SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
(Mark One)

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the Fiscal Year Ended March 31, 2008
                                       OR
    ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

Commission File No. 0-31679

                                QUANTUM MRI, INC.
                                -----------------
                 (Name of Small Business Issuer in its charter)

                Washington                                  54-0231483
         --------------------------                    --------------------
         (State of incorporation)                        (IRS Employer
                                                       Identification No.)
   4750 Paton Street
   Vancouver, British Columbia, Canada                         V6L 2J1
   ---------------------------------------                    ----------
   (Address of Principal Executive Office)                     Zip Code

Registrant's telephone number, including Area Code: (303)-506-1633
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                  ------------
                                (Title of Class)

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act. [ ]

Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the Registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days.             X
                 YES           NO

Check if 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  the  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. [X]

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

<PAGE>

The Company's revenues during the year ended March 31, 2008, were $ 0.

The aggregate market value of the voting stock held by non-affiliates of the
Company, (7,799,889 shares) based upon the closing price of the Company's common
stock on June 30, 2008, was approximately $390,000.

Documents incorporated by reference:      None

As of November 30, 2008, the Company had 14,073,391 issued and outstanding
shares of common stock.

           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

     This report includes  "forward-looking  statements".  All statements  other
than  statements of historical  facts included in this  Registration  Statement,
regarding  the  Company's  financial  position,  business  strategy,  plans  and
objectives, are forward-looking  statements.  Although the Company believes that
the expectations reflected in the forward-looking statements and the assumptions
upon which such forward-looking statements are based are reasonable, it can give
no assurance  that such  expectations  and  assumptions  will prove to have been
correct.








                                       2
<PAGE>



ITEM 1.     DESCRIPTION OF BUSINESS

     The Company was  incorporated in Washington on June 7, 1989, under the name
P.L.D.F.E.T.,  Inc.  On November  17,  2000,  the Company  changed its name from
P.L.D.F.E.T. to Travelshorts.com, Inc. Between the date of its incorporation and
December 3, 2002, the Company was essentially inactive. On December 3, 2002, the
Company acquired all of the issued and outstanding shares of SETI Corp. ("SETI")
in exchange for 111,275 shares of the Company's  common stock. In April 2003 the
Company  repurchased  33,178 of these shares from four shareholders at a cost of
$1,300.

      Any reference to the Company, unless otherwise indicated, includes the
operations of SETI.

      In December 2002, the Company changed its trade name to Sharps Elimination
Technologies Inc. ("SETI")

      SETI was incorporated in Delaware on September 25, 2001. On November 12,
2001, SETI acquired from Spectrum Meditech Inc.("Spectrum"), a related party,
the exclusive license, to develop, manufacture, and sell Needle-Ease(TM), a
device used for the safe disposal of used needles and hypodermic syringes. The
acquisition required a cash payment of $300,000 due on December 31,2005.

      The Needle-Ease(TM) is a battery operated incineration system that
destroys a range of needles by passing an electric current through the needle
thereby reducing the steel to ashes in a matter of seconds. The electric charge
is generated from a rechargeable sealed lead-acid battery. The contact points of
the device can be touched directly or with a metal object by the operator or
anyone else without the transfer of current (i.e. shock).

      On May 5, 2005 the shareholders of the Company:

     o    approved  amendments to the Company's Articles of Incorporation  which
          changed the Company's name to Sharps Elimination  Technologies,  Inc.;
          and
     o    approved a 150-for-1 reverse stock split.
     o    approved an  increase to the  Company's  authorized  capital  stock to
          issue 100,000 shares of preffer stock.

      All information in this report concerning the Company's common stock,
except as otherwise indicated, gives effect to the 150-for-1 reverse split.

      Subsequent to the May 5, 2005, shareholders' meeting, the Company decided
it would no longer pursue the Needle-Ease(TM) project.

      In September 2005, the Company changed its name to Quantum MRI, Inc.

      The Company has been inactive since 2005.


                                       3
<PAGE>

      On July 15, 2008 Kelly Fielder, the Company's only officer and director,
converted all amounts owed to him by the Company, including any accrued interest
and penalties ($1,310,672 as of March 31, 2008), into 1,000 shares of the
Company's common stock.

      Also on July 15, 2008 Spectrum Meditech Inc., a corporation controlled by
Mr. Fielder, converted all amounts owed to Spectrum by the Company, including
any accrued interest and penalties (which was a minimal amount as of March 31,
2008) into 1,000 shares of the Company's common stock.

      As of November 30, 2008, the Company did not have any full time employees.
The Company's officers devote only a minimal amount of time to the Company
business employee.

      The Company does not have a website.

      An investment in the Company's securities should only be considered by
persons who can afford a complete loss of their investment. As of March 31,
2008, the Company had assets of $39, liabilities of $2,225,214, and an
accumulated deficit of $(7,964,573). There has been virtually no trading
activity in the Company's common stock.

      The Company's auditors have issued a going concern opinion for the year
ended March 31, 2008. This means that there is substantial doubt that the
Company can continue as an ongoing business for the next twelve months. The
financial statements do not contain any adjustments that might result from the
uncertainty about the Company's ability to continue in business. As such, the
Company may have to cease operations and the Company's shareholders could lose
their investment.

      The Company's common stock currently trades on the OTC Bulletin Board. The
rules applicable to securities traded on the OTC Bulletin Board provide that if
an issuer is delinquent in filing its 10-KSB or 10-QSB reports on three
occasions in any twenty-four month period the issuer's securities will be
delisted from the OTC Bulletin Board and will not be eligible for relisting
until the issuer has timely filed all of its required annual and quarterly
reports for twelve months. The Company was delinquent in filing its 10-KSB
report in July 2007 and July 2008. If the Company is delinquent in filing one
other 1934 report prior to July 2009 the Company's securities will be delisted
from the OTC Bulletin Board.

ITEM 2.     DESCRIPTION OF PROPERTY

      See Item 1.

ITEM 3.     LEGAL PROCEEDINGS.

     In September 2003,  Erika Gardner  ("Gardner")  commenced a civil action in
the  Supreme  Court of British  Columbia  against  the  Company,  Kelly  Fielder
("Fielder"),  the Company's  president,  and Spectrum.  In her complaint Gardner
alleges that the Company  and/or Fielder are liable to Gardner for a loan in the
amount of approximately  $250,000 (USD), and that Fielder and Spectrum failed to
deliver shares of the Company's common stock which were to be held by Gardner as
security  for the loan.  As part of this civil action  Gardner also  obtained an
order from the British  Columbia  Court which,  among other  things,  restrained


                                       4
<PAGE>

Fielder and Spectrum from selling,  transferring  or voting any of the Company's
shares,  and  restrained  the  Company  from  making any  changes to its capital
structure.

      The Company and Fielder have filed answers to the complaint generally
denying the claims of Gardner. This civil action has been dormant since December
2003 and it is not possible to predict the outcome of this matter.

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

      Not Applicable

ITEM 5.     MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
            OTHER SHAREHOLDER MATTERS.

      The Company's common stock is listed on the OTC Bulletin Board under the
symbol QTMR. The following table sets forth the high and low sale prices of the
Company's common stock during the periods presented as reported by the NASD. The
closing sale prices reflect inter-dealer prices without adjustment for retail
markups, markdowns or commissions and may not reflect actual transactions.

                                             Closing Sale Price
                                                Common Stock
            Quarter Ended                    High            Low
            -------------                    ----            ---

            June 30, 2006                    $0.70          $0.40
            September 30, 2006               $0.42          $0.07
            December 31, 2006                $0.09          $0.04
            March 31, 2007                   $0.09          $0.07

            June 30, 2007                    $0.06          $0.06
            September 30, 2007               $0.06          $0.02
            December 31, 2007                $0.02          $0.01
            March 31, 2008                   $0.01          $0.01


      As of November 30, 2008 there were approximately 65 record holders of the
Company's common stock.

      During the year ended March 31, 2008, neither the Company, any officer or
director of the Company, nor any principal shareholder of the Company, purchased
any shares of the Company's common stock either from the Company, from third
parties in a private transaction, or as a result of purchases in the open
market.



                                       5
<PAGE>


     Holders  of common  stock  are  entitled  to  receive  dividends  as may be
declared by the Board of  Directors.  The  Company'  Board of  Directors  is not
restricted from paying any dividends but is not obligated to declare a dividend.
No dividends  have ever been declared and it is not  anticipated  that dividends
will ever be paid.

     The Company's Articles of Incorporation authorize its Board of Directors to
issue up to 100,000 shares of preferred stock. The provisions in the Articles of
Incorporation  relating to the preferred  stock allow the Company'  directors to
issue  preferred  stock with multiple votes per share and dividend  rights which
would have priority  over any dividends  paid with respect to the holders of the
Company'  common  stock.  The issuance of preferred  stock with these rights may
make the removal of management difficult even if the removal would be considered
beneficial  to  shareholders  generally,  and will have the  effect of  limiting
shareholder  participation  in  certain  transactions  such as mergers or tender
offers if these transactions are not favored by the Company's management.

ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            PLAN OF OPERATION

     The Company has been  inactive  since 2005.  During the twelve months ended
March 31,  2008 the  Company  did not have any  revenues.  During this period of
time, the Company was primarily  involved in attempting to raise capital for its
operations.

     As of  March  31,  2008 the  Company  had  assets  of $39,  liabilities  of
$2,225,214,  and an accumulated  deficit of $(7,964,573).  During the year ended
March 31, 2008 the Company  incurred a net loss of $(559,472)  and the Company's
operations  used $(8,203) in cash. The Company  satisfied its cash  requirements
during fiscal 2008 with a loan from a principal shareholder.

     The  Company  does  not  have  any  bank  lines  of  credit,  or any  other
traditional  financing  arrangements.  The Company expects to obtain  additional
capital  through the private  sale of its common stock or from  borrowings  from
private  lenders.  There can be no assurance that the Company will be successful
in obtaining the capital which it may need.

ITEM 7.     FINANCIAL STATEMENTS

      See the financial statements attached to this report.

ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
            ---------------------------------------------

      The following 8-K reports, all of which pertain to a change in the
Company's auditors, are incorporated by reference.

            Report filed on 02-19-03
            Report filed on 06-29-04
            Report filed on 10-20-05
            Report filed on 11-22-05
            Report filed on 07-18-08


                                       6
<PAGE>

            Report filed on 11-21-08

ITEM 8.A(T) CONTROLS AND PROCEDURES

     Kelly Fielder,  the Company's  Principal  Executive and Financial  Officer,
evaluated the effectiveness of the Company's  disclosure controls and procedures
as of the end of the  period  covered by this  report;  and in his  opinion  the
Company's  disclosure  controls and procedures were not effective to ensure that
material  information  relating to the  Company,  is made known to him by others
within the Company, particularly during the period in which this report is being
prepared, so as to allow timely decisions regarding required disclosure.

Management's Report on Internal Control Over Financial Reporting
----------------------------------------------------------------

     The Company's  management is responsible for  establishing  and maintaining
adequate internal control over financial reporting and for the assessment of the
effectiveness  of internal control over financial  reporting.  As defined by the
Securities and Exchange Commission, internal control over financial reporting is
a process  designed  by, or under the  supervision  of the  Company's  principal
executive  officer and principal  financial officer and implemented by its Board
of Directors,  management and other personnel,  to provide reasonable  assurance
regarding  the  reliability  of  financial  reporting  and  the  preparation  of
financial  statements  in accordance  with U.S.  generally  accepted  accounting
principles.

     The Company's  internal  control over  financial  reporting  includes those
policies and procedures  that (1) pertain to the maintenance of records that, in
reasonable   detail,   accurately  and  fairly  reflect  its   transactions  and
dispositions of its assets; (2) provide  reasonable  assurance that transactions
are recorded as  necessary  to permit  preparation  of the  Company's  financial
statements in accordance with U.S. generally accepted accounting principles, and
that its  receipts  and  expenditures  are being  made only in  accordance  with
authorizations  of its  management  and  directors;  and (3) provide  reasonable
assurance regarding prevention or timely detection of unauthorized  acquisition,
use or disposition of the Company's  assets that could have a material effect on
the financial statements.

     Because  of its  inherent  limitations,  internal  control  over  financial
reporting  may not prevent or detect  misstatements.  Also,  projections  of any
evaluation  of  effectiveness  to future  periods  are  subject to the risk that
controls may become  inadequate  because of changes in  conditions,  or that the
degree of compliance with the policies or procedures may deteriorate.

     In  connection  with the  preparation  of the  Company's  annual  financial
statements,  management  undertook an  assessment  of the  effectiveness  of the
Company's  internal  control  over  financial   reporting,   based  on  criteria
established in Internal  Control - Integrated  Framework issued by the Committee
of Sponsoring  Organizations of the Treadway Commission,  or the COSO Framework.
Management's  assessment  included an  evaluation of the design of the Company's
internal   control  over  financial   reporting  and  testing  the   operational
effectiveness of those controls.



                                       7
<PAGE>


     Based on this  evaluation,  management  has  concluded  that the  Company's
internal control over financial reporting was not effective as of March 31, 2008
due to the following:

     (i)  a  number  of  transactions  were not  recorded  or  presented  in the
          Company's  financial  records in accordance  with  Generally  Accepted
          Accounting Principles.

     (ii) weaknesses  in the risk  assessment  controls,  including  the lack of
          adequate   mechanisms  for  anticipating  and  identifying   financial
          reporting  risks;  and  for  reacting  to  changes  in  the  operating
          environment that could have a potential effect on financial reporting;

    (iii) weaknesses  in  monitoring  controls,  including the lack of adequate
          staffing and  procedures to ensure  periodic  evaluations  of internal
          controls  to  ensure  that  appropriate   personnel  regularly  obtain
          evidence that controls are functioning effectively and that identified
          control deficiencies are timely remedied.

     If the  Company  is  not,  or is  not  in  future  periods,  successful  in
identifying  these  control  weaknesses,   its  quarterly  or  annual  financial
statements could be materially misstated, which could require a restatement.

     The  certifications  of  the  Company's  principal  executive  officer  and
principal  financial  officer  required in  accordance  with  Section 302 of the
Sarbanes-Oxley  Act of 2002 are  attached as  exhibits to this Annual  Report on
Form  10-KSB.  The  disclosures  set forth in this Item 8A  contain  information
concerning  (i)  the  evaluation  of  the  Company's   disclosure  controls  and
procedures,  and changes in internal control over financial reporting,  referred
to in paragraph 4 of the  certifications,  and (ii)  material  weaknesses in the
design or operation of the Company's internal control over financial  reporting,
referred to in paragraph 5 of the certifications. Those certifications should be
read in conjunction  with this Item 8A for a more complete  understanding of the
matters covered by the certification.

     This annual report does not include an attestation  report by the Company's
independent  registered public accounting firm regarding the Company's  internal
control  over  financial  reporting.  Management's  report  was not  subject  to
attestation  by the Company's  independent  registered  public  accounting  firm
pursuant to  temporary  rules of the SEC that permit the Company to provide only
management's report on internal control in this annual report.

     There  was no change  in the  Company's  internal  control  over  financial
reporting  identified in connection  with the  evaluation  described  above that
occurred  during  the  Company's  fourth  fiscal  quarter  that  has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.

ITEM 8B.    OTHER INFORMATION

      Not applicable



                                       8
<PAGE>


ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

      Name            Age     Position
      ----            ---     ---------

      Kelly Fielder    39     Chief Executive Officer, Principal Financial
                              Officer, Principal Accounting Officer and a
                              Director

     Kelly  Fielder  has been an  officer  and  director  of the  Company  since
December 31, 2002 and of SETI since September 25, 2001.  Between March 22, 2002.
and September 17, 2002, Mr. Fielder was an officer and director of Armagh Group,
Inc. Mr.  Fielder has been an officer and director of Spectrum  since 1998.  Mr.
Fielder  is also the  President  of IRG  Services  Ltd.  ("IRG"),  a  management
consulting business which he formed in 1996.

     The Company does not have a compensation committee. Kelly Fielder serves as
the Company's Audit Committee.  Mr. Fielder is not a financial expert and is not
independent as that term is defined in Section  121(A) of the Listing  Standards
of the American Stock Exchange.

     The Company has not adopted a Code of Ethics  applicable  to the  Company's
principal executive,  financial,  and accounting officers and persons performing
similar  functions.  The  Company  does not  believe  it needs a Code of  Ethics
because the Company has only one officer and one director.

ITEM 10.    EXECUTIVE COMPENSATION

     The following table sets forth in summary form the  compensation  earned or
received  by (i) the Chief  Executive  Officer of the  Company  and (ii) by each
other  executive  officer of the  Company  who earned or  received  in excess of
$100,000 during the fiscal years ended March 31, 2007 and 2008.

                                                                  All
                                                                Other
                                                                Annual
                                               Stock   Option  Compen-
Name and Principal     Fiscal  Salary  Bonus   Awards  Awards   sation
   Position             Year    (1)     (2)     (3)     (4)       (5)     Total
------------------     ------  ------  -----   ------  ------  -------    -----

Kelly Fielder,          2008      --      --        --     --       --        --
President and           2007      --      --  $175,000     --       --  $175,000
Chief Executive
Officer since
December 2002

(1)  The dollar value of base salary (cash and non-cash) received.

(2)  The dollar value of bonus (cash and non-cash) received.


                                       9
<PAGE>

(3)  During the periods covered by the table,  the value of the Company's shares
     issued as compensation for services calculated in accordance with FAS 123R.

(4)  The amount  recognized  for financial  statement  reporting  purposes,  and
     calculated  in accordance  with FAS 123R,  for options  awarded  during the
     year.

(5)  All other compensation  received that the Company could not properly report
     in any other column of the table.

     The Company's Board of Directors may increase the compensation  paid to the
Company's   officers   depending  upon  the  results  of  the  Company's  future
operations.

      The Company has an employment contract with Kelly Fielder which provides
for an annual salary of $120,000.

      On June 30, 2004, the Company issued 33,333 shares of its common stock to
Kelly Fielder for services provided to the Company.

      In November 2005, the Company issued 6,000,000 shares of common stock to
Kelly Fielder for services rendered.

      In January 2007, the Company issued 2,500,000 shares of common stock to
Kelly Fielder for services rendered. The shares were valued at $0.07 per share
for financial reporting purposes.

Long Term Incentive Plans - Awards in Last Fiscal Year
------------------------------------------------------

      None.

Employee Pension, Profit Sharing or Other Retirement Plans
----------------------------------------------------------

     The Company does not have a defined benefit,  pension plan,  profit sharing
or other  retirement  plan,  although  the Company may adopt one or more of such
plans in the future.

Compensation of Directors
-------------------------

          Standard Arrangements. At present, the Company does not pay its
          directors for attending meetings of the Board of Directors, although
          the Company may adopt a director compensation policy in the future.
          The Company has no standard arrangement pursuant to which directors of
          the Company are compensated for any services provided as a director or
          for committee participation or special assignments.

          Other Arrangements. During the year ended March 31, 2008, and except
          as disclosed elsewhere in this report, no director of the Company
          received any form of compensation from the Company.


                                       10
<PAGE>

Stock Option and Bonus Plans
----------------------------

      The Company has an Incentive Stock Option Plan, a Non-Qualified Stock
Option Plan and a Stock Bonus Plan. In some cases, these Plans are collectively
referred to as the "Plans". A summary description of these Plans follows. The
Plans provide for the granting, to selected employees of the Company and other
persons, of either stock bonuses or options to purchase shares of the Company's
common stock.

    Incentive Stock Option Plan. The Company's Incentive Stock Option Plan
    authorizes the issuance of shares of the Company's Common Stock to persons
    that exercise options granted pursuant to the Plan. Only Company employees
    may be granted options pursuant to the Incentive Stock Option Plan.

    Non-Qualified Stock Option Plan. The Company's Non-Qualified Stock Option
    Plan authorizes the issuance of shares of the Company's Common Stock to
    persons that exercise options granted pursuant to the Plans. The Company's
    employees, directors, officers, consultants and advisors are eligible to be
    granted options pursuant to the Plans, provided however that bona fide
    services must be rendered by such consultants or advisors and such services
    must not be in connection with the offer or sale of securities in a
    capital-raising transaction. The option exercise price is determined by the
    Company's Board of Directors.

    Stock Bonus Plan. The Company's Stock Bonus Plan allows for the issuance of
    shares of Common Stock to the Company's employees, directors, officers,
    consultants and advisors, provided however that bona fide services must be
    rendered by consultants or advisors and such services must not be in
    connection with the offer or sale of securities in a capital-raising
    transaction.

Summary
-------

     The  following  presents  certain  information  as of  November  30,  2008,
concerning the stock options and stock bonuses  granted by the Company  pursuant
to the Plans.  Each option  represents  the right to  purchase  one share of the
Company's common stock.

                                Total       Shares                 Remaining
                                Shares    Reserved for   Shares    Options/
                               Reserved   Outstanding   Issued As    Shares
Name of Plan                  Under Plans   Options    Stock Bonus Under Plans
------------                  ----------- -----------  ----------- -----------

Incentive Stock Option Plan   2,000,000          --         N/A   2,000,000
Non-Qualified Stock Option Plan2,000,000         --         N/A   2,000,000
Stock Bonus Plan              6,000,000         N/A      33,333     966,667




                                       11
<PAGE>


      The person listed below has received options or shares of the Company's
common stock as a stock bonus:

                             Incentive Stock Options
                             -----------------------

                      Shares                        Expiration  Options Expired/
                      Subject   Exercise  Date of    Date of    Exercised as of
Option Holder        To Option   Price     Grant      Option     June 30, 2008
-------------        ---------  --------  -------   ----------  ----------------

                                      None

                           Non-Qualified Stock Options
                           ---------------------------

                      Shares                        Expiration  Options Expired/
                      Subject    Exercise  Date of   Date of    Exercised as of
Option Holder        To Option    Price     Grant    Option      June 30, 2008
-------------        ---------   --------  -------  ----------  ---------------

                                      None


                                  Stock Bonuses
                                  -------------

                              Shares Issued
Name                          as Stock Bonus         Date Issued
----                          --------------         -----------

Kelly Fielder                     33,333               6-30-04


ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
            ---------------------------------------------------------------

     The following table lists the share ownership of the Company's officers and
directors of each person known by the Company to be the beneficial owner of more
than 5% of the  Company's  outstanding  common  stock as of November  30,  2008.
Except as otherwise  indicated,  the Company believes that the beneficial owners
of the common stock listed  below,  have sole  investment  and voting power with
respect to such shares.

                                   Number of Shares            Percent of
Name and Address                  Beneficially Owned       Outstanding Shares
----------------                  ------------------       ------------------

Kelly Fielder                          8,867,000                      63%
4750 Paton St.
Vancouver, B.C.
Canada  V6L 2J1




                                       12
<PAGE>


                                   Number of Shares            Percent of
Name and Address                  Beneficially Owned       Outstanding Shares
----------------                  ------------------       ------------------

Spectrum Meditech Inc.                   21,417 (1)                  nil
4750 Paton St.
Vancouver, B.C.
Canada  V6L 2J1

 Murray Atkins                        2,566,818 (2)                18.2%
 Suite 101
 1111-11th Avenue S.W.
 Calgary, Alberta T2R 0G5

 All officers and directors as a      8,887,417                    63.2%
   group (one person)

(1)  Spectrum Meditech, Inc. is controlled by Kelly Fielder.

(2)  Includes 2,500,000 shares owned of record by a corporation controlled by
     Murray Atkins, but excluded 5,840,000 shares which, as of June 30, 2008,
     would be issuable upon the conversion of promissory notes held by Mr.
     Atkins.

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      The Company acquired its license to the Needle-Ease device from Spectrum
Meditech Inc. Kelly Fielder, an officer, director and principal shareholder of
the Company, is also an officer, director and principal shareholder of Spectrum
Meditech Inc.

      Between April 2003 and June 2004 the Company borrowed $292,275 from Murray
Atkins, a principal shareholder of the Company. The amounts borrowed were
represented by notes which, at the option of Mr. Atkins, were convertible into
shares of the Company's common stock. During March and June 2004 Mr. Atkins
converted the notes into 64,950 shares of the Company's common stock. In
November 2005, the Company issued $292,275 of convertible notes to Murray Atkins
in exchange for common shares held by Mr. Atkins and cash in the amount of
$120,780. At Mr. Atkins' option, the notes are convertible into shares of the
Company's common stock equal in number to the amount determined by dividing each
$1.00 of note principal or accrued interest to be converted by an amount equal
to 90% of average closing bid price of Quantum's common stock for the 30 trading
days preceding the date of conversion. The notes bear interest at 5.5% per year
but all accrued interest has been waived by Mr. Atkins.

      In January 2006, the Company entered into a Note Conversion Agreement with
Mr. Atkins. Under the terms of the Note Conversion Agreement, as amended, Mr.
Atkins agreed to convert a promissory note with a principal balance of $100,000
into 1,000,000 shares of the Company's common stock. Prior to September 30, 2008
Mr. Atkins agreed to sell not more than 50,000 shares per week, and at a price
of not less than $0.40 per share, without the consent of the Company. All
proceeds received by Mr. Atkins from the sale of the shares will reduce the


                                       13
<PAGE>

amounts owed by the Company under the promissory notes. Any shares remaining at
September 30, 2008 can be returned to the Company or retained by Mr. Atkins, at
his option. If shares are returned to the Company, a new promissory note will be
issued to Mr. Atkins for any balance remaining on the $100,000 note. If any
shares are retained by Mr. Atkins, the shares will be valued at 90% of the
average closing price of the Company's common stock for the 30 trading days
preceding December 31, 2008. The value of the shares will then be applied
against amounts owing under any of the notes which remain unpaid at December 31,
2008. If the value of the shares exceeds $100,000 plus the amounts payable under
the remaining unpaid notes, Mr. Atkins will return to the Company that number of
shares determined by dividing the excess value by the average closing price of
the Company's common stock for the 30 trading days preceding December 31, 2008.

      In April 2006 Mr. Atkins agreed to convert promissory notes with a
principal balance of $185,780 into 1,280,000 shares of the Company's common
stock, the note bears interest at 5.5% per year and was due and payable on
August 15, 2006. The 1,280,000 shares were issued to eight persons in
consideration for services provided to the Company. Kelly Fielder, the Company's
President, received 300,000 of these shares. In consideration for the conversion
of the notes and the transfer of the shares, the Company issued Mr. Atkins a new
promissory note in the principal amount of $185,780.

      On June 30, 2004 the Company issued 33,333 shares of its common stock to
Kelly Fielder for services rendered.

      On November 15, 2005 the Company issued 6,000,000 shares of its common
stock to Kelly Fielder for services rendered.

      On January 10, 2006 the Company issued 5,000,000 shares of its common
stock to Memphis Capital Corp. for consulting and financial services. The shares
were later returned to the Company and cancelled.

      In April 2006 the Company issued 10,0000 shares of its common stock to an
unrelated party for consulting services.

      In January 2007 the Company issued 2,500,000 shares of common stock to
Kelly Fielder, and 2,500,000 shares of common stock to Blur Investments, a firm
controlled by Murray Atkins. The shares were issued for services rendered and
valued at $0.07 a share for financial reporting purposes.

      On July 15, 2008 Kelly Fielder, the Company's only officer and director,
converted all amounts owed to him by the Company, including any accrued interest
and penalties ($1,310,672 as of March 31, 2008), into 1,000 shares of the
Company's common stock.

      Also on July 15, 2008 Spectrum Meditech Inc., a corporation controlled by
Mr. Fielder, converted all amounts owed to Spectrum by the Company, including
any accrued interest and penalties (which was minimal as of March 31, 2008) into
1,000 shares of the Company's common stock.


                                       14
<PAGE>

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K

Exh. #    Description of Exhibit                                  Page Number
------    ----------------------                                  -----------

3.1       Certificate of Incorporation                                 *

3.3       Bylaws                                                       *

31        Rule 13a-14(a) Certifications

32        Section 1350 Certifications

*   Incorporated by referenced to the same exhibit filed with the Company's
    registration statement on Form 10-SB.


ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

      Manning Elliott LLP, Chartered Accountants ("Manning Elliott"), served as
the Company's independent public accountants during the fiscal years ended March
31, 2008 and 2007.

      The following table shows the aggregate fees billed to the Company during
the years ended March 31, 2008 and 2007 by Manning Elliott.

                                               2008         2007
                                               ----         ----

            Audit Fees                      $25,554       $30,750
            Audit-Related Fees                   --            --
            Financial Information Systems        --            --
            Design and Implementation Fees       --            --
            Tax Fees                        $   175            --
            All Other Fees                       --            --

      Audit fees represent amounts billed for professional services rendered for
the audit of the Company's annual financial statements and the reviews of the
financial statements included in the Company's Form 10-QSB reports for the
fiscal year. Before Manning Elliott was engaged by the Company to render audit
services, the engagements were approved by the Company's Director.

      Manning Elliot resigned as the Company's independent public accountants on
July 16, 2008. Prior to its resignation, Manning Elliot did not complete the
audit of the Company's financial statements for the year ended March 31, 2008.



                                       15
<PAGE>


      On September 15, 2008 the Company hired Gruber & Company, LLC as the
Company's independent public accountants. Since Gruber & Co. was hired after the
Company's fiscal year ended March 31, 2008, Gruber & Co. did not bill the
Company for any fees during the Company's fiscal year ended March 31, 2008.








                                       16
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)

March 31, 2008

                                                                           Index

Report of Independent Registered Public Accounting Firm....................F-1

Consolidated Balance Sheets................................................F-2

Consolidated Statements of Operations......................................F-3

Consolidated Statements of Cash Flows......................................F-4

Consolidated Statements of Stockholders' Deficit...........................F-5

Notes to the Consolidated Financial Statements.............................F-6




<PAGE>

                              GRUBER & COMPANY LLC

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Quantum MRI, Inc.

We  have  audited  the  accompanying   balance  sheet  of  quantum  MRI,  Inc.(A
Development  Stage  Enterprise)  as of March 31,  2008 and 2007 and the  related
statements of operations,  stockholders equity and cash flows for the years then
ended and for the  period of  inception  June 7,  1989 to March 31,  2008  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform our audit 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 audit 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 audit provides a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of the Company as at March 31,
2008 and 2007 and the results of its'  operations and its'  stockholders  equity
and cash flows for the years then ended and for the period of inception  June 7,
1989 to March  31,  2008 in  conformity  with  accounting  principles  generally
accepted in the United States of America.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue as a going  concern.  As discussed in the notes to the  financial
statements,  the Company has incurred  losses.  This item among  others,  raises
substantial  doubt  about its  ability to  continue  as a going  concern.  These
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty

/s/ Gruber & Company LLC

Dated November 10, 2008




<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
(Expressed in US dollars)


                                                           March 31,  March 31,
                                                             2008       2007
                                                               $         $

ASSETS

Current Assets

Cash                                                            39         142
--------------------------------------------------------------------------------
Total Current Assets                                            39         142

Property and Equipment (Note 3)                                  -       1,527
--------------------------------------------------------------------------------
Total Assets                                                    39       1,669
================================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities

 Accounts payable                                          197,238     151,838
 Accrued liabilities                                       173,771      96,385
 Due to related parties (Note 4(b) and (d))              1,390,450   1,189,931
 Loans payable (Note 5)                                    160,700     160,700
 Convertible notes payable (Note 6)                        303,055     303,055
--------------------------------------------------------------------------------
Total Liabilities                                        2,225,214   1,901,909
--------------------------------------------------------------------------------

Commitments and Contingencies (Notes 1 and 8)

Stockholders' Deficit

Common Stock
Authorized: 50,000,000 shares, par value $0.001
Issued: 14,071,306                                          14,071      14,071

Additional Paid-in Capital                               5,599,777   5,365,240

Common Stock Subscribed                                    125,550     125,550

Deficit Accumulated During the Development Stage        (7,964,573) (7,405,101)
--------------------------------------------------------------------------------
Total Stockholders' Deficit                             (2,225,175) (1,900,240)
--------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit                     39       1,669
================================================================================


The accompanying notes are an integral part of these financial statements.




                                      F-2
<PAGE>

Quantum MRI, Inc
(A Development Stage Company)
Consolidated Statements of Operations
(Expressed in US dollars)
                                              Accumulated
                                                 From
                                             June 7, 1989
                                                (Date of          For the
                                               Inception)        Year Ended
                                              to March 31,        March 31,
                                                 2008          2008       2007
                                                   $            $          $

Revenue                                         2,731             -          -
--------------------------------------------------------------------------------
Expenses

Consulting                                  1,340,975        42,401  1,089,960
Donated rent (Note 4(c))                      129,446        29,381     27,060
Donated services                               28,070             -          -
General and administrative                    438,981        29,942     29,123
Impairment loss on intangible asset           252,819             -          -
Management fees (Notes 4(a), 8(b) and 8(c)) 3,149,000       156,000    343,000
Product development                            92,402             -          -
Professional fees                             490,183        55,206     71,648
--------------------------------------------------------------------------------
Total Expenses                              5,921,876       312,930  1,560,791
--------------------------------------------------------------------------------
Other Expense

 Beneficial conversion feature of
  convertible notes                            66,537             -     26,034
 Imputed interest  (Notes 4(b) and 6)         665,555       205,156    201,615
 Interest expense                             423,119        41,386    162,593
 Loss on settlement of debt                   230,000             -          -
--------------------------------------------------------------------------------
Net Loss                                   (7,304,356)     (559,472) (1,951,033)
================================================================================
Net Loss Per Share - Basic and Diluted                        (0.04)     (0.19)
================================================================================
Weighted Average Shares Outstanding                      14,071,391 10,044,000
================================================================================


The accompanying notes are an integral part of these financial statements.



                                      F-3
<PAGE>


Quantum MRI, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Expressed in US dollars)

<TABLE>
<S>                                                   <C>             <C>           <C>

                                               Accumulated from
                                                 June 7, 1989        For the      For the
                                              (Date of Inception)  Year Ended    Year Ended
                                                  to March 31,      March 31,     March 31,
                                                      2008            2008          2007

Operating Activities
Net loss for the period                           $(7,304,356)      $(559,472)   $(1,951,033)
Adjustment to reconcile net loss to net
 cash used in operating activities
Beneficial conversion feature of
 convertible notes                                     66,537               -         26,034
Depreciation and amortization                          37,151           1,527          1,878
Donated rent                                          157,516          29,381         27,060
Impairment loss on intangible asset                   252,819               -              -
Imputed interest                                      665,555         205,156        201,615
Loss on disposal of assets                              4,597               -              -
Loss on settlement of debt                            230,000               -              -
Stock issued pursuant to loan agreement               101,550               -              -
Stock-based compensation                            3,677,295               -      1,346,775
Changes in operating assets and
liabilities:
 Accounts payable and accrued liabilities             381,376         122,786         98,988
 Due from related parties                             695,722         192,419        122,228
                                                 -------------   -------------  -------------
Net Cash Used in Operating Activities              (1,034,238)         (8,203)      (126,455)
                                                 -------------   -------------  -------------
Investing Activities
      Purchase of property and equipment              (19,603)              -              -
                                                 -------------   -------------  -------------
Net Cash Used in Investing Activities                 (19,603)              -              -
                                                 -------------   -------------  -------------
Financing Activities
   Proceeds from loans payable                        185,700               -         85,700
   Repayment of loans payable                         (25,000)              -        (25,000)
   Proceeds from convertible notes payable            433,305               -              -
   Repayment of convertible notes payable             (10,000)              -        (10,000)
   Proceeds from issuance of common stock, net        461,775               -              -
   Advances from related parties                        8,100           8,100
                                                 -------------   -------------  -------------
Net Cash Flows Provided By Financing
Activities                                          1,053,880           8,100         50,700
                                                 -------------   -------------  -------------
Increase (Decrease) In Cash                                39            (103)       (75,755)
Cash - Beginning of Period                                  -             142         75,897
                                                 -------------   -------------  -------------
Cash - End of Period                                       39              39            142
                                                 =============   =============  =============
Non-cash Investing and Financing Activities
   Share issued pursuant to loan agreement            101,550               -              -
   Shares issued on conversion of notes
     payable                                        1,288,275               -        896,000
   Forgiveness of debt with settlement
     from shareholder                                 239,487               -              -
   Acquisition of licensing agreement with
     assumption of liabilities                        274,964               -              -
   Licensing agreement acquired                       918,490               -              -
                                                 =============   =============  =============
Supplemental Disclosures
   Interest paid                                            -               -              -
  Income taxes paid                                         -               -              -
                                                 =============   =============  =============

</TABLE>


The accompanying notes are an integral part of these financial statements.



                                      F-4
<PAGE>

Quantum MRI, Inc.
(formerly Travelshorts.com, Inc.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
From June 7, 1989 (Date of inception) to March 31, 2008
(Expressed in US dollars)

<TABLE>
<S>                                              <C>          <C>        <C>           <C>        <C>

                                                                                     Deficit
                                                                                   Accumulated
                                                                      Additional   During the
                                                  Common Stock         Paid-in     Development
                                                Shares       Amount    Capital        Stage      Total
                                                ------       ------   ----------  ------------   -----
                                                   #            $          $            $          $
Balance -June 7, 1989 (Date of inception)            -            -           -            -          -
Stock issued for services at $0.045 per share   50,000           50      (2,450)           -      2,500
Net loss for the period                              -            -           -       (2,500)    (2,500)
Balance - March 31, 1997                        50,000           50      (2,450)      (2,500)         -
Sale of common stock for cash at $1.05
 per share                                      55,800           56      59,944            -     60,000
Net loss for the year                                -            -           -      (52,100)   (52,100)
                                             ----------   ----------  ----------   ---------- ----------
Balance - March 31, 1998                       105,800          106      62,394      (54,600)     7,900
Sale of common stock for cash at $6.75
 per share                                       1,720            2      11,498            -     11,500
Net loss for the year                                -            -           -      (21,400)   (21,400)
                                             ----------   ----------  ----------   ---------- ----------
Balance - March 31, 1999                       107,520          108      73,892      (76,000)    (2,000)
Sale of common stock for cash at $25.00
 per share                                       1,460            1      36,499            -     36,500
Net loss for the year                                -            -           -      (12,471)   (12,471)
                                             ----------   ----------  ----------   ---------- ----------
Balance - March 31,2000                        108,980          109     110,391      (88,471)    22,029
Sale of common stock for cash at $28.35
 per share                                         657            1      18,624            -     18,625
Stock cancelled and returned                    (2,000)          (2)     (1,998)           -     (2,000)
Net loss for the year                                -            -           -      (82,446)   (82,446)
                                             ----------   ----------  ----------   ---------- ----------
Balance - March 31, 2001                       107,637          108     127,017     (170,917)   (43,792)
Stock cancelled and returned                      (680)          (1)          1            -          -
Stock reissued                                     366            -           -            -          -
Donated capital                                      -            -      27,475            -     27,475
Net loss for the year                                -            -           -      (50,750)   (50,750)
                                             ----------   ----------  ----------   ---------- ----------
Balance - March 31, 2002                       107,323          107     154,493     (221,667)   (67,067)
Acquisition of SETI                            111,275          111      16,580     (660,217)  (643,526)
Cancellation of shares                         (50,000)         (50)     (7,450)           -     (7,500)
Sale of common stock for cash at $75.00
 per share                                       1,933            2     144,998            -    145,000
Offering costs                                       -            -      (6,000)           -     (6,000)
Forgiveness of debt                                  -            -      20,250            -     20,250
Donated capital                                      -            -      26,059            -     26,059
Net loss for the year                                -            -           -     (195,666)  (195,666)
                                             ----------   ----------  ----------   ---------- ----------
Balance - March 31, 2003                       170,531          170     348,930   (1,077,550)  (728,450)
Sale of common stock for cash at $75.00
 per share                                         620            1      46,499            -     46,500
Adjustment for non-cancellation of shares       50,000           50         (50)           -          -
Shares repurchased                             (33,178)         (33)     (1,267)           -     (1,300)
Donated capital                                      -            -      71,767            -     71,767
Net loss for the year                                -            -           -     (915,529)  (915,529)
                                             ----------   ----------  ----------   ---------- ----------
Balance - March 31, 2004                       187,973          188     465,879   (1,993,079)(1,527,012)
                                             ==========   ==========  ==========  =========== ==========

</TABLE>


The accompanying notes are an integral part of these financial statements.



                                      F-5
<PAGE>

Quantum MRI, Inc.
(formerly Travelshorts.com, Inc.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
From June 7, 1989 (Date of inception) to March 31, 2008
(Expressed in US dollars)

<TABLE>
<S>                                              <C>          <C>         <C>          <C>          <C>             <C>
                                                                                                   Deficit
                                                                                                 Accumulated
                                                                       Additional    Common       During the
                                                  Common Stock          Paid-in       Stock      Development
                                                Shares       Amount     Capital     Subscribed       Stage         Total
                                                ------       ------    ----------   ----------   -----------       -----
                                                   #            $           $            $          $

Balance - March 31, 2004                       187,973          188      465,879            -     (1,993,079)   (1,527,012)
Stock issued for conversion
  of notes at $4.50 per share                   64,950           65      292,210            -              -       292,275
Stock issued for management
  services at $3.00 per share                   33,333           33       99,967            -              -       100,000
Donated capital                                      -            -       88,609            -              -        88,609
Net loss for the year                                -            -            -            -       (434,408)     (434,408)
                                            -----------  -----------  -----------  -----------    -----------   -----------
Balance - March 31, 2005                       286,256          286      946,665            -     (2,427,487)   (1,480,536)
Shares returned to treasury
   for cancellation                            (50,000)         (50)          50            -              -             -
Sale of common stock at
   $0.29 per share                             485,000          485      139,465            -              -       139,950
Sale of common stock at
   $0.30 per share                              35,000           35       10,465            -              -        10,500
Shares issued for management
   services at $0.36 per share               6,000,000        6,000    2,154,000            -              -     2,160,000
Shares returned to treasury
   for cancellation                            (64,950)         (65)    (292,210)           -              -      (292,275)
Shares issued for services at
   $0.35 per share                           5,000,000        5,000    1,745,000            -              -     1,750,000
Shares returned to treasury
   for cancellation                         (5,000,000)      (5,000)  (1,745,000)           -              -    (1,750,000)
Shares issued on conversion
  of debt                                    1,000,000        1,000      329,000            -              -       330,000
Shares issuable pursuant to
   investment agreements                             -            -            -      101,550              -       101,550
Beneficial conversion feature                        -            -       45,895            -              -        45,895
Donated capital                                      -            -       25,596            -              -        25,596
Fair value of warrants issued
   pursuant to investment                            -            -       70,520            -              -        70,520
Gain on forgiveness of debt                          -            -      239,487            -              -       239,487
Imputed interest, including
   $10,368 accrued in prior periods
   reclassified from accrued
   liabilities                                       -            -      130,595            -              -       130,595
Net loss for the year                                -            -            -            -     (3,026,581)   (3,026,581)
                                            -----------  -----------  -----------  -----------    -----------   -----------
Balance - March 31, 2006                     7,691,306        7,691    3,799,528      101,550     (5,454,068)   (1,545,299)
                                            ===========  ===========  ===========  ===========    ===========   ===========
</TABLE>


The accompanying notes are an integral part of these financial statements.



                                      F-6
<PAGE>

Quantum MRI, Inc.
(formerly Travelshorts.com, Inc.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
From June 7, 1989 (Date of inception) to March 31, 2008
(Expressed in US dollars)

<TABLE>
<S>                                              <C>          <C>         <C>          <C>          <C>             <C>
                                                                                                   Deficit
                                                                                                 Accumulated
                                                                       Additional    Common       During the
                                                  Common Stock          Paid-in       Stock      Development
                                                Shares       Amount     Capital     Subscribed       Stage         Total
                                                ------       ------    ----------   ----------   -----------       -----
                                                   #            $           $            $          $

Balance - March 31, 2006                     7,691,306        7,691    3,799,528      101,550     (5,454,068)   (1,545,299)
Shares issued on conversion
   of debt                                   1,280,000        1,280      894,720      (90,000)             -       806,000
Shares issued for services
   at $0.70 per share                          100,000          100       69,900            -              -        70,000
Shares issued for services
   at $0.07 per share                        5,000,000        5,000      345,000            -              -       350,000
Shares issuable pursuant to
   loan agreement                                    -            -            -      114,000              -       100,000
Beneficial conversion feature                        -            -       20,642            -              -        20,642
Fair value of warrants issued
   pursuant to investment                            -            -        6,775            -              -         6,775
Donated capital                                      -            -       27,060            -              -        27,060
Imputed interest                                     -            -      201,615            -              -       201,615
Net loss for the year                                -            -            -            -     (1,951,033)   (1,951,033)
                                            -----------  -----------  -----------  -----------    -----------   -----------
Balance - March 31, 2007                    14,071,306       14,071    5,365,240      125,550     (7,405,101)   (1,900,240)
Donated capital                                      -            -       29,381            -              -        29,381
Imputed interest                                     -            -      205,156            -              -       205,156
Net loss for the year                                -            -            -            -       (559,472)     (559,472)
                                            -----------  -----------  -----------  -----------    -----------   -----------
Balance - March 31, 2008                    14,071,306       14,071    5,599,777      125,550     (7,964,573)   (2,225,175)
                                            ===========  ===========  ===========  ===========    ===========   ===========
</TABLE>




The accompanying notes are an integral part of these financial statements.






                                      F-7
<PAGE>


Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


1.  Nature of Operations and Continuance of Business

   Quantum MRI Inc. (the "Company") was incorporated in Washington on June 7,
   1989 under the name P.L.D.F.E.T., Inc. On March 17, 2000, the Company changed
   its name to Travelshorts.com, Inc. On May 5, 2005, the Company changed its
   name to Sharps Elimination Technologies, Inc. On August 25, 2005, the Company
   changed its name to Quantum MRI, Inc. The Company is in the development stage
   as defined by the Statement of Financial Accounting Standard ("SFAS") No. 7
   "Accounting and Reporting by Development Stage Enterprises". The Company's
   principal business is the constructing and operating MRI testing centers in
   the United States and Canada. Each center will exclusively provide MRI tests
   on an outpatient basis for patients.

   On December 3, 2002, the Company acquired all of the issued and outstanding
   shares of SETI Corp. ("SETI") in exchange for 111,275 newly issued
   split-adjusted shares of the Company's common stock. Prior to the
   acquisition, the Company had no operations and was considered a public shell.
   SETI was also a development stage company with no operations, however had a
   licensing agreement for certain patented technology (see Note 5).
   Accordingly, since SETI was not considered a business, the transaction was
   accounted for as a recapitalization of the public shell and the issuance of
   stock by the Company for the assets and liabilities of SETI. The value of the
   net assets of SETI is the same as their historical book value, which included
   the licensing agreement of $274,964 and liabilities assumed of $918,490. In
   addition, as part of the transaction, the former president returned 50,000
   split-adjusted common shares to the Company for cancellation.

   The accompanying consolidated financial statements include the historical
   accounts of SETI since December 3, 2002. All significant intercompany
   balances and transactions have been eliminated in consolidation.

   At March 31, 2008, the Company had a working capital deficit of $2,225,175
   and accumulated losses of $7,964,573 since inception. The ability of the
   Company to continue as a going concern is dependent on its ability to emerge
   from the development stage with respect to its planned principal business
   activity, attaining profitable operations and raising additional debt and/or
   equity financing to fund its operations. Management's plan in this regard is
   to raise additional funding through private offerings and to operate MRI
   testing centers. These factors raise substantial doubt about the Company's
   ability to continue as a going concern. The consolidated financial statements
   do not include any adjustment relating to the recovery and classification of
   recorded asset amounts or the amount and classification of liabilities that
   might be necessary should the Company discontinue operations.



                                      F-8
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


2. Significant Accounting Policies

(a)   Basis of Presentation

      These financial statements are prepared in conformity with accounting
      principles generally accepted in the United States and are expressed in US
      dollars. These financial statements include accounts of the Company and
      its wholly-owned subsidiary, SETI Corp. All significant intercompany
      transactions and balances have been eliminated. The Company's fiscal year
      end is March 31.

(b)   Use of Estimates

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

(c)   Cash Equivalents

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

(d)   Property and Equipment

      Property and equipment are stated at cost less accumulated depreciation
      and consist of computer hardware and office furniture. These assets are
      depreciated on a straight-line basis using an estimated useful life of
      five years.



                                      F-9
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


2. Significant Accounting Policies (continued)

(e)   Comprehensive Income

      SFAS No. 130, "Reporting Comprehensive Income," establishes standards for
      the reporting and display of comprehensive income and its components in
      the financial statements. As at March 31, 2008 and 2007, the Company has
      no items that represent comprehensive income and, therefore, has not
      included a schedule of comprehensive income in the financial statements.

(f)   Product Development Costs

      Product development costs related to the Needle-Ease(TM) technology are
      expensed as incurred.

(g)   Long-lived Assets

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

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

(h)   Foreign Currency Translation

      The Company's functional and reporting currency is the United States
      dollar. The financial statements of the Company are translated to United
      States dollars in accordance with SFAS No. 52 "Foreign Currency
      Translation". Monetary assets and liabilities denominated in foreign
      currencies are translated using the exchange rate prevailing at the
      balance sheet date. Gains and losses arising on translation or settlement
      of foreign currency denominated transactions or balances are included in
      the determination of income. Foreign currency transactions are primarily
      undertaken in Canadian dollars. The Company has not, to the date of these


                                      F-10
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


      financials statements, entered into derivative instruments to offset the
      impact of foreign currency fluctuations.

(i)   Income Taxes

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

(j)   Stock-based Compensation

      Prior to January 1, 2006, the Company accounted for stock-based awards
      under the recognition and measurement provisions of Accounting Principles
      Board Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees"
      using the intrinsic value method of accounting, under which compensation
      expense was only recognized if the exercise price of the Company's
      employee stock options was less than the market price of the underlying
      common stock on the date of grant. Effective January 1, 2006, the Company
      adopted the fair value recognition provisions of SFAS No. 123R "Share
      Based Payments", using the modified prospective transition method. The
      Company has not issued any stock options since its inception. Accordingly,
      there was no effect on the Company's reported loss from operations, cash
      flows or loss per share, as a result of adopting SFAS No. 123R.

(k)   Financial Instruments

      The fair values of cash, accounts payable, accrued liabilities, amounts
      due to related parties, loans payable, and convertible notes payable
      approximate their fair value due to the relatively short maturity of these
      instruments.

(l)   Revenue Recognition

      The Company recognizes revenue in accordance with SEC Staff Accounting
      Bulletin No. 104 when there is persuasive evidence of an arrangement,
      delivery of products has occurred or services have been rendered, the
      seller's price to the buyer is fixed or determinable, and collectibility
      is reasonably assured.



                                      F-11
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


2. Significant Accounting Policies (continued)

(m)   Basic and Diluted Net Income (Loss) per Share

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

(n)   Reclassification

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

(o)   Recently Issued Accounting Pronouncements

      In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS
      No. 163, "Accounting for Financial Guarantee Insurance Contracts - An
      interpretation of FASB Statement No. 60". SFAS 163 requires that an
      insurance enterprise recognize a claim liability prior to an event of
      default when there is evidence that credit deterioration has occurred in
      an insured financial obligation. It also clarifies how Statement 60
      applies to financial guarantee insurance contracts, including the
      recognition and measurement to be used to account for premium revenue and
      claim liabilities, and requires expanded disclosures about financial
      guarantee insurance contracts. It is effective for financial statements
      issued for fiscal years beginning after December 15, 2008, except for some
      disclosures about the insurance enterprise's risk-management activities.
      SFAS 163 requires that disclosures about the risk-management activities of
      the insurance enterprise be effective for the first period beginning after
      issuance. Except for those disclosures, earlier application is not
      permitted. The adoption of this statement is not expected to have a
      material effect on the Company's financial statements.

      In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
      Financial Assets and Financial Liabilities - Including an Amendment of
      FASB Statement No. 115". This statement permits entities to choose to
      measure many financial instruments and certain other items at fair value.
      Most of the provisions of SFAS No. 159 apply only to



                                      F-12
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


   o) Recently Issued Accounting Pronouncements (continued)

      entities that elect the fair value option. However, the amendment to SFAS
      No. 115 "Accounting for Certain Investments in Debt and Equity Securities"
      applies to all entities with available-for-sale and trading securities.
      SFAS No. 159 is effective as of the beginning of an entity's first fiscal
      year that begins after November 15, 2007. Early adoption is permitted as
      of the beginning of a fiscal year that begins on or before November 15,
      2007, provided the entity also elects to apply the provision of SFAS No.
      157, "Fair Value Measurements". The adoption of this statement is not
      expected to have a material effect on the Company's financial statements.

      In December 2007, the Financial Accounting Standards Board (FASB) issued
      SFAS No. 141R, "Business Combinations". This statement replaces SFAS 141
      and defines the acquirer in a business combination as the entity that
      obtains control of one or more businesses in a business combination and
      establishes the acquisition date as the date that the acquirer achieves
      control. SFAS 141R requires an acquirer to recognize the assets acquired,
      the liabilities assumed, and any noncontrolling interest in the acquiree
      at the acquisition date, measured at their fair values as of that date.
      SFAS 141R also requires the acquirer to recognize contingent consideration
      at the acquisition date, measured at its fair value at that date. This
      statement is effective for fiscal years, and interim periods within those
      fiscal years, beginning on or after December 15, 2008. Earlier adoption is
      prohibited. The adoption of this statement is not expected to have a
      material effect on the Company's financial statements.

      In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests
      in Consolidated Financial Statements Liabilities -an Amendment of ARB No.
      51". This statement amends ARB 51 to establish accounting and reporting
      standards for the Noncontrolling interest in a subsidiary and for the
      deconsolidation of a subsidiary. This statement is effective for fiscal
      years, and interim periods within those fiscal years, beginning on or
      after December 15, 2008. Earlier adoption is prohibited. The adoption of
      this statement is not expected to have a material effect on the Company's
      financial statements.

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



                                      F-13
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


2. Significant Accounting Policies (continued)

(p)   Recently Adopted Accounting Pronouncements

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

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

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




                                      F-14
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


   (p)Recently Adopted Accounting Pronouncements (continued)

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

3. Property and Equipment
                                                        March 31,   March 31,
                                                          2008        2007
                                         Accumulated  Net Carrying  Net Carrying
                                 Cost   Depreciation      Value        Value
                                  $          $              $            $

   Office furniture and
    computer hardware            9,391       9,391            -         1,527
   ----------------------------------------------------------------------------

4.    Related Party Transactions

(a)   During the year ended March 31, 2008, management fees of $156,000 (2007 -
      $168,000) were charged to operations pursuant to executive services
      agreements with the President of the Company and the Vice-President of
      Finance.

(b)   As of March 31, 2008, the Company's President, and a company controlled by
      the President are owed $1,310,672 (2007 - $1,178,520) relating to amounts
      assumed by the Company at the acquisition of SETI and subsequent advances
      made to the Company. These amounts have no due date and are non-interest
      bearing. During the year ended March 31, 2008, interest of $188,467 (2007
      - $184,543) has been imputed at twice prime rate and charged to operations
      with a corresponding credit to additional paid-in capital.

(c)   During the year ended March 31, 2008, the Company recognized a total of
      $29,381 (2007 - $27,060) for donated rent provided by the President of the
      Company.



                                      F-15
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


4.    Related Party Transactions (continued)

(d)   As of March 31, 2008, the Company is indebted to a Director of the Company
      for $79,778 (2007 - $11,411), representing expenses paid on behalf of the
      Company. These amounts have no due date and are non-interest bearing.

(e)   On January 10, 2007, the Company issued 2,500,000 shares of common stock
      with a fair value of $175,000 to the President of the Company for services
      provided. The shares were valued at the closing price of the Company's
      common stock on the date of issue.

(f)   On April 7, 2006, the President of the Company received 300,000 shares of
      common stock in consideration for services provided to the Company as
      described in Note 6.

5.    Loans Payable

(a)  On March 31, 2007, the Company entered into an investment agreement with an
     investor  and  received  $10,700 as a loan  repayable on September 1, 2007.
     Pursuant to the agreement,  the Company will pay interest of 15% per annum.
     During the year ended  March 31,  2008,  the  Company  accrued  interest of
     $1,609.

(b)  On November 17,  2006,  the Company  entered  into an unsecured  investment
     agreement  with an investor and received  $50,000 as a loan repayable on or
     before January 20, 2007.  Pursuant to the  agreement,  the Company will pay
     interest of 12% per annum and issue the  investor  2,000,000  shares of the
     Company's  common  stock.  The issuance of the  2,000,000  shares of common
     stock was valued at $100,000 and recorded as stock-based  compensation  and
     common stock subscribed.  During the year ended March 31, 2008, the Company
     accrued  interest of $6,016 (2007 - $2,203).  At March 31,  2008,  the loan
     remains unpaid and the 2,000,000 shares have not been issued. Refer to Note
     7(c).

(c)  On May 22, 2006, the Company entered into an unsecured investment agreement
     with an investor and received $25,000 as a loan repayable on July 22, 2006.
     Pursuant to the  agreement,  the Company will pay interest of 15% per annum
     and issue the investor  35,000  restricted  shares of the Company's  common
     stock and a warrant to purchase 35,000  restricted  shares of the Company's
     common stock at a price of $0.30 per share until May 22,  2008.  During the
     year ended March 31, 2008, the Company  accrued  interest of $3,761 (2007 -
     $3,205) and no warrants were exercised. The loan was not repaid on July 22,
     2006 and remains outstanding. Refer to Note 7(d).



                                      F-16
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


5.    Loans Payable (continued)

(d)  On March 6, 2006,  the  Company  entered  into three  unsecured  investment
     agreements with investors to receive loans totalling $75,000,  repayable on
     May 6, 2006.  Pursuant to the agreements,  the Company will pay interest of
     $15,000 and issue the  investors  180,000  shares of the  Company's  common
     stock and warrants to purchase 180,000  restricted  shares of the Company's
     common stock at a price of $0.30 per share until May 6, 2007.  At March 31,
     2008,  the  Company  accrued  interest  of  $15,000  and no  warrants  were
     exercised.   The  loans  were  not  repaid  on  May  6,  2006,  and  remain
     outstanding. Under the terms of the notes, additional interest of $2,500 is
     charged  for each 30 day  period or  fraction  of 30 day  period  where the
     repayment of the  principal  amounts are past due. At March 31,  2008,  the
     Company  had  accrued  additional  interest  penalties  of $57,500  (2007 -
     $27,500)  based on  non-payment  of the  principal  portions  of the  notes
     payable. Refer to Note 7(g).

(e)  On  February 8, 2006,  the Company  entered  into an  unsecured  investment
     agreement  with an investor  and  received  $25,000 as a loan  repayable on
     April 10, 2006. Pursuant to the agreement, the Company will pay interest of
     12% per  annum  and  issue the  investor  35,000  restricted  shares of the
     Company's common stock and a warrant to purchase 35,000  restricted  shares
     of the Company's common stock at a price of $0.30 per share until April 10,
     2008.  At March 31,  2007,  the  Company  accrued  interest  of $477 and no
     warrants were  exercised.  During the fiscal year ended March 31, 2007, the
     loan was repaid.

6.    Convertible Notes Payable

   On November 16, 2005, the Company entered into an Exchange Agreement with the
   holder of all of the Company's outstanding notes payable (the "Creditor").
   Under the terms of the agreement, the Creditor agreed to return for
   cancellation the 64,950 shares of common stock previously received on
   settlement of promissory notes in exchange for three new convertible notes in
   the aggregate principal amount of $292,275. The notes matured on December 17,
   2005 ($100,000), January 15, 2006 ($100,000) and March 15, 2006 ($92,275).
   The Creditor also agreed to cancel the prior outstanding promissory notes
   totalling $85,780 in exchange for a new convertible note for $85,780 that
   matured on June 15, 2006. The Company also issued a new convertible note for
   cash proceeds of $35,000 that matures on August 15, 2006. All notes bear
   interest at 5.5% per annum. The principal and accrued interest on the
   promissory notes may be converted into shares of the Company's common stock
   at the Conversion Price at the option of the holder. The Conversion Price is
   90% of average closing bid price of the Company's common stock for the 30
   trading days preceding the conversion. During the year ended March 31, 2006,
   the creditor agreed to waive interest on all outstanding notes.




                                      F-17
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


6. Convertible Notes Payable (continued)

   In accordance with EITF 98-5 "Accounting for Convertible Securities with
   Beneficial Conversion Features or Contingently Adjustable Conversion Ratios",
   the Company recognized the value of the embedded beneficial conversion
   feature of $45,895 as additional paid-in capital as the debt was issued with
   an intrinsic value conversion feature. At March 31, 2006, the Company
   recognized $40,503 as interest expense which increased the carrying value of
   the promissory notes to $121,883. The Company recognized $5,392 as interest
   expense during the fiscal year ending March 31, 2007 and repaid $10,000 of
   principal payments, decreasing the carrying value of the promissory notes to
   the face value of $117,275.

    On January 26, 2006, the Company entered into a Note Conversion Agreement
    ("the Agreement") with the holder of the convertible promissory notes (the
    "Creditor"). Under the terms of the agreement, the Creditor agreed to
    convert the promissory note with a principal of $100,000 and a maturity date
    of December 17, 2005 into 1,000,000 shares of common stock. The Creditor
    will dispose of the shares in the market up to a maximum of 50,000 shares
    per week and, prior to March 31, 2006, at no less than $0.40 per share
    without the consent of the Company. All proceeds received by the Creditor to
    March 31, 2006 will reduce the amounts owed by the Company under the
    promissory notes. Any shares remaining at March 31, 2006 can be returned to
    the Company or retained by the Creditor. If shares are returned to the
    Company, a new promissory note will be issued for the balance of principal
    remaining after any reduction applied for proceeds from the sale of common
    stock. If shares are retained by the Creditor, the shares will be valued at
    90% of the average closing price of the Company's common stock for the 30
    trading days preceding March 31, 2006 (the "Calculated Value"). The
    Calculated Value will then be applied against amounts owing under any of the
    notes unpaid at March 31, 2006. If the Calculated Value of the shares
    exceeds $100,000 plus the aggregate amounts payable under the remaining
    unpaid notes (the "Remaining Value"), then the Creditor will return to the
    Company that number of shares determined by dividing the Remaining Value by
    the average closing price of the Company's common stock for the 30 trading
    days preceding March 31, 2006. During the year ended March 31, 2008, the
    Agreement was amended to extend the deadline to December 31, 2008.

   On April 7, 2006, the Company entered into a Note Conversion Agreement ("the
   Agreement") with the holder of the convertible promissory notes (the
   "Creditor"). Under the terms of the agreement, the Creditor agreed to convert
   the promissory note with a principal of $100,000 and a maturity date of
   January 15, 2006 and a note in the principal amount of $85,780 with a
   maturity date of June 15, 2006 into 1,280,000 shares of common stock. The
   shares were issued to eight individuals including 300,000 shares to the
   President of the Company in consideration for services provided to the
   Company. The fair value of the common stock issued exceeded the value of the
   promissory notes by $710,220. This amount has been recognized as the cost of
   the past services provided.



                                      F-18
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


6. Convertible Notes Payable (continued)

   In consideration for the transfer of the shares described above, the Company
   agreed to issue a promissory note in the amount of $185,780. In accordance
   with EITF 98-5 "Accounting for Convertible Securities with Beneficial
   Conversion Features or Contingently Adjustable Conversion Ratios", the
   Company recognized the value of the embedded beneficial conversion feature of
   $20,642 as additional paid-in capital as the debt was issued with an
   intrinsic value conversion feature. The Company recognized $20,642 as
   interest expense during the year ended March 31, 2007, increasing the
   carrying value of the promissory notes to the face value of $185,780. During
   the year ended March 31, 2008, interest of $16,689 (2007 - $17,072) was
   treated as imputed at 5.5% per annum.

7.    Common Stock

     (a)  On January 10, 2007,  the Company  issued  2,500,000  shares of common
          stock with a fair  value of  $175,000  for  services  provided  to the
          Company.  The shares were valued at the closing price of the Company's
          common stock on the date of issue.

     (b)  On January 10, 2007,  the Company  issued  2,500,000  shares of common
          stock with a fair value of  $175,000 to the  President  of the Company
          for services provided.  The shares were valued at the closing price of
          the Company's common stock on the date of issue.

     (c)  On November 17, 2006,  pursuant to an investment  agreement  (refer to
          Note  5(b))  the  Company  agreed  to issue  2,000,000  shares  of the
          Company's  common  stock  with a fair  value of  $100,000.  During the
          period  ended March 31,  2007,  the total fair value of  $100,000  was
          charged to interest expense with a corresponding credit of $100,000 to
          common stock subscribed.

     (d)  On May 22, 2006,  pursuant to an investment  agreement  (refer to Note
          5(c)) the  Company  agreed  to issue  35,000  shares of the  Company's
          common  stock with a fair value of $14,000  and  warrants  to purchase
          35,000 shares at $0.30 per share with a fair value of $6,775  pursuant
          to an  investment  agreement.  During the period ended March 31, 2007,
          the total fair value of $20,775 was charged to interest expense with a
          corresponding  credit of  $6,775 to  additional  paid in  capital  and
          $14,000 to common stock subscribed.

     (e)  On April 10, 2006,  the Company  issued  100,000  common shares with a
          fair value of $70,000 for services provided to the Company. The shares
          were valued at the closing price of the Company's  common stock on the
          date of issue.

     (f)  On April 7, 2006,  the  Company  issued  1,280,000  shares with a fair
          value of $896,000 upon the conversion of $185,780 of convertible notes
          payable  during the period  ended  September  30,  2006,  the  Company
          recognized $710,220 as the cost of the past services provided.



                                      F-19
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


7. Common Stock (continued)

     (g)  On March 6, 2006,  the Company  agreed to issue 180,000  shares of the
          Company's  common  stock with a fair value of $90,000 and  warrants to
          purchase  180,000  shares  at $0.30  per  share  with a fair  value of
          $63,294 pursuant to three investment agreements. During the year ended
          March 31,  2006,  the total  fair  value of  $153,294  was  charged to
          interest expense with a corresponding  credit of $63,294 to additional
          paid-in  capital and $90,000 to common  stock  subscribed.  During the
          year ended  March 31,  2007,  a  shareholder  transferred  the 180,000
          shares of the  Company's  common  stock on behalf  of the  Company  in
          consideration for a convertible note. Refer to Note 5(d).

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

                                          Number of     Weighted average
                                        split-adjusted   exercise price
                                            shares             $
                                        --------------------------------

      Balance, March 31, 2007              285,000           0.32
      Expired                             (215,000)          0.33
                                        --------------------------------
      Balance, March 31, 2008               70,000           0.30
                                        ================================

      At March 31, 2008, the following share purchase warrants were outstanding:

      Number of Shares  Exercise Price     Expiry Date
      ---------------------------------------------------------

      35,000                $0.30          April 10, 2008
      35,000                $0.30          May 22, 2008

8.    Commitments and Contingencies

     (a)  On March 1, 2006,  the Company  entered into an  employment  agreement
          with the Company's  Vice-President of Finance.  Under the terms of the
          employment  agreement,  the  Company  must pay $4,000 per month for an
          initial term of eight  months,  and grant  options to acquire  300,000
          shares of common stock.  During the year ended March 31, 2008, $36,000
          was  charged to  operations.  At March 31,  2008,  the Company had not
          granted any options and the agreement had been terminated.

     (b)  On November 1, 2005, the Company entered into an employment  agreement
          with the Company's  Chief  Executive  Officer.  Under the terms of the
          employment agreement,  the Company must pay $120,000 per annum for the
          period from April 1, 2006 to March 31, 2008. This employment agreement
          extends the terms of the previous employment agreement,  which expires
          on March 31,  2008.  During the year ended  March 31,  2008,  $120,000
          (2007 - $120,000) was charged to operations.


                                      F-20
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


     (c)  A claim has been  asserted  against the Company,  its  subsidiary  and
          President alleging that the Company and/or its President are liable to
          for a loan in the amount of approximately $250,000, and that there was
          a failure to deliver approximately 53,333 split-adjusted shares of the
          Company's common stock which were to be held as security for the loan.
          The Company  intends to  vigorously  defend  itself in this matter and
          management feels it has meritorious defenses. This action is in a very
          preliminary  stage and it is not  possible to  determine  the probable
          outcome.  The  accompanying  financial  statements  do not include any
          provision for possible loss.

9.    Income Taxes

   The Company accounts for income taxes under SFAS No. 109, "Accounting for
   Income Taxes." Deferred income tax assets and liabilities are determined
   based upon differences between financial reporting and tax bases of assets
   and liabilities and are measured using the enacted tax rates and laws that
   will be in effect when the differences are expected to reverse. Income tax
   expense differs from the amount that would result from applying the U.S
   federal and state income tax rates to earnings before income taxes. The
   Company has a net operating loss carryforward of approximately $6,540,000
   available to offset taxable income in future years which expires in fiscal
   2024. Pursuant to SFAS 109, the potential benefit of the net operating loss
   carryforward has not been recognized in the financial statements since the
   Company cannot be assured that it is more likely than not that such benefit
   will be utilized in future years.

   The Company is subject to United States federal and state income taxes at an
   approximate rate of 35%. The reconciliation of the provision for income taxes
   at the United States federal statutory rate compared to the Company's income
   tax expense as reported is as follows:



                                      F-21
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


9. Income Taxes (continued)

                                                March 31,     March 31,
                                                  2008          2007
                                                    $             $


Net loss before income taxes per financial      559,472      1,951,033
   statements

Income tax rate                                     35%             35%

Income tax recovery                            (195,820)      (682,860)

Permanent differences                            82,080         80,040

Temporary differences                               530            660

Valuation allowance change                      113,210        602,160
-------------------------------------------------------------------------
Provision for income taxes                            -              -
=========================================================================


   Deferred income taxes reflect the net tax effects of temporary differences
   between the carrying amounts of assets and liabilities for financial
   reporting purposes and the amounts used for income tax purposes. Deferred
   income taxes arise from temporary differences in the recognition of income
   and expenses for financial reporting and tax purposes. The significant
   components of deferred income tax assets and liabilities at March 31, 2008
   and 2007 are as follows:

                                                March 31,     March 31,
                                                  2008          2007
                                                    $             $

Net operating loss carryforward                2,289,000     2,176,000

Valuation allowance                           (2,289,000)   (2,176,000)
-------------------------------------------------------------------------
Net deferred income tax asset                          -             -
=========================================================================


   The Company has recognized a valuation allowance for the deferred income tax
   asset since the Company cannot be assured that it is more likely than not
   that such benefit will be utilized in future years. The valuation allowance
   is reviewed annually. When circumstances change and which cause a change in
   management's judgment about the realizability of deferred income tax assets,
   the impact of the change on the valuation allowance is generally reflected in
   current income.


                                      F-22
<PAGE>

Quantum MRI, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2008
(Expressed in US dollars)


10.   Subsequent Event

     On May 22, 2008, warrants to purchase 35,000 shares of the Company's common
     stock expired.

     On July 15, 2008 Kelly  Fielder,  the Company's  only officer and director,
     converted  all amounts  owed to him by the Company,  including  any accrued
     interest and penalties ($1,310,672 as of March 31, 2008), into 1,000 shares
     of the Company's common stock.

     Also on July 15, 2008 Spectrum  Meditech Inc., a corporation  controlled by
     Mr.  Fielder,  converted  all  amounts  owed to  Spectrum  by the  Company,
     including any accrued interest and penalties (which was minimal as of March
     31, 2008) into 1,000 shares of the Company's common stock.







                                      F-23
<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized on the 3rd day of December 2008.

                                  QUANTUM MRI, INC.


                                  By   /s/ Kelly Fielder
                                      ------------------------------------------
                                      Kelly Fielder, President, Principal
                                      Financial Officer and Principal Accounting
                                      Officer


      Pursuant to the requirements of the Securities Act of l934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

                                     Title                    Date

 /s/ Kelly Fielder
-----------------------
Kelly Fielder                       Director             December 3, 2008






<PAGE>