**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB**





**x** **ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF** 1934





**For
      the fiscal year ended December 31, 200** 6





**o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**


For
      the
      transition period from _______ to _______








**Commission
      file number: 000-50221**


**INFORMEDIX
      HOLDINGS, INC.**


(Name
      of
      small business issuer in its charter)


**Nevada**
              **88-0462762***(State
                  or other jurisdiction of*
              *(I.R.S.
                  Employer Identification No.)**incorporation
                  or organization)*
 
 **Georgetowne
        Park**
 **5880
        Hubbard Drive**
 **Rockville,
        Maryland 20852**
 *(Address
        of principal executive offices)*


**Issuer's
      Telephone Number:  (301) 984-1566**








Securities
      registered under Section 12(b) of the Exchange Act:


Title
      of
      each class





Name
      of
      each exchange on which registered


None




Securities
      registered under Section 12(g) of the Exchange Act:


Common
      stock, $.001 par value


*(Title
      of class)*





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. Yes o No
x




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 past 90 days. Yes x No o




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of registrant's knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-KSB
      or any amendment to this Form 10-KSB. o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No
x




The
      issuer's revenues for the fiscal year ended December 31, 2006 were $102,721




The
      aggregate market value of the issuer's common stock held by non-affiliates
      as of
      April 25, 2007, was approximately $10,125,569. On such date, the closing price
      for the issuer's common stock, as quoted on the OTC Bulletin Board, was $0.11
      per share.




The
      issuer had 92,050,624 shares of common stock outstanding as of April 25, 2007.




Documents
      incorporated by reference: None




Transitional
      Small Business Disclosure Format: Yes o No x







**InforMedix
      Holdings, Inc.**


**SEC
      Form 10-KSB - For the fiscal year ended December 31, 2006**








***ITEM
                & DESCRIPTION***
            ***PAGE*****(iv)****INTRODUCTORY
                COMMENTS****1****PART
                I****Item
                1:**
            Description
                of Business
            1History
            1Company
                Overview
            2Product
                Overview
            4Patient
                Interface
            5Information
                Management
            6Value
                Proposition
            6Target
                Markets
            8Market
                Size
            10Current
                State of Technology
            11Market
                Opportunity
            12Marketing
                & Sales Strategy
            14Sales
                Plan
            16Competition
            17Government
                Regulations
            18Risk
                Factors
            19Employees
            24**Item
                2:**
            Description
                of Property
            24**Item
                3:**
            Legal
                Proceedings
            24**Item
                4:**
            Submission
                of Matters to Vote of Security Holders
            25


**26****PART
                  II****Item
                  5:**
              Market
                  for Common Equity, Related Stockholder Matters, and Small
                  Business
                    Issuer Repurchases of Equity Securities
              26**Item
                  6:**
              Management
                  Discussion and Analysis
              27Results
                  of Operations
              29Liquidity
                  and Capital Resources
              30Implementation
                  of Business Plan
              33**Item
                  7:**
              Financial
                  Statements
              36**Item
                  8:**
              Changes
                  in and Disagreements with Accountants
              36**Item
                  8A:**
              Controls
                  and Procedures
              36**Item
                  8B:**
              Other
                  Information
              37**38****PART
                  III****Item
                  9:**
              Directors,
                  Executive Officers, Promoters, Control Persons, and Corporate Governance,
                  Compliance and Section 16(a) of the Exchange Act
              38











Directors,
                  Executive Officers
              38Executive
                  Officers
              38Significant
                  Consultants
              40Board
                  of Directors
              40Code
                  of Ethics
              42**Item
                  10:**
              Executive
                  Compensation
              43**Item
                  11:**
              Security
                  Ownership of Certain Beneficial Owners and ManagementAnd
                  Related Stockholder Matters
              45**Item
                  12:**
              Certain
                  Relationships and Related Transactions & Director
                  Independence
              47**Item
                  13:**
              Exhibits
                  and Reports on Form 8-K
              47**Item
                  14:**
              Principal
                  Accountants Fees and Services
              47**48****PART
                  IV****Financial
                  Information and****Index**
              48**Report
                  of Independent Registered Public Accounting Firm**
              49**Consolidated
                  Balance Sheets as of December 31, 2006 and 2006**
              50**Consolidated
                  Statements of Operations for the Years Ended December 31, 2006
                  and
                  2005**
              **51****Consolidated
                  Statements of Changes in Stockholders’ Deficit For the Years Ended
                  December 31, 2006 and 2005**
              **52****Consolidated
                  Statements of Cash Flows for the Years Ended December 31, 2006
                  and
                  2005**
              **53****Notes
                  to Consolidated Financial Statements**
              **54****SIGNATURES**
              **71****EXHIBIT
                  INDEX**
              **73****CERTIFICATIONS**
              **75****STATEMENT
                  PURSUANT TO 18 U.S.C. SECTION 1250, AS ADOPTED****PURSUANT
                  TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**
              **77**










Page
      iii


























**Use
      of Names**





Throughout
      this report, the terms *“InforMedix”,
      "we," "us," "our"* and *"the
      company"* refer
      to
      InforMedix Holdings, Inc. and, unless the context indicates otherwise, includes
      InforMedix's wholly-owned subsidiary, InforMedix, Inc.








**Forward-Looking
      Statements**





Statements
      contained in this report include "forward-looking statements" within the meaning
      of such term in Section 27A of the Securities Act of 1933 and Section 21E of
      the
      Securities Exchange Act of 1934. Forward-looking statements involve known and
      unknown risks, uncertainties and other factors which could cause actual
      financial or operating results, performances or achievements expressed or
      implied by the forward-looking statements not to occur or be realized.
      Forward-looking statements generally are based on our best estimates of future
      results, performances or achievements, based upon current conditions and the
      most recent results of the companies involved and their respective industries.
      Forward-looking statements may be identified by the use of forward-looking
      terminology such as "may," "will," "could," "project," "expect," "believe,"
      "estimate," "anticipate," "intend," "continue," "potential," "opportunity"
      or
      similar terms, variations of those terms or the negative of those terms or
      other
      variations of those terms or comparable words or expressions.





Potential
      risks and uncertainties include, among other things, such factors as:




·
            our
                business strategies and future plans of operations,


·
            general
                economic conditions in the United States and elsewhere, as well as
                the
                economic conditions affecting the industries in which we operate,


·
            the
                market acceptance and amount of sales of our products and services,


·
            the
                competitive environment within the industry in which we compete,


·
            our
                ability to raise additional capital, needed for expansion,


·
            the
                other factors and information discussed in other sections of this
                report
                and in the documents incorporated by reference in this report.


We
      discuss many of these risks in greater detail under the heading “Risk Factors”
in Item 1 below.





Persons
      reading this report should carefully consider such risks, uncertainties and
      other information, disclosures and discussions which contain cautionary
      statements identifying important factors that could cause actual results to
      differ materially from those provided in the forward-looking statements. We
      undertake no obligation to publicly update or revise any forward-looking
      statements, whether as a result of new information, future events or otherwise.





**This
      report also contains estimates made by independent parties and by us relating
      to
      market size, growth, and other industry data. These estimates involve a number
      of assumptions and limitations and you are cautioned not to give undue weight
      to
      such estimates.**
















**Page
      iv**

























**ITEM
      1 -**


**DESCRIPTION
      OF BUSINESS**








**HISTORY**





InforMedix
      Holdings, Inc. (the “Company”) was organized under the laws of the State of
      Nevada on January 19, 2000 under the name Hunapu, Inc.





On
      May 8,
      2003, InforMedix Acquisition Corp. (“Acquisition Corp.”) merged with and into
      Hunapu Inc. (“Hunapu”) pursuant to the Agreement and Plan of Reorganization
      dated February 7, 2003 (the “Agreement”). Hunapu was the surviving entity and
      subsequently changed its name to InforMedix Holdings, Inc.





Pursuant
      to the Agreement, Hunapu acquired Acquisition Corp., subject to specified
      conditions and terms set forth in the Agreement. The consideration paid by
      Hunapu for its acquisition of Acquisition Corp. consisted of the issuance of
      7,451,000 shares of Hunapu common stock, inclusive of 112,500 shares that were
      issued to InforMedix debt holders in conversion of their notes to equity, for
      the net assets of Acquisition Corp. Simultaneously, with the acquisition of
      the
      issuance of the 7,451,000 shares of stock, Hunapu cancelled 5,545,000 shares
      of
      stock issued to its chief executive officer.





For
      accounting purposes, the transaction has been accounted for as a reverse
      acquisition, under the purchase method of accounting. Accordingly, Acquisition
      Corp. was treated as the continuing entity for accounting purposes. Following
      the merger, the sole officer and director of Hunapu resigned and were replaced
      with the officers and directors of Acquisition Corp.





Pursuant
      to the Agreement, the Company’s stockholders approved the authorization of
      4,500,000 shares of preferred stock which may be issued from time to time by
      the
      Board of Directors without further shareholder approval.





Acquisition
      Corp. was a Delaware holding company, incorporated on June 26, 2002, with a
      wholly owned subsidiary IFAC, Inc. (“IFAC”), for the purpose of acquiring
      InforMedix, Inc. (“the Operating Company”). The Operating Company was
      incorporated in the State of Delaware on January 27, 1997, for the purpose
      of
      developing the Med-eMonitor System TM .





On
      August
      14, 2002, the Operating Company merged with IFAC, pursuant to a Plan and
      Agreement of Merger dated August 14, 2002. According to the Agreement, the
      Operating Company merged into IFAC in a share exchange agreement, and the
      Operating Company became the surviving company post merger, and thus became
      the
      sole wholly- owned subsidiary of Acquisition Corp.





The
      Operating Company’s stockholders received 4.774 shares of Acquisition Corp.
      stock for each 1 share of the Operating Company’s stock pursuant to the terms of
      the merger. Acquisition Corp. conducted no other business operations other
      than
      the share exchange with InforMedix and subsequent merger into Hunapu. The
      initial merger into Acquisition Corp became effective on August 22, 2002. The
      Operating Company remains the only operational segment of the Company through
      the date of this filing.





Since
      its
      inception, InforMedix has devoted substantially all of its efforts to business
      planning, maintaining and expanding its patent portfolio, research and
      development, recruiting management and technical staff, acquiring operating
      assets, scientifically testing and proving the efficacy of its Med-eMonitor
      System through academic medical centers and raising capital. InforMedix has
      generated small amounts of revenue through sales of its Med-eMonitor System
      to
      academic research centers and commercial customers.


***InforMedix
          Holdings, Inc.***
 **Page
          1**








**COMPANY
      OVERVIEW** **** ******





InforMedix
      has developed, patented and integrated a portable interactive patient monitoring
      “smart pillbox” appliance, software and networked two-way communications system
      to enable insurance companies, disease management organizations, pharmaceutical
      firms, medical researchers and physicians to efficiently monitor and manage
      patients’ adherence to their medications and care plans. The Med-eMonitorTM
System leverages InforMedix’s rich pioneering art patent portfolio of 15 issued
      and 14 pending patents (two of the Company’s patents have expired as of December
      31, 2006).





The
      Med-eMonitor System is primarily used to monitor high-risk and high cost
      patients. More specifically, the Med-eMonitor is used with patients being
      treated for heart disease, stroke prevention, heart failure, diabetics with
      high
      blood pressure, HIV/AIDS, solid organ transplantation, chronic obstructive
      pulmonary disease, Alzheimer’s disease, schizophrenia, and bipolar
      disease.





The
      following six phases summarize the strategies and tactics that the Company
      has
      employed and expects to continue to employ in order to generate future
      revenues:




1)
            In
                Phase I, the Company established and expanded upon its Pioneer Patent
                Portfolio to protect the substantial investment involved in launching
                the
                Med-eMonitor System.




2)
            In
                Phase II, the Company developed and tested the Med-eMonitor System
                to
                maximize its functionality and value
                proposition.




3)
            In
                Phase III, the Company scientifically established that the Med-eMonitor
                System improves patient medication and care plan adherence, using
                independent third party academic medical center trials, peer-reviewed
                medical journal articles, presentations at national and international
                scientific symposia, and received a national award for technologic
                excellence. These research studies and awards provide a scientific
                basis
                for the marketing and sales claims the Company makes to customer
                prospects.




4)
            In
                Phase IV, the Company increased its visibility to customer prospects
                without building a large infrastructure, by establishing strategic
                alliances to penetrate disease management organizations, major insurers
                and self insured organizations, strategic channel and retail partners.
                The
                Company also increased its visibility through positioning InforMedix’s CEO
                as a national expert in the field of medication adherence, by his
                being
                appointed to a prestigious Medical Board (where he was recently appointed
                Chairman of that Board), being personally invited by hosts of prestigious
                seminars to network with CEOs of prospective customers, and by public
                speaking including symposia presentations and print, radio, and televised
                interviews.




5)
            In
                Phase V, the Company improved its ability to make direct sales into
                the
                disease management and managed care markets, through hiring top performing
                salespeople experienced in these
                markets




6)
            
            In
                Phase VI, the Company has begun to achieve revenue recognition. By
                establishing the technology through scientific studies, establishing
                alliances with larger companies and developing national visibility
                and
                credibility, InforMedix has positioned the Med-eMonitor System as
                a
                product disease management companies can trust to safely and effectively
                monitor their patients’ medication and medical treatment adherence. The
                Company is also focused on securing third party reimbursement for
                the
                Med-eMonitor through large insurers, and government
                agencies.






The
      Company has accomplished numerous objectives in 2005 and 2006. It demonstrated
      improved medication adherence rates continually in excess of 90%, with data
      presented at a variety of domestic and international meetings, and reports
      through publications in several peer-reviewed medical journals and
      books.


***InforMedix
          Holdings, Inc.***
 **Page
          2**





The
      Company completed a study in diabetes adherence in remote rural Montana.
      Feedback from patient participants was positive, and data analysis demonstrated
      medication adherence rates of 95%, with HbA1c levels reduced by an average
      of at
      least 15% over three months. HbA1c is a key diabetes biomarker that predicts
      morbidity, mortality and cost in diabetic patients, with a reduction of 10%
      considered clinically significant. A leading disease management company, after
      one year of service provision, achieved only a 4% reduction in HbA1c. Clinical
      feedback from the Montana program on InforMedix’s ability to deliver was very
      positive. The Company also created a program for outcomes research, disease
      management and economic return-on investment analysis of Med-eMonitor System
      through a partnership with The University of Pennsylvania, Wharton’s Leonard
      Davis Institute, McKesson Health Solutions/Disease Management and St. Vincent
      Healthcare. This involved working with McKesson’s Medical Director of their
      Disease Management Division.





Increased
      revenue recognition will be critical to the future success of the Company. During
      the early part of 2004, the Company emerged from a development stage status
      to
      an early stage commercialization status. During 2006, the Company experienced
      sustained quarterly revenue growth increasing from $4,627 in the first quarter
      to $4,722, $33,373, and $59,999 in second, third and fourth quarters
      respectively.





The
      Company has built a sales pipeline in the Medication Adherence market and has
      entered into definitive agreements for orders from customers As of December
      31,
      2006, the Company has entered into contracts with the University of Pennsylvania
      (two separate agreements addressing stroke prevention, diabetics with high
      blood
      pressure), the University of Texas - HSCSA (Schizophrenia), ADT WellHealth
      (division of ADT Security Services - a division of Tyco) and XLHealth (a Goldman
      Sach-backed disease management organization) in a Medicare program in Tennessee,
      the University of California, San Francisco in a NIH (National Institutes for
      Health) program directed at HIV/AIDS treatment, and Enhanced Care Initiatives
      an
      elderly care organization. The Company recently added excelleRx (an Omnicare
      Company) as a strategic partner and customer. In addition, the Company is also
      in early to more advanced discussions with numerous other
      organizations.





InforMedix
      has established an active Board of Directors and a Scientific Advisory Board
      comprised of nationally recognized experts in pharmaceutical research, drug
      trials, business management, and disease management. InforMedix is now
      positioned and actively engaged in fully commercializing its technology via
      strategic alliances with channel partners and large retail distributors. More
      specifically, key distribution partners include large home security monitoring
      companies, health cost reduction companies, personal emergency response
      companies, and retail marketing companies.





The
      Company also strengthened its corporate structure in October 2006 with the
      addition of Harry M. Stokes, an experienced financial professional, as its
      Senior Vice President and Chief Financial Officer. Mr. Stokes has served in
      senior financial roles for over 25 years in managing national and international
      organizations holding assets from $5 million to $1 billion. He has represented
      high-net worth investors, privately held and public organizations, and start-up,
      turnaround, growth and matured organizations as both an employee and an
      independent consultant.





In
      March
      2007, the Company furthered strengthened its corporate structure with the
      addition of Richard P. Voss, an experienced business development and marketing
      professional, as its Senior Vice President of Business Development, Marketing
      and Channel Sales. Mr. Voss brings over 15 years of executive level experience
      with leading pharmaceutical organizations, and 11 years of responsibility in
      product, marketing, and sales management.














***InforMedix
          Holdings, Inc.***
 **Page
          3**





**PRODUCT
      OVERVIEW** ****





The
      Med-eMonitorTM System is a combined medication adherence and e-diary solution.
      The Med-eMonitor appliance is a smart pillbox, which is non-threatening and
      easy
      to use. The System comprises a portable patient interface device and automated
      data upload and download capability using a cradle modem connected to a standard
      telephone line. The device is programmed remotely via the Internet, and patient
      medication adherence, health status, quality of life and physiologic data are
      accessible via a secure Internet site. The System provides secure access through
      a role-based navigation system that permits users access with read and/or write
      privileges based on their security credentials on the System. All transmitted
      data is encrypted. The System is built to be both HIPAA and 21 CFR Part 11
      compliant.





The
      Med-eMonitor System was specifically designed for the disease management and
      home care market. In these patient populations, independent third party academic
      centers have documented repeated medication and care plan adherence rates in
      excess of 90%.





The
      Med-eMonitor System prompts patients to take medication, contains the medication
      and automatically tracks patient adherence, eliminating the need for hand
      written diaries. This fully integrated system conveniently combines these
      features with an easy-to-read display screen. It holds up to five different
      medications in its storage compartments, which are sensored allowing the
      medicines to be time and date stamped when accessed. Twenty-five additional
      medications, outside of the device, can be managed via a “Virtual Compartment”
feature. The Med-eMonitor can manage up to 20 additional medications, including
      patches, injectables, refrigerants, liquids, and other medications.





Patients
      are directed to take specific medications when the device sounds a chime
      (several optional chimes are available for selection) and to eliminate any
      confusion, the LCD screen points to the appropriate compartment. Once the
      compartment is opened to take the pill, a variety of information may be
      displayed on the LCD screen, depending upon the information established by
      the
      physician through the care plan protocol. This information could include a
      description of the pills (graphic image pending) to enable the patient to
      visually verify they are taking the right medication, or it could inform the
      patient about dosage and how the medication treats their condition.





The
      device prompts the patient to enter information about their response to the
      medication(s) in an intuitive manner by responding to a series of fully
      customized questions determined by the sponsor or physician, including branching
      logic capabilities. Data entry is performed via over-sized soft keys. A series
      of queries may follow at any pre-selected interval following the taking of
      the
      medication, requesting facts about the occurrence of possible adverse events,
      or
      relevant physiologic measures. The patient may be prompted to assess how they
      are feeling or doing at a given time during that specific day. Data may be
      input
      via full-scale visual analogue scales that enable easy entry of numeric values
      such as glucose levels and systolic and diastolic blood pressure values. Using
      this scale, the patient dose-response data can be recorded at multiple times
      throughout the day, to measure parameters such as time to onset of action,
      duration of action, degree of symptom relief and/or physiologic response, and
      onset/duration of side effects. Predetermined triggers based on specific answers
      may alert the patient to perform a self-care behavior (e.g. entering a low
      glucose level might prompt them to drink fruit juice or take a glucose pill);
      or
      to call a caregiver (e.g. a weight gain of four pounds or more may trigger
      a
      behavioral prompt to call the doctor immediately).





All
      patient interactions with the device are automatically recorded. This includes
      the patient changing the settings such as the muting of the chimes or adjusting
      the contrast of the display screen. All of this data is available real time
      via
      a secure Internet site to physicians, clinical teams, and care managers to
      analyze the patient’s status, progress and adherence level. The data can also be
      used to assess the patient’s risk status to provide early warning signs that
      trigger interventions.





One
      or
      more times each day the patient is prompted to place the portable device in
      its
      data exchange cradle (normally in the evening), and the patient’s data from that
      day is automatically transferred from the patient’s device to the database via
      secure communication over a non-dedicated telephone line. If the patient cannot
      access a phone line, the device can retain patient data indefinitely in
      non-volatile “flash” memory, and then upload the data the next time the device
      is placed in its cradle. The patient’s regimen can be remotely re-programmed in
      the database, and downloaded to the device when it is communicating with the
      database, facilitating up to daily changes in the patients regimen based upon
      analysis of the patient data. The database provides standard “risk-stratified”
summary reports, and detailed reports of all patient event data. It will also
      trigger urgent outbound e-mails to caregivers should the patient data fall
      outside of pre-determined acceptable limits. The database is hosted in a secure
      facility, and can export data in XML or ASCII formats, and is SOAP compatible.
      It provides an audit trail of any changes made to the patient regimen or to
      patient data. It is written in Microsoft.Net for SQL. The Med-eMonitor System
      is
      protected by numerous domestic and international issued and pending patents.


***InforMedix
          Holdings, Inc.***
 **Page
          4**








In
      the
      clinical drug trial market, the Med-eMonitor System organizes and translates
      complex clinical drug trial protocols into a simple, automated series of
      prompted and recorded events for patients and researchers. InforMedix is
      providing the Med-eMonitor device and the network infrastructure that ensures
      secure transmission of patient data. With the assistance of channel partners,
      InforMedix can provide specialty packaging of the Med-eMonitor medication
      dispensing trays, thereby integrating medication adherence, electronic diary,
      and drug packaging into one system. The Company has developed with outside
      providers the capability to label, store, inventory, and pre-package medications
      for the Med-eMonitor device, ensuring product stability and patient safety
      through proper dosage, hermetically sealed trays, and other safety measures.
      In
      addition, the capability to manage the logistics of distributing these packaged
      materials through a cGMP-compliant facility, along with a patient-specific
      pharmacy, was previously developed for shipping this turnkey solution either
      direct-to-clinical sites or direct-to-patients.





This
      integrated system significantly reduces the cost of managing drug trials and
      dramatically shortens the time required to transcribe patient diaries into
      manageable electronic data for analysis and reporting.





Traditional
      drug trial methodologies require considerable investments in professional
      resources to train patients on drug and trial protocols, conduct site visits
      to
      ensure adherence, and administer paper-based protocol changes and retrain
      patients on new protocols. Traditional methodologies also depend on patients
      to
      remember when to take their medication, which medication to take and to maintain
      hand-written diaries about adherence and drug response. Interpreting and
      transcribing these hand-written diaries requires a great deal of time and is
      prone to errors.





This
      Med-eMonitor System prompts patients to take the medication, dispenses the
      medication (eliminating expensive poster-size blister packs), automatically
      tracks patient adherence, and eliminates the need for hand written diaries
      and
      the costs associated with converting paper-based diaries to electronic format.
      Through drug packaging directly shipped to patients, the costs be further
      reduced through a reduction in the frequency of patient site visits for normally
      accessible as well as remote rural patient populations..








**PATIENT
      INTERFACE**





The
      portable patient interface hardware assists patient by telling the patient
      which
      medication to take, when to take it, how many to take, and provides the means
      by
      which patients can keep track of their reaction to the medication.





The
      device combines medication storage with an easy-to-read display screen. It
      also
      dispenses the medication via five storage compartments and sensored-lids. The
      medication can be provided in hermetically sealed trays that are pre-labeled,
      prepackaged, and shipped directly to patients and/or set-up as re-fillable
      storage compartments.





Patients
      are directed to take specific medications when the device sounds a chime. The
      LCD screen also points to the appropriate compartment. The device automatically
      records the opening and closing of each compartment lid as it occurs. Once
      the
      compartment is opened to take the pill, a variety of information is displayed
      on
      the LCD screen, depending upon what information the care plan protocol has
      determined. This information could include a description of the pills (shape
      and
      color) to enable the patient to visually verify he is taking the right
      medication, or it could inform the patient about dosage and how the medication
      treats their condition, or other information.


***InforMedix
          Holdings, Inc.***
 **Page
          5**





The
      device prompts the patient to enter information about their response to the
      medication(s) in an intuitive manner by responding to a series of fully
      customized questions. Data entry is performed via push buttons, eliminating
      the
      need for keyboard, computer or other data entry mechanics. Additionally, a
      series of queries may follow requesting information about the occurrence of
      possible adverse events, or physiologic measures may be requested and entered
      that are relevant to the study.





The
      device can deliver an unlimited number of other "virtual" events. These may
      include instructions about medications not dispensed by the device. These
      instructions may include asking the patient to take their blood glucose, their
      weight or blood pressure, and other instructions depending upon the nature
      of
      the clinical trial and the patient's related clinical history.





Additionally,
      all other patient interaction with the device is recorded. This includes muting
      the chimes, adjusting the contrast, etc. All of this data is available to
      researchers and study monitors to analyze to explain certain reactions, such
      as
      a missed dosage because the device was muted.








**INFORMATION
      MANAGEMENT**





The
      Med-eXpertTM and Med-eXpert TM database
      and patient enrollment system provides medical and research personnel with
      extensive real-time information about patient adherence and medication response,
      all of which is customized to the individual patient care plan or trial protocol
      specifications. The Med-eXpertTM database and patient enrollment system provides
      a wide range of patient-monitoring features available via the Web, including:





·
            Capturing
                and managing automated medication adherence (date and time-stamped)


·
            Remote
                monitoring of patients’ responses to drug and dosage
                regimens


·
            Remote
                monitoring of patients’ physiologic and quality of life
                information


·
            The
                ability to analyze data from multiple patients during
                trials


·
            The
                ability to implement protocol changes and enhancements instantly


·
            Aggregated
                data collection to provide real-time trend analysis during
                trials


·
            Outbound
                e-mail messages sent automatically to case managers and clinical
                research
                coordinators when certain patient-reported data is “out of
                bounds.”











**VALUE
      PROPOSITIONS**





**Medication
      Adherence** - We
      believe that the Med-eMonitor ’ System
      provides significant value to caretakers and disease managers, due to the
      healthcare cost savings and improved quality of care resulting from improved
      medication adherence. This value is added in five critical areas:




·
            Early
                identification and intervention of adherence and physiological issues
                with
                high-risk patients,


·
            Consistent
                improvement in medication
                adherence,


·
            Reduced
                hospitalization and outpatient
                expenditures,


·
            Improved
                quality of life,


·
            Improved
                medical decision making, through providing medication-specific adherence
                information for each patient, and


·
            Acceptance
                by patients using the appliance.





**Clinical
      Trials** - We
      believe that the Med-eMonitor ’ System
      provides significant value to pharmaceutical manufacturers and contract research
      organizations (CRO’s) in five critical areas:




***InforMedix
          Holdings, Inc.***
 **Page
          6**







·
            **Time.**The time required to acquire, aggregate, analyze and report clinical
                trial
                information can be reduced dramatically, thereby shortening the
                time-to-market for new drugs. Real-time data capture enables researchers
                to address the onset of complications well in advance of traditional
                methodologies.*Pharmaceutical
                industry sources estimate that each day’s delay in bringing a drug to
                market can cost the pharmaceutical manufacturer from $1,000,000 to
                $10,000,000 in lost revenues.*


·
            **Cost.**The operational costs of conducting a trial and managing the results
                are
                significantly reduced through operational efficiencies and minimizing
                the
                requirement for researcher - patient
                intervention.


·
            **Patient
                Attrition.**A
                primary cause of patients leaving a trial is their frustration with
                the
                need to keep hand-written diaries and having to remember when to
                take
                their medications. Recruiting patients is an extremely expensive
                and
                time-consuming aspect of drug trials and reducing attrition is of
                great
                value. A November 2001 Tufts University study on the cost of introducing
                a
                new drug states that the cost of recruiting and retaining the patients
                in
                a trial comprises approximately 20% of the $802 million total
                cost.


·
            **Data
                Accuracy.**Automated data collection via patient prompts and intuitive data
                capture
                increases the accuracy and relevancy of patient
                data.


·
            **Integration
                of Medication Adherence, Electronic Patient Diary, and Medication
                Packaging.**This
                unified turnkey platform simplifies the protocol delivery and patient
                response, helping ensure that the patient more closely adheres to
                proper
                medication adherence and protocol
                adherence.





**Value
      to Biotechnology and Pharmaceutical Firms -** We
      believe that the Med-eMonotor TM **** **s** ystem
      offers the following benefits to biotechnology and pharmaceutical
      firms:




·
            Integrates
                medication adherence, patient diary, and drug packaging into one
                platform
                and seamless system


·
            Provides
                an entirely new population of patients to participate in clinical
                drug
                trials - remote rural patients


·
            Direct
                shipment of Med-eMonitor drug packaging to
                patients


·
            Reduced
                frequency of patient site visits through remote monitoring and direct
                shipments


·
            Accelerates
                the clinical trial and reduces time-to-market for a new drug, thereby
                increasing revenues


·
            Real-time
                data enables rolling submissions and mid-course protocol
                modifications


·
            Earlier
                identification of compounds that lack efficacy or produce unacceptable
                side effects or quality of life


·
            Facilitates
                comparison studies post-market launch to identify and quantify earlier
                onset of action, longer duration of action, improved quality-of-life,
                reduced side effects of sponsor drug in comparison to competitors’
                drugs


·
            Improved
                patient safety through daily
                monitoring


·
            Accurate
                measure of test subject adherence with entire clinical protocol,
                and with
                medication dosing


·
            Monitoring
                global patient protocol adherence “by patient” and “by
                site”


·
            More
                scientific and accurate method of capturing data from
                patients





**Value
      to Contract Research Organizations and Investigators** **-** We
      believe that the Med-eMonitor TM System
      offers the following
      benefits to CRO’s and investigators:




·
            Increases
                data reliability and reduced transcription errors: electronic data
                capture, using a Med-eMonitor in place of manual data capture, provides
                more detailed data without requiring manual data input based upon
                hand-written forms


·
            Facilitates
                responses to FDA questions based upon use of the database to provide
                real
                time analysis regarding issues raised by
                FDA


·
            Accelerates
                the “unblinding” of the database, by shortening the time from the last
                patient visit until all the data, regarding that patient, has been
                entered
                into the database


***InforMedix
          Holdings, Inc.***
 **Page
          7**





·
            Control
                data for non-experimental drugs that are being taken by the patient,
                the
                effects of which may be attributed unfairly to the experimental
                drug


·
            Daily
                identification of trial participants who are not following the protocol,
                permitting rapid intervention to either get the patient back on the
                protocol or rapid recruitment of new patients to achieve statistical
                validity for the trial


·
            Identification
                of compliant patients who adhere to the trial, who may form a registry
                of
                adherent patients for a subsequent
                trial


·
            Identification
                of prior dates and times of patient drug administration, side effects
                incidence and duration, and other data currently manually captured
                by CRCs
                that is based upon the patient’s retrospective
                recall


·
            Allows
                for improved analysis of drug holidays on patient outcomes


·
            Value
                of interactive communications and opportunities provided by mass
                customizing of Med-eMonitor protocols; e.g. site administrator has
                unlimited capacity to place patients and study personnel in one or
                more
                defined “groups” and to selectively change protocol or send specific
                message to defined group only


·
            Selected
                instructions sent to patient group(s) based upon monitoring
                data


·
            Allows
                study supervisors to anonymously monitor clinical research associates
                work, site physicians’ results on patient adherence, patient sign-up, or
                other aspects of study, on a daily basis without breaking into double
                blind protocol code for study





**Value
      to Patients -** We
      believe that the Med-eMonitor System the following benefits to
      patients:




·
            Assists
                patients in adhering to the trial protocol by providing daily behavioral
                prompts


·
            Dramatically
                reduces the patient’s burden of filling in written diaries or trial forms
                just before office visits, or based upon faulty
                memory


·
            Enables
                accurate and timely responses to questionnaires and recording of
                physiological data


·
            Reduced
                frequency of site visits due to direct-to-patient pharmacy
                shipments


·
            May
                provide opportunity to avoid adverse reactions before they become
                serious


·
            Enables
                caregivers to intervene on behalf of the patient when an anticipated
                possible drug reaction is detected in its early stages prior to causing
                serious side effects


·
            Increases
                patient’s sense of independence


·
            Long
                term monitoring with Med-eMonitor allows a more rapid and targeted
                intervention when daily physiological data or questionnaires indicate
                a
                patient is headed toward a serious clinical
                event








**TARGET
      MARKETS**





We
      believe that the following statistics demonstrate the large market opportunity
      for the Med-eMonitor TM System:


·
            One
                in six Americans (50 million people), take three or more medications
                per
                day,


·
            Non-institutional
                Medicare patients spent approximately 22% of their income on health
                care
                in 2003,


·
            Baby
                boomers currently comprise 29% of the US
                population,


·
            Medication
                non-adherence costs the U.S. economy $300 billion
                annually,


·
            There
                are over 40 million chronic care patients in the United States,
                and


·
            The
                expected market for home health care monitoring technologies is projected
                to reach $35 billion by 2015


·
            Unnecessary
                hospitalizations resulting from medication non-adherence amounts
                to $100
                billion annually in the United States alone, and
                that


·
            Failure
                to take medications as prescribed
                causes:


·
            10%
                of total hospital admissions,


·
            33%
                of Chronic Heart Failure (“CHF”) hospital
                admissions,


·
            75%
                of Schizophrenia admissions,


***InforMedix
          Holdings, Inc.***
 **Page
          8**





·
            22%
                of nursing home admissions, and


·
            $300
                billion annually in unnecessary healthcare costs.





**Medication
      Adherence -** patient
      adherence with medications in the general population is a multi-billion dollar
      issue for healthcare insurers and pharmaceutical companies. When medication
      adherence is improved, the healthcare system saves billions of dollars from
      a
      reduction in hospitalizations, emergency room visits and disease state
      complications. Improved medication adherence can translate into a 10-20%
      increase in sales for a typical pharmaceutical company. It is well documented
      that improved medication adherence significantly improves the health status
      of a
      patient and it simultaneously reduces overall healthcare costs. Market data
      indicates that poor medication adherence is responsible for upwards of $300
      billion per year in unnecessary healthcare costs. The Med-eMonitor System is
      well positioned to capitalize on both of those considerable value
      propositions.




Over
      25,000,000 patients in the United States are chronically ill and treated with
      complex poly-pharmaceutical medication regimens. Their conditions include
      congestive heart failure (CHF), hypertension, diabetes, asthma, schizophrenia,
      schizophrenia, bipolar disorder, depression, hyperlipidemia, chronic obstructive
      pulmonary disease, coronary artery disease, HIV/AIDS, transplant, and others.
      These patients utilize a disproportionate amount of healthcare resources, and
      may individually cost the system $50,000 to $75,000 per year or more. Major
      costs relate to medication non-adherence resulting in unnecessary emergency
      room
      and hospital visits. It is estimated that over 50% of chronically ill patients
      are non-adherent and 33% of all CHF hospital admissions (the major hospital
      cost
      under Medicare) results from patients not properly adhering to their medication
      regimens. Increasingly these patients are being case managed by nurse
      specialists operating out of call centers. Payors provide a monthly per patient
      fee for case management. The use of remote telemonitoring technologies, such
      as
      digital blood pressure cuffs and scales demonstrates increasing adoption rates,
      with price points ranging from $50 to $125 per patient per month depending
      upon
      the number of devices being used, and the length of the monitoring period
      commitment.







**Clinical
      Trials** -
      InforMedix also addresses the market for clinical trials of new and emerging
      drugs and medications. This multi-billion dollar market is well defined and
      has
      a significant need for an immediate and efficient solution to obtain accurate
      clinical trial data to accelerate time-to-market for new drugs and to reduce
      the
      costs associated with clinical trials. The market is comprised of:


·
            Pharmaceutical
                firms


·
            Biotechnology
                firms


·
            Contract
                Research Organizations


·
            The
                National Institutes of Health


·
            Leading
                research academic institutions





Both
      the
      risks and rewards derived from developing and marketing new drugs are
      compelling. In November 2001, Tufts University published a widely referenced
      study that determined the average cost of developing and bringing a new drug
      to
      market is $802 million. Recent data that includes the marketing costs of
      launching a new drug product estimate the cost at $1.2 billion. Though other
      industry experts debate these estimates, all agree the costs associated with
      developing and introducing a new drug to the market are staggering, especially
      when factoring in the cost of pure research, failed projects, data capture
      and
      analysis, and clinical trials.





Key
      cost
      elements related to clinical trials include acquiring patient adherence and
      response data, aggregating and managing the data, patient site visits, and
      analyzing and reporting the study results in accordance with Food and Drug
      Administration (FDA) requirements.





The
      Tufts
      article also cites recruitment of patients as one of the largest cost components
      of clinical trials. Pharmaceutical and biotechnology companies are experiencing
      difficulty in maintaining enrollment in clinical trials and keeping patients
      adherent to the prescribed drug regimen and other elements of the protocol.
      InforMedix’s primary market research with major pharmaceutical firms revealed
      that more than 20% of patients “fall off” during clinical trials. Retaining
      trial patients saves time, saves money, and potentially saves the trial itself.
      Opening up the opportunity for remote rural patients to participate in clinical
      drug trials may result in a significant expense reduction to
      sponsors.


***InforMedix
          Holdings, Inc.***
 **Page
          9**











**MARKET
      SIZE**





**Medication
      Adherence** - it is
      estimated that the current market size for remote telemonitoring of disease
      management is approximately $100 million and will grow to $2 - $5 billion over
      the next five years. This market is expected to grow as technology is adopted
      and baby boomers age. We expect baby boomers will prefer home monitoring to
      entering assisted living and nursing homes. Significant cost savings and
      quality-of-life improvements have been demonstrated in the research literature
      related to the deployment of home telemonitoring systems. Generic and specialty
      disease management companies have been developed to address these market and
      demographic opportunities, and they seek early warning mechanisms to head off
      expensive emergency room and hospital costs, while simultaneously enabling
      nurse
      case managers to manage more patients using real-time remote patient data
      captured.





We
      estimate that there are over 25 million patients in the United States that
      suffer from complex chronic illnesses treated with “drug cocktails.” If chronic
      care improvement technologies were deemed appropriate for 25% of these patients,
      and the average cost for this service was $50 per month, the total market for
      chronic care improvement technologies in the US would be $3.75 billion annually.





We
      believe the market for chronic care improvement technologies is poised for
      rapid
      growth due to the increased level of commitment to technology by the federal
      government and private insurers. For example, in passing the Medicare
      Modernization Act of 2003, Congress committed the federal Centers for Medicare
      and Medicaid Services to improve chronic care treatment for senior citizens
      and
      other Medicare beneficiaries. The federal Centers for Medicare and Medicaid
      Services (CMS) in April 2004 released a request for proposal to implement
      chronic care improvement programs as mandated under the Medicare reform bill.
      In
      its introduction to the RFP, CMS emphasizes that one key purpose of the
      initiative is to “accelerate the adoption of health information technology.”





In
      the
      private sector, almost all health plans have a disease management program in
      effect. Many of these plans are investing millions of dollars to implement
      systems and business processes for systematic patient monitoring, care
      coordination, and the prevention of complications from chronic illnesses. The
      goal of these programs is the same: to increase medication adherence in order
      to
      reduce the occurrence of costly hospital visits due to non-adherence, while
      also
      reducing the costs associated with monitoring treatment.





We
      believe there is strong evidence to support the conclusion that information
      technology can reduce the cost of disease management services. Third party
      academic medical center studies have repeatedly demonstrated substantial
      improvement in medication adherence with the use of the Med-eMonitor. By
      enabling healthcare service providers to detect early warning signs and improve
      medication adherence, health care costs can be reduced. Tele-monitoring of
      patient response to medication can reduce the need for costly nursing visits
      and
      therefore, reduce the cost of disease management programs.





**Clinical
      Trials -** pharmaceutical
      and biotechnology companies had more than 4,360 new drugs in the development
      pipeline in 2002. These new medications were being tested and validated in
      more
      than 40,000 clinical trials. According to Center Watch, Inc., 4-6 million people
      take part in clinical trials each year. In the next decade, this number is
      projected to grow at double-digit rates through new research and development
      breakthroughs, including genomic and proteomic discoveries.





To
      introduce a new drug to the market, pharmaceutical companies must proceed
      through four well-defined phases, each of which requires researchers to collect
      and analyze significant amounts of patient-generated data. There are
      considerable costs related to each trial phase and significant time is required
      to acquire and manage the data to ensure accurate reporting and
      results.





Total
      clinical research expenditures in the US for CY2000 were approximately $26
      billion. Of that, clinical trials Phases I, II and III accounted for
      approximately $7.35 billion, and Phase IV required an additional $1.5 billion.
      (According to the Parexel Pharmaceutical Statistical Sourcebook, the average
      Phase III trial costs $43.3 million and requires 2.5 years to
      complete.)


***InforMedix
          Holdings, Inc.***
 **Page
          10**








**The
      Four Phases of Clinical Drug Trials:**





**Number
                of**
              **Patients**
            **Length**
            **Purpose**
            **Estimated
                Cost**
              **(%
                of drug company R&D budget)**
            **Number
                of Drugs in Pipeline (CY2000)**
            **Total
                Estimated Number of**
              **Patients****Phase
                I**
            20-100
                healthy volunteers
            Several
                months
            Mainly
                safety
            15%
                - 20%
            690
            35,000**Phase
                II**
            100-300
                patients that have the targeted disease
            Several
                months to 2 years
            Some
                short-term safety but mainly effectiveness
            20%
                - 25%
            1,400
            280,000**Phase
                III**
            500-5,000
                patients that have the disease
            1-4
                years
            Safety,
                dosage, effectiveness and broad scale FDA approval
            30%
                - 35%
            970
            1,940,000**Phase
                IV**
              **(post-
                market launch)**
            2,500
                to many thousands of patients
            1+
                years
            Determine
                long term effects and identify cross-marketing
                opportunities
            Funded
                by marketing budgets
            Many
            2,500,000+




New
      Drug
      Approval Rate: of 100 drugs submitted for NDA’s to the FDA, approximately 70
      drugs complete Phase I trials and go to Phase II; approximately 33 complete
      Phase II and go to Phase III; and 25 to 30 drugs clear Phase III (on average
      about 20 drugs are approved per annum).













**CURRENT
      STATE OF TECHNOLOGY**





**Medication
      Adherence** - the
      medication adherence technology market is currently in its infancy. Even though
      the original solution was launched over ten years ago (MEMS Cap), the evolution
      of technology from this original, clumsy electronic pill cap to the current
      solutions with remote programming and daily data transfer has been slow to
      develop. The market penetration of this technology is less than 5%. With recent
      technology innovations and accelerating interest in improving medication
      adherence, we believe that this penetration should significantly increase in
      the
      next few years.





The
      available technologies include the following:




***Plastic
      Pill Box -*** the
      most
      commonly used product for medication adherence is portable, but does not monitor
      or measure adherence.




***Electronic
      pill bottle caps*** ,
      with
      some linked to cell phone cards for dial-out - these technologies are geared
      to
      monitor single medications and do not yet have the remote programming
      functionality




***Home
      based medication dispenser*** - these
      devices hold and lock-up a patient’s medications and then dispense them into a
      cup at a predefined time of the day. These devices are large and not portable.
      They require sophisticated and careful loading of the medications. They also
      run
      on AC power which has caused numerous problems during power outages around
      the
      country. If these units lose power, they lose their programming requiring that
      a
      care giver come to the patient’s home to re-set the device.




***Mobile
      phone and pager systems*** - These
      solutions utilize a patient’s current mobile phone or pager to deliver reminders
      to take medications. They are not able to record if the patient took their
      medications and are limited in the amount of information that can be delivered.
      They are, however, simple to implement on a large scale.




***InforMedix
          Holdings, Inc.***
 **Page
          11**







***Web
      based systems*** - These
      systems are very rich in content and educational material. They are simple
      to
      implement with large populations however they require that the patient have
      a
      computer with Internet connectivity to work. In addition, the computer must
      be
      on for the patient to receive any active reminders. Otherwise the system is
      passive and only of benefit when the patient comes to the web site.







**Clinical
      Trials** -
      currently, 25% of all clinical trials use patient diaries to collect critical
      patient data. Most of these clinical trials require patients to use handwritten
      diaries to track when and how the patient takes the prescribed doses during
      the
      study. Patients are also instructed to keep track of their physiologic responses
      to the medications they are taking during the trial.





Protocol
      adherence (determining if the patient took the drug when and how they were
      supposed to take it) is also a major aspect to a study. Researchers must rely
      on
      visual examination of drug packages to determine if the patient took the drug.
      In many studies, the drugs provided patients are packaged in poster-sized
      blister packs and patients are instructed to save their used packs to enable
      researchers to visually verify that the patient took all of the medications
      in
      the package. This is a very expensive and cumbersome solution to track patient
      adherence.





Each
      patient participating in these trial programs is required to bring their diary
      and pill pack to regularly scheduled meetings with research supervisors for
      visual inspection. These assigned visits to the study site range from every
      week
      to every 6-8 weeks, depending upon the disease type and the phase of the
      clinical trial.





Not
      infrequently, patients forget to write the daily notations in their diaries,
      and
      enter the diary data retrospectively just prior to the site visit, or at the
      site visit itself. Patients also forget to take the medications on time from
      the
      blister packages, and will empty the number of pills they were supposed to
      have
      taken from the packages in advance of the study visit. The clinical research
      coordinator must first review this information; then a study monitor is brought
      in to monitor the information inputted by the clinical research coordinator
      to
      make sure they have not misread or omitted information received from the
      participating patients. All the blister packs and diaries are then sent to
      the
      pharmaceutical/biotechnology company where they are typically manually reviewed
      for a third time, and manually input into a database using double entry into
      the
      system.





Industry
      analysts estimate the cost of managing the acquisition, translation and
      aggregation of patient diary and data management to be approximately $650
      million per year. The use of patient diaries is expected to grow dramatically
      as
      more drugs enter later phases of trials and more patients are recruited to
      support trials. We estimate that the market for electronic patient diaries
      is
      currently $75 million per year and will grow to $500 million over the next
      three
      years.








**MARKET
      OPPORTUNITY**








**Medication
      Adherence** - there
      are a number of companies providing home physiologic monitoring devices, and
      several home medication adherence monitors. However, we believe that no other
      vendor has yet developed a true “plug and play” technology platform that allows
      the easy integration of two or more devices into a suite of products that
      include medication adherence monitoring. Phillips has developed an integrated
      plug and play physiologic monitoring system, but it lacks medication adherence
      monitoring. Several companies have brought to market medication adherence
      monitors that are bedside units operating on A/C power. These devices are
      capable of recording medication adherence and providing remote alerts of
      non-adherence. We believe that only InforMedix has developed a portable device
      that captures medication adherence and electronic diary data, along with
      patient-entered physiologic data, which may possibly be combined with Fisher
      specialty packaging for the disease management market. Additional plans include
      directly streaming physiologic monitor data into our Med-eXpert
      database.


***InforMedix
          Holdings, Inc.***
 **Page
          12**








**Clinical
      Trials** - the
      entire clinical trials process is labor-intensive and error-prone, resulting
      in
      poor quality data, less scientific studies, and longer time-to-market for a
      new
      drug under study. Pharmaceutical and biotech companies want to improve data
      collection to better measure health outcomes and to prove the value of a given
      drug. This information will enable the placement of these drugs on managed
      care
      drug formularies and reduce market pressure for price reductions.




The
      data
      analysis phase of clinical trials process is also time-consuming. One of the
      major delays in unblinding studies today is the lag between the last patient
      visit to the study site and the entry of all patient data. Today, that period
      lasts between 15 to 20 weeks due to all the manual data-entry and data
      cleansing. ** With
      direct electronic data capture (EDC), this period can be reduced by up to 15
      weeks, as there is no additional data-entry and scrubbing after the patient’s
      last visit.




A
      second
      major delay is caused by the need for the study results to be certified as
      statistically valid. To achieve valid results, a minimum number of patients
      must
      have adhered to the trial protocol. This minimum number is determined by the
      study design and statistical analysis used in the study. Currently, when
      patients are not re-evaluated for 4 to 8 weeks after the previous clinical
      site
      visit, the researchers may not know for 4 to 8 weeks, or longer, if the patient
      is adhering to the protocol. Once it is determined that patients are not
      adhering to the protocol, they will require intervention to place them back
      on
      it, or the researchers may need to recruit new patients into the study,
      resulting in further delays. One leading pharmaceutical company estimates it
      loses 20% or more of its patients in clinical trials due to patients’
non-adherence.




In
      conjunction with randomization, a design feature known as "blinding" helps
      ensure that bias doesn't distort the conduct of a study or the interpretation
      of
      its results. Single blinding consists of keeping patients from knowing if they
      are receiving the investigational drug or a placebo. In a double-blind study,
      neither patients nor investigators or data analysts know which patients get
      the
      investigational drug.





**Adoption
      of New Technology -** current
      approaches to accelerate time-to-market and save costs in clinical trials
      include exploring a variety of electronic data capture (EDC) technologies and
      electronic patient diaries (EPD). The FDA and its European counterparts have
      used EDC and EPD in part of their development programs to approve 13 new drugs.
      This number is projected to grow rapidly as the demand for improved clinical
      research processes is pushed forward beyond current labor-intensive
      methodologies. Cato Research, a well known CRO, states that many pharmaceutical
      companies are requesting information on the use of EDC for future planning
      of
      their clinical trials.





According
      to a 2001 report by DATATRAK, electronic data capture methods can reduce
      clinical trials costs by an average of 82%. This is based on an average EDC
      cost
      of $485,000 per trial as compared to $2,700,000 per trial for paper and pen
      methods.





Over
      the
      last two years, major pharmaceutical manufacturers have been creating eBusiness
      divisions to enable researchers to begin to capture patient-based information
      electronically. These business units are forming alliances with medical
      information technology companies to accelerate this growing trend. The success
      and accuracy of the patient-based information obtained during these trials
      will
      facilitate more rapid FDA approval, which is required to market new drug
      products. As the recruitment of patients for participation in clinical drug
      trials becomes more difficult, more rapid, accurate feedback of patient
      compliance using captured data becomes imperative.





Palm
      Pilot vendors currently have a revenue run rate of $75 million in the electronic
      patient diary space, and had revenue growth of 75% in 2004 when compared to
      2003.





The
      InforMedix Med-eMonitor(TM) System directly addresses this growing segment
      of
      the clinical trials market. The Med-eMonitor(TM) System can significantly
      improve the speed and integrity of data captured in clinical drug trials. For
      example, the Med-eMonitor System eliminates the 4 - 8 week gaps in information
      between patient site visits. And it eliminates the 15 - 20 week time until
      the
      trial database is locked at the end of the trial.


***InforMedix
          Holdings, Inc.***
 **Page
          13**








**MARKETING
      AND SALES STRATEGY**





**Medication
      Adherence**





Third
      party payors, self-insured corporations, disease management organization, and
      Medicare are all seeking novel methods to reduce the staggering and growing
      costs of caring for complex, chronically ill patients. We believe that there
      will be wide appeal for a true plug and play technology platform that would
      combine medication adherence monitoring, drug packaging solutions for complex
      patient medication care plans, electronic patient diary data, and physiologic
      data at a reasonable monthly cost. The company that provides this platform
      combined with Web-enabled monitoring should have significant first mover
      advantage. InforMedix believes that the Med-eMonitor and Med-eXpert system
      provide this solution.





**T** he
      targets for our marketing efforts are those entities at risk for the healthcare
      dollar. Since improved medication adherence reduces hospitalizations, ER visits
      and other costly complications, we believe that the groups willing to pay for
      the Med-eMonitor System will be those that save money when the above cost
      savings are realized.





In
      addition to the above main market there is a market with the pharmaceutical
      industry outside of the clinical trials market. It is estimated that
      pharmaceutical companies in the US lose approximately $30 billion in annual
      revenue because patients do not take the medications they are prescribed. By
      implementing the Med-eMonitor System with patients, we believe patients will
      take more medications and the pharmaceutical company will sell more pills.
      Some
      of our resources will continue to be focused on a plan to combine the financial
      backing of pharmaceutical companies with the implementation resources of a
      health plan or specialty pharmacy company to execute a comprehensive medication
      adherence program.





***Customer
      Segments*** **-**


·
            Self
                Insured Employers-
                employers who insure themselves for the risk of healthcare costs.
                Employers have a long term horizon for saving healthcare costs and
                improving employee productivity.


·
            Health
                Plans-
                Insure for health care cost and deliver
                care


·
            MCOs-
                same as above


·
            TPAs-
                deliver administrative and claims services for self funded employers
                and
                insurers.


·
            Insurers(Traditional and Reinsurers) - Insure for healthcare expenditures
                but do
                not deliver care


·
            DMO’s-
                Disease Management Organizations - deliver services to high risk
                patients
                on behalf of the payer. Significant projects with Medicare, Medicaid
                and
                VA.


·
            Clinics,
                Hospitals and Specialty Centers


·
            PBMs-
                Pharmacy Benefit Management Companies - manage the pharmacy benefit
                for
                all of the above. These companies could be key implementation
                partners.


·
            Specialty
                Pharmacies-
                Mail order and retail pharmacy for key therapeutic areas. This group
                could
                also be a key implementation
                partner.


·
            Pharmaceutical
                Companies





***Positioning:
      The Medication Adherence Solution*** **-**


We
      believe that the Med-eMonitor System is the best available solution to improve
      patient adherence to their prescribed medication regimen. Med-eMonitor provides
      combination of the following functions and features:


·
            physically
                organizing and monitoring the taking of medications,


·
            electronic
                prompts and reminders on when to take medications,


·
            medication-specific
                education about the medication and why they are taking it and how
                they
                should take it right when they open their medication
                compartment


·
            Daily
                monitoring of medication adherence with risk stratified reporting
                to care
                givers for proactive intervention


·
            All
                combined with e-dairy functionality for patient reported outcomes
                including Quality of Life and early risk
                identification


***InforMedix
          Holdings, Inc.***
 **Page
          14**





***Tactical
      Execution -***


The
      main
      tactical element in this plan is direct sales by our sales team. This includes
      numerous phone calls and networking to identify and gain access to decision
      makers in the above customer segments. These sales efforts are supplemented
      with
      the following tools:





·
            Exhibit
                at main Disease Management and Telehealth meetings during the
                year


·
            Exhibit
                Booth update to highlight our key messages in medication
                adherence


·
            Attend
                small boutique meetings where high level decision makers
                attend


·
            Collateral
                Material - Single page 81/2 x 11 sell
                sheet


·
            Leave
                items - TBA - to facilitate name
                recognition


·
            Direct
                Mail/Detailed Promotional Packet - Target lists have been identified
                for
                direct mail receipt. This will drive name recognition and some hit
                rate
                for follow-up. The main direct mail effort will be for contacts made
                through exhibiting or attending meetings as a follow on in the sales
                process. A Medicare Part D specific mailing will be executed to this
                very
                focused group of health plans and
                providers.


·
            Web
                Site Update - update of our website to include the description and
                benefits of our medication adherence solution in addition to our
                solution
                in the Clinical Trials market


·
            CRM
                System - to more actively manage our growing list of prospects to
                track,
                report and organize the steps of moving them through the sales
                process





The
      internal sales team efforts will be supported by one or two key consultants
      that
      can facilitate the sales process with very large players in the above market
      customer segments





We
      will
      selectively consider using some of our resources to purchase market data
      including directories of the key customer segments listed above as may be deemed
      appropriate.





Other
      than advertising around key meetings we will attend, no other advertising effort
      is planned.





We
      currently market and sell and/or lease the Med-eMonitor System to pharmaceutical
      and biotechnology companies, home security companies, disease management
      organizations, health insurers, Federal Government Research Centers, Contract
      Research Organizations (CROs) and Site Management Organizations (SMOs). Key
      decision makers and influencers include senior management, clinical trials
      directors, and product managers responsible for the launch of a new product,
      marketing managers responsible for Phase IV and post-launch trials, and the
      eHealth / I.T. divisions of these organizations. We are also actively developing
      relationships with E-retailers and potentially retail pharmacies, retirement
      and
      assisted living community operators, as well as both managed care organizations
      and home care providers..





InforMedix
      also markets and leases/sells the Turnkey Platform (i.e. medically trained
      call
      center support to respond to alerts reported by the Med-eMonitor) through
      strategic alliances. InforMedix will market and sell the Platform through direct
      sales, commercial and government customer contacts, and through CXO-attended
      targeted trade show visibility.





**Public
      Relations/Investor Relations**





On
      March
      2, 2007 the
      Company retained The Investor Relations Group (“IRG”), a well recognized public
      relations and investor relations firm to develop, orchestrate and implement
      a
      multi-faceted awareness program. IRG has already launched a PR program to drive
      awareness of its InforMedix and its products. Planned-for key activities include
      press releases, and placements of white papers (company and third party
      authored), advertisements and articles in leading industry publications. These
      may include newspaper articles in newspapers throughout the United States and
      international countries, live television news programs and talk shows geared
      to
      consumers and investors, the investment banking community, news organizations,
      free lance and beat writers, and the general public *.* Customer
      testimonials, scientific findings, executive hires, major product placements,
      new product announcements, and key strategic alliance announcements will be
      highlighted. High profile speaking engagements will also be pursued.


***InforMedix
          Holdings, Inc.***
 **Page
          15**





Investor
      relations activities will be focused on distribution of press releases over
      the *Dow
      Ticker, BusinessWire, and Information Week* .





**Trade
      Events -** The
      Company intends to secure high visibility booth space at key industry events,
      attended by CEO’s, COO’s, CMO’s, and other key decision makers. ** In
      addition, the Company will try to identify event opportunities which offer
      a
      strong booth presence, speaking opportunities at event break-out sessions and
      panel discussions. Qualified lead generation will be the focus of trade event
      activities.




**Direct
      Marketing -** IRG
      intends to distribute key awareness information to highly targeted decision
      makers. These mailings will be comprised of selected white papers, new product
      announcements, product literature and related information tailored to the
      recipient. These will include targeted individuals identified by IRG and
      InforMedix.




**Product
      Collaterals -** product
      sell sheets for stand alone and brochure insertion; and product demos to include
      the Med-eMonitor device, cradle and Med-eXpert Software; and an updated
      InforMedix website to effectively demonstrate the turnkey platform to potential
      customers. Links to each partners’ websites and to the Med-eMonitor demo will be
      created as well.




**Target
      Advertising -** where
      and
      when appropriate, the Company and IRG intend to create and place a high
      visibility advertisement in support of its PR and Trade Events activities,
      to be
      placed in a subset of the journals listed above.







We
      expect
      that the theme of the Company’s PR, IR and future advertising and marketing
      materials will be to demonstrate how the Med-eMonitor System allows people
      to
“age gracefully while maintaining a sense of independence.




Recently
      as a result of the efforts by IRG, Dr. Kehr, the Chairman and CEO of InforMedix
      participated in a live broadcast on the national cable network news channel
      of
      FOX News Live. Other efforts have resulted in interviews with major newspapers
      located throughout the United States, the London Times and another London
      newspaper, and upcoming interviews and potential stories with popular magazines,
      and other media outlets.









**SALES
      PLAN** ****




InforMedix
      primarily leases and considers sales of its Med-eMonitor System directly to
      target accounts, and indirectly through established distribution channels of
      additional Strategic Alliance partners (“Channel Partners”. The Company intends
      to utilize its extensive contact, along with the significant industry
      information, which is readily available through published industry reports.
      The
      Company also intends to leverage its extensive contacts in the industry to
      secure meetings and initial product implementations.




InforMedix
      intends to continue to use academic sites to test and prove the product’s
      capabilities, while further validating its clinical application. We will seek
      opportunities within the academic sites to apply the Med-eMonitor System to
      numerous disease states where the data gathered and trial methodology support
      the unique value offered by InforMedix. Among the channel partner categories
      targeted by InforMedix are companies operating as large home-security monitoring
      companies, health cost reduction companies, personal emergency response
      companies and retail marketing companies.




With
      the
      recent addition of Richard Voss as Senior Vice President of Business Development
      and Marketing and Channel Sales, the Company believes it has added a key asset
      with Mr. Voss to achieving its sales goals. We expect that Mr. Voss will provide
      a complementary match to Randy Dulin, who continues as Senior Vice President
      Operations and Direct Sales.


***InforMedix
          Holdings, Inc.***
 **Page
          16**





**Direct
      Sales**





The
      Company intends to leverage its opportunity through accessing pharmaceutical
      and
      medical products and disease management relationships developed over the recent
      years. The pharmaceutical firms determine how drugs will be tested and by whom.
      Pharmaceutical companies typically perform 50% of their clinical trials within
      their own organizations and contract the remainder to CROs and SMOs.





**Strategic
      Alliances**





InforMedix
      set out to develop strategic alliances with companies with established
      distribution channels for products and services used in either clinical trials
      or disease management. In March 2007, the Company signed an agreement with
      excelleRx, an Omnicare Company. Under this agreement, excelleRx will provide
      the
      Company with the necessary back-end monitoring, initial device set-up services,
      consulting and pharmaceutical distribution services for a retail rollout. In
      addition, excelleRx provides services to over 240,000 hospice patients and
      disease management organizations.





With
      the
      addition of excelleRx, InforMedix can establish excelleRx to enroll patients,
      set-up devices, monitor patients, update care plans, and counsel patients on
      the
      medications in their individual care plans, and the stressing the importance
      of
      establishing good medication adherence habits. Other services could include
      providing medication management risk assessments, response to exception
      reports/alerts, notifying pharmacies regarding prescription refills, instructing
      on device usage, and an optimization of medication regimens.





InforMedix
      can also engage XLHealth, which is providing similar services to excelleRx
      in
      the ADT/XLHealth Tennessee Medicare program, for similar monitoring
      services.





Most
      importantly, with excelleRx and XLHealth, the Company has the capability of
      providing a range of monitoring options, ranging from comprehensive monitoring
      by excelleRx and/or XLHealth, to monitoring by a family member.








**COMPETITION**





The
      market for our products and services is fragmented, competitive, and rapidly
      evolving. We expect to encounter new and evolving competition as the market
      consolidates and matures. While we believe that none of our competitors offers
      a
      product that incorporates all of the features and functionality of the
      Med-eMonitor System, many of our competitors and potential competitors have
      longer operating histories and substantially greater financial resources than
      we
      have. Our principal competitors include the following:








**Medication
      Adherence**





Direct
      competitors in the medication adherence market include:


·
            HomMed
                (Honeywell),


·
            SimPill,


·
            MedSignal,
                and


·
            Humana
                Innovation Enterprises, a subsidiary of Humana,
                Inc.





Indirect
      Competitors include various competitors with products which prompt for
      medications, and ask if patients have taken their medications, but which do
      not
      prompt or record for specific medications. Indirect
      Competitors include:


·
            HealthHero/Healthbuddy


·
            Various
                Cell Phone and Pager solutions


·
            Various
                Web Solutions (i.e. Medem), and


·
            Various
                Print Solution


***InforMedix
          Holdings, Inc.***
 **Page
          17**








Other
      Disease Management Dedicated Technology Providers include:


·
            AMD
                Telemedicine,


·
            American
                Telecare (ATI),


·
            CyberNet
                Medical,


·
            LifeLink
                Monitoring,


·
            Phillips(Health
                Hero Network), and


·
            Viterion
                TeleHealthCare (a Bayer/Panasonic
                co-venture).





Technology
      and Services Companies include:


·
            Alere
                Medical,


·
            American
                Medical Alert Corporation (AMAC,)


·
            Cardiocom,
                and


·
            QMed
                Inc.











**Clinical
      Trials**





The
      market for clinical trials continues to be fragmented with new entrants each
      year. A number of small firms offering PDA (personal digital assistant) based
      solutions. These applications utilize either the Palm Operating System products,
      such as Palm Pilot and Handspring, or Windows CE Operating System products,
      such
      as the Compaq IPAQ. Regardless of platform, each competitor’s offering provides
      the same user interface and related user challenges found with using a small
      stylus to enter data on a small LCD screen. Additionally, no competitor provides
      automated medication adherence tracking.





Direct
      Competitors in Clinical Trials include companies that provide electronic
      prescription vials, such as:


·
            Electronic
                Prescription Vials,


·
            PHT
                Clinical,


·
            invivodata,
                Inc, and


·
            CRF,
                Inc.











**GOVERNMENT
      REGULATION**





**HIPAA** -
      The
      Health Insurance Portability and Accountability Act mandates the adoption of
      standards for the exchange of electronic health information in an effort to
      encourage overall administrative simplification and to enhance the effectiveness
      and efficiency of the healthcare industry. Ensuring privacy and security of
      patient information - "accountability" - is one of the key factors driving
      the
      legislation. The other major factor - "portability" - refers to Congress'
      intention to ensure that individuals can take their medical and insurance
      records with them when they change employers. In August 2000, HHS issued final
      regulations establishing electronic data transmission standards that healthcare
      providers must use when submitting or receiving certain healthcare data
      electronically. All affected entities, including InforMedix, are required to
      comply with these regulations.





In
      December 2000, HHS issued final regulations concerning the privacy of healthcare
      information. These regulations regulate the use and disclosure of individuals'
      healthcare information, whether communicated electronically, on paper or orally.
      All affected entities, including InforMedix, are required to comply with these
      regulations effective April 14, 2003. The regulations also provide patients
      with
      significant new rights related to understanding and controlling how their health
      information is used or disclosed.


***InforMedix
          Holdings, Inc.***
 **Page
          18**





In
      February 2003, HHS issued final regulations concerning the security of
      healthcare information maintained or transmitted electronically. These
      regulations require implementation of organizational and technical practices
      to
      protect the security of such information. All affected entities, including
      InforMedix, are required to comply with these regulations effective April 30,
      2005. Although the enforcement provisions of HIPAA have not yet been finalized,
      sanctions are expected to include criminal penalties and civil sanctions.
      InforMedix believes that it is in compliance with the HIPAA regulations that
      have been issued. Based on the existing and proposed HIPAA regulations,
      InforMedix believes that the cost of its compliance with HIPAA will not have
      a
      material adverse effect on its business, financial condition or results of
      operations.





The
      Company has hired a medical software engineer who is an expert in the area
      of
      HIPAA and 21CFR part 11, to ensure that the back-end software of the
      Med-eMonitor complies with the required government regulations. See "Item 9.
      Directors, Executive Officers and Control Persons; Compliance with Section
      16(a)
      of the Exchange Act - Significant Consultant” of this Form 10-KSB, for further
      background on this topic.





**Food,
      Drug and Cosmetic Act** -
      The
      Food and Drug Administration has notified InforMedix that the Med-eMonitor
      System is not subject to the registration, device listing or pre-market
      notification provisions of the Food, Drug and Cosmetic Act, because the
      Med-eMonitor System satisfies certain conditions established by the FDA in
      its
      enforcement discretion. The Med-eMonitor System is subject to the adulteration
      and misbranding provisions of the FDCA and InforMedix must comply with the
      medical device reporting requirements of the FDCA InforMedix must also comply
      with 21CFR Part 11 regulations governing the electronic capture of clinical
      trial data. InforMedix believes that the cost and administrative burden
      associated with FDA compliance are not material to InforMedix's business,
      financial condition or results of operations. It should be noted that the FDA
      has approved new drug applications using PDAs, such as Palm Pilots, in the
      capture of patient information. Palm Pilot is a modified modality.





**Environmental
      Matters** -
      Management of InforMedix believes that it currently is in compliance, in all
      material respects, with applicable federal, state and local statutes and
      ordinances regulating the discharge of hazardous materials into the environment.
      InforMedix does not believe that it will be required to expend any material
      amounts in order to remain in compliance with these laws and regulations or
      that
      such compliance will materially affect its capital expenditures, earnings or
      competitive position.








**RISK
      FACTORS**


We
      are
      subject to various risks that may materially harm our business, financial
      condition and results of operations. There are not the only risks and
      uncertainties that we face. If any of these risks or uncertainties actually
      occurs, our business, financial condition or operating results could be
      materially harmed.





**Risks
      Relating to Our Financial Condition:**




**Qualified
      financial statements based on operating losses and a capital deficit question
      InforMedix’s ability to continue in business.**




InforMedix’s
      Independent Registered Public Accounting Firm recently issued an unqualified
      report on our financial statements as of and for the year ended December 31,
      2006. The report states that InforMedix has sustained operating losses and
      capital deficits and there is no guarantee whether the Company will be able
      to
      generate enough revenue and/or raise sufficient capital to support current
      operations and expand sales. This raises substantial doubt about InforMedix’s
      ability to continue as a going concern. See “Report of Independent Registered
      Public Accounting Firm” and “Note 11 of Notes to InforMedix Consolidated
      Financial Statements” included in the financial statements included in this
      Annual Report.




**Need
      for additional financing.**




During
      the year ended December 31, 2005, InforMedix raised $483,854 in proceeds from
      common stock issuances and $1,006,000 in proceeds from debt issuances.




***InforMedix
          Holdings, Inc.***
 **Page
          19**







During
      the fiscal year ending December 31, 2006, the Company recorded an aggregate
      of $3,426,771 of Series A Convertible Preferred Stock , and an
      aggregate of $865,000 of Common Stock. The Company continues to have trade
      debt
      and other liabilities, a significant portion of which is past due, in excess
      of
      cash on hand.  At
      the
      present time we continue to require additional funds to fully implement our
      business pla n.
      Management can give no assurance we will obtain the funds to fully implement
      the
      business plan, or that a full implementation of such business plan will result
      in InforMedix’s profitability.





**If
      InforMedix continues to incur negative cash flow from its operations, it may
      exhaust its capital resources.**




No
      net
      positive cash flow has been generated from InforMedix’s operations since its
      inception. InforMedix was primarily a development stage company, until early
      2004, and invested the majority of its resources in the R&D of the product
      and its patents, with minimal investment for the commercialization of its
      product. InforMedix had a net loss of $3,324,848 (including Accretion the loss
      for the year ended December 31, 2006 equals $6,751,619 and $1,985,619
      respectively on sales of $102,721 and $21,550 for the years ended December
      31,
      2006 and 2005, respectively; and a cumulative loss from inception through
      December 31, 2006, of $21,545,196 (excluding an adjustment for Accretion in
      the
      year ending December 31, 2006 related to the Preferred Stock transaction in
      the
      amount of $3,426,771).




InforMedix
      has funded its operating activities primarily through sales of equity securities
      to its founders, individual accredited investors, corporate investors, private
      investment lenders and equity issued for services in the amount of approximately
      $17,126,595 and $19,724,908 (excluding an adjustment for Accretion in the year
      ending December 31, 2006 related to the Preferred Stock transaction in the
      amount of $3,426,771) as of December 31, 2005 and December 31, 2006,
      respectively. In addition, from inception to December 31, 2002, we borrowed
      $725,000 from our Chief Executive Officer, directors and affiliates and an
      additional $65,000 in 2003 (all of which has been converted into equity).
      InforMedix anticipates negative cash flow from operations to continue for the
      immediate future.




We
      currently estimate that we will remain almost wholly dependent upon additional
      cash funds which must be provided from investors, either in the form of debt
      or
      equity, in order to continue our operations. Accordingly, we can give no
      assurance that we will be able to operate profitably or be able to produce
      positive cash flow from operations in the future. Our efforts to operate
      profitably and obtain positive cash flow from operations will depend on, among
      other things:




•
            Developing
                the InforMedix brand, marketing and other promotional activities
                of the
                Med-eMonitor System;




•
            Expanding
                general and administrative functions to support growth that may occur;
                and




•
            Establishing
                and developing relationships in the healthcare industry, particularly
                with
                health insurance companies, disease management organizations, self
                insured
                employers, academic research centers and retail
                distributors.




**If
      we fail to establish the Med-eMonitor System brand or to attract repeat
      customers, InforMedix may not be able to increase its revenues sufficiently
      to
      fund its operations.**




We
      must
      develop, establish and strengthen the InforMedix brand for the Med-eMonitor
      System, particularly because of the early stage of our development and the
      highly competitive nature of our business. If we fail to establish the
      Med-eMonitor System brand, we will be at a competitive disadvantage and may
      lose
      the opportunity to obtain, and thereafter maintain, a sufficient number of
      customers. The development of the Med-eMonitor System brand will depend largely
      on the success of InforMedix’s marketing efforts and its ability to provide
      consistent, high quality customer experiences. We cannot be certain that the
      Med-eMonitor System brand promotion activities will be successful, or will
      result in increased revenues. If increased revenues are achieved, there can
      be
      no assurance that these revenues will be sufficient to offset the expenditures
      incurred in establishing the Med-eMonitor System brand.




***InforMedix
          Holdings, Inc.***
 **Page
          20**







**InforMedix
      is obligated to comply with government regulation and its failure to do so
      could
      result in significant liability and curtailment or suspension of
      operations.**




The
      technology used in the monitoring of clinical drug trial protocols is regulated
      by the Food and Drug Administration (FDA). No FDA approval is required for
      the
      Med-eMonitor System and the FDA currently does not require the documentation
      of
      regulatory compliance. However, if in the future the FDA requires InforMedix
      to
      document regulatory compliance and it fails to do so, because of a lack of
      funds, or otherwise, the Company may be required to curtail or suspend its
      operations.





**We
      will lack business diversification.**




As
      a
      result of our limited resources, the prospects for our initial success are
      entirely dependent upon the future performance of a single product and a single
      business. Although the product and its patents are applicable to other aspects
      of medical use, the Company will initially focus upon disease management and
      consumer applications through channel partners and retail distributors. Unlike
      certain entities that have the resources to consummate several business
      combinations or entities operating in multiple industries or multiple segments
      of a single industry, we will not have the resources to diversify our operations
      or benefit from the possible spreading of risks or offsetting of
      losses.




**We
      have a limited operating history upon which you can base an investment
      decision.**




We
      were
      organized on January 27, 1997, completed our reverse merger and became a public
      company in May 2003, and as a public company, we have a limited operating
      history upon which you can make an investment decision, or upon which we can
      accurately forecast future sales. You should, therefore, consider us subject
      to
      all of the business risks associated with a new business. The likelihood of
      our
      success must be considered in light of the expenses, difficulties and delays
      frequently encountered in connection with the formation and initial operations
      of a new and unproven business.




**Preferred
      Stock as an anti-takeover device.**




InforMedix
      is authorized to issue 4,500,000 shares of preferred stock, $.001 par value.
      The
      preferred stock may be issued in series from time to time with such designation,
      voting and other rights, preferences and limitations as the Board of Directors
      of InforMedix may determine by resolution. In December 2005, the Company’s board
      of directors authorized the issuance of up to 480 shares of preferred stock
      with
      a stated value of $10,000 per share. As of December 31, 2006, the Company
      recorded a total value of $3,426,771 under the authorized offering, consisting
      of 342.6771 shares of Series A Preferred Stock. As a result of the E xchange  Offering
      to convert these preferred shares to common shares, commenced on October 27,
      2006 and closed on February 12, 2007, the Company reduced the outstanding number
      of Preferred Shares from the previously issued 342.6771 shares to 12.3
      outstanding shares, with the 330.3771 exchanged shares converted into common
      stock of the Company.




Unless
      the nature of a particular transaction and applicable statutes require such
      approval, the Board of Directors has the authority to issue these shares without
      shareholder approval subject to approval of the holders of the Preferred Stock.
      The issuance of preferred stock may have the effect of delaying or preventing
      a
      change in control of InforMedix without any further action by
      shareholders.




**InforMedix
      could be subject to fines, facility shutdowns and possible exclusion from
      participation in providing information technology services if it fails to comply
      with the laws and regulations.**




InforMedix
      is subject to regulations, such as compliance and record-keeping requirements,
      under the Health Insurance Portability and Accountability Act (HIPAA) and the
      Food, Drug and Cosmetic Act. In addition, the provision of services,
      pharmaceuticals and equipment is subject to strict licensing and safety
      requirements. If InforMedix is deemed to have violated these laws and
      regulations, InforMedix could be subject to fines and/or facility shutdowns.
      Government officials and the public will continue to debate healthcare reform.
      Changes in healthcare law, new interpretations of existing laws, or changes
      in
      payment methodology for pharmaceuticals may have a dramatic effect on
      InforMedix’s business and results of operations.




***InforMedix
          Holdings, Inc.***
 **Page
          21**







**Continued
      pressure could reduce InforMedix’s margins and limit InforMedix’s ability to
      maintain or increase its market share.**




Certain
      competitors of InforMedix may have or may obtain significantly greater financial
      and marketing resources than InforMedix. As a result, InforMedix could encounter
      increased competition in the future that may increase pricing pressure and
      limit
      its ability to maintain or increase its market share.




**If
      we lost the services of Dr. Bruce Kehr, InforMedix’s CEO, Randy Dulin,
      InforMedix’s Senior Vice President, or Harry M. Stokes, InforMedix’s Senior Vice
      President & CFO, we might not be able to execute InforMedix’s current
      business in accordance with our current plans.**




InforMedix’s
      future success depends significantly on the skills, experience and efforts
      of
      its chief executive officer, Dr. Bruce Kehr, Randy Dulin, its senior vice
      president of business development and operations, Harry M. Stokes, its Senior
      Vice President & CFO, and other key personnel. These individuals would be
      difficult to replace. Dr. Kehr, Mr. Dulin and Mr. Stokes are engaged in carrying
      out, InforMedix’s strategic business plan. The loss of the services of Dr. Kehr,
      Mr. Dulin, or Mr. Stokes could seriously harm InforMedix’s ability to implement
      its strategy. A failure to implement InforMedix’s business strategy could result
      in the cessation of InforMedix’s operations which would have a material adverse
      effect on our company and on your investment.




**If
      InforMedix is unable to adequately protect or enforce its rights to its
      intellectual property, InforMedix may lose valuable rights, experience reduced
      market share, if any, or incur costly litigation to protect such
      rights.**




InforMedix
      generally requires its employees, consultants, advisors and collaborators to
      execute appropriate confidentiality agreements with it. These agreements
      typically provide that all materials and confidential information developed
      or
      made known to the individual during the course of the individual’s relationship
      with InforMedix is to be kept confidential and not disclosed to third parties
      except in specific circumstances. These agreements may be breached, and in
      some
      instances, InforMedix may not have an appropriate remedy available for breach
      of
      the agreements. Furthermore, InforMedix’s competitors may independently develop
      substantial equivalent proprietary information and techniques, reverse engineer
      information and techniques, or otherwise gain access to InforMedix’s proprietary
      technology. In addition, the laws of some foreign countries may not protect
      proprietary rights to the same extent as U.S. law. InforMedix may be unable
      to
      meaningfully protect its rights in trade secrets, technical know-how and other
      non-patented technology.




InforMedix
      may have to resort to litigation to protect its rights for certain intellectual
      property, or to determine their scope, validity or enforceability. Enforcing
      or
      defending InforMedix’s rights is expensive and may distract management from its
      development of the business if not properly managed. Such efforts may not prove
      successful. There is always a risk that patents, if issued, may be subsequently
      invalidated, either in whole or in part, and this could diminish or extinguish
      protection for any technology InforMedix may license. Any failure to enforce
      or
      protect InforMedix’s rights could cause it to lose the ability to exclude others
      from using its technology to develop or sell competing products.




**InforMedix
      may be sued by third parties who claim that InforMedix’s product infringes on
      their intellectual property rights. Defending an infringement lawsuit is costly
      and InforMedix may not have adequate resources to defend. Any settlement or
      judgment against us could harm our future prospects.**




InforMedix
      may be exposed to future litigation by third parties based on claims that its
      technology, product or activity infringes on the intellectual property rights
      of
      others or that InforMedix has misappropriated the trade secrets of others.
      This
      risk is compounded by the fact that the validity and breadth of claims covered
      in technology patents in general and the breadth and scope of trade secret
      protection involves complex legal and factual questions for which important
      legal principles are unresolved. Any litigation or claims against InforMedix,
      whether or not valid, could result in substantial costs, could place a
      significant strain on InforMedix’s financial and managerial resources, and could
      harm InforMedix’s reputation. In addition, intellectual property litigation or
      claims could force InforMedix to do one or more of the following:




***InforMedix
          Holdings, Inc.***
 **Page
          22**







Cease
      selling, incorporating or using any of InforMedix’s technology and/or product
      that incorporates the challenged intellectual property, which could adversely
      affect InforMedix’s revenue;




•
            Obtain
                a license from the holder of the infringed intellectual property
                right,
                which may be costly or may not be available on reasonable terms,
                if at
                all; or




•
            Redesign
                InforMedix’s product, which would be costly and time
                consuming.




**We
      may not be able to manufacture our planned product in sufficient quantities
      at
      an acceptable cost, or at all, which could harm our future
      prospects.**




InforMedix
      is in the initial phase of product commercialization. InforMedix does not
      presently own any manufacturing facilities. Accordingly, if InforMedix’s product
      becomes available for widespread sale, we may not be able to arrange for the
      manufacture of our product in sufficient quantities at an acceptable cost,
      or at
      all, which could materially adversely affect InforMedix’s future prospects.
      InforMedix has begun initial discussions with potential alternate manufacturers
      to mitigate this risk.




**The
      market for InforMedix’s product is rapidly changing and competitive. New
      products may be developed by others which could impair our ability to develop,
      grow or maintain our business and be competitive.**




InforMedix’s
      industry is subject to substantial technological change. Developments by others
      may render InforMedix’s technology and planned product noncompetitive or
      obsolete, or it may be unable to keep pace with technological developments
      or
      other market factors. Competition from other companies, universities, government
      research organizations and others diversifying into the field is intense and
      is
      expected to increase. Many of these entities have significantly greater research
      and development capabilities and budgets than InforMedix does, as well as
      substantially more marketing, manufacturing, financial and managerial resources.
      These entities could represent significant competition for InforMedix.
      InforMedix is a development-stage enterprise and as such its resources are
      limited and it may experience technical challenges inherent in developing its
      technology. Competitors have developed or are in the process of developing
      technologies that are, or in the future may be, the basis for
      competition.




**InforMedix’s
      planned product could be exposed to significant product liability claims which
      could be time consuming and costly to defend, divert management attention and
      adversely affect InforMedix’s ability to obtain and maintain insurance coverage.
      If InforMedix incurred a material liability for which it is not adequately
      insured, it might be rendered insolvent.**




The
      testing, manufacture, marketing and sale of InforMedix’s product will involve an
      inherent risk that product liability claims will be asserted against it. We
      currently have a general liability policy with an annual aggregate limit of
      $1
      million with a $1 million limit per occurrence and product liability insurance
      with an aggregate limit of $5 million. This insurance may prove inadequate
      to
      cover claims and/or litigation costs. Product liability claims or other claims
      related to InforMedix’s planned product, regardless of their outcome, could
      require us to spend significant time and money in litigation or to pay
      significant settlement amounts or judgments. Any successful product liability
      or
      other claim may prevent InforMedix from obtaining adequate liability insurance
      in the future on commercially desirable or reasonable terms. In addition,
      product liability coverage may cease to be available in sufficient amounts
      or at
      an acceptable cost. Any inability to obtain sufficient insurance coverage at
      an
      acceptable cost or otherwise to protect against potential product liability
      claims could prevent or inhibit the sale of InforMedix’s
      Med-eMonitor.




InforMedix
      faces the risk of liability resulting from claims made directly by patients.
      InforMedix currently has property, general liability and product liability
      insurance in amounts that we believe to be adequate, but InforMedix can give
      no
      assurance that such insurance will remain available at a reasonable price or
      that any insurance policy would offer coverage sufficient to meet any liability
      arising as a result of a claim. We can give no assurance that InforMedix will
      be
      able to obtain or maintain adequate insurance on reasonable terms or that,
      if
      obtained, such insurance will be sufficient to protect against such potential
      liability or at a reasonable cost. The obligation to pay any substantial
      liability claim could render InforMedix insolvent and could force it to curtail
      suspend operations, which would have a material adverse effect on our company
      and your investment in our company.




***InforMedix
          Holdings, Inc.***
 **Page
          23**










**EMPLOYEES**





InforMedix
      currently has seven employees and eight part-time consultants. The seven
      employees are the Chief Executive Officer, Senior Vice President & Chief
      Financial Officer, Senior Vice President of Operations and Direct Sales, Senior
      Vice President of Business Development, Marketing & Channel Sales, Vice
      President of Research and Development, Director of Software Development, and
      Executive Assistant.







**ITEM
      2 -**


**DESCRIPTION
      OF PROPERTY**





InforMedix
      leases facilities in Rockville, Maryland from a non-affiliated landlord. These
      facilities encompass approximately 1,000 square feet and serve as InforMedix's
      corporate headquarters and operations center. The current lease commenced on
      March 1, 2004, for a one-year term at $2,408 per month. The one year term of
      the
      lease has expired and the company currently leases its facility on a month
      to
      month basis.





InforMedix
      believes that it has adequate facilities to conduct its current operations,
      and
      does not expect to seek additional administrative offices and/or research
      facilities in the near term. It has no current proposed programs for the
      renovation, improvement or development of current facilities.







**ITEM
      3 -**


**LEGAL
      PROCEEDINGS**





In
      the
      ordinary course of business, InforMedix may be involved in legal proceedings
      from time to time. At December 31, 2006, there were no material legal
      proceedings against InforMedix. No governmental agency has instituted any
      proceedings or served InforMedix with any complaints.





InforMedix
      anticipates that, from time to time, it will receive inquiries from the FDA
      and
      other government agencies requesting records and other documents. It is
      InforMedix's policy to cooperate with all such requests for information.





Private
      litigants may also make claims against InforMedix for violations of healthcare
      laws in actions known as qui tam suits and the government may intervene in,
      and
      take control of, such actions.








The
      Company has advised two former service providers that their billings (amounting
      to an aggregate of $147,777 ) are contested. The Company also notified these
      firms that the Company would seek not only forgiveness of the billings, but
      also
      a yet to be determined monetary recovery.





Following
      our notice on February 1, 2007 Wolfe Axelrod Weinberger Associates, LLC, one
      of
      the service providers, initiated a Complaint against the Company. The amount
      of
      the contested billing with Wolfe Axelrod Weinberger equals
      $42,791.74.





This
      Complaint was filed in the Supreme Court of New York located in the County
      of
      New York. In the Complaint, the plaintiff has set forth four Causes of Action.
      These causes of Action include the recovery of the billed amount, a claim for
      an
      automatic renewal of their agreement, a claim for a finder’s fee in our December
      5, 2005 financing, and finally a claim for compensation for the efforts
      allegedly extended by the firm in assisting the Company secure
      financing.


***InforMedix
          Holdings, Inc.***
 **Page
          24**





The
      Company has retained a New York law firm to represent its interests and the
      Company has filed a counter-complaint in this matter.





**ITEM
      4 -**


**SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS**





Not
      Applicable











***InforMedix
          Holdings, Inc.***
 **Page
          25**


**ITEM
        - 5**
 **MARKET
        FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
        REPURCHASES OF EQUITY SECURITIES**
 
 
 Our
        common stock has traded on the Over-the-Counter Bulletin Board maintained
        by the
        NASD under the symbol "IFMX" since July 30, 2003. The following table sets
        forth
        the high and low closing bid prices for the Common Stock, as reported by
        Pink
        Sheets, LLC for the periods indicated below. The following quotations represent
        prices between dealers and do not include retail markups, markdowns or
        commissions. These do not represent actual transactions and have not been
        adjusted for stock dividends or splits.
 
 **High**
              **Low****Calendar
                  Year 2006**Fourth
                  Quarter
              October
                  1 through December 31
              $
                  0.14
              $
                  0.08Third
                  Quarter
              July
                  1 through September 30
              $
                  0.16
              $
                  0.09Second
                  Quarter
              April
                  1 through June 30
              $
                  0.25
              $
                  0.13First
                  Quarter
              January
                  1 through March 31
              $
                  0.25
              $
                  0.14**Calendar
                  Year 2005**Fourth
                  Quarter
              October
                  1 through December 31
              $
                  0.31
              $
                  0.12Third
                  Quarter
              July
                  1 through September 30
              $
                  0.24
              $
                  0.12Second
                  Quarter
              April
                  1 through June 30
              $
                  0.40
              $
                  0.15First
                  Quarter
              January
                  1 through March 31
              $
                  0.54
              $
                  0.19
 As
        of
        March 31, 2007, there were 92,050,624 holders of record of our Common Stock.
        On
        March 31, 2006, the closing price of our Common Stock was $0.13 per
        share.
 
 We
        have
        not declared any cash dividends on our common stock since our inception and
        do
        not anticipate paying such dividends in the foreseeable future. We plan to
        retain earnings, if any, to support the development of our business. Payment
        of
        future dividends, if any, will be at the discretion of our Board of Directors
        after taking into account various factors, including our financial condition,
        operating results, current and anticipated cash needs and plans for expansion.
 
 
 
 ***Equity
        Compensation Plan Information***
 
 The
        following table summarizes information with respect to options under our
        equity
        compensation plans as of December 31, 2006:
 
 ·
              the
                  number of shares of our common stock issuable upon exercise of
                  outstanding
                  options, warrants and rights, separately identified by those granted
                  under
                  equity incentive plans approved by our stockholders and those granted
                  under plans, including individual compensation contracts, not approved
                  by
                  our stockholders (column A).
  ·
              the
                  weighted average exercise price of such options, warrants and rights,
                  also
                  as separately identified (column B), and
   ***InforMedix
            Holdings, Inc.***
 **Page
            26**
  
  ·
              the
                  number of shares remaining available for future issuance under
                  such plans,
                  other than those shares issuable upon exercise of outstanding options,
                  warrants and rights (column C).
 
  **#
                    of Securities remaining****available
                    for future****#
                    of Securities To be**
                
                **Weighted-average**
                
                **issuance
                    under equity****issued
                    upon Exercise**
                
                **Exercise
                    price of**
                
                **compensation
                    plans****of
                    outstanding options,**
                
                **Outstanding
                    options**
                
                **(excl.
                    securities reflected****warrants
                    and rights.**
                
                **warrants
                    and rights**
                
                **in
                    Column A****(A)**
                
                **(B)**
                
                **‘(C)****Equity
                    Compensation plans****Approved
                    by security holders**
                
                
                7,907,829
                
                $
                0.32
                
                
                238,891**Equity
                    Compensation plans not****Approved
                    by security holders**
                
                
                696,720
                
                $
                0.85
                
                
                -**TOTAL**
                
                
                8,604,549
                
                $
                0.39
                
                
                238,891
 
 
 **ITEM
        6 -**
 **MANAGEMENT'S
        DISCUSSION AND ANALYSIS**
   Portions
        of the discussion in this Form 10-KSB contain forward-looking statements,
        all of
        which included herein are based on information available to the Company on
        the
        date hereof, and the Company assumes no obligation to update any such
        forward-looking statements. The Company’s actual results could differ materially
        from those anticipated in these forward-looking statements as a result of
        a
        number of factors, including those set forth elsewhere in this Form
        10-KSB.
 
 In
        December 2001, the Securities and Exchange Commission requested that all
        registrants discuss their "critical accounting policies" in management's
        discussion and analysis of financial condition and results of operations.
        The
        SEC indicated that a "critical accounting policy" is one that is both important
        to the portrayal of the company's financial condition and results and that
        requires management's most difficult, subjective or complex judgments. Such
        judgments are often the result of a need to make estimates about the effect
        of
        matters that are inherently uncertain. InforMedix currently believes the
        following accounting policies to be critical:
  
 ***1.***
              ***Inventory***
 
 Inventory
        consists of component parts to be used in the manufacture of Med-eMonitor
        units
        and outsourced manufacturing costs for units that have not yet been placed
        into
        service. The Company values the inventory at the lower of cost (first-in,
        first-out basis) or market. Approximately 250 units have been placed in service
        and have been reclassified to fixed assets as of December 31, 2006, as the
        Company holds title to all units placed into service. As of December 31,
        2006,
        an additional 750 units were in the final stages of production.
 
 The
        Company states the inventory at the lower of cost (first-in, first-out basis)
        or
        market value.
  ***2.***
              ***Fixed
                  Assets***
  Fixed
        assets are stated at cost. Depreciation is computed using the straight-line
        method over the estimated useful lives of the assets; three years for computer
        software and equipment and finished Med-eMonitor units provisioned for
        demonstration purposes and/or customer rental programs, and five years for
        office furniture and equipment. Property and equipment held under capital
        leases
        and leasehold improvements are amortized over the shorter of the lease term
        or
        the estimated useful life of the related asset. When fixed assets are retired
        or
        otherwise disposed of, the cost and related accumulated depreciation are
        removed
        from the accounts and the resulting gain or loss is included in operations.
        Maintenance and repairs that do not materially add to the useful life are
        charged to operations as incurred.
   ***InforMedix
            Holdings, Inc.***
 **Page
            27**
  
  *3.*
              ***Intellectual
                  Property Assets***
  Internal
        use software and web site development costs are capitalized in accordance
        with
        Statement of Position (SOP) No. 98-1, "Accounting for the Costs of Computer
        Software Developed or Obtained for Internal Use," and Emerging Issues Task
        Force
        (EITF) Issue No. 00-02, "Accounting for Web Site Development Costs." Qualifying
        costs incurred during the application development stage, which consist primarily
        of outside services and the Company’s consultants, are capitalized and amortized
        over the estimated useful life of the asset. All other costs are expensed
        as
        incurred. All costs for internal use software for the years ended December
        31,
        2006 and 2005 were expensed as Product Development (previously referred to
        as
        Research and Development).
  The
        Company owns 15 issued U.S. and Foreign and 14 pending U.S. and Foreign patents.
        A formal patent valuation appraisal was performed in 2002 by the Patent &
License Exchange, Inc. The appraisal revealed that the Company’s patents were
        cited as prior art in 154 other issued patents. Two of the 15 issued patents
        may
        no longer be asserted as of December 31, 2006. Under present accounting
        principles generally accepted in the United States of America, and FASB 142,
        management of the Company has not reflected the value of these patents on
        its
        consolidated balance sheet at December 31, 2006 and 2005 **.**
  ***4.***
              ***Internal
                  Use Software
                  Costs***
  Internal
        use software and Web site development costs are capitalized in accordance
        with
        Statement of Position (SOP) No. 98-1, "Accounting for the Costs of Computer
        Software Developed or Obtained for Internal Use," and Emerging Issues Task
        Force
        (EITF) Issue No. 00-02, "Accounting for Web Site Development Costs." Qualifying
        costs incurred during the application development stage, which consist primarily
        of outside services and the Company’s consultants, are capitalized and amortized
        over the estimated useful life of the asset. All other costs are expensed
        as
        incurred. All costs for internal use software for the years ending December
        31,
        2006 and 2005 have been expensed as research and development.
  ***5.***
              ***Product
                  Development***
  Product
        development costs are related primarily to the Company obtaining its 15 issued
        U.S. and Foreign and 14 pending U.S. and Foreign patents and patent valuation
        analysis, developing early prototypes and beta products of its Med-e Monitor
        device, development of first, second and third generation databases to monitor
        patient data and remotely program the Med-eMonitor devices, communications
        connectivity between the devices and the databases via the Internet, continuing
        improvement of the firmware in the device and Med-eXpert software to better
        meet
        customer needs, and Website development. Research and development costs are
        expensed as incurred.
  ***6.***
              ***Income
                  Taxes***
  The
        income tax benefit is computed on the pretax loss based on the current tax
        law.
        Deferred income taxes are recognized for the tax consequences in future years
        of
        differences between the tax basis of assets and liabilities and their financial
        reporting amounts at each year-end based on enacted tax laws and statutory
        tax
        rates. No benefit is reflected for the years ended December 31, 2006 and
        2005.
  ***7.***
              ***Advertising***
  The
        cost
        of advertising is expensed as incurred. Advertising costs were $10,839 and
        $11,754 for the years ended December 31, 2006 and 2005,
        respectively.
  ***InforMedix
            Holdings, Inc.***
 **Page
            28**
  
 
 ***8.***
              ***Discount
                  on Notes Payable***
 
 A
        discount on notes payable was recorded by the Company with respect to various
        promissory notes issued during the year ended December 31, 2005. The amount
        of
        the discount was calculated by subtracting the fair market value of the warrants
        or shares of common stock included in the units issued pursuant to the terms
        of
        the private placement. The discount is being amortized over the life of the
        respective promissory notes and recorded as interest expense, but the balance
        of
        which is accelerated in the event respective notes are converted to equity
        and/or paid off in advance of the expected life of the promissory note. As
        of
        December 31, 2006 all previously recorded Discounts on Notes Payable were
        fully
        amortized.
 
 ***9.***
              ***Deferred
                  Loan Costs***
 
 Deferred
        loan costs are comprised of expenses incurred in connection with the issuance
        of
        promissory notes and include investment banking and legal fees. The discount
        is
        being amortized over the life of the respective promissory notes and recorded
        as
        depreciation and amortization, but the balance of which is accelerated in
        the
        event respective notes are converted to equity and/or paid off in advance
        of the
        expected life of the promissory note. As of December 31, 2006 all deferred
        loan
        costs were fully amortized.
 
 ***10.***
              ***Common
                  Stock to be
                  Issued***
 
 In
        conformance with GAAP accounting procedures, the Company recognizes Common
        Stock
        to be Issued as a liability until the shares are issued. The amount represents
        the value assigned to stock which had been requested, but was not issued
        as of
        December 31, 2006. For the year ended December 31, 2006, a total of $1,558,604
        of Common Stock to be Issued was recognized.
  
 **RESULTS
        OF OPERATIONS**
 
 ***For
        the year ended December 31, 2006, compared to the year ended December 31,
        2005***
 
 The
        Company recognized $102,721 in revenues from the sale/lease of its
        Med-eMonitor(TM) System for the year ended December 31, 2006. This represents
        an
        increase of $81,171 over sales of $21,550 for the year ended December 31,
        2005.
        Prior to January 1, 2004, the product was still in the development stage
        and had
        only been sold into studies at academic research centers that resulted in
        two
        research articles published in peer reviewed medical journals in prior periods.
        These articles were published in the July/August 2003 issue of *Heart
        & Lung* ,
        and the
        September 2003 issue of the *Drug
        Information Journal* (official
        publication of the Drug Information Association).
 
 Compensation
        expense for the year ended December 31, 2006 of $898,569 increased by $254,880
        (40%) compared to $643,689 for the prior year ended on December 31, 2005.
        The
        increase was primarily the result of the annualized prior year staffing changes
        in the marketing area, the severance costs associated with the transition
        of the
        Company’s former CFO’s ($50,000), and achievement/performance bonuses related to
        an employment contract and the achievement of key business transactions
        ($133,725), and other staffing transition expenses.
 
 Selling,
        general and administrative expenses for the year ended December 31, 2006
        of
        $1,612,758 increased by $851,587 (112%) compared to $761,171 for the prior
        year.
        The increase resulted significantly from the value related to the non-cash
        issuance of shares to the placement agents leading the Preferred Stock offering
        (concluded on August 25, 2006), and the Common Stock offering (commenced
        on
        October 16, 2006).  In addition to these fees, the Company incurred an
        increase in professional fees associated with third party accounting services,
        executive search fees, and other professional fees.
  ***InforMedix
            Holdings, Inc.***
 **Page
            29**
  
 
 Product
        development expenses for the year ended December 31, 2006 of $474,934 increased
        by $43,618 (10%) compared to $431,316 for the prior year due to costs related
        to
        various software and firmware upgrades to the Med-eMonitor (TM) system,
        and next generation database development.
 
 Depreciation
        and Amortization expense for the year ended December 31, 2006 of $159,064
        increased by $95,340 (150%) compared to $63,724 for the prior year. This
        increase resulted primarily from the amortization of deferred loan costs
        originating in 2005 in connection with various debt offerings.
  Interest
        expense during the year ended December 31, 2006 increased to $224,979 for
        an
        increase of $130,319 from the $94,660 reported for the year ended December
        31,
        2005. This increase resulted from the amortization of Deferred Loan Costs
        and
        Discount on Notes Payable. With the closing of the Preferred Stock funding
        efforts, all loans, with the exception of one loan for $100,000 received
        on
        November 13, 2006, were either repaid or converted into the Preferred Stock
        offering.
 
 
 **LIQUIDITY
        AND CAPITAL RESOURCES**
 
 For
        the
        year ended December 31, 2006, the Company does not have an operating line
        of
        credit from a financial institution and consequently has relied on debt and
        equity financing from investors to complete the development phase of our
        business and to manufacture Med-eMonitorTM units. We had cash and cash
        equivalents on deposit of $435,879 at December 31, 2006, as compared with
        $15,432 at December 31, 2005. In addition, as of December 31, 2006, the Company
        had accounts receivable equaling $52,162 or an increase of $32,612 over the
        accounts receivable recorded as of December 31, 2005.
  At
        December 31, 2006 the Company had $302,441 in uncontested trade debt. In
        addition, we have remaining cash commitments of at least $40,630 to our third
        party contract manufacturer which must be paid in order to secure release
        of our
        current production run of 750 additional Med-eMonitor Units, scheduled for
        release in 2007, and which are critical to the fulfillment of our current
        business development activities and estimated revenue backlog.
  As
        more
        fully described in the Financial Statements for the year ended December 31,
        2006, we have raised the following gross cash amounts from outside sources
        since
        January 1, 2006:
 
 1.
              ***Dawson
                  James Preferred Stock Offering***-
                  Pursuant to a confidential Private Placement Memorandum dated December
                  5,
                  2005 (“PPM4”), as supplemented, the Company completed the sale of an
                  aggregate of $3,426,771, consisting of 289.5 Preferred shares
                  (representing $2,895,000 principal amount in cash payments) plus
                  52.5
                  Preferred Shares (representing $525,000 principal amount of cancelled
                  notes payable), and an additional 0.6771 shares for interest expenses.
                  An
                  additional $25,000 of interest expense related to the cancelled
                  notes
                  payable converted into shares in this offering was accrued as of
                  December
                  31, 2006.
 
 Each
        Preferred Shares (or Unit under this offering) consisted of one share of
        Series
        A Preferred Stock along with certain Series A-1 Warrants and Series A-2
        Warrants. Each share of Series A Preferred Stock had a $10,000 Stated Value
        and
        an 8% dividend payable annually in cash or common stock, and was initially
        convertible into 62,500 shares of Common Stock at $.16 per share (the
“Conversion Price”) at the option of the shareholder and, subject to an
        effective Registration Statement, automatically convertible by the Company
        into
        Common Stock at the Conversion Price, if the Common Stock exceeds 200% of
        the
        Conversion Price for 20 consecutive trading days.
 
 Each
        Unit
        also includes one Series A-1 Warrant exercisable for 31,250 shares of Common
        Stock exercisable at $.24 per share and one Series A-2 Warrant exercisable
        for
        31,250 shares at $.32 per share (collectively, the Warrants”). The Warrants
        expire on April 30, 2011 and are exercisable, in whole or in part, through
        cash
        only (not cashless) exercises. The Warrants are subject to redemption commencing
        12 months after the effective date of a registration statement covering the
        underlying shares of common stock provided there is a current registration
        statement and the average closing bid price has been at least 200% of the
        Exercise Price for 10 consecutive trading days.
  ***InforMedix
            Holdings, Inc.***
 **Page
            30**
  
 If
        the
        Company completes an equity offering of less than $5 million at a price lower
        than the Conversion Price, the investors may exchange their Series A Preferred
        Stock at the stated value for the securities issued in the subsequent
        offering.
 
 Of
        the
        $2,895,000 cash received through December 31, 2006 from the funds received
        under
        this offering, $496,700 was paid out in related offering costs, including
        $100,000 to the placement agent (Bruce Meyers of Meyers Associates) as a
        buy-out
        of their agreement. An additional $509,685 was disbursed to repay $481,000
        in
        notes payable, including $28,685 in accrued interest thereon.
 
 The
        placement agent received 10% sales commissions on the 289.5 Units sold for
        $2,895,000 cash as described above, or $289,500, and an additional 3%
        non-accountable expense allowance payment of $86,850 on these same Units,
        both
        of which were accounted for as issuance costs.
 
 The
        placement agent will also be issued 4,523,436 shares of common stock as
        additional issuance cost for the sale of the 289.5 Units for cash. The value
        of
        these additional common shares, amounting to $939,625, has been recorded
        as an
        additional cost charge to “Additional paid-in capital - preferred stock,” with
        an offsetting credit to “Common stock to be issued.” Upon the issuance of these
        common shares, the related values will be transferred from “Common Stock to be
        issued” to “Common Stock” and “Additional paid-in capital - common
        stock.”
 
 On
        August
        25, 2006, the Company concluded its money raising activities pursuant to
        the
        confidential Private Placement Memorandum dated December 5, 2005.
 
 The
        issuance of these securities did not require registration under the Act,
        pursuant to exemption available under the provision of Section 4(2) of the
        Act
        and Rule 506 of Regulation D promulgated under the Act.
 
 2.
              ***Exchange
                  Offering of Dawson James Preferred Stock***-
                  On October 27, 2006, the Company issued an Exchange offering to
                  the
                  holders of the Series A Preferred Stock and related Series A-1
                  and Series
                  A-2 warrants for the purpose of reducing the number of outstanding
                  warrants. The determination of the exchange structure was reviewed
                  with
                  several brokers engaged in the PPM4 offering. With a reduced number
                  of
                  Series A-1 and Series A-2 outstanding warrants, the Company will
                  be
                  enabled to increase the potential funding available under the PPM5
                  offering issued on October 17, 2006.
 
 The
        terms
        of the Exchange Agreement provide for a total exchange of 115,000 shares
        of
        common stock for each share ($10,000 initial investment) of Preferred Series
        A
        Stock and accompanying Series A-1 and Series A-2 warrants.
 
 On
        February 12, 2007, the Company closed the Exchange Offering, with 96.4 %
        of the
        funds invested under the Dawson James Preferred Stock Offering electing to
        accept the Exchange Offering. Of the total funds received, only $123,000,
        or
        12.3 shares of Preferred Stock, chose not to convert pursuant to the Exchange
        Agreement.
 
 3.
              
              ***Basic
                  Investors Common Stock Offering (October 16,
                  2006)***-
                  In October 2006, the Company retained Basic Investors, Inc as the
                  placement agent for a new Private Placement agreement (“PPM5”). Based on
                  the terms of the offering released on October 17, 2006, the Minimum
                  funding sought would be in the amount of $500,000, with the Maximum
                  Offering set at $2,000,000. The offering also allows for an over
                  subscription of an additional 25% (i.e. $500,000) over the Maximum
                  Offering, or up to $2,500,000 of total
                  funding.
  ***InforMedix
            Holdings, Inc.***
 **Page
            31**
 
 The
        terms
        of PPM5 involved a purchase price per share of common stock of $0.10, with
        an
        accompanying Class C warrant priced at $0.15 for each share of common stock
        purchased under the offering. The placement agent receives a 10% sales
        commission, along with a 3% non-accounted allowance for expenses, and 1.5
        million restricted shares of Common Stock, and 1 Class C warrant for every
        10
        Class C warrants issued in the offering. In addition, the Company will incur
        legal costs in documenting the transactions, as well as an escrow account
        fee of
        $2,500.
 
 As
        of
        December 31, 2006, the Company received a total of $865,000 of funding from
        this
        PPM5. On February 28, 2007, the Company closed the offering, with a final
        level
        of funding of $865,000.
 
 On
        March
        23, 2007, the Company initiated a second PPM (“PPM6”) with Basic Investors. The
        terms of this new offering matched the terms of the previous PPM5 launched
        on
        October 16, 2006, with the exception that a maximum of $2,000,000 will be
        offered, and no over-subscription will be made available.
 
 The
        accompanying unqualified financial statements have been prepared on a going
        concern basis, which contemplates the realization of assets and the settlement
        of liabilities and commitments in the normal course of business. **
 
 To
        date,
        we have not invested in derivative securities or any other financial instruments
        that involve a high level of complexity or risk. We plan to invest any excess
        cash in investment grade interest bearing securities.
 
 We
        believe that if we are successful in raising additional funds with the PPM6
        (launched on March 23, 2007) of $2.0 million in April/May 2007, we may be
        able
        to meet our working capital requirements for the next 18 to 24 months from
        invested capital and revenues, including an estimated $500,000 from the existing
        Revenue Backlog, along with potential revenues (sales and rental) from strategic
        partnerships and prospective channel partners.
 
 As
        of
        April 27, 2007, the Company reached the minimum amount to close under PPM6,
        however, we cannot assure either our success at reaching the full amount
        of the
        PPM6 offering, or whether the funding will be sufficient to meet our working
        capital requirements.
 
 The
        accompanying financial statements have been prepared on a going concern basis,
        which contemplates the realization of assets and the settlement of liabilities
        and commitments in the normal course of business.
 
 The
        Company had a working capital deficit of $1,870,305 at December 31, 2006,
        which
        produced a current ratio of 0.3 to 1.0. At December 31, 2005, the Company
        had a
        working capital deficit of $1,312,350 and the current ratio was 0.1 to 1.0.
        A
        reduction in expenses would jeopardize our ability to carry out our new business
        strategy and consequently reduce or eliminate future growth, which would
        adversely affect the value of an investment in our Company.
 The
          working capital deficit includes a value of $2,045,885 for Common Stock
          to be
          Issued as a Current Liability. Once shares are physically issued, this
          value
          will be recognized as Additional Paid in Capital and Common Stock. If the
          Company had issued the shares related to this Common Stock to be Issued
          prior to
          December 31, 2006, the current ratio would have equaled 1.3 to 1, and a
          working
          capital surplus o f
          $175,580 would have resulted.
 To
        date,
        we have not invested in derivative securities or any other financial instruments
        that involve a high level of complexity or risk. We plan to invest any excess
        cash in investment grade interest bearing securities.
 
 We
        have
        not declared any cash dividends on our common stock since our inception and
        do
        not anticipate paying such dividends in the foreseeable future. We plan to
        retain earnings, if any, to support the development of our business. Payment
        of
        future dividends, if any, will be at the discretion of our Board of Directors
        after taking into account various factors, including our financial condition,
        operating results, current and anticipated cash needs and plans for
        expansion.
 
 
 
  ***InforMedix
            Holdings, Inc.***
 **Page
            32**
  **IMPLEMENTATION
        OF BUSINESS PLAN**
 
 Revenue
        recognition will be critical to our future success. The
        following six phases summarize the strategies and tactics that we have employed
        and will continue to employ in order to generate future revenues:
 
 In
        Phase
        I, we have established and expanded upon its Pioneer Patent Portfolio to
        protect
        the substantial investment involved in launching the Med-eMonitor
        System.
 
 In
        Phase
        II, we developed and tested the Med-eMonitor System to maximize its
        functionality and value proposition.
 
 In
        Phase
        III **,** we
        scientifically established that the Med-eMonitor System improves patient
        medication and care plan adherence, using independent third party academic
        medical center trials, peer-reviewed medical journal articles, presentations
        at
        national and international scientific symposia, and receiving a national
        award
        for technologic excellence. These research studies and awards provide a
        scientific basis for the marketing and sales claims that we make to customer
        prospects.
 
 In
        Phase
        IV, we increased our visibility to customer prospects without building a
        large
        infrastructure, by establishing strategic alliances to penetrate the disease
        management markets. We also increased our visibility through positioning
        our CEO
        as a national expert in the field of medication adherence, by his being
        appointed to Chair a prestigious Medical Board, being personally invited
        by
        hosts of prestigious seminars to network with CEOs of prospective customers,
        and
        by public speaking including symposia presentations and print, radio, and
        televised interviews.
 
 In
        Phase
        V, we improved its ability to make direct sales into the disease management
        and
        managed care markets, through hiring top performing salespeople experienced
        in
        these markets
  a)
              In
                  Phase VI, we expect to achieve significant revenue recognition
                  and have
                  begun achieving revenues with nationally recognized customers.
                  By
                  establishing the technology through scientific studies, establishing
                  alliances with larger companies and dev Up to $155,000 in commitments
                  from
                  the University of Texas Health Science Center, San Antonio. This
                  commitment is over five (5) years, or approximately $33,000 in
                  2007, and
                  in support of a medication and care plan adherence program for
                  schizophrenia patients.
  b)
              $13,000
                  with Enhanced Care Initiatives (ECI). This initiative, projected
                  to be
                  through June 2007, relates to an expanded program in Tennessee
                  and
                  Texas;
  c)
              $11,500
                  for a pilot study with the University of Pennsylvania through September
                  or
                  October, 2006, for patients with a high risk of stroke, which represents
                  an initial order for a pilot program followed by a second order
                  to expand
                  the program based upon positive results and customer
                  satisfaction.
    ***Background
        on Estimated Revenue Backlog***
  Earlier
        the year ended December 31, 2005 we announced that we had successfully
        established the effectiveness of the Med-eMonitor System in improving medication
        adherence rates and significantly reducing Hemoglobin A1c (HbA1c) rates in
        a
        study of diabetes patients at St. Vincent Healthcare in Billings, Montana.
        We
        believe that we have continued to benefit from these findings as we continue
        our
        business development activities.
 
 a)
              ADT
                  WellHealth & XLHealth-
                  Chronic Care
 
 On
        November 15, 2006, we issued a Form 8-K announcing a Medicare Health Support
        Program with XL Health, a leading disease management company financed by
        Goldman
        Sachs, and ADT WellHealth, a division of ADT Security Services (a Tyco Fire
        & Security company).
  ***InforMedix
            Holdings, Inc.***
 **Page
            33**
  
 
 Baltimore,
        Maryland based XLHealth (“XL”), one of the leading providers of disease
        management and support programs to chronically ill patients, physicians,
        health
        plans, and employers, is also a Medicare and Medicaid accepted provider.
        XL’s
        services involve a “high touch” approach that incorporates face-to-face meetings
        with patients along with innovative program and data management to improve
        the
        quality of patient care - and thereby reduce healthcare costs. Current services
        include supporting patients with diabetes, congestive heart failure (CHF),
        cardiovascular disease (CVD), end stage renal disease (ESRD), and chronic
        kidney
        disease (CKD).
 
 ADT
        WellHealth is focused on a strategic initiative to expand into healthcare
        monitoring. ADT WellHealth offers a comprehensive program to manage and improve
        health and wellness, including health care monitoring and emergency help,
        24
        hours a day, 7 days a week, through ADT MediHealth (focused on Medication
        Compliance), ADT Vital Health (focused on monitoring vital signs) ,
        and ADT
        ManageHealth (focused on encourage healthy behavior and lifestyles). InforMedix
        believes that a new paradigm for *“Aging
        Gracefully in Place”* can
        emerge from the combined efforts of ADT WellHealth, XLHealth and InforMedix.
  The
        new
        paradigm has three key components:
  ·
              InforMedix’s
                  Med-eMonitorTM, an interactive “smart pillbox,” monitors and reports
                  medication adherence for each individual medication each patient
                  is taking
                  in real-time, while also monitoring the overall health status of
                  the
                  patient, and signs of impending
                  stroke.
  ·
              ADT
                  Health Coach functions like an “OnStar” system, responding to emergent
                  alerts that may be given by the Med-eMonitor (much like an intrusion
                  alarm) or by the patient, and which are displayed directly on the
                  Health
                  Coach’s computer screen at an ADT call center. The Health Coach will
                  assess and resolve situations then and there if possible, or “triage in”
                  the XLHealth nurse, patient’s doctor, family member, ambulance, or
                  pharmacy to assist the patient, and do so while remaining on the
                  line with
                  the patient.
  ·
              XLHealth
                  has deployed a world class Personal Support Team, which is comprised
                  of a
                  dedicated local program manager, personal support nurse, telephone
                  coach
                  nurse and a local pharmacist to provide the clinical back up and
                  interventions.
  Under
        the
        terms of the agreements, InforMedix will provide the Med-eMonitor System
        for
        remote monitoring and communication of healthcare information to 266 chronically
        ill patients in this 12 month program. The clinical population in Tennessee
        has
        been identified, and the contracting with ADT and XLHealth is completed.
        The
        companies have spent several months coordinating and meshing information
        handling and transmissions in preparation for the launch of the program in
        the
        near term.
 
 b)
              National
                  Institute of Health (“NIH”)-
                  HIV
 
 We
        currently have a grant from the National Institute of Health (“NIH”), wherein
        the Med-eMonitor System is engaged in a HIV study being conducted by Dr.
        David
        Banksburg of the University of California of San Francisco. This grant in
        the
        amount of $149,000 began in June 2006.
 
 c)
              University
                  of Pennsylvania-
                  Human Resources
 
 The
        University of Pennsylvania, a self-insured employer, is offering our
        Med-eMonitor System as an employee benefit to selected University of
        Pennsylvania (Penn) employees and retirees with chronic health care conditions
        known to cause high rates of stroke, heart disease, premature death, and
        reduced
        quality-of-life. The contract carries a value of $129,000 to
        InforMedix.
  ***InforMedix
            Holdings, Inc.***
 **Page
            34**
  
 
 Penn,
        the
        home of the nation’s first medical school, the largest private employer in
        Philadelphia, and the second largest employer in the Commonwealth of
        Pennsylvania, is using its Cardiovascular Disease Risk Factor Care (CDRF)
        Management Team to administer this first-in-the-nation employee benefit program.
        This comprehensive program is designed to significantly improve patient outcomes
        and reduce health care costs.
 
 In
        the
        first phase of the program, 100 selected patients will receive The Med-eMonitorTM
System. The CDRF team will monitor patient data through a secure Internet
        site
        and alert patients and their healthcare professionals to early signs of poor
        compliance or declining health. This program is currently underway.
 
 Penn’s
        CDRF Management Team previously conducted a program for Type II diabetics
        in
        Montana using InforMedix’s Med-eMonitor System, whereby mean medication
        adherence rates improved to over 92% compared to a baseline medication adherence
        rate of 40%, and Hemoglobin A1c (HbA1c) levels were reduced by an average
        of
        18.5% in a 3 month period (p<.002). Reductions in HbA1c, hypertension, and
        cholesterol are associated with improved lifespan and morbidity and a
        significant reduction in healthcare costs in the treatment of Diabetes
        patients.
 
 d)
              University
                  of Texas Health Sciences Center, San Antonio-
                  Schizophrenia
 
 We
        have
        received an order for 200 Med-eMonitor Systems and monitoring services amounting
        to $155,000 from the University of Texas Health Sciences Center, San Antonio.
        The program, which is currently underway, engages the use of Med-eMonitors
        and
        Med-eXpert system for use in a medication and care plan adherence program
        for
        schizophrenia patients. This substantial order follows a highly successful
        pilot
        program, whereby medication adherence rates were increased from 52% to over
        94%.
        These results were previously published in Schizophrenia Bulletin, and were
        featured in a recent edition of Psychiatric Times (circulated to 39,500
        patient-care psychiatrists) along with a picture of the Med-eMonitor. The
        Med-eMonitor System pilot program results will also be published in a chapter
        this scientist is writing for a book on Clinical Practice.
 
 e)
              Enhanced
                  Care Initiatives-
                  Chronic Care
 
 We
        previously announced that our agreement with Enhanced Care Initiatives (ECI)
        for
        the State of Tennessee has been expanded to include a newly developed program
        for the State of Texas. Based in Shelton CT, ECI is a specialty care management
        company focused on the top 1% to 2 % of chronically ill patient populations
        that
        have multiple co-morbidities and the highest costs (comprising approximately
        27%
        of all healthcare expenditures nationwide). ECI’s proprietary SAM platform has
        been designed to monitor and improve the health status of these complex and
        expensive patients. We have developed for ECI a custom designed application
        of
        our highly interactive Med-eMonitor system to be fully integrated with the
        SAM
        platform.
 
 At
        the
        time of the announcement, Dr. David Chess, ECI’s President and CEO, said he
        views our Med-eMonitor as, “An important extension of the SAM platform that
        provides ECI with a meaningful competitive advantage.” Dr. Chess commented that
        ECI plans to utilize the Med-eMonitor with virtually 100% of its complex
        psychiatric patients, and that a large number of frail elderly patients would
        also be involved in using the InforMedix’s “smart pillbox.”
  f)
              University
                  of Pennsylvania-
                  Stroke Prevention
 
 We
        recently initiated a pilot program with the University of Pennsylvania utilizing
        the Med-eMonitor System TM for patients with high risk of stroke. This novel
        rewards-based program has begun enrolling  patients
        who are currently taking anticoagulant medication. This “blood thinner”
medication is used to prevent blood clots from forming in the body that cause
        life-threatening strokes and pulmonary embolism (an often fatal blood clot
        in
        the lungs). Taking too little medication results in increased incidence of
        stroke and pulmonary embolism, while taking too much medication may cause
        life-threatening excessive bleeding. This program has recently been expanded
        as
        a result of the positive results experienced in the initial pilot
        program.
  ***InforMedix
            Holdings, Inc.***
 **Page
            35**
  
 
 In
        addition to the above contracts, the Company will continue to seek meetings
        with
        senior executives from large health plans, as well as gaining a product listing
        for reimbursement from the Center for Medicare and Medicaid Services
        (CMS).
 
 In
        December 2006, the Company announced a teaming agreement with RICHMAR
        Associates, an 8A minority owned company, which has the ability to market
        the
        Company’s products to Medicare and VA applications. In addition, RICHMAR has
        successfully developed software applications to demonstrate the statistical
        benefits gained through the implementation of sound tracking systems. The
        Company believes that RICHMAR can provide the kind of information, which
        will
        further demonstrate on a non-clinical basis the improved health, and enhanced
        cost effectiveness realizable through the use of the Med-eMonitor.
 
 In
        March
        2007, the Company announced a strategic relationship with excelleRx, a division
        of Omnicare. In this agreement, the Company will market its products to clients
        of excelleRx as well as engaging excelleRx as a backend service provider
        to
        support the Company’s retail efforts, planned for the second quarter of 2007.
 
  
 **ITEM
        - 7**
 **FINANCIAL
        STATEMENTS**
 
 Our
        audited financial statements and related notes required by this Item 7 begin
        on
        page 48 following Part III of this report.
 
  **ITEM
        - 8**
 **CHANGES
          IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
          DISCLOSURE**
 
 None
 
 
 **ITEM
        - 8A**
 **CONTROLS
        AND PROCEDURES**
 
 Our
        management and the Audit Committee of the Board of Directors, with the
        participation of our Chief Executive Officer and Chief Financial Officer,
        evaluated the effectiveness of our disclosure controls and procedures (as
        defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
        of
        1934), as of December 31, 2006. Based on that evaluation, our Chief Executive
        Officer and Chief Financial Officer concluded that our disclosure controls
        and
        procedures were effective were effective as of that date.
 
 
  ***InforMedix
            Holdings, Inc.***
 **Page
            36**
  ***Changes
        in Internal Controls*** **
  There
        has
        not been any change in our internal control over financial reporting identified
        in connection with the evaluation that occurred during the quarter ended
        December 31, 2006 that has materially affected, or is reasonably likely to
        materially affect, those controls.
  
 ***Limitations
        on the Effectiveness of Controls*** **
  Our
        management, including our CEO and CFO, does not expect that our Disclosure
        Controls and internal controls will prevent all error and all fraud. A control
        system, no matter how well conceived and operated, can provide only reasonable,
        not absolute, assurance that the objectives of the control system are met.
        Further, the design of a control system must reflect the fact that there
        are
        resource constraints, and the benefits of controls must be considered relative
        to their costs. Because of the inherent limitations in all control systems,
        no
        evaluation of controls can provide absolute assurance that all control issues
        and instances of fraud, if any, within the Company have been detected. These
        inherent limitations include the realities that judgments in decision-making
        can
        be faulty and that breakdowns can occur because of simple error or mistake.
        Additionally, controls can be circumvented by the individual acts of some
        persons, by collusion of two or more people or by management override of
        the
        controls.
  The
        design of any system of controls also is based in part upon certain assumptions
        about the likelihood of future events, and there can be no assurance that
        any
        design will succeed in achieving its stated goals under all potential future
        conditions; over time, a control may become inadequate because of changes
        in
        conditions or the degree of compliance with the policies or procedures may
        deteriorate. Because of the inherent limitations in a cost-effective control
        system, misstatements due to error or fraud may occur and may not be detected.
 
 
 
 
 **ITEM
        - 8B**
 **OTHER
        INFORMATION**
 
 None
 
 
 *InforMedix
            Holdings,
            Inc.*
 **Page
            37**
 
  
 
 
 
 **ITEM
        9 -**
 **DIRECTORS,
        EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
        COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT**
 
 
 The
        following table sets for the names, ages and positions of all of InforMedix’s
        executive officers and directors as of April 15, 2007:
 
 **PRINCIPAL
                  POSITIONS AND OFFICES****NAME**
              **AGE**
              **WITH
                  OUR COMPANY**Bruce
                  A. Kehr, MD
              57
              Chairman
                  of the Board & CEO, DirectorHarry
                  M. Stokes
              58
              Corporate
                  Secretary, CFO, Senior Vice PresidentDavidson
                  R. Dulin
              49
              Senior
                  Vice President of Operations and Direct SalesMichael
                  P. Gavin
              53
              Vice
                  President of Research and DevelopmentRhonda
                  B. Friedman
              56
              DirectorPhilip
                  J. Gross, CPA
              54
              DirectorHarris
                  Kaplan
              55
              DirectorBruce
                  S. Morra, PhD, MBA
              52
              DirectorDavid
                  Nash, MD, MBA
              52
              Director
 
 
 Set
        forth
        below is a brief description of the background of each of our executive officers
        and directors, based on information provided to us by them.
 
 EXECUTIVE
        OFFICERS **:**
 
 
 **BRUCE
        A. KEHR, M.D.** has been
        the Chairman of the Board of Directors and Chief Executive Officer of
        InforMedix, Inc. since its formation in 1997. Dr Kehr is also Chairman of
        the
        Board of the Institute on Aging at the University of Pennsylvania. Dr. Kehr
        is a
        forensic consultant in neuropsychiatry and traumatic brain injury and a
        practicing physician. Since 1982, Dr. Kehr has been the President of
        Contemporary Psychiatric Services, a psychiatric group practice he formed
        which
        employs 10 full and part-time employees. Dr. Kehr is the inventor of fifteen
        issued patents and twelve pending patents in the United States, Europe, Japan,
        and Canada, as well as issued and pending trademarks and service marks. In
        1995,
        he was named in Who's Who of American Inventors. He has actively written
        and
        lectured on neuropsychiatry aspects of traumatic brain injury and on medication
        noncompliance, a field in which he is recognized as an expert. Dr. Kehr received
        his Bachelors degree from the University of Pennsylvania in 1971, followed
        by
        his Medical degree from Georgetown University School of Medicine in 1975.
 
 **HARRY
        M. STOKES** became
        Senior Vice President and Chief Financial Officer on October 1, 2006, and
        Corporate Secretary on November 6, 2006 **.** Mr.
        Stokes is an accomplished financial and operating executive with over 25
        years
        of experience managing national and international organizations holding assets
        from $5 million to in excess of $1 billion. Most recently, he served as CFO
        for
        Transnational Automotive Group (OTC BB:TAMG). From 2002-2005 he served as
        Chief
        Financial Officer and Vice President of Finance and Administration for the
        Major
        Indoor Soccer League, LLC. From 1994-2002, he was the Managing Director of
        HMS
& Associates, a consulting firm representing high net-worth individuals, and
        privately held organizations, which provided strategic, operational and
        financial consulting to both start-up and established domestic and international
        organizations. Mr. Stokes previously served as Vice President of Finance
        of Gund
        Investment Corporation, where he personally represented a high net-worth
        individual as a key financial, strategic, operational and investment advisor
        on
        all portfolio assets and operating companies. He provided extensive merger,
        acquisition, integration, turn-around, operating and tax planning counsel
        and
        entity leadership. His role also included service as lead financial advisor
        for
        several of the closely held investments. Mr. Stokes received his BBA from
        Temple
        University where he majored in Business Administration/Law, and also attended
        Temple University for his graduate studies in Finance.
  ***InforMedix
            Holdings, Inc.***
 **Page
            38**
  
 
 
 **DAVISON
        R. DULIN** became
        Senior Vice President of Operations and Direct Sales on March 19, 2007. Prior
        to
        that, Mr. Dulin served as our Senior Vice President of Business Development
        and
        Operations from September 30, 2004. Prior thereto, from February 15, 2004,
        he
        served as Vice President of Sales and Marketing. From July 2001 until February
        2004, he served as the Vice President of Marketing and Sales of Database
        Publishing Group, Inc. From August 1998 until April 2001, Mr. Dulin was employed
        by HealthOnline, Inc., serving as Executive Vice President Marketing and
        Sales/Director from August 1998 until June 2000 and then President/Director
        from
        June 2000 until April 2001. From January 1997 until August 1998, he was the
        Executive Vice President of Marketing and Sales for FutureHealth Corporation.
        Mr. Dulin graduated from Davidson College in 1980 with a B.A.. in Chemistry.
        Mr.
        Dulin also spent more than 12 years at Ciba Pharmaceuticals, where he held
        numerous senior positions including marketing and sales director of the
        company's UK division, vice president of marketing, and executive director
        and
        head of headquarter sales.
 
 
 **RICHARD
        P. VOSS** became
        Senior Vice President of Business Development, Marketing & Channel Sales on
        March 19, 2007. Throughout his career, Mr. Voss has been responsible for
        launching a number of significant new products and negotiating high-level
        multi-million licensing agreements, co-promotions and partnerships with major
        healthcare companies worldwide. While serving as Senior Product Manager for
        Abbott PPD, a division of Abbott Laboratories, Mr. Voss launched Abbott’s first
        generic erythromycin product, generating more than $10 million in sales in
        its
        first year. Mr. Voss also led the product launch of Particle Coated Erythromycin
        (PCE) for Abbott PPD, which quickly established itself as one of the best
        selling brands in the category, producing annual revenues of more that $100
        million. While serving as Vice President, Business Development and Director
        of
        Human Health at Royer Biomedical, Inc., Mr. Voss led numerous transactions
        and
        negotiated significant licensing agreements and co-promotions.. Mr. Voss
        also
        served as the Executive Director, Strategic Planning and Corporate Development
        at Boehringer Manheim Corp, Therapeutics, where he negotiated a major
        co-promotion with DuPont Merck Pharmaceutical Co. Mr. Voss received his BS
        degree from Marquette University, majoring in Finance, and his MBA from the
        University of Chicago.
 
 
 **MICHAEL
        P. GAVIN** became
        the Vice President of Research & Development of InforMedix, Inc. on February
        1, 2002. From 1992 until November 2001, he was the Vice President of Research
        and Development for ITC International Technodyne, where he was directly
        responsible for the creation, development, clinical testing, and manufacturing
        scale-up of numerous medical devices. These devices included in-vitro
        diagnostics devices, disposable medical devices, and laboratory based clinical
        chemistry and hematology systems. In addition, he directly managed the design,
        development, clinical testing, and regulatory submissions for the first home
        use
        Prothrombin time monitor to be approved by the FDA and managed the modification
        of two portable diagnostic devices for use in double-blinded clinical trials.
        Mr. Gavin holds six United States patents. He graduated cum laude from Farleigh
        Dickinson University in 1985 with a B.S.E.E. in Computer Science &
Communication Systems. He has additional course work in Project Management,
        Design for Manufacturability, Statistics, Human Resource management, Financial
        Analysis, Real Time Operating Systems, Assembly Language Programming, cGMP
        Practices and Best Practices in Product Development.
 
 
 
  ***InforMedix
            Holdings, Inc.***
 **Page
            39**
  **SIGNIFICANT
        CONSULTANT(S)**
  **REMIE
        J. SMITH** **,
        BSEE** has
        served as Director of Software Development of InforMedix, Inc. since May,
        2003.
        Mr. Smith has over 19 years experience in medical software product development
        with specialization in project management, software lifecycle development,
        and
        verification/validation. Mr. Smith has successfully lead numerous major medical
        software and WEB projects to commercial products. His technique for making
        goals
        measurable and repeatable provides the mechanics for success. Mr. Smith brings
        extensive experience in FDA regulations including CFR 21 Part 11 and HIPPA
        compliance. He has seven end-to-end medical product launches and three vertical
        web applications, which Management believes is ideally suited to the
        Med-eMonitor product line. Mr. Smith graduated with a BSEE in 1984, in Computer
        Engineering, from State University of New York at Buffalo. In addition, Mr.
        Smith has obtained certifications in Microsoft and SUN Technologies.
 
  **BOARD
        OF DIRECTORS**
   **BRUCE
        A. KEHR, M.D** .,
        Chairman, see description above.
 
 
 **RHONDA
        B. FRIEDMAN, SC.D** .
        has
        been a director of InforMedix since February 2001. Since March 2006 she has
        served as President and Chief Operating Officer of TraumaCare, Inc., a medical
        device company. From October 2002 until March 2006, Dr. Friedman was a partner
        at Bethesda Bioscience Partners, a consulting firm. From January 1997 until
        October 2002, she served as the President and Chief Operating Officer of
        Coagulation Diagnostics, Inc., a company specializing in the development
        of
        tests for hyper-coagulability, or the tendency to form blood clots. From
        November 1987 until December 1996, Dr. Friedman worked at the MEDSTAT Group
        in
        Washington, D.C., a company specializing in medical database development.
        During
        her tenure at MEDSTAT, she held such positions as Director of Clinical Research
        and Outcomes, Acting Vice President and General Manager of the Research and
        Policy Division, and Vice President of Disease Management. Dr. Friedman has
        a
        wide range of experience in global clinical trials, outcomes research, strategic
        business planning, business development, and financial and personnel management.
        Dr. Friedman earned her Bachelors degree from Hobart and William Smith Colleges
        in 1971. She has also earned an Sc.M. in 1974 and Sc.D. in 1978 from the
        John
        Hopkins University School of Hygiene and Public Health.
 
 
 **PHILLIP
        J. GROSS, CPA** was
        appointed to the InforMedix Holdings, Inc. Board of Directors on January
        24,
        2005 by the Board to replace Bert Wasserman who retired. Phil also serves
        as the
        Chairman of the Audit Committee. He has over 30 years of finance, business,
        and
        healthcare related experience. Since March 1, 2005, Mr. Gross has served
        as a
        consultant to and prior thereto, from February 2004, he was the Senior Vice
        President of Business Development and Chief Financial Officer of Dr.First.com,
        Inc. From May 2002 until January 2004, Mr. Gross was an independent consultant.
        Prior thereto from December 1998 he was President, Vice Chairman and a Director
        of PrimeWire, Inc. He began his career as a management consultant with the
        International Association of Chiefs of Police, Hallcrest Systems and Cresap,
        McCormack and Paget. He then entered the telecommunications and information
        services industry in 1981. Mr. Gross spent four years with MCI during which
        he
        held senior management positions on the Corporate Staff and in MIS, and spent
        three years as the CFO of Ameri`ca Online. For the last 20 years, he has
        co-founded or been involved during the development stage with several business
        services, healthcare and information technology companies in which he held
        senior financial and operating positions, or served as an "angel investor,"
        board member, consultant and/or advisor. During the 1998-1999 academic year,
        Mr.
        Gross served as the Entrepreneur-in-Residence at the Dingman Center for
        Entrepreneurship, at the R.H. Smith School of Business, University of Maryland;
        he was an Adjunct Professor of Entrepreneurship at the Smith School through
        Spring 2002. He is active in the venture capital community as both the recipient
        of venture capital funds as an early stage investor. He holds B.A. and M.P.A.
        degrees from Syracuse University and obtained his Certified Public Accountant
        and Certified Internal Auditor certificates in 1978.
  ***InforMedix
            Holdings, Inc.***
 **Page
            40**
  
 
 **HARRIS
        KAPLAN, MBA** has been
        a director of InforMedix since August 2001 and is Chairman of the Compensation
        Committee. Since May 1999, Mr. Kaplan has been the Chief Executive Officer
        of
        the Collaborative Consulting Group, providing strategic guidance to
        pharmaceutical and biotechnology companies, for the commercialization and
        licensing of new pharmaceutical products. In September 1980, Mr. Kaplan
        co-founded Migliara-Kaplan Associates, which became the largest healthcare
        custom marketing research and strategic planning company in the world with
        revenues in excess of $45 million. Migliara-Kaplan specialized in helping
        pharmaceutical, diagnostic, and medical device companies identify new product
        opportunities and then maximizing the commercial potential of new products
        in
        development. Migliara-Kaplan clients included virtually all of the major
        pharmaceutical companies as well as many of the largest diagnostics companies
        in
        the United States and in Europe. During his tenure at Migliara-Kaplan, Mr.
        Kaplan was involved in the launch of over 50 new pharmaceutical products
        including, most recently, Prilosec, Nexium, Lipitor, Aricept, Celebrex, Norvasc,
        Cozaar, Tequin, and TNKase. He remained with Migliara-Kaplan until April
        1999.
        Mr. Kaplan was an early investor in and consultant to several healthcare
        companies including Ventana Medical, Biosite, and Digene Corporation. Harris
        has
        also been an advisor to a number of venture capital groups including CW Group,
        Frazier & Co., DeNovo Ventures and Medicus Ventures. He received his
        Bachelors degree and MBA from Temple University.
 
 
 **BRUCE
        S. MORRA, PH.D., MBA** was
        appointed to the Board on December 7, 2005 by the Board of Directors and
        was
        elected by the Shareholders on March 14, 2006. Dr. Morra earned his Ph.D.
        and
        M.S. in Polymer Science and Engineering and his M.B.A. from the University
        of
        Massachusetts, Amherst in 1980, after graduating magna cum laude in Chemical
        Engineering from Princeton University in 1976. He has more than 24 years
        of
        pharmaceutical, medical device, drug delivery, biotech and polymers industry
        leadership experience, and is now a consultant and Board member to various
        companies in these fields. From April 2003 through the end of 2004, Dr. Morra
        was President of West Pharmaceutical Services’ Drug Delivery and Contract
        Clinical Research businesses. After turning around the businesses via strategies
        that refocused on the company’s core expertise, driving three new products into
        phase II clinical trials, submitting the first formulation for regulatory
        approval and consummating 10 new development/licensing deals, Dr. Morra
        orchestrated the sale of the Drug Delivery business to a leading venture
        capital
        group, Warburg Pincus. Prior to joining West, for the period 2000 to 2003,
        he
        was Chief Business Officer for Progenitor Cell Therapy, LLC, a start-up company
        performing cell-based process, device and drug development; President, COO
        and
        CFO of Biopore Corporation and its sister company Polygenetics, Inc., driving
        development of applications for their unique porous polymer microsphere
        technology in fields that included drug delivery, embolotherapy, gene therapy
        and bioartificial livers; while also being a Board Member and consultant
        for
        other life science companies. From 1993 to 2000 Dr. Morra served as President,
        COO and Founder of Flamel Technologies, Inc., a drug delivery systems and
        biomaterials company. Dr. Morra assisted in raising venture capital funding
        for
        Flamel and taking the company public on the NASDAQ in 1996. Before he started
        Flamel’s US subsidiary, Dr. Morra served as the President of ISP Filters, Inc.,
        a subsidiary of GAF Corp and held positions in General Management, New Business
        Development, Product Management, Marketing, Finance and R&D at Ausimont USA,
        Amoco Performance Products and E.I. DuPont.
 
 
 **DAVID
        B. NASH, MD, MBA, FACP** ,
        was
        appointed to the InforMedix Board of Directors on March 14, 2006 and was
        elected
        by the shareholders on March 14, 2006. He is Founder and Dr. Raymond C. and
        Doris N. Grandon Professor and Chairman of the Department of Health Policy,
        at
        Jefferson Medical College of Thomas Jefferson University in Philadelphia.
        Internationally recognized for his work in outcomes management, disease
        management, medical staff development and quality-of-care improvement, his
        publications have appeared in more than 100 articles in major journals. He
        has
        edited fifteen books, including A
        Systems Approach to Disease Management by
        Jossey-Bass, Connecting
        with the New Healthcare Consumer by Aspen
        and The
        Quality Solution by Jones
        and Bartlett. Dr. Nash has served on the Board of Directors of five companies,
        including two publicly-traded companies, three disease management companies,
        and
        two companies that were acquired while he served as a Director. These companies
        include: Patient InfoSystems (PATI:NASDAQ) from 1996 -2000; I-Trax Corporation
        (DMX:AMEX) from 2002 to current; Future Health, which was recently acquired
        by Nationwide
        Mutual Insurance Company from 2003 to current ;
        Pharma
        Detailing.Com from 1999 to 2000; and DoctorQuality which was also acquired
        from
        2000 to 2003. In addition, Dr. Nash has served on the Advisory Boards of
        nine
        other companies including Pfizer Health Solutions. Repeatedly named by Modern
        Healthcare to the
        top 100 most powerful persons in healthcare list, his national activities
        include appointment to the JCAHO Advisory Committee on Performance Measurement,
        the CIGNA Physician Advisory Committee, membership on the Board of Directors
        of
        the Disease Management Association of America (DMAA) and Chair of an NQF
        Technical Advisory Panel - four key national groups focusing on quality
        measurement and improvement. Dr. Nash was also named as a finalist in the
        15 th Annual
        Discover Awards for Innovation in Public Health by Discover magazine. In 1995, he was awarded the Latiolais (“Lay-shee-o-lay”) Prize by the
        Academy of Managed Care Pharmacy for his leadership in disease management
        and
        pharmacoeconomics. Currently, he is Editor-in-Chief of four major national
        journals including P&T , Disease
        Management , Biotechnology
        Healthcare and the American
        Journal of Medical Quality .
        Dr.
        Nash received his BA in economics (Phi Beta Kappa) from Vassar College in
        1977;
        his MD from the University of Rochester School of Medicine and Dentistry
        in
        1981; and his MBA in Health Administration (with honors) from the Wharton
        School
        at the University of Pennsylvania in 1986. While at Penn, he was a former
        Robert
        Wood Johnson Foundation Clinical Scholar and Medical Director of a nine
        physician faculty group practice in general internal medicine.
  ***InforMedix
            Holdings, Inc.***
 **Page
            41**
  
 **AUDIT
        COMMITTEE**
 
 Our
        Board
        of Directors has established an Audit Committee, consisting of Mr. Gross
        (Chairman), Dr. Friedman and Mr. Kaplan. The Board has determined that Mr.
        Gross
        qualifies as an “audit committee financial expert” in
        accordance with applicable rules and regulations of the SEC, and is independent.
 
 ***Section
        16(a) Beneficial Ownership Reporting Compliance***
 
 Pursuant
        to Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange
        Act”), our directors and executive officers and beneficial owners of more than
        10% of our common stock are required to file certain reports, within specified
        time periods, indicating their holdings of and transactions in the common
        stock
        and derivative securities. Officers, directors, and persons who beneficially
        own
        more than ten percent of a registered class of the Company’s equities are
        required by the regulations of the SEC to furnish the Company with copies
        of all
        Section 16(a) forms they file. Based solely on a review of the copies of
        such
        reports provided to us and written representations from such persons regarding
        the necessity to file such reports, we are not aware of any failures to file
        reports or report transactions in a timely manner during the our fiscal year
        ended December 31, 2006.
 
 
 **CODE
        OF ETHICS**
 
 On
        March
        31, 2004 our Board of Directors adopted a Code of Ethics which applies to
        the
        principal executive officer, principal financial officer, principal accounting
        officer or controller and persons performing similar functions. We will provide
        a copy of the Code of Ethics, without charge, to any person who sends a written
        request addressed to the Secretary at InforMedix Holdings, Inc., Georgetowne
        Park, 5880 Hubbard Drive, Rockville, Maryland 20852.
 ***InforMedix
              Holdings, Inc.***
 **Page
              42**
 **ITEM
        -10**
 **EXECUTIVE
        COMPENSATION**
 
 
 The
        following table sets forth all compensation awarded to, earned by, or paid
        for
        all services rendered to us during the fiscal year ended December 31, 2006
        by
        our chief executive officer and our two other most highly-compensated executive
        officers during our 2006 fiscal year (we refer to these individuals collectively
        as the “named executive officers”).
 
 
 ***Summary
        Compensation Table:***
  **Name
                  & Position**
              
              **Year**
              
              **Salary**
              
              **Bonus*******
              
              **Options****Awards**
              
              **All
                  Other**
                **Compensation**
              
              **Total**Bruce
                  A. Kehr, CEO
              
              
              2006
              
              $
              225,000
              
              $
              102,370
              
              $
              0
              
              $
              0
              
              $
              327,370Davidson
                  R. Dulin, SVP
              
              
              2006
              
              $
              162,000
              
              $
              12,256
              
              $
              0
              
              $
              0
              
              $
              174,256Michael
                  P. Gavin, VP
              
              
              2006
              
              $
              180,000
              
              $
              12,120
              
              $
              0
              
              $
              0
              
              $
              192,120
 *
          Includes amounts paid in Cash and Shares of Common Stock
 Bonuses
        were awarded for the achievement of certain milestones established in Dr.
        Kehr’s
        employment agreement, and for performance in successfully advancing the
        Company’s business relationships and contracts. These bonuses were accrued as of
        December 31, 2006.
 
 The
        above
        compensation firgures do not include the costs of benefits, including healthcare
        benefits, all of which does not exceed the lesser of $50,000 or 10% of such
        person’s annual salary and bonus for the the year ended December 31,
        2006.
 
 
 ***Outstanding
        Equity Awards at Fiscal Year-End***
 
 The
        following table sets forth certain information concerning outstanding equity
        awards held by the Named Executive Officers at December 31,
        2006:
  **Name**
                
                **Number
                    of Securities Underlying Unexercised Options**
                  **(#)**
                  **Exercisable**
                
                **Number
                    of Securities Underlying Unexercised Options**
                  **(#)**
                  **Unexercisable**
                
                **Option
                    Exercise Price**
                  **($)**
                
                **Option
                    Expiration****Date**Bruce
                    A. Kehr
                
                
                300,000
                  143,006
                  56,082
                  1,450,952
                  220,000
                  300,000
                  150,000
                
                
                0
                  0
                  0
                  0
                  220,000
                  0
                  0
                
                $
                  $
                  $
                  $
                  $
                  $
                  $
                1.00
                  1.00
                  0.37
                  0.32
                  0.30
                  0.15
                  0.15
                
                
                5/8/13
                  1/21/14
                  1/21/14
                  9/24/14
                  1/24/15
                  8/24/15
                  8/24/15Davidson
                    R. Dulin
                
                
                193,750
                  254,250
                  25,000
                
                
                193,750
                  258,250
                  75,000
                
                $
                  $
                  $
                0.32
                  0.32
                  0.30
                
                
                9/24/14
                  9/24/14
                  1/24/05Michael
                    P. Gavin
                
                
                150,000
                  40,403
                  179,798
                  43,750
                
                
                0
                  0
                  179,799
                  131,250
                
                $
                  $
                  $
                  $
                1.00
                  0.37
                  0.30
                  0.30
                
                
                5/8/13
                  1/21/14
                  9/24/14
                  1/24/15
 
 ***InforMedix
              Holdings, Inc.***
 **Page
              43**
 
 **EMPLOYMENT
        AGREEMENTS**
 
 InforMedix,
        Inc. entered into an employment agreement with Bruce A. Kehr, MD, Chairman
        and
        Chief Executive Officer on January 1, 2000 which was amended and restated
        on
        July 1, 2004. The term of such employment agreement shall continue until
        June
        30, 2007. During the term of the agreement Dr. Kehr may continue to oversee
        the
        business operations of Contemporary Psychiatric Services Inc. and may continue
        to provide treatment to patients for up to 6 hours per week provided these
        activities do not prevent or impair Dr. Kehr's performance under the employment
        agreement. Dr. Kehr's base salary is $100,000 increasing to $225,000 when
        InforMedix obtains cumulative cash receipts of $2 million from sales, royalties,
        license fees or other income (collectively "Revenues"), or InforMedix obtains
        gross proceeds of at least $2 million from an equity offering. His base salary
        shall be subject to annual increases subject to approval by the Compensation
        Committee of our board of directors. In July 2005, the Compensation Committee
        agreed to increase Dr. Kehr’s salary to $225,000 effective January 1, 2006. He
        also will be entitled to an annual bonus at the discretion of the Compensation
        Committee of our board of directors. He agreed to convert $21,000 of accrued
        but
        unpaid salary into units identical to those of the Equity Offering, consisting
        of 58,892 shares of Common stock 58,892 Class A Warrants and 58,892 Class
        B
        Warrants to purchase 58,892 and 29,446 shares, respectively. Dr. Kehr shall
        be
        entitled to two bonuses of $40,000 each when InforMedix obtains $1 million
        and
        $2 million of Revenues. Dr. Kehr shall also be entitled to two bonuses of
        $17,500 each when InforMedix (a) successfully completes a test of the Company's
        Med-e-Monitor by a major pharmaceutical company and (b) executes an agreement
        for use of the Med-e-Monitor in a clinical drug trial for which InforMedix
        receives compensation. Dr. Kehr received $17,500 in January 2005 when the
        Company received written confirmation of successful completion of a pilot
        test.
 
 His
        estate will also be entitled to receive one year's base salary in the event
        Dr.
        Kehr dies while employed by InforMedix. If Dr. Kehr is terminated other than
        for
        cause, death or total disability, then he is entitled to receive an amount
        equal
        to the product of his base salary for 12 months plus payment of all unused
        vacation time and un-reimbursed expenses. Upon a change of control, if Dr.
        Kehr
        is terminated other than for cause or good reason, he shall be retained as
        Executive Vice President of InforMedix. Dr. Kehr shall be subject to
        non-competition and non-solicitation provisions with respect to any past
        or
        present customers and any employee or agent for the period of his employment
        plus 12 months after termination.
 
 InforMedix
        entered into an Employment Agreement with Harry M. Stokes as of October 4,
        2006.
        The agreement provides that Mr. Stokes shall serve as Senior Vice President
        and
        Chief Financial Officer. Mr. Stokes is employed “at will” at an annual base
        salary of $180,000 per year. He is entitled to an annual bonus. Until such
        time
        as InforMedix establishes a health plan for employees, InforMedix has agreed
        to
        reimburse Mr. Stokes $415 on a monthly basis for his personal health insurance
        through his existing health plan.
 
 InforMedix
        entered into an Employment Agreement with Davison R. Dulin as of February
        15,
        2004. The agreement provides that Mr. Dulin shall serve as Vice President
        of
        Sales and Marketing. Mr. Dulin is employed "at will" at an annual base salary
        of
        $162,000 per year. He is entitled to a quarterly performance bonus in an
        amount
        equal to 4% of actual cash collected from customer accounts for which he
        is
        directly responsible during the quarter up to targeted cash collections of
        $2,000,000 for the year ending December 31, 2004. During the year ending
        December 31, 2004, the minimum quarterly bonus that Mr. Dulin shall receive
        is
        Five Thousand ($5,000) Dollars which will serve as an offset against all
        performance bonuses in 2004. In the event that InforMedix collects cash in
        excess of $2,000,000 in the year ending December 31, 2004, he shall be entitled
        a discretionary bonus in an amount to be determined by the Compensation
        Committee of our Board of Directors of the Company. Until such time as
        InforMedix establishes a health plan for employees, InforMedix has agreed
        to
        reimburse Mr. Dulin on a monthly basis for the cost of his paying for his
        personal health insurance through his existing health plan.
 
  ***InforMedix
            Holdings, Inc.***
 **Page
            44**
  
 **DIRECTOR
        COMPENSATION**
 
 The
        Compensation Committee has determined that directors shall be compensated
        for
        their services on the Board of Directors with options. On November 6, 2006,
        the
        Board approved a resolution that increased the number of options that each
        director shall individually receive to 0.5% of the total authorized shares
        of
        the Company’s common stock. The incremental options are subject to a three year
        vesting period commencing on a monthly basis as of October 1, 2006, and include
        all previous granted options. Prior to this increase, on January 24, 2005,
        the
        Board unanimously passed a resolution that each director shall receive a
        grant
        of 270,000 options, exercisable at $.30 per share, vesting over a three year
        period at a rate of 7,500 options per month subject to the approval of the
        2005
        Board of Director Stock Option Plan by the shareholders. The 2005 Board of
        Directors Stock Option Plan was approved by the shareholders on March 14,
        2006.
        In addition, the four independent directors that had served on the Board
        but had
        not been compensated for the period August 2002 through December 2004, received
        a grant of 75,000 fully vested options exercisable at $.30 per share. We
        reimburse our directors for their reasonable expenses incurred in attending
        meetings of our board.
 
 The
        following table sets forth the compensation paid to each of our non-employee
        directors in fiscal 2006:
  **Name**
              
              **Fees
                  Earned or Paid in****Cash**
              
              **Stock****Awards**
              
              **Option****Awards**
              
              **All
                  Other****Compensation**
              
              **Total**Rhonda
                  B. Friedman
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0Philip
                  J. Gross
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0Harris
                  Kaplan
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0Bruce
                  S. Morra
              
              
              0
              
              
              0
              
              
              17,558
              
              
              0
              
              
              17,558David
                  Nash
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
 
 The
        Company reimburses all Directors for expenses incurred in attending Board
        Meetings and other costs directly incurred in connection with services requested
        by either the Board or Management.
 
 As
        cited
        in Note 10 to the Consolidated Financial Statements, the Company entered
        into a
        consulting agreement with Board Member Bruce Morra for strategic business
        development matters. This agreement provided compensation to Mr. Morra in
        the
        form of a warrant for 144,000 shares of the Company’s common stock at an
        exercise price of $0.19, vesting in twelve equal monthly increments . This
        agreement involved services rendered from December 7, 2005 through December
        7,
        2006. For accounting pruposes the value of this option was calculated as
        $17,558,
 
 
  **ITEM
        - 11**
 **SECURITY
        OWNERSHIP OF CERTAIN BENEFICIAL OWNERS**  **AND
        MANAGEMENT AND RELATED STOCKHOLDER MATTERS**
 The
        following table sets forth information known to us with respect to the
        beneficial ownership of shares of our common stock outstanding, as of March
        31,
        2007 by:
  ·
              Each
                  person known by us to beneficially own 5% or more of our common
                  stock,
  ·
              Each
                  of our Named Executive Officers and directors, and
  ·
              All
                  of our executive officers and directors as a group.
 
 Beneficial
        ownership is determined in accordance with the rules of the SEC and includes
        voting and investment power. Under SEC rules, a person is deemed to be the
        beneficial owner of securities which may be acquired by such person upon
        the
        exercise of options and warrants or the conversion of convertible securities
        within 60 days from the date on which beneficial ownership is to be determined.
        Each beneficial owner's percentage ownership is determined by dividing the
        number of shares beneficially owned by that person by the base number of
        outstanding shares, increased to reflect the beneficially-owned shares
        underlying options, warrants or other convertible securities included in
        that
        person's holdings, but not those underlying shares held by any other person.
  ***InforMedix
            Holdings, Inc.***
 **Page
            45**
  
 
 Except
        as
        otherwise indicated in the notes to the following table,
  ·
              We
                  believe that all shares are beneficially owned, and investment
                  and voting
                  power is held by, the persons named as owners; and
  ·
              The
                  address for each beneficial owner listed in the table, except where
                  otherwise noted, is c/o InforMedix, Inc., Georgetown Park, 5880
                  Hubbard
                  Drive, Rockville, Maryland 20852-4821.
 **Amount/Nature
                    of**
                
                **%
                    of Beneficially****Name
                    of Stockholder**
                
                **Stock
                    Ownership**
                
                **Owned****Bruce
                    A. Kehr**
                
                
                4,636,781
                    (1
                )
                
                4.9
                %**Davidson
                    R. Dulin**
                
                
                687,023
                    (2
                )
                
                ***Michael
                    P. Gavin**
                
                
                532,418
                    (3
                )
                
                ***Rhonda
                    B. Friedman**
                
                
                270,000
                    (4
                )
                
                ***Harris
                    Kaplan**
                
                
                270,000
                    (4
                )
                
                ***Philip
                    Gross**
                
                
                339,000
                    (5
                )
                
                ***Bruce
                    S. Morra**
                
                
                1,272,367
                    (6
                )
                
                1.4
                %**David
                    Nash**
                
                
                97,500
                    (7
                )
                
                ***All
                    Executives and Officers as a Group**
                
                
                8,105,089
                    .
                
                
                8.3
                %
  *
        Less
        than 1% of the issued and outstanding shares.
 
 
 1)
              Includes
                  2,748,333 shares issuable upon exercise of presently-exercisable
                  stock
                  options and 101,838 shares issuable upon exercise of warrants issued
                  in
                  exchange for accrued and unpaid compensation. Does not include
                  91,667
                  shares of Common Stock issuable upon exercise of options not currently
                  exercisable.
  2)
              Includes
                  687,023 shares issuable upon exercise of presently exercisable
                  stock
                  options. Does not include 312,977 shares issuable upon exercise
                  of options
                  not currently exercisable.
  3)
              Includes
                  532,418 shares issuable upon exercise of presently-exercisable
                  warrants
                  and options. Does not include 192,582 shares of Common Stock issuable
                  upon
                  exercise of options not currently
                  exercisable.
  4)
              Includes
                  270,000 shares issuable upon exercise of presently-exercisable
                  options,
                  but excludes the 75,000 shares issuable upon exercise of options
                  not
                  currently exercisable.
  5)
              Includes
                  339,000 shares issuable upon exercise of presently-exercisable
                  options.
                  Does not include 75,000 shares issuable upon exercise of options
                  not
                  currently exercisable.
  6)
              Includes
                  112,500 shares issuable upon exercise of presently-exercisable
                  options and
                  219,000 shares issuable upon exercise of warrants issued in connection
                  with previous bridge financing and warrants issued in consideration
                  of
                  strategic business development consulting services. Does not include
                  157,500 shares issuable upon exercise of warrants not currently
                  exercisable.
  7)
              Includes
                  97,500 shares issuable upon exercise of presently-exercisable options,
                  but
                  excludes 172,500 shares issuable upon exercise of options not currently
                  exercisable.
   ***InforMedix
            Holdings, Inc.***
 **Page
            46**
  
  
 **ITEM
        - 12**
 C **ERTAIN
        RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
        INDEPENDENCE** ****
 
 **Certain
        Relationships**
 
 The
        employment agreements we entered into with each of Bruce Kehr, Harry M. Stokes,
        Davison Dulin and Richard P. Voss are discussed in the "Employments" subsection
        set forth previously in this Item - 10.
 
 **Director
        Independence**
 
 Our
        Board
        of Directors has determined, after considering all the relevant facts and
        circumstances, that each of our directors other than Dr. Kehr are independent
        directors, as “independence” is defined in the Nasdaq Marketplace Rules, because
        they have no relationship with us that would interfere with their exercise
        of
        independent judgment.
 
 
 
 
 **ITEM
        - 13**
 **EXHIBITS**
 
 
 The
        list
        of exhibits set forth under the heading “Exhibit Index” following the signature
        page to this Annual Report is incorporated herein by this
        reference.
 
 
 
 
 **ITEM
        - 14**
 **PRINCIPAL
        ACCOUNTANT FEES AND SERVICES.** ****
 
 
 The
        aggregate fees billed by our independent auditors, Bagel, Josephs Levine
&
Company LLC, for each of our last two fiscal years are as follows:
 
 **2006**
              
              **2005**Audit
                  Fees
              
              $
              17,500
              
              $
              17,500Audit
                  Related Fees
              
              
              0
              
              
              0Tax
                  Fees
              
              
              0
              
              
              0All
                  Other Fees
              
              $
              10,500
              
              $
              10,500
 
 The
        fees
        labeled as All Other Fees above constitute interim reviewed financial
        statements. Prior to the engagement of Bagell, Josephs, Levine & Company
        LLC, our audit committee considered whether the provision of the financial
        information systems design and implementation and all other non-audit services
        was compatible with maintaining the accounting firm's independence. Our audit
        committee recommended to our board of directors that Bagell, Josephs, Levine
        & Company LLC be engaged to audit our consolidated financial statements for
        our fiscal year ending December 31, 2006.
  *InforMedix
            Holdings,
            Inc.*
 **Page
            47**
  **FINANCIAL
          INFORMATION**
 
 
 
 
 
 
 **INFORMEDIX
          HOLDINGS, INC.**
   **INDEX
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  
 
 
  **Page(s)**Cover
                    and Index
                
                
                48Report
                    of Independent Registered Public Accounting Firm
                
                
                49Consolidated
                    Balance Sheets as of December 31, 2006 and 2005
                
                
                50Consolidated
                    Statements of Operations for the Years EndedDecember
                    31, 2006 and 2005
                
                
                51Consolidated
                    Statement of Changes in Stockholders’ Deficitfor
                    the Years ended December 31, 2006 and 2005
                
                
                52Consolidated
                    Statements of Cash Flows for the Years EndedDecember
                    31, 2006 and 2005
                
                
                53Notes
                    to Consolidated Financial Statements
                
                
                54
 
  ***InforMedix
              Holdings, Inc.***
 **Page
              48**
   
 
 **ITEM
          V-1****REPORT
          OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 
 
 
 
 
 To
          the
          Stockholders of
 InforMedix
          Holdings, Inc.
 Rockville,
          MD
 
 We
          have
          audited the accompanying consolidated balance sheets of InforMedix Holdings,
          Inc. (the “Company”) as of December 31, 2006 and 2005, and the related
          consolidated statements of operations, changes in stockholders’ deficit and cash
          flows for each of the years in the two-year period ended December 31, 2006.
          These consolidated financial statements are the responsibility of management.
          Our responsibility is to express an opinion on these consolidated financial
          statements based on our audits.
 
 We
          conducted our audits in accordance with standards established by the Public
          Company Accounting Oversight Board (United States). Those standards require
          that
          we plan and perform the audits to obtain reasonable assurance about whether
          the
          financial statements are free of material misstatement. The Company is
          not
          required to have, nor were we engaged to perform, an audit of its internal
          control over financial reporting. Our audits included consideration of
          internal
          control over financial reporting as a basis for designing audit procedures
          that
          are appropriate in the circumstances, but not for the purpose of expressing
          an
          opinion on the effectiveness of the Company’s internal control over financial
          reporting. Accordingly, we express no such opinion. An audit includes examining,
          on a test basis, evidence supporting the amounts and disclosures in the
          financial statements. An audit also includes assessing the accounting principles
          used and significant estimates made by management, as well as evaluating
          the
          overall financial statement presentation. We believe that our audits provide
          a
          reasonable basis for our opinion.
  
 In
          our
          opinion, the consolidated financial statements referred to above present
          fairly,
          in all material respects, the financial position of InforMedix Holdings,
          Inc.,
          as of December 31, 2006 and 2005, and the results of its operations, changes
          in
          stockholders’ deficit, and cash flows for the years then ended in conformity
          with accounting principles generally accepted in the United States of
          America.
 
 The
          accompanying consolidated financial statements have been prepared assuming
          the
          Company will continue as a going concern. As discussed in Note 11 to the
          consolidated financial statements, the Company has sustained operating
          losses
          and capital deficits that raise substantial doubt about its ability to
          continue
          as a going concern. Management’s operating and financing plans in regards to
          these matters are also discussed in Note 11. The consolidated financial
          statements do not include any adjustments that might result from the outcome
          of
          these uncertainties.
 
 
 **/S/
          BAGELL, JOSEPHS, LEVINE & COMPANY, L.L.C.**
 BAGELL,
          JOSEPHS, LEVINE & COMPANY, L.L.C.
 Gibbsboro,
          New Jersey
 
 April
          5,
          2007
  ***InforMedix
              Holdings, Inc.***
 **Page
              49**
  **INFORMEDIX
          HOLDINGS, INC.**
 **CONSOLIDATED
          BALANCE SHEETS**
 **DECEMBER
          31,** ****
 
 
 **2006**
                    
                    **2005****ASSETS:****Current
                        Assets -**Cash
                        and Cash Equivalents
                    
                    $
                    435,879
                    
                    $
                    15,432Accounts
                        Receivable
                    
                    
                    52,162
                    
                    
                    19,550Inventory
                    
                    
                    275,448
                    
                    
                    186,600Prepaid
                        Expenses and other Current Assets
                    
                    
                    50,240
                    
                    
                    5,910**Total
                        Current Assets**
                    
                    
                    813,730
                    
                    
                    227,492**Fixed
                        Assets, Net of Depreciation**
                    
                    
                    89,313
                    
                    
                    143,302**Other
                        Assets, Deferred Loan Costs - Net**
                    
                    
                    -
                    
                    
                    114,014**TOTAL
                        ASSETS**
                    
                    $
                    903,043
                    
                    $
                    484,808**LIABILITIES
                        & STOCKHOLDERS' DEFICIT:****Current
                        Liabilities -**Notes
                        Payable - Net
                    
                    $
                    100,000
                    
                    $
                    816,301Common
                        Stock to be Issued
                    
                    
                    2,045,885
                    
                    
                    -Accounts
                        Payable and Accrued Expenses
                    
                    
                    538,150
                    
                    
                    723,541**Total
                        Current Liabilities**
                    
                    
                    2,684,035
                    
                    
                    1,539,842**Stockholders'
                        Deficit-**Preferred
                        Stock , $0.001 Par Value; 4,500,000 shares authorized342.6771
                        and 0 shares issued and outstanding
                    
                    $
                    -
                    
                    $
                    -Common
                        Stock, $0.001 Par Value; 200,000,000 share authorized39,296,321
                        and 38,718,827 shares issued and outstanding
                    
                    
                    39,296
                    
                    
                    38,719Additional
                        Paid-in Capital
                    
                    
                    23,151,679
                    
                    
                    17,165,083Unearned
                        Compensation
                    
                    
                    -
                    
                    
                    (38,488
                    )Accumulated
                        Deficit
                    
                    
                    (24,971,967
                    )
                    
                    (18,220,348
                    )**Total
                        Stockholders' Deficit**
                    
                    
                    (1,780,992
                    )
                    
                    (1,055,034
                    )**TOTAL
                        LIABILITIES & STOCKHOLDERS' DEFICIT**
                    
                    $
                    903,043
                    
                    $
                    484,808***The
                        accompanying notes are an integral part of these consolidated
                        financial
                        statements.***
 
 
  ***InforMedix
              Holdings, Inc.***
 **Page
              50**
  **INFORMEDIX
          HOLDINGS, INC.**
 **CONSOLIDATED
          STATEMENTS OF OPERATIONS**
 **FOR
          THE YEARS ENDED DECEMBER 31,**
 **2006**
                    
                    **2005****REVENUES**
                    
                    $
                    102,721
                    
                    $
                    21,550**COST
                        OF GOODS SOLD**
                    
                    
                    65,604
                    
                    
                    12,613**GROSS
                        PROFIT**
                    
                    
                    37,117
                    
                    
                    8,937**OPERATING
                        EXPENSES**Compensation
                    
                    
                    898,569
                    
                    
                    643,689Product
                        Development*(formerly
                        Research and Development)*
                    
                    
                    474,934
                    
                    
                    431,316Selling,
                        General & Administrative Expenses
                    
                    
                    1,612,758
                    
                    
                    761,171Depreciation
                        & Amortization
                    
                    
                    159,064
                    
                    
                    63,724Total
                        Operating Expenses
                    
                    
                    3,145,325
                    
                    
                    1,899,900**LOSS
                        BEFORE OTHER INCOME/(EXPENSE)**
                    
                    
                    (3,108,208
                    )
                    
                    (1,890,963
                    )**OTHER
                        INCOME/(EXPENSE)**Interest
                        Income
                    
                    
                    8,339
                    
                    
                    4Interest
                        Expense
                    
                    
                    (224,979
                    )
                    
                    (94,660
                    )Total
                        Other Income/(Expense)
                    
                    
                    (216,640
                    )
                    
                    (94,656
                    )**LOSS
                        BEFORE PROVISION FOR TAXES**
                    
                    
                    (3,324,848
                    )
                    
                    (1,985,619
                    )**PROVISION
                        FOR TAXES**
                    
                    
                    -
                    
                    
                    -**LOSS
                        BEFORE ACCRETION OF PREFERRED****STOCK
                        DIVIDEND**
                    
                    
                    (3,324,848
                    )
                    
                    (1,985,619
                    )**ACCRETION
                        OF PREFERRED STOCK DIVIDENDS**
                    
                    
                    (3,426,771
                    )
                    
                    -**NET
                        LOSS APPLICABLE TO COMMON SHARES**
                    
                    $
                    (6,751,619
                    )
                    $
                    (1,985,619
                    )**Net
                        Loss per Basic and Diluted Shares**
                    
                    $
                    (0.17
                    )
                    $
                    (0.05
                    )**Weighted
                        Average Number of Common Shares Outstanding**
                    
                    
                    38,923,737
                    
                    
                    36,291,714***The
                        accompanying notes are an integral part of these consolidated
                        financial
                        statements.***
 
  ***InforMedix
              Holdings, Inc.***
 **Page
              51**
  **INFORMEDIX
          HOLDINGS, INC.**
 **CONSOLIDATED
          STATEMENTS OF CHANGES IN STOCKHOLDERS’** **DEFICIT**
 **FOR
          THE YEARS ENDED DECEMBER 31, 2006 AND 2005** ****
 
 
 
 **Additional****Preferred
                          Stock**
                      
                      **Common
                          Stock**
                      
                      **Paid-in**
                      
                      **Unearned**
                      
                      **Accumulated****Shares**
                      
                      **Amount**
                      
                      **Shares**
                      
                      **Amount**
                      
                      **Capital**
                      
                      **Compensation**
                      
                      **Deficit**
                      
                      **Total****Balance,
                          January 1, 2005**
                      
                      
                      -
                      
                      $
                      -
                      
                      
                      25,032,136
                      
                      $
                      25,032
                      
                      $
                      16,342,923
                      
                      $
                      -
                      
                      $
                      (16,234,729
                      )
                      $
                      133,226Shares
                          issued for services and compensation
                      
                      
                      -
                      
                      
                      -
                      
                      
                      511,883
                      
                      
                      512
                      
                      
                      103,891
                      
                      
                      -
                      
                      
                      -
                      
                      
                      104,403Shares
                          issued for cash and warrant exchange
                      
                      
                      -
                      
                      
                      -
                      
                      
                      12,424,808
                      
                      
                      12,425
                      
                      
                      471,429
                      
                      
                      -
                      
                      
                      -
                      
                      
                      483,854Shares
                          issued in connection with debt
                        financing
                      
                      
                      -
                      
                      
                      -
                      
                      
                      750,000
                      
                      
                      750
                      
                      
                      139,500
                      
                      
                      -
                      
                      
                      -
                      
                      
                      140,250Unearned
                          Compensation
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (38,488
                      )
                      
                      -
                      
                      
                      (38,488
                      )Warrants
                          Issued in connection with debt
                        financing
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      95,180
                      
                      
                      -
                      
                      
                      -
                      
                      
                      95,180Warrants
                          Issued in connection with beneficial
                        conversion
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      12,160
                      
                      
                      -
                      
                      
                      -
                      
                      
                      12,160Net
                          Loss for the year
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (1,985,619
                      )
                      
                      (1,985,619
                      )**Balance
                          , December 31, 2005**
                      
                      
                      -
                      
                      
                      -
                      
                      
                      38,718,827
                      
                      
                      38,719
                      
                      
                      17,165,083
                      
                      
                      (38,488
                      )
                      
                      (18,220,348
                      )
                      
                      (1,055,034
                      )Shares
                          issued in connection with Preferred
                        Stock
                          Offering
                      
                      
                      343
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      3,426,771
                      
                      
                      -
                      
                      
                      -
                      
                      
                      3,426,771Shares
                          issued for services
                      
                      
                      -
                      
                      
                      -
                      
                      
                      577,494
                      
                      
                      577
                      
                      
                      72,679
                      
                      
                      -
                      
                      
                      -
                      
                      
                      73,256Issuance
                          costs in connection with preferred
                        stock
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (939,625
                      )
                      
                      -
                      
                      
                      -
                      
                      
                      (939,625
                      )Accretion
                          related to Preferred Shares
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      3,426,771
                      
                      
                      -
                      
                      
                      (3,426,771
                      )
                      
                      -Vested
                          Compensation
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      38,488
                      
                      
                      -
                      
                      
                      38,488Net
                          loss for the year
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (3,324,848
                      )
                      
                      (3,324,848
                      )**Balance,
                          December 31, 2006**
                      
                      
                      343
                      
                      $
                      -
                      
                      
                      39,296,321
                      
                      $
                      39,296
                      
                      $
                      23,151,679
                      
                      $
                      -
                      
                      $
                      (24,971,967
                      )
                      $
                      (1,780,992
                      )
 
 ***The
                          accompanying notes are an integral part of these consolidated
                          financial
                          statements.***
  ***InforMedix
              Holdings, Inc.***
 **Page
              52**
  **INFORMEDIX
          HOLDINGS, INC.**
 **CONSOLIDATED
          STATEMENTS OF CASH FLOW**
 **FOR
          THE YEARS ENDED DECEMBER 31,**
 **2006**
                    
                    **2005****CASH
                        FLOWS FROM OPERATING ACTIVITIES -**Net
                        Loss
                    
                    $
                    (3,324,848
                    )
                    $
                    (1,985,619
                    )Adjustments
                        to Reconcile Net Loss to Net Cash used in Operations -Depreciation
                    
                    
                    45,050
                    
                    
                    21,106Amortization
                        of Discount on Notes Payable
                    
                    
                    189,699
                    
                    
                    57,141Amortization
                        of Deferred Loan Costs
                    
                    
                    114,014
                    
                    
                    42,618Amortization
                        of Unearned Compensation
                    
                    
                    38,488
                    
                    
                    -Preferred
                        Stock Issued for Interest
                    
                    
                    6,771
                    
                    
                    -Common
                        Stock to be Issued for interest
                    
                    
                    25,000
                    
                    
                    -Common
                        Stock to be Issued for Employee Compensation
                    
                    
                    86,725
                    
                    
                    -Common
                        Stock to be Issued for Services
                    
                    
                    129,535
                    
                    
                    104,403Common
                        Stock Issued for Services
                    
                    
                    73,256
                    
                    
                    -Changes
                        in Assets and Liabilities(Increase)
                        in Accounts Receivable
                    
                    
                    (32,612
                    )
                    
                    (550
                    )(Increase)
                        in Inventory
                    
                    
                    (79,909
                    )
                    
                    (39,730
                    )(Increase)
                        in Prepaid Expenses and Other Assets
                    
                    
                    (44,330
                    )
                    
                    19,420(Decrease)
                        increase in Accounts Payable and Accrued Expenses
                    
                    
                    (185,392
                    )
                    
                    383,143Total
                        Adjustments to Reconcile Loss to Net Cash
                    
                    
                    366,295
                    
                    
                    587,551Net
                        Cash (Used in) Operating Activities
                    
                    
                    (2,958,553
                    )
                    
                    (1,398,068
                    )**CASH
                        FLOWS FROM INVESTING ACTIVITIES -**Deferred
                        Loan Costs
                    
                    
                    -
                    
                    
                    (171,500
                    )Net
                        Cash (Used in) Investing Activities
                    
                    
                    -
                    
                    
                    (171,500
                    )**CASH
                        FLOWS FROM FINANCING ACTIVITIES -**Proceeds
                        from Preferred Stock Issuances
                    
                    
                    2,895,000
                    
                    
                    -Proceeds
                        from Common Stock to be Issued
                    
                    
                    865,000
                    
                    
                    483,854Proceeds
                        from Notes Payable - Other
                    
                    
                    100,000
                    
                    
                    1,006,000Payments
                        of Notes Payable
                    
                    
                    (481,000
                    )
                    
                    -Net
                        Cash Provided by Financing Activities
                    
                    
                    3,379,000
                    
                    
                    1,489,854**Net
                        Increase (Decrease) in Cash and Cash Equivalents**
                    
                    
                    420,447
                    
                    
                    (79,714
                    )**Cash
                        and Cash Equivalents - Beginning of Year**
                    
                    
                    15,432
                    
                    
                    95,146**Cash
                        and Cash Equivalents - End of Year**
                    
                    $
                    435,879
                    
                    $
                    15,432**Supplemental
                        Disclosure of Cash Flow Information -**Cash
                        Paid During the Year:Interest
                        Expense
                    
                    $
                    30,759
                    
                    $
                    -Income
                        Taxes
                    
                    $
                    -
                    
                    $
                    -**Supplemental
                        Disclosure of Non-Cash Investing and Financing Activities
                        -**Common
                        Stock issued or to be issued in connection with debt
                        financing
                    
                    $
                    -
                    
                    $
                    140,250Bridge
                        loan converted to preferred stock
                    
                    $
                    525,000
                    
                    $
                    -Issuance
                        costs in connection with preferred stock
                    
                    $
                    939,625
                    
                    $
                    -Accretion
                        of deemed preferred stock dividend against paid-in capital
                    
                    $
                    3,426,771
                    
                    $
                    -Reclassification
                        of inventory to fixed assets
                    
                    $
                    8,393
                    
                    $
                    61,920***The
                        accompanying notes are an integral part of these consolidated
                        financial
                        statements.***
 
  ***InforMedix
              Holdings, Inc.***
 **Page
              53**
  **NOTE
            1 -**  **ORGANIZATION
            AND BASIS OF PRESENTATION**
  InforMedix
            Holdings, Inc. (the “Company”) was organized under the laws of the State of
            Nevada on January 19, 2000 under the name Hunapu, Inc.
 
 On
            May 8,
            2003, InforMedix Acquisition Corp. (“Acquisition Corp.”) merged with and into
            Hunapu Inc. (“Hunapu”) pursuant to the Agreement and Plan of Reorganization
            dated February 7, 2003 (the “Agreement”). Hunapu was the surviving entity and
            subsequently changed its name to InforMedix Holdings, Inc.
 
 Pursuant
            to the Agreement, Hunapu acquired Acquisition Corp., subject to specified
            conditions and terms set forth in the Agreement. The consideration paid
            by
            Hunapu for its acquisition of Acquisition Corp. consisted of the issuance
            of
            7,451,000 shares of Hunapu common stock, inclusive of 112,500 shares
            that were
            issued to InforMedix debt holders in conversion of their notes to equity,
            for
            the net assets of Acquisition Corp. Simultaneously, with the acquisition
            of the
            issuance of the 7,451,000 shares of stock, Hunapu cancelled 5,545,000
            shares of
            stock issued to its chief executive officer.
 
 For
            accounting purposes, the transaction has been accounted for as a reverse
            acquisition, under the purchase method of accounting. Accordingly, Acquisition
            Corp. was treated as the continuing entity for accounting purposes. Following
            the merger, the sole officer and director of Hunapu resigned and was
            replaced
            with the officers and directors of Acquisition Corp.
 
 Pursuant
            to the Agreement, the Company’s stockholders approved the authorization of
            4,500,000 shares of preferred stock which may be issued from time to
            time by the
            Board of Directors without further shareholder approval.
 
 Acquisition
            Corp. was a Delaware holding company, incorporated on June 26, 2002,
            with a
            wholly owned subsidiary IFAC, Inc. (“IFAC”), for the purpose of acquiring
            InforMedix, Inc. (“InforMedix”). InforMedix was incorporated in the State of
            Delaware on January 27, 1997, for the purpose of developing the Med-eMonitor
            System TM .
 
 On
            August
            14, 2002, InforMedix merged with IFAC, pursuant to a Plan and Agreement
            of
            Merger dated August 14, 2002. According to the Agreement, InforMedix
            merged into
            IFAC in a share exchange agreement, and InforMedix became the surviving
            company
            post merger, and thus became the sole wholly- owned subsidiary of Acquisition
            Corp.
 
 InforMedix’s
            stockholders received 4.774 shares of Acquisition Corp. stock for each
            1 share
            of InforMedix’s stock pursuant to the terms of the merger. Acquisition Corp.
            conducted no other business operations other than the share exchange
            with
            InforMedix and subsequent merger into Hunapu. The initial merger into
            Acquisition Corp became effective on August 22, 2002. InforMedix remains
            the
            only operational segment of the Company through the date of this
            filing.
  ***InforMedix
                Holdings, Inc.***
 **Page
                54**
   Since
            its
            inception, InforMedix has devoted substantially all of its efforts to
            business
            planning, maintaining and expanding its patent portfolio, research and
            development, recruiting management and technical staff, acquiring operating
            assets, scientifically testing and proving the efficacy of its Med-eMonitor
            System through academic medical centers and raising capital. InforMedix
            has
            generated small amounts of revenue through sales of its Med-eMonitor
            System to
            academic research centers and commercial customers.
 
 
 
 
 **NOTE
            2 -**  **SUMMARY
            OF SIGNIFICANT ACCOUNTING POLICIES**
  ***Reclassification***
  Certain
            reclassifications have been made to the December 31, 2005 financial statements
            to conform to the 2006 presentation. These reclassifications had no effect
            on
            previously reported results of operations or accumulated deficit.
  ***Principles
            of Consolidation***
  The
            consolidated financial statements include the accounts of InforMedix
            Holdings
            and its subsidiary for the years ending December 31, 2006 and 2005. All
            significant inter-company accounts and transactions have been eliminated
            in
            consolidation.
  ***Use
            of Estimates***
  The
            preparation of consolidated financial statements in conformity with accounting
            principles generally accepted in the United States of America requires
            management to make estimates and assumptions that affect the reported
            amounts of
            assets and liabilities and disclosures of contingent assets and liabilities
            at
            the date of the condensed consolidated financial statements and the reported
            amounts of revenue and expense during the reporting period. Actual results
            could
            differ from those estimates.
 ***InforMedix
                  Holdings, Inc.***
 **Page
                  55**
 
 
 ***Cash
            and Cash Equivalents***
 
 The
            Company considers all highly liquid debt instruments and other short-term
            investments with an initial maturity of three months or less to be cash
            equivalents.
 
 Currently,
            the Company maintains cash and cash equivalent balances at several financial
            institutions, which are insured by the Federal Deposit Insurance Corporation
            up
            to $100,000. The Company had cash concentration risk of $271,129 and
            $0 as of
            December 31, 2006 and 2005, respectively
 
 ***Inventory***
 
 Inventory
            consists of component parts to be used in the manufacture of Med-eMonitor
            units
            and outsourced manufacturing costs for units that have not yet been placed
            into
            service. The Company values the inventory at the lower of cost (first-in,
            first-out basis) or market. Approximately 250 units have been placed
            in service
            and have been reclassified to fixed assets as of December 31, 2006, as
            the
            Company holds title to all units placed into service. As of December
            31, 2006,
            an additional 750 units were in the final stages of production.
 
 The
            Company states the inventory at the lower of cost (first-in, first-out
            basis) or
            market value.
  ***Fixed
            Assets***
  Fixed
            assets are stated at cost. Depreciation is computed using the straight-line
            method over the estimated useful lives of the assets; three years for
            computer
            software and equipment and finished Med-eMonitor units provisioned for
            demonstration purposes and/or customer rental programs, and five years
            for
            office furniture and equipment. Property and equipment held under capital
            leases
            and leasehold improvements are amortized over the shorter of the lease
            term or
            the estimated useful life of the related asset. When fixed assets are
            retired or
            otherwise disposed of, the cost and related accumulated depreciation
            are removed
            from the accounts and the resulting gain or loss is included in operations.
            Maintenance and repairs that do not materially add to the useful life
            are
            charged to operations as incurred.
   ***Intellectual
            Property Assets***
  Internal
            use software and web site development costs are capitalized in accordance
            with
            Statement of Position (SOP) No. 98-1, "Accounting for the Costs of Computer
            Software Developed or Obtained for Internal Use," and Emerging Issues
            Task Force
            (EITF) Issue No. 00-02, "Accounting for Web Site Development Costs."
            Qualifying
            costs incurred during the application development stage, which consist
            primarily
            of outside services and the Company’s consultants, are capitalized and amortized
            over the estimated useful life of the asset. All other costs are expensed
            as
            incurred. All costs for internal use software for the years ended December
            31,
            2006 and 2005 were expensed as Product Development (previously referred
            to as
            Research and Development).
 
  The
            Company owns 15 issued U.S. and Foreign and 14 pending U.S. and Foreign
            patents.
            A formal patent valuation appraisal was performed in 2002 by the Patent
&
License Exchange, Inc. The appraisal revealed that the Company’s patents were
            cited as prior art in 154 other issued patents. Two of the 15 issued
            patents may
            no longer be asserted as of December 31, 2006. Under present accounting
            principles generally accepted in the United States of America, and FASB
            142,
            management of the Company has not reflected the value of these patents
            on its
            consolidated balance sheet at December 31, 2006 and 2005 **.**
  
   ***InforMedix
                Holdings, Inc.***
 **Page
                56**
  
  **** ***Internal
            Use Software Costs***
  Internal
            use software and Web site development costs are capitalized in accordance
            with
            Statement of Position (SOP) No. 98-1, "Accounting for the Costs of Computer
            Software Developed or Obtained for Internal Use," and Emerging Issues
            Task Force
            (EITF) Issue No. 00-02, "Accounting for Web Site Development Costs."
            Qualifying
            costs incurred during the application development stage, which consist
            primarily
            of outside services and the Company’s consultants, are capitalized and amortized
            over the estimated useful life of the asset. All other costs are expensed
            as
            incurred. All costs for internal use software for the years ending December
            31,
            2006 and 2005 have been expensed as research and development.
  ***Start-up
            Costs***
  In
            accordance with the American Institute of Certified Public Accountants
            Statement
            of Position 98-5, *“Reporting
            on the Costs of Start-up Activities”* ,
            the
            Company expensed all costs incurred in connection with the start-up and
            organization of the Company.
 
 ***Revenue
            and Cost Recognition***
 
 The
            Company records its transactions under the accrual method of accounting
            whereby
            income gets recognized when the services are billed rather than when
            the fees
            are collected, and costs and expenses are recognized in the period they
            are
            incurred rather than when they are paid.
  The
            Company provides a medication adherence device known as a “Med-eMonitor,” which
            is placed in a patient’s proximity and which is programmed via a back-end Web
            services platform to both prompt and provide access to medications pursuant
            to
            each particular patient’s prescribed medication regimen.
  The
            Company is developing a number of different channel alternatives and
            transaction
            models for the delivery of its products and service offerings, including
            Med-eMonitor unit sales and rental programs. In all cases, the Company
            also
            provides Web platform installation and set-up services, training, and
            an ongoing
            Web-services monitoring services via its proprietary Med-eXpert
            platform.
  Revenues
            are derived as follows:
  a)
                  Front-end
                      training, set-up and installation support services are earned
                      at the time
                      the service is rendered.
 b)
                  Revenue
                      is recognized as a “Sales” transaction for any Med-eMonitor units wherein
                      the title legally transfers to the patient or an intermediary
                      service
                      provider. For the year ended December 31, 2006, the Company
                      recorded the
                      sale of 20 Med-eMonitor units.
 c)
                  Revenue
                      is recognized on a monthly basis as rental income, wherein
                      the Company
                      retains title to the Med-eMonitor units. As of December 31,
                      2006, the
                      Company had fifty (50) units under this transaction
                      model.
 d)
                  Revenue
                      is recognized on a monthly basis for a separate service fee
                      for the
                      back-end Med-eXpert hosting service, regardless of whether
                      the
                      Med-eMonitor units are deployed under the sales or rental transaction
                      model as aforementioned. This fee includes reimbursement for
                      the requisite
                      monitoring and connectivity service to the individual deployed
                      Med-eMonitor devices. For the year ended December 31, 2006,
                      the company
                      had five (5) such hosting platforms deployed for revenue producing
                      purposes.
 e)
                  Revenues
                      from government grants are recognized at the time the services
                      and/or
                      provisioned equipment are rendered or provided
                      respectively.
 
 Out-of
            pocket costs and directly allocable internal costs incurred in producing
            the
            above revenues are allocated to “Costs of producing revenue” at the time the
            corresponding revenues are recognized. Until such time as Med-eMonitor
            units
            included in Fixed Assets are deployed in rental programs with sufficient
            scale,
            the related deprecation charges are recorded as period depreciation operating
            expense.
   ***InforMedix
                Holdings, Inc.***
 **Page
                57**
  
 ***Product
            Development***
 Product
            development costs are related primarily to the Company obtaining its
            15 issued
            U.S. and Foreign and 14 pending U.S. and Foreign patents and patent valuation
            analysis, developing early prototypes and beta products of its Med-e
            Monitor
            device, development of first, second and third generation databases to
            monitor
            patient data and remotely program the Med-eMonitor devices, communications
            connectivity between the devices and the databases via the Internet,
            continuing
            improvement of the firmware in the device and Med-eXpert software to
            better meet
            customer needs, and Website development. Research and development costs
            are
            expensed as incurred.
  ***Income
            Taxes***
  The
            income tax benefit is computed on the pretax loss based on the current
            tax law.
            Deferred income taxes are recognized for the tax consequences in future
            years of
            differences between the tax basis of assets and liabilities and their
            financial
            reporting amounts at each year-end based on enacted tax laws and statutory
            tax
            rates. No benefit is reflected for the years ended December 31, 2006
            and
            2005.
  ***Advertising***
  The
            cost
            of advertising is expensed as incurred. Advertising costs were $10,839
            and
            $11,754 for the years ended December 31, 2006 and 2005,
            respectively.
  ***(Loss)
            Per Share of Common Stock***
  Historical
            net (loss) per common share is computed using the weighted average number
            of
            common shares outstanding. Diluted earnings per share (EPS) include additional
            dilution from common stock equivalents, such as stock issuable pursuant
            to the
            exercise of stock options and warrants. Common stock equivalents were
            not
            included in the computation of diluted earnings per share at December
            31, 2006
            and 2005 when the Company reported a loss because to do so would be
            anti-dilutive. The Company has incurred significant losses since its
            inception
            to fund its research and development of its Med-eMonitor Systems, including
            the
            development of its intellectual property portfolio; and travel activities
            and
            attendance at trade shows to create awareness of the product to pre-sell
            the
            Med-eMonitor.
 
 The
            following is a reconciliation of the computation for basic and diluted
            EPS:
 
 **Dec.
                      31, 2006**
                  
                  **Dec.
                      31, 2005**Net
                      Loss (including Accretion Adjustments)
                  
                  $
                  (6,751,619
                  )
                  $
                  (1,985,619
                  )Weighted
                      Average Common Shares Outstanding (Basic)
                  
                  
                  38,923,737
                  
                  
                  36,291,714Weighted
                      Average Common Stock Equivalents:.
                      Common Stock to be Issued
                  
                  
                  -
                  
                  
                  -.
                      Stock Options
                  
                  
                  -
                  
                  
                  -.
                      Warrants
                  
                  
                  -
                  
                  
                  -Weighted
                      Average Common Shares Outstanding
                  
                  
                  38,923,737
                  
                  
                  36,291,714Basic
                      Earnings per Share
                  
                  $
                  (0.17
                  )
                  $
                  (0.05
                  )Diluted
                      Earnings per Share
                  
                  $
                  (0.17
                  )
                  $
                  (0.05
                  )
 
 The
            Company had 65,658,076 and 56,930,503 common stock equivalents available as
            of December 31, 2006 and 2005, respectively.
  ***InforMedix
                Holdings, Inc.***
 **Page
                58**
  ***Fair
            Value of Financial Instruments***
  The
            carrying amount reported in the consolidated balance sheet for cash and
            cash
            equivalents, accounts payable and accrued expenses approximate fair value
            because of the immediate or short-term maturity of these financial instruments.
            The carrying amount reported for notes payable approximates fair value
            because,
            in general, the interest on the underlying instruments fluctuates with
            market
            rates.
 
 ***Stock-Based
            Compensation***
 
 Effective
            January 1, 2006, the Company adopted the provisions of Financial Accounting
            Standards Board Statement of Financial Accounting Standard (“SFAS”) No. 123(R),
“Share-Based Payments,” which establishes the accounting for employee
            stock-based awards. Under the provisions of SFAS No.123(R), stock-based
            compensation is measured at the grant date, based on the calculated fair
            value
            of the award, and is recognized as an expense over the requisite employee
            service period (generally the vesting period of the grant). The Company
            adopted
            SFAS No. 123(R) using the modified prospective method and, as a result,
            periods
            prior to January 1, 2006 have not been restated. The Company recognized
            stock-based compensation for awards issued under the Company’s stock option
            plans in the “Selling, general and administrative expenses” line item of the
            Consolidated Statement of Operations. Additionally, no modifications
            were made
            to outstanding stock options prior to the adoption of SFAS No. 123(R),
            and no
            cumulative adjustments were recorded in the Company’s financial
            statements.
 
 Prior
            to
            January 1, 2006, the Company accounted for stock-based compensation in
            accordance with provisions of Accounting Principles Board Opinion No.
            25 (“APB
            No. 25”), “Accounting for Stock Issued to Employees,” and related
            interpretations. Under APB No. 25, compensation cost was recognized based
            on the
            difference, if any, on the date of grant between the fair value of the
            Company’s
            stock and the amount an employee must pay to acquire the stock. In certain
            cases
            the Company granted stock options at an exercise price less than the
            market
            price on the date of grant, and accordingly compensation expense was
            recognized
            for the stock option grants in periods prior to the adoption of SFAS
            No.
            123(R).
 
 SFAS
            No.
            123(R) requires disclosure of pro-forma information for periods prior
            to the
            adoption. The pro-forma disclosures are based on the fair value of awards
            at the
            grant date, amortized to expense over the service period. The following
            table
            illustrates the effect on net loss and earnings per share as if the Company
            had
            applied the fair value recognition provisions of SFAS No. 123, “Accounting for
            Stock-Based Compensation,” for the twelve months ending December 31, 2006 prior
            to the adoption of SFAS No. 123(R), and the actual effect on net income
            and
            earnings per share for the period after the adoption of SFAS No.
            123(R).
 
 **2006**
                  
                  **2005**Applicable
                      to Common Shares:Net
                      Loss, as reported
                  
                  $
                  (6,751,619
                  )
                  $
                  (1,985,619
                  )Add
                      Stock Base Compensation Expense included in reported Net
                      Loss
                  
                  
                  0
                  
                  
                  (278,439
                  )Less
                      total stock-base employee compensation expense determined under
                    the
                      fair-value based method for all awards
                  
                  
                  (0
                  )
                  
                  0Pto-forma
                      Net Loss
                  
                  $
                  (6,751,619
                  )
                  $
                  (2,264,058
                  )Net
                      Loss per common share (Basic and Diluted):Reported
                  
                  $
                  (0.17
                  )
                  $
                  (0.05
                  )Pro
                      Forma
                  
                  $
                  (0.17
                  )
                  $
                  (0.06
                  )
 
 
 The
            Company measures compensation expense for its non-employee stock-based
            compensation under the Financial Accounting Standards Board (FASB) Emerging
            Issues Task Force (EITF) Issue No. 96-18, “ *Accounting
            for Equity Instruments that are Issued to Other Than Employees for Acquiring,
            or
            in Conjunction with Selling, Goods or Services* ”.
            The
            fair value of the option issued is used to measure the transaction, as
            this is
            more reliable than the fair value of the services received. The fair
            value is
            measured at the value of the Company’s common stock on the date that the
            commitment for performance by the counterparty has been reached or the
            counterparty’s performance is complete. The fair value of the equity instrument
            is charged directly to compensation expense (or to prepaid expense if
            the
            underlying services are to be performed over a fixed period, and than
            amortized
            into expense over that period) and credited to additional paid-in
            capital.
  ***InforMedix
                Holdings, Inc.***
 **Page
                59**
  
 
 ***Discount
            on Notes Payable***
 
 A
            discount on notes payable was recorded by the Company with respect to
            various
            promissory notes issued during the year ended December 31, 2005. The
            amount of
            the discount was calculated by subtracting the fair market value of the
            warrants
            or shares of common stock included in the units issued pursuant to the
            terms of
            the private placement. The discount is being amortized over the life
            of the
            respective promissory notes and recorded as interest expense, but the
            balance of
            which is accelerated in the event respective notes are converted to equity
            and/or paid off in advance of the expected life of the promissory note.
            As of
            December 31, 2006 all previously recorded Discounts on Notes Payable
            were fully
            amortized.
 
 ***Deferred
            Loan Costs***
 
 Deferred
            loan costs are comprised of expenses incurred in connection with the
            issuance of
            promissory notes and include investment banking and legal fees. The discount
            is
            being amortized over the life of the respective promissory notes and
            recorded as
            depreciation and amortization, but the balance of which is accelerated
            in the
            event respective notes are converted to equity and/or paid off in advance
            of the
            expected life of the promissory note. As of December 31, 2006 all deferred
            loan
            costs were fully amortized.
 
 ***Common
            Stock to be Issued***
 
 In
            conformance with GAAP accounting procedures, the Company recognizes Common
            Stock
            to be Issued as a liability until the shares are issued. The amount represents
            the value assigned to stock which had been requested, but was not issued
            as of
            December 31, 2006. For the year ended December 31, 2006, a total of $2,045,885
            of Common Stock to be Issued was recognized.
 
 ***Recent
            Accounting Pronouncements***
 
 In
            November 2004, the FASB issued Financial Accounting Standards No. 151
            (FAS 151),
“ *Inventory
            Costs - an amendment of ARB No. 43, Chapter 4* ”.
            FASB
            151 clarifies the accounting for abnormal amounts of idle facility expense,
            freight, handling costs and spoilage. In addition, FASB 151 requires
            companies
            to base the allocation of fixed production overhead to the costs of conversion
            on the normal capacity of production facilities. FASB 151 did not impact
            the
            Company results and financial statements.
  In
            May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error
            Corrections.” SFAS No. 154 replaces Accounting Principles Board (“APB”)
            Opinion No. 20, “Accounting Changes” and SFAS No. 3, “Reporting
            Accounting Changes in Interim Financial Statements.” SFAS No. 154 requires
            retrospective application to prior periods’ financial statements of a voluntary
            change in accounting principle unless it is impracticable. APB No. 20
            previously required that most voluntary changes in accounting principle
            be
            recognized by including the cumulative effect of changing to the new
            accounting
            principle in net income in the period of the change. SFAS No. 154 is
            effective for accounting changes and corrections of errors made in fiscal
            years
            beginning after December 15, 2005. The adoption of SFAS No. 154 did
            not have a material impact on the Company’s 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.” SFAS No. 155 resolves issues addressed in SFAS No. 133
            Implementation Issue No. D1, “Application of Statement 133 to Beneficial
            Interests in Securitized Financial Assets,” and permits fair value
            re-measurement for any hybrid financial instrument that contains an embedded
            derivative that otherwise would require bifurcation, clarifies which
            interest-only strips and principal-only strips are not subject to the
            requirements of SFAS No. 133, establishes a requirement to evaluate
            interests in securitized financial assets to identify interests that
            are
            freestanding derivatives or that are hybrid financial instruments that
            contain
            an embedded derivative requiring bifurcation, clarifies that concentrations
            of
            credit risk in the form of subordination are not embedded derivatives
            and amends
            SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose
            entity from holding a derivative financial instrument that pertains to
            a
            beneficial interest other than another derivative financial instrument.
            SFAS
            No. 155 is effective for all financial instruments acquired or issued after
            the beginning of the first fiscal year that begins after September 15,
            2006. The Company is currently evaluating the effect the adoption of
            SFAS
            No. 155 will have on its financial position, results of operations and cash
            flows.
   ***InforMedix
                Holdings, Inc.***
 **Page
                60**
  
  In
            March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of
            Financial Assets, an amendment of FASB Statement No. 140.” SFAS
            No. 156 requires an entity to recognize a servicing asset or liability each
            time it undertakes an obligation to service a financial asset by entering
            into a
            servicing contract under a transfer of the servicer’s financial assets that
            meets the requirements for sale accounting, a transfer of the servicer’s
            financial assets to a qualified special-purpose entity in a guaranteed
            mortgage
            securitization in which the transferor retains all of the resulting securities
            and classifies them as either available-for-sale or trading securities
            in
            accordance with SFAS No. 115, “Accounting for Certain Investments in Debt
            and Equity Securities” and an acquisition or assumption of an obligation to
            service a financial asset that does not relate to financial assets of
            the
            servicer or its consolidated affiliates. Additionally, SFAS No. 156
            requires all separately recognized servicing assets and servicing liabilities
            to
            be initially measured at fair value, permits an entity to choose either
            the use
            of an amortization or fair value method for subsequent measurements,
            permits at
            initial adoption a one-time reclassification of available-for-sale securities
            to
            trading securities by entities with recognized servicing rights and requires
            separate presentation of servicing assets and liabilities subsequently
            measured
            at fair value and additional disclosures for all separately recognized
            servicing
            assets and liabilities. SFAS No. 156 is effective for transactions entered
            into after the beginning of the first fiscal year that begins after
            September 15, 2006. The Company is currently evaluating the effect the
            adoption of SFAS No. 156 will have on its financial position and results of
            operations.
  In
            September 2006, the FASB issued Statement of Financial Accounting Standards
            No. 157, *Fair
            Value Measurements* ,(“FAS
            157”). This Standard defines fair value, establishes a framework for measuring
            fair value in generally accepted accounting principles and expands disclosures
            about fair value measurements. FAS 157 is effective for financial statements
            issued for fiscal years beginning after November 15, 2007 and interim
            periods within those fiscal years. The adoption of FAS 157 is not expected
            to
            have a material impact on the Company’s financial position, results of
            operations or cash flows.
 
 The
            FASB
            also issued in September 2006 Statement of Financial Accounting Standards
            No. 158, *Employers’
            Accounting for Defined Benefit Pension and Other Postretirement Plans
— an
            amendment of FASB Statement No. 87, 88, 106 and 132(R),* (“FAS
            158”) *.* This
            Standard requires recognition of the funded status of a benefit plan
            in the
            statement of financial position. The Standard also requires recognition
            in other
            comprehensive income certain gains and losses that arise during the period
            but
            are deferred under pension accounting rules, as well as modifies the
            timing of
            reporting and adds certain disclosures. FAS 158 provides recognition
            and
            disclosure elements to be effective as of the end of the fiscal year
            after
            December 15, 2006 and measurement elements to be effective for fiscal years
            ending after December 15, 2008. The Company has not yet analyzed the impact
            FAS 158 will have on its financial condition, results of operations,
            cash flows
            or disclosures.
  
 **NOTE
            3 - FIXED ASSETS**
 Fixed
            assets consist of the following at December 31, 2006 and 2005:
   ***InforMedix
                Holdings, Inc.***
 **Page
                61**
   
  
 **2006**
                  
                  **2005****Office
                      and Manufacturing Equipment**
                  
                  $
                  38,457
                  
                  $
                  38,457**Med-eMonitors**
                  
                  
                  94,260
                  
                  
                  103,200**Computer
                      Equipment and Software**
                  
                  
                  97,830
                  
                  
                  97,830**Equipment
                      under capital leases**
                  
                  
                  45,622
                  
                  
                  45,621**Sub-total**
                  
                  
                  276,169
                  
                  
                  285,108**Less:
                      Accumulated Depreciation**
                  
                  
                  186,856
                  
                  
                  141,806**Net
                      Book Value**
                  
                  $
                  89,313
                  
                  $
                  143,302
  
 A
            total
            of 20 Med-eMonitors were transferred at a cost of $8,939 from Fixed Assets
            to
            Finished Goods Inventory and sold in the year ended December 31, 2006.
            Depreciation expense for the years ended December 31, 2006 and 2005 was
            $45,050
            and $21,106, respectively.
  Med-eMonitor
            Company-Owned Units consists of the original 250 units previously manufactured
            for the Company by its third party contract manufacturer in 2002 and
            2003. The
            average original cost for this group of units is $413, and the units
            are being
            depreciated on a straight line basis over 3 years.
  
 
 **NOTE
            4 - NOTES PAYABLE - OTHER**
 ***Notes
            Payable - dated June 6, June 18 and June 28, 2005***
 
 On
            June
            6, June 18, and June 28, 2005, the Company entered into short-term promissory
            notes payable (“Bridge Notes”) with various individuals pursuant to a private
            offering arranged by the Company’s then placement agent Meyers Associates, L.P.
            (“Meyers”). These individuals loaned $230,000 collectively to the Company
            evidenced by notes that were to mature on June 30, 2006. The notes accrued
            interest at a rate of 10% annually. In addition, the investors received
            warrants
            exercisable for 230,000 shares at $.15 per share. As of December 31,
            2005, the
            outstanding balance on these Notes was $230,000.
 
 During
            the year ended December 31, 2006, notes totaling $100,000, together with
            $7,932
            of accrued interest thereon were repaid. The remaining notes totaling
            $130,000
            (principal amounts only) were converted into 13.0 shares of the Company’s
            preferred convertible stock, pursuant to a confidential Private Placement
            Memorandum dated December 5, 2005, as supplemented. As of December 31,
            2006,
            these notes were either repaid or converted into the Company’s preferred
            convertible stock.
 
 ***Note
            Payable - dated July 26, 2005***
 
 On
            July
            26, 2005, the Company borrowed an aggregate $6,000 from the six Directors
            on the
            Company’s Board of Directors. The notes accrued interest at a rate of 10%
            annually. In addition, the Directors will receive warrants exercisable
            for an
            aggregate of 6,000 shares at $.15 per share. As of December 31, 2005,
            the
            outstanding balance on this Note was $6,000.
 
 During
            the year ended December 31, 2006, all notes totaling $6,000, together
            with $508
            of accrued interest thereon, were repaid. As of December 31, 2006 this
            note was
            repaid.
 
 ***Note
            Payable - dated August 5, 2005***
 
 On
            August
            5, 2005, the Company entered into a promissory note and warrant agreement
            with
            an existing shareholder pursuant to a private placement offering made
            directly
            by the Company without the assistance of its placement agent. The accredited
            investor loaned $175,000 to the Company pursuant to a note scheduled
            to mature
            on August 5, 2006. The note accrued interest at a rate of 10% per annum.
            In
            addition, the investor received warrants exercisable for 175,000 shares
            at $.15
            per share. As of December 31, 2005, the outstanding balance on this note
            was
            $175,000
  ***InforMedix
                Holdings, Inc.***
 **Page
                62**
  
 
 The
            Note,
            which was secured with a pledge of accounts receivable, inventory, and
            common
            stock, was repaid, together with accrued interest of $8,507, during the
            year
            ended December 31, 2006. As of December 31, 2006 this note was
            repaid.
 
 ***Notes
            Payable - dated August 28 and 24, 2005***
 
 On
            August
            18, 2005, August 24, 2005, and September 9, 2005, the Company closed
            on three
            separate promissory note and stock purchase agreements with existing
            shareholders pursuant to a private placement offering arranged by Meyers.
            The
            investors loaned $125,000, $75,000 and $50,000 to the Company pursuant
            to
            promissory notes maturing on August 18, 2006, August 24, 2006, and September
            9,
            2006, respectively. The notes accrued interest at a rate of 10% per annum.
            In
            addition, Meyers was issued 375,000, 225,000, and 150,000 shares of common
            stock
            as “replacement shares” to reimburse Meyers at 150% of the registered shares it
            transferred to the investors pursuant to the stock purchase agreements.
            As of
            December 31, 2005, the outstanding balance on these Notes was $250,000.
 
 During
            the year ended December 31, 2006, two of the notes of totaling $175,000
            together
            with accrued interest thereon totaling $11,316 were repaid. The remaining
            note
            in the amount of $75,000 was converted into 7.5 shares of the Company’s
            preferred convertible stock, pursuant to a confidential Private Placement
            Memorandum dated December 5, 2005, as supplemented (see Note 8). As of
            December
            31, 2006, these notes were either repaid or converted into the Company’s
            preferred convertible stock
 
 ***Notes
            Payable - dated October 5, 13, and 27, 2005***
 
 On
            October 5, 2005, October 13, 2005 and October 27, 2005, the Company entered
            into
            various short term promissory notes payable with various individuals
            pursuant to
            a private offering arranged by the Company’s new placement agent Dawson James
            Securities, Inc. These individuals loaned $320,000 collectively to the
            Company
            in notes that mature on October 5, 2006, October 13, 2006 and October
            27, 2006,
            respectively. The notes accrued interest at a rate of 10% per annum.
            In
            addition, the investors received warrants exercisable for an aggregate
            of
            320,000 common shares at $.15 per share. As of December 31, 2005, the
            outstanding balance on these Notes was $320,000.
 
 During
            the year ended December 31, 2006, these notes totaling $320,000 (principal
            only)
            were converted into 32.0 shares of the Company’s preferred convertible stock,
            pursuant to a confidential Private Placement Memorandum dated December
            5, 2005,
            as supplemented (see Note 8). As of December 31, 2006, these notes, were
            converted into the Company’s preferred convertible stock.
 
 ***Notes
            Payable - dated December 21, 2005***
 
 On
            December 21, 2005, the Company borrowed an aggregate of $25,000 from
            two of its
            six Directors on the Company’s Board of Directors. The notes accrue interest at
            a rate of 10% per annum. In addition, the Directors will receive warrants
            exercisable for an aggregate of 25,000 common shares at $.15 per share.
            As of
            December 31, 2005, the outstanding balance on these Notes was $25,000.
  During
            the year ended December 31, 2006, both notes aggregating $25,000, together
            with
            accrued interest thereon of $422, were repaid. As of December 31, 2006
            these
            Notes were repaid.
 
 Interest
            expense accrued on the face value of the notes converted into the Company’s
            Preferred Convertible Stock was $31,771 and $-0- for the year ended December
            31,
            2006 and 2005. Of this amount, $6,771 was converted into additional Preferred
            shares (i.e. 6.771 shares) and the remaining $25,000 was converted into
            shares
            after December 31, 2006
  ***InforMedix
                Holdings, Inc.***
 **Page
                63**
  
 An
            additional amount of discount on notes payable was also recognized as
            interest
            expense amounting to $183,129 and $5,970 for the year ended December
            31, 2006
            and 2005, respectively. As of December 31, 2006 this discount was fully
            amortized.
  Certain
            loan costs have previously been deferred in connection with the above-referenced
            notes payable. An additional amount of amortization on deferred loan
            costs was
            recognized amounting to $114,014 and $110,842 for the year ended December
            31,
            2006 and 2005, respectively. At December 31, 2006, the deferred loan
            costs were
            totally amortized.
   In
            summary, for the year ended December 31, 2006, the above described notes
            payable
            , which were unpaid at December 31, 2005, totaled $1,006,000 face value
            in the
            aggregate ($816,301, net of then unamortized discount on notes payable
            at that
            date), have been dispensed with as follows:
  a)
                  Notes
                      payable totaling $525,000 face value were converted into 52.5.0
                      shares of
                      the Company’s preferred convertible stock, pursuant to a confidential
                      Private Placement Memorandum dated December 5, 2005, as supplemented
                      (see
                      above), and
 b)
                  Notes
                      payable totaling $481,000 face value and interest earned were
                      repaid;
                      and
 
 On
            November 13, 2006, the Company entered into a $100,000 short-term promissory
            note and warrant agreement with an existing stockholder. The terms of
            the note
            include a 10% per annum interest rate payable at the end of the 90 day
            term
            along with the delivery of 10,000 warrants at an exercise price of $0.15.
            The
            term of the note was extended on February 12, 2007 to May 12, 2007. As
            of
            December 31, 2006, this Note, which is due in 2007, was unpaid with a
            balance of
            $100,000.
 
  **NOTE
            5 - OBLIGATIONS UNDER CAPITAL LEASE(S)**
  
 The
            Company is the lessee of computer and other equipment under capital leases.
            These leases are direct obligations of the Company.
 
 
 
 **NOTE
            6 - OPERATING LEASE**
 
 Effective
            March 2004, the Company signed a one year lease agreement for $2,408
            per month.
            The Company continues to make lease payments on a month to month basis
            at a rate
            of $2,408 per month.
 
 
  **NOTE
            7 - PROVISION FOR INCOME TAXES**
  Deferred
            income taxes will be determined using the liability method for the temporary
            differences between the financial reporting basis and income tax basis
            of the
            Company’s assets and liabilities. Deferred income taxes will be measured based
            on the tax rates expected to be in effect when the temporary differences
            are
            included in the Company’s consolidated tax return. Deferred tax assets and
            liabilities are recognized based on anticipated future tax consequences
            attributable to differences between financial statement carrying amounts
            of
            assets and liabilities and their respective tax bases.
 
 At
            December 31, 2006, deferred tax assets consisted of the following:
 
 **2006**
                  
                  **2005****Deferred
                      Tax Assets**
                  
                  $
                  7,325,366
                  
                  $
                  6,195,000**Less:
                      Valuation Allowance**
                  
                  
                  (7,325,366
                  )
                  
                  (6,195,000
                  )**Net
                      Deferred Tax Assets**
                  
                  $
                  0
                  
                  $
                  0
   ***InforMedix
                Holdings, Inc.***
 **Page
                64**
  At
            December 31, 2006, the Company had accumulated deficits in the amount
            of
            $21,545,196 (net of Accretion related to the Preferred Stock offering
            of 2006),
            available to offset future taxable income through 2024. The Company established
            valuation allowances equal to the full amount of the deferred tax assets
            due to
            the uncertainty of the utilization of the operating losses in future
            periods.
 
  
 **NOTE
            8 - EQUITY FINANCING**
  
 For
            the
            year ended December 31, 2005, the Company issued 7,731,802 shares of
            common
            stock pursuant to PPM2, 4,542,199 shares pursuant to PPM3, 511,883 shares
            to
            vendors and consultants in exchange for services rendered, 750,000 shares
            in
            connection with debt financings, and 150,807 to three independent Board
            Members pursuant to the terms in PPM2.
 
 During
            the year ended December 31, 2006, and pursuant to a confidential Private
            Placement Memorandum dated December 5, 2005 (“PPM4”), as supplemented, the
            Company completed the sale of an aggregate of $3,426,771, consisting
            of 289.5
            Preferred shares (representing $2,895,000 principal amount in cash payments)
            plus 52.5 Preferred Shares (representing $525,000 principal amount of
            cancelled
            notes payable), and an additional 0.6771 shares for interest expenses.
            An
            additional $25,000 of interest expense related to the cancelled notes
            payable
            converted into shares in this offering was accrued as of December 31,
            2006.
 
 Each
            Preferred Share (or Unit under this offering) consisted of one share
            of Series A
            Preferred Stock along with certain Series A-1 Warrants and Series A-2
            Warrants.
            Each share of Series A Preferred Stock had a $10,000 Stated Value and
            an 8%
            dividend payable annually in cash or common stock, and was initially
            convertible
            into 62,500 shares of Common Stock at $.16 per share (the “Conversion Price”) at
            the option of the shareholder and, subject to an effective Registration
            Statement, automatically convertible by the Company into Common Stock
            at the
            Conversion Price, if the Common Stock exceeds 200% of the Conversion
            Price for
            20 consecutive trading days.
 
 Each
            Unit
            also includes one Series A-1 Warrant exercisable for 31,250 shares of
            Common
            Stock exercisable at $.24 per share and one Series A-2 Warrant exercisable
            for
            31,250 shares at $.32 per share (collectively, the Warrants”). The Warrants
            expire on April 30, 2011 and are exercisable, in whole or in part, through
            cash
            only (not cashless) exercises. The Warrants are subject to redemption
            commencing
            12 months after the effective date of a registration statement covering
            the
            underlying shares of common stock provided there is a current registration
            statement and the average closing bid price has been at least 200% of
            the
            Exercise Price for 10 consecutive trading days.
 
 If
            the
            Company completes an equity offering of less than $5 million at a price
            lower
            than the Conversion Price, the investors may exchange their Series A
            Preferred
            Stock at the stated value for the securities issued in the subsequent
            offering.
 
 On
            October 27, 2006, the Company offered investors involved in the Preferred
            Stock
            offering the opportunity to exchange their interest rights and Series
            A and
            Series B warrants in exchange for cashless shares on a 1.5 for 10 ratio.
            This
            Exchange Agreement was closed on February 12, 2007, with a 96.4% conversion
            ratio. As a result as of February 12, 2007, only 12.3 shares of Preferred
            Stock
            remained outstanding.
 
 The
            placement agent received 10% sales commissions on the 289.5 Preferred
            shares
            sold for $2,895,000 cash as described above, or $289,500, and an additional
            3%
            non-accountable expense allowance payment of $86,850 on these same Units,
            both
            of which were accounted for as issuance costs.
 
 The
            placement agent earned 4,523,438 shares of common stock as additional
            issuance
            cost for the cash sale of the 289.5 Preferred Shares. These shares were
            not
            issued as of December 31, 2006, and were included in the Common Stock
            to be
            Issued reported as of December 31, 2006 as a liability of the Company,
            with a
            value of $452,344. Upon the issuance in January, the value will be moved
            from a
            current liability to equity. .
  ***InforMedix
                Holdings, Inc.***
 **Page
                65**
  
 
 The
            Company concluded its money raising activities pursuant to the confidential
            private placement memorandum dated December 5, 2005 with a closing on
            $70,000 of
            cash and $81,771 of converted notes/earned interest on August 25,
            2006.
 
 In
            October 2006, the Company retained Basic Investors, Inc as the placement
            agent
            for a new Private Placement agreement (“PPM5”). Based on the terms of the
            offering released on October 16, 2006, the Minimum funding sought would
            be in
            the amount of $500,000, with the Maximum Offering set at $2,000,000.
            The
            offering also allows for an over subscription of an additional 25% (i.e.
            $500,000) over the Maximum Offering, or up to $2,500,000 of total
            funding.
 
 On
            October 27, 2006, the Company issued an Exchange offering to the holders
            of the
            Series A Preferred Stock and related Series A-1 and Series A-2 warrants
            for the
            purpose of reducing the number of outstanding warrants. The determination
            of the
            exchange structure was reviewed with several brokers engaged in the PPM4
            offering. With a reduced number of Series A-1 and Series A-2 outstanding
            warrants, the Company will be enabled to increase the potential funding
            available under the PPM5 offering issued on October 17, 2006.
 
 The
            terms
            of the Exchange Agreement provide for a total exchange of 115,000 shares
            of
            common stock for each share ($10,000 initial investment) of Preferred
            Series A
            Stock and accompanying Series A-1 and Series A-2 warrants.
 
 
 
 **NOTE
            9 - STOCKHOLDERS’ EQUITY**
  ***Common
            Stock***
  On
            December 7, 2005, the Company’s Board of Directors approved a resolution to
            increase the number of authorized common shares from 80,000,000 to 200,000,000
            effective as of March 14, 2006, when it was approved by shareholder vote.
  For
            the
            year ended December 31 2005, the Company issued 7,731,802 shares pursuant
            to
            PPM2, 4,542,199 shares pursuant to PPM3, 511,883 shares to consultants
            and
            vendors in exchange for services rendered, 750,000 shares in connection
            with
            debt financings and 150,807 shares to three independent Board Members
            pursuant
            to the terms in PPM2.
 
 For
            the
            year ended December 31, 2006, the Company issued the following shares
            of common
            stock in exchange for services as indicated:
 1)
                  500,000
                      shares for investment counseling services, valued at
                      $60,000,
 2)
                  24,494
                      shares to a vendor to satisfy $5,216 in services related to
                      research and
                      development activities,
 3)
                  50,000
                      shares to the consulting company of a former director in settlement
                      of
                      prior commitment obligations valued at $7,500,
                      and
 4)
                  3,000
                      shares to the chairman of the Company’s Scientific Advisory Board in
                      satisfaction of services valued at
                      $540.
 
 For
            the
            year ended December 31, 2006, the Company is obligated to issue a total
            of
            4,523,438 shares representing additional consideration to the Placement
            Agent as
            related to confidential Private Placement Memorandum dated December 5,
            2005,
            which is valued at $939,625. The other commitments to issue stock involve
            the
            obligations to issue 8,650,000 shares for sales of shares from PPM5,
            1,000,000
            shares to the placement agent involved in PPM5 for consulting services,
            86,725
            shares to employees for achievement and performance bonuses, 32,000 shares
            outside vendors in lieu of cash payments, and 7,500 shares owed to a
            member of
            the Company’s Scientific Advisory Board for past service. In total the value of
            these shares is carried at $1,558,604.
  ***InforMedix
                Holdings, Inc.***
 **Page
                66**
  
 
 ***Preferred
            Stock***
 
 InforMedix
            Holdings, Inc. also has authorized 4,500,000 shares of preferred stock
            which may
            be issued from time to time by the Board of Directors without further
            shareholder approval. No shares of preferred stock had been issued by
            the
            Company as of December 31, 2005.
 
 Pursuant
            to a confidential Private Placement Memorandum dated December 5, 2005,
            as
            supplemented (see Note 8), the Company has issued 342.6771 shares of
            preferred
            stock (including 53.771 such shares issued pursuant to the conversion
            of
            $525,000 of promissory notes and earned interest) during the year ended
            December
            31, 2006.
 
 Each
            share of preferred stock is initially convertible into 62,500 shares
            of common
            stock, at an initial conversion price of $.16 per underlying common share,
            or
            21,417,319 shares of common stock in the aggregate.
 
 The
            fair
            market value of each of the three elements of each of the Units sold,
            namely the
            share of preferred stock, together with the A-1 and A-2 Warrants, each
            exercisable into 31,250 shares of common stock at $.24 and $.32, respectively,
            was calculated using the Black-Scholes method, utilizing the following
            additional assumptions:
 
 Fair
            value price - $.12 to $.24
 Expected
            dividend yield (preferred stock element only) - 8%
 Risk-free
            interest rate - 5.25% to 6.0%
 Expected
            stock price volatility - 54.39% to 81.16%
 Expected
            instrument lives - 5 years
 
 The
            resulting values were allocated pro rata to the three elements of the
            Units, and
            of the $3,426,771 in gross value ($2,895,000 in cash and $531,771 in
            converted
            notes payable and related earned interest) received during the twelve
            months
            ended December 31, 2006, $1,060,261 and $934,271 was accordingly allocated
            to
            the warrant value for the A-1 and A-2 Warrants, respectively.
 
 The
            Company also recorded an additional charge to “Discount on preferred stock”
totaling $1,432,239, related to the beneficial conversion feature of
            the
            preferred stock.
 
 The
            total
“Discount on preferred stock” arising from the above transactions, and
            aggregating $3,426,771 as of December 31, 2006, was written off as “Accretion,
            deemed preferred stock dividend,” as the underlying preferred stock is
            immediately convertible at the option of the preferred stockholder.
 
 
 
 
 **NOTE
            10 - COMMITMENTS AND CONTINGENCIES**
 
 ***Employment
            Agreements***
 
 The
            Company has entered into employment agreements with key members of management
            and some officers. Most of these employment agreements are for a period
            of three
            years. Compensation earned by these employees has been properly reflected
            in
            either “Product Development” or “Selling, general and administrative expenses”
for the fiscal years ended December 31, 2006 and 2005, respectively.
            Historically, the Company has been unable to fully pay management compensation
            in the form of cash, and has issued stock options in lieu of cash for
            a portion
            of the services rendered.
  ***InforMedix
                Holdings, Inc.***
 **Page
                67**
  
  During
            the first quarter ending March 31, 2006, the Company entered into a termination
            agreement with its former CFO, which included a four-month continuation
            of
            salary payout totaling $50,000 plus employer taxes, payments to be made
            on a pro
            rata basis during the subsequent period April - July, 2006. Accordingly,
            and as
            of March 31, 2006, the Company recorded a severance accrual totaling
            $53,824,
            which was fully paid by December 31, 2006.
 
 ***Consulting
            Agreements***
 
 In
            January 2006, the Company entered into a consulting agreement with Bruce
            Morra,
            a member of its Board of Directors, in connection with strategic business
            development matters. The term of the engagement is for one year, effective
            as of
            December 7, 2005. Compensation consists of a warrant to purchase 144,000
            shares
            of the Company’s common stock at an exercise price of $.19, vesting in
            1/12 th monthly
            increments. For accounting purposes the value of this option was calculated
            as
            $17,558, which was amortized in full as of December 31, 2006.
 
 On
            March
            15, 2006, the Company retained Equity Communications, LLC as the Company’s
            financial public relations advisor for a one-year term, with total cash
            compensation of $72,000, payable in 12 monthly payments of $6,000. In
            addition,
            the Company also issued pursuant to this agreement an option to purchase
            759,569
            shares of the Company’s common stock at an exercise price of $.20, and which
            vests in quarterly increments on the three-month anniversaries of the
            date of
            the agreement. For accounting purposes the value of this option was calculated
            as $81,873, which has been recorded as a charge to “Prepaid expenses” and will
            be amortized into expense at the rate of 1/12 th per
            month. As of December 31, 2006, $61,404 had been expensed.
 
 In
            May
            2006, the Company entered into a consulting agreement with Mitch Gooze
            and his
            consulting company Customer Manufacturing Group (“CMG”) to provide sales
            consulting services for an initial term of three months, commencing July
            1,
            2006. Compensation consists of a monthly cash payment to CMG of $2,500
            and a
            monthly grant of 7,000 shares of common stock to Mitch Gooze individually.
            As of
            December 31, 2006, shares due under this agreement were included in the
            Common
            Stock to be Issued, and $15,000 had been expensed.
 
 In
            June
            2006, the Company entered into a consulting agreement with Peter Levitch,
            in
            connection with providing support on business development matters. The
            term of
            the engagement is for one year, effective June 1, 2006. Compensation
            consists of
            a warrant to purchase 144,000 shares of the Company’s common stock at an
            exercise price of $.32, vesting in 1/12 th monthly
            increments. For accounting purposes the value of this option was calculated
            as
            $21,600, which has been recorded as a charge to “Prepaid expense” and will be
            amortized into expense at the rate of 1/12 th per
            month, commencing June 1, 2006. As of December 31, 2006, a balance of
            $12,600
            had been expensed.
 
 In
            December 2006, the Company entered into a consulting agreement with CMS
            International, in connection with certain efforts to improve the awareness
            of
            InforMedix and more specifically the Med-eMonitor to governmental and
            other
            potential third party insurers and related parties. The Company believes
            that
            the Med-eMonitor is the type of appliance, which could be used by governmental
            authorities to expand the services realized from current expenditures,
            while
            also providing private insurers and related parties with significant
            cost saving
            opportunities, through reduced hospitalizations and lessened demands
            for
            interactions with skilled caregivers, while also promoting improved health
            among
            both the aging and multiple medication populations. The relationship
            was
            initially launched as a six month program, with a monthly retainer of
            $15,000
            and a $25,000 initial fee. The agreement also contains certain bonus
            features
            based on achievements. As of December 31, 2006, $40,000 had been
            expensed.
 
 The
            Company is party to other consulting agreements with various third parties
            for
            the development of software and production of the monitors.
  ***InforMedix
                Holdings, Inc.***
 **Page
                68**
  
 
 ***Production
            Agreement***
 
 The
            Company has a production agreement with a third party contract manufacturer
            which is assembling and testing 750 additional units of the Med-eMonitor
            device.
            Two final payments of $20,315 each will be due upon the two shipments
            of 375
            Med-eMonitor Units, respectively, scheduled for early 2007.
 
 Charges
            incurred, to date, on these 750 in-process Med-eMonitor units totaled
            $275,448
            as of December 31, 2006, and are classified by the Company as work-in-process
            inventory. Total costs, including the above described remaining payments,
            for
            these 750 units will total approximately $300,000 upon final finished
            assembly
            acceptance by the Company. The cost per unit includes costs related to
            various
            design and firmware changes initiated during the assembly period.
 
 
 
 **NOTE
            11-**  **GOING
            CONCERN**   As
            shown
            in the accompanying consolidated financial statements, as is typical
            of
            companies going through early-stage development of intellectual property,
            and
            products and services, the Company incurred net operating losses for
            the years
            ended December 31, 2006, and 2005. The Company emerged from the development
            stage in early 2004, and there is no guarantee whether the Company will
            be able
            to generate enough revenue and/or raise capital to support current operations
            and expand sales. This raises substantial doubt about the Company’s ability to
            continue as a going concern.
 
 In
            March
            2007, the Company began its second Private Placement with Basic Investors
            Inc as
            the placement agent for a new Private Placement agreement (“PPM6”) dated March
            23, 2007. This new PPM6 follows the terms of the October 16, 2006 offering
            (“PPM5”), with the following changes, namely (1) the maximum offering is capped
            at $2,000,000, and the minimum funding requirement is $250,000.
 
 From
            a
            revenue standpoint, the Company is beginning to recognize revenues from
            a number
            of programs which have been implemented in 2006. At the present time,
            the
            Company has agreements in place for $500,000 of estimated revenues. In
            addition,
            once the Company completes its current private placement offering, it
            is
            anticipated that Management will be able to direct its focus on expanding
            the
            business as opposed to financing the immediate needs of the business.
 
 A
            number
            of academic medical center/health care companies have successfully tested
            the
            Med-eMonitor System on a pilot test basis and the results have been publicly
            announced in peer reviewed medical journals, presentations at national
            conferences, and featured in book chapters and trade publications. The
            consolidated financial statements do not include any adjustments that
            might
            result from the outcome of these uncertainties.
 
 
 
 **NOTE
            12 - PATENTS**
 The
            Company has been successful in securing 15 issued U.S. and Foreign patents
            pertaining to devices and methods to prompt and record patient information,
            including the Med-eMonitor System. The Company believes, as a result
            of an
            independent valuation of its patents, that it owns the “pioneer” patent
            portfolio in medication compliance and patient monitoring, as its patents
            have
            been cited as prior art in over 154 issued patents. In addition, there
            are 14
            pending U.S. and Foreign patents. Two of the 15 issued patents may no
            longer be
            asserted. The cost in obtaining these patents has been expensed as a
            research
            and development expense by the Company in the year that the costs pertained
            to
            in accordance with SOP 98-1.
   ***InforMedix
                Holdings, Inc.***
 **Page
                69**
  
 **NOTE
            13 - SUBSEQUENT EVENTS**
  Change
            in Investor and Public Relations Firm
  Most
            recently in March 2007, the Company opted to
            make a change in its Investor Relations and Public Relations efforts,
            by
            engaging The Investor Relations Group, located in New York City. This
            change was
            the result of the Company’s desire to increase its awareness program with the
            investment and media communities, as well as with the public given the
            Company’s
            desire to launch a retail marketing program.
  ***Exchange
              Offering to convert Preferred Shares of Stock and
              Related*** ***Warrants
              to shares of Common Stock***
  On
                February 12, 2007, the Company closed the Exchange Offering   dated
                October 27, 2006, with 96.4% of the funds invested under the Dawson
                James Preferred Stock Offering electing to accept the Exchange
                Offering presented by the Company. Of the total funds  received
                under the Dawson James Preferred Stock offering (i.e $3,426,771),
                only $123,000, or 12.3 shares of Preferred Stock chose not to
                convert pursuant to the Exchange Agreement. For additional information
                on this Exchange Offering.
  ***Private
                  Placement Offering (“PPM6”) initiated on March 23,
                  2007***
  On
                    March
                    23, 2007, the Company initiated a second PPM (“PPM6”) with Basic Investors. The
                    terms of this new offering matched the terms of the previous
                    PPM5 offering
                    launched on October 16, 2006. with the exception that a maximum
                    of $2,000,000
                    will be offered, and no over subscription will be made available.
                    For additional
                    information on this PPM Offering
  
 ***InforMedix
                  Holdings, Inc.***
 **Page
                  70**
 In
              accordance with the requirements of the Exchange Act, the registrant
              caused this
              report to be signed on its behalf by the undersigned, thereunto duly
              authorized.
 
 
 
 
 
 Dated:
                        April 27, 2007
                    **InforMedix
                        Holdings, Inc.**By:
                    ***s/Bruce
                        A. Kehr*Bruce
                        A. Kehr, Chief Executive Officer(Principal
                        executive officer)By:
                    *s/Harry
                        M. Stokes*Harry
                        M. Stokes, Chief Financial Officer(Principal
                        financial officer)
 
 
  ***InforMedix
                  Holdings, Inc.***
 **Page
                  71**
  
 
 In
              accordance with the Exchange Act, this report has been signed below
              by the
              following persons on behalf of the registrant and in the capacities
              and on the
              dates indicated.
 
 
 
 
 */****s/******Bruce
                        A. Kehr, M.D*****.**
                    Chairman
                        of the Board andBruce
                        A. Kehr
                    Chief
                        Executive Officer(Principal
                          Executive Officer)
                    April
                        27, 2007***/******s/******Harry
                        M. Stokes***
                    Chief
                        Financial OfficerHarry
                        M. Stokes
                    (Principal
                        Financial Officer)
                    April
                        27, 2007***/s/******Rhonda
                        B. Friedman, Sc. D***
                    Director
                    April
                        27, 2007Rhonda
                        B, Friedman***/s/******Harris
                        Kaplan***
                    Director
                    April
                        27, 2007Harris
                        Kaplan***/s/******Philip
                        J, Gross***
                    Director
                    April
                        27, 2007Philip
                        J. Gross***/s******/
                        Bruce S. Morra***
                    Director
                    April
                        27, 2007Bruce
                        S. Morra***/s/******David
                        N. Nash***
                    Director
                    April
                        27, 2007David
                        N. Nash
 
 
 
  ***InforMedix
                  Holdings, Inc.***
 **Page
                  72**
  **InforMedix
              Holdings, Inc.**
 
 **Annual
              Report on Form 10-KSB**
 **Fiscal
              Year Ended December 31, 2006**
 
 
 **EXHIBIT
              INDEX**
 
 
 
 **Exhibit****Number**
                    **Description*****Exhibits
                        attached to this Form 20-KSB***:**31.1**
                    Certification
                        pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted
                        pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.**31.2**
                    Certification
                        pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted
                        pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.**32.1**
                    Certification
                        pursuant to 18 U.S.C. 1350, as adopted pursuant to Section
                        906 of the
                        Sarbanes-Oxley Act of 2002.**32.2**
                    Certification
                        pursuant to 18 U.S.C. 1350, as adopted pursuant to Section
                        906 of the
                        Sarbanes-Oxley Act of 2002.
 
 
 
 
 ***Exhibits
              incorporated into this Report by Reference are as
              follows:***
 
  3.1
                    Articles
                        of Incorporation, as amended (1)3.2
                    By-Laws.
                        (1)4.1
                    Specimen
                        common stock certificate. (1)4.2
                    Specimen
                        Class A Warrant certificate. (1)4.3
                    Specimen
                        Bridge Warrant certificate (5)4.4
                    Specimen
                        Class A Warrant certificate from Private Placement (5)4.5
                    Specimen
                        Class B Warrant certificate from Private Placement (5)4.6
                    Specimen
                        Placement Agent Warrant certificate from Private Placement
                        (5)10.1
                    Employment
                        Agreement dated January 1, 2000 between InforMedix Inc. and
                        Bruce A. Kehr,
                        as amended on February 5, 2001. (2)10.2
                    Employment
                        Agreement dated January 18, 2001 between InforMedix Inc.
                        and Harry M.
                        Stokes, see Form 8-K, dated 10/04/06, File Number 000-50221,
                        Film Number
                        6112901910.3
                    Employment
                        Agreement dated as of February 15, 2004, between InforMedix,
                        Inc. and
                        Davison R. Dulin. (4)
  ***InforMedix
                  Holdings, Inc.***
 **Page
                  73**
  
  10.4
                    Lease
                        dated March 1, 2003, by and between Augusto Tono and InforMedix
                        Inc.
                        (2)10.5
                    Placement
                        Agent Agreement dated as of August 21, 2003, by and between
                        InforMedix
                        Holdings, Inc. and Meyers Associates, L.P. (4)10.6
                    Amendment
                        No. 1 to Employment Agreement between Bruce A. Kehr and InforMedix,
                        Inc.
                        dated as of February 5, 2001. (4)10.7
                    Amendment
                        No. 2 to Employment Agreement between Bruce A. Kehr and InforMedix,
                        Inc.
                        dated October 2003. (4)10.8
                    Security
                        and Loan Agreement (without exhibits) between InforMedix
                        Acquisition
                        Corp., InforMedix, Inc. and Irving G. Snyder, Jr., and Secured
                        Convertible
                        Promissory Note in the principal amount of $750,000 and Warrant
                        to
                        Purchase Shares issued to Irving Snyder, each dated as of
                        April 9,
                        2003.(4)10.9
                    Letter
                        Agreement between InforMedix Acquisition Corp., InforMedix,
                        Inc. and
                        Irving Snyder dated October 16, 2003. (4)10.10
                    Form
                        of Warrant Exchange Agreement dated December 22, 2004
                        (6)10.11
                    Form
                        of Placement Agent Warrant Exchange Agreement dated Feb.
                        16, 2005
                        (6)14.1
                    Code
                        of Ethics (4)21.1
                    List
                        of Subsidiaries
 
 ______________________________________________
 
 
 
 1)
                    Incorporated
                        herein by reference from Exhibits to the Registrant's Registration
                        Statement on Form SB-2 (File No. 33-45774), filed on September
                        14,
                        2000.
 
 2)
                    Incorporated
                        herein by reference from Exhibits to Post-Effective Amendment
                        No. 4 to the
                        Registrant's Registration Statement on Form SB-2 (File No.
                        33-45774),
                        filed on March 25, 2003.
 
 3)
                    Incorporated
                        herein by reference from Exhibits to Post-Effective AmendmentNo.
                        5 to the Registrant's Registration Statement on Form SB-2
                        (File
                        No.33-45774), filed on April 7,
                        2003.
 
 4)
                    Incorporated
                        herein by reference from Exhibits to the Registrant's Annual
                        Report on
                        Form 10-KSB for the year ended December 31, 2003 (File No.
                        000-50221),
                        filed on April 5, 2004.
 
 5)
                    Incorporated
                        herein by reference from Exhibits to the Registrant's Registration
                        Statement on Form SB-2 (File No.
                        333-112726)
 
 6)
                    Incorporated
                        herein by reference from Exhibits to the Registrant's Registration
                        Statement on Form SB-2 (File No.
                        33-123237)
 
  ***InforMedix
                  Holdings, Inc.***
 **Page
                  74**