UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K

              Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                  For the fiscal year ended: December 31, 2007


                        Commission file number: 33-20582

                        VirtualHealth Technologies, Inc.
              ----------------------------------------------------
                (Name of registrant as specified in its charter)

        Delaware                                          75-2276137
---------------------------------              -------------------------------
(State or other jurisdiction of                (IRS employer identification no.)
      incorporation)

          PO Box 12012
   Lexington, Kentucky 40579                           (859) 321-2466
---------------------------------              -------------------------------
 (Address of principal executive offices)        (Registrant's telephone number,
                                                 including area code)


Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

                                                Name of each exchange
   Title of each class                             on which registered
   -------------------                   --------------------------------------
Class A Common Stock, $.001 Par Value                     None











<PAGE>



Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. |_|



Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. Yes |X| No |_|



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



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



Issuer's revenues for its most recent fiscal year: $1,396,812.



The aggregate market value of the common stock held by non-affiliates of the
issuer as of December 31, 2007 was approximately $7,592,582.



Shares  outstanding  of the  registrant's  common  stock as of April  13,  2008:
42,701,533 shares.






<PAGE>




                       TABLE OF CONTENTS TO ANNUAL REPORT
                                  ON FORM 10-K
                          YEAR ENDED DECEMBER 31, 2007



                                     PART I

ITEM 1.    Description of Business.............................................4
ITEM 2.    Description of Properties..........................................16
ITEM 3.    Legal Proceedings..................................................16
ITEM 4.    Submission of Matters to a Vote of Security Holders................16

                                     PART II

ITEM 5.    Market for Common Equity and Related Stockholder Matters...........17
ITEM 6.    Management's Discussion and Analysis or Plan of Operation..........18
ITEM 7.    Financial Statements...............................................22
ITEM 8.    Changes In and Disagreements With Accountants on Accounting
           and Financial Disclosure...........................................22
ITEM 8A.   Controls and Procedures............................................22
ITEM 8B.   Other Information..................................................22

                                    PART III

ITEM 9.    Directors, Executive Officers, Promoters and Control Persons;
           Compliance With Section 16(a) of the Exchange Act..................22
ITEM 10.   Executive Compensation.............................................24
ITEM 11.   Security Ownership of Certain Beneficial Owners and Management
           and Related Stockholder Matters....................................25
ITEM 12.   Certain Relationships and Related Transactions.....................26
ITEM 13.   Exhibits...........................................................26
ITEM 14.   Principal Accountant Fees and Services.............................28

Index to Financial Statements................................................F-1

Signatures....................................................................51











<PAGE>



                                     PART I

ITEM 1.  Description of Business.

Background

     The Company was organized on March 4, 1988, as a placeStateDelaware
corporation under the name Sherry Lyn Corporation. The Company was organized as
a public company for the purpose of finding a suitable combination partner. On
December 6, 1988, the Company changed its name to Equity Gold, Inc.

     On December 14, 1989, the Company merged with Gold Equity, Inc., a
placeStateDelaware corporation. The surviving corporation was Equity Gold, Inc.
On February 7, 1989, the Company changed its name to Equity AU, Inc.

     From the original inception of the Company on March 4, 1988, through
January 1, 1994, the Company was engaged in research and development of a
process to extract gold and other precious metals on various real properties
located in placeStateArkansas. Partnerships were formed prior to 1994 by the
Company or by affiliates of the Company to raise working capital, to acquire
mineral claims, rights, facilities and equipment, and to explore for precious
metals. In 1994, general partners of the partnerships notified the Company that
they were terminated and dissolved. The Company has had no significant
operations since August 1993 and entered the development stage on January 1,
1994. During September 1996, the Company resumed operations and again suspended
operations in December 1996. As result of the dissolution of the partnerships,
the Company ceased its operations and entered the development stage.

     In January 2000, the Company elected to change its name from Equity AU,
Inc., to Equity Technologies & Resources, Inc.

     On December 15, 2000, the Company acquired all of the issued and
outstanding common stock of Verified Prescription Safeguards, Inc. ("VPS") in
exchange for shares of the Company's Class B voting preferred stock. At the time
the purchase was consummated, VPS held no assets or liabilities. The
consolidated entity elected to change its business plan toward the development
and marketing of internet prescription drug technology.

     In May 2001, the Company acquired a newly formed wholly-owned subsidiary,
ETCR M&A, Inc. ("ETCR M&A"), a placeStateFlorida corporation, in exchange for
shares of the Company's common stock. ETCR M&A held no assets or liabilities at
the time of purchase. In November 2001, these shares were canceled and the
Company does not currently hold any interest in ETCR M&A.

     On August 2, 2002, the Company amended its Certificate of Incorporation to
change the authorized capital stock of the Company. The aggregate number of
Class A common shares authorized for issuance is 300,000,000 shares with a par
value of $0.0001; the aggregate number of Class B common shares authorized for
issuance is 100,000 with a par value of $0.01; the aggregate number of Class A
preferred shares authorized for issuance is 2,000,000 with a par value of
$0.001; the aggregate number of Class B preferred shares authorized for issuance
is 300,000 shares with a par value of $0.001; and the aggregate number of Class
C preferred shares authorized for issuance is 100,000 shares with a par value of
$0.001.

     Effective August 25, 2006, in furtherance of its business plan, the Company
acquired MB Holding Corporation, a placeStateNevada corporation ("MB Holding"),
from H.E.B., LLC, a placeStateNevada limited liability company ("HEB"), in
exchange for 34,000,000 (post reverse-split) shares of the Company's common
stock. MB Holding, through its wholly-owned subsidiaries, VPS Holding, LLC, a
Kentucky limited liability company ("VPSH"), and Envoii Healthcare, LLC, a



                                        4
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Nevada limited liability company ("Envoii"), developed and owned certain
technologies related to real-time internet prescription drug monitoring. In
connection with the acquisition of MB Holding, we (a) effected a 1 for 100
reverse split of our Class A Common Stock, (b) cancelled all of our outstanding
Class B Common Stock, (c) amended our Certificate of Incorporation, and (d)
changed our name to "VirtualHealth Technologies, Inc."

     On October 6, 2006, the Company consummated a Stock Exchange Agreement with
NewMarket Technology, Inc., a placeStateNevada corporation, pursuant to which
the Company acquired the outstanding shares of Medical Office Software, Inc., a
placeStateFlorida corporation ("MOS"). Prior to the acquisition, the Company
owned forty-nine percent (49%) of MOS' outstanding shares. Under the terms of
the Stock Exchange Agreement, the Company acquired the remaining outstanding
shares of MOS in exchange for (a) 1,400,000 shares of our common stock, and (b)
a two year convertible promissory note in the principle amount of $900,000. The
outstanding principal balance of the note may be converted, at the option of
NewMarket, into shares of our common stock at the market price of the common
stock at the time of conversion; provided, however, that in no event will we be
obligated to issue more than 675,000 shares of our common stock upon a
conversion. The convertible note will automatically convert into shares of our
common stock if the market price for our common stock reaches $2.00 per share.

Business

     The Company's primary business focus is healthcare technology. We are still
in the early stage of our development and will have to raise additional capital,
either through the sale of equity or through debt financing, to meet our
contractual obligations, and continue operations. We have developed a
proprietary software solution tailored toward object security and primarily
utilized this software in products and services we offered under the name
VeriscripTM.

     In addition to our Veriscrip products and services, MOS' client base of
over 1,500 users is a tremendous asset to Veriscrip. It establishes an existing
platform of early technology adopters already familiar with Virtual Health as a
trusted source of technology solutions for their practice. As Veriscrip is
deployed in each state where MOS has a base of users, those users would serve as
the initial sites for testing.

Veriscrip Business Model and Market Strategy

     The business model for our Veriscrip products and services is primarily
based upon the selling and operation of real-time controlled prescription drug
monitoring for state agencies, which pay for the services. Our fees are
comprised of license fees and transaction fees. We believe that these fee
components are a standard practice for electronic solutions and will be accepted
in the market. In addition, a small amount of revenue may be derived from
electronic networks with which we have established connectivity to reach
pharmacies and Pharmacy Benefit Managers (PBMs). We expect that our customers
will typically be a state and/or federal agency and can be classified as
follows:

     Primary Paying Customer: State agencies who contract with us to provide
controlled prescription management solutions within their jurisdiction,
typically a state, and the regulators they employ to manage the administration
of prescription drugs within their states.

     Parties Involved: Prescribers, including physicians, nurse practitioners,
psychiatrists, and dentists, as well as pharmacies are participants as they are
directly involved in the authorization and dispensing of controlled prescription
drugs. We service these parties per our agreements with state sponsors; however,
we have not forecasted nor do we expect to derive revenue for our core
functionality from these parties for our core product offering. Future
value-added transaction sets and functionality may garner additional revenue.




                                        5
<PAGE>



The following are our anticipated primary sources of revenue:

     Pilot Fees: In advance of each contract with a state-wide agency, it is
anticipated we will begin with a pilot program within a small region to test and
verify with the state agency the effectiveness and operation of our solution. We
anticipate that the state agency will pay a nominal amount, most likely as a
flat fee, to support these pilot activities.

     License Fees: We expect to be paid a one-time license fee from our state
agency customers, based upon state population, and paid over a period of time.
This fee is anticipated to cover all of our startup and implementation costs.

     State Transaction Fees: We also anticipate receiving transaction revenue
from our state agency customers for each transaction processed.

     During January through April of 2004, the Veriscrip solution was programmed
and beta-tested at two pilot sites in Harlan and Perry counties in Southeastern
placeStateKentucky. During this period, our solution was previewed by several
third parties, including the state licensure board president and a key
legislator. On April 28, 2004, the first real-time electronic prescription was
transmitted and received using the Veriscrip System at a rural clinic in Harlan
County, placeStateKentucky. A second pilot project was conducted at a medical
center practice and pharmacy in Hazard, placeStateKentucky. On October 15, 2004,
the first public demonstration of our Veriscrip System was conducted at the
annual National Technology Meeting for State Prescription Drug Monitoring
Programs in placeCityLexington, placeStateKentucky, sponsored by the National
Alliance for Model State Drug Laws.

     The University of Louisville School of Public Health and Information
Sciences initiated an assessment of our placeStateKentucky pilot projects in
October 2004. The Assessment Report recommended that, "there may be significant
benefits for the state to move ahead now with the proposed technology, either as
an alternative or an enhancement for the existing KASPER ("Kentucky All-Schedule
Prescription Electronic Reporting" system), or, potentially, as a plug-in to
KASPER, providing a way for prescribers data to move in real-time from
prescribers to dispenser to the regulatory side," but notes, "[t]he major
barrier to implementation will be resistance by physicians because of
productivity costs and opportunity costs in the context of emerging health
information exchange technologies." The Assessment Report also includes an
appendix in which the U of L assessment concludes the Veriscrip(TM) System
completely meets 18 criteria, and partially meets another 7 criteria, of the 60
Recommendations for Comparing Electronic Prescribing Systems made by the RAND
Electronic Prescribing Advisory Board. All of the recommendations have been met,
the Company will continue in 2008 to present our program.

     We have made a vigorous business analysis of the market in which Veriscrip
is designed for and have had to make some strategic adjustments to our overall
business plan. We now realize that the states are moving much slower than
anticipated. Realizing this, we have introduced new products which will allow us
to go after markets other than real time drug monitoring programs. Veriscrip is
the only company in the market which now can offer a base model program for
prescription drug monitoring programs, and then upgrade it to real time with
very little investment required from the states as well as little or no
interruption in their operations. We are also pursuing the opportunities on the
national level with the federal agencies in putting together a pilot program
which will test the ability of states to securely exchange prescription drug
information, with a goal of doing this in real time. It is our business strategy
to place Veriscrip into the forefront as a leader in this technology during
these pilot programs.

     We believe that our Veriscrip System has several advantages in this
emerging market:

     First to Operate a Real Time Solution: We believe that the Veriscrip pilot
project in Kentucky is the first state-backed real time electronic prescription
drug-monitoring program (PDMP) in the United States. This experience provides us
with an opportunity to work with regulators and state governments to fine tune
an overall product offering, and provides a potential advantage in marketing to
other states.



                                        6
<PAGE>



     Single Focus: Unlike many potential competitors, Veriscrip has one focus,
the provision of controlled prescription compliance solutions to state agencies.
By maintaining a simple focus, we can maximize our resources. Although our
management personnel have a deep and varied base of experience in related
healthcare solutions (i.e., records management, healthcare privacy solutions) of
our competitors, our simple focus helps to avoid management distractions that
might otherwise be focused toward these related areas.

     Our Veriscrip marketing strategy is to position Veriscrip such that user
barriers to adoption are minimized, we leverage existing complementary vendors
rather than compete with them, and combine a set of services that both uniquely
meets the regulatory monitoring needs of state agencies and resolves current
problems facing prescribers and pharmacies. Our current marketing strategy is to
seek out the states which are in the process of putting together a PDMP, as well
as marketing our security processes to those states who have already implemented
a monitoring program, enhancing their current program with better security in
the transference of records and documents. We feel this will allow for our
personnel to establish an important relationship with each of these customers,
and help push the movement to real time monitoring. As a rule, the following
challenges exist within every state:

     Lack of awareness: Most state governments do not have a general awareness
of the extent and cost of prescription drug abuse. In addition, most do not know
that practical real time options exist for administration and monitoring of
prescription drugs. Generating awareness through media stories and direct
marketing to government officials and health related groups are essential parts
of our strategy.

     Confidentiality of Patient Information: Patient confidentiality remains a
key barrier in passing legislation in certain states and is a primary
contributing factor in the slow adoption. HIPAA legislation passed by Congress
in 1996 provides a strong framework for securing health information. We believe
that our Veriscrip System not only is HIPAA compliant, but is strong enough to
raise the comfort level for state, local and federal agency personnel. This will
allow the movement to a real time solution to gain more momentum and increase
the overall market abilities of Veriscrip.

     Funding: Most of the current funding for PDMP's is still coming from the
Hal Rogers grants given out through the Department of Justice. The overall
funding for the monitoring programs are handled differently in every state: for
example placeStateLouisiana will be funding their program with a $25 fee on
pharmacy licenses for a period of five years. We will be analyzing over the next
ten to twelve months to see if there is a certain pattern of funding legislation
coming from the states. The tight budgets currently faced by the state
legislatures are going to make it more difficult for the active agencies seeking
new programs to get any state revenue help.

MOS Business Model and Market Strategy

     Medical Office Software, Inc. ("MOS") was incorporated in the State of
placeStateFlorida in September of 1984. Since its inception, MOS has engaged in
the physician practice management system ("PMS") market. Having completed more
than 1,500 installations, MOS has established a strong presence and brand
throughout placeSoutheastern Florida as what we believe is the premiere provider
of physician practice solutions. MOS began as a developer and marketer of its
own PMS solution. At the present, however, MOS focuses almost exclusively on
reselling and supporting products developed by other parties in an effort to
provide the best of breed to its customers. The market segments and products for
each of these markets are as follows:

     Physician Practices: Practice Management Software, Electronic Medical
Records Software, Electronic Claims Transactions via our Portal, E-prescribing
Solutions and Pre-packaged Pharmaceuticals for the development of an in-house
retail pharmacy.

     Orthotic  and  Prosthetic  Facilities:  Practice  Management  Software  and
Electronic Claims Transactions via our electronic solution.



                                        7
<PAGE>



The following are our anticipated primary sources of revenue:

     License Fees: For each of the software solutions whether Practice
Management or Electronic Medical Records there is a license fee collected. The
amount of each fee varies upon the scope of the installation and number of
users. This one-time fee is independent of any on-going maintenance fees paid.

     Upgrade Fees: As newer and improved versions of the software products are
released an upgrade fee is collected from the customer. Since many of the
transactions that emerge from the software are regulated standards these
upgrades are issued annually and are quickly adopted by the user base.

     Training Fees: Training fees are collected for both new installations and
for existing installations that have a need to train new staff or for improved
use of the existing product.

     Support Maintenance Fees: We expect to be paid an annual maintenance fee
for each installation. These fees are typically collected on the anniversary of
the installation for each customer. They allow customers to receive critical
updates and support for their products. Support is available via telephone,
remotely via the web or on-site as deemed necessary.

     Transaction Fees: There are multiple transactions that are generated by the
Practice Management Software: Electronic Claims, Electronic Statements and
Electronic Prescriptions. These transactions are all billed to the customer as a
per transaction fee or a flat monthly rate option.

     Hardware Sales: In addition to the software solutions, MOS also provides
and installs hardware on which the MOS services operate (PC Workstations,
Network HW and Servers).

     Hardware and Network Maintenance and Consulting Fees: MOS has an in-house
team of technicians that are capable of setting up, trouble shooting and
streamlining network performance and efficiency. These fees vary with the scope
of each request.

     Custom Development Fees: We also provide custom development services for
customers who desire forms or reports particular to their operations. These fees
vary on the scope of each request.

     The Company currently has no funds to execute its business plans and it has
no agreements or understandings in place that would provide it with the required
funding to execute its business plan.

Competition

Veriscrip

     We believe that minimal direct competition for the type of solution offered
by Veriscrip exists in the market today, and no other company that we are aware
of has operated a state-funded pilot program for real time prescription drug
compliance monitoring. There are several potential sources of competition,
however, and it will likely come most heavily from e-prescribing or pharmacy
management firms and other healthcare IT/Government contracted firms that have
existing business for database collection and reporting. Of these potential
sources of competition, many have greater financial resources than we do and can
provide a greater range of solutions for our targeted customers. These potential
competitors are currently involved in state Prescription Drug Monitoring





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Programs by providing regulators access to retrospective prescription history
(typically 2-4 weeks old), not real time access to current prescription activity
as Veriscrip does. These include Nevoca (a company that originally bid against
Veriscrip for the placeStateKentucky pilot project), Optimum Technology (a
technology firm that contracts with several state agencies for law enforcement
and drug monitoring data collection) and Atlantic Associates (a company that
performs prescription drug monitoring for several states including Wyoming,
Kentucky and Ohio).

     The Practice Management industry is fraught with competition dating as far
back as the 1980's. Two very distinct characteristics necessary for a company to
survive in this highly competitive market are flexibility and foresight. Since
its establishment in 1984 MOS has outlived hundreds of its competitors in the
field of practice management by leveraging both the foresight to see changes
ahead and the flexibility to make those changes immediately. MOS' close ties
with its customers provide a unique relationship that allow its software to
evolve with its users in a way that other companies cannot. MOS's commitment to
bringing only the best of breed to its customers also insures that they deliver
what their users need not what the industry feels is important

Employees

     We currently have 14 employees, of which 2 currently provide services for
our Veriscrip operations and 12 provide services for our MOS operations. We
expect to use consultants, attorneys, and accountants as necessary.

Risk Factors

     The following risk factors should be considered with respect to making any
investment in our securities as such an investment involves a high degree of
risk. You should carefully consider the following risks and the other
information set forth elsewhere in this report, including the financial
statements and related notes, before you decide to purchase shares of our common
stock. If any of these risks occur, our business, financial condition and
results of operations could be adversely affected. As a result, the trading
price of our common stock could decline, perhaps significantly, and you could
lose part or all of your investment.

We expect to incur losses in the future and may not achieve or maintain
profitability.

     We have incurred net losses since we began operations in 2003. Our net loss
was approximately $805,729 for fiscal year 2007 and $680,875 for the fiscal year
ended December 31, 2006. We expect to make significant investments in our sales
and marketing programs and research and development, resulting in a substantial
increase in our operating expenses. Consequently, we will need to generate
significant additional revenue to achieve and maintain profitability in the
future. We may not be able to generate sufficient revenue from sales of our
products and related professional services to become profitable. Even if we do
achieve profitability, we may not sustain or increase profitability on a
quarterly or annual basis. In addition to funding operations through increased
revenue, we anticipate that we will need to raise additional capital before
reaching profitability. We cannot predict when we will operate profitably, if at
all. If we fail to achieve or maintain profitability, our stock price may
decline.

We have a limited operating history with which you can evaluate our current
business model and prospects.

     The first pilot for our Veriscrip System was launched in the early part of
2004. To date, we have not obtained any commercial customers for the Veriscrip
System.



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     Because the Veriscrip System is still at a relatively early stage of
commercialization, it is difficult for us to forecast the full level of market
acceptance that our solution will attain. Some of the risks we face include:

     *    competitors may develop products, technologies or capabilities that
          render our products obsolete or noncompetitive or that shorten the
          life cycle of the Veriscrip System;
     * we may not be able to attract and retain a broad customer base; and * we
     may not be able to negotiate and maintain favorable strategic
          relationships.

     We expect the Medical Office Software to account for a significant portion
of our total revenue for the foreseeable future. We intend to continue to
enhance the Veriscrip System throughout the pilot project phase and after
commercialization.

     Failure to successfully manage these risks could harm our business and
cause our stock price to fall. Furthermore, to remain competitive, products like
ours typically require frequent updates that add new features. We may not
succeed in creating and licensing updated or new versions of our products. A
decline in demand for, or in the average price of, our products would have a
direct negative effect on our business and could cause our stock price to fall.

If we cannot meet our future capital requirements, our business will suffer.

     We will need additional financing to continue operating our business. We
need to raise additional funds in the future through public or private debt or
equity financings in order to:

     *    fund operating losses;
     * scale sales and marketing to address our targeted markets; * take
     advantage of opportunities, including expansion or acquisitions
          of complementary businesses or technologies; * hire, train and retain
     employees; * develop new products or professional services; or * respond to
     economic and competitive pressures.

     If our capital needs are met through the issuance of equity or convertible
debt securities, the percentage ownership of our stockholders will be reduced.
Our future success may be determined in large part by our ability to obtain
additional financing, and we can give no assurance that we will be successful in
obtaining adequate financing on favorable terms, if at all. If adequate funds
are not available or are not available on acceptable terms, our operating
results and financial condition may suffer, and our stock price may decline.

Our operating results may fluctuate, which may adversely affect our stock price.

     We are an emerging company. As such, our quarterly revenue and results of
operations are difficult to predict. We have experienced fluctuations in revenue
and operating results from quarter-to-quarter and anticipate that these
fluctuations will continue until the company reaches critical mass and the
market becomes more stable. These fluctuations are due to a variety of factors,
some of which are outside of our control, including:

     *    the fact that we are a relatively young company;
     *    we expect to derive the bulk of our revenue  from sales to  government
          agencies;
     * our ability to attract new customers and retain existing customers; * the
     length and variability of our sales cycle, which makes it
          difficult to forecast the quarter in which our sales will occur; * the
     amount and timing of operating expense relating to the expansion
          of our business and operations;
     *    the  development of new products or product  enhancements by us or our
          competitors, as well as the adoption of new standards;
     *    the  introduction  and  market  acceptance  of  new  technologies  and
          products;



                                       10
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     *    actual events, circumstances, outcomes, and amounts differing from
          judgments, assumptions, and estimates used in determining the values
          of certain assets (including the amounts of related valuation
          allowances), liabilities, and other items reflected in our financial
          statements; and
     *    how well we execute on our strategy and operating plans.

     As a consequence, operating results for a particular future period are
difficult to predict, and, therefore, prior results are not necessarily
indicative of results to be expected in future periods. Any of the foregoing
factors, or any other factors discussed elsewhere herein, could have a material
adverse affect on our business, results of operations, and financial condition
that could adversely affect our stock price.

     We also typically realize a significant portion of our revenue in the last
few weeks of a quarter because of our customers' purchasing patterns. As a
result, we are subject to significant variations in license revenue and results
of operations if we incur a delay in a large customer's order. If we fail to
close one or more significant license agreements that we have targeted to close
in a given quarter, this failure could seriously harm our operating results for
that quarter. Failure to meet or exceed the expectation of securities analysts
or investors due to any of these or other factors may cause our stock price to
fall.

Our revenues for a particular period are difficult to predict, and a shortfall
in revenues may harm our operating results.

     As a result of a variety of factors discussed in this Report, our revenues
for a particular quarter are difficult to predict. Our net sales may grow at a
slower rate than we anticipate, or may decline. We plan our operating expense
levels based primarily on forecasted revenue levels. These expenses and the
impact of long-term commitments are relatively fixed in the short term. A
shortfall in revenue could lead to operating results being below expectations as
we may not be able to quickly reduce these fixed expenses in response to short
term business changes.

Product quality problems could lead to reduced revenues, gross margins, and net
income.

     Our Veriscrip System is a highly complex product that incorporates
leading-edge technology, including both hardware and software. Software
typically contains bugs that can unexpectedly interfere with expected
operations. There can be no assurance that our testing programs will be adequate
to detect all defects, either ones in individual products or ones that could
affect numerous shipments, which might interfere with customer satisfaction,
reduce sales opportunities, or affect gross margins. We may have had to replace
certain components and respond to the discovery of defects or bugs in products
that we had shipped. There can be no assurance that such replacement and cure,
would not have a material impact. In addition, an inability to cure a product
defect could result in a temporary or permanent withdrawal of our product from
the market which could result in damage to our reputation, inventory costs, or
product reengineering expenses, any of which could have a material impact on
revenues, margins, and net income.

Our proprietary rights may prove difficult to enforce.

     We generally rely on patents, copyrights, trademarks, and trade secret laws
to establish and maintain proprietary rights in our technology and products.
While we have process pending on some of our intellectual property, there can be
no assurance that this process or other proprietary rights will not be
challenged, invalidated, or circumvented or that our rights will in fact provide
competitive advantages to us. Furthermore, many key aspects of our Veriscrip
System technology are governed by industry-wide standards, which are usable by
all market entrants. In addition, there can be no assurance that patents will be



                                       11
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issued from pending applications or that claims allowed on any patents will be
sufficiently broad to protect our technology. In addition, the laws of some
foreign countries may not protect our proprietary rights to the same extent, as
do the laws of the placeUnited States. The outcome of any actions taken in these
foreign countries may be different than if such actions were determined under
the laws of the placeUnited States. If we are unable to protect our proprietary
rights (including aspects of products protected other than by patent rights) in
a market, we may find ourselves at a competitive disadvantage to others who need
not incur the substantial expense, time, and effort required to create the
innovative products that have enabled us to be successful.

We may be found to infringe on intellectual property rights of others.

     Third parties, including customers, may in the future assert claims or
initiate litigation related to exclusive patent, copyright, trademark, and other
intellectual property rights to technologies and related standards that are
relevant to us. These assertions may emerge over time as a result of our growth
and the general increase in the pace of patent claims assertions, particularly
in the placeUnited States. Because of the existence of a large number of patents
in the IP field, the secrecy of some pending patents, and the rapid rate of
issuance of new patents, it is not economically practical or even possible to
determine in advance whether a product or any of its components infringes or
will infringe the patent rights of others. The asserted claims and/or initiated
litigation can include claims against us or our manufacturers, suppliers, or
customers, alleging infringement of their proprietary rights with respect to our
existing or future products or components of those products. Regardless of the
merit of these claims, they can be time-consuming, result in costly litigation
and diversion of technical and management personnel, or require us to develop a
non-infringing technology or enter into license agreements. Where claims are
made by customers, resistance even to unmeritorious claims could damage customer
relationships. There can be no assurance that licenses will be available on
acceptable terms and conditions, if at all, or that our indemnification by our
suppliers will be adequate to cover our costs if a claim were brought directly
against us or our customers. Furthermore, because of the potential for high
court awards that are not necessarily predictable, it is not unusual to find
even arguably unmeritorious claims settled for significant amounts. If any
infringement or other intellectual property claim made against us by any third
party is successful, or if we fail to develop non-infringing technology or
license the proprietary rights on commercially reasonable terms and conditions,
our business, operating results, and financial condition could be materially and
adversely affected.

We rely on the availability of third-party licenses.

     Although we attempt to limit any use of third-party products requiring
licensing, our Veriscrip System is designed to include software or other
intellectual property licensed from third parties. It may be necessary in the
future to seek or renew licenses relating to various aspects of this or other
products. There can be no assurance that the necessary licenses would be
available on acceptable terms, if at all. The inability to obtain certain
licenses or other rights or to obtain such licenses or rights on favorable
terms, or the need to engage in litigation regarding these matters, could have a
material adverse effect on our business, operating results, and financial
condition. Moreover, the inclusion in our products of software or other
intellectual property licensed from third parties on a nonexclusive basis could
limit our ability to protect our proprietary rights in our products.

Our operating results and future prospects could be materially harmed by
uncertainties of regulation of the Healthcare market.

     The healthcare market is highly regulated. Regulations that effect or could
potentially effect us or our product include regulations regarding patients'
privacy rights. Although we believe that the Veriscrip System complies with
current state and federal requirements, we may find that such is not the case.



                                       12
<PAGE>



Further, we could be materially adversely affected by any new regulations
applicable to our market space. If the Veriscrip System were found not in
compliance with current regulations or if new regulations were adopted that
apply to the Veriscrip System, we may incur unanticipated expenses to modify our
product to meet such regulations and, at the same time, the demand for our
products could decrease, which would have a material adverse effect on our
business, operating results, and financial condition.

Failure to retain and recruit key personnel would harm our ability to meet key
objectives.

     Our success will depend, in large part, on our ability to attract and
retain highly skilled technical, executive, managerial, sales, and marketing
personnel. Competition for these personnel is intense in the market today.
Volatility or lack of positive performance in our stock price may also adversely
affect our ability to retain key employees, virtually all of whom have been
granted stock options. The loss of services of any of our key personnel, the
inability to retain and attract qualified personnel in the future, or delays in
hiring required personnel, particularly executive management, engineering and
sales personnel, could make it difficult to meet key objectives, such as timely
and effective product introductions.

Our stock price may continue to be volatile.

     Our common stock has experienced substantial price volatility, particularly
as a result of speculation in the investment community about our strategic
position, financial condition, results of operations, or business. In addition,
the stock market has experienced extreme price and volume fluctuations that have
affected the market price of many technology companies, in particular, and that
have often been unrelated to the operating performance of these companies. These
factors, as well as general economic and political conditions, may materially
adversely affect the market price of our common stock in the future.
Additionally, volatility or a lack of positive performance in our stock price
may adversely affect our ability to retain key employees, all of whom are
compensated in part based on the performance of our stock price.

Failure to manage our planned growth could harm our business.

     Our ability to successfully market and license the Veriscrip System
requires an effective plan for managing our future growth. Future expansion
efforts may be expensive and may strain our managerial and other resources. To
manage future growth effectively, we must maintain and enhance our financial and
accounting systems and controls, integrate new personnel and manage expanded
operations. If we do not manage growth properly, it could harm our operating
results and financial condition and cause our stock price to fall.

     A few of our existing shareholders own a large percentage of our voting
stock and will have a significant influence over matters requiring stockholder
approval and could delay or prevent a change in control.

     Our officers, directors and their affiliates beneficially own or control
approximately 64 % of our outstanding common stock. As a result, our management
could have the ability to exert substantial influence over all matters requiring
approval by our stockholders, including the election and removal of directors
and any proposed merger, consolidation or sale of all or substantially all of
our assets and other corporate transactions. This concentration of control could
be disadvantageous to other stockholders with interests different from those of
our officers, directors and principal stockholders. For example, our officers,
directors and principal stockholders could delay or prevent an acquisition or
merger even if the transaction would benefit other stockholders. In addition,
this significant concentration of share ownership may adversely affect the
trading price for our common stock because investors often perceive
disadvantages in owning stock in companies with controlling stockholders. Please
see "Security Ownership of Certain Beneficial Owners and Management" for a more
detailed description of our share ownership.



                                       13
<PAGE>



Liquidity of our common stock.

     Although there is a public market for our common stock, trading volume has
been historically low which substantially increases your risk of loss. We can
give no assurance that an active and liquid public market for the shares of the
common stock will develop in the future. Low trading volume in our common stock
could affect your ability to sell the shares of common stock. The development of
a public trading market depends upon not only the existence of willing buyers
and sellers, but also on market makers. The market bid and asked prices for the
shares may be significantly influenced by decisions of the market makers to buy
or sell the shares for their own account, which may be critical for the
establishment and maintenance of a liquid public market in the shares. Market
makers are not required to maintain a continuous two-sided market and are free
to withdraw firm quotations at any time. Additionally, in order to maintain our
eligibility for quotation on the OTC Bulletin Board, we need to have at least
one registered and active market maker. No assurance can be given that any
market making activities of any additional market makers will commence or that
the activities of current market makers will be continued.

Sales of our common stock in the public market may lower our stock price and
impair our ability to raise funds in future offerings.

     If our stockholders sell substantial amounts of our common stock in the
public market, the market price of our common stock could fall. The price of our
common stock could also drop as a result of the exercise of options for common
stock or the perception that such sales or exercise of options could occur.
These factors also could make it more difficult for us to raise funds through
future offerings of our common stock.

Our Articles and Bylaws may delay or prevent a potential takeover of us.

     Our Articles of Incorporation, as amended, and Bylaws, as amended, contain
provisions that may have the effect of delaying, deterring or preventing a
potential takeover of us, even if the takeover is in the best interest of our
stockholders. The Bylaws limit when stockholders may call a special meeting of
stockholders. The Articles also allow the Board of Directors to fill vacancies,
including newly created directorships.

Dividends.

     We have not paid and do not currently intend to pay dividends, which may
limit the current return you may receive on your investment in our common stock.
Future dividends on our common stock, if any, will depend on our future
earnings, capital requirements, financial condition and other factors. We
currently intend to retain earnings, if any, to increase our net worth and
reserves. Therefore, we do not anticipate that any holder of common stock will
receive any cash, stock or other dividends on our shares of common stock at any
time in the near future. You should not expect or rely on the potential payment
of dividends as a source of current income.

"Penny Stock" Limitations.

     Our common stock currently trades on the OTC Bulletin Board. Since our
common stock continues to trade below $5.00 per share, our common stock is
considered a "penny stock" and is subject to SEC rules and regulations, which
impose limitations upon the manner in which our shares can be publicly traded.

     These regulations require the delivery, prior to any transaction involving
a penny stock, of a disclosure schedule explaining the penny stock market and
the associated risks. Under these regulations, certain brokers who recommend
such securities to persons other than established customers or certain
accredited investors must make a special written suitability determination
regarding such a purchaser and receive such purchaser's written agreement to a
transaction prior to sale. These regulations have the effect of limiting the
trading activity of our common stock and reducing the liquidity of an investment
in our common stock.



                                       14
<PAGE>



     Stockholders should be aware that, according to the Securities and Exchange
Commission Release No. 34- 29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. These patterns include:

     *    Control of the market for the security by one or a few broker-dealers
          that are often related to the promoter or issuer;
     *    Manipulation of prices through prearranged matching of purchases and
          sales and false and misleading press releases;
     *    "Boiler room" practices involving high pressure sales tactics and
          unrealistic price projections by inexperienced sales persons;
     *    Excessive and undisclosed bid-ask differentials and markups by selling
          broker-dealers; and
     *    The wholesale dumping of the same securities by promoters and
          broker-dealers after prices have been manipulated to a desired level,
          along with the inevitable collapse of those prices with consequent
          investor losses.

     Furthermore, the "penny stock" designation may adversely affect the
development of any public market for the Company's shares of common stock or, if
such a market develops, its continuation. Broker-dealers are required to
personally determine whether an investment in "penny stock" is suitable for
customers.

     Penny stocks are securities (a) with a price of less than five dollars per
share; (b) that are not traded on a "recognized" national exchange; (c) whose
prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed
stocks must still meet requirement (a) above); or (d) of an issuer with net
tangible assets less than $2,000,000 (if the issuer has been in continuous
operation for at least three years) or $5,000,000 (if in continuous operation
for less than three years), or with average annual revenues of less than
$6,000,000 for the last three years.

     Section 15(g) of the Exchange Act and Rule 15g-2 of the Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."

     Rule 15g-9 of the Commission requires broker-dealers in penny stocks to
approve the account of any investor for transactions in such stocks before
selling any penny stock to that investor. This procedure requires the
broker-dealer to (a) obtain from the investor information concerning his or her
financial situation, investment experience and investment objectives; (b)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (c) provide the investor with a written statement
setting forth the basis on which the broker-dealer made the determination in (b)
above; and (d) receive a signed and dated copy of such statement from the
investor, confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for the Company's stockholders to
resell their shares to third parties or to otherwise dispose of them.

Forward-Looking Statements

     When used in this Form 10-K or other filings by the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized officer of the Company's executive officers, the words
or phrases "would be", "will allow", "intends to", "will likely result", "are
expected to", "will continue", "is anticipated", "estimate", "project", or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.



                                       15
<PAGE>



     The Company cautions readers not to place undue reliance on any
forward-looking statements, which speak only as of the date made, and advises
readers that forward-looking statements involve various risks and uncertainties.
Our management believes its assumptions are based upon reasonable data derived
from and known about our business and operations. No assurances are made that
our actual results of operations or the results of our future activities will
not differ materially from these assumptions. The Company does not undertake,
and specifically disclaims any obligation to update any forward-looking
statements to reflect occurrences or unanticipated events or circumstances after
the date of such statement.


ITEM 2.  Description of Properties.

     The Company's executive offices are located at place325 West Main Street,
Suite 240, Lexington, Kentucky 40507. These offices occupy approximately 796
square feet and are held under a month to month lease with Regency Financial,
LLC. The aggregate rental for these office leases is $782 per month. The Company
does not own or invest in, nor does the Company intend in the future, to own or
invest in real estate or interests in real estate, real estate mortgages or
securities of or interests in persons primarily engaged in real estate
activities. MOS`s executive offices are located at 790 E. Broward, Suite 300,
Fort Lauderdale, FL 33301. MOS occupies approximately 1,000 square feet. MOS
does not pay any rent as the space is rented to a Director, or entities related
to the director of the Company. Rent valued at $26,000 was accounted for as a
capital contribution.


ITEM 3.  Legal Proceedings.

     MOS is engaged in a lawsuit by a former employee for unpaid commissions on
sales. A court date has not been set. Management considers the claim to be
without merit and is therefore vigorously defending the same. A loss contingency
has not been accrued for in the financial statements. The Company is also
involved from time to time in other litigation through the normal course of its
business. Management believes there are no such undisclosed claims which would
have a material effect on the financial position of the Company.


ITEM 4.  Submission of Matters to a Vote of Security Holders

     No matter was submitted to a vote of the security holders during the 4th
quarter of the fiscal year covered by this report.







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                                       16
<PAGE>



                                     PART II


ITEM 5. Market for Common Equity, Related Stockholder Matters and Small Business
                     Issuer Purchases of Equity Securities.

Share Price History

     The Company's common stock is traded in the Over-the-Counter Bulletin board
under the trading symbol "VHGI.OB". The following table sets forth the high and
low bid information of the Company's common stock for the periods indicated.
Note that the over-the-counter market quotations reflect inter-dealer prices,
without retail mark-up, markdown or commission, and that the quotations may not
necessarily represent actual transactions in the common stock.

                  Quarter Ended                  High        Low
                  -------------                --------     -------

                  2006
                  March 31.............        $0.02        $0.02
                  June 30..............        $0.02        $0.02
                  September 30.........        $1.50        $1.25
                  December 31..........        $0.08        $0.05

                  2007
                  March 31.............        $0.73        $0.05
                  June 30..............        $0.60        $0.49
                  September 30.........        $0.51        $0.35
                  December 31..........        $0.21        $0.19

Holders of Record

     As of April, 2008 there were approximately 642 holders of record of the
Company's common stock. The number of holders of record was calculated by
reference to the Company's stock transfer agent's books.


Dividend Policy

     To date, the Company has not paid dividends on its common stock. The
payment of dividends on the Company's common stock, if any, is at the discretion
of the board and will depend upon its earnings, if any, the Company's capital
requirements and financial condition, and other relevant factors. See Item 6.
"Management's Discussion and Analysis or Plan of Operation." The Company does
not intends to declare any dividends in the foreseeable future, but instead
intends to retain all earnings, if any, for use in its anticipated operations.

     Stock Option Plans To date, the Company does not have any stock option
plans in place.

Securities Authorized for Issuance Under Equity Compensation Plans

     The Company does not have any equity compensation plans.

Issuance of Securities

     Effective April 14, 2006, the Company entered into a Stock Purchase
Agreement with MLH Investments, LLC ("MLH"), a placeNevada limited liability
corporation, where MLH purchased 156,196,406 pre-split shares of authorized but
unissued shares of Class A Common Stock, par value $0.0001 per share, at a
purchase price of $0.0001 per share ($15,619.64 in the aggregate).



                                       17
<PAGE>



Simultaneously, an additional 100,000 shares of Class B Common Stock were also
purchased by MLH Investments from James Arch, Chairman of the Board of the
Company, at a purchase price of $0.001 per share ($100 in the aggregate). The
sale of the Class B shares was a private transaction. The Company did not use an
underwriter in connection with the above described transaction and the
transaction was exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933 and Rule 506 as promulgated thereunder.

     Effective August 25, 2006, pursuant to the terms of a Stock Exchange
Agreement with HEB, the Company issued and sold 34,000,000 (post reverse-split)
shares of its common stock in exchange for 1,000 shares of MB Holding. In
connection with the consummation of the Stock Exchange Agreement, the Company
also, pursuant to the terms of certain debt exchange agreements, exchanged
approximately $2,600,000 of its outstanding debt for 2,600,000 shares of post
split common stock. The sale of the shares of our common stock pursuant to the
Stock Exchange Agreement and debt exchange agreements was a private transaction.
The Company did not use an underwriter in connection with the above described
transaction and the transaction was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933 and Rule 506 as promulgated thereunder.

     On October 6, 2006, the Company consummated a Stock Exchange Agreement with
NewMarket Technology, Inc., a Nevada corporation, pursuant to which the Company
acquired the outstanding shares of Medical Office Software, Inc., a Florida
corporation ("MOS"). Prior to the acquisition, the Company owned forty-nine
percent (49%) of MOS' outstanding shares. Under the terms of the Stock Exchange
Agreement, the Company acquired the remaining outstanding shares of MOS in
exchange for (a) 1,400,000 shares of our common stock, and (b) a two year
convertible promissory note in the principle amount of $900,000. The outstanding
principal balance of the note may be converted, at the option of NewMarket, into
shares of our common stock at the market price of the common stock at the time
of conversion; provided, however, that in no event will we be obligated to issue
more than 675,000 shares of our common stock upon a conversion. The convertible
note will automatically convert into shares of our common stock if the market
price for our common stock reaches $2.00 per share.


ITEM 6.  Management's Discussion and Analysis or Plan of Operation

     The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's plan of
operation and financial condition. The discussion should be read in conjunction
with the consolidated financial statements and notes thereto.

Financial Position

     The Company had $226,393 in cash and $1,228,856 in goodwill as of December
31, 2007. The Company's liabilities were $2,392,819 and it had a working capital
deficit of $(2,065,843). The Company had $1,396,812 in revenues during 2007 and
$531,358 in revenues during 2006, its general and administrative expenses
including depreciation were $1,995,859 and $1,100,634, respectively, during
these periods and its net losses were $805,729 and $680,875, respectively,
during these periods.

     The Company does not have sufficient funds to pay its current liabilities.
The Company will continue to follow its plan of operation.

Plan of Operation

     We are still in the early stages of our operations. In December 2000 we
acquired all of the common stock in Verified Prescription Safeguards, Inc., with
the intention of developing an electronic system to provide solutions for the
prescription drug and healthcare industry. In August 2006, in furtherance of our
business plan, we acquired MB Holding, and its wholly owned subsidiaries, VPS
and Envoii Healthcare. The Company will seek to obtain favorable funding from
sources outside its principal shareholders during the next twelve months. There
can be no assurance that the Company will be successful in obtaining additional
funding.



                                       18
<PAGE>



     Effective September 1, 2006, to continue with its new business plan, the
Company acquired MOS which was incorporated in the State of placeFlorida in
September of 1984. Since its inception, the Company has built an ever growing
regional presence in the physician practice management system ("PMS") market.
Having completed more than 1,500 installations, the very seasoned management
team has established a very strong presence and brand throughout
placeSoutheastern Florida as the premiere provider of physician practice
solutions. The Company began as a developer and marketer of its own PMS
solution, and has continued to maintain a high level of development expertise.
At the present, however, the Company focuses almost exclusively on reselling and
supporting products developed by other parties in an effort to provide the best
of breed to its customers in this emerging landscape of interoperability.

     In 2002, the Company lobbied for House Bill 26 in the Kentucky General
Assembly that directed the Kentucky Office of Technology to apply for a United
States Department of Justice Bureau of Justice Assistance grant to conduct a
pilot project of its real-time prescription drug monitoring system in two rural
placeKentucky counties. On July 30, 2003, the Commonwealth of Kentucky, awarded
a contract to VPS Holding, LLC, ("VPSH") a placeKentucky limited liability
company incorporated on August 29, 2002, by the sole member and manager, James
Millard, the current President and CEO of the Company. The contract awarded
allowed VPSH to lead a pilot project, in Perry and Harlan counties, Kentucky, at
medical, clinical, and pharmacy facilities. After withstanding a competitive
challenge to the contract, the planning for implementing the project commenced
in November 2003. The project was conducted by a consortium of companies under
license to VPSH, that includes Envoii Healthcare, LLC, a placeNevada
corporation, and Computer Information Systems, Inc., London, Kentucky,
consulting firm and solutions provider for information technology, both of which
are privately-held corporations. In order to perform under the terms and
conditions of the state contract, VPSH, licensed the technologies from each
corporation for a nominal fee. Any benefits or revenues derived from the use of
technology acquired by VPSH, shall pass directly through to the Company, under
the terms of a Joint Venture Agreement.

     During January-April 2004 the Veriscrip System was programmed and
beta-tested at the two pilot sites in Harlan and Perry counties in Southeastern
placeKentucky in preparation for implementing the project under the terms of the
contract. During this period, the system was previewed by several third parties,
including a state licensure board president and a key legislator. On April 28,
2004, the first real-time electronic prescription was transmitted and received
using the Veriscrip System at a rural clinic in Harlan County, Kentucky. The
pilot project was also conducted at a medical center practice and pharmacy in
Hazard, placeKentucky, and was concluded on September 23, 2004. On October 15,
2004, the first public demonstration of the Veriscrip System was conducted at
the National Technology Meeting for State Prescription Drug Monitoring Programs
in placeplaceLexington, placeKy., sponsored by the National Alliance for Model
State Drug Laws.

     In December 2004, the Company contracted with a full-time lobbyist, Babbage
Cofounder/InterSouth, Inc., of placeplaceLexington, placeKentucky, for the
duration of the 2005 Kentucky General Assembly, which concluded in April, and
unanimously passed Senate Bill 2, which provides for the preliminary framework
for establishing an e-health information exchange in Kentucky.

     The University of Louisville School of Public Health and Information
Sciences initiated the assessment phase of the project in October 2004, and the
Assessment Report was completed and delivered to the Kentucky Office of
Technology on May 12, 2005. The Office of Technology released the U of L
Assessment Report as a public document on August 19, 2005. The Assessment Report
states, "there may be significant benefits for the state to move ahead now with
the proposed technology, either as an alternative or an enhancement for the
existing KASPER ["Kentucky All-Schedule Prescription Electronic Reporting"



                                       19
<PAGE>



system], or, potentially, as a plug-in to KASPER, providing a way for prescriber
data to move in real-time from prescriber to dispenser to the regulatory side,"
but notes, "[t]he major barrier to implementation will be resistance by
physicians because of productivity costs and opportunity costs in the context of
emerging health information exchange technologies." The Assessment Report also
includes an appendix in which the U of L assessment concludes the Veriscrip
System completely meets 18 criteria, and partially meets another 7 criteria, of
the 60 Recommendations for Comparing Electronic Prescribing Systems made by the
placeRAND Electronic Prescribing Advisory Board.

     During the next twelve months, the Company expects to present the findings
of the University of Louisville assessment report to interested state and
federal regulatory agencies, as well as an accompanying report prepared for the
California HealthCare Foundation in 2004 that concludes productivity and
opportunity costs are minimal, if any, and additional savings may be accrued
from "downstream time savings, chiefly from electronic data transmission and
more thorough order entry (resulting in fewer pharmacy callbacks for
clarification and revision." The Company also plans to have a presence at
national meetings and conferences of law enforcement and regulatory professions,
at which to demonstrate the Veriscrip(TM) System. At the same time, the
Veriscrip(TM) System is constantly being improved and upgraded to meet and
exceed emerging technology improvements under the terms of the Joint Venture
Agreement.

     The Company's working capital requirements for the foreseeable future will
vary based upon a number of factors and depending upon the entity owned by the
company. VPS Holding, LLC, the owner of the Veriscrip System has capital demands
to finish development and any customization of its primary system for the
tracking of controlled prescriptions, the costs associated with launching the
system if successfully developed, the acceptance of the system by each state and
market penetration along with other factors that may not be foreseeable at this
time. Our entity, Envoii Healthcare, LLC, has capital requirements to finish
development and any customization of its security platform and the launching and
distribution of its systems. MOS, even though it has revenues sufficient to
support its typical operations, has capital demands from time to time that
exceeds its ability to fund itself on its own. Management believes that the
Company will need at least $2,000,000 in financing to fund operations, pay off
existing debt, pay for planned expansion and pay for required development work
during the next twelve months. We have no commitments to provide additional
funding and there can be no assurance that we will be able to obtain additional
funding on satisfactory terms, or at all. If we do not receive the needed
funding, we will not be able to execute our business plans.

Third Party Claims and Contingencies

     In addition to the foregoing, we are subject to a number of additional
potential third party claims. These potential claims include the following:

     MOS has received a claim from Bell South for an advertising fee that they
claim is valid. Management believes that they are not liable for this claim. The
original agreement was signed by previous management in 2002. The matter has
been turned over to our attorney. Management believes the ultimate outcome of
this matter will not have a material impact on the financial condition of the
Company.

     Pursuant to an agreement with Growth Fund Partnership, Inc. ("Growth
Fund"), the Company agreed to pay a dividend on the Class B preferred stock on
June 1, 2003, in cash equal to two percent of the value of the Class B Preferred
Stock, or in restricted Class A common stock equal to three percent of the value
of the Class B Preferred Stock. On August 15, 2003, a demand was made by Growth
Fund for the dividend payment, which the Company did not pay. On March 10, 2005,
the circuit court dismissed without prejudice this action for lack of
prosecution by Growth Fund.




                                       20
<PAGE>



     On April 21, 2003, the Company entered into an agreement with a former
consultant whereby the Company owes this consultant a total of $199,650 as
payment for services rendered. This obligation was satisfied during 2006 by the
issuance of 199,650 shares of common stock. During 2005, the Company, based on
discussions with and tax notices from the Internal Revenue Service, became aware
of certain potential unpaid payroll taxes and related penalties and interest
from 1993 and 1995 totaling $10,500. These liabilities have been recorded as
accounts payable and general and administrative expenses at December 31, 2005,
but will be subject to further research of the Company's historical tax records
and of the statutes of limitations related to such liabilities, and to
negotiations with the Internal Revenue Service.

     During the year ended December 31, 2003, the Companies renegotiated an
existing consulting agreement with a related party for consulting services,
defined by the agreement, totaling $125,000 through March 31, 2004, which is
included in Accounts Payable - related party as of December 31, 2005. Also,
during the year ended December 31, 2003, the Companies entered into two new
consulting agreements with related parties for consulting services, defined by
the agreements, totaling $67,500 through completion of the projects, or earlier
termination by agreement of the parties, which is included in Accounts Payable -
related party as of December 31, 2005 (see Note 7 for related party
transactions). All three of these agreements provide for payment to be made in
cash or, in lieu of cash, Securities and Exchange Commission Rule S-8 stock of
the Companies. The two new agreements contain incentive clauses that could
result in the issuance of up to 2,000,000 shares of the Companies' common stock.
This was converted to common stock during 2006.

     An Agreement by and between the Company and ABSZ, LLC was entered into May
9, 2005 for the purpose of paying for accounting, auditing, tax and legal work
to enable the company to make current filings with SEC and Internal Revenue
Service in order to maintain its current stock registration and to operate as a
viable public company. ABSZ agreed to provide oversight of all such work,
obtaining invoice from and making direct payments to those providing the various
services. This agreement was originally filed as Exhibit 10.8 of the Company's
Form 10-K, dated December 31, 2003. Under terms of this agreement contributing
members (Lenders) each loaned 500,000 unrestricted shares of Common Stock to
ABSZ. Also under the terms of this agreement, the Company, upon filing all
necessary documents with the SEC and meets regulatory guidelines to issue said
shares, agrees to issue 3,500,000 shares of unrestricted Common Stock to ABSZ
for equal distribution of 1,000,000 shares each to the Lenders with 500,000
shares to the Managing Member, or his designee. ABSZ has paid to date $33,774.23
for the benefit of the Company. An account payable of $105,000 had previously
been recorded for the value of the 3,500,000 shares to be issued. This was
converted to common stock during 2006.

     The Company had a 3 year lease agreement for office space that converted to
a month-to-month rental arrangement in March 2006. Monthly rental expense is
currently $783 per month. Total rents paid for the years ended December 31, 2007
and 2006 was $9,396 and $9,396 respectively.

Off Balance Sheet Arrangements

     The Company does not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.

Critical Accounting Policies

     The Company does not have any accounting policies that it believes are
critical to facilitate an investor's understanding of the Company's financial
and operating status.



                                       21
<PAGE>



Recent Accounting Pronouncements

     The Company has not adopted any new accounting policies that would have a
material impact on the Company's financial condition, changes in financial
condition or results of operations.


ITEM 7.  Financial Statements

     Our financial statements for the year ended December 31, 2007 have been
prepared in accordance with generally accepted accounting principles and
pursuant to Regulation S-K as promulgated by the Securities and Exchange
Commission and are included herein starting on Page F-1 of this Form 10-K.


ITEM 8.  Changes  In  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure

     None.


ITEM 8A.   Management's   Annual  Report  on  Internal  Control  Over  Financial
           Reporting; Changes in Internal Controls Over Financial Reporting.

     Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external reporting purposes in accordance with accounting principles
generally accepted in the United States. Because of inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements. Our management has conducted an evaluation of the effectiveness
of our internal control over financial reporting based on the framework in
Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on our evaluation, our
management has concluded that our internal control over financial reporting was
effective as of December 31, 2007. This annual report on Form 10-K does not
include an attestation report of the Company's registered public accounting firm
regarding internal control over financial reporting. Management's report was not
subject to attestation by the company's registered public accounting firm
pursuant to temporary rules of the SEC that permit the Company to provide only
management's report in this annual report on Form 10-K.


ITEM 8B.  Other Information

     Not Applicable.



                                    PART III


ITEM 9.  Directors and Executive Officers of the Registrant

Identify Directors and Executive Officers

     Set forth below is certain information concerning each of the directors and
executive officers of the Company as of December 31, 2007:

     The following table sets forth the name, age, and position of each
executive officer and director of the Company:

 Director's Name     Age     Position With Company
-----------------    ---     ---------------------------------------------------
 Scott A. Haire       43     Chief Executive Officer, Chief Financial Officer
                             and Director

 James M. Renfro      61     President

 Deborah Jenkins      49     Director



                                       22
<PAGE>



     SCOTT A. HAIRE. Mr. Haire has been Chief Executive Officer, Chief Financial
Officer and a director of the Company  since August 28, 2006.  Mr. Haire is also
Chief Executive  Officer,  Chief Financial Officer and a director of MB Software
Corporation,  a company  focused on  providing  wound care  products.  Shares of
common stock of MB Software are traded over the counter on the OTC:BB.  Prior to
founding MB Software  Corporation,  Mr. Haire was President of Preferred Payment
Systems,  a company  specializing  in  electronic  claims and  insurance  system
related projects.

     JAMES M. RENFRO. Mr. Renfro has served as President of the Company since
August 28, 2006. Mr. Renfro began his management experience with a tour in the
placeU.S. Marines in placeVietnam where he received several decorations, which
included three Purple Hearts for wounds in combat. Mr. Renfro earned his BS
degree in Business and Governmental Accounting from Cumberland College in
Williamsburg, placeKentucky with additional studies toward an MBA at both
Morehead State and Eastern Kentucky Universities. Afterwards he worked for the
Kentucky Democratic Party and the Jefferson County Government. He next secured a
position with Rockwell International where he worked for over 20 years. During
his tenure with Rockwell he served in key management roles in areas of
production, accounting, quality control, as well as sales and service. In each
of these functions Jim was recognized as the best in the company operations.
Jim's most cherished recognition came in his final year when he received the
National Account Sales Award for personally producing over $80mm in sales. Jim
then joined a new start up venture as Vice President of Field Operations for
GraMag commercial seating. In this position Jim worked with heavy equipment
manufacturers to get their products tested and approved for ordering by major
trucking companies. He was also instrumental in the development of products to
be used by the commercial airlines industry. Jim has a proven track record as a
leader and innovator and possesses extensive experience in developing an
organization and fueling its momentum to achieve success.

     DEBORAH JENKINS. Ms. Jenkins has served as a Director of the Company since
August 28, 2006. Ms. Jenkins is the Managing Member of Cognitive Communications,
LLC, a Business Consulting company. She has served as Special Consultant to
Health Office placeIndia for strategy development and operations assistance for
work with US clients in medical transcription and coding services. Prior to
serving in these capacities, she was President of pH Solutions, Ltd, the patent
licensee of "safe acids" used in cosmetics, water purification, agriculture,
pharmaceutical and many other industries. She has served on many national and
international trade association's boards including the Intel Internet Health
Board of Advisors, the American National Standards Institute Health Informatics
Standards Board - representing HIBCC (ANSI HISB and the American Society for
Automation in Pharmacy (ASAP) where she also served as President and Secretary
of the Board. Ms. Jenkins earned a BA degree in English-Minor Journalism from
placeplaceTexas placeChristian placeUniversity in 1980.

Board Composition and Committees

     Our Board of Directors currently consists of two members, Mr. Haire and Ms.
Jenkins. We are planning to expand the number of members constituting our Board
of Directors and will seek persons who are "independent" within the meaning of
the rules and regulations of NASDAQ to fill vacancies created by any expansion.
Because of our current stage of development, we do not have any standing audit,
nominating or compensation committees, or any committees performing similar
functions. The Board meets periodically throughout the year as necessity
dictates. No current director has any arrangement or understanding whereby they
are or will be selected as a director or nominee.



                                       23
<PAGE>



     We do not believe that any member of our Board of Directors is an "audit
committee financial expert," within the meaning of such phrase under applicable
regulations of the Securities and Exchange Commission. Like many small
companies, it is difficult for us to attract and retain board members who
qualify as "audit committee financial experts," and competition for these
individuals is significant. We believe, however, that our current board members
are able to fulfill their roles under SEC regulations despite not having a
designated "audit committee financial expert."

Director Compensation

     We do not pay our directors a fee for attending scheduled and special
meetings of our board of directors. We intend to reimburse each director for
reasonable travel expenses related to such director's attendance at board of
directors and committee meetings. In the future we might have to offer some
compensation to attract the caliber of independent board members the Company is
seeking.

Indebtedness of Directors and Executive Officers

     None of our directors or officers or their respective associates or
affiliates is indebted to us.

Family Relationships

     There are no family relationships among our directors or executive
officers.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act requires our executive
officers, directors and persons who beneficially own more than 10% of our common
stock to file initial reports of ownership and reports of changes in ownership
with the SEC. Such persons are required by SEC regulations to furnish us with
copies of all Section 16(a) forms filed by such persons.

     Based solely on our review of forms furnished to us and representations
from reporting persons, we believe that Mr. Haire was late in filing his initial
report.

Code of Ethics

     Due to the fact that the Company has only recently begun operations, the
Company has not adopted a Code of Ethics, but it expects to adopt one in the
future.


ITEM 10.  Executive Compensation

     Messrs. Scott Haire and James Renfro became executive officers of the
Company upon consummation of the acquisition of MB Holding. None of these
individuals received any compensation in excess of $100,000 (annualized) from
the Company, MB Holding or any of its subsidiaries (collectively the
"Entities"), nor do any of these individuals have any employment agreements, or
other compensatory plans or arrangements with any of the Entities, which result
or will result from the resignation, retirement or any other termination of such
individual's employment with us or from a change in control of the Company or a
change in the individual's responsibilities following a change in control. We
expect that the Company will adjust executive compensation during fiscal 2008.

     Prior to the acquisition of MB Holding, Mr. James K. Millard was our
President, Chief Executive Officer and Chief Financial Officer. During the past
three fiscal years, the Company had not paid any salary, wage or other
compensation to its officers. The Company had an employment agreement with Mr.



                                       24
<PAGE>



Millard which provided for an annual salary of $120,000 per year and provides
for insurance and other benefits. The Company paid Mr. Millard's past due salary
with 30,000 shares of the Company's stock.

     During the prior year the Company did not compensate its non-executive
director. There are presently no ongoing pension or other plans or arrangements
pursuant to which remuneration is proposed to be paid to the non-executive
director of the Company.

Option Grants and Exercises in Last Fiscal Year

     No options to acquire shares of our common stock were granted to Mr.
Millard or any of the other above named individuals prior to the acquisition of
MB Holding, nor do these individuals hold any such options. We expect, however,
that the Company may grant options to our current officers during fiscal 2008.


ITEM 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters

     The following table sets forth certain information with respect to the
beneficial ownership of the common stock of the Company as of April 11, 2008,
for: (i) each person who is known by the Company to beneficially own more than
five percent of the Company's common stock, (ii) each of the Company's
directors, (iii) each of the Company's Named Executive Officers, and (iv) all
directors and executive officers as a group. As of 2008, the Company had
42,701,533 shares of common stock issued and outstanding.

<TABLE>
<CAPTION>
                                              Directors                5%
Title of  Name And Address                Nature and Amount of  Nature and Amount of
Class     Of Beneficial Owners(1)         Beneficial Ownership  Beneficial Ownership   Percent
-------   ----------------------          --------------------  ---------------------   -------
<S>       <C>                                  <C>                    <C>                <C>
Common    HEB, LLC                             24,119,730                                56.5%
          place777 Main Street
          placeplaceSuite 3100
          placeplaceFort Worth, placeTexas place76102

Common    Scott A. Haire(2)                    24,119,730(2)                             56.5%

Common    James M. Renfro                               -

Common    Deborah Jenkins                         500,000                                 1%

Common    James W. Stuckert Trust
          James Stuckert UA, DTD 2-10-86                               4,497,000         11%
                                           -------------------------------------------------
                                               24,619,730              4,497,000         68.5%
  All Officers and Directors as a Group        29,116,730
                                           ==============
</TABLE>

(1)  Except where otherwise indicated, the address of the beneficial owner is
     deemed to be the same address as the Company.

(2)  Represents shares held by H.E.B., LLC, 777 Main Street, Suite 3100, Fort
     Worth, Texas 76102. Mr. Haire is a one-percent member, but the managing
     member, of H.E.B., LLC and as such, is deemed to be the beneficial owner of
     such shares.



                                       25
<PAGE>



ITEM 12.  Certain   Relationships   and   Related   Transactions   and  Director
          placeIndependence

     Effective April 14, 2006, the Company entered into a Stock Purchase
Agreement with MLH Investments, LLC, a Nevada limited liability corporation,
where MLH Investments purchased 156,196,406 shares of authorized but unissued
shares of Class A Common Stock, par value $0.0001 per share, at a purchase price
of $0.0001 per share ($15,619.64 in the aggregate). Simultaneously, an
additional 100,000 shares of Class B Common Stock were also purchased by MLH
Investments from James Arch, the Company's former Chairman of the Board, at a
purchase price of $0.001 per share ($100 in the aggregate). The sale of the
Class A shares was approved by unanimous written consent of the Board of
Directors of the Company. The reasons behind the consent were (a) the insolvency
of the Company and the inability to obtain sufficient funding to execute its
business plan, (b) the Company's unsuccessful attempts to obtain funding from
any other sources, (c) the fact that without an immediate infusion of operating
capital, the Company will be forced to cease operating and liquidate, (d) MLH
Investments offered to immediately wire more than $15,000 to the Company's
account, (e) MLH Investments will explore a potential restructuring of the debt
and equity of the Company on terms to be determined, (f) this is the only
funding alternative available to the Company, and (g) the Board determined all
shareholders and creditors of the Company will be better served by the stock
purchase than liquidation.

     Prior to the sale of securities to MLH Investments, the authorized capital
stock of the Company consisted of: (i) 300,000,000 shares of Class A Common
Stock, of which 143,803,594 shares are issued and outstanding; (ii) 100,000
shares of Class B Common Stock, of which 100,000 shares are issued and
outstanding; (iii) 2,000,000 shares of Class A Preferred Stock, par value $0.001
per share, none of which shares are issued or outstanding; (iv) 300,000 shares
of Class B Preferred Stock, par value $0.001 per share, of which 70,000 shares
are issued and outstanding; and (v) 100,000 shares of Class C Preferred Stock,
par value $0.001 per share, none of which share are issued and outstanding.
Immediately after MLH Investments acquired the above referenced shares it owned
52% of the outstanding Class A Common Stock, 100% of the outstanding Class B
Common and approximately 52% of the total outstanding shares of equity
securities.

     On June 15, 2006, the Company entered into a letter of intent with HEB and
MB Holding, pursuant to which the Company would acquire MB Holding in exchange
for shares of the Company's common stock. Under the Stock Exchange Agreement,
HEB received 34,000,000 post split shares of the Company's common stock in
exchange for all of the issued and outstanding shares of MB Holding.

     In connection with the acquisition of MB Holding, on July 20, 2006,
pursuant to the terms of a Stock Cancellation Agreement between the Company and
MLH Investments, all of the issued and outstanding shares of Class B Common
Stock were cancelled.


ITEM 13.  Exhibits

     (a) The exhibits required to be filed herewith by Item 601 of Regulation
S-K, as described in the following index of exhibits, are incorporated herein by
reference, as follows:

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
----------------------------------
3(i)      Amended and Restated Certificate of Incorporation*

3(ii)     By-Laws (Incorporated by reference to Exhibit 3(ii).1 of the Company's
          Form 10-KSB, dated December 31, 2003)

10.1      Consulting  Agreement by and between the Company and Rusbar  Financial
          Services, Inc., dated April 2001 (Incorporated by reference to Exhibit
          10.1 of the Company's Form 10-KSB, dated December 31, 2003)


                                       26
<PAGE>



10.2      Consulting  Agreement  by and between the Company and Harry M. Zachem,
          dated May 14, 2001 (Incorporated  by  reference to Exhibit 10.2 of the
          Company's Form 10-KSB, dated December 31, 2003)

10.3      Consulting Agreement by and between the Company, Verified Prescription
          Safeguards,  Inc. and Fairmund  International  Services,  Ltd.,  dated
          April 21,  2003  (Incorporated  by  reference  to Exhibit  10.3 of the
          Company's Form 10-KSB, dated December 31, 2003)

10.4      Consulting Agreement by and between the Company and Internet
          Capital.com, LLC, dated July 2003 (Incorporated by reference to
          Exhibit 10.4 of the Company's Form 10-KSB, dated December 31, 2003)

10.5      Consulting Agreement by and between the Company and Innovative
          Technologies, dated October, 2003 (Incorporated by reference to
          Exhibit 10.5 of the Company's Form 10-KSB, dated December 31, 2003)

10.6      Employment Agreement by and between the Company and James Kemper
          Millard, dated December 31, 2003 (Incorporated by reference to Exhibit
          10.6 of the Company's Form 10-KSB, dated December 31, 2003)

10.7      Patent License Agreement and Release by and between the Company,
          Verified Prescription Safeguards, Inc., Envoii Healthcare, LLC, and
          VPS Holdings, LLC, dated January 5, 2004 (Incorporated by reference to
          Exhibit 10.7 of the Company's Form 10-KSB, dated December 31, 2003)

10.8      Stock Loan Agreement, by and between the Company and the parties
          referenced therein, dated May 9, 2005 (Incorporated by reference to
          Exhibit 10.8 of the Company's Form 10-KSB, dated December 31, 2003)

10.9      Promissory  Note payable to Kentrust,  Inc.,  dated  November 14, 1998
          (Incorporated  by  reference  to Exhibit  10.9 of the  Company's  Form
          10-KSB, dated December 31, 2003)

10.10     Promissory  Note payable to Kentrust,  Inc.,  dated  December 23, 1998
          (Incorporated  by reference  to Exhibit  10.10 of the  Company's  Form
          10-KSB, dated December 31, 2003)

10.11     Promissory  Note  payable to Kentrust,  Inc.,  dated  January  27,1999
          (Incorporated  by reference  to Exhibit  10.11 of the  Company's  Form
          10-KSB, dated December 31, 2003)

10.12     Promissory Note payable to James Arch, dated August 1, 2000
          (Incorporated by reference to Exhibit 10.12 of the Company's Form
          10-KSB, dated December 31, 2003)

10.13     Promissory Note payable to Lee M. Tillman, dated September 7, 2005
          (Incorporated by reference to Exhibit 10.13 of the Company's Form
          10-KSB, dated December 31, 2003)

10.14     Promissory Note payable to FV Investments, dated July 31, 2003
          (Incorporated by reference to Exhibit 10.14 of the Company's Form
          10-KSB, dated December 31, 2003)

10.15     Promissory Note payable to James Arch, dated September 15, 2003
          (Incorporated by reference to Exhibit 10.15 of the Company's Form
          10-KSB, dated December 31, 2003)

10.16     Promissory Note payable to Cora Spence Carrick, dated April 27, 2005
          (Incorporated by reference to Exhibit 10.16 of the Company's Form
          10-KSB, dated December 31, 2003)

10.17     Promissory Note payable to James Kemper Millard, dated March 18, 2005
          (Incorporated by reference to Exhibit 10.17 of the Company's Form
          10-KSB, dated December 31, 2003)


                                       27
<PAGE>



10.18     Promissory  Note  payable  to Lee M.  Tillman,  dated  January 5, 2006
          (Incorporated  by reference  to Exhibit  10.18 of the  Company's  Form
          10-QSB, dated March 31, 2005)

10.19     Stock Purchase Agreement by and between the Company and MLH
          Investments, LLC, dated April 14, 2006. (Incorporated by reference to
          Exhibit 10.19 to the Company's Annual Report on Form 10-KSB dated
          December 31, 2005)

10.20     Stock   Exchange   Agreement   dated  July  20,  2006  between  Equity
          Technologies & Resources,  Inc., MB Holding  Corporation,  and H.E.B.,
          LLC.  (Incorporated  by  reference to Exhibit  10.20 to the  Company's
          Current  Report  on Form 8-K  filed  with the  Commission  on July 25,
          2006).

10.21     Stock Cancellation Agreement (Class B Common Stock) dated July 20,
          2006 between Equity Technologies & Resources, Inc., and MLH
          investments, LLC (Incorporated by reference to Exhibit 10.21 to the
          Company's Current Report on Form 8-K filed with the Commission on July
          25, 2006)

10.22     Form  of  Debt  Exchange  Agreement  between  Equity   Technologies  &
          Resources,  Inc.,  and Holder  (Incorporated  by  reference to Exhibit
          10.22 to the  Company's  Current  Report  on Form 8-K  filed  with the
          Commission on July 25, 2006)

10.23     Stock  Exchange  Agreement  dated  October  6,  2006,  by and  between
          VirtualHealth  Technologies,  Inc.,  NewMarket  Technology,  Inc., and
          Medical Office  Software,  Inc.  (Incorporated by reference to Exhibit
          10.1 to the  Company's  Current  Report  on Form  8-K  filed  with the
          Commission on October 12, 2006)

10.24     Convertible Promissory Note dated October 6, 2006, issued by
          VirtualHealth Technologies, Inc. (Incorporated by reference to Exhibit
          10.2 to the Company's Current Report on Form 8-K file with the
          Commission on October 12, 2006)

21.1      Schedule of Subsidiaries (Incorporated by reference to Exhibit 21.1 of
          the Company's Form 10-KSB, dated December 31, 2003)

31.1*     Certification  pursuant  to Section 302 of the  Sarbanes-Oxley  Act of
          2002

32.1*     Certification  pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002
-------------
* Filed herewith

     (b) Reports on Form 8-K

     During the last quarter of the fiscal year ended December 31, 2007, we did
not file any reports on Form 8-K.


ITEM 14.  Principal Accountant Fees and Services

Audit Fees

     The aggregate fees billed for professional services rendered by our
principal accountant for the audit of our annual financial statements, review of
financial statements included in our quarterly reports and other fees that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for the fiscal years ended December 31, 2007 and 2006
were $70,995 and $17,070, respectively.



                                       28
<PAGE>



Audit Related Fees

     The aggregate fees billed for assurance and related services by our
principal accountant that are reasonably related to the performance of the audit
or review of our financial statements, other than those previously reported in
this Item 14, for the fiscal years ended December 31, 2007 and 2006 were $0 and
$0, respectively.

Tax Fees

     The aggregate fees billed for professional services rendered by our
principal accountant for tax compliance, tax advice and tax planning for the
fiscal years ended December 31, 2007 and 2006 were $ 0 and $0, respectively.

All Other Fees

     The aggregate fees billed for products and services provided by the
principal accountant, other than those previously reported in this Item 14, for
the fiscal years ended December 31, 2007 and 2006 were $0 and $0, respec tively.

Audit Committee

     The Company's Board of Directors functions as its audit committee. It is
the policy of the Company for all work performed by our principal accountant to
be approved in advance by the Board of Directors. All of the services described
above in this Item 14 were approved in advance by our Board of Directors.







                [Balance of this page intentionally left blank.]












                                       29
<PAGE>




VIRTUALHEALTH TECHNOLOGIES, INC. AND SUBSIDIARIES



                                TABLE OF CONTENTS
--------------------------------------------------------------------------------

                                                                            Page

Report of Independent Registered Public Accounting Firm                     F-2

     Consolidated Balance Sheets                                            F-3

     Consolidated Statements of Operations                                  F-4

     Consolidated Statements of Stockholders' Deficiency                    F-5

     Consolidated Statements of Cash Flows                                  F-6

     Notes to Consolidated Financial Statements                             F-8

--------------------------------------------------------------------------------















                                       F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors
VIRTUALHEALTH TECHNOLOGIES, INC. AND SUBSIDIARIES
Lexington, KY

We have audited the accompanying consolidated balance sheets of VirtualHealth
Technologies, Inc. and Subsidiaries as of December 31, 2007 and 2006 and the
related consolidated statements of operations, stockholders' deficiency and cash
flows for the years ended December 31, 2007 and 2006. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the 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, and 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of VirtualHealth
Technologies, Inc. & Subsidiaries as of December 31, 2007 and 2006 and the
consolidated results of their operations and their cash flows for the years
ended December 31, 2007 and 2006 in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
The Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has incurred losses in recent years and has
not yet been successful in establishing profitable operations. Further, the
Company has current liabilities in excess of current assets. These factors raise
substantial doubt about the ability of the Company to continue as a going
concern. Management's plans in regards to these matters are also described in
Note 2. The consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.


/s/ PRITCHETT, SILER & HARDY, P.C.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
April 16, 2008


                                       F-2

<PAGE>




<PAGE>


<TABLE>
<CAPTION>
VIRTUALHEALTH TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2007 and 2006
--------------------------------------------------------------------------------

                                                                                        2007                 2006
                                                                                -----------------    ---------------
<S>                                                                             <C>                  <C>
                                               ASSETS
CURRENT ASSETS:
Cash                                                                            $         226,393    $       125,330
Accounts Receivable, net                                                                  100,583            301,027
                                                                                -----------------    ---------------
                   Total current assets                                                   326,976            426,357
                                                                                -----------------    ---------------
Property and Equipment, net                                                                 5,269              7,449
Goodwill                                                                                1,228,856          1,228,856
                                                                                -----------------    ---------------
                                    TOTAL ASSETS                                $       1,561,101          1,662,662
                                                                                =================    ===============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Notes Payable Current                                                           $       1,680,926    $       688,958
Accounts Payable - Trade                                                                  421,756            128,457
Accrued Payroll and Payroll Taxes                                                          33,554             96,381
Accrued Interest                                                                          220,496            110,709
Other Accrued Liabilities                                                                   2,337              8,993
Dividends Payable                                                                          33,750             33,750
                                                                                -----------------    ---------------
                   Total current liabilities                                            2,392,819          1,067,248
                                                                                -----------------    ---------------

NOTES PAYABLE, LONG-TERM PORTION - RELATED PARTY
Note Payable and Long Term Debt                                                                 -            900,000
                                                                                -----------------    ---------------
Long-Term Liabilities                                                                           -            900,000
                                                                                -----------------    ---------------
                      Total liabilities                                                 2,392,819          1,967,248
                                                                                -----------------    ---------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY:
 Preferred stock - $0.001 par value, 10,000,000 shares authorized,
   300,000 designated as Class B                                                                -                  -
 Preferred stock, Class B - $0.001 par value, 300,000 shares designated,
   70,000 issued and outstanding                                                               70                 70
 Common stock - $0.001 par value, 100,000,000 shares authorized,
   42,701,533 issued and outstanding                                                       42,702             41,744
Stock Subscription Receivable                                                              (89,904)                 -
Additional paid-in capital                                                              1,406,132          1,037,589
Retained Earnings                                                                      (2,189,718)        (1,383,989)
                                                                                -----------------    ---------------
Total Stockholders' Deficiency                                                           (831,718)          (304,586)
                                                                                -----------------    ---------------
TOTAL LIABILITIES AND EQUITY                                                    $       1,561,101    $     1,662,662
                                                                                =================    ===============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-3
<PAGE>


<TABLE>
<CAPTION>
VIRTUALHEALTH TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
--------------------------------------------------------------------------------

                                                                                        2007                 2006
                                                                                -----------------    ---------------
<S>                                                                             <C>                  <C>

Sales Revenue                                                                   $       1,396,812    $       531,358

Expenses:
     Selling, general and administrative                                                1,993,679          1,098,454
     Depreciation                                                                           2,180              2,180
                                                                                -----------------    ---------------
Total Expenses                                                                          1,995,859          1,100,634
                                                                                -----------------    ---------------

Loss Before Other Income (Expense)                                                       (599,047)          (569,276)

OTHER INCOME (EXPENSES):
     Interest Income                                                                          753                 45
     Interest (Expense)                                                                  (207,435)          (111,644)
                                                                                -----------------    ---------------
Total Other Income (Expenses)                                                            (206,682)          (111,599)
                                                                                -----------------    ---------------

Loss Before Income Taxes                                                                 (805,729)          (680,875)
     Current Tax Expense                                                                        -                  -
     Deferred Tax Expense                                                                       -                  -

                                                                                -----------------    ---------------
Net Income                                                                      $        (805,729)   $      (680,875)
                                                                                =================    ===============


Basic loss per common share                                                     $           (0.02)   $         (0.02)
                                                                                =================    ===============

Weighted average number of common shares
     outstanding basic and diluted                                                     42,287,738         36,921,544
                                                                                =================    ===============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       F-4
<PAGE>

<TABLE>
<CAPTION>
VIRTUALHEALTH TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
--------------------------------------------------------------------------------

                                                 Preferred   Preferred
                                                  Stock       Stock      Common    Common   Stock     Additional
                                                 Class B     Class B     Stock     Stock  Subscription  Paid-in    Accumulated
                                                 Shares      Amount      Shares    Amount  Receivable   Capital       Deficit
                                                 -------------------------------------------------------------------------------
<S>                                              <C>         <C>         <C>         <C>      <C>       <C>          <C>

BALANCES, DECEMBER 31, 2005                              -           -   34,000,000    34,000             (143,340)     (703,114)

Reverse Merger in July 2006 with MB
 Holding Corporation                                70,000          70    5,661,705     5,662              363,901

Rounding shares issued in stock split                                         2,000         2                   (2)

Common stock issued for services valued at
 approximately $1.25 per share in September 2006                             16,328        16               20,394

Common stock issued to James Millard for the
 cancellation of debt valued at
 approximately $1.00 per share                                               30,000        30               29,970

Common stock issued for the acquisition of MOS
 Subsidiary at approximately $.30 per share in
 October 2006                                                             1,400,000     1,400              418,600

Common stock issued for services valued at
approximately $.55 per share in December 2006                               634,000       634              348,066

Net loss for the year ended December 31, 2006                                                                           (680,875)
                                                 -------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 2006                         70,000   $      70   41,744,033  $ 41,744           $ 1,037,589  $(1,383,989)

Common stock issued for services valued at
 approximately $.75 per share in February 2007                               70,000        70                52,430

Common stock issued for cash of $100,000; Common Stock Subscription receivable
 of $89,904 and reduction of related party note
 payable of $10,096                                                         887,500       888    (89,904)   199,113

Imputed interest contributed as additional
 paid in capital from a non-interest related
 party note payable valued at $90,000.                                                                       90,000

Rent contributed by an officer, or an entity
 related to an officer of the Company valued
 at $26,000.                                                                                                 26,000

Net loss for the year ended December 31, 2007                                                                          (805,729)

                                                 -------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 2007                         70,000     $     70  42,701,533  $ 42,702    (89,904)$ 1,405,132 $(2,189,718)
                                                 -------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-5
<PAGE>

<TABLE>
<CAPTION>
VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
--------------------------------------------------------------------------------

                                                                                           2006                2005
                                                                                ------------------   ------------------
<S>                                                                             <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                        $         (805,729)  $         (680,874)

Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization                                                            2,180                2,180
    Non-cash expenses                                                                       52,500              424,264
    Loss on disposal of assets and partnership interests
    Changes in assets and liabilities:
        (Increase) Decrease in accounts receivable                                         255,553              (42,079)
        Increase in accounts payable                                                       293,300              27,920
        Increase (Decrease) in accrued payroll                                             (62,827)             29,767
        Increase in accrued liabilities                                                     (6,656)             (36,284)
        Increase in accrued interest                                                       109,787              80,635
        Change due to recapitalization                                                           -              141,329
                                                                                ------------------   ------------------
Net cash (used) in operating activities                                                   (101,001)             (53,142)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from note receivable - related party                                                -                  500
Net cash provided by (used) investing activities                                                 -                  500
                                                                                ------------------   ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from notes payable - related party                                            384,053              184,346
    Principal payments on notes payable - related party                                   (281,989)              (6,596)
                                                                                ------------------   ------------------
    Proceeds from sale of stock                                                            100,000                    -
                                                                                ------------------   ------------------
Net cash provided by financing activities                                                  202,064              177,750
                                                                                ------------------   ------------------
NET INCREASE (DECREASE) IN CASH                                                            101,063              125,108

CASH, beginning of period                                                                  125,330                  222
                                                                                ------------------   ------------------
CASH, end of period                                                             $          226,393   $          125,330
                                                                                ==================   ==================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during period for interest                                        $                -   $                -
    Cash paid during period for income taxes                                    $                -   $                -
</TABLE>

                                   (Continued)

                                       F-6
<PAGE>

<PAGE>





VIRTUALHEALTH TECHNOLOGIES,INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

--------------------------------------------------------------------------------

Supplemental Schedule of Non-cash Investing and Financing Activities - For the
     year ended December 31, 2007:

     During February 2007 the Company issued 70,000 shares of common stock for
     consulting expenses valued at $52,500.

     During May 2007 the Company issued 887,500 shares of common stock for
     $100,000 cash, common stock subscription of $89,904 and payment of related
     party note payable of $10,096.

     During 2007, a director, or an entity related to a director of the company,
     contributed rent valued at $26,000, that was accounted for as a capital
     contribution.

     During 2007, $90,000 of imputed interest on a non-interest bearing related
     party note payable was accounted for as a capital contribution.

Supplemental Schedule of Non-cash Investing and Financing Activities - For the
     year ended December 31, 2006:

     During July 2006 the Company issued 34,000,000 shares common stock in a
     business combination with MB Holding Corporation that is accounted for as a
     reverse acquisition.

     During September 2006 the Company issued 16,328 shares of common stock for
     services valued at $20,410, or approximately $1.25 per share.

     During September 2006 the Company issued 30,000 shares of common stock to a
     related party for reduction of debt of $30,000.

     During October 2006 the Company issued 1,400,000 shares of common stock in
     the purchase acquisition of Medical Office Software valued at $420,000, or
     approximately $.30 per share.

     During December 2006 the Company issued 634,000 shares of common stock for
     services valued at $348,700, or approximately $.55 per share.





          See accompanying notes to consolidated financial statements.

                                       F-7
<PAGE>



VIRTUALHEALTH TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements presented are those of VirtualHealth
Technologies, Inc., (the "Company") and its wholly-owned subsidiaries, Verified
Prescription Safeguards, Inc., MB Holding Corporation, VPS Holding, LLC dba
Veriscrip, Envoii Healthcare, LLC, and Medical Office Software, Inc.
Collectively, they are referred to herein as the "Companies".

The Company's name change to VirtualHealth Technologies, Inc., became effective
on August 24, 2006 with the filing of an Amended and Restated Certificate of
Incorporation with the Delaware Secretary of State.

Organization and Nature of Operations.

Organization - The Company was organized on March 4, 1988, as a placeDelaware
corporation under the name Sherry Lyn Corporation. The Company was organized as
a public company for the purpose of finding a suitable combination partner.On
December 6, 1988, the Company changed its name to Equity Gold, Inc. The number
of shares of common stock authorized to be issued changed from 50,000,000 to
150,000,000 with a par value of $0.001 per share of common stock.

On December 14, 1989, the Company merged with Gold Equity, Inc., a placeDelaware
corporation. The surviving corporation was Equity Gold, Inc. On February 7,
1989, the Company changed its name to Equity AU, Inc.

On April 14, 1989, the Company changed the number of authorized shares of common
stock to 99,900,000.

On November 7, 1991, the Company authorized 2,000,000 shares of preferred stock
with a par value of $1.00 each.

On February 19, 1992, the Company authorized 99,900,000 shares of Class A common
shares with a par value of $0.001 per share and 100,000 shares of Class B common
shares with a par value of $0.01 per share.

From the original inception of the Company on March 4, 1988 through January 1,
1994, the Company was heavily involved in mining and exploration activities
principally in Arkansas. The Company generated an accumulated deficit of
$8,390,740 prior to the Company re-entering the development stage.

In January 2000, the Company elected to change its official name from Equity AU,
Inc., to Equity Technologies & Resources, Inc.

On August 2, 2002, the Company amended its articles of incorporation to change
the authorized capital stock of the Company. The aggregate number of Class A
common shares authorized for issuance was 300,000,000 shares with a par value of
$0.0001; the aggregate number of Class B common shares authorized for issuance
was 100,000 with a par value of $0.01; the aggregate number of Class A preferred
shares authorized for issuance was 2,000,000 with a par value of $0.001; the
aggregate number of Class B preferred shares authorized for issuance was 300,000
shares with a par value of $0.001; and the aggregate number of Class C preferred
shares authorized for issuance was 100,000 shares with a par value of $0.001.
The amendment was recorded by the State of placeDelaware on January 23, 2003.
All per share and share information has been retroactively restated to reflect
the changes in par value.


                                       F-8
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

On August 24, 2006 the Company amended its certificate of incorporation to
change the authorized capital of the Company and to change the name of the
Company. The Company's name was changed to VirtualHealth Technologies, Inc. The
aggregate number of common shares authorized for issuance is 100,000,000 shares
with a par value of $.001 per share. The previous common stock class
designations were cancelled. The aggregate number of preferred shares authorized
for issuance is 10,000,000 shares with a par value of $.001 per share. The
Company designated 300,000 shares of Class B preferred stock as non-voting. All
other designations of preferred stock that previously existed were cancelled.
All per share and share information has been retroactively restated to reflect
the changes in par value.

During August 2006, the Companies effected a 1-for-100 stock split. The
financial statements for all periods presented have been retroactively restated
to reflect the stock split.

Nature of Operations - The Company was originally engaged in research and
development of a process to extract gold and other precious metals on various
real properties located in placeArkansas. Partnerships were formed prior to 1994
by the Company or by affiliates of the Company to raise working capital, to
acquire mineral claims, rights, facilities and equipment, and to explore for
precious metals. In 1994, general partners of the partnerships notified the
Company that they were terminated and dissolved. As a result of the dissolution
of the partnerships, the Company ceased its operations and entered the
development stage as per Statement of Financial Accounting Standards ("SFAS")
No. 7.

On December 15, 2000, the Company acquired all of the issued and outstanding
common stock of Verified Prescription Safeguards, Inc. ("VPS") in exchange for
40,000 shares of the Company's Class B voting preferred stock (see Note 5). The
acquisition of VPS was accounted for as a purchase per Accounting Principles
Board No. ("APB") 16. At the time the purchase was consummated, VPS held no
assets or liabilities. The consolidated entity elected to change its business
plan toward the development and marketing of internet prescription drug
technology (see Notes 10 and 11). Management intends to use the majority of
funds obtained toward this development. The purchase price of the acquired
subsidiary was determined among the parties to be 40,000 shares of Class B
preferred stock redeemable at $500 per share ($20,000,000). The preferred shares
issued are redeemable for cash only at $500 per share payable from 50% of net
revenues of the subsidiary for the next seven years. The conversion feature of
the issued preferred shares allows them to be converted into cash, pursuant to
future revenues, but does not allow them to be converted into common stock at
any time.

In May 2001, the Company acquired a newly formed wholly-owned subsidiary, ETCR
M&A, Inc. ("ETCR M&A"), a placeFlorida corporation, in exchange for shares of
the Company's common stock. ETCR M&A held no assets or liabilities at the time
of purchase and thus, the acquisition was recorded at $0 value. In November
2001, these shares were canceled and the Company does not currently hold any
interest in ETCR M&A.

The Companies are currently engaged in the development and marketing of internet
prescription drug technology and sales of medical office software, hardware and
services.

On June 15, 2006, the Company entered into a letter of intent with H.E.B. LLC, a
Nevada corporation, hereafter "HEB," and MB Holding Corporation, a Nevada
corporation and wholly owned subsidiary of HEB, hereafter "MBH," pursuant to


                                       F-9
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

which the Company would acquire MBH in exchange for shares of the Company's
common stock. MBH is the sole member of VPS Holding, LLC, a placeKentucky
limited liability company, hereafter "VPSH", and Envoii Healthcare, LLC, a
placeNevada limited liability company, hereafter "Envoii." VPSH and Envoii
developed and own certain technologies and led a consortium to conduct the first
prescription drug monitoring pilot project in real time in the placeUnited
States. Under the Stock Exchange Agreement, HEB is to receive 34,000,000 post
split shares of the Company's common stock in exchange for all of the issued and
outstanding shares of MBH. On July 20, 2006, the Company entered into a Stock
Exchange Agreement with HEB and MBH incorporating the terms of the letter of
intent (the "Stock Exchange Agreement"). The Stock Exchange Agreement was
authorized and approved by the Company's board of directors by written consent
dated July 20, 2006.

The stock exchange agreement had been subject to several conditions, including:

     *    The cancellation of all of the Company's outstanding Class B Common
          Stock, par value $.01 per share ("Class B Common Stock");
     * The adoption and approval of the Reverse Stock Split; * The adoption and
     approval of the Amended and Restated Certificate; and * The agreement of
     the holders of approximately $2,600,000 of the
          Company's outstanding debt to exchange such debt for 2,600,000 post
          split shares of the Company's common stock.

Mr. Scott Haire owns 1% of the membership interest in HEB and as manager, has
voting control of HEB. Mr. Barker is the sole member and the manager of MLH
Investments LLC, a placeNevada limited liability company, hereafter "MLH". On
April 14, 2006, the Company, Mr. James K. Millard, our Former President and
Chief Executive Officer, Mr. James Arch and MLH entered into a stock purchase
agreement pursuant to which MLH acquired from the Company 156,196,406 newly
issued shares of our Class A Common Stock for $15,619 and acquired from Mr. Arch
all of our issued and outstanding shares of Class B Common Stock for $100. As a
result of this transaction, Mr. Barker obtained effective voting control over a
majority of the Company's outstanding voting securities. The Class B common
stock was contributed back to the Company for cancellation.

Effective August 25 2006, the Company completed its acquisition of MB Holding
Corporation, a placeNevada corporation ("MB Holding") in exchange for 34,000,000
post reverse-split) shares of the Company's common stock. MB Holding, through
its wholly-owned subsidiaries, VPS Holding, LLC, a placeKentucky limited
liability company ("VPSH"), and Envoii Healthcare, LLC, a placeNevada limited
liability company ("Envoii") developed and own certain technologies related to
real-time internet prescription drug monitoring. In connection with the
acquisition of MB Holding, the Company (a) effected a 1 for 100 reverse split of
our Class A Common Stock, (b) cancelled all of our outstanding Class B Common
Stock, (c) amended our Certificate of Incorporation, and (d) changed the Company
name to "VirtualHealth Technologies, Inc."

During October 2006, Medical Office Software, Inc was acquired. Medical Office
Software, Inc. ("MOS") was incorporated in the State of placeFlorida in
September of 1984. Since its inception, the Company has built an ever growing
regional presence in the physician practice management system ("PMS") market.
The Company began as a developer and marketer of its own PMS solution, and has
continued to maintain a high level of development expertise. At the present,
however, the Company focuses almost exclusively on reselling and supporting
products developed by other parties in an effort to provide the best of breed to
its customers in this emerging landscape of interoperability.

The merger of these companies will enhance each other by Medical Office
Software, Inc having a medical customer base and VPS Holding, LLC dba Veriscrip
having the license and technology being developed to market an internet
prescription drug technology.

                                       F-9
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Summary of Significant Accounting Policies.

Accounting Method - The Companies' consolidated financial statements are
prepared using the accrual method of accounting. The Companies have elected
December 31 year-ends.

Principles of Consolidation - The accompanying consolidated financial statements
include the accounts of VirtualHealth Technologies, Inc.,and its wholly-owned
subsidiaries, Verified Prescription Safeguards, Inc. ("VPS"), MB Holding
Corporation, VPS Holding, LLC dba Veriscrip, Envoii Healthcare, LLC. and Medical
Office Software, Inc. All intercompany accounts and transactions have been
eliminated.

Accounting Treatment of Acquisitions.- The acquisition of MB Holding Corporation
during 2006 is accounted for as a reverse purchase and accordingly their results
of operations will be included for the entire period. The results of operations
of VirtualHealth prior to the date of acquisition will be eliminated. The
results of operations of Medical Office Software will be included from the date
of acquisition forward.

Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the placeUnited States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Management makes its best
estimate of the ultimate outcome for these items based on historical trends and
other information available when the financial statements are prepared. Changes
in estimates are recognized in accordance with the accounting rules for the
estimate, which is typically in the period when new information becomes
available to management. Actual results could differ from those estimates.

Cash and Cash Equivalents - The Companies consider all highly liquid investments
with a maturity of three months or less from the date of purchase to be cash
equivalents. As of December 31, 2007 and 2006, the Companies had no cash
equivalents.

Concentration of Credit Risk - The Companies maintain cash balances at financial
institutions that are insured by the FDIC up to $100,000. At December 31, 2007,
and 2006 the Company had approximately $126,000 and $25,000 in deposit accounts
that exceeded the FDIC limits.

Revenue Recognition - The Companies' revenues result primarily from sales of
products to doctors and medical billing companies. Revenues are recognized upon
delivery of the products or services.

Income Taxes - The Companies account for income taxes under the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 109 "Accounting for
Income Taxes." Under SFAS No. 109, deferred income tax assets and liabilities
are computed for differences between the financial statements and tax bases of
assets and liabilities that will result in taxable or deductible amounts in the
future, based on enacted tax laws and rates applicable to the periods in which
the differences are expected to affect taxable income. Valuation allowances are
established when necessary, to reduce deferred income tax assets to the amount
expected to be realized. No deferred tax asset has been recognized for the
operating loss carryforward as it is more likely than not that all or a portion
of the net operating loss will not be realized and any valuation allowance would
reduce the benefit to zero.

                                      F-10
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Functional Currency - The functional currency of the Companies is the U. S.
dollar. When a transaction is executed in a foreign currency, it is remeasured
into U. S. dollars based on appropriate rates of exchange in effect at the time
of the transaction. At each balance sheet date, recorded balances that are
denominated in a currency other than the functional currency of the Companies
are adjusted to reflect the current exchange rate. The resulting foreign
currency transaction gains (losses) are included in general and administrative
expenses in the accompanying consolidated statements of operations. At December
31, 2007, and 2006 there were no recorded balances denominated in foreign
currency.

Long-lived Assets - The Company reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of
the assets may not be recoverable through undiscounted future cash flows. If it
is determined that an impairment loss has occurred based on expected cash flows,
such loss is recognized in the consolidated statement of income.

Goodwill - Goodwill represents the excess purchase price paid by the Company
over the fair value of the tangible and intangible assets and liabilities of
Medical Office Software, Inc. at October 6, 2006, the date of the Acquisition.
In accordance with SFAS 142, the goodwill is not being amortized, but instead
will be subject to an annual assessment of impairment by applying a fair-value
based test. No impairment was recorded during the year ended December 31, 2007.

Property and Equipment - Property and equipment are stated at cost less
accumulated depreciation. Depreciation is provided on a straight line basis over
the estimated useful lives of the assets. Maintenance and repairs are charged to
expense as incurred and major improvements are capitalized. Gains or losses on
sales or retirements are recognized in income. Interest is capitalized on
significant construction projects.

Trade Accounts - Other Receivables and Allowance for Doubtful Accounts - Trade
accounts receivables and other receivables are carried at original invoiced
amounts less an allowance for doubtful accounts. Accounts receivable are
determined to be delinquent when the account has become 30 days past due. The
allowance for doubtful accounts is calculated based on the aggregate amount of
accounts 60+ days old, or on a case by case basis. Management will occasionally
review accounts receivable and determine if the account should be written off.

Earnings Per Share - Basic earnings or loss per share is based on the weighted
average number of common shares outstanding. Diluted earnings or loss per share
is based on the weighted average number of common shares outstanding and
dilutive common stock equivalents. Basic earnings/loss per share is computed by
dividing income/loss (numerator) applicable to common stockholders by the
weighted average number of common shares outstanding (denominator) for the
period. All earnings or loss per share amounts in the consolidated financial
statements are basic earnings or loss per share, as defined by SFAS No. 128,
"Earnings Per Share." Diluted earnings or loss per share does not differ
materially from basic earnings or loss per share for all periods presented.
Convertible securities that could potentially dilute basic loss per share are
not included in the computation of diluted loss per share because to do so would
be antidilutive. All per share and per share information are adjusted
retroactively to reflect stock splits and changes in par value.


                                      F-11
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting  Pronouncements - Statement of Financial  Accounting Standards
("SFAS") No. 155,  "Accounting  for Certain  Hybrid  Financial  Instruments - an
amendment of FASB Statements No. 133 and 140", SFAS No. 156, "Accounting for the
Servicing of Financial Assets",  SFAS No. 157, "Fair Value  Measurements",  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 No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities - Including an amendment of FASB  Statement  No. 115",  and SFAS No.
160, "Noncontrolling Interest in Consolidated Financial  Statements an amendment
of ARB 50" (SFAS 160), were recently  issued.  SFAS No. 155, 156, 157, 158 , 159
and 160 have no current  applicability  to the  Company  or their  effect on the
financial statements would not have been significant.

Pending Accounting Pronouncements - It is anticipated that current pending
accounting pronouncements will not have an adverse impact on the consolidated
financial statements of the Companies.


NOTE 2 - GOING CONCERN

The Companies have incurred losses in recent years and at December 31, 2007 has
current liabilities in excess of current assets. The Company's day-to-day
expenses have been covered by proceeds obtained and services paid by the
issuance of stock and notes payable. The adverse effect on the Companies'
results of operation due to its lack of capital resources can be expected to
continue until such time as the Companies are able to generate additional
capital from other sources. These conditions raise substantial doubt about the
Companies' ability to continue as going concerns.

Management has implemented, or developed plans to implement, a number of actions
to address these conditions including the acquisition of VPS and development of
VPS's projects, which management believes will provide opportunities for growth
within the prescription drug and healthcare industry. With the additional
acquisition of MOS with its growing medical customer base management plans to
obtain working capital funds by seeking additional funding from shareholders,
debt financing, and/or private placements of its common stock to meet such
needs. Without realization of additional capital, it would be unlikely for the
Companies to continue as a going concern. The Companies anticipate that their
major shareholders will contribute sufficient funds to satisfy the cash needs of
the Companies for the next twenty-four months. If the Companies cannot obtain
needed funds, it may be forced to curtail or cease its activities. There can be
no assurance that additional funding will be available when needed or, if
available, that the terms of such financing will not adversely affect the
Companies' results from operations.

The consolidated financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the
outcome of this uncertainty. The continuation of the Companies as going concerns
is dependent upon the success of the Companies in obtaining additional funding
and the success of their future operations. The Companies' ability to achieve
these objectives cannot be determined at this time.


                                      F-12
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 3 - TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable consist of the following at December 31,

                                                 2007            2006
                                               --------       --------
   Trade accounts receivable                   $115,474       $371,027
   Less allowance for doubtful accounts         (14,891)      (70,000)
                                               --------       --------
   Net accounts receivable                     $100,583       $301,027
                                               --------       --------

Bad debt expense for the year ended December 31, 2007 was $0, and for December
31, 2006 was $70,045.


NOTE 4 - PROPERTY PLANT & EQUIPMENT

Property and equipment consists of the following at December 31:

                                      Estimated life
                                         In years        2007        2006
                                      --------------   --------    --------
  Computers                                5           $ 13,626    $ 13,626
  Less: Accumulated depreciation
        and amortization                                 (8,357)     (6,177)
                                                       --------    --------
                                                       $  5,269    $  7,449
                                                       --------    --------

Depreciation expense amounted to $2,180 and $2,180 for the years ended December
31, 2007 and 2006, respectively.


NOTE 5 - NOTES PAYABLE

Funds are advanced from various related parties including the Company's
Director, Scott A Haire, and entities managed by him. Other shareholders fund
the Company as necessary to meet working capital requirements and expenses. The
advances are made pursuant to a note agreement that bears interest at 10% per
annum, payable quarterly per the table below. One of the notes is currently in
default. Accrued interest due to related parties as of December 31, 2007 and
2006 was approximately $213,200 and $110,709 respectively. The following is a
summary of amounts due to related parties as of December 31, 2007 and 2006:











                [Balance of this page intentionally left blank.]









                                      F-13
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 5 - NOTES PAYABLE (continued)

<TABLE>
<CAPTION>
                                                                      2006          2007
                                                                  ------------  ------------
<S>                                                               <C>           <C>
Heb, LLC, Scott Haire is the President, CEO, and CFO of this
company  These  notes are  considered  to be  related  party
notes. The total accrued interest on these notes at December
31, 2007  and 2006 is $183,103 and $82,954.  Funds  advanced
under three  unsecured notes are:

Dated 8/24/06 10% per annum                                       $             $     25,600
Dated 4/6/06 line of credit, 10% per annum                             648,921       521,257
Dated 8/24/06  no stated interest rate                                   3,900         3,900

MLH Investments, LLC, Frank Barker is the owner. This note payable is considered
to be a related party note. The total accrued interest on this note at December
31, 2007 and 2006 is $51 and $51.

Dated 12/13/06 10% per annum                                                 -        10,096

New Market
Dated 10/6/06 no stated interest rate, note will automatically convert to
450,000 shares of stock or the equivalent of $900,000 worth of stock but is
limited to 675,000 shares on October 1, 2008. This note is considered to be a
related party note. This note is non-interest bearing and imputed interest of
$90,000 was recorded as a
capital contribution at December 31, 2007.                             900,000       900,000

SWCC
Dated 7/21/06 no stated interest rate                                   20,150        20,150
Dated 7/21/06 no stated interest rate                                    1,750         1,750

Nevada Multicare, Scott Haire - Owner. This note is considered to be a related
party note. The total accrued interest on this note at December 31, 2007 and
2006 is $21,813 and $14,966.

Dated 1/5/06 line of credit, 10% per annum                              73,805        73,805

Scott Haire, This note is considered a related party note The total accrued
interest on this note at December 31, 2007 and 2006 is $7,452 and $5,700.

Dated 9/30/04 line of credit, 10% per annum                             22,400        22,400

Anthony Chamblin - investor in Envoii Healthcare, this note is considered a
related party note. The total accrued interest on this note at December 31, 2006
is $3,808

3/31/03, 10% per annum                                                  10,000        10,000
                                                                  ------------  ------------
                        Total Notes Payable                          1,680,926     1,588,958
                        Less current portion                        (1,680,926)     (688,958)
                                                                  ------------  ------------
                        Long term notes payable                   $          -  $    900,000

</TABLE>


                                      F-14
<PAGE>


VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 5 - NOTES PAYABLE (continued)

                                                      2007          2006
                                                  ------------  ------------

Notes payable related party current               $  1,659,026  $    667,058
Notes payable current                                   21,900        21,900
                                                  ------------  ------------
Current notes payable                                1,680,926       688,958
                                                  ------------  ------------
Long-Term notes payable related party             $          -  $    900,000


NOTE 6 - CAPITAL STOCK

Preferred Stock

The Company is authorized to issue 10,000,000 shares of Preferred Stock at a par
value of $.001. At December 31, 2007 and 2006 the Company has designated 300,000
shares of Class B Preferred Stock.

Preferred Stock - Class A

The Company was previously authorized to issue 2,000,000 shares of Class A
preferred stock, at a par value of $0.001 per share. There were no shares issued
or outstanding during 2007 and 2006. Effective August 24, 2006 the Company no
longer has a designation for Class A Preferred Stock.

Preferred Stock - Class B

The Company is authorized to issue 300,000 shares of voting preferred shares, at
a par value of $0.001 per share and as of December 31, 2007 and 2006, there were
70,000 shares outstanding. Accrued but unpaid dividends amounted to $33,750 at
December 31, 2007 and 2006.

Preferred Stock - Class C

The Company was previously authorized to issue 100,000 shares of Class C common
stock. There were no shares issued or outstanding during 2007 or 2006. Effective
August 24, 2006 the Company no longer has a designation for Class C Preferred
Stock.

Common Stock

The Company is authorized to issue 100,000,000 common shares, at a par value of
$0.001 per share. These shares have full voting rights. At December 31, 2006
there are 41,744,033 shares issued and outstanding. At December 31, 2007, there
were 42,701,533 shares issued and outstanding.

On July 20, 2006, the Company acquired 100% of MB Holding Corporation, and its
wholly-owned subsidiaries, VPS Holding, LLC and Envoii Healthcare, LLC, in
exchange for 34,000,000 (post reverse-split) shares of the Company's common
stock. Prior to the MB Holding merger on July 20, 2006 the Company had 3,000,000
shares of Common stock outstanding.

On July 20, 2006, the Company issued a total of 2,661,705 shares of common stock
as part of various debt exchange agreements for accounts and notes payable at
$1.00 per share.


                                      F-15
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 6 - CAPITAL STOCK (continued)


On August 18, 2006, the Company issued 2,000 rounding shares due to the 1:100
reverse stock split.

On September 25, 2006, the Company issued 16,328 shares of common stock to
Computer Information Systems, Inc. as part of a legal judgment in May 2006.

On September 25, 2006, the Company issued 30,000 shares of common stock to James
K. Millard for debt valued at $30,000 or $1.00 per share.

On October 6, 2006, the Company issued 1,400,000 shares of common stock to New
Market, to acquire 51% ownership of Medical Office Software, valued at $.30 per
share.

On December 11, 2006, the Company issued a total of 634,000 shares of common
stock for services valued at $348,700 or $.55 per share.

During May 2007 the Company issued a total of 887,500 shares of common stock for
$100,000 cash, payment of a note payable of $10,096, and a stock subscription
agreement of $89,904 or $.23 per share.

During February 2007 the Company issued 70,000 Shares of common stock for
consulting expenses valued at $52,500 or $.75 per share.

Common Stock - Class B

The Company was previously authorized to issue 100,000 shares of Class B common
shares at a par value of $0.01 per share. There were 100,000 shares of Class B
common stock issued and outstanding as of December 31, 2007 and 2006, which were
held by related parties. On July 20, 2006, pursuant to the terms of a Stock
Cancellation Agreement between the Company and MLH, all of the issued and
outstanding shares of Class B Common Stock were cancelled. Effective August 24,
2006 the Company no longer has a designation for Class B Common Stock.


NOTE 7 - CONTINGENCIES AND COMMITMENTS

(a) Federal Payroll Taxes

     During 2005, the Company, based on discussions with and tax notices from
     the Internal Revenue Service, became aware of certain potential unpaid
     payroll taxes and related penalties and interest from 1993 and 1995
     totaling $10,500. These liabilities have not been recorded as accounts
     payable at December 31,2007 and 2006, but will be subject to further
     research of the Company's historical tax records and of the statutes of
     limitations related to such liabilities, and to negotiations with the
     Internal Revenue Service.

(b) Prior Operations

     The Company has been inactive for some time and has recently been
     reorganized through business acquisitions. Management believes that there
     are no valid outstanding liabilities or other claims from its operations
     prior to reorganization. If a creditor were to come forward and claim a
     liability, the Company has committed to contest the claim to the fullest
     extent of the law. Due to various statutes of limitations and because the
     likelihood that a very old liability would not still be valid, no amounts
     have been accrued in these financial statements for any such items.


                                      F-16
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 7 - CONTINGENCIES AND COMMITMENTS (continued)

(c) Claims from Creditors

     Medical Office Software, Inc has received a claim from Bell South for an
     advertising fee that they claim is valid. Management believe that they are
     not liable for this claim. The original agreement was signed by previous
     management in 2002. The matter has been turned over to our attorney.
     Management believes the ultimate outcome of this matter will not have a
     material impact on the financial condition of the Company.

(d) Class B Preferred Stock Dividend

     Pursuant to an agreement with Growth Fund, the Company agreed to pay a
     dividend on the Class B preferred stock on June 1, 2003, in cash equal to
     two percent of the value of the Class B Preferred Stock, or in restricted
     Class A common stock equal to three percent of the value of the Class B
     Preferred Stock. During 2003, a demand was made by Growth Fund through the
     circuit courts for the dividend payment, which the Companies had not paid.
     On March 10, 2005, the circuit court dismissed without prejudice this
     action for lack of prosecution by Growth Fund (see Note 6).

(e) Consulting Agreements

          (1) On April 21, 2003, the Companies entered into an agreement with a
     former consultant whereby the Company owed this consultant a total of
     $199,650 as payment for services rendered. During 2006 this obligation was
     satisfied by conversion into 199,650 shares of common stock.

          (2) During the year ended December 31, 2003, the Companies
     renegotiated an existing consulting agreement with a related party for
     consulting services, and entered into two new consulting agreements with
     related parties for consulting services. The total amount due under these
     agreements was $192,500. This amount was satisfied during 2006 by
     conversion into 192,500 shares of common stock.

          (3) An Agreement by and between the Company and ABSZ, LLC was entered
     into May 9, 2005 for the purpose of paying for accounting, auditing, tax
     and legal work to enable the Company to make current filings with SEC and
     Internal Revenue Service in order to maintain its current stock
     registration and to operate as a viable public company. ABSZ agreed to
     provide oversight of all such work, obtaining invoice from and making
     direct payments to those providing the various services. This agreement was
     originally filed as Exhibit 10.8 of the Company's Form 10-KSB, dated
     December 31, 2003 and is again filed as an exhibit within this Form 10-K.
     Under terms of this agreement contributing members (Lenders) each loaned
     500,000 unrestricted shares of Common Stock to ABSZ. Also under the terms
     of this agreement, the Company, upon filing all necessary documents with
     the SEC and meeting regulatory guidelines to issue said shares, agrees to
     issue 3,500,000 shares of unrestricted Common Stock to ABSZ for equal
     distribution of 1,000,000 shares each to the Lenders with 500,000 shares to
     the Managing Member, or his designee. ABSZ has paid to date $33,774.23 for
     the benefit of the Company. At December 31, 2005 an account payable of
     $105,000 had been recorded for the value of the 3,500,000 shares to be
     issued. During 2006, this obligation was satisfied by conversion into
     105,000 shares of common stock.


                                      F-17
<PAGE>



VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 7 - CONTINGENCIES AND COMMITMENTS (continued)

(f) Securities and Exchange Act of 1934 Filings

     Since December 31, 2003, the Companies have failed to comply with
     substantially all of the obligations imposed upon them by the Securities
     Exchange Act of 1934. The Companies were late in filing their annual
     reports on Form 10-KSB for the years ended December 31, 2003 and 2004 and
     their quarterly reports on Form 10-QSB for the quarterly periods ended in
     2003, 2004 and 2005, and required current reports on Form 8-K. As a result,
     the Companies and their officers and directors could be subject to
     substantial civil and criminal penalties due to such non-compliance. There
     can be no assurance that substantial civil and criminal penalties will not
     be imposed.

(g) Litigation

     Medical Office Software, Inc., a subsidiary of the Company is engaged in a
     lawsuit by a former employee for unpaid commissions on sales. A court date
     has not been set. Management for MOS is defending the litigation and
     considers the claim to be without merit and is therefore vigorously
     defending the same. A loss contingency has not been accrued for in the
     financial statements. The Company is also involved from time to time in
     other litigation through the normal course of its business. Management
     believes there are no such undisclosed claims which would have a material
     effect on the financial position of the Company.

(h) Operating lease

     The Company had a 3 year lease agreement for office space that converted to
     a month-to-month rental arrangement in March 2006. Monthly rental expense
     is currently $783 per month. Total rents paid for the years ended December
     31, 2007 and 2006 were $9,396 and $9,396 respectively.

     The Company is renting a storage unit on a month to month basis. Monthly
     rent is $290 a month. Total rents paid for the years ended December 31,
     2007 and 2006 were $3,480 and $0 respectively.

NOTE 8 - RELATED PARTY TRANSACTIONS

On March 18, 2005, the Company issued a note payable in the amount of $4,000 to
James Kemper Millard, former president of the Company and on April 25, 2005
issued an additional note of $10,000 to a relative of the former president. The
notes and related accrued interest were converted into common stock during 2006,
see below.

On July 20, 2006, the Company issued a total of 2,661,705 shares of common stock
as part of a debt exchange agreement for accounts/notes payable with accrued
interest from officers, directors and other related parties of the Company.

On September 25, 2006, the Company issued 30,000 shares of common stock to an
officer of the Company for settlement of accrued payroll.

HEB, LLC, a Nevada Limited Liability Company, has made funds available to the
various Companies in the form of three unsecured lines of credit, each note is
at 10% interest. The total amount drawn against the lines as of December 31,
2007 is $652,821. The total credit line is $1,100,000. Accrued interest is
$181,999 and $124,687 for 2007 and 2006 respectively.


                                      F-18
<PAGE>

VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 8 - RELATED PARTY TRANSACTIONS (continued)

Scott A. Haire individual has loaned the companies a total of $22,400 in the
form of a unsecured line of credit note, with 10% interest. The total credit
line is $50,000. Accrued interest is $7,452 and $5,181 for 2007 and 2006
respectively.

Rent of $26,000 was contributed to the Company by an officer, or a related
entity of the officer and accounted for as a capital contribution.

MLH Investments, LLC, a Nevada Limited Liability Company owned by Frank Barker,
has made funds available to the Company. Said unsecured line of credit note
bears interest at 10% per annum, maturity date is December 31, 2007. At December
31, 2007 the balance drawn against the $50,000 line is $0.

NewMarket Technology, Inc., note dated October 6, 2006 for $900,000. Said note
will automatically convert October 1, 2008 into 450,000 shares of Common Stock
if the stock price is $2.00 per share or convert for additional shares as the
price may vary, but total shares are limited to 675,000 shares of stock. Imputed
interest of $90,000 was contributed to the Company and accounted for as a
capital contribution.

Nevada Multicare LLC, a Nevada Limited Liability Company owned by Scott A.
Haire, has made funds available to the Company in the form of an unsecured line
of credit note that bears interest at 10%. At December 31, 2007 and 2006 the
balance drawn against the $150,000 line is $73,805. Accrued interest is $21,813
and $14,330 for 2007 and 2006 respectively.



NOTE 9 - INCOME TAXES

There is no current or deferred income tax expense due to the Companies'
consolidated loss position and the net deferred tax benefits of timing
differences having been reduced by an offsetting valuation allowance. The
deferred tax consequences of temporary differences in reporting items for
financial statement and income tax purposes are recognized, as appropriate.
Realization of the future tax benefits related to the net deferred tax assets is
dependent on many factors, including the Companies' ability to generate taxable
income within the net operating loss carryforward period. Management has
considered these factors in reaching its conclusion as to the valuation
allowance for financial reporting purposes and has recorded a 100% valuation
allowance against the net deferred tax asset. The change in the valuation
allowance is approximately $145,000 for the year ended December 31, 2007.

Reconciliations of the expected federal income tax benefit based on the
statutory income tax rate of 20% to actual benefit for the years ended December
31, 2007,and 2006 are as follows:

                                        2007           2006
                                     ---------      ---------
Expected federal income tax benefit  $ 145,000      $ 161,000
Increase in valuation allowance       (145,000)      (161,000)
                                     ---------      ---------
Income tax expense (benefit)         $       0      $       0
                                     =========      =========

At December 31, 2007, the potential non-current deferred tax asset of
approximately $447,000 results from the deferred tax benefit of applying the
statutory income tax rate of 20% to the net operating loss carryforwards of
approximately $2,234,000 and bad debt allowance of $14,900, which have a 100%
valuation allowance, as the ability of the Companies to generate sufficient
taxable income in the future is uncertain. There are no other significant
deferred tax assets or liabilities.


                                      F-19
<PAGE>

VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 9 - INCOME TAXES (continued)

As of December 31, 2006, the Companies have potential available net operating
loss carryforwards for federal income tax purposes of approximately $1,440,000,
which have been offset by a 100% valuation allowance and expire through 2026.
Pursuant to the Tax Reform Act of 1986, annual utilization of the Companies' net
operating loss carryforwards will be limited due to a cumulative change in
ownership of more than 50%.


NOTE 10 - BUSINESS ACQUISTIONS

MB HOLDING CORPORATION

On August 28, 2006, MB Holding corporation was acquired by the Company pursuant
to an Agreement and Plan of Reorganization. The agreement called for the Company
to issue 34,000,000 post-split shares of common stock to the shareholders of MBH
for 100% of the outstanding shares of MBH's common stock in a transaction
wherein MBH would became a wholly-owned subsidiary of the Company. The ownership
interests of the former owners of MBH in the combined enterprise will be greater
than that of the ongoing shareholders of the Company and, accordingly, the
management of MBH will assume operating control of the combined enterprise.
Consequently, the acquisition is accounted for as a recapitalization of MBH,
wherein MBH purchased the assets of the Company and accounted for the
transaction as a reverse purchase for accounting purposes.

MB Holding Corp. ("MBH") was organized under the laws of the State of Nevada on
July 11, 1997. MBH owns VPS Holdings,LLC and Envoii Healthcare LLC and 49% of
Medical Office Software Inc. VPS Holdings, LLC, is a software development
company with its primary business being the development of secure transactions
for real-time government Prescription Drug Tracking programs within the
healthcare industry which are compliant with the guidelines of HIPAA (Health
Insurance Portability and Accountability Act). Envoii Healthcare LLC's initial
application has been developed for use in the pharmacy field. This application
utilizes a front-end platform designed around Envoii's operating system enabling
private information to be transferred in a secure and encrypted envelope, only
viewable to the parties for whom it was originally intended. The Company
believes that the opportunity for this type of application extends beyond the
initial pharmacy offering and it will seek to develop or partner with other
companies to bring this type of HIPAA compliant application to other areas of
the healthcare industry.

MEDICAL OFFICE SOFTWARE

On October 6, 2006, the Company completed its acquisition of Medical Office
Software, Inc. The Company issued 1,400,000 shares of common stock to acquire
the remaining 51% control of all the issued and outstanding common stock of MOS.
The acquisition is accounted for as a purchase. The purchase was valued at
$420,000.

The following is a summary of the estimated fair values of the assets acquired
and liabilities assumed as of the date of the acquisition:

        Cash and Receivables   $    303,091
        Liabilities            $ (1,111,947)
        Goodwill               $  1,228,856
                               ------------
        Total                  $    420,000


                                      F-20
<PAGE>


VIRTUALHEALTH TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED December 31, 2007 and 2006 (Continued)


NOTE 10 - BUSINESS ACQUISTIONS (continued)

Medical Office Software, Inc. ("MOS") was incorporated in the State of Florida
in September of 1984. Since its inception, the Company has built an ever growing
regional presence in the physician practice management system ("PMS") market.
The Company began as a developer and marketer of its own PMS solution, and has
continued to maintain a high level of development expertise. At the present,
however, the Company focuses almost exclusively on reselling and supporting
products developed by other parties in an effort to provide the best of breed to
its customers in this emerging landscape of interoperability.

Pro forma results (unaudited)

The following table presents pro forma results of operations of the Company, MB
Holding and Medical Office Software, as though the companies had been combined
as of the beginning of the earliest period presented. The unaudited pro forma
results of operations are not necessarily indicative of results that would have
occurred had the acquisition taken place on January 1, 2005 or of results that
may occur in the future.

                                                   For the Year Ended
                                                      December 31,
                                                --------------------------
                                                   2007           2006
                                                ----------      ----------
Revenues                                        $1,396,812      $1,621,742
Earnings (loss) from continuing operations      $ (689,729)     $ (815,765)
Basic earnings (loss) per share                 $     (.02)     $     (.02)
Diluted earnings (loss) per share               $     (.02)     $     (.02)


NOTE 11 - LOSS PER SHARE

The following data show the amounts used in computing loss per share for the
periods presented:

                                                   For the Year Ended
                                                      December 31,
                                                --------------------------
                                                   2007           2006
                                                ----------      ----------
 Income (loss) from continuing operations
   (numerator)                                  $ (805,729)     $ (680,875)
                                                ----------      ----------
 Income (loss) available to common
 shareholders (numerator)                       $ (805,729)     $ (680,875)
                                                ----------      ----------
 Weighted average number of common
 shares outstanding used in loss per share
 for the period (denominator)                   42,287,738      36,921,544
                                                ----------      ----------

Dilutive loss per share was not presented, as the Company had no common
equivalent shares for all periods presented that would affect the computation of
diluted loss per share.


NOTE 13 - SUBSEQUENT EVENTS

Subsequent to December 31, 2007.  None


                                      F-21
<PAGE>



                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has duly caused this report to be signed by the undersigned, thereunto duly
authorized.

                        VIRTUALHEALTH TECHNOLOGIES, INC.
                                  (Registrant)

Date: April 17, 2008      By  /s/ Scott A. Haire
                              ------------------
                             Scott A. Haire
                           Chief Executive Officer and
                             Chief Financial Officer
                             (principal accounting officer)


     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

  Signature                    Title                             Date

 /s/ Scott A. Haire           Chief Executive Officer,           April 17, 2008
--------------------          Chief Financial Officer and
Scott A. Haire                Director


 /s/ James M. Renfro          Director                           April 17, 2008
--------------------
James M. Renfro


 /s/ Deborah Jenkins         Director                            April 17, 2008
--------------------
Deboarah Jenkins
                                       51