UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549


________________




FORM
      10-Q


________________




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




For
      the
      quarterly period ended March 31, 2008




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




Commission
      File Number: 000-30556




________________




**FLAGSHIP
      GLOBAL HEALTH, INC.**




(Exact
      Name of Small Business Issuer as Specified in Its Charter)




________________




**Delaware**
            **11-3210792**(State
                or Other Jurisdiction of
              Incorporation
                or Organization)
            (I.R.S.
                Employer
              Identification
                No.)




220
      West
      42 nd Street,
      23 rd Floor,
      New York, NY 10036


(Address
      of Principal Executive Offices)




(212)
      340-9100


(Issuer’s
      Telephone Number, Including Area Code)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      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 ý  No
       ̈




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.




Large accelerated filer               o
            
            
            Accelerated
                filer  oNon-accelerated filer                
                o
            
            (Do
                not check if a smaller reporting company)
            Smaller
                reporting company x





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


Yes  ̈   No ý




As
      of May
      13, 2008, Flagship Global Health, Inc. had 69,482,630 shares of common stock
      outstanding.







**Flagship
      Global Health, Inc.**


**(Formerly
      known as Patients & Physicians, Inc.)**


**(A
      Development Stage Company)**




**INDEX**




**PART
      I. FINANCIAL INFORMATION**




Page**Item
                1.** **Condensed Consolidated Financial
                Statements.**Condensed
                Consolidated Balance Sheets, as of March 31, 2008
              (unaudited)
                and December 31, 2007 (audited)
            3Condensed
                Consolidated Statements of Operations, for the three
              months
                ended March 31, 2008 and 2007 and for the period
              from
                inception (July 9, 2002) to March 31, 2008 (unaudited)
            4Condensed
                Consolidated Statement of Stockholders’ Equity,
              for
                the three months ended March 31, 2008 (unaudited)
            5Condensed
                Consolidated Statements of Cash Flows, for the three months
              ended
                March 31, 2008 and 2007 and for the period from inception
              (July
                9, 2002) to March 31, 2008 (unaudited)
            6Notes
                to Condensed Consolidated Financial Statements (unaudited)
            7**Item
                2.** **Management’s Discussion and Analysis of Financial
                Condition and Results of Operations.**
            17**Item
                4T. Controls and Procedures.**
            23**PART
                II. OTHER INFORMATION****Item
                1.****Legal
                Proceedings.**
            24**Item
                1A.****Risk Factors.**
            24**Item
                2.**     **Unregistered Sales of Equity
                Securities and Use of Proceeds.**
            30**Item
                3.**     **Defaults Upon Senior
                Securities.**
            30**Item
                4.**     **Submission of Matters to a
                Vote of Security Holders.**
            30**Item
                5.**     **Other
                Information.**
            31**Item
                6.**    
                **Exhibits.**
            31




-2-


**Flagship
      Global Health, Inc. and Subsidiary**


**(Formerly
      known as Patients & Physicians, Inc.)**


**(A
      Development Stage Company)**


**Condensed
      Consolidated Balance Sheets**


**As
      of March 31, 2008 (unaudited) and December 31, 2007**





March
                31,
              2008
              (Unaudited)
            
            December
                31,
              2007
              (Note
                2)**ASSETS****Current
                Assets:**Cash
                and cash equivalents
            
            $
            3,864,729
            
            $
            8,511,494Prepaid
                expenses and other current assets
            
            
            491,122
            
            
            335,451Total
                current assets
            
            
            4,355,851
            
            
            8,846,945Property
                and equipment, net
            
            
            552,860
            
            
            594,917Other
                assets
            
            
            34,170
            
            
            43,132Restricted
                cash
            
            
            824,117
            
            
            824,117**Total
                assets**
            
            $
            5,766,998
            
            $
            10,309,111**LIABILITIES
                AND STOCKHOLDERS’ EQUITY****Current
                Liabilities:**Accounts
                payable
            
            $
            403,309
            
            $
            470,085Accrued
                liabilities
            
            
            465,025
            
            
            536,823Notes
                payable, current portion, net of unamortized discounts
            
            
            3,335,440
            
            
            4,033,361Total
                current liabilities
            
            
            4,203,774
            
            
            5,040,269Notes
                payable, net of current portion and unamortized discounts
            
            
            -
            
            
            1,430,109Deferred
                rent liability
            
            
            428,443
            
            
            416,058**Total
                liabilities**
            
            
            4,632,217
            
            
            6,886,436**COMMITMENTS
                AND CONTINGENCIES**
            
            
            **-**
            
            
            **-****Stockholders’
                Equity:**Preferred
                stock, $0.001 par value: 25,000,000 shares authorized, 0 shares issued
                and
                outstanding at March 31, 2008 and December 31, 2007
            
            
            -
            
            
            -Common
                stock, $0.001 par value: 175,000,000 shares authorized, 69,482,630
                shares
                issued and outstanding at March 31, 2008 and December 31,
                2007
            
            
            69,484
            
            
            69,484Additional
                paid-in capital
            
            
            41,405,500
            
            
            41,259,908Deficit
                accumulated during the development stage
            
            
            (40,340,203
            )
            
            (37,906,717
            )Total
                stockholders’ equity
            
            
            1,134,781
            
            
            3,422,675**Total
                liabilities and stockholders’ equity**
            
            $
            5,766,998
            
            $
            10,309,111





See
      Notes
      to Condensed Consolidated Financial Statements




-3-


**Flagship
      Global Health, Inc. and Subsidiary**


**(Formerly
      known as Patients & Physicians, Inc.)**


**(A
      Development Stage Company)**


**Condensed
      Consolidated Statements of Operations**


**For
      the three months ended March 31, 2008 and 2007**


**and
      for the period from inception (July 9, 2002) to March 31, 2008
      (unaudited)**





Three
                Months Ended March 31,
            
            For
                the period from inception (July 9, 2002) to March 31,2008
            
            
            2007
            
            
            2008Subscription
                revenue
            
            $
            195,847
            
            $
            50,902
            
            $
            580,562Costs
                of revenue
            
            
            45,000
            
            
            7,275
            
            
            120,425Gross
                profit
            
            
            150,847
            
            
            43,627
            
            
            460,137Operating
                expenses:Membership
                services
            
            
            280,498
            
            
            674,818
            
            
            8,009,416Selling,
                general and administrative
            
            
            1,972,024
            
            
            1,631,558
            
            
            25,087,556Loss
                on sale of equipment
            
            
            -
            
            
            -
            
            
            88,953Impairment
                of long-lived assets
            
            
            -
            
            
            -
            
            
            623,235Total
                operating expenses
            
            
            2,252,522
            
            
            2,306,376
            
            
            33,809,106Loss
                from operations
            
            
            (2,101,675
            )
            
            (2,262,749
            )
            
            (33,349,023
            )Interest
                income
            
            
            48,145
            
            
            8,836
            
            
            380,322Amortization
                of debt discounts and debt issuance costs
            
            
            (435,507
            )
            
            (832,137
            )
            
            (6,178,198
            )Interest
                expense
            
            
            (97,780
            )
            
            (246,677
            )
            
            (1,772,256
            )Other
                income, net
            
            
            153,331
            
            
            76,850
            
            
            578,952Loss
                before provision for income taxes
            
            
            (2,433,486
            )
            
            (3,255,877
            )
            
            (40,340,203
            )Provision
                for income taxes
            
            
            -
            
            
            -
            
            
            -Net
                loss
            
            $
            (2,433,486
            )
            $
            (3,255,877
            )
            $
            (40,340,203
            )Weighted
                average number of shares outstanding, basic and diluted
            
            
            69,482,630
            
            
            58,862,329Net
                loss per share, basic and diluted
            
            $
            (0.04
            )
            $
            (0.06
            )




See
      Notes
      to Condensed Consolidated Financial Statements




-4-


**Flagship
      Global Health, Inc. and Subsidiary**


**(Formerly
      known as Patients & Physicians, Inc.)**


**(A
      Development Stage Company)**


**Condensed
      Consolidated Statement of Stockholders’ Equity**


**For
      the three months ended March 31, 2008 (unaudited)**


Common
                  Stock
              
              Additional
                Paid-in
                  Capital
              
              Deficit
                Accumulated
                  During the Development
                Stage
              
              Total
                Stockholders’
                  EquityShares
              
              AmountBalances
                  at December 31, 2007
              
              
              69,482,630
              
              $
              69,484
              
              $
              41,259,908
              
              $
              (37,906,717
              )
              $
              3,422,675Issuance
                  of options to purchase common stock to employees for
                  services
              
              
              -
              
              
              -
              
              
              276,310
              
              
              -
              
              
              276,310Issuance
                  of options to purchase common stock to non-employees for
                  services
              
              
              -
              
              
              -
              
              
              (130,718
              )
              
              -
              
              
              (130,718
              )Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,433,486
              )
              
              (2,433,486
              )Balances
                  at March 31, 2008 (unaudited)
              
              
              69,482,630
              
              $
              69,484
              
              $
              41,405,500
              
              $
              (40,340,203
              )
              $
              1,134,781




See
      Notes
      to Condensed Consolidated Financial Statements




-5-


**Flagship
      Global Health, Inc. and Subsidiary**


**(Formerly
      known as Patients & Physicians, Inc.)**


**(A
      Development Stage Company)**


**Condensed
      Consolidated Statements of Cash Flows**


**For
      the three months ended March 31, 2008 and 2007**


**and
      for the period from inception (July 9, 2002) to March 31, 2008
      (unaudited)**





Three Months Ended March 31,
            
            For the period from
              inception (July
                9,
              2002)2008
            
            2007
            
            to March 31, 2008**OPERATING
                ACTIVITIES**Net
                loss
            
            $
            (2,433,486
            )
            $
            (3,255,877
            )
            $
            (40,340,203
            )Adjustments
                to reconcile net loss to net cash used in operating activities:Stock-based
                compensation expense
            
            
            145,591
            
            
            256,140
            
            
            3,810,502Amortization
                of debt discounts and debt issuance costs
            
            
            435,507
            
            
            832,137
            
            
            6,178,198Depreciation
                and amortization expense
            
            
            79,445
            
            
            50,226
            
            
            866,082Deferred
                rent liability
            
            
            12,385
            
            
            18,604
            
            
            428,443Loss
                on sale of equipment
            
            
            -
            
            
            -
            
            
            88,953Common
                stock issued in exchange for services
            
            
            -
            
            
            -
            
            
            532,566Common
                stock issued as payment for interest expense and accrued interest
                payable
            
            
            -
            
            
            -
            
            
            335,754Preferred
                stock issued in exchange for services
            
            
            -
            
            
            -
            
            
            85,000Common
                stock issued to employees
            
            
            -
            
            
            -
            
            
            83,896Common
                stock issued to founders
            
            
            -
            
            
            -
            
            
            16,000Common
                stock issued to employees in lieu of compensation
            
            
            -
            
            
            -
            
            
            1,591,406Note
                payable in lieu of compensation
            
            
            -
            
            
            -
            
            
            165,000Impairment
                of long-lived assets
            
            
            -
            
            
            -
            
            
            623,235Common
                stock issued in connection with acquisition
            
            
            -
            
            
            -
            
            
            (76
            )Changes
                in operating assets and liabilities:Prepaid
                expenses and other current assets
            
            
            (155,671
            )
            
            16,948
            
            
            (491,122
            )Other
                non current assets
            
            
            (981
            )
            
            (15,691
            )
            
            (21,212
            )Restricted
                assets
            
            
            -
            
            
            -
            
            
            (824,117
            )Accounts
                payable and accrued liabilities
            
            
            (138,574
            )
            
            340,947
            
            
            868,334Net
                cash used in operating activities
            
            
            (2,055,784
            )
            
            (1,756,566
            )
            
            (26,003,361
            )**INVESTING** **ACTIVITIES**Purchases
                of property and equipment
            
            
            (37,388
            )
            
            (32,859
            )
            
            (1,545,576
            )Proceeds
                from the sale of equipment
            
            
            -
            
            
            -
            
            
            25,000Net
                cash used in investing activities
            
            
            (37,388
            )
            
            (32,859
            )
            
            (1,520,576
            )**FINANCING
                ACTIVITIES**Proceeds
                from stockholders
            
            
            -
            
            
            -
            
            
            83,763Proceeds
                from issuance of common stock
            
            
            -
            
            
            1,130,000
            
            
            17,918,195Proceeds
                from exercise of stock options
            
            
            -
            
            
            -
            
            
            67,025Proceeds
                from exercise of warrants
            
            
            -
            
            
            -
            
            
            7,500Proceeds
                from issuance of Redeemable Series A Convertible Preferred
                Stock
            
            
            -
            
            
            -
            
            
            1,735,000Costs
                associated with issuance of Redeemable Series A Convertible Preferred
                Stock
            
            
            -
            
            
            -
            
            
            (52,871
            )Proceeds
                from exercise of warrants to purchase Redeemable Series A Convertible
                Preferred Stock
            
            
            -
            
            
            -
            
            
            305,000Proceeds
                from issuance of Redeemable Series B Convertible Preferred
                Stock
            
            
            -
            
            
            -
            
            
            3,383,748Costs
                associated with issuance of Redeemable Series B Convertible Preferred
                Stock
            
            
            -
            
            
            -
            
            
            (37,015
            )Proceeds
                from issuance of notes payable
            
            
            -
            
            
            -
            
            
            7,335,000Debt
                issuance costs
            
            
            -
            
            
            -
            
            
            (225,321
            )Repayments
                of notes payable
            
            
            (2,553,593
            )
            
            -
            
            
            (4,362,758
            )Proceeds
                from issuance of convertible bridge notes, net
            
            
            -
            
            
            -
            
            
            1,050,000Proceeds
                from issuance of secured convertible term notes, net
            
            
            -
            
            
            -
            
            
            4,181,400Net
                cash provided by (used in) financing activities
            
            
            (2,553,593
            )
            
            1,130,000
            
            
            31,388,666**Net
                increase (decrease) in cash and cash equivalents**
            
            
            (4,646,765
            )
            
            (659,425
            )
            
            3,864,729**Cash
                and cash equivalents at beginning of period**
            
            
            8,511,494
            
            
            941,733
            
            
            -**Cash
                and cash equivalents at end of period**
            
            $
            3,864,729
            
            $
            282,308
            
            $
            3,864,729**Supplemental
                cash flow information**Cash
                payments for interest
            
            $
            82,327
            
            $
            163,468
            
            $
            1,301,313




See
      Notes
      to Condensed Consolidated Financial Statements




-6-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


**1.**
            **Nature
                of Business and Basis of
                Presentation**




Flagship
      Global Health, Inc (“Flagship” or the “Company”) (formerly known as Patients
& Physicians, Inc.) was organized on February 5, 1993 and commenced
      operations on July 9, 2002.




On
      June
      27, 2006, Flagship closed an Exchange Agreement (the “Share Exchange”) with all
      of the stockholders of Flagship Patient Advocates, Inc. (“Advocates”) (formerly
      U.S. Open Healthcare Management, Inc.) whereby Flagship acquired all of the
      issued and outstanding capital stock of Advocates. Upon completion of the Share
      Exchange, Advocates’ stockholders controlled approximately 99% of the then
      issued and outstanding common stock. Prior to the Share Exchange, Flagship
      was a
      shell company. Post the Share Exchange, Advocates’ business activities were the
      activities of Flagship. As a result of these factors, this transaction has
      been
      treated as a reverse merger and a capital transaction, equivalent to the
      issuance of stock by Advocates for Flagship’s net assets and, accordingly, the
      historical financial statements prior to June 27, 2006 are those of Advocates.
      All shares and per share data prior to the Share Exchange have been restated
      to
      reflect the stock issuances and the effect of the closing of the Share
      Exchange.




On
      January 12, 2007, a Certificate of Ownership and Merger was filed with the
      Secretary of State of the State of Delaware, pursuant to which Flagship merged
      with Advocates, its wholly owned subsidiary. As a result of the merger, Flagship
      assumed all the obligations of Advocates and the operations of Advocates were
      dissolved. As the surviving entity, Patients & Physicians, Inc. changed its
      name to Flagship Global Health, Inc. on January 12, 2007.




During
      2007, the Company established a wholly-owned subsidiary, Flagship Global
      Health-China, Inc. (“Flagship China”), in the People’s Republic of China
      (“PRC”). The purpose of establishing the subsidiary was to expand the Company’s
      worldwide operations and to provide the Company with a vehicle for making
      investments in joint ventures in the PRC in entities operating in related areas
      to the Company’s business.




Flagship
      is an international membership-based, healthcare management company dedicated
      to
      obtaining the highest quality of healthcare for its members, whether they are
      at
      home or traveling. Acting as a member’s healthcare advocate, Flagship is focused
      on providing priority access to renowned and clinically acclaimed physicians,
      which are typically difficult to access. Rather than simply providing names,
      Flagship offers physician referrals and priority scheduled appointments, in
      addition to emergent care needs, a personal electronic Internet-based medical
      record repository, air evacuation and personalized advocacy services to its
      members, all linked by a sophisticated and proprietary information management
      system. For Flagship, healthcare advocacy means bringing about the delivery
      of
      exceptional quality medicine to each of our members. The Company derives revenue
      from the sale of annual memberships through a combination of various service
      offerings.




-7-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


Flagship
      has not generated significant revenues through March 31, 2008 and is considered
      to be a development stage company in accordance with Statement of Financial
      Accounting Standards (“SFAS”) No. 7, *Accounting
      and Reporting by Development Stage Enterprises* .




The
      accompanying condensed consolidated financial statements have been prepared
      assuming the Company will continue as a going concern. The Company has
      experienced net losses of $40,340,203 since inception (July 9, 2002) to March
      31, 2008 and had working capital of $152,077 at March 31, 2008. These factors,
      among others, raise substantial doubt about its ability to continue as a going
      concern.




Although
      the Company completed an equity financing in July 2007 and realized net proceeds
      of $14,185,226 (Note 5), management recognizes that Flagship’s continuation as a
      going concern is dependent upon its ability to generate sufficient cash flow
      to
      allow Flagship to continue the development of its business plan and satisfy
      its
      obligations on a timely basis. Although there can be no assurance, management
      believes that such cash flows will be funded by additional equity and/or debt
      financings through the time in which Flagship emerges from the development
      stage
      and generates sufficient positive cash flows from its operations. Our condensed
      consolidated financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.




All
      references to “Company” shall apply to Flagship Global Health, Inc. and
      subsidiary.




**2.**
            **Summary
                of Significant Accounting
                Policies**




**Interim
      financial statements**




The
      accompanying condensed consolidated balance sheet as of December 31, 2007,
      which
      has been derived from audited statements, and the unaudited interim
      condensed consolidated financial statements have been prepared pursuant to
      the
      rules and regulations of the Securities and Exchange Commission (“SEC”). Certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States of America (“GAAP”) have been omitted pursuant to such rules and
      regulations. However the Company believes that the disclosures are adequate
      to
      make the information presented not misleading. The unaudited condensed
      consolidated financial statements reflect all adjustments (consisting only
      of
      normal recurring adjustments) that are, in the opinion of management, necessary
      for a fair presentation of the Company’s financial position and results of
      operations. The operating results for the three months ended March 31, 2008
      and
      2007 are not necessarily indicative of the results to be expected for any other
      interim period of any future year. The accompanying unaudited condensed
      consolidated financial statements should be read in conjunction with the
      Company’s audited consolidated financial statements for the year ended December
      31, 2007 included in our Form 10-KSB filed with the SEC on March 28, 2008 and
      registration statement Form SB-2 filed on December 21, 2007.




-8-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


**Consolidation**




The
      condensed consolidated financial statements include the accounts of Flagship
      and
      its wholly-owned subsidiary, Flagship China. All significant intercompany
      transactions and balances have been eliminated in consolidation.




**Use
      of Estimates**




The
      preparation of the Company’s condensed consolidated financial statements in
      conformity with GAAP 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, if any, and expenses during the reporting
      period. The accounting estimates that require management’s most difficult and
      subjective judgments include capitalization of certain assets,
      depreciable/amortizable lives, impairment of long-lived assets, the expected
      volatility of common stock, and the fair value of common stock and options
      issued for services as well as the allocation of proceeds from the issuance
      of
      debt and equity instruments. Because of the uncertainty inherent in such
      estimates, actual results may differ from these estimates.




**Net
      loss per share**




Net
      loss
      per share is computed based on the weighted average number of shares of common
      stock outstanding during the period.




Basic
      loss per share is computed by dividing loss available to common stockholders
      by
      the weighted average common shares outstanding for the period. Diluted earnings
      per share reflects the potential dilution that could occur if securities or
      other contracts to issue common stock were exercised or converted into common
      stock or resulted in the issuance of common stock that then shared in the
      earnings of the entity. Since the effect of outstanding warrants, options and
      debt conversion features is antidilutive, due to the losses of the Company,
      they
      have been excluded from the Company’s computation of net loss per share for
      three months ended March 31, 2008 and 2007. Therefore, basic and diluted loss
      per share was the same for three months ended March 31, 2008 and 2007. The
      total
      number of potentially dilutive securities excluded from the calculation of
      diluted loss per share for the three months ended March 31, 2008 and 2007 was
      22,443,608 and 17,834,313, respectively.




**Revenue
      Recognition**




The
      Company recognizes revenues in accordance with SEC Staff Accounting Bulletin
      No.
      101, *Revenue
      Recognition in Financial Statements* (“SAB
      No. 101”) as amended by SEC Staff Accounting Bulletin No. 104, *Revenue
      Recognition* ,
      revised
      and updated (“SAB No. 104”), which stipulates that revenue generally is realized
      or realizable and earned, once persuasive evidence of an arrangement exists,
      delivery has occurred or services have been rendered, the fee is fixed or
      determinable and collectibility is reasonably assured. The Company sells
      memberships to individuals and institutions for access to its healthcare service
      offerings. The Company recognizes revenue ratably over the life of the
      membership. The Company recognized $195,847 and $50,902 of revenue for the
      three
      months ended March 31, 2008 and 2007, respectively.




-9-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


**Stock-Based
      Compensation**




The
      Company accounts for share-based compensation to employees and directors in
      accordance with SFAS No. 123(R), *Share-Based
      Payment* (“SFAS
      No. 123(R)”), which requires the recognition of compensation expense for
      employee stock options and other share-based payments. Under SFAS No. 123(R),
      expense related to employee stock options and other share-based payments is
      recognized over the relevant service period based on the fair value of each
      stock option grant.




The
      Company has accounted for non-employee compensation expense in accordance with
      Emerging Issues Task Force (“EITF”) Issue No. 96-18, *Accounting
      for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
      or
      in Conjunction with Selling, Goods or Services* (“EITF
      96-18”), which requires non-employee share based compensation to be measured at
      their fair value as of the earlier of the date at which a commitment for
      performance to earn the equity instruments is reached (“performance commitment
      date”) or the date at which performance is complete (“performance completion
      date”). Non-employee stock options which involve only performance conditions
      when neither the performance commitment date nor performance completion date
      has
      occurred as of the interim financial reporting date are accounted for by
      measuring the instrument’s then-current fair value. As of March 31, 2008, the
      Company accounted for 2,597,500 options under the guidance of EITF
      96-18.




**Fair
      Value Measurements**




In
      September 2006, the FASB issued FASB Statement No. 157, *Fair
      Value Measurements* (“SFAS
      No. 157”), which defines fair value, establishes a framework for measuring
      fair value under GAAP, and expands disclosures about fair value measurements.
      SFAS No. 157 applies to other accounting pronouncements that require or permit
      fair value measurements. The new guidance is effective for financial statements
      issued for fiscal years beginning after November 15, 2007, and for interim
      periods within those fiscal years. The Company adopted SFAS No. 157 on January
      1, 2008. The adoption of SFAS No. 157 had no impact on the Company’s
      condensed consolidated financial statements or financial statement
      disclosure.




-10-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


**Fair
      Value Option for Financial Assets and Financial
      Liabilities**




In
      February 2007, FASB issued Statement No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* (“SFAS
      No. 159”). SFAS No. 159 provides a “Fair Value Option” under which a company may
      irrevocably elect fair value as the initial and subsequent measurement attribute
      for certain financial assets and liabilities. SFAS No. 159 will be available
      on
      a contract-by-contract basis with changes in fair value recognized in earnings
      as those changes occur. SFAS No. 159 is effective for fiscal years beginning
      after November 15, 2007. SFAS No. 159 also allows early adoption provided that
      the entity also adopts the requirements of SFAS No. 157. The Company adopted
      SFAS No. 159 on January 1, 2008. The adoption of SFAS No. 159 had no impact
      on
      the Company’s condensed consolidated financial statements or financial statement
      disclosure.




**Recent
      Accounting Pronouncements Issued, Not Yet Adopted**




Management
      does not believe that any recently issued, but not yet effective, accounting
      standards if currently adopted would have a material effect on the Company’s
      condensed consolidated financial statements.




**3.**
            **Stock-Based
                Compensation**




The
      Company issues stock-based compensation to its officers, directors, employees
      and consultants under its Amended and Restated 2006 Stock Option and Grant
      Plan
      (the “Stock Option Plan”). There are 19,622,000 shares authorized under the
      Stock Option Plan. The maximum life of options granted is generally 10 years
      and
      the options generally vest over a period of four years. The Board of Directors
      of the Company may approve other vesting schedules. Vested options may be
      exercised in whole or in part. The exercise price is determined by the Board
      of
      Directors at the time that the options are granted, which is typically at the
      end of the quarter.




A
      summary
      of stock-based compensation expense recognized during the three months ended
      March 31, 2008 and 2007 is presented below:




Three
                Months Ended March 31,2008
            
            2007Membership
                services
            
            $
            40,364
            
            $
            17,824Selling,
                general and administrative
            
            
            235,945
            
            
            62,943Non-employees
            
            
            (130,718
            )
            
            175,373Total
                options expense
            
            $
            145,591
            
            $
            256,140




Stock-based
      compensation expense related to non-employees is included in membership services
      in the accompanying condensed consolidated statements of operations. The Company
      adjusts to fair market value stock-based compensation expense related to
      non-vested stock options issued to non-employees as of the end of the reporting
      period.




-11-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


A
      summary
      of options activity for the three months ended March 31, 2008 is presented
      below:




Options
            
            Weighted Average
                Exercise PriceOutstanding,
                December 31, 2007
            
            
            10,018,250
            
            $
            1.08Granted
            
            
            3,215,000
            
            $
            0.16Exercised
            
            
            -
            
            $
            -Forfeited
                or expired
            
            
            (485,000
            )
            $
            1.25Outstanding,
                March 31, 2008
            
            
            12,748,250
            
            $
            0.84Exercisable,
                March 31, 2008
            
            
            5,883,000
            
            $
            0.79




Outstanding
      stock options at March 31, 2008 include 1,585,000 stock options which will
      vest
      based on performance criteria and whose measurement has not been
      achieved.




The
      fair
      value of each stock option grant to employees is estimated on the date of grant.
      A Black-Scholes option-pricing model, applying the following range of
      assumptions, was used to estimate the fair value for employee stock options
      issued:




Three
                Months Ended March 31,2008
            
            2007Expected
                volatility
            
            
            81
            %
            
            82
            %Risk-free
                rate
            
            
            2.46%
                to 3.45
            %
            
            4.58%
                to 4.65
            %Expected
                life of options
            
            
            6.60
                years
            
            
            5
                to 10 yearsDividend
                yield
            
            
            0
            %
            
            0
            %




Due
      to
      the Company’s limited history as a public company, the Company has estimated
      expected volatility based on the historical volatility of certain comparable
      companies as determined by management. The risk-free interest rate assumption
      is
      based upon observed interest rates appropriate for the expected term of the
      Company’s employee stock options. The dividend yield assumption is based on the
      Company’s intent not to issue a dividend under its dividend policy. The expected
      term is based on the simplified method in accordance with SEC Staff Accounting
      Bulletin No. 107, *Share-Based
      Payment* .




The
      weighted average grant-date fair value of the options granted was $0.16 per
      share and $1.50 per share for the three months ended March 31, 2008 and 2007,
      respectively.




The
      options outstanding at March 31, 2008 have exercise prices ranging from $0.035
      to $2.00 per share, a weighted average remaining contractual life of
      approximately 8.0 years and an intrinsic value of $909,110.




The
      options which are exercisable at March 31, 2008 have a weighted average
      remaining contractual life of approximately 7.6 years and an intrinsic value
      of
      $113,400.




Options
      which are exercisable as of March 31, 2008 and options expected to vest
      thereafter total 4,952,400 shares, have a weighted average exercise price of
      $0.62, remaining contractual life of approximately 5.9 years, and an aggregate
      intrinsic value of $112,800. The options expected to vest reflect an estimated
      forfeiture rate.




-12-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


As
      of
      March 31, 2008, there was $1,825,508 of total deferred compensation cost related
      to options issued to employees that will be recognized as expense over a
      weighted average period of 1.7 years.




**4.**
            **Debt**




Debt
      financings consist of the following as of March 31, 2008:




Principal
            
            Unamortized Debt
                Discounts
            
            NetLaurus
                Convertible Notes
            
            $
            847,656
            
            $
            (54,187
            )
            $
            793,469Junior
                Convertible Notes
            
            
            1,635,415
            
            
            (113,810
            )
            
            1,521,605Bridge
                Notes
            
            
            1,050,000
            
            
            (29,634
            )
            
            1,020,366$
            3,533,071
            
            $
            (197,631
            )
            
            3,335,440Less
                current portion
            
            
            
            
            
            
            
            
            3,335,440Long-term
                portion
            
            
            
            
            
            
            
            $
            -




*Bridge
      Notes*




The
      Company issued an aggregate of $1,050,000 of 9% convertible notes in the second
      quarter of 2007 (the “Bridge Notes”). Total unpaid principal, together with
      all accrued interest was due one year from the issuance date of each Bridge
      Note. The Bridge Note holders received 525,000 warrants to purchase shares
      of
      the Company’s common stock at an exercise price of $2.00 per share and a five
      year term. In the event the Company completes the closing of a financing, at
      any
      time prior to the maturity of the Bridge Notes, the Bridge Note holders may,
      at
      their sole option, convert the remaining outstanding principal and accrued
      interest, into the form of securities issued in such next round of financing
      on
      the same terms and conditions and the same price per share of the securities
      issued in such financing. The Company allocated the $1,050,000 of proceeds
      from
      the Bridge Notes based on the computed relative fair values of the debt and
      the
      warrants issued to the Bridge Note holders. The warrants were valued using
      a
      Black-Scholes Option pricing model with the following assumptions: (1) common
      stock fair values ranging from $1.05 - $1.50 per share on the date of
      issuance, (2) expected volatility of 81%, (3) risk free rates ranging from
      4.51%
      to 4.55% on the date of issuance, (4) life of 5 years and (5) no dividend,
      which
      resulted in a fair value of $438,813 for the warrants. The resulting relative
      fair value of the warrants was $309,477. Accordingly, the resulting relative
      fair value allocated to the debt component at the date of issuance was $740,523.
      Since the conversion of the Bridge Notes is contingent upon the completion
      of a
      future event no beneficial conversion was recorded at the time of issuance
      (See
      Note 7).




-13-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


*Laurus
      and Junior Convertible Notes*




In
      January 2006, Flagship entered into a securities purchase agreement (the “Laurus
      Securities Agreement”) with Laurus Master Fund, Ltd. (“Laurus”). Under the
      Laurus Securities Agreement, Laurus purchased from Flagship a secured
      convertible term note (the “Laurus Convertible Note”) in an aggregate principal
      amount of $4,100,000. The Laurus Convertible Note bears interest at 1.0% above
      the prime rate per annum, with a minimum interest rate of 7%, and is convertible
      in whole or in part into common stock of the Company at a fixed conversion
      price
      of $0.90 per share at the election of Laurus. During July 2007, Laurus converted
      principal of $270,000 of the Laurus Convertible Note in exchange for 300,000
      shares of the Company’s common stock.




In
      January 2006, Flagship entered into a securities purchase agreement (the “Junior
      Securities Agreement”) with certain holders of Flagship’s short-term notes.
      Under the Junior Securities Agreement, the note holders (the “Junior Note
      Holders”) agreed to convert $3,000,000 of the short-term notes previously issued
      into secured convertible term notes (the “Junior Convertible Notes”) in
      Flagship. The Junior Convertible Notes bear interest at 1.0% above the prime
      rate per annum, with a minimum interest rate of 7% and are convertible in whole
      or in part into common stock of the Company at a fixed conversion price of
      $0.90
      per share at the election of each of the Junior Note Holders. During June 2007,
      two Junior Note Holders converted principal of $42,500 of Junior Convertible
      Notes in exchange for 47,222 shares of the Company’s common stock. Additionally,
      several Junior Note Holders converted principal of $441,669 of Junior
      Convertible Notes in exchange for 490,743 shares of the Company’s common
      stock.




Flagship
      was originally required to repay the Laurus Convertible Notes and Junior
      Convertible Notes (collectively the “Convertible Notes”) on a monthly basis over
      a 24 month period beginning on February 1, 2007. In 2007, holders of the
      Convertible Notes and the Company executed waivers (the ”Waivers”) whereby
      the parties agreed that the first monthly payment would be deferred until July
      1, 2007. All deferred payments are payable in January 2009. As consideration
      for
      the Waiver, the Company agreed to pay a fee of approximately $57,500 to the
      Convertible Note holders. The Company is amortizing the fee for the remaining
      time the Convertible Notes are outstanding. The Company has determined that
      the
      changes in the repayment of the debt per the Waivers did not substantially
      change the Convertible Notes. For the three months ended March 31, 2008, $27,237
      of the fee has been amortized on the accompanying condensed consolidated
      statement of operations and charged to interest expense. The Company has
      accounted for this transaction in accordance with EITF Issue No. 96-19 *Debtor’s
      Accounting for a Modification (or Exchange) of Convertible Debt
      Instruments* .
      No
      adjustment to the condensed consolidated financial statements was necessary
      as a
      result of such modification. During 2008, Flagship repaid $2,553,593 in
      principal on the Convertible Notes including a prepayment of $2,000,000 on
      the
      Laurus Convertible Notes in January 2008. In connection with the original
      issuance of the Convertible Notes, the Company issued warrants to purchase
      1,902,174 shares of common stock at an exercise price of $0.92 per share and
      a
      term of seven years.




-14-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


*Debt
      Discounts and Debt Issuance Costs*




During
      the three months ended March 31, 2008 and 2007, $425,564 and $799,945,
      respectively, of debt discounts were amortized and included in amortization
      of
      debt discounts and debt issuance costs on the accompanying condensed
      consolidated statements of operations. During the three months ended March
      31,
      2008 and 2007, $9,943 and $32,192 respectively, of debt issuance costs, which
      are included in other assets on the accompanying condensed consolidated balance
      sheets, have been amortized and are included in amortization of debt discounts
      and debt issuance costs on the accompanying condensed consolidated statements
      of
      operations.




**5.**
            **Capital
                Stock**




*FrontPoint
      Financing*




In
      July
      2007, the Company sold 6,809,258 shares of its common stock and issued 2,042,777
      warrants to purchase common stock at a price of $2.20 per unit, for an aggregate
      of $14,980,367 (the ”FrontPoint Financing”) to FrontPoint Healthcare Fund,
      L.P., FrontPoint Healthcare Fund 2X, L.P., FrontPoint Healthcare Horizons Fund,
      L.P. and FrontPoint Healthcare Long Horizons Fund, L.P. (collectively,
“FrontPoint”). The warrants are exercisable beginning July 16, 2008, have an
      exercise price of $3.00 per share and a term of four years. The Company incurred
      $795,141 of financing costs related to the FrontPoint Financing and,
      accordingly, has recorded such costs as a reduction to additional
      paid-in-capital on the accompanying condensed consolidated balance
      sheet.




In
      accordance with the terms and conditions of the FrontPoint Financing, the
      Company and FrontPoint entered into a Registration Rights Agreement (the
“Registration Rights Agreement”). Pursuant to the Registration Rights Agreement,
      the Company agreed to register FrontPoint’s shares of common stock issued under
      the Securities Purchase Agreement and the common stock underlying the warrants.
      The Company’s registration statement was filed with the SEC and became effective
      on September 19, 2007. The Company expects the registration of such shares
      to remain effective and therefore no contingent liability has been recorded
      as
      of March 31, 2008.




**6.**
            **Commitments
                and Contingencies**




*Pending
      litigation*




A
      former
      independent contractor (the “Plaintiff”) has filed a lawsuit against the Company
      and Flagship, among others. The Plaintiff alleges that he was promised
      employment with the Company and performed services to Flagship based on these
      promises. The Plaintiff is seeking compensatory and punitive damages, including
      the issuance of additional shares of common stock for these services and
      attorney fees in an aggregate amount of approximately $1,800,000. The Company
      believes this lawsuit is without merit and intends to defend it vigorously.
      In
      management’s opinion, the final resolution of this matter will not have a
      material impact on the condensed consolidated financial position or condensed
      consolidated results of operations of the Company.




-15-


Flagship
        Global Health, Inc. and Subsidiary
 (Formerly
        Patients & Physicians, Inc.)
 (A
        Development Stage Company)
 Notes
        to
        the Condensed Consolidated Financial Statements


**7.**
            **Subsequent
                Events**




The
      Company has not paid the principal of two promissory notes, aggregating
      $650,000, which was due on April 23, 2008 and April 30, 2008, respectively.
      Management’s decision to defer the payment of these notes was made to preserve
      cash for operations. The maturity of a third promissory note in the principal
      amount of $400,000 and originally due on May 2, 2008 has been extended by
      consent of the holder to November 2, 2008. In connection with the
      extension, the Company issued to the holder a warrant to purchase 400,000 shares
      of common stock at an exercise price of $0.21 per share.




-16-


**Item
      2. Management’s Discussion and Analysis of Financial Condition and Results of
      Operations.**




This
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations (MD&A) contains forward-looking statements that involve known and
      unknown risks, significant uncertainties and other factors that may cause our
      actual results, levels of activity, performance or achievements to be materially
      different from any future results, levels of activity, performance or
      achievements expressed, or implied, by those forward-looking statements. You
      can
      identify forward-looking statements by the use of the words “may,” “will,”
“should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “intends,” “potential,” “proposed,” or “continue” or the negative of
      those terms. These statements are only predictions. In evaluating these
      statements, you should specifically consider various factors, including the
      risk
      factors outlined below. These factors may cause our actual results to differ
      materially from any forward-looking statements. Although we believe that the
      exceptions reflected in the forward-looking statements are reasonable, we cannot
      guarantee future results, levels of activity, performance or achievements.
      Therefore, actual results may differ materially and adversely from those
      expressed in any forward-looking statements. We undertake no obligation to
      revise or update publicly any forward-looking statements for any
      reason.




**General
      Discussion on Results of Operations and Analysis of Financial
      Condition**




**Overview**




**Corporate
      History**




Flagship
      Global Health, Inc (“Flagship”) (formerly known as Patients & Physicians,
      Inc.) was organized on February 5, 1993 and commenced operations on July 9,
      2002.




On
      June
      27, 2006, Flagship closed an Exchange Agreement (the “Share Exchange”) with all
      of the stockholders of Flagship Patient Advocates, Inc. (“Advocates”) whereby
      Flagship acquired all of the issued and outstanding capital stock of Advocates.
      Upon completion of the Share Exchange, Advocates’ stockholders controlled
      approximately 99% of the then issued and outstanding common stock. Prior to
      the
      Share Exchange, Flagship was a shell company. Post the Share Exchange,
      Advocates’ business activities were the activities of Flagship. As a result of
      these factors, this transaction has been treated as a reverse merger and a
      capital transaction, equivalent to the issuance of stock by Advocates for
      Flagship’s net assets and, accordingly, the historical financial statements
      prior to June 27, 2006 are those of Advocates. All shares and per share data
      prior to the Share Exchange have been restated to reflect the stock issuances
      and the effect of the closing of the Share Exchange.




On
      January 12, 2007, a Certificate of Ownership and Merger was filed with the
      Secretary of State of the State of Delaware, pursuant to which Flagship merged
      with its wholly owned subsidiary, Advocates. As a result of the merger, Flagship
      assumed all the obligations of Advocates and the operations of Advocates were
      dissolved. As the surviving entity, Patients & Physicians, Inc. changed its
      name to Flagship Global Health, Inc. on January 12, 2007.




-17-


During
      2007 the Company established a wholly-owned subsidiary, Flagship Global
      Health-China, Inc. (“Flagship China”), in the People’s Republic of China
      (“PRC”). The purpose of establishing the subsidiary was to expand the Company’s
      worldwide operations and to provide the Company with a vehicle for making
      investments in joint ventures in the PRC in entities operating in related areas
      to the Company’s business.




Flagship
      is an international membership-based, private medical group dedicated to
      obtaining the highest level of healthcare services for its members, whether
      they
      are at home or traveling. Acting as a member’s healthcare advocate, Flagship is
      focused on providing priority access to renowned and clinically acclaimed
      physicians, which are typically difficult to access. Rather than simply
      providing names, Flagship offers referrals and priority appointments, in
      addition to emergent care needs, a personal electronic internet-based medical
      record repository and air evacuation to its members, all linked by a
      sophisticated IT management system. For Flagship, healthcare advocacy means
      bringing about the delivery of exceptional quality medicine to each of our
      members. The Company derives revenue from the sale of annual memberships through
      a combination of various service offerings.




**Critical
      Accounting Policies**




Refer
      to
      the Company’s audited financial statements for the year ended December 31, 2007
      included in our Form 10-KSB, filed with the SEC on March 28, 2008, for a summary
      of the Company’s significant accounting policies.




**Revenue
      Recognition**




We
      derive
      revenue from the sale of memberships to individuals and institutions for access
      to our healthcare service offerings.




We
      recognize revenues in accordance with the SEC Staff Accounting Bulletin No.
      101, *Revenue
      Recognition in Financial Statements* (“SAB
      No. 101”) as amended by SEC Staff Accounting Bulletin No. 104, *Revenue
      Recognition, revised and updated* (“SAB
      No. 104”). SAB No. 104 stipulates that revenue generally is realized or
      realizable and earned, once persuasive evidence of an arrangement exists,
      delivery has occurred or services have been rendered, the fee is fixed or
      determinable and collectibility is reasonably assured. We sell memberships
      to
      individuals and institutions for access to our healthcare service offerings.
      The
      Company recognizes revenue ratably over the life of the membership.




-18-




To
      date,
      our memberships have been marketed only through our in-house sales force and
      a
      network of independent brokers.




In
      the
      broker channel, we recognize revenue when the broker distributor sells our
      memberships, provided we have satisfied all other terms and conditions.




**Stock-Based
      Compensation**




We
      have
      adopted Statement of Financial Accounting Standards (“SFAS”) No. 123(R) (revised
      2004), *Share-Based
      Payment* (“SFAS
      No. 123(R)”), which requires the recognition of compensation expense for
      employee stock options and other share-based payments. SFAS No. 123(R) was
      issued in December 2004. Under this method of adoption, expense related to
      employee stock options and other share-based payments is recognized over the
      relevant service period based on the fair value of each stock option
      grant.




We
      have
      accounted for non-employee compensation expense in accordance with Emerging
      Issues Task Force (“EITF”) Issue No. 96-18, *Accounting
      for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
      or
      in Conjunction with Selling, Goods or Services* (“EITF
      96-18”), which requires non-employee stock options to be measured at their fair
      value as of the earlier of the date at which a commitment for performance to
      earn the equity instruments is reached (“performance commitment date”) or the
      date at which performance is complete (“performance completion date”).
      Accounting for non-employee stock options, which involve only performance
      conditions when no performance commitment date or performance completion date
      has occurred as of the interim financial reporting date, requires measurement
      at
      the instruments then-current fair value.




We
      have
      followed the guidance outlined in Financial Accounting Standards Board (“FASB”)
      Interpretations (“FIN”) No. 28, *Accounting
      for Stock Appreciation Rights and Other Variable Stock Option or Award
      Plans* (“FIN
      28”), as it relates to computing expense when appreciation rights vest over
      time. As of March 31, 2008, we accounted for 2,597,500 options under the
      guidance of EITF 96-18.




The
      fair
      value of each stock option grant to employees is estimated on the date of grant.
      The fair value of each stock option grant to non-employees is estimated on
      the
      applicable performance commitment date, performance completion date or interim
      financial reporting date.




**Results
      Of Operations For The Three Months Ended March 31, 2008 Compared To The Three
      Months Ended March 31, 2007**




Our
      activities to date have been focused on developing a membership-based
      international health assurance company providing health management and emergency
      support resources typically not available through conventional medical
      insurance. The Company provides physician referrals and priority appointments,
      in addition to emergent care needs, a personal electronic internet-based medical
      record repository and air evacuation to its members, all linked by a
      sophisticated and proprietary IT management system.




-19-




We
      are
      still a development stage company. Our operating activities to date have
      consisted primarily of developing our membership and physician databases and
      establishing our physician network. We had revenues of $195,847 and total
      operating expenses of $2,252,522 for the three months ended March 31, 2008
      compared to revenues of $50,902 and total operating expenses of $2,306,376
      for
      the three months ended March 31, 2007.




**Revenues**




Our
      total
      revenue increased by $144,945 to $195,847 for the three months ended March
      31,
      2008 versus $50,902 for the three months ended March 31, 2007. The increase
      is a
      primarily a result of a contract entered into in late 2007 to provide second
      opinion services to Quinn-healthcare in Ireland and the recognition of revenue
      from sales of annual memberships made in 2007. We are still in the stages of
      early product and services development and, although no assurances can be given,
      we do not expect to generate significant revenue from our various product lines
      until late 2008.




**Costs
      of Revenue**




Our
      total
      costs of revenue increased to $45,000 for the three months ended March 31,
      2008
      versus $7,275 for the three months ended March 31, 2007. The increase is
      directly related to costs associated with the recognition of revenues related
      to
      membership sales.




**Total
      Operating Expenses**




Total
      operating expenses for the three months ended March 31, 2008 were $2,252,522
      compared to $2,306,376 for the three months ended March 31, 2007, a decrease
      of
      $53,854 or 2.3%. The decrease in expenses incurred during the three months
      ended
      March 31, 2008 as compared to 2007 are described in greater detail below and
      in
      the accompanying condensed consolidated financial statements
      attached.




Membership
      services expenses. Membership services expenses decreased by $394,320, or 58.4%,
      to $280,498 for the three months ended March 31, 2008 versus $674,818 for the
      three months ended March 31, 2007. The decrease was principally due to a
      reduction in personnel resulting in a decrease in related costs of approximately
      $71,000 and a reduction in the stock compensation expense related to consultants
      of approximately $306,000 which, since these options are marked to market,
      was a
      result of a decrease in the market price of the Company’s stock.




Selling,
      general and administrative expenses. Selling, general and administrative
      expenses increased by $340,466, or 20.9%, to $1,972,024 for the three months
      ended March 31, 2008 as compared to $1,631,558 for the three months ended March
      31, 2007. This increase was principally attributable to the issuance of stock
      options in the current quarter resulting in a charge to stock compensation
      expense of approximately $170,000, an increase in legal and professional fees
      of
      approximately $128,000 primarily relating to additional legal and accounting
      work required in 2008 related to being a public company, and an increase in
      depreciation and amortization of approximately $29,000 in 2008 versus 2007
      due
      to an increase in fixed assets.




-20-




Interest
      income. Interest income increased by $39,309 to $48,145 for the three months
      ended March 31, 2008 as compared to $8,836 for the three months ended March
      31,
      2007. This increase was a result of having more cash on hand during the current
      three months ended March 31, 2008 as compared to the same period in 2007 due
      to
      the financing that closed in July 2007.




Amortization
      of debt discounts and debt issuance costs. Amortization of debt discounts and
      debt issuance costs decreased by $396,630 to $435,507 for the three months
      ended
      March 31, 2008 versus $832,137 for the three months ended March 31, 2007. The
      costs allocated to the debt are charged to operations over the life of the
      debt
      using the interest method, which produces a constant periodic rate of return,
      based on the outstanding principal. The amortization decreased due to the
      decrease in the outstanding principal related to the Convertible
      Notes.




Interest
      expense. Interest expense decreased by $148,897 to $97,780 for the three months
      ended March 31, 2008 versus $246,677 for the three months ended March 31, 2007.
      This decrease is primarily due to a reduction in the principal amount of
      Convertible Notes outstanding as a result the repayment of principal, certain
      conversions to common stock and the conversion of a $4,000,000 note to equity
      in
      June 2007. These decreases were partially offset by an increase in interest
      expense incurred in the current period related to the issuance of $1,050,000
      of
      short term notes, which were not outstanding in the first quarter of
      2007.




Other
      income, net. Other income, net increased by $76,481 to $153,331 for the three
      months ended March 31, 2008 versus $76,850 for the same period in 2007. This
      increase is related to the foreign currency translation gain in 2008 which
      did
      not exist in 2007.




**Net
      loss**




As
      a
      result of the foregoing, for the three months ended March 31, 2008, net loss
      decreased by $822,391, or 25.3%, to a net loss of $2,433,486, compared to a
      net
      loss of $3,255,877 for the corresponding period in 2007.




**Liquidity
      And Capital Resources**




At
      March
      31, 2008, the Company had a working capital of approximately $152,000 compared
      to working capital of approximately $3,807,000 at December 31, 2007. The
      decrease in working capital was due to the use of cash of approximately
      $2,056,000 to fund operating activities and the repayment of approximately
      $2,554,000 of the outstanding principal on the Convertible Notes. These uses
      of
      cash were offset by a decrease in the current portion of notes payable of
      approximately $700,000.




At
      March
      31, 2008, current liabilities included the principal due on the Convertible
      Notes of approximately $2,483,000 and the Bridge Notes of $1,050,000, net of
      the
      unamortized debt discounts of approximately $198,000.




-21-




The
      Company currently has approximately $1,500,000 on deposit in China and is in
      the
      process of repatriating these funds. Due to statutory regulation in China,
      this
      process may take time to complete. In the event that the Company is not able
      to
      repatriate these funds on a timely basis, it will have a significant impact
      on
      our ability to fund the Company’s continuing operations.




The
      Company has not paid the principal of two promissory notes, aggregating
      $650,000, which was due on April 23, 2008 and April 30, 2008, respectively.
      Management’s decision to defer the payment of these notes was made to preserve
      cash for operations. The maturity of a third promissory note in the principal
      amount of $400,000 and originally due on May 2, 2008 has been extended by
      consent of the holder to November 2, 2008. In connection with the
      extension, the Company issued to the holder a warrant to purchase 400,000 shares
      of common stock at an exercise price of $0.21 per share.






**Going
      Concern**




Our
      condensed consolidated financial statements have been prepared assuming we
      will
      continue as a going concern. We have experienced net losses of $2,433,486 and
      $3,255,877 during the three months ended March 31, 2008 and 2007, respectively,
      and $40,340,203 for the period from inception (July 9, 2002) to March 31, 2008.
      As of March 31, 2008, we had working capital of $152,077 versus $3,806,676
      at
      December 31, 2007. The net losses and the decrease in working capital, among
      other factors, raise substantial doubt about our ability to continue as a going
      concern. Our condensed consolidated financial statements do not include any
      adjustment that might result from the outcome of this uncertainty. Assurances
      cannot be given that adequate financing can be obtained to meet our capital
      needs. If we are unable to generate profits and unable to continue to obtain
      financing to meet our working capital requirements, we may have to curtail
      our
      business sharply or cease operations altogether. Our continuation as a going
      concern is dependent upon our ability to generate sufficient cash flow to meet
      our obligations on a timely basis, to obtain additional financing and,
      ultimately, to attain profitability. Although no assurances can be given, we
      expect our gross margins to decrease in 2008 to approximately 61% as forecasted
      costs of revenues anticipate the increases in sales commissions associated
      with
      revenue generated from various sales strategies, we also expect sales to
      increase as the acceptance of our products take hold in the marketplace. We
      expect expenses in 2008 to be substantially the same as 2007 as infrastructure
      is sufficient for us to meet the operating needs of our current membership
      base
      and the forecasted increase in the coming year as well as operating
      requirements. In the event that we are able to achieve our forecast for 2008,
      the Company will be cash flow positive in the first half of 2009. If we are
      unable to meet the forecast, the Company could have significant cash needs.
      Presently, the Company is considering various alternatives, including pursuing
      a
      private placement financing, a merger or acquisition of the Company, as well
      as
      various strategies to improve cash from operations, in order to provide for
      the
      future working capital needs of the Company. Should the Company not be able
      to
      fund its working capital needs through a financing or increase in sales, we
      will
      be adversely affected and we may have to cease operations.




-22-




**Item
      4(T). Controls and Procedures.**




**A.**  **Evaluation
      of Disclosure Controls and Procedures**




The
      Company’s management has established disclosure controls and procedures designed
      to ensure that information it is required to disclose in the reports that it
      files or submits under the Securities Exchange Act of 1934, as amended (the
      “Exchange Act”), is recorded, processed, summarized and reported within time
      periods specified in the SEC rules and forms. Such disclosure controls and
      procedures include, without limitation, controls and procedures designed to
      ensure that information the Company is required to disclose in the reports
      that
      it files or submits under the Exchange Act is accumulated and communicated
      to
      the Company’s management to allow timely decisions regarding required
      disclosure.




Based
      on
      an evaluation of the Company’s disclosure controls and procedures as of
      March 31, 2008, made by management, under the supervision and with the
      participation of the Chief Executive Officer and Chief Financial Officer, the
      Chief Executive Officer and Chief Financial Officer have concluded that the
      Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and
      15d-15(e) promulgated under the Exchange Act) were effective as of
      March 31, 2008.




**B.**  **Changes
      in Internal Control Over Financial Reporting**




No
      changes in our internal control over financial reporting occurred during the
      three months ended March 31, 2008 that has materially affected or is
      reasonably likely to materially affect our internal control over financial
      reporting.




-23-


**PART
      II**




**OTHER
      INFORMATION**




**Item
      1. Legal Proceedings.**




A
      former
      independent contractor (the “Plaintiff”) has filed a lawsuit against the
      Company, among others. The Plaintiff alleges that he was promised employment
      with Flagship and performed services for Flagship based on these promises.
      The
      Plaintiff is seeking compensatory and punitive damages, including the issuance
      of additional shares of common stock for these services and attorney fees in
      an
      aggregate amount of approximately $1,800,000. The Company believes this lawsuit
      is without merit and intends to defend it vigorously. In management’s opinion
      the final resolution of this matter will not have material impact on the
      consolidated financial position or results of operations of the
      Company.




**Item
      1A. Risk Factors**




**Risk
      Factors**




*You
      should carefully consider the risks described below before investing in the
      Company. We consider these risks to be significant to your decision whether
      to
      invest in our common stock at this time. If any of the following risks actually
      occur, our business, results of operations and financial condition could be
      seriously harmed, the trading price of our common stock could decline and you
      may lose all or part of your investment. The risks and uncertainties set forth
      below are not the only risks and uncertainties we face. Additional risks and
      uncertainties not presently known to us or that we currently deem immaterial
      may
      also impair our business and results of operations.*




**Risks
      Relating To Our Business**




***The
      Company’s business is difficult to evaluate because it has a limited operating
      history.***




The
      Company has a limited operating history and participates in a relatively new
      and
      rapidly evolving market. The business has undergone significant transformation
      during its short history as a result of changes in the services and products
      offered, changes in market conditions, and changes in our targeted membership,
      and is expected to continue to change for similar reasons. We cannot assure
      you
      that our current business strategy will be successful in the long
      term.




Many
      companies with business plans based on providing similar healthcare products
      and
      services have failed to be successful. We have experienced significant losses
      since inception and, even if demand from members exists, we cannot assure you
      that our business will be successful.




***The
      Company has a history of significant losses and may not be profitable in the
      future and has going concern considerations.***




Flagship
      has a history of net losses and has an accumulated deficit of $40,340,203 from
      inception (July 9, 2002) through March 31, 2008. This amount does not include
      losses of Flagship prior to the Share Exchange. Furthermore, developing the
      Company’s business strategy and expanding the Company’s services will require
      additional capital, which may or may not be available to the Company. You should
      not rely solely on the public market valuation of the Company and the views
      of
      security analysts and investors for assessing the operational, business and
      financial success of the Company. Fluctuations in our quarterly operating
      results or our inability to achieve or maintain profitability may cause
      volatility in the price of our common stock in the public market. In light
      of
      these factors, among others, our independent registered public accounting firm
      has stated that there is substantial doubt about our ability to continue as
      a
      going concern in their opinion dated March 26, 2008 on our audited consolidated
      financial statements. The financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.




-24-




***The
      Company may be unable to fund future growth.***




The
      Company’s business strategy calls for expansion through an increase in sales of
      memberships by its internal and external sales forces. To this end, the Company
      has decided to invest substantial funds to increase its sales and marketing
      resources in order to grow revenues. In order to implement this strategy, the
      Company will require funding for additional personnel, capital expenditures
      and
      other expenses, as well as for working capital purposes. Financing may not
      be
      available to the Company on favorable terms, if at all. If adequate funds are
      not available on acceptable terms, then the Company may not be able to meet
      its
      business objectives for expansion. This, in turn, could harm the Company’s
      business, results of operations and financial condition. In addition, if the
      Company raises additional funds through the issuance of equity or convertible
      debt securities, or a combination thereof, then the shareholders will suffer
      dilution, and any new securities may have rights, preferences and privileges
      senior to those of our common stock. Furthermore, if the Company raises capital
      or acquires businesses by incurring indebtedness, the Company will become
      subject to the risks associated with indebtedness, including interest rate
      fluctuations and any financial or other covenants that the Company’s lender may
      require. Moreover, if the Company’s strategy to increase its sales and marketing
      resources in order to grow revenues does not produce the desired result, then
      the Company may incur significant unrecoverable expenses.




***The
      Company’s growth may be limited if it is unable to attract and retain qualified
      personnel.***




The
      Company’s business is largely dependent on the skills, experience and
      performance of key members of the Company’s senior management team. The Company
      plans to enter into agreements with independent third parties to sell products
      and services in order to grow revenue. The Company believes that its success
      depends largely on its ability to attract and retain highly-skilled and
      qualified technical, managerial and marketing personnel and enter into
      agreements with third parties. The market for highly skilled medical, sales,
      marketing and support personnel is highly competitive as a result of the limited
      availability of technically-qualified personnel with the requisite understanding
      of the markets which the Company serves. The inability to hire or retain
      qualified personnel may hinder the Company’s ability to implement its business
      strategy and may harm its business.




-25-




***Lengthy
      sales and implementation cycles for the Company’s product makes it difficult to
      forecast revenues and, as a result, may have an adverse impact on the Company’s
      business.***




The
      period from the Company’s initial contact with potential corporate buyers to the
      consummation of an agreement to offer the Company’s products and services is
      difficult to predict. These sales may be subject to delays due to a client’s
      internal procedures for approving such expenditures and other factors beyond
      the
      Company’s control. Implementation may be subject to delays based on the
      availability of the internal resources of the client that are needed, acceptance
      by potential members and other factors outside of the Company’s control. As a
      result, the Company has limited ability to forecast the timing of revenue from
      new members. This, in turn, makes it more difficult to predict the Company’s
      financial performance from quarter to quarter.




During
      the sales cycle and the implementation period, the Company may expend
      substantial time, effort and money preparing contract proposals and negotiating
      contracts without receiving any related revenue. In addition, many of the
      expenses related to providing the Company’s services are relatively fixed in the
      short term, including personnel costs, fixed overhead, and technology and
      infrastructure costs. As a result, the Company may be unable to adjust spending
      quickly enough to offset any unexpected revenue shortfall or delay, in which
      case the Company’s results of operations would suffer. In addition, in an
      attempt to enhance the Company’s long-term competitive position, the Company may
      from time to time make decisions regarding pricing, marketing, services and
      technology that could have a near-term adverse effect on the Company’s operating
      results.




***The
      Company faces significant competition for its products and
      services.***




While
      the
      Company’s products and services are relatively new, the greater healthcare
      markets in which the Company operates are intensely competitive, continually
      evolving and, in some cases, subject to rapid change. The Company expects the
      intensity of competition and the pace of change either to be maintained or
      at
      least be increased in the future. Many of the Company’s potential competitors
      may have greater financial, technical, product development, marketing and other
      resources than the Company. These organizations may be better known than the
      Company and may have more customers or users than the Company does. The Company
      cannot provide assurance that the Company will be able to compete successfully
      against these organizations or any alliances they have formed or may
      form.




***If
      the Company is unable to provide priority access to high quality healthcare
      that
      attracts and retains members, the Company’s revenues will be
      reduced.***




Interest
      in the Company’s products and services is based upon the Company’s ability to
      provide members with referrals and priority access to the Company’s network
      physicians. Although the Company has been able to continue to maintain and
      expand this network, if the Company is unable to continue to do so for any
      reason, the value of a membership would diminish and membership interest in
      the
      Company’s products and services would be adversely affected. Similarly, the
      Company’s ability to maintain or increase the number of highly qualified
      physicians in its network is based upon the Company’s ability to provide the
      physicians with incentive to continue to participate in the network. We cannot
      assure you that the Company will be able to retain qualified physicians to
      provide referral and priority access to members. If the Company is unable to
      provide high quality physicians to its members, the quality of the Company’s
      products and services will be reduced.




-26-




***The
      Company is exposed to the general condition of the healthcare
      market.***




The
      Company’s business is subject to global economic conditions, and in particular,
      market conditions in the healthcare industry. The Company’s operations may be
      adversely affected by the continued declines in employee benefit spending by
      large corporations and small to medium sized businesses. If global economic
      conditions worsen, or a prolonged slowdown in providing such benefits exists,
      then the Company may experience adverse operating results.




***The
      Company’s products and services may not achieve acceptance in the
      marketplace.***




The
      Company intends to offer its membership based products and services to large
      corporations, small to medium sized businesses and individuals. The markets
      for
      these products are relatively new, unpredictable and rapidly evolving. Lack
      of
      acceptance in the marketplace for these new products and services could have
      a
      material adverse effect on the Company’s business, results of operations and
      financial condition.




***Government
      regulation of healthcare creates risks and challenges with respect to Flagship’s
      compliance efforts and business strategies.***




The
      healthcare industry is highly regulated and is subject to changing political,
      legislative, regulatory and other influences. Existing and new Federal and
      state
      laws and regulations affecting the healthcare industry could create unexpected
      liabilities for the Company and cause the Company to incur additional costs
      and
      restrict the Company’s operations. Many healthcare laws are complex and their
      application to specific products and services may not be clear. In particular,
      many existing healthcare laws and regulations, when enacted, did not anticipate
      the healthcare products and services that the Company provides. However, these
      laws and regulations may nonetheless be applied to the Company’s products and
      services. As an international company, the Company may conduct business in
      a
      number of countries and thus may be subjected to local business practices,
      laws
      and regulations. The Company’s presence in the Chinese market in particular is a
      significant risk to our business. Management’s failure to accurately anticipate
      the application of these laws and regulations, or other failures to comply,
      could create liability, result in adverse publicity and negatively affect our
      businesses. Some of the risks the Company faces from healthcare regulation
      are
      as follows:




*Anti-kickback
      Laws*




There
      are
      federal and state laws that govern patient referrals, physician financial
      relationships and inducements to healthcare providers and patients. The federal
      healthcare programs anti-kickback law prohibits any person or entity from
      offering, paying, soliciting or receiving anything of value, directly or
      indirectly, for the referral of patients covered by Medicare, Medicaid and
      other
      federal healthcare programs or the leasing, purchasing, ordering or arranging
      for or recommending the lease, purchase or order of any item, good, facility
      or
      service covered by these programs. Many states also have similar anti-kickback
      laws that are not necessarily limited to items or services for which payment
      is
      made by a federal healthcare program.




-27-




The
      laws
      in this area are broadly written and it is often difficult to determine
      precisely how the laws will be applied in specific circumstances. Penalties
      for
      violating the federal anti-kickback law include imprisonment, fines and
      exclusion from participating, directly or indirectly, in Medicare, Medicaid
      and
      other federal healthcare programs. Any determination by a state or federal
      regulatory agency that any of the Company’s practices violate any of these laws
      could subject the Company to civil or criminal penalties and require the Company
      to change or terminate some portions of its business and could have an adverse
      effect on the Company’s business. Even an unsuccessful challenge by regulatory
      authorities of the Company’s practices could result in adverse publicity and be
      costly for the Company to defend.




*Medical
      Professional Regulation*




The
      practice of most healthcare professions requires licensing under applicable
      state law. In addition, the laws in some states prohibit business entities
      from
      practicing medicine. If a state determines that some portion of the Company’s
      business violates these laws, it may seek to have the Company discontinue those
      portions or subject the Company to penalties or licensure requirements. Any
      determination that the Company is a healthcare provider and has acted improperly
      as a healthcare provider may result in liability to the Company.




***The
      Company faces potential liability related to the privacy and security of
      personal information it collects from consumer and healthcare professionals
      through its website.***




Internet
      user privacy has become a major issue both in the United States and abroad.
      The
      Company has privacy policies posted on its website that the Company believes
      comply with applicable laws requiring notice to users about the Company’s
      information collection, use and disclosure practices. However, whether and
      how
      existing privacy and consumer protection laws in various jurisdictions apply
      to
      the Internet is still uncertain and may take years to resolve. Any legislation
      or regulation in the area of privacy of personal information could affect the
      way the Company operates its website and could harm its business. Further,
      the
      Company cannot assure you that the privacy policies and other statements on
      its
      website or its practices will be found sufficient to protect the Company from
      liability or adverse publicity relating to the privacy and security of personal
      information.




Under
      the
      Health Insurance Portability and Accountability Act of 1996, or HIPAA, Congress
      established a set of federal national privacy standards for the protection
      by
      health plans, healthcare clearinghouses, healthcare providers and their business
      associates of individually identifiable health records. While the Company’s
      members own and control their own personal health records, the Company’s
      maintenance of these records using Flagship Global Health ID TM may subject
      the
      Company to HIPAA regulations. Furthermore, legislation regarding HIPAA is
      evolving and often confusing as it applies to new businesses such as the
      Company. Violation of HIPAA could result in substantial penalties that could
      adversely affect the Company’s future.




-28-




**Risks
      Relating To Our Stock Being Publicly Traded**




***We
      incur costs as a result of being a publicly-traded
      company.***




As
      a
      publicly-traded company, we incur legal, accounting and other expenses,
      including costs associated with the periodic reporting requirements applicable
      to a company whose securities are registered under the Exchange Act, recently
      adopted corporate governance requirements, including requirements under the
      Sarbanes-Oxley Act of 2002, and other rules implemented relatively recently
      by
      the SEC and the National Association of Securities Dealers (the
“NASD”).




***We
      do not intend to pay dividends on our Common Stock.***




We
      have
      never declared or paid any cash dividend on our common stock. We currently
      intend to retain any future earnings and do not expect to pay any dividends
      in
      the foreseeable future.




***Penny
      stock rules could make it hard to resell your shares.***




The
      Company’s common stock is traded on the OTCBB. An investor may find it more
      difficult to dispose of shares or obtain accurate quotations as to the market
      value of our common stock. In addition, rules promulgated by the SEC impose
      various practice requirements on broker-dealers who sell securities that fail
      to
      meet certain criteria set forth in those rules to persons other than established
      customers and accredited investors. Consequently, the liquidity of the Company’s
      securities could be impaired, not only in the number of securities which could
      be bought and sold, but also through delays in the timing of transactions,
      reduction in security analysts’ and the news media’s coverage of the Company,
      and lower prices for the Company’s securities than might otherwise be
      attained.




***Future
      Sales By Our Stockholders May Negatively Affect Our Stock Price And Our Ability
      To Raise Funds In New Stock Offerings.***




Sales
      of
      our common stock in the public market could lower the market price of our common
      stock. Sales may also make it more difficult for us to sell equity securities
      or
      equity-related securities in the future at a time and price that our management
      deems acceptable or at all. Of the 69,482,630 shares of common stock outstanding
      as of May 8, 2008, 32,398,167 shares are freely tradable without
      restriction, unless held by our “affiliates.” The remaining 37,084,463 shares of
      common stock, which are held by existing stockholders, including the officers
      and directors, are “restricted securities” and may be resold in the public
      market only if registered or pursuant to an exemption from registration. Some
      of
      these shares may be resold under Rule 144.




***Volatility
      in Our Common Share Price May Subject Us to Securities
      Litigation.***




The
      market for our common stock is characterized by significant price volatility
      when compared to seasoned issuers, and we expect that our share price will
      continue to be more volatile than a seasoned issuer for the indefinite future.
      In the past, plaintiffs have often initiated securities class action litigation
      against a company following periods of volatility in the market price of its
      securities. We may, in the future, be the target of similar litigation.
      Securities litigation could result in substantial costs and liabilities and
      could divert management’s attention and resources.




-29-




***Our
      stock price may be volatile, which may result in losses to our
      shareholders.***




The
      stock
      markets have experienced significant price and trading volume fluctuations,
      and
      the market prices of companies traded on the OTCBB have been volatile in the
      past and have experienced sharp share price and trading volume changes. The
      trading price of our common stock is likely to be volatile and could fluctuate
      widely in response to many of the following factors, some of which are beyond
      our control:




·
            variations
                in our operating results;




·
            changes
                in expectations of our future financial performance, including financial
                estimates by securities analysts and
                investors;




·
            changes
                in operating and stock price performance of other companies in our
                industry;




·
            additions
                or departures of key personnel; and




·
            future
                sales of our common stock.




Domestic
      and international stock markets often experience significant price and volume
      fluctuations. These fluctuations, as well as general economic and political
      conditions unrelated to our performance, may adversely affect the price of
      our
      common stock.




***The
      Company lacks internal accounting personnel.***




The
      Company’s Chief Financial Officer is solely responsible for the accounting and
      reporting functions for the Company and outsources certain of its accounting
      and
      finance functions to an independent third party. Although the Company currently
      has limited segregation of duties regarding the Company’s accounting and
      reporting functions, with the guidance of an outside consulting firm we have
      designed and implemented improvements in our internal controls over financial
      reporting. Our consultants have concluded that the Company’s use of an
      outsourcing firm for certain accounting functions provides reasonable accounting
      resources to provide us with the expertise needed to assist the Company in
      the
      preparation of its financial statements.




**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.**




None.




**Item
      3. Defaults Upon Senior Securities.**




The
      Company has not paid the principal of two promissory notes, aggregating
      $650,000, which was due on April 23, 2008 and April 30, 2008, respectively.
      Management’s decision to defer the payment of these notes was made to preserve
      cash for operations. The maturity of a third promissory note in the principal
      amount of $400,000 and originally due on May 2, 2008 has been extended by
      consent of the holder to November 2, 2008. In connection with the extension,
      the
      Company issued to the holder a warrant to purchase 400,000 shares of common
      stock at an exercise price of $0.21 per share.




**Item
      4. Submission of Matters to a Vote of Security Holders.**




None.




-30-




**Item
      5. Other Information.**




On
      January 21, 2008, the Board of Directors of the Company adopted an amendment
      to
      the Company's bylaws, pursuant to which certain provisions relating to director
      nominations were added to the bylaws.




According
      to the bylaws, nominations of persons for election to the Board of Directors
      may
      be made at any annual meeting or at any special meeting of the stockholders
      called for the purpose of electing directors. A stockholder may make a
      nomination if he or she is a stockholder of record on the date of the giving
      of
      the notice provided for in the bylaws and on the record date for the
      determination of stockholders entitled to vote at such meeting. The stockholder
      who makes a nomination also must comply with the notice procedures set forth
      in
      the bylaws. For a nomination to be made by a stockholder, the stockholder must
      give timely notice in proper written form to the secretary of the Company,
      as
      set forth in the bylaws.




A
      copy of
      the bylaws is included as Exhibit 3.2 to Form 8-K filed on January 21, 2008,
      and
      was later amended effective March 14, 2008, to delete Section 3.8 of Article
      III
      of the bylaws in its entirety.




**Item
      6. Exhibits.**




Exhibit
              Number
            
            Description
                of Document31.1
            
            Rule
                13a-14(a)/15d-14(a) Certification (CEO)**31.2
            
            Rule
                13a-14(a)/15d-14(a) Certification (CFO)**32.1
            
            Section
                1350 Certification (CEO)**32.2
            
            Section
                1350 Certification (CFO)**


________


**
      Filed
      herewith.




-31-


**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




**FLAGSHIP
                GLOBAL HEALTH, INC.**Date:
                May 15, 2008
            By:
                /s/ John H. Flood IIIJohn H. Flood III, President and Chief Executive OfficerDate:
                May 15, 2008
            By:
                /s/ Philip E. BarakPhilip
                E. Barak, Chief Financial Officer




-32-