the Company has not experienced any
    significant losses from uncollectible accounts. All revenues recorded during
    the six-month periods ended December 31, 2006 and 2005 were earned from customers
    domiciled in the United States.

m)     Comprehensive Loss

SFAS No.
    130, Reporting Comprehensive Income, establishes
    standards for the reporting and display of comprehensive loss and its components
    in the financial statements. For the three month and six month periods ended
    December 31, 2006 and 2005, the Companys only component of comprehensive
    loss was foreign currency translation adjustments.

n)     Reclassifications

Certain reclassifications
    have been made to the prior periods financial statements to conform
    to the current periods presentation.



F-6

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|VisualMED Clinical Solutions Corp.
(A Development Stage Company) Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)
(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------

2.      Summary of Significant Accounting Principles (continued)

o)      Income Taxes

Potential
    benefits of income tax losses are not recognized in the accounts until realization
    is more likely than not. The Company has adopted SFAS No. 109 Accounting
    for Income Taxes as of its inception.
    Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits
    for net operating losses carried forward. The potential benefit of net operating
    losses have not been recognized in these financial statements because the
    Company cannot be assured it is more likely than not it will utilize the
    net operating losses carried forward in future years.

p)      Stock-based Compensation

The Company
    records stock-based compensation in accordance with SFAS No. 123R Share
    Based Payments, using the fair
    value method. The Company had not issued any stock options and had no unvested
    share based payments prior to January 1, 2006. Accordingly, there was no
    effect on the Companys reported loss from operations, cash flows or
    loss per share as a result of adopting SFAS No 123R.

q)      Recent Accounting Pronouncements

In September
    2006, the SEC issued Staff Accounting Bulletin (SAB) No. 108, Considering
    the Effects of Prior Year Misstatements when Quantifying Misstatements in
    Current Year Financial Statements. SAB
    No. 108 addresses how the effects of prior year uncorrected misstatements
    should be considered when quantifying misstatements in current year financial
    statements. SAB No. 108 requires companies to quantify misstatements using
    a balance sheet and income statement approach and to evaluate whether either
    approach results in quantifying an error that is material in light of relevant
    quantitative a qualitative factors. SAB No. 108 is effective for periods
    ending after November 15, 2006. The Company is currently evaluating the impact
    of adopting SAB No. 108 but does not expect that it will have a material
    effect on its financial statements.

In September
    2006, the FASB issued SFAS No. 158, Employers Accounting
    for Defined Benefit Pension and Other Postretirement Plans  an amendment
    of FASB Statements No. 87, 88, 106, and 132(R).
    This statement requires employers to recognize the overfunded or underfunded
    status of a defined benefit postretirement plan (other than a multiemployer
    plan) as an asset or liability in its statement of financial position and
    to recognize changes in that funded status in the year in which the changes
    occur through comprehensive income of a business entity or changes in unrestricted
    net assets of a not-for-profit organization. This statement also requires
    an employer to measure the funded status of a plan as of the date of its
    year-end statement of financial position, with limited exceptions. The provisions
    of SFAS No. 158 are effective for employers with publicly traded equity securities
    as of the end of the fiscal year ending after December 15, 2006. The adoption
    of this statement is not expected to have a material effect on the Company's
    future reported financial position or results of operations.

In September
    2006, the FASB issued SFAS No. 157, Fair
    Value Measurements. The objective
    of SFAS No. 157 is to increase consistency and comparability in fair value
    measurements and to expand disclosures about fair value measurements. SFAS No. 157
    defines fair value, establishes a framework for measuring fair value in generally
    accepted accounting principles, and expands disclosures about fair value
    measurements. SFAS No. 157 applies under other accounting pronouncements
    that require or permit fair value measurements and does not require any new
    fair value measurements. The provisions of SFAS No. 157 are effective for
    fair value measurements made in fiscal years beginning after November 15,
    2007. The adoption of this statement is not expected to have a material effect
    on the Company's future reported financial position or results of operations.



F-7

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|VisualMED Clinical Solutions Corp.
(A Development Stage Company) Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------

2.      Summary of Significant Accounting Principles (continued)

q)      Recent Accounting Pronouncements (continued)

In June 2006,
    the Financial Accounting Standards Board (FASB) issued FASB Interpretation
    No. 48, Accounting for Uncertainty
    in Income Taxes, an interpretation of FASB Statements No. 109.
    FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing
    a two-step method of first evaluating whether a tax position has met a more
    likely than not recognition threshold and second, measuring that tax position
    to determine the amount of benefit to be recognized in the financial statements.
    FIN 48 provides guidance on the presentation of such positions within a classified
    statement of financial position as well as on derecognition, interest and
    penalties, accounting in interim periods, disclosure, and transition. FIN
    48 is effective for fiscal years beginning after December 15, 2006. The adoption
    of this statement is not expected to have a material effect on the Company's
    future reported financial position or results of operations.

In March
    2006, the FASB issued SFAS No. 156, “Accounting
    for Servicing of Financial Assets, an amendment of FASB Statement No. 140,
    Accounting for Transfers and Servicing of Financial Assets and Extinguishments
    of Liabilities”. This statement requires
    all separately recognized servicing assets and servicing liabilities be initially
    measured at fair value, if practicable, and permits for subsequent measurement
    using either fair value measurement with changes in fair value reflected
    in earnings or the amortization and impairment requirements of Statement
    No. 140. The subsequent measurement of separately recognized servicing assets
    and servicing liabilities at fair value eliminates the necessity for entities
    that manage the risks inherent in servicing assets and servicing liabilities
    with derivatives to qualify for hedge accounting treatment and eliminates
    the characterization of declines in fair value as impairments or direct write-downs.
    SFAS No. 156 is effective for an entity's first fiscal year beginning after
    September 15, 2006. The adoption of this statement is not expected to have
    a material effect on the Company's future reported financial position or
    results of operations.

In February
    2006, the FASB issued SFAS No. 155, “Accounting
    for Certain Hybrid Financial Instruments-an amendment of FASB Statements
    No. 133 and 140”, to simplify and make
    more consistent the accounting for certain financial instruments. SFAS No. 155
    amends SFAS No. 133, “Accounting for
    Derivative Instruments and Hedging Activities”,
    to permit fair value re-measurement for any hybrid financial instrument with
    an embedded derivative that otherwise would require bifurcation, provided
    that the whole instrument is accounted for on a fair value basis. SFAS No.
    155 amends SFAS No. 140, “Accounting
    for the Impairment or Disposal of Long-Lived Assets”,
    to allow a qualifying special-purpose entity to hold a derivative financial
    instrument that pertains to a beneficial interest other than another derivative
    financial instrument. SFAS No. 155 applies to all financial instruments acquired
    or issued after the beginning of an entity's first fiscal year that begins
    after September 15, 2006, with earlier application allowed. The adoption
    of this statement is not expected to have a material effect on the Company's
    future reported financial position or results of operations.



3.      Advances to Related Parties

| |                       | December 31, | June 30,
| | --------------------- | ------------ | --------
| |                       | 2006         | 2006    
| |                       | $            | $       
|
| | Advances to employees | 26,338       | 30,175  
| |                       | 26,338       | 30,175  

Advances to
    employees of $26,338 represent amounts advanced towards travel expenses
    to be incurred. These amounts are non-interest bearing.



F-8

---





|VisualMED Clinical Solutions Corp.
(A Development Stage Company) Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)
(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------



4.      Prepaid expenses

| | As at December 31, 2006 and June
    30, 2006, the following comprises prepaid expenses:
| | ----------------------------------------------------------------------------------------
| |                                                                                         
| |                                                                                         
| |                                                                                         
|
| | Directors and officers insurance                                                        
| | Prepaid expenses related to Medicool contract                                           
| | Other                                                                                   
| |                                                                                         

5.      Property and Equipment

| |                        |         |  | Accumulated  |  | December 31, 2006  |  | June 30, 2006     
| | ---------------------- | ------- |  | ------------ |  | ------------------ |  | ------------------
| |                        | Cost    |  | Amortization |  | Net carrying value |  | Net carrying value
| |                        | $       |  | $            |  | $                  |  | $                 
|
| | Computer hardware      | 59,256  |  | 23,744       |  | 35,512             |  | 38,023            
| | Computer software      | 25,858  |  | 11,867       |  | 13,991             |  | 15,873            
| | Office furniture       | 12,004  |  | 4,478        |  | 7,526              |  | 9,128             
| | Leasehold improvements | 9,243   |  | 3,734        |  | 5,509              |  | 6,730             
| |                        | 106,361 |  | 43,823       |  | 62,538             |  | 69,754            

Assets under
    capital lease are included in office furniture with a cost of $11,088
    (CAD$12,921). During the six month period ended December 31, 2006, the
    Company recognized accumulated amortization of assets under capital lease
    of $1,233 (December 31, 2005 - $1,179).

6.      Accrued Liabilities

| | As at December 31, 2006 and June
    30, 2006, the following comprises accrued liabilities: |              |  |          |         | 
| | ------------------------------------------------------------------------------------------- | ------------ |  | -------- | ------- | 
| |                                                                                             | December 31, |  | June 30,
| |                                                                                             | 2006         |  | 2006    
| |                                                                                             | $            |  | $       
|
| | Salaries, wages and vacation pay                                                            | 110,547      |  |          | 112,276 | 
| | Professional fees                                                                           | 11,000       |  |          | 35,000  | 
| | Other                                                                                       | 249          |  |          | 8,250   | 
| |                                                                                             | 121,796      |  |          | 155,526 | 

F-9

---





|VisualMED Clinical Solutions Corp.
(A Development Stage Company) Notes to the Consolidated Financial Statements
(expressed in U.S. dollars) 
(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------

7.      Advances from Related Parties

| |                        | December 31, |  | June 30,
| | ---------------------- | ------------ |  | --------
| |                        | 2006         |  | 2006    
| |                        | $            |  | $       
|
| | Advances from officers | 29,647       |  |        
| |                        | 29,647       |  |        

Advances from
    officers bear interest at 15% per annum, are unsecured and have no fixed
    terms of repayment.

8.      Preferred Stock

On January
    12, 2006, the Company restated its Articles of Incorporation to increase
    the authorized share capital to 125,000,000 shares consisting of 100,000,000
    shares of common stock, and 25,000,000 shares of preferred stock, of which
    15,000,000 have been designated as Series A 10% Cumulative Preferred Stock.

The Series
    A 10% Cumulative Preferred Stock has a par value of $0.00001 per share,
    a stated value of $1.00 per share and are non-voting. The holders of
    the Series A Preferred Stock will be entitled to receive an annual dividend
    equal to 10% per annum of the stated value of $1.00 per share payable,
    at the option of the Board of Directors, in either cash or in shares of Series
    A Preferred Stock.

9.      Common Stock

| | a) | On July 5, 2006, the Company issued 5,000 shares of common stock upon the exercise of 5,000 options at an exercise price of $0.49 per share for proceeds of $2,450.                           
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) | On July 10, 2006, the Company issued 5,000 shares of common stock upon the exercise of 5,000 options at an exercise price of $0.49 per share for proceeds of $2,450.                          
|
| | c) | On October 6, 2006, the Company issued 375,000 shares of common stock upon the exercise of 375,000 options at an exercise price of $0.00001 per share.                                        
|
| | d) | On October 16, 2006, the Company issued 175,000 shares of common stock upon the exercise of 175,000 options at an exercise price of $0.00001 per share.                                       
|
| | e) | On October 17, 2006, the Company issued 120,000 shares of common stock upon the exercise of 120,000 options at an exercise price of $0.00001 per share.                                       
|
| | f) | On October 26, 2006, the Company issued 155,000 shares of common stock upon the exercise of 155,000 options at an exercise price of $0.00001 per share.                                       
|
| | g) | On November 13, 2006, the Company issued 200,000 shares of common stock at a fair value of $360,000 in exchange for services pursuant to an investor relations agreement. Refer to Note 12(d).
|
| | h) | On November 14, 2006, the Company issued 4,000 shares of common stock upon the exercise of 4,000 options at an exercise price of $0.00001 per share.                                          
|
| | i) | On November 16, 2006, the Company issued 97,000 shares of common stock upon the exercise of 97,000 options at an exercise price of $0.00001 per share.                                        
|

F-10

---





|VisualMED Clinical Solutions Corp. 
(A Development Stage Company) Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)
(Unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------

10.      Stock Options and Share Purchase Warrants

i)Stock
    Options:

a)   On
    September 1, 2006, the Company entered into an agreement with an individual
    to provide consulting services. As consideration for these services, the
    Company agreed to grant 125,000 options pursuant to Companys October
    2006 Nonqualified Stock Option Plan. Further remuneration is payable based
    on the following performance milestones: 50,000 options pursuant to Companys
    October 2006 Nonqualified Stock Option Plan per contract proposal, and 100,000
    options pursuant to Companys October 2006 Nonqualified Stock Option
    Plan upon completion of any sale to a healthcare facility in Italy. During
    the six-month period ended December 31, 2006 the consultant was responsible
    for five contract proposals and accordingly was granted 250,000 options.
    The consultant also received the initial grant provision of 125,000 options
    for a total of 375,000 which were granted on October 6, 2006, exercisable
    at $0.00001 per share
    for five year terms expiring between August 31, 2011 and September 28, 2011.
    The fair value for options granted was estimated at each measurement date
    using the Black-Scholes option-pricing model with the following weighted
    average assumptions: an expected life of 5 years, a risk-free interest rate
    of 4.35% to 4.51% and an expected volatility of 89% to 93%. During the period
    ended September 30, 2006, the Company recognized stock based compensation
    of $663,747.

b)   On
    September 8, 2006, the Company entered into an agreement with an individual
    to provide consulting services. As consideration for these services, the
    Company agreed to grant 150,000 options pursuant to Companys October
    2006 Nonqualified Stock Option Plan. Further remuneration is payable based
    on the following performance milestones: 50,000 options pursuant to Companys
    October 2006 Nonqualified Stock Option Plan per contract proposal; and 100,000
    options pursuant to Companys October 2006 Nonqualified Stock Option
    Plan upon completion of any sale. Further options will be granted in the amount of 75,000 options for the initiation of contact discussions with companies that are publicly listed corporations with sales of more than one billion dollars. On October 16,
2006, the Company granted the initial provision of 150,000 stock options exercisable at $0.00001 per share for a five year term expiring on September 7, 2011. The fair value for options granted was estimated at the measurement date using the
Black-Scholes option-pricing model with the following weighted average assumptions: an expected life of 5 years, a risk-free interest rate of 4.54% and an expected volatility of 92%. During the period ended September 30, 2006, the Company recognized
stock based compensation of $299,999.

c)   On October
    16, 2006, the Company entered into an agreement with an individual to provide
    consulting services. As consideration for these services, the Company agreed
    to grant up to 50,000 options pursuant to Companys October 2006 Nonqualified
    Stock Option Plan. Further remuneration is payable based on the following
    performance milestones: 50,000 options pursuant to Companys October
    2006 Nonqualified Stock Option Plan per contract proposal; and 100,000 options
    pursuant to Companys October 2006 Nonqualified Stock Option Plan upon
    completion of any sale. On October 16, 2006, the Company granted 25,000 stock
    options exercisable at $0.00001 per share for a five year term expiring
    on October 16, 2011. The fair value for options granted was estimated at
    the measurement date using the Black-Scholes option-pricing model with the
    following weighted average assumptions: an expected life of 5 years, a risk-free
    interest rate of 4.59% and an expected volatility of 88%. During the period
    ended December 31, 2006, the Company recognized stock based compensation
    of $45,250.



F-11

---





|VisualMED Clinical Solutions Corp.
(A Development Stage Company) Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)
(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------

10.      Stock Options and Share Purchase Warrants (continued)

i)Stock
    Options: (continued)

d)   On October 17, 2006, the Company entered into an agreement with an individual
    to provide consulting services. As consideration for these services, the
    Company agreed to grant 50,000 options pursuant to Companys October
    2006 Nonqualified Stock Option Plan. Further remuneration is payable based
    on the following performance milestones: 50,000 options pursuant to Companys
    October 2006 Nonqualified Stock Option Plan per contract proposal; and 100,000
    options pursuant to Companys October 2006 Nonqualified Stock Option
    Plan upon completion of any sale. The consultant will also receive an additional 15,000 options pursuant to the Companys October 2006 Nonqualified Stock Option Plan.  On October 17, 2006, the Company granted 85,000 stock options exercisable at
$0.00001 per share for a five year term expiring on October 16, 2011. On October 26, 2006, the Company granted a further 80,000 stock options exercisable at $0.00001 per share for a five year term expiring on October 25, 2011. The fair value
for options granted was estimated at the measurement date using the Black-Scholes option-pricing model with the following weighted average assumptions: an expected life of 5 years, a risk-free interest rate of 4.56% and an expected volatility of
88%. During the period ended December 31, 2006, the Company recognized stock based compensation of $265,550.

e)   On October 17, 2006, the Company entered into an agreement with an individual
    to provide consulting services. As consideration for these services, the
    Company agreed to grant 10,000 options pursuant to Companys October
    2006 Nonqualified Stock Option Plan. Further remuneration is payable based
    on the following performance milestones: 50,000 options pursuant to Companys
    October 2006 Nonqualified Stock Option Plan per contract proposal; and 100,000
    options pursuant to Companys October 2006 Nonqualified Stock Option
    Plan upon completion of any sale. On October 17, 2006, the Company granted
    10,000 stock options exercisable at $0.00001 per share for a five year
    term expiring on October 16, 2011. The fair value for options granted was
    estimated at the measurement date using the Black-Scholes option-pricing
    model with the following weighted average assumptions: an expected life of
    5 years, a risk-free interest rate of 4.59% and an expected volatility of
    88%. During the period ended December 31, 2006, the Company recognized stock
    based compensation of $17,500.

f)   On November 2, 2006, the Company entered into an agreement with an individual
    to provide consulting services. As consideration for these services, the
    Company agreed to a one-time grant of 50,000 options pursuant to Companys
    October 2006 Nonqualified Stock Option Plan. On November 16, 2006, the Company
    granted 50,000 stock options exercisable at $0.00001 per share for a
    five year term expiring on November 15, 2011. The fair value for options
    granted was estimated at the measurement date using the Black-Scholes option-pricing
    model with the following weighted average assumptions: an expected life of
    5 years, a risk-free interest rate of 4.16% and an expected volatility of
    91%. During the period ended December 31, 2006, the Company recognized stock
    based compensation of $82,500.

g)   On November 16, 2006, the Company entered into an agreement with an individual
    to provide consulting services. As consideration for these services, the
    Company agreed to grant 75,000 options pursuant to Companys October
    2006 Nonqualified Stock Option Plan. On November 16, 2006, the Company granted
    75,000 stock options exercisable at $0.00001 per share for a five year
    term expiring on November 15, 2011. The fair value for options granted was
    estimated at the measurement date using the Black-Scholes option-pricing
    model with the following weighted average assumptions: an expected life of
    5 years, a risk-free interest rate of 4.16% and an expected volatility of
    91%. During the period ended December 31, 2006, the Company recognized stock
    based compensation of $123,750.



F-12

---





|VisualMED Clinical Solutions
            Corp.
        (A Development Stage Company) Notes to the Consolidated Financial
          Statements 
        (expressed in U.S. dollars) 
        (Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10.      Stock Options and Share Purchase Warrants (continued)

i)Stock
    Options: (continued)

The following
    table summarizes the continuity of the Companys stock options:

| |                                |           |   |                | Weighted
| | ------------------------------ | --------- | - | -------------- | --------
| |                                |           |   |                | average 
| |                                | Number of |   | exercise price
| |                                | Shares    |   | $             
|
| | Outstanding, June 30, 2006     | 884,500   |   |                | 1.08    
| | Granted                        | 1,375,500 |   |                | 0.57    
| | Exercised                      | (936,000  | ) |                | 0.00001 
| | Cancelled                      |          |   |                |        
| | Outstanding, December 31, 2006 | 1,324,000 |   |                | 1.31    

During the
    six-month period ended December 31, 2006, the Company granted 937,000 stock
    options to purchase shares of common stock at a price below market of $0.00001
    per share.

ii)      Share Purchase Warrants:

The following
    table summarizes the continuity of the Companys warrants:

| |                                |           |  |       | Weighted        
| | ------------------------------ | --------- |  | ----- | ----------------
| |                                |           |  |       | average exercise
| |                                | Number of |  | price
| |                                | Warrants  |  | $    
| | Balance, June 30, 2006         | 262,122   |  |       | 1.25            
| | Issued                         |          |  |       |                
| | Exercised                      |          |  |       |                
| | Outstanding, December 31, 2006 | 262,122   |  |       | 1.25            

|
|
|
|
|
|
|

11.      Segment Disclosures

The Company
    operates as one operating segment which is the sale of its suite of clinical
    software modules. The Chief Executive Officer is the Companys Chief
    Operating Decision Maker (CODM) as defined by SFAS 131, Disclosure
    about Segments of an Enterprise and Related Information. The
    CODM allocates resources and assesses the performance of the Company based
    on the results of operations.



F-13

---





|VisualMED Clinical Solutions
            Corp.
(A Development Stage Company) Notes to the Consolidated Financial
        Statements
(expressed in U.S. dollars) 
(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12.      Contingencies
and Commitments

a)      In
    November 2004, the Company entered into a lease agreement for office premises
    at a rate of $67,532 (CDN$78,700) per annum including property taxes,
    insurance and other operating expenses, for a five year term expiring on
    September 30, 2009, with an option to renew for an additional five years.
    During the six month period ended December 31, 2006, the Company incurred
    rent expense of $26,156. Future payments for the next five fiscal years
    are as follows:

| | 2007 |  | $ | 33,766  | 
| | ---- |  | - | ------- | 
| | 2008 |  | $ | 67,532  | 
| | 2009 |  | $ | 67,532  | 
| | 2010 |  | $ | 16,883  | 
| | 2011 |  | $ | -       | 
| |      |  | $ | 185,713 | 

b)
         On June 5, 2006, the Company entered into an automobile lease for a term
    of 48 months. The monthly payments are $551 (CAD$642) ending May
    5, 2010.

c)      During the six-month period ended December 31, 2006, the Company committed
    to contingently issue stock options to various consultants as disclosed in
    Note 10(i) based on the achievement of certain performance conditions.

d)      On November 13, 2006, the Company entered into an investor relations agreement
    with a consultant and issued 200,000 shares of common stock with a fair value
    of $360,000 which is included in general and administrative expense.
    The Company has also agreed to issue the following: 100,000 shares of common
    stock when the Companys stock trades at $2.50 per share, 100,000
    shares of common stock when the Companys stock trades at $3.25
    per share, and 100,000 shares of common stock when the Companys stock
    trades at $3.75 per share. The contingently issuable shares have been
    recorded at a fair value of $540,000 in additional paid-in capital in
    accordance with EITF 96-18,Accounting
    for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
    or in Conjunction With Selling, Goods or Servicesand
    EITF 00-19Accounting for Derivative
    Financial Instruments Indexed to, and Potentially Settled in, a Companys
    Own Stock.

13. Subsequent Events

a)      The Company granted 20,000 stock options exercisable at a price of $0.00001
    per share on or before January 2, 2012.

b)
         The Company granted 20,000 stock options exercisable at a price of $0.00001
    per share on or before January 15, 2012.

c)      On
    January 10, 2007, the Company entered into an agreement with an individual
    to provide consulting services. As consideration for these services, the
    Company agreed to grant 20,000 options pursuant to Companys Nonqualified
    Stock Option Plan. Further granting of stock options may also be made under
    the agreement. On January 15, 2007, the Company granted 20,000 stock options
    exercisable at $0.00001 per share for a five year term expiring on January
    14, 2012.

d)      The Company issued 49,000 shares of common stock upon the exercise of 49,000
    stock options at an exercise price of $0.00001 per share.



F-14

---



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS

We incurred losses of $4,114,744 for the six months ending December 31, 2006. This compares to $1,115,979 in the comparable prior year period. The principal components of the loss
involved the following:

- Maintenance and continuing development of our expanding marketing and customer support facilities;
- operating and maintaining our world-wide state-of-the-art service center capable of supporting client hospitals by remote support technology;
- newly hired employees and consultants, and increased travel expenses as our business grows in the United States and overseas, and as we continue to pursue contracts and
attend industry conferences;
- software licenses;
- Stock-based compensation
- travel and presentation expenses
- costs related to direct sales approach and first contact with potential client hospitals, from a steadily growing sales funnel comprising over 120 hospitals
worldwide.
- Finally, a small amount was devoted to professional expenses, depreciation, and filing fees.

Operating expenses for the six months ending December 31, 2006 were $4,034,448.

The main challenges that we will have over the next year will be to continue financing operations, continue building our base of client hospitals and healthcare facilities, new development and
marketing of our modules and concluding strategic alliances to help us penetrate specific marketplaces in promising geographical locations. We now offer round the clock support service to our clients. This service is capable of providing on the spot
assistance to our growing customer base.

During the six month period ended December 31, 2006, we started to implement our system in the Colorectal Surgery Department of Montreals Sir Mortimer B. Davis Jewish General Hospital. We are continuing our
stated program of diversification, adding independent stand-alone modules to our product line. This makes VisualMED both available and affordable to prospective clients, including small practices, clinics and private specialty facilities. Much of
our efforts during the quarter went toward development of our recent completed VisualDENTISTRY and VisualANESTHESIOLOGY modules which are now available for implementation. Our new system configurations designed for smaller practices, private
laboratories and clinics has made the system even faster to implement and has reduced integration time to one of the most efficient in the industry. One of the unique aspects of the system continues to be its full scalability, helping us to target
 small and medium-sized clients. VisualDENTISTRY has been positively reviewed by dentists and we expect the success of VisualDENTISTRY to open the private dental clinic market to
us, a field in which few of our competitors are active

We continue to implement our marketing and sales strategy for the VisualMED system, and other product lines in development. We have hired, and intend to continue hiring, sales and marketing
executives and consultants as our business grows.

Our sales effort will continue targeting regions where current legal regulations encourage the adoption of our clinical management modules, as well as areas in close proximity to our existing
sites in Wichita, Kansas, Battle Creek, Michigan, El Paso, Texas and Montreal. These markets are being aggressively pursued through the creation of sales consortiums that bring together local healthcare consultants, hardware vendors and local
systems integrators. The system continues to operate at full capacity with zero downtime at all of our client facilities.

Negotiations are on going with several hospital management groups in Italy and France for the implementation of our clinical modules, and we are continuing to respond to requests for proposals
from hospitals in Canada, France, Italy, and the United States. We are preparing our proposals for VisualMED partner Post Logic, to claim portions of the French healthcare IT market with our fully shareable Electronic Medical Record. Since the
French National Assembly recently passed into law a mandate for the implementation of such technology, France will soon become one the most important markets for our products and our continued presence there increases our product
and brand recognition factor, not only in France but in the rest of Europe.

---



In the Middle East, The Tunisian Minister of Health continues a review of our pilot project with Habib Thameur Hospital in Tunis, and we expect to receive the official approbation of Tunisian
healthcare authorities to proceed in the coming year.

Pursuant to our representation agreement with International Test Systems of Riyadh, Saudi Arabia, we continue to look for a suitable first site through which VisualMED technology
will be showcased for potential clients in Saudi Arabia, the United Arab Emirates, and Lebanon. System demonstrations have been organized at a number of hospitals. Several healthcare professionals and hospital administrators in Saudi Arabia have
shown interest in making VisualMED technology available within the Saudi healthcare system. ITS is well established in the Middle East, with significant experience in complex system implementation and validation. As well, ITS, through its own
partnership programs, brings broad-based business expertise to the relationship. This expertise will be critical in the implementation of any large scale healthcare informatics projects.

System-wide improvements to our technology platform to make VisualMED compatable within the Dot-Net environment are complete. Dot-Net will replace the Windows Win32 operating system, in
existance for more than a decade, and new VisualMED components have been, and continue to be, developed, capable of communicating with Dot-Net. The first components undergoing redesign included VisualMEDs load balancing process. The load
balancing process ensures timely access by users to servers and business objects in the application tier of VisualMEDs state-of-the-art n-tier application. For us the practical benefits of this shift to the Dot-Net environment include more
cost-effective development over time and increasing attractive pricing for our system. The system upgrade will also render VisualMED more attractive to individual doctors offices and smaller group practices, where rapid series of fast
implementations with extremely low integration costs, executed over a matter of days, could significantly boost our market presence in the short term. While our original development efforts involved programming languages whose use ensured overall
high quality of code, moving to Dot-Net brings advantages that carry over to future development. The Quality-Assurance process is now more fully integrated with programming, bringing benefits to our programming staff and all system
users.

---



Subsequent Events

Financial Condition, Liquidity and Capital Resources

During the six months ending December 31, 2006, we recognized revenue of $18,124 from licensing of our product.

At December 31, 2006, we had a working capital deficiency of $1,006,806, compared to a working capital deficiency of $74,429 at June 30, 2006. We had cash on hand of $16,587 at
December 31, 2006.

We had a net loss of $4,114,744 and $1,115,979 for the six month periods ending December 31, 2006 and 2005, respectively.

At December 31, 2006, our total assets were $164,643, as compared to total assets of $392,878 at June 30, 2006.

At December 31, 2006, we had pre-paid expenses of $22,520. This amount consisted of $16,450 for directors and officers insurance, $2,208 for employee benefits and a security
deposit of $3,862 for the lease of an automobile for a marketing employee.

At December 31, 2006, our total liabilities were $1,109,967 as compared to total liabilities of $400,785 at June 30, 2006.

We will need to raise additional equity and/or debt financing to sustain operations over the next twelve months. Our auditors have expressed substantial doubt about our ability to continue as a
going concern in their audit report that was included in our Form 10-KSB for the fiscal year ended June 30, 2006.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations are based upon the financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and disclosures on the date of
the financial statements. On an on-going basis, we evaluate our estimates, including, but not limited to, those related to revenue recognition.

We use authoritative pronouncements, historical experience and other assumptions as the basis for making judgments. Actual results could differ from those estimates. Critical accounting
policies identified are as follows:

Long-Lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we test
long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant
decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset;
current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed
significantly before the end of its estimated useful life.

---



Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the
use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Foreign Currency Transactions/Balances

Our functional and reporting currency is the United States dollar. The functional currency of the Companys subsidiary is the Canadian dollar. The financial statements of this subsidiary
are translated to United States dollars in accordance with SFAS No. 52, Foreign Currency Translation, using period-end rates of exchange for assets and
liabilities, and average rates of exchange for the period for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders equity. Foreign currency transaction
gains and losses are included in current operations.

Revenue Recognition

The Company recognizes revenue related to sales and licensing of medical software in accordance with Statement of Position No. 97-2, Software Revenue
Recognition (SOP 97-2), as amended by Statement of Position No. 98-9, Software Revenue Recognition with Respect to Certain Arrangements. Pursuant to SOP 97-2 and Staff Accounting Bulletin No. 104 Revenue Recognition, revenue will only be recognized when
the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectibility is reasonably assured. The Companys revenue contracts are accounted for in conformity with Accounting Research
Bulletin No. 45 Long-Term Construction-Type Contracts, using the relevant guidance in SOP 81-1 Accounting for Performance
of Construction-Type and Certain Production-Type Contracts, unless specified criteria for separate accounting for any service element are met. The Company also follows the guidance in Emerging Issues Task
Force (EITF) Issue No. 00-21 Revenue Arrangements with Multiple Deliverables relating to the separability of deliverables included in an arrangement
into different units of accounting and the allocation of an arrangements consideration to those units of accounting. It does not address when revenue should be recognized for the units of accounting. The Company received $23,750 during the
six month period ended December 31, 2006 for the annual license renewal fees. At December 31, 2006, the balance of deferred revenue, which relates to the unearned portion received of annual license fees, is $14,167. During the period ended
December 31, 2006, the Company also received $248,000, representing advances paid to the Company in relation to a contract. This amount is recorded in deferred revenue. Incremental direct costs related to contract acquisition and origination,
which result in deferred revenue, are expensed as incurred. Any allowance for doubtful accounts is based on the Companys detailed assessment of the collectibility of specific customer accounts. Any significant customer accounts that are not
expected to be collected are excluded from revenues. To date, the Company has not experienced any losses from uncollectible accounts.

Disclosure Regarding Forward-Looking Statements

Certain statements contained in this quarterly report on Form 10QSB/A constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and
the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause deviations in actual results, performance or achievements to be materially
different from any future results, performance or achievement expressed or implied. Such factors include but are not limited to: market and customer acceptance of and satisfaction with our products, market demand for our products; fluctuations in
foreign currency markets; the use of estimates in the preparation of our financial statements; the impact of competitive products and pricing in our field; the ability to develop and launch new products in a timely fashion; government and industry
regulatory environment; fluctuations in operating results, including, but not limited to, spending on research and development, spending on sales and marketing activities, spending on technical and product support; and other risks outlined in
previous filings with the Securities and Exchange Commission, and in this quarterly report on Form 10-QSB/A. The words believe, expect, may, anticipate, intend and plan and
similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties that cannot be quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking
statements. You are cautioned not to place undue reliance on these forward-looking statements. The terms Company, we, us, our, VisualMED and the Registrant refer to VisualMED
Clinical Solutions Corp., a Nevada corporation, and its subsidiaries.

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Factors that could cause actual results to differ from those expressed in forward-looking statements include, but are not limited to:

- Our limited operating history;
- Our auditors have issued a going concern opinion. Therefore we may not be able to achieve our objectives and may have to suspend or cease operations;
- Because we have historically incurred losses and these losses may increase in the future, we must begin generating a profit from our operations. If we do not begin
generating a profit we may have to suspend or cease operations;
- We have experienced a history of losses and expect to incur future losses. Therefore, we must continue to raise money from investors to fund our operations. If we are
unable to fund our operations, we will cease doing business;
- Because we depend on a limited number of third parties to manufacture and supply critical components for our products and services, if a third party manufacturer should
cease operations or refuse to sell components to us, we may have to suspend or cease operations;
- If we cannot deliver the VisualMed systems our customers demand, we will be unable to attract customers, which would likely result in a loss of income and eventually a
termination of our operations;
- Competition from companies with already established marketing links to our potential customers may adversely affect our ability to market our products;
- Our parent company has significant influence over our corporate decisions;
- Because we do not have any patents, we rely on trade secrets, confidentiality agreements and contractual agreements, which may not be adequate to protect our proprietary
interests. If our proprietary interests are divulged to the public, our operations may be adversely impacted and we may have to cease operations;

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- We may be exposed to liability claims if products based on our technologies are marketed and sold. We have liability insurance coverage in the amount of $1,000,000,
however, if a judgment is rendered against us in excess of the amount of our coverage, we may have to cease operations;
- Third parties may claim that our current or future products or services infringe their proprietary rights or assert other claims against us;

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- Fluctuations in the value of foreign currencies could result in increased product costs and operating expenses;
- We must be able to respond to rapidly changing technology, services and standards in order to remain competitive;
- Because the market for our common stock is limited, our investors may not be able to resell their shares of common stock;
- Because our common stock is subject to penny stock rules, the liquidity of investments may be restricted.

ITEM 3. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, under the supervision and with the participation of our management, including Gerard Dab, our Chief Executive Officer, and Larry Kurlender,
our Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities and Exchange Act of 1934 (Exchange Act)). Based on that evaluation, our Chief Executive
Officer and our Chief Financial Officer have concluded that these disclosure controls and procedures are effective to ensure that information required to be disclosed in our annual reports filed under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities Exchange Commission rules and forms. There were no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2006 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our officers believe that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that VisualMED files or submits under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and our Chief Financial Officer in order to allow timely decisions regarding required disclosure. There are frequent daily communications among all of our executives, including Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer, President and our Vice President for Finance. All of our budgetary decisions and all of our billing and other expenditures require the written, signed approval of at least three of
our executives. All issues regarding disclosures and procedures are discussed in a timely fashion, including all financial and other key operational information. Current disclosure controls and procedures are governed by the Board of Directors, and
any changes to such controls and procedures must be made with the Boards approval.

Part II

ITEM 1. LEGAL PROCEEDINGS

From time to time we may be involved in litigation incidental to the conduct of our business, such as contractual matters and employee-related matters. Currently, we are not a party to any material legal proceeding or
litigation, whether current or threatened, nor are any of our officers, directors or affiliates, a party adverse to us in any legal proceeding or litigation.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

|(a) | Exhibits | Description                                                                                                                                                                                          
|--- | -------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |          |                                                                                                                                                                                                      
|    | 3.1      | Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Companys Registration Statement on Form SB2 (Registration No. 33394835) filed with the SEC on January 18,
2001).       
|   
|    | 3.2      | Amendment to the Articles of Incorporation (incorporated by reference to Exhibit 3.2 to the Companys Quarterly Report on Form 10QSB filed with the SEC on February 22, 2005).                      
|   
|    | 3.3      | ByLaws (incorporated by reference to Exhibit 3.2 to the Companys Registration Statement on Form SB2 (Registration No. 33394835) filed with the SEC on January 18, 2001).                         
|   
|    | 3.4      | VisualMED Clinical Solutions Corp. October 2006 Nonqualified Stock Option Plan (incorporated by reference to the Companys Registration Statement on Form S-8 filed with the SEC on October 4,
2006).
|   
|    | 31.1     | Certification of Principal Executive Officer pursuant to Rule 13a-15(e) and Rule 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.                                   
|   
|    | 31.2     | Certification of Principal Financial Officer pursuant to Rule 13a-15(e) and Rule 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.                                   
|   
|    | 32.1     | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Executive Officer).                                                
|   
|    | 32.2     | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Financial Officer).                                                
|   

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized, on this 13thday of February, 2007.

| | VISUALMED CLINICAL SOLUTIONS CORP. |                                           
| | ---------------------------------- | ------------------------------------------
| | (Registrant)                       |                                           
| |                                    |                                           
| | By:                                | /s/
    Gerard Dab                        
| |                                    | Gerard Dab                                
| |                                    | Principal Executive Officer, Secretary and
| |                                    | a member of the Board of Directors        





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