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

                                 Amendment No. 1
                                       to
                                   Form 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

                  For the quarterly period ended March 31, 2006

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

             For the transition period from __________ to __________


                       Commission File Number:   333-118155

                                  MDWERKS, INC.
                                  -------------
          (Exact name of small business issuer as specified in charter)

              Delaware                                   33-1095411
              --------                                   ----------
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
    incorporation or organization)

                            WINDOLPH CENTER, SUITE I
                              1020 N.W. 6TH STREET
                            DEERFIELD BEACH, FL 33442
                            -------------------------
               (Address of principal executive offices)(Zip Code)

                                 (954) 834-0352
                                 --------------
                (Issuer's telephone number, including area code)

                                       N/A
                                       ---
              (Former name, former address and former fiscal year,
                         if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [x] No [ ]

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 11,732,415 shares at May 1, 2006

Transitional Small Business Disclosure Format (Check one): Yes [  ] No [x]




                                  MDWERKS, INC.
                                   FORM 10-QSB
                    FOR THE THREE MONTHS ENDED MARCH 31, 2006

                                      INDEX

                                                                           Page
                                                                           -----

PART I - FINANCIAL INFORMATION

      Item 1 - Consolidated Financial Statements

      Consolidated Balance Sheets
               As of March 31, 2006 (Unaudited) and December 31, 2005      3
      Consolidated Statements of Operations (Unaudited)
               For the Three Months Ended March 31, 2006 and 2005          4
      Consolidated Statements of Cash Flows (Unaudited)
               For the Three Months Ended March 31, 2006 and 2005          5

      Notes to Unaudited Consolidated Financial Statements                 6-14

      Item 2 - Management's Discussion and Analysis or Plan of Operation   15-19

      Item 3 - Controls and Procedures                                     20

PART II - OTHER INFORMATION

      Item 1 - Legal Proceedings                                           21

      Item 2 - Unregistered Sales of Equity Securities and Use of
               Proceeds                                                    21

      Item 3 - Defaults Upon Senior Securities                             21

      Item 4 - Submission of Matters to a Vote of Security Holders         21

      Item 5 - Other Information                                           21

      Item 6 - Exhibits                                                    21


                                        2



                         MDWERKS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS



                                                                                  March 31,      December 31,
                                                                                    2006             2005
                                                                                -------------    -------------
                                      ASSETS                                    (Unaudited)

Current assets:
     Cash                                                                       $    325,155     $    766,464
     Notes receivable                                                                372,055          363,845
     Accounts receivable                                                              38,997           10,415
     Prepaid expenses and other                                                      121,941           68,816
                                                                                -------------    -------------

       Total current assets                                                          858,148        1,209,540

Property and equipment, net of accumulated depreciation of $19,701
 for March 31, 2006 and $13,428 for December 31, 2005                                119,418           80,391
                                                                                -------------    -------------

       Total assets                                                             $    977,566     $  1,289,931
                                                                                =============    =============

          LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY).

     Current liabilities:
     Notes payable                                                              $     90,000     $    135,000
     Loan payable                                                                     98,700           98,700
     Accounts payable                                                                475,650          211,517
     Accrued expenses                                                                216,622          167,382
     Deferred revenues                                                                 2,579            5,357
     Warrant liability                                                                    --        1,735,237
                                                                                -------------    -------------

     Total current liabilities                                                       883,551        2,353,193

Long-term liabilities:
     Deferred revenues, less current portion                                          32,572            3,390
                                                                                -------------    -------------

     Total liabilities                                                               916,123        2,356,583
                                                                                -------------    -------------

     Stockholders' equity (deficiency):
         Preferred stock, $.001 par value, 10,000,000 shares authorized;
            no shares issued and outstanding                                              --               --
         Series A preferred stock, $.001 par value, 1,000 shares authorized;
            5 shares issued and outstanding                                               --               --
         Common stock, $.001 par value, 100,000,000 shares authorized;
            11,732,415 shares issued and outstanding at March 31, 2006 and            11,732           11,539
            11,538,730 shares issued and outstanding at December 31, 2005
      Additional paid-in capital                                                  18,246,134       15,480,037
      Accumulated deficit                                                        (18,196,423)     (16,558,228)
                                                                                -------------    -------------

      Total stockholders' equity (deficiency)                                         61,443       (1,066,652)
                                                                                -------------    -------------

      Total liabilities and stockholders' equity (deficiency)                   $    977,566     $  1,289,931
                                                                                =============    =============


          The accompanying notes should be read in conjunction with the
                       consolidated financial statements


                                        3



                         MDWERKS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                                  For the Three Months Ended
                                                                                           March 31
                                                                                ------------------------------
                                                                                    2006             2005
                                                                                -------------    -------------
                                                                                (Unaudited)      (Unaudited)

Revenue:
         Service fees                                                           $     52,584     $         --
         Financing income                                                             16,348               --
                                                                                -------------    -------------

                  Total revenue                                                       68,932               --
                                                                                -------------    -------------

Operating expenses:
         Compensation                                                                759,947               --
         Consulting expense and outside services                                      43,121           78,361
         Professional fees                                                            59,971            9,813
         Selling, general and administrative                                         391,420           26,055
                                                                                -------------    -------------

                  Total operating expenses                                         1,254,459          114,229
                                                                                -------------    -------------

Loss from operations                                                              (1,185,527)        (114,229)
                                                                                -------------    -------------

Other income (expense):
         Interest income                                                               2,454               --
         Interest expense                                                             (4,066)              --
         Loss on settlement of note payable conversions                             (180,827)              --
         Other income                                                                     11               --
                                                                                -------------    -------------

                  Total other income (expense)                                      (182,428)              --
                                                                                -------------    -------------

Net Loss                                                                          (1,367,955)        (114,229)

Deemed dividend arising from beneficial conversation of preferred stock
and other charges                                                                    (24,000)              --
Fair value of common stock issued in connection with anti-dilutive
agreements                                                                          (246,240)              --
                                                                                -------------    -------------

Net loss attributable to common shareholders                                    $ (1,638,195)    $   (114,229)
                                                                                =============    =============

NET LOSS PER COMMON SHARE - basic and diluted                                   $      (0.14)    $      (0.01)
                                                                                =============    =============

WEIGHTED AVERAGE COMMON SHARES
   OUTSTANDING - basic and diluted                                                11,669,869        9,246,339
                                                                                =============    =============


          The accompanying notes should be read in conjunction with the
                       consolidated financial statements


                                        4



                         MDWERKS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                                  For the Three Months Ended
                                                                                           March 31
                                                                                ------------------------------
                                                                                    2006             2005
                                                                                -------------    -------------
                                                                                (Unaudited)      (Unaudited)

Cash flows from operating activites:
         Net Loss                                                               $ (1,367,955)    $   (114,229)
                                                                                -------------    -------------
         Adjustments to reconcile net loss to net cash
          used in operating activities:
                  Depreciation                                                         1,940            4,483
                  Stock-based compensation                                           345,426               --
                  Loss on settlement of note payable conversions                     180,827               --

         Changes in assets and liabilities
                  Notes receivable                                                    (8,210)              --
                  Accounts receivable                                                (28,582)              --
                  Prepaid expenses and other                                         (53,125)              --
                  Accounts payable                                                   264,133               --
                  Accrued expenses                                                    50,490            1,001
                  Deferred revenues                                                   26,404                -
                                                                                -------------    -------------

                           Total Adjustments                                         779,303            5,484
                                                                                -------------    -------------

Net cash used in operating activities                                               (588,652)        (108,745)
                                                                                -------------    -------------

Cash flows from investing activities:
         Purchase of property and equipment                                          (40,967)         (62,899)
                                                                                -------------    -------------

Net cash used in investing activities                                                (40,967)         (62,899)
                                                                                -------------    -------------

Cash flows from financing activities:
         Capital contributions                                                            --          225,000
         Proceeds from sale of Series A preferred stock                              300,000               --
         Placement fees and other expenses paid                                     (111,690)              --
                                                                                -------------    -------------

Net cash provided by financing activities                                            188,310          225,000
                                                                                -------------    -------------

Net increase (decrease) in cash                                                     (441,309)          53,356

Cash - beginning of year                                                             766,464          267,388
                                                                                -------------    -------------

Cash - end of period                                                            $    325,155      $   320,744
                                                                                =============    =============

Supplemental disclosure of cash flow information:

         Cash paid for:
                  Interest                                                      $      1,947     $         --
                                                                                =============    =============

         Noncash investing and financing activities:
                  Reclassification of warrant liability to paid-in capital      $  1,735,237     $         --
                                                                                =============    =============
                  Common stock issued for debt and accrued interest             $     46,250     $         --
                                                                                =============    =============


          The accompanying notes should be read in conjunction with the
                       consolidated financial statements


                                        5



                         MDWERKS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. Accordingly, the financial statements do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included and
such adjustments are of a normal recurring nature. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements for the year ended December 31, 2005 and notes thereto and other
pertinent information contained in the Form 10-KSB of MDwerks, Inc. (the
"Company") as filed with the Securities and Exchange Commission (the
"Commission"). The results of operations for the three months ended March 31,
2006 are not necessarily indicative of the results for the full fiscal year
ending December 31, 2006.

Organization

On November 16, 2005, a wholly-owned subsidiary of MDwerks, Inc. (f/k/a Western
Exploration, Inc., and hereinafter referred to as the "Company") was merged with
and into MDwerks Global Holdings, Inc., a Florida corporation ("MDwerks"), with
MDwerks surviving. The Company acquired all of the outstanding capital stock of
MDwerks in exchange for issuing 9,352,328 shares of the Company's common stock,
par value $0.001 per share to MDwerks' stockholders, which at closing of the
Merger Agreement represented approximately 87.4% of the issued and outstanding
shares of the Company's common stock. In connection with the Merger, the Company
changed its corporate name to MDwerks, Inc.

The acquisition was accounted for as a reverse merger because, on a post-merger
basis, the MDwerks stockholders hold a majority of the outstanding common stock
of the Company on a voting and fully diluted basis. As a result, MDwerks was
deemed to be the acquirer for accounting purposes. Accordingly, the consolidated
financial statements presented, beginning with the period ending December 31,
2005, are those of the Company for all periods prior to the acquisition, and the
financial statements of the consolidated companies from the acquisition date
forward. The historical stockholders' deficit of the Company prior to the
acquisition has been retroactively restated (a recapitalization) for the
equivalent number of shares received in the acquisition after giving effect to
any differences in the par value of the Company and MDwerks common stock, with
an offset to additional paid-in capital. The restated consolidated accumulated
deficit of the accounting acquirer MDwerks carried forward after the
acquisition.

On June 7, 2005, MDwerks entered into and consummated Share Exchange Agreements
with all of the shareholders of each of the Xeni Companies: Xeni Medical
Systems, Inc. ("XMS"); Xeni Financial Services, Corp. ("XFS"); and Xeni Medical
Billing, Corp. ("XMB"). Pursuant to each of the Share Exchange Agreements,
MDwerks acquired 100% of the issued and outstanding shares of each of the Xeni
Companies' common stock.

The acquisition of the Xeni Companies by MDwerks was accounted for as a reverse
merger because, on a post-merger basis, the former Xeni shareholders held a
majority of the outstanding common stock of MDwerks on a voting and fully
diluted basis. As a result, Xeni was deemed to be the acquirer for accounting
purposes. Accordingly, the financial statements of MDwerks are those of Xeni for
all periods presented.

XMS was incorporated under the laws of the state of Delaware on July 21, 2004.
XMS provides a Web-based package of electronic claims solutions to the
healthcare provider industry through Internet access to its MDwerks' suite of
proprietary products and services so that healthcare providers can significantly
improve daily insurance claims transaction processing, administration and
management.


                                        6



                         MDWERKS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

Organization (continued)

XFS was incorporated under the laws of the state of Florida on February 3, 2005.
XFS offers financing and advances to health care providers secured by claims
processed through the MDwerks system.

XMB was incorporated under the laws of the state of Florida on March 2, 2005.
XMB offers health care providers billing services facilitated through the
MDwerks system.

Going concern

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered losses that
raise substantial doubt about its ability to continue as a going concern. While
the Company is attempting to attain revenue growth and profitability, the growth
has not been significant enough to support the Company's daily operations.
Management intends to attempt to raise additional funds by way of a public or
private offering and make strategic acquisitions. While the Company believes in
the viability of its strategy to improve sales volume and in its ability to
raise additional funds, there can be no assurances to that effect. The ability
of the Company to continue as a going concern is dependent on the Company's
ability to further implement its business plan and generate revenue. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern. Management believes that
the actions presently being taken to further implement its business plan and
generate revenue provide the opportunity for the Company to continue as a going
concern.

Basis of presentation

The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States of America ("US GAAP"). The
consolidated statements include the accounts of the Company and its wholly-owned
subsidiaries, XMS, XFS and XMB. All significant intercompany balances and
transactions have been eliminated. All material intercompany balances and
transactions have been eliminated.

Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

Cash and cash equivalents

For purposes of the consolidated statements of cash flows, the Company considers
all highly liquid instruments purchased with a maturity of three months or less
and money market accounts to be cash equivalents.

At various times, the Company has deposits in excess of the Federal Deposit
Insurance Corporation limit. The Company has not experienced any losses on these
accounts.

Accounts and notes receivable

Accounts and notes receivable are reported at net realizable value. The Company
will establish an allowance for doubtful accounts based upon factors pertaining
to the credit risk of specific customers, historical trends, and other
information. Delinquent accounts are written-off when it is determined that the
amounts are uncollectible.


                                        7



                         MDWERKS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

Property and equipment

Property and equipment are stated at cost. Depreciation and amortization are
provided using the straight-line method over the estimated useful life.

Income (loss) per common share

Basic income (loss) per share is computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the period.
Diluted income (loss) per share is computed by dividing net income by the
weighted average number of shares of common stock, potential common stock and
potentially dilutive securities outstanding during each period. As of March 31,
2006, the Company had outstanding options to purchase an aggregate of 1,060,000
shares of common stock, warrants to purchase an aggregate of 814,640 shares of
common stock, and 100,000 shares of common stock issuable upon conversion of
preferred stock which could potentially dilute future earnings per share.
Diluted loss per common share has not been presented for the period ended March
31, 2006 since the impact of the stock options and warrants would be
antidilutive. At March 31, 2005, the Company did not have any potential common
stock equivalents.

Revenue recognition

The Company follows the guidance of the Securities and Exchange Commission's
("SEC") Staff Accounting Bulletin 104 for revenue recognition. In general, the
Company records revenue when persuasive evidence of an arrangement exists,
services have been rendered or product delivery has occurred, the sales price to
the customer is fixed or determinable, and collectability is reasonably assured.
The following policies reflect specific criteria for the various revenue streams
of the Company.

Revenue derived from fees related to claims and contract management services are
generally recognized when services are provided to the customer.

The Company provides advance funding services to unaffiliated healthcare
providers (the Company's "Customer"). The Customer advances are typically
collateralized by Security Agreements granting first position liens on the
medical claims submitted by its Customers to third party payors (the "Payors").
The advances are repaid through the remittance of payments of Customer medical
claims, by Payors, directly to the Company. The Company withholds from these
advances interest, an administrative fee and other charges as well as any amount
for prior advances that remain unpaid after a specified number of days. These
interest charges, administrative fees and other charges are recognized as
revenue when earned. There is no right of cancellation or refund provisions in
these arrangements and the Company has no further obligations once the services
are rendered.

Revenue derived from fees related to billing and collection services are
generally recognized when the customer's accounts receivable are collected.

Revenue from implementation fees are generally recognized over the term of the
customer's agreement. Revenue derived from maintenance, administrative and
support fees are generally recognized at the time the services are provided to
the customer.


                                        8



                         MDWERKS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

Stock-based compensation

Effective January 1, 2006, the Company adopted Statement of Financial Accounting
Standards No. 123 (revised 2004), Share Based Payment ("SFAS No. 123R")
utilizing the modified prospective method. SFAS No. 123R establishes the
financial accounting and reporting standards for stock-based compensation plans.
As required by SFAS No. 123R, the Company recognized the cost resulting from all
stock-based payment transactions including shares issued under its stock option
plans in the financial statements.

Prior to January 1, 2006, the Company accounted for stock-based employee
compensation plans (including shares issued under its stock option plans) in
accordance with APB Opinion No. 25 and followed the pro forma net income, pro
forma income per share, and stock-based compensation plan disclosure
requirements set forth in the Statement of Financial Accounting Standards No.
123, Accounting for Stock-Based Compensation ("SFAS No. 123").

Income Taxes

Income taxes are accounted for under the asset and liability method of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). Under SFAS 109, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under SFAS
109, the effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.

The Company has net operating loss carryforwards for tax purposes totaling
approximately $3,362,000 at March 31, expiring at various times through the year
2026 subject to the Internal Revenue Code Section 382, which places a limitation
on the amount of net operating losses that can offset by taxable income after a
change in control (generally greater than a 50% change in ownership). The
Company recorded a deferred tax asset of approximately $1,278,000 offset by a
full valuation of $1,278,000 since it is more likely than not that the deferred
tax asset will not be realized.

Recent accounting pronouncements

In February 2006 the Financial Accounting Standards Board issued Statement No.
155 ("SFAS No 155"), "Accounting for Certain Hybrid Instruments: An Amendment of
FASB Statements No. 133 and 140". Management does not believe that this
statement will have a significant impact as the Company does not use such
instruments.

NOTE 2 -- NOTES RECEIVABLE

At March 31, 2006, the Company advanced two healthcare providers under lines of
credit and note agreements, respectively, aggregating $372,055. Advances under
the line of credit are due to be repaid out of providers' claims collections, as
defined in the agreement. The note receivable under a note agreement is payable
as the provider collects certain receivables. The Company charged the health
care providers interest and other charges as defined in the agreements. At March
31, 2006 no amounts were past due.

Notes receivable are reported at their outstanding unpaid principal balances
reduced by an allowance for doubtful accounts. The Company estimates doubtful
accounts based on historical bad debts, factors related to specific customers'
ability to pay and current economic trends. The Company writes off receivables
against the allowance when a balance is determined to be uncollectible. At March
31, 2006 the Company has no allowance for doubtful accounts.


                                        9



                         MDWERKS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE 3 -- PROPERTY AND EQUIPMENT

At March 31, 2006, property and equipment consisted of the following:

                                              Estimated Life
                                              --------------
      Office furniture and equipment             5-7 Years         $      741
      Computer equipment and software            3-5 Years            138,378
                                                                   -----------
                                                                      139,119

      Less: accumulated depreciation                                  (19,701)
                                                                   -----------

                                                                   $  119,418
                                                                   ===========

NOTE 4 -- NOTES PAYABLE

At March 31, 2006, the Company has notes payable of $90,000 to unrelated parties
that bear interest at 8%. The outstanding principal and all accrued and unpaid
interest is due and payable 180 days from the date of each loan through July
2006. At the Company's option, all or any part of the outstanding principal
balance and accrued interest may be prepaid. In the event the Company raises
$2.5 million or more in a financing transaction involving the sale of equity
securities, the notes shall become due and payable at the closing of such
transaction. Additionally, in such event, the Company shall grant to the note
holders four-year warrants to purchase an aggregate of 90,000 shares of the
Company's common stock or the Company's successor parent company at $1.25 per
share. In February, 2006, $45,000 of these notes payable plus accrued interest
of $1,342 were converted into 92,685 shares of the Company's common stock in
full satisfaction of a portion the notes payable (see note 6).

NOTE 5 -- LOAN PAYABLE

The Company has a loan payable to an unrelated individual in the amount of
$98,700. The loan bears interest at 8% per annum and is payable on a monthly
basis, less fees. The loan shall be repaid proportionally upon repayment of
certain of the Company's notes receivable.

NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIENCY)

Preferred stock

The Company is authorized to issue 10,000,000 shares of preferred stock, $.001
par value, with such designations, rights and preferences as may be determined
from time to time by the Board of Directors.

On February 1, 2006, the Board of Directors of the Company authorized the
creation of 1,000 shares of $.001 par value Series A convertible preferred stock
with a liquidation value of $60,000 per share (subject to adjustment in the
event of stock splits, combinations or similar events). The Series A convertible
preferred stock shall not be entitled to receive dividends or other
distributions from the Company. Each holder of record of shares of the Series A
convertible preferred stock shall have the right at such holder's option, at any
time and from time to time, to convert any of such shares of Series A
convertible preferred stock into fully paid shares of common stock. Each share
of Series A convertible preferred stock shall initially be convertible into
20,000 shares of common stock (the "Conversion Rate"), subject to adjustment due
to consolidation, merger or sale or common stock dividends. The holders of
shares of Series A convertible preferred stock shall be entitled to vote on all
matters submitted to a vote of the stockholders of the Company and shall have
such number of votes equal to the number of shares of the Company's common stock
into which such holders' shares of Series A convertible preferred stock are
convertible.


                                       10



                         MDWERKS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE 6 -  SHAREHOLDERS' EQUITY (DEFICIENCY) (continued)

Preferred Stock (continued)

On March 22, 2006, the Company sold five units in a private placement to
accredited investors pursuant to the terms of a Confidential Private Placement
Memorandum, dated February 1, 2006, and private placement subscription
agreements executed and delivered by each investor on or before the closing of
the private placement. Each unit consists of one share of Series A Convertible
Preferred Stock, par value $.001 per share convertible into 20,000 shares of
common stock, and a detachable, transferable warrant to purchase 20,000 shares
of our common stock, at a purchase price of $3.00 per share. In connection with
the sale of the 5 units, the Company received net proceeds of $188,310.

In accordance with Emerging Issues Task Force ("EITF") 98-5 and EITF 00-27, the
Series A Preferred was considered to have an embedded beneficial conversion
feature because the conversion price was less than the fair value of the
Company's common stock. This Series A Convertible Preferred was fully
convertible at the issuance date, therefore a portion of proceeds allocated to
the Series A Preferred was determined to be the value of the beneficial
conversion feature and was recorded as a deemed dividend with a corresponding
credit to additional paid-in capital in the amount of $24,000.

Brookshire Securities Corporation, ("Brookshire"), served as the lead placement
agent in connection with the private placement. Brookshire received a cash fee
in the aggregate of $25,000, and for the payment of $10.00, received five-year
warrants to purchase 10,000 shares of the Company's common stock at an exercise
price of $1.50 per share on terms which are identical to those warrants included
in the units except that they contain a cashless exercise provision. In
addition, the warrants have registration rights that are the same as those
afforded to investors in the private placement.

Common Stock

On January 1, 2006, the Company issued 76,000 shares of the Company's common
stock to certain stockholders pursuant to agreements to offset the effect of
dilutive financing of the Xeni Companies. The shares issued were value at the
fair value at the date of issuance of $246,240 and were treated as an additional
charge to the loss available to common stockholders.

On January 3, 2006, the Company granted options to purchase 860,000 shares of
common stock to employees of the Company under the Incentive Plan. The options
are exercisable at $3.40 per share. The options vest as to 33.33% of such shares
on each of the first and second anniversaries of the date of grant and as to
33.34% of such shares on the third anniversary of the date of grant, and expire
on January 3, 2016 or earlier due to employment termination. As of January 1,
2006, the Company will account for stock options issued to employees in
accordance with the provisions of SFAS 123(R) and related interpretations. The
fair value of this option grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions: dividend yield of 0%; expected volatility of 105%; risk-free
interest rate of 3.75%; and, a term of 8 years. In connection with these
options, the Company valued these options at a fair market value of
approximately $2,578,445 and will record stock-based compensation expense over
the vesting period.

On February 13, 2006, $45,000 of notes payable plus accrued interest of $1,342
was converted into 92,685 shares of the Company's common stock in full
satisfaction of the notes payable. The common shares were valued at a fair
market value of $2.45 per share for an aggregate fair market value of $227,077
based on recent trading price of the stock. Accordingly, in connection with the
issuance of these shares, the Company reduced notes payable by $45,000, reduced
interest payable by $1,342, and recorded settlement expenses related to the debt
conversion of $180,827.

On February 28, 2006, the Company issued 25,000 shares of the common stock to
the Chief Financial Officer of the Company in consideration for services
rendered. The shares were issued at the fair value at the date of the issuance
of $81,000 or $3.24 per share. For the three months ended March 31 2006, in
connection with these shares, the Company recorded stock-based compensation of
$81,000.


                                       11



                         MDWERKS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE 6 - SHAREHOLDERS' EQUITY (DEFICIENCY) (continued)

Common Stock (continued)

In addition, the Company recognized compensation expense of $264,426 for the
three months ended March 31, 2006. There was no compensation expense for the
three months ended March 31, 2005.

As of March 31, 2006, the total future compensation expense related to
non-vested options not yet recognized in the consolidated statement of
operations is approximately $2,911,000, which will be recognized through
December 2008.

A summary of the status of the Company's outstanding stock options as of March
31, 2006 and changes during the period ending on that date is as follows:



                                                                                 Weighted Average         Aggregate
                                                                    Shares        Exercise Price       Intrinsic Value
                                                                  ----------    -----------------      ---------------

   Outstanding at December 31, 2005                                  200,000      $       3.25
   Granted                                                           860,000              3.40
   Exercised                                                              --                --
   Forfeited                                                              --                --
                                                                  ----------      ------------

   Outstanding at March 31, 2006                                   1,060,000      $       3.37           $        0
                                                                  ==========      ============           ==========

   Options exercisable at end of period                                   --                --
                                                                  ==========      ============

   Weighted-average  fair  value of  options  granted  during
   the period                                                     $     3.40
                                                                  ==========


The following information applies to options outstanding at March 31, 2006:



                                                Options Outstanding                           Options Exercisable
                                ---------------------------------------------------    ---------------------------------
                                                       Weighted
                                                       Average          Weighted                               Weighted
                                                      Remaining         Average                                Average
       Range of Exercise                             Contractual        Exercise                               Exercise
            Prices                  Shares           Life (Years)        Price             Shares               Price
    ------------------------    ----------------    ---------------    ------------    ----------------    -------------

            $3.25                  200,000              9.75             $3.25                 --                   --
            $3.40                  860,000              9.75             $3.40                 --                   --


Common Stock Warrants

In connection with the Series A Preferred Stock Offering, the Company issued to
investors three-year warrants to purchase an aggregate of 100,000 shares of its
common stock at an exercise price of $3.00 per share, which expire on March 22,
2009. Additionally, the Company issued to the placement agent five-year warrants
to purchase 10,000 shares of its common stock at an exercise price of $1.50 per
share, which expire on March 22, 2011.


                                       12



                         MDWERKS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE 6 - SHAREHOLDERS' EQUITY (DEFICIENCY) (continued)

Common Stock Warrants (continued)

A summary of the status of the Company's outstanding stock warrants granted as
of March 31, 2006 and changes during the period is as follows:



                                                                              Weighted-Average
                                                                Shares         Exercise Price
                                                             ------------     ----------------

   Outstanding at December 31, 2005                               704,640        $       2.25
   Granted                                                        110,000                2.86
   Exercised                                                           --                  --
   Forfeited                                                           --                  --
                                                             ------------     ----------------

   Outstanding at March 31, 2006                                  814,640        $       2.45
                                                             ============     ================

   Common stock issuable upon exercise of warrants                814,640        $       2.45
                                                             ============     ================

   Weighted-average fair value of common stock issuable      $       2.45
                                                             ============




                                                                                     Common Stock issuable
       Common Stock issuable upon exercise of warrants outstanding                 upon Warrants Exercisable
       -----------------------------------------------------------                 -------------------------
                      Number          Weighted Average         Weighted            Number             Weighted
   Range of       Outstanding at    Remaining Contractual      Average         Exercisable at         Average
Exercise Price    March 31, 2006        Life (Years)        Exercise Price     March 31, 2006      Exercise Price
--------------    --------------    ---------------------   --------------     --------------      --------------

 $   1.25             64,040                4.65             $     1.25            64,040           $     1.25
 $   1.50             10,000                4.90             $     1.50            10,000           $     1.50
 $   2.50            640,600                2.65             $     2.50           640,600           $     2.50
 $   3.00            100,000                2.90             $     3.00           100,000           $     3.00
                     -------                                 ----------                             ----------
                     814,640                                 $     2.45           814,640           $     2.45
                     =======                                 ==========           =======           ==========



                                       13



                         MDWERKS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

NOTE 6 - SHAREHOLDERS' EQUITY (DEFICIENCY) (continued)

Registration rights

The Company has agreed to use its best efforts to file a "resale" registration
statement with the SEC covering all shares of common stock and shares of common
stock underlying the warrants (including shares of common stock and underlying
warrants issued to the Placement Agent) issued in connection with the June 13,
2005 Private Placement. The Company has agreed that it will maintain the
effectiveness of the "resale" registration statement from the effective date
through and until the earlier of two years and the time at which exempt sales
pursuant to Rule 144(k) may be permitted. The Company will use its best efforts
to respond to any SEC comments to the "resale" registration statement on or
prior to the date which is 20 business days from the date such comments are
received, but in any event not later than 30 business days from the date such
comments are received. The Company has agreed to use its best efforts to have
such "resale" registration statement declared effective by the SEC as soon as
possible after the initial filing date.

In the event the "resale" registration statement is not filed with the SEC on or
prior to the date which is 180 days after the last closing date of the Private
Placement, each investor in the Private Placement will receive as liquidating
damages an additional number of shares of common stock equal to 2% of the total
number of shares of common stock purchased by the investor in the Private
Placement for each month (or portion thereof) that the Registration Statement is
not so filed, provided that the aggregate increase in such shares of common
stock as a result of the delinquent filing will in no event exceed 20% of the
original number of shares of common stock purchased in the Private Placement.

In the event that the Company fails to respond to SEC comments to the
Registration Statement within 30 business days, each investor in the Private
Placement will receive an additional number of shares of common stock equal to
2% of the total number of shares of common stock purchased by the investor in
the Private Placement for each month (or portion thereof) that a response to the
comments to the Registration Statement has not been submitted to the SEC,
provided that the aggregate increase in such shares shall in no event exceed 20%
of the original number of shares of common stock purchased in the Private
Placement.

In accordance with Emerging Issues Task Force Issue 00-19 ("EITF 00-19"),
"Accounting for Derivative Financial Instruments Indexed To, and Potentially
Settled in, a Company's Own Stock", the Company has initially accounted for the
fair value of the warrants as a liability since the Company will incur penalties
if the Company cannot comply with the warrant holders' registration rights. As
of the closing date of the private placement the fair value of the warrants was
$1,142,770 calculated utilizing the Black-Scholes option pricing model. In
addition, changes in the market value of the Company's common stock from the
closing date through the date of filing of the registration statement will
result in non-cash charges or credits to operations to reflect the change in
fair value of the warrants during this period. The Company recorded a charge to
operations of $592,467 during the year ended December 31, 2005 to reflect the
change in market value of the warrants. On March 9, 2006 the Company filed the
registration statement, and the fair value of the warrants of approximately
$1,735,000 was reclassified to equity.


                                       14



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Overview

      On November 16, 2005, we acquired all of the outstanding capital stock of
MDwerks Global Holdings, Inc. in connection with the merger of a wholly owned
subsidiary of the Company with and into MDwerks Global Holdings, Inc. (the
"Merger"), with the former stockholders of MDwerks being issued approximately
9,352,000 shares of common stock of the Company in exchange for all their shares
of common stock of MDwerks Global Holdings, Inc. In connection with the Merger,
we changed our name to MDwerks, Inc. Simultaneously with the closing of the
Merger, we completed the closing of a private placement of units, with each unit
consisting of 10,000 shares of our common stock and a warrant to purchase 10,000
shares of our common stock at an exercise price of $2.50 per share, with gross
proceeds of $1,600,000 and net proceeds to us, after deduction of offering
expenses and commissions paid at the closing, of $1,310,000 (the "Private
Placement"). As we have ceased our prior mining operations we will operate the
business of MDwerks Global Holdings, Inc. and the Xeni Companies as our sole
line of business, therefore the following discussion and analysis is of the
financial condition and results of operations for the year ended December 31,
2005 and 2004 of MDwerks Global Holdings, Inc. and the Xeni Companies. The
following discussion and analysis should be read in conjunction with the
financial statements, including footnotes, and other information presented in
this prospectus. For purposes of the following discussion and analysis,
references to "we", "our", "us" or the "Company" refers to MDwerks, Inc. and
includes MDwerks Global Holdings, Inc. as its wholly-owned subsidiary and the
Xeni Companies as indirect wholly-owned subsidiaries.

      MDwerks Global Holdings, Inc. was incorporated under the laws of the state
of Florida on October 23, 2003. It was originally formed to provide
international telecommunications products and services. In April 2004, MDwerks
Global Holdings, Inc. decided not to pursue the telecommunications business. In
December 2004, it decided to focus on a new line of business involving
healthcare provider claims processing, funding and related services. On May 25,
2005, MDwerks Global Holdings, Inc. changed its name from Global IP
Communications, Inc, to MDwerks Global Holdings, Inc.

      On June 7, 2005, MDwerks Global Holdings, Inc. entered into and
consummated Share Exchange Agreements with all of the stockholders of each of
the Xeni Companies (Xeni Medical, Xeni Financial and Xeni Billing). Pursuant to
each of the Share Exchange Agreements, MDwerks Global Holdings, Inc. acquired
100% of the issued and outstanding shares of common stock of each of the Xeni
Companies, in exchange for approximately 52,623,000 shares of common stock of
MDwerks Global Holdings, Inc. (which shares, together with the shares of the
holders of common stock of MDwerks Global Holdings, Inc. prior to the share
exchanges were exchanged for approximately 9,352,000 shares of our common stock
in connection with the Merger). As a result of the share exchanges, each of the
Xeni Companies became a wholly-owned subsidiary of MDwerks Global Holdings, Inc.

      The acquisition of the Xeni Companies was accounted for as a reverse
merger, because, after giving effect to the share exchanges, the former
stockholders of the Xeni Companies held a majority of the outstanding common
stock of MDwerks Global Holdings, Inc. on a voting and fully diluted basis. As a
result of the share exchanges, Xeni Medical was deemed to be the acquirer for
accounting purposes. Accordingly, the financial statements presented are those
of Xeni Medical for all periods prior to the acquisition of the Xeni Companies
on June 7, 2005, and the financial statements of the consolidated companies from
the acquisition date forward. The historical stockholders' deficiency of the
Xeni Companies prior to their acquisition has been retroactively restated for
the equivalent number of shares received in the acquisition. The restated
consolidated stockholders' deficiency of the accounting acquirer is carried
forward after the acquisition.

      Xeni Medical provides a web-based package of electronic claims solutions
to the healthcare provider industry. Through internet access to our "MDwerks"
suite of proprietary products and services, healthcare providers can
significantly improve daily insurance claims transaction processing,
administration, funding and management.

      Xeni Financial offers advance funding to healthcare providers secured by
claims processed through the MDwerks system. Xeni Billing offers healthcare
providers billing services facilitated through the MDwerks suite of products and
services.


                                       15



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (CONTINUED)

CRITICAL ACCOUNTING POLICIES

      The discussion and analysis of our financial condition and results of
operations are based on our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these consolidated financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, we evaluate our estimates based on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

      We apply the Securities and Exchange Commission's Staff Accounting
Bulletin 104 for revenue recognition. In general, we record revenue when
persuasive evidence of an arrangement exists, services have been rendered or
product delivery has occurred, the sales price to the customer is fixed or
determinable, and collectability is reasonably assured. We have identified the
policy below as critical to our business operations and understanding of our
financial results:

      Revenue derived from fees related to claims and contract management
services are generally recognized when services are provided to the customer. We
provide funding services to unaffiliated healthcare providers. These
arrangements typically require us to advance funds to these unaffiliated
healthcare providers (our customers) in exchange for liens on the receivables
related to invoices remitted to their clients for services performed. The
advances are repaid through the remittance of payments of receivables by their
clients directly to us. We withhold from these advances interest, an
administrative fee and other charges as well as the amount of receivables
relating to prior advances that remain unpaid after a specified number of days.
These interest charges, administrative fees and other charges are recognized as
revenue when earned.

      Revenue derived from fees related to billing and collection services are
generally recognized when the customer's accounts receivable are collected.
Revenues from implementation fees are generally recognized upon over the term of
the customer agreement. Revenues derived from maintenance, administrative and
support fees are generally recognized at the time the services are provided to
the customer.

      Because we have had a limited operating history, it is difficult to
accurately forecast our revenues and expenses. Additionally, our operations will
continue to be subject to risks inherent in the establishment of a new business,
including, among other things, efficiently deploying our capital, developing our
product and services offerings, developing and implementing our marketing
campaigns and strategies and developing awareness and acceptance of our
products. Our ability to generate future revenues will be dependent on a number
of factors, many of which are beyond our control, including the pricing of other
services, overall demand for our products, market competition and government
regulation.

RESULTS OF OPERATIONS

FOR THE QUARTER ENDED MARCH 31, 2006 VERSUS QUARTER ENDED MARCH 31, 2005

Revenue

      In July 2005, we began processing claims on our MDwerks suite of products
for our first client and recorded total revenue of $68,932 during the three
months ended March 31, 2006. Of this total, we recorded service fee revenue of
$52,584, or 76.3% and financing income of $16,348, or 23.7%. We did not have any
revenue in the 2005 period.


                                       16



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (CONTINUED)

Operating Expenses

      Our operating expenses significantly increased for the quarter ended March
31, 2006 from the quarter ended March 31, 2005 as a result of increased
operations as we began to implement our business plan.

      For the three months ended March 31, 2006, total operating expenses were
$1,254,459 as compared to $114,229 for the three months ended March 31, 2005, an
increase of $1,140,230. Included in this increase for the three months ended
March 31, 2006 is the following:

      1.    We recorded compensation expense of $759,947 as compared to $0 for
the quarter ended March 31, 2005. This increase was attributable to the hiring
of permanent sales, operations and executive staff, which began on September 26,
2005. We expect compensation expense to increase as we hire additional
administrative, sales and technical personnel. In addition, for the three months
ended March 31, 2006, we recorded $81,000 of compensation expense related to the
issuance of 25,000 shares to our chief financial officer and $264,426 of
compensation expense related to issuance of stock options to employees;

      2.    Consulting expense and outside services amounted to $43,141 for the
three months ended March 31, 2006 as compared to $78,361 for the three months
ended March 31, 2005, a decrease of $35,240. For the three months ended March
31, 2005, we paid consultants for substantially all of our sales, operations and
executive functions prior to the hiring of permanent staff on September 26,
2005.

      3.    Professional fees amounted to $59,971 for the three months ended
March 31, 2006 as compared to $9,813 for the quarter ended March 31 2005, an
increase of $50,158. This increase was attributable to accounting fees for the
audit of our financial statements and SEC filings and legal fees related to
other corporate matters.

      4.    Selling, general and administrative expenses were $391,420 for the
three months ended March 31, 2006 as compared to $26,055 for the three months
ended March 31, 2005, an increase of $365,365. This increase was attributable to
an increase in all of our general and administrative expenses as we implement
our business plan.

Other Income (Expenses)

      For the three months ended March 31, 2006, interest income was $2,454 as
compared to $0 for the three months ended March 31, 2005, an increase of $2,454.
This increase was due to an increase in interest-bearing cash deposits.

      For the three months ended March 31, 2006, interest expense was $4,066 as
compared to $0 for the quarter ended March 31, 2005, an increase of $4,066. This
increase was due to an increase in borrowings.

      For the three months ended March 31, 2006, we recorded a loss on
settlement of notes payable related to the issuance of common shares for debt
conversion of $180,827 compared to $0 for the three months ended March 31, 2005.

Net Loss

      As a result of these factors, we reported a net loss of $1,367,955 for the
three months ended March 31, 2006 as compared to a net loss of $114,229 for the
three months ended March 31, 2005.

Deemed Dividend arising from beneficial conversion on Preferred Stock and Other
Charges

      During the three months ended March 31, 2006, we recorded a deemed
dividend arising from a beneficial conversion feature of preferred stock of
$24,000 which relates to our Series A Convertible Preferred Stock. This non-cash
expense related to the beneficial conversion features of those securities and is
recorded with a corresponding credit to paid-in capital. In addition, for the
three months ended March 31, 2006, we issued 76,000 shares of the Company's


                                       17



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (CONTINUED)

common stock to certain shareholders pursuant to agreements to offset the effect
of dilutive financing of the Xeni Companies. The shares issued were valued at
the fair market value at the date of issuance of $246,240 and were treated as an
additional charge to the loss attributable to common shareholders.

Net Loss Attributable to Common Shareholders

      We reported a net loss attributable to common shareholders of $1,638,195
for the three months ended March 31, 2006 as compared to net loss attributable
to common shareholders of $114,229 for the three months ended March 31, 2005.
This translates to an overall per share loss available to shareholders of ($.14)
for the three months ended March 31, 2006 as compared to a per share loss of
$(.01) for the three months ended March 31, 2005.

Liquidity and Capital Resources

      We used the proceeds from the sales of common stock through December 31,
2005 and proceeds from notes and loans payable for working capital purposes and
to fund our note receivable of which we have $372,055 owed to us at March 31,
2006. We will continue to advance funds under note agreements to providers that
subscribe to our MDwerks financial services solution.

      On March 22, 2006, we sold five units in a private placement to accredited
investors pursuant to the terms of a Confidential Private Placement Memorandum,
dated February 1, 2006, and private placement subscription agreements executed
and delivered by each investor on or before the closing of the private
placement. Each unit consists of one share of our Series A Convertible Preferred
Stock, par value $.001 per share, and a detachable, transferable warrant to
purchase 20,000 shares of our common stock, at a purchase price of $3.00 per
share. In connection with the sale of the 5 units, we received net proceeds of
$188,310.

      While we have sufficient funds to conduct our business and operations as
they are currently undertaken for the near term, our ability to continue to
implement our revenue and profit growth strategy could be adversely affected if
we are unable to consummate additional private placement transactions or debt
financing.

      We currently have no material commitments for capital expenditures.

Cash flows

      At March 31, 2006, we had cash of $325,155.

      Net cash used in operating activities was $588,652 for the three months
ended March 31, 2006 as compared to $108,745 for the three months ended March
31, 2005, an increase of $479,907. This increase is primarily attributable to an
increase in our net loss and:

      1.    An increase in notes receivable, accounts receivable and prepaid
expenses aggregating $89,917 related to the increase in revenue and the funding
of notes receivable to providers that subscribe to our MDwerks financial
services solution;

      2.    An increase in accounts payable and accrued expenses related to an
increase in operations aggregating $314,623.

      Net cash used in investing activities were $40,967 for the three months
ended March 31, 2006 as compared to $62,899 for the three months ended March 31,
2005, a decrease of $21,932 and is related to the acquisition of computer and
office equipment and furniture.


                                       18



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (CONTINUED)

      Net cash provided by financing activities was $188,310 for the three
months ended March 31, 2006 as compared to $225,000 for the three months ended
March 31, 2005. For the three months ended March 31, 2006, we received proceeds
from the sale of Series A preferred stock of $300,000 offset by placement fees
and other expenses paid of $111,690 related to the preferred stock offering.
During the three months ended March 31, 2005, we received capital contributions
from the former stockholders of the Xeni Companies of $225,000.

OFF BALANCE SHEET ARRANGEMENTS

      We had no off balance sheet arrangements as of March 31, 2006.

CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

      This report contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties, many of which are beyond our control. Our actual results could
differ materially and adversely from those anticipated in such forward-looking
statements as a result of certain factors, including those set forth below and
elsewhere in this report. Important factors that may cause actual results to
differ from projections include, but are not limited to, for example:

      o     adverse economic conditions;

      o     inability to raise sufficient additional capital to implement our
            business plan;

      o     intense competition, including entry of newly-developed alternative
            drug technologies;

      o     unexpected costs and operating deficits, and lower than expected
            sales and revenue;

      o     adverse results of any legal proceedings;

      o     inability to satisfy government and commercial customers using our
            technology;

      o     the volatility of our operating results and financial condition;

      o     inability to attract or retain qualified senior management
            personnel, including sales and marketing, and technology personnel;
            and

      o     other specific risks that may be alluded to in this report.

      All statements, other than statements of historical facts, included in
this report regarding our strategy, future operations, financial position,
estimated revenue or losses, projected costs, prospects and plans and objectives
of management are forward-looking statements. When used in this report, the
words "will," "may," "believe," "anticipate," "intend," "estimate," "expect,"
"project," "plan" and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements contain
such identifying words. All forward-looking statements speak only as of the date
of this report. We do not undertake any obligation to update any forward-looking
statements or other information contained herein. Potential investors should not
place undue reliance on these forward-looking statements. Although we believe
that our plans, intentions and expectations reflected in or suggested by the
forward-looking statements in this report are reasonable, no one can assure
investors that these plans, intentions or expectations will be achieved.

      Information regarding market and industry statistics contained in this
report is included based on information available to us that we believe is
accurate. It is generally based on academic and other publications that are not
produced for purposes of securities offerings or economic analysis. We have not
reviewed or included data from all sources, and we cannot assure investors of
the accuracy or completeness of the data included in this report. Forecasts and
other forward-looking information obtained from these sources are subject to the
same qualifications and the additional uncertainties accompanying any estimates
of future market size, revenue and market acceptance of products and services.
We have no obligation to update forward-looking information to reflect actual
results or changes in assumptions or other factors that could affect those
statements.


                                       19



ITEM 3. CONTROLS AND PROCEDURES

      We maintain "disclosure controls and procedures," as such term is defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange
Act"), that are designed to ensure that information required to be disclosed in
our Exchange Act reports is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission rules and
forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required disclosure. We
conducted an evaluation (the "Evaluation"), under the supervision and with the
participation of our Chief Executive Officer ("CEO") and Chief Financial Officer
("CFO"), of the effectiveness of the design and operation of our disclosure
controls and procedures ("Disclosure Controls") as of the end of the period
covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on
this Evaluation, our CEO and CFO concluded that our Disclosure Controls were
effective as of the end of the period covered by this report.

      We have also evaluated our internal controls for financial reporting, and
there have been no significant changes in our internal controls or in other
factors that could significantly affect those controls subsequent to the date of
their last evaluation.

      Our management, including our CEO and CFO, does not expect that our
Disclosure Controls and internal controls will prevent all errors and all fraud.
A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of a simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management or
board override of the control. The design of any system of controls also is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions; over time, controls may
become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or
fraud may occur and not be detected. CEO and CFO Certifications appearing
immediately following the signatures section of this report there are
Certifications of the CEO and the CFO. The Certifications are required in
accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302
Certifications). This item of this report, which you are currently reading is
the information concerning the Evaluation referred to in the Section 302
Certifications and this information should be read in conjunction with the
Section 302 Certifications for a more complete understanding of the topics
presented.


                                       20



                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

      None

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

      On January 1, 2006, we issued 76,000 shares of the Company's common stock
      to certain shareholders pursuant to agreements to offset the effect of
      dilutive financing of the Xeni Companies.

      On February 13, 2006, $45,000 of notes payable plus accrued interest of
      $1,342 was converted into 92,685 shares of the Company's common stock in
      satisfaction of a portion of notes payable.

      On February 28, 2006, we issued 25,000 shares of the common stock to the
      Chief Financial Officer of the Company in consideration for services
      rendered. The shares were issued at the fair values at the date of the
      issuance of $81,000 or $3.24 per share. The shares described above were
      exempt from the registration requirements of the Securities Act by reason
      of Section 4(2) of the Securities Act and the rules and regulations,
      including Regulation D there under, as a transaction by an issuer not
      involving a public offering.

      On March 22, 2006, we sold five units in a private placement to accredited
      investors pursuant to the terms of a Confidential Private Placement
      Memorandum, dated February 1, 2006, and private placement subscription
      agreements executed and delivered by each investor on or before the
      closing of the private placement. Each unit consists of one share of our
      Series A Convertible Preferred Stock, par value $.001 per share
      convertible into 20,000 shares of common stock, and a detachable,
      transferable warrant to purchase 20,000 shares of our common stock, at a
      purchase price of $3.00 per share. In connection with the sale of the 5
      units, we received net proceeds of $188,310. The private placement was
      made solely to "accredited investors," as defined in Regulation D under
      the Securities Act of 1933, as amended, or the Securities Act. None of the
      units, warrants or the Common Stock, or shares of our common stock
      underlying the warrants sold in the offering were registered under the
      Securities Act, or the securities laws of any state, and were offered and
      sold in reliance on the exemption from registration afforded by Section
      4(2) and Regulation D (Rule 506) under the Securities Act and
      corresponding provisions of state securities laws, which exempts
      transactions by an issuer not involving any public offering.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

      None.

ITEM 4 - SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None.

ITEM 5. OTHER INFORMATION

      None

ITEM 6. EXHIBITS

      31.1  Section 302 Certification of Principal Executive Officer

      31.2  Section 302 Certification of Principal Financial Officer

      32.1  Section 906 Certification of Principal Executive Officer

      32.2  Section 906 Certification of Principal Financial Officer


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                                   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.


                                            MDWERKS, INC.


May 15, 2006                                        /s/ Howard B. Katz
                                            ------------------------------------
                                            Howard B. Katz
                                            Chief Executive Officer


May 15, 2006                                        /s/ Vincent Colangelo
                                            ------------------------------------
                                            Vincent Colangelo
                                            Chief Financial Officer


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