UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

|Mark One                                                      |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For The Fiscal Year Ended December 31, 2007                  
|OR                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the Transition Period
from                             to

Commission File Number 001-33521

INFOLOGIX, INC.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of incorporation or organization)      |  | 20-1983837(IRS Employer Identification Number)
|--------------------------------------------------------------------------- |  | ----------------------------------------------
|101 E. County Line Road
Hatboro, PA(Address of principal executive offices) |  | 19040(Zip code)                               

(215) 604-0691(Registrant's telephone number, including area code)

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

Title of each class

Names of each exchange on which registeredCommon Stock, par value $0.00001

The NASDAQ Stock Market, LLC


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

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes o    No ý

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 o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. o

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 o

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company ý


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

As of June 29, 2007, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was $57,524,368 based
on the closing price as reported on the National Association of Securities Dealers Over-the-Counter Bulletin Board.

The
number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date,

Class

Outstanding at March 21, 2008Common Stock, $0.00001 par value per share

24,919,301 Shares


DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement for its 2008 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on
Form 10-K.



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TABLE OF CONTENTS

PART IItem 1.

Business

4Item 1A.

Risk Factors

17Item 1B.

Unresolved Staff Comments

29Item 2.

Properties

29Item 3.

Legal Proceedings

29Item 4.

Submission of Matters to a Vote of Security Holders

30PART IIItem 5.

Market for the Company's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

30Item 6.

Selected Financial Data

31Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

32Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

41Item 8.

Financial Statements and Supplementary Data

42Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

71Item 9A.

Controls and Procedures

71Item 9B.

Other Information

72PART IIIItem 10.

Directors, Executive Officers and Corporate Governance

73Item 11.

Executive Compensation

73Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

73Item 13.

Certain Relationships, Related Transactions, and Director Independence

73Item 14.

Principal Accountant Fees and Services

73PART IVItem 15.

Exhibits and Financial Statement Schedules

73Schedule II

Valuation and Qualifying Account

74Signatures

78


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CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS

This report contains "forward-looking statements" that are based on our current expectations, estimates, forecasts and projections about our company and our
industry. These forward-looking statements reflect our current views about future events and can be identified by terms such as "will," "may," "believe," "anticipate," "intend," "estimate," "expect,"
"should," "project," "plan" and similar expressions, although not all forward-looking statements contain such identifying words. You are cautioned not to place undue reliance on these forward-looking
statements. These forward-looking statements are not guarantees of future events and involve risks and uncertainties that are difficult to predict and are based upon assumptions that may prove to be
incorrect.

Important
factors that may cause actual results to differ from projections include the following, among other factors:



We
have disclosed additional important factors that could cause actual outcomes and results to differ materially from the forward-looking statements under Item 1A "Risk Factors"
included in Part I of this report. All forward-looking statements speak only as of the date of this report and we do not undertake any obligation to update or revise any forward-looking
statements to reflect new information, future events or otherwise, except as required by federal securities laws.

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PART I

Item 1.    Business

General

InfoLogix, Inc. is a Delaware corporation that was organized under the laws of the State of Nevada on November 22, 2004 and subsequently merged with
and into a corporation organized under the laws of the State of Delaware on November 22, 2006. On November 29, 2006, InfoLogix Systems Corporation (formed in 2001), a Delaware
corporation, merged with and into a wholly owned subsidiary of InfoLogix, Inc. As a result, InfoLogix, Inc. is a holding company for, and conducts substantially all of its operations
through, its wholly-owned subsidiary InfoLogix Systems Corporation. References throughout this report to "we", "us", "our", "the Company" and "InfoLogix" are references to InfoLogix, Inc. and
its wholly-owned direct and indirect subsidiaries unless otherwise indicated.

Overview

InfoLogix is a provider of enterprise mobility and radio frequency identification, or RFID, solutions. We provide these solutions to our customers by utilizing a
combination of products and services, including consulting, business software applications, managed services, mobile workstations and devices, and wireless infrastructure. Our solutions are designed
to allow the real time usage of data throughout a customer's enterprise in order to enhance workflow, improve customer service, increase revenue and reduce costs. We sell wireless communication and
computing devices, including mobile workstations that connect to a customer's wireless network so that information can be accessed from any location within the enterprise. We also implement customized
software applications and provide RFID technology, a data-exchange method using transponders that store and remotely send or retrieve information, to enable the transmission and processing
of that information between the customer's information system and its wireless communication and computing devices. We also offer professional services that support and complement a customer's
wireless computing systems, including consulting, managed services, training, engineering, technical support and network monitoring.

Historically,
the sale of mobile workstations and other wireless devices has represented a majority of our revenues. In the past two years, we have been transitioning our business to
offer more software applications and professional services. With our new focus on selling software and services, we believe that we can provide more comprehensive enterprise mobility solutions to our
customers. These solutions involve:



We
believe that we are well positioned to capitalize on the development, proliferation and convergence of enterprise mobility solutions in the marketplace. We believe that the
application of our

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knowledge
and experience in combining industry leading wireless infrastructure with proprietary and third-party software creates solutions that address our customers' critical needs. Because we do not
depend on any particular technology or network carrier, we believe that we can provide tailored solutions in a rapidly changing technological landscape. Also, as market conditions continue to evolve,
we believe that our solutions are adaptable to customers in any industry and scalable to customers of varying size or technological sophistication.

Services and Products

Our implementation and support organization provides solutions that include consulting, business software applications, managed services, mobile workstations and
devices, and wireless infrastructure. Our services and products are designed to help our customers enhance workflow, improve customer service, increase revenue and reduce costs. We believe our
services and products address several functional applications including, for example, in enterprises in the following industries:



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Our
service and product offerings can be sold to a customer separately or together, in each case in a manner tailored to that particular customer. We offer the following services and
products:

Consulting and Professional Services

Our sales and implementation process takes a consultative approach, rather than the taking and filling of product orders. We work closely with our customers to
assess their operations and identify the stress points in their organization where work processes and information management can be improved through the implementation of our solutions. Our
professionals are experienced in providing strategic planning and guidance in the areas of information technology systems engineering, clinical systems, financial systems, operational systems and
software development.

Through
our recent acquisition of the business of Healthcare Informatics Associates, Inc., or HIA, we have established capabilities as a national management and clinical systems
consulting company. Our management and clinical systems consulting business is dedicated to the healthcare industry, while our
professional services capabilities extend horizontally to each industry we serve. Our professional services and solutions expertise in the healthcare market includes:



Our
professional services and solutions expertise in commercial markets includes designing, developing and improving wireless networks and developing customized software applications.

We
can provide the following professional services through the project development and deployment process of a complete mobile system implementation or on a discrete individual basis
based on the needs of our customers:



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Training
modules developed and implemented to date include HIPAA privacy and security training, clinical application training templates (Siemens AG Medication Administration Checker
training, McKesson Corporation's Horizon Expert Documentation clinical documentation training and Medical Information Technology, Inc.'s nursing training) and an assessment and certification
module, designed to test, certify, provide feedback, and report on clinical courseware retention. We have several other e-Learning software modules currently under development.

Products and Software

Mobile Workstations and Devices

We develop, implement and sell wireless mobile workstations and devices. Our mobile workstations provide the basis for hardware and software solutions that create
a gateway into a customer's information technology systems. Mobile workstations can be configured to address a broad continuum of a customer's mobile computing needs. Customers are provided the option
to mount on our workstations small form-factor PCs, liquid crystal display flat panel monitors, laptop computers, tablet PCs, proprietary power solutions, keyboards, bar-code
data collection devices, RFID medication administration solutions and other mobility-enabled equipment. As a result, users can gain ready access to the most current information required to complete
tasks in an efficient manner.

Our
mobile workstations and devices include:



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Our
mobility solutions also include bar-code data collection devices, form-factor PCs, secure wireless networks, handheld devices, tablet PCs, mobile wireless
bar-code and label printers, wearable computers, wireless connectivity and interconnectivity devices, and proprietary power solutions.

Software

We have dedicated significant resources and capital to developing, acquiring and partnering with leading software firms to deliver a full range of software
applications. These software applications are designed to facilitate and integrate tracking and delivery solutions for our customers. Our proprietary software applications include the following:



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Managed Services

Our managed services are designed to provide our customers with external asset management and system monitoring and support that enables their mobile technology
to operate without interruption and at peak performance levels. We offer managed services to our customers through a dedicated in-house support staff that can monitor and maintain as much
of a customer's information technology systems as the customer desires. We take a proactive approach to identifying and solving problems within a customer's wireless network systems, which we believe
is an attractive alternative to the typical reactive approach to information technology support.

In
general, managed services are provided through an ongoing contracted arrangement that is budgeted and invoiced periodically as opposed to our professional services, which are
typically one-time engagements that run through product deployment. Examples of our managed services include:



Our
managed services are generally offered through service level agreements that range from two to five years.

Sales and Marketing

We employ several methods to sell our services and products, including direct selling, an inside sales approach and channel partner programs. Our direct selling
and inside sales approach aims to align the compensation paid to our sales representatives with our business strategy. Sales representatives are paid largely on a commission basis based on the profit
margin for the services and products sold.

Our
direct sales force is primarily geographically based to support a regional strategy focused on one-to-one selling. In addition, many of our sales
representatives specialize in a particular industry or industries, which we believe makes them more effective in understanding the needs of our customers and ultimately generating more sales. Over the
past year we have approximately doubled the size of our sales force. We currently employ approximately 40 direct sales representatives located across the United States. In general, new sales
representatives take approximately six to nine months to generate leads, initiate contacts and become integrated into the purchasing cycle of our customers.

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Through our AMTSystems acquisition we have developed an inside sales approach that primarily uses telephonic and email communications. These sales representatives work from within our
offices and are responsible for handling inbound sales orders and for following up with customers. To support this sales approach, we have created a proprietary sales force automation system that
integrates our inside and outside sales force, customer service representatives, marketing support staff and management through our email system.

We
also sell and market our services and products through a network of key relationships, including channel partners. These relationships are synergisticwe refer business to
our key relationships from our existing customers and, in exchange, we receive preferential pricing and referrals from these key relationships. We provide incentives to our channel partners to
actively pursue opportunities to market and sell our services and products with our support. In addition, we intend to continue to leverage our key relationships and channel partners by increasing the
amount of business, in particular that portion of our business surrounding hardware and wireless device sales, done through these partners while directing our direct sales team to focus on selling our
higher margin professional and managed services.

We
market our services and products through a variety of other methods, including industry trade shows and professional conferences, public relations and targeted marketing campaigns,
our corporate website, and search engine optimization and marketing.

Customers

We have delivered enterprise mobility solutions to over 2,200 customers in North America, including over 1,400 hospitals and 800 commercial enterprises since we
began operations in 2001. The following are examples of the enterprise mobility solutions that we have delivered to our customers.

Car Rental Firm



Hospital



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As
a percentage of total revenue, our five largest customers accounted for, in the aggregate, approximately 37%, 28%, and 42% of our revenue for the fiscal years ended
December 31, 2007, 2006 and 2005, respectively. Of this concentration, for the same periods, one of our channel partners represented 12.5%, 13.3%, and 11.2% of our revenue respectively. Sales
through this channel partner were distributed to approximately 300 unique customers. Management does not believe that the loss of any single customer will have a material adverse effect on our
business or results of operations.

We
generated revenues from customers located in the United States of $75.5 million, $61.9 million and $55.5 million in the years ended December 31, 2007, 2006
and 2005, respectively. We generated revenues from customers located outside of the United States of $3.3 million, $0.2 million and $0.9 million in the years ended
December 31, 2007, 2006, and 2005, respectively.

Strategic Acquisitions in 2007

Acquisition of DDMS Holdings, LLC

On April 9, 2007, we acquired DDMS Holdings, LLC. The acquired assets consist of five patents issued in the U.S., and four patents issued in foreign
countries, along with one published U.S. patent application and five pending foreign patent applications. The patents and patent applications relate to a system for managing the delivery of
pharmaceutical drugs through the use of RFID technology. The purchase price consisted of $200,000 in cash and 400,000 shares of our common stock. The shares of common stock are unregistered and
subject to a one-year lock-up. Both of the former shareholders of DDMS Holdings, LLC were granted options to acquire 30,000 shares of our common stock. We believe this
acquisition will provide us with protections related to our on-going sale and development of RFID technologies and mobility solutions across our business.

In
connection with the acquisition, we agreed to commit funds as we deem necessary toward the maintenance and expansion of the patents and patent applications acquired from DDMS,
including a minimum of $250,000 before April 9, 2008.

We
also entered into a ten-year consulting agreement with LM Consulting LLC, an entity wholly owned by the former shareholders of DDMS. Under the consulting agreement,
LM Consulting will provide up to 20 hours of consulting services per month. The consulting services will be rendered by the former shareholders of DDMS, who are the original inventors of the
patents, and will consist of
services related to the commercialization and development of the patents and other intellectual property acquired from DDMS. LM Consulting is entitled to receive a consulting fee during the term of
the consulting agreement equal to 36% of the revenue generated by the patents after deducting (i) certain expenses related to the generation of those revenues and (ii) a portion of the
funds expended by us in maintaining and expanding the patents.

Acquisition of Certain Assets of AMTSystems, Inc.

On May 10, 2007, we acquired certain assets of AMTSystems, Inc., including the rights to existing relationships with customers, vendors and
partners, and the intellectual property rights behind AMTSystems' clinical and financial mobility solutions for healthcare. The purchase price consisted of $100,000 in cash and 138,160 shares of our
common stock at closing, and $500,000 in cash, plus interest, payable in 72 equal monthly installments. The shares of common stock issued in the transaction are unregistered and are subject to a
two-year lock-up.

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The
addition of professional staff from AMT has enabled us to enhance our software development capabilities and has enhanced our barcode and RFID technology offerings. The focus of this
acquisition is on the integration of clinical and financial systems through software applications that operate on mobile computing devices enabling materials management, patient charge capture, and a
full line of proof positive patient identification solutions.

In
connection with the acquisition, we entered into a two-year employment agreement with Todd D. Stewart. Under the employment agreement, Mr. Stewart was appointed to
the position of Director, Healthcare Technology Sales, is entitled to receive an annual base salary of $125,000 plus related sales incentive commissions, and received options to purchase 30,000 shares
of our common stock, pursuant to our 2006 Equity Compensation Plan.

Acquisition of Healthcare Informatics Associates, Inc.

On September 30, 2007, we acquired substantially all of the assets of Healthcare Informatics Associates, Inc., or HIA, including all of HIA's cash
and cash equivalents and certain bank accounts, accounts receivable, the rights to existing relationships with customers, vendors and partners, certain tangible personal property and certain
intangible rights and property. The consideration paid for the acquired assets was composed of cash, shares of our common stock, a convertible promissory note and
additional contingent consideration under an earn out agreement, each as discussed in more detail below. We believe that the acquisition of HIA and its combination of IT and clinical experience has
enabled us to expand the strategic value of our current and future customer relationships.

The
cash purchase price payable at closing was $5.5 million of which $900,000 was placed into escrow to fund a portion of certain employee retention payments to be made to HIA's
employees over a three-year period after the closing. In addition, $1,556,586 from HIA's cash account was deposited into an escrow account to be used to fund any working capital adjustment
payable to the Company, all of which was subsequently released back to HIA in January 2008. We also deposited approximately $83,000 into escrow representing certain outstanding customer invoices due
to HIA. We have collected the amounts due under those invoices so we released an equivalent amount to HIA from the escrow in January 2008.

In
addition to the cash consideration described above, the purchase price for the assets of HIA included 755,478 unregistered shares of our common stock and a $3,500,000 convertible
subordinated promissory note issued by our wholly-owned subsidiary, InfoLogix Systems Corporation. The note bears interest at a rate of 9% per annum, compounding annually until the principal amount is
paid in full. The principal amount of the note and all accrued interest are payable in full on September 30, 2010. The outstanding unpaid principal amount of the note is convertible at the
option of HIA into unregistered shares of our common stock at a conversion price of $5.50 per share. We may also require HIA to convert all or any portion of the outstanding unpaid principal of the
note into our unregistered common stock at a conversion price of $5.50 per share if the closing bid price of our common stock for at least 45 consecutive trading days equals or exceeds $8.00 per
share. Any accrued but unpaid interest on the note at the time of any conversion will be paid, at our option, either in cash or in additional shares of our common stock at a conversion price of $5.50
per share. HIA may also, at its option, declare the note payable in full upon the occurrence of a change of control (as defined in the note) of InfoLogix Systems. The note also contains customary
events of default that would allow HIA to accelerate the amounts payable under the note, including any default on our senior debt. The note is subject to a subordination agreement with Sovereign Bank,
our senior lender. The note also grants HIA the right to require us to redeem a portion of the unpaid and outstanding principal of the note if we engage in an offering of our equity securities, the
primary purpose of which is to raise capital.

In
addition, we entered into an earn out agreement pursuant to which HIA is eligible to earn additional consideration in respect of the two years after the closing of the acquisition.
HIA can earn up to $2,000,000 in the first year and up to $2,500,000 in the second year upon satisfaction of certain financial

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milestones
described in the earn out agreement. To the extent HIA exceeds those milestones, it may earn additional consideration equal to 25% of such excess.

In
connection with the acquisition, we entered into a two-year employment agreement with Gerald E. Bartley, a 50% stockholder of HIA. Under the employment agreement,
Mr. Bartley was appointed to the position of Executive Vice President and Managing Director of our Healthcare
Consulting Group and is entitled to receive an annual base salary of $250,000. In addition, Mr. Bartley is entitled to participate in such incentive compensation plans and equity plans that we
provide to employees from time to time. Mary Ann Bartley, the other 50% stockholder of HIA, also entered into a one-year employment agreement with us in connection with the acquisition.

Patents and Proprietary Technology

We file patent applications to protect technology, innovations and improvements that we consider important to the development of our business. Throughout our
history, we have proactively invested in and acquired intellectual property assets. We continue to partner and invest to develop, capture and deliver unique, high-quality, differentiated
and cost-effective mobile workforce technology solutions for our customers. We have 19 issued patents in the U.S. related to wearable computers and surrounding RFID technology that manages
proper medication delivery and administration. We also have 15 patent applications pending with the U.S. Patent and Trademark Office related to medication delivery and administration and a proprietary
power solution specifically designed for mobile workstations, a system and method for live interactive distance learning, and related mobile wireless computer systems. The patents for which we have
received a final issuance have remaining legal lives that vary from 5 to 17 years.

We
also rely on trade secrets and proprietary know-how that we seek to protect, in part, through confidentiality agreements with our employees, consultants, customers,
business partners, and other third parties. As a condition of employment, we require that all full-time and part-time employees enter into an inventor assignment and
non-disclosure agreement.

We
intend to continue to broaden the scope of our intellectual property portfolio, which we consider critical to our future product development. We might choose to acquire additional
intellectual property through selective acquisitions, as we did through our acquisition of DDMS Holdings LLC. If we are unable to protect our patents and proprietary rights, our reputation and
competitiveness in the marketplace could be materially damaged.

Litigation
may be necessary in order to enforce any patents that we now hold or any patents that are issued to us or acquired by us in the future.

Competition

We operate in a fragmented marketplace, competing with a variety of participants in the wireless mobility market including companies that design systems, provide
hardware and software applications,
integrate software and hardware applications, provide consulting services and offer management and maintenance services. Our primary competition comes from regional and local firms that are similar to
us in terms of revenue and numbers of employees.

We
sell and support mobile point of care workstations with over 40,000 units currently in use in the U.S. healthcare market. In this business, we compete with a variety of companies,
including furniture and fixture distributors and several nationally known mobile cart manufacturers and distributors. The larger competitors include Stinger Medical (in business for over ten years and
the first company to provide mobile carts to the healthcare industry), Flo Healthcare (the holder of several patents on mobile computing and now owned by Emerson Storage Solutions), Ergotron, Rioux
Vision (now owned by Omnicell), Rubbermaid, NAware, Lionville (also owned by Emerson Storage Solutions), Howard Computer, Artomick and EnovateIT.

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In
the healthcare market, we also compete with device manufacturers, service providers and software platform companies that offer unique, specialty use products. For example, Palm and
Dictaphone compete for market share in the sales of devices to physicians and other providers, Microsoft and Intel are positioning for wireless IP platform adoption, while companies like MedQuist and
Scribe vie for customers of specialty use software applications and services. While we maintain our focus on enterprise mobility solutions, we will encounter these companies in the marketplace while
competing for a portion of the work-flow and voice-over-IP solution sets.

We
encounter the very large consulting firms such as IBM Global Services, Accenture, Deloitte Consulting, EDS, Computer Sciences Corporation/First Consulting Group, and Affiliated
Computer Services in both our commercial and healthcare groups. Many of these national and international consulting firms focus on design and architecture of wireless networks, and
work-flow or process improvement. We believe there are also many small, local and regional consulting firms offering services similar to the larger firms, as well as
site-surveys, infrastructure support and information technology outsourcing. Each of these participants will continue to compete with us for our core services around enterprise mobility
solutions and mobile managed services.

We
compete with handheld mobile computer products companies in our supply-chain solutions business, including Symbol/Motorola, Intermec, LXE and other makers of tablet computers such as
Dell, Hewlett-Packard, Sony and Fujitsu. Symbol/Motorola is a global leader in mobile data management systems and services with innovative customer solutions based on wireless local area networking
for voice and data, application-specific mobile computing and bar-code data capture.

We
also compete with a smaller group of companies that are more solutions oriented, but operate in the sectors in which we operate, including healthcare, transportation, manufacturing,
distribution and retail. These companies include Wavelink Corporation, Ennovative, Inc., ID Systems, and OAT (a recognized RFID framework provider). This group of companies competes for
business that delivers RFID software and solutions. Solution sets include data and content management, materials management, e-commerce, e-Learning, custom application and web
interface development, and infrastructure management.

In
addition to the foregoing, there are hundreds of firms that operate in a variety of vertical-specific or technology-centric groupings. Due to the increasing level of market activity
related to these two general areas, an increasing number of companies are claiming capabilities.

When
evaluating our competitive landscape, we consider:



Product Development

To ensure our ability to identify and develop new technologies and applications for our mobile workforce technology solution platforms, we have organized a
software and technology engineering group to provide identification, design, programming, testing, quality assurance and implementation support. We have experienced managers and engineering staff that
provide the necessary expertise required to position us for future growth in our business. We spent approximately $1.0 million in 2007 to support initiatives that have broadened our
intellectual property portfolio to support our future mobility solution offerings.

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Manufacturing

We engage third parties to produce our mobile point of care and point of activity workstations. We currently do not have a long-term contract with the
company providing us with the majority of these products. Most of the manufactured products are shipped directly from the manufacturing facility to our customer site. Our employees provide
on-site customized assembly and installation, upon request of our customers.

Employees

As of December 31, 2007, we had 167 employees of which 45 were in sales and marketing, 64 were in professional consulting services and
e-Learning, 21 were in software engineering, quality assurance, and field services, 19 were in operations and customer support, and 18 were in finance, executive and administrative
capacities. We are not subject to any collective bargaining agreements, and we believe that our relationship with our employees is good.

In
addition to full-time employees, we utilize the services of various independent contractors, primarily for certain product development and foreign sales, marketing and
administrative activity.

Our
principal executive offices are located at 101 East County Line Road, Suite 210, Hatboro, Pennsylvania 19040. Our telephone number is (215) 604-0691.
Our website address iswww.infologix.com.

Item 1A.    Risk Factors

An investment in our common stock involves a number of risks. Before deciding to invest in us or to maintain or increase your investment,
you should carefully consider the risks described below, in addition to the other information contained in this report and other reports we have filed with the Securities and Exchange Commission. The
risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business
operations. If any of these risks are realized, our business, financial condition or results of operations could be harmed. In that event, the market price for our common stock could decline and you
may lose all or part of your investment.

Risks Relating to our Business and Industry

We are an early-stage company with a limited operating history, which limits the information available to you to evaluate our business.

Our
operating company, InfoLogix Systems Corporation, was formed in 2001. There is limited operating and financial information to evaluate our historical performance and our future
prospects. We face the risks and difficulties of an early-stage company, including the uncertainties of competition, cost increases and delays in achieving business objectives. There can be no
assurance that we will succeed in addressing any or all of these risks or that our efforts will generate significant revenue or achieve future profitability. The failure to do so would have an adverse
effect on our business, financial condition and operating results.

We have incurred losses in the past and our ability to operate profitably in the future is uncertain.

For
the year ended December 31, 2007 we generated revenues of $78.8 million and incurred net losses of $3.2 million. We have incurred net losses in three out of the
last five fiscal years and we may incur additional losses in the future. Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If
our business and revenues grow more slowly than we anticipate, our operating expenses exceed our expectations, we are unable to sell our products and services at acceptable prices relative to our
costs, or we fail to develop and introduce on a timely basis new products and services from which we can derive additional revenues, our financial results will suffer.

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We may need additional financing to fund our operations and finance our growth; we may be unable to obtain financing on terms acceptable to us.

Although
we believe that our credit facilities and our anticipated cash flows from operations will be sufficient to meet our operating and capital requirements for at least the next
12 months, we may be required to raise additional capital through either equity or debt financing to fund our operations, including any operating losses, and to implement our current or future
strategies, including strategic acquisitions. Factors that could increase our need to seek additional financing include decreased demand and market acceptance for our products and services, the
inability to successfully develop new products and services, competitive pressures resulting in lower pricing, new products and services offered by our competitors, and acquisition opportunities. In
addition, when our existing credit facilities expire, we may need to obtain replacement debt financing. There can be no assurance that additional or replacement debt financing will be available to us
on commercially reasonable terms or at all. If we incur additional debt, our interest expense would increase. If we raise capital through the sale of equity securities, the percentage ownership of our
existing stockholders would be diluted and any new equity securities may have rights, preferences or privileges senior to those of our common stock. If we are unable to obtain additional or
replacement financing when we need it, our ability to fund our operations and meet our plans for expansion would be adversely affected.

Our revenues and profitability may be affected by changes in economic, business or industry conditions.

If
the economic climate in the U.S. or abroad deteriorates or suffers a prolonged downturn, customers or potential customers could reduce or delay their technology investments. Reduced
or delayed technology investments could decrease our sales and profitability. In such an environment, our customers may experience financial difficulty, cease operations or fail to budget or reduce
budgets for the purchase of our products and professional services. This may lead to longer sales cycles, delays in purchase decisions, payment and collection, and may also result in downward price
pressures, causing our sales and profitability to decline. In addition, general economic uncertainty and general declines in capital spending in the information technology sector make it difficult to
predict changes in the purchasing requirements of our customers and the markets we serve. There are many other factors that could affect our revenues and profitability, including:



These
factors could adversely affect our business, profitability and financial condition and diminish our ability to achieve our strategic objectives.

Increasing our profitability and managing our growth are necessary to achieve our strategic objectives.

The
industries in which we operate are highly competitive. To meet our growth objectives, we believe that we need to continue to add and increasingly emphasize higher-value, proprietary
solutions, including software applications and professional services. There can be no assurance that we will effectively deploy our initiatives or be successful in obtaining customer acceptance of our
current and anticipated higher margin products and services or developing new products and services with higher margins, and if we do not, we would not meet our strategic objectives.

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In
addition, the implementation of our strategic initiatives to improve profitability may have the unintended effect of straining our operations, increasing operating expenses, and
adversely affecting our profitability, even if the initiatives are successful. The difficulties associated with implementing these initiatives may place a significant burden on our management and our
operational and financial resources. If we fail to successfully implement these initiatives, or encounter unexpected difficulties in that process, our business and results of operations could be
adversely affected.

Also,
to manage any future growth of our business, we will need to hire, integrate and retain highly skilled and motivated employees. We will also need to continue to improve our
financial and management controls, reporting and operational systems and procedures. If we do not effectively manage our growth we may not be able to meet our customers' needs, thereby adversely
affecting our results of operations, or be able to meet our strategic objectives.

We may engage in acquisitions that could disrupt our business, could be difficult to integrate with our existing operations, cause dilution to our stockholders and harm our
business, operating results and financial condition, and we may be unable to find suitable acquisition candidates consistent with our strategic objectives.

As
part of our acquisition strategy, we acquired the businesses and certain assets of DDMS Holdings, LLC, AMTSystems, Inc. and Healthcare Informatics
Associates, Inc. during 2007. While acquisitions of other companies or businesses may present us with growth opportunities, they involve numerous risks, including:



We
have limited historical experience with the integration of acquired companies and there can be no assurance that we will be able to manage the integration of acquired businesses
effectively or be able to retain and motivate key personnel from these businesses. Any difficulties we encounter in the integration process could divert management from
day-to-day responsibilities, increase our expenses and have a material adverse effect on our business, financial condition and results of operations.

For
future acquisitions, we may not be able to find suitable acquisition candidates and we may not be able to complete acquisitions on favorable terms, if at all. If we do complete
acquisitions, we may not maintain or may weaken our competitive position or may not achieve our goals, or may be viewed negatively by customers, financial commentators or investors. Acquisitions may
disrupt our ongoing operations, divert management from day-to-day responsibilities, increase our expenses and adversely impact our business, operating results and financial
condition. Future acquisitions may reduce our cash available for operations and other uses and could result in an increase in amortization expense related to identifiable assets acquired, potentially
dilutive issuances of equity securities or the incurrence of debt.

We depend on retaining our existing senior management team and recruiting and retaining additional senior managers in order to be successful, and the loss of or failure to
recruit key executives could materially and adversely affect our business.

Our
current and future performance depends, in significant part, upon retaining our existing senior management team, whose knowledge, leadership and technical abilities would be
difficult to replace and recruiting and retaining qualified senior managers. Our success also depends in part upon the ability of our executives to work effectively together and with the rest of our
employees to continue to develop our technologies and services and to manage the operation and potential growth of our business. We also must

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continue
to develop and retain a strong core group of senior executives in order to realize our goal of growing our business and sustaining profitability. We cannot assure you that we will be
successful in our efforts. The unplanned loss of the services of one or more of our executives could have an adverse effect on our business and profitability.

We are dependent on our allied customers and key industry relationships.

We
maintain important relationships with hardware and software technology leaders. We regard these relationships as more than traditional customer/supplier relationships and believe they
represent an important lead referral source and sales channel for us.

There
can be no assurance that we or our key relationships can continue to be successful in maintaining relationships with customers or that we or our allied customers could find
adequate replacements if needed. The loss of any of these allied customers or key relationships could result in the temporary or permanent cessation of a group of products or solutions and result in
the loss of a portion of our existing and anticipated customer base and related revenue.

We depend on third-party suppliers and manufacturers to manufacture our products. If these third parties experience any delay, disruption or quality control problems in their
operations, or cease manufacturing our products, we could lose market share and revenues, and our reputation may be harmed.

A
substantial portion of our products are manufactured, assembled, tested and packaged by third parties. We rely on several suppliers and manufacturers to procure components and various
products that we sell and, in some cases, subcontract engineering work. Some of our products are manufactured by a single manufacturer and, if we were to lose the services of this manufacturer,
finding a suitable replacement could prove particularly difficult. In most cases, we do not have long-term contracts with these third parties. If our suppliers and manufacturers encounter
financial or other business difficulties, if their strategic objectives change, or if they perceive us to no longer be an attractive customer, they may cease to manufacture our products and our
business could be harmed.

The
loss of the services of any of our primary manufacturers or a material change in the terms on which we do business with them could cause a significant disruption in operations and
delays in product shipments, which could adversely impact our cash flow. Qualifying a new manufacturer and commencing volume production is expensive and time consuming.

Our
reliance on third-party suppliers and manufacturers also exposes us to the following risks over which we have limited control:



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If we are unable to provide our third-party suppliers and manufacturers with an accurate and timely forecast of our component and material requirements, we may experience
delays in the manufacturing of our products and the costs of our products may increase.

We
provide our third-party suppliers and manufacturers with forecasts of our demand that they use to determine their material and component requirements. Lead times for ordering
materials and components vary significantly and depend on various factors, such as the specific supplier, contract terms and demand and supply for a component at a given time. Some of our components
require
substantial lead times. If our forecasts are less than our actual requirements, or are not delivered in a timely manner, our manufacturers may not be able to manufacture enough products to meet our
needs. If our forecasts are too high, our suppliers and manufacturers may be unable to use all of the components they have purchased on our behalf. Therefore, the cost per unit of producing products
for us may be higher and those costs may be passed through to us, which could reduce our margins or raise our product prices relative to our competitors. Moreover, if they are unable to use certain
components, we may be required to reimburse them for any losses they incur.

Our industry is highly competitive, and competitive pressures from existing and new companies may have a material adverse effect on our business, revenues, growth rates, market
share, and profitability.

Our
industry is highly competitive and is influenced by many factors, including the following:



If
we do not keep pace with product and technology advances, our products and services could be rendered obsolete, which would have a material adverse effect on our competitive position,
revenues and prospects for growth. There is also likely to be continued pricing pressure as competitors attempt to maintain or increase market share.

The
products manufactured and marketed by us and our competitors are becoming more complex. As the technological and functional capabilities of our products increase, these products may
begin to compete with products being offered by companies that have substantially greater financial, technical, marketing and manufacturing resources than we do. We may not be able to compete
successfully against these competitors, and competitive pressures may result in a material adverse effect on our business, revenues, growth rates, market share and profitability.

We
also compete with certain of our key relationships from time to time. If we are unable to maintain our relationships with them, we may be forced to compete directly with them for
customers that we previously had served through our relationships. We may also lose our key relationships as customers. Our

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key
relationships generally have substantially greater financial, technical, marketing and manufacturing resources than we do and may be able to directly offer their customers solutions similar to
those we offer.

If we fail to continue to introduce new products and services that achieve sufficient market acceptance on a timely basis, we will not be able to compete effectively and we
will be unable to increase or maintain revenues and profitability.

Our
future success depends on our ability to develop and introduce new products, services and technology enhancements that achieve sufficient market acceptance. If we are unable to
develop and introduce new products and services that respond to emerging technological trends and customers' critical needs, our profitability and market share may suffer. The process of developing
new technology and related services is complex and uncertain, and if we fail to accurately predict customers' changing needs or emerging technological trends, our business could be harmed. We must
commit resources to developing new products before knowing whether our investments will result in products the market will accept. We may encounter delays in deploying new or improved products or
offering new or improved services. If we expend a significant amount of resources and our efforts do not lead to the successful introduction of new or improved products or services, there could be a
material adverse effect on our business, profitability, financial condition and market share. We may encounter delays in manufacturing and producing new products and our new products may not be
commercially successful.

Demand
for existing products may decrease following the announcement of new or improved products. Further, since products under development are often announced before introduction, these
announcements may cause customers to delay purchases of our products, even if newly introduced, until new or improved versions of those products are available. If customer orders decrease or are
delayed during a product transition, we may experience a decline in revenue. Our profitability might decrease if customers, who may otherwise choose to purchase existing products, instead choose to
purchase lower priced models of new products. Delays or deficiencies in the development, manufacturing, and delivery of, or demand for, our new or improved products could have a negative effect on our
business and profitability.

If we are unsuccessful in expanding our professional services, we may fail to achieve our objectives.

We
are in the process of expanding our professional services and enhancing our technical knowledge in order to broaden our service offerings. We hope to accomplish that by increasing our
in-house talent pool and introducing new models for support and professional services, including through acquisitions of businesses that we believe complement our existing services. We
look to leverage new employees that are skilled in our business to reduce our dependence on outside assistance. Our initiatives will include reducing dependence on outside service providers,
determining specific methodologies and processes for meeting customer needs, conducting in-house training sessions, and leveraging business partnerships to increase professional services
opportunities. These initiatives have required, and will continue to require, significant investment by us, including expenses relating to the recruiting and training of these new employees. There is
no assurance that the expansion will improve the sales and profitability of our professional services.

Any failure in our ability to offer high-quality support and other services could have a material adverse effect on our sales and results of
operations.

Once
our products are integrated within our customers' hardware and software systems, our customers may depend on our support organization to manage those systems and resolve any issues
that may arise. A high level of support is critical for the successful marketing and sale of our solutions. If we do not effectively assist our customers in deploying our products, succeed in helping
our customers quickly resolve post-deployment issues, and provide effective ongoing support, our ability to sell our solutions to existing customers could be adversely affected, and our
reputation with potential customers could be harmed. In addition, as we expand our operations internationally, our support organization will face additional challenges, including those associated with
delivering support, training and documentation in

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languages
other than English. Our failure to maintain high-quality support and services, or to adequately assist our key relationships in providing high-quality support and
services, could result in customers choosing to use our competitors' products and services instead of ours.

The success of our business depends on the continuing development, maintenance and operation of our information technology systems. If we fail to maintain and upgrade our
information technology systems to meet the demands of our customers and protect our information technology systems against risks that we cannot control, our business may be adversely
affected.

We
compete for customers based in part on the flexibility and sophistication of our information technology systems. The failure of the hardware or software that supports these systems,
the loss of data contained in the systems or the inability to access or interact with our website or connect with our customers electronically, could significantly disrupt our operations, prevent
customers from placing orders with us or cause us to lose customers. Although we have redundant systems at a separate location to back up our primary application systems, there can be no assurance
that these redundant systems will operate properly if and when required. If our information technology systems are unable to handle additional volume as our business and scope of professional services
grows, our service levels and operating efficiency will likely decline. In addition, we expect that our customers will continue to demand increasingly sophisticated information technology systems from
us. If we fail to hire or retain qualified persons to implement, maintain and protect our information technology systems, or if we fail to upgrade or replace these systems to handle increased volumes
and levels of complexity and meet the increased demands of our customers, our business and profitability may be adversely affected.

Our
information technology systems are dependent upon global communications providers, web browsers, telephone systems and other aspects of Internet infrastructure which are vulnerable
to a variety of threats, including computer viruses and natural disasters. There can be no guarantee that the steps we have taken to protect against those threats will be effective. Any disruption to
or infiltration of our information technology systems could significantly harm our business and profitability.

If we are unable to protect our intellectual property rights or if third parties assert we are in violation of their intellectual property rights, we could be prevented from
selling our products, the time and attention of management could be diverted from operating our business and our ability to attract new customers and retain current customers could be hampered, any of
which could have a material adverse effect on our business, financial condition and results of operations.

We
have 19 issued patents in the U.S. and four foreign patents issued related to wearable computers and RFID technology that manages medication delivery and administration. We also have
15 patent applications pending with the U.S. Patent and Trademark Office and five foreign patent applications related to medication delivery and administration and a proprietary power solution
specifically designed for mobile workstations, a system and method for live interactive distance learning, and related mobile wireless computer systems. The patents for which we have received a final
issuance have remaining legal lives that vary from 5 to 17 years.

We
have also developed other proprietary solutions, including form-factor PC technologies designed specifically for low power consumption, handheld and kiosk point of sale
devices and several customized software applications. We seek to protect our proprietary information and technology through licensing agreements, third-party nondisclosure agreements and other
contractual provisions, as well as through patent, trademark, copyright and trade secret laws in the U.S. and similar laws in other countries. There can be no assurance that these protections will be
available in all cases or will be adequate to prevent our competitors from copying, reverse engineering or otherwise obtaining and using our technology, proprietary rights or products.

There
can be no assurance that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology or design around our
proprietary rights. In each case, our ability to compete and to receive licensing revenues could be significantly impaired. To prevent

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substantial
unauthorized use of our intellectual property rights, it may be necessary to prosecute actions for infringement and/or misappropriation of our proprietary rights against third parties. Any
such action could result in significant costs and diversion of our resources and management's attention, and there can be no assurance that we will be successful in any such action. In addition, third
parties may seek to challenge, invalidate or circumvent our patents, trademarks, copyrights and trade secrets, or applications for any of the foregoing. Furthermore, the laws of certain countries in
which our products are or may be licensed do not protect our proprietary rights to the same extent as the laws of the U.S.

Third
parties may assert claims of infringement of intellectual property rights against us or against our partners for which we may be liable under certain indemnification arrangements.
The failure to obtain a license on commercially reasonable terms or the entry of an injunction that impairs our ability to market certain products or services could have a material adverse effect on
our business, reputation, profitability or financial condition. Any litigation regarding patent and other intellectual property rights could have a material adverse effect on our business and our
ability to compete.

We
may also be subject to claims from customers for indemnification. Any resulting litigation, regardless of its resolution, could result in substantial costs and diversion of resources.
If it were determined that our products infringe upon the intellectual property rights of others, we would need to obtain licenses from these parties or reengineer our products in order to avoid
infringement. We might not be able to obtain the necessary licenses on acceptable terms or at all, or to reengineer our products successfully. Moreover, if we are sued for infringement and lose the
suit, we could be required to pay substantial damages or be enjoined from licensing or using the infringing products or technology, or both. Any of these events could cause us to incur significant
costs and prevent us from selling our products and could have material adverse effect on our business and our ability to compete.

We rely upon third parties for technology that is critical to our products, and if we are unable to continue to use this technology and future technology our ability to offer
competitive products could be harmed and our costs of production could increase.

We
obtain non-exclusive software license rights to technologies from third parties that are incorporated into and necessary for the operation and functionality of certain of
our products. Because the intellectual property for which we have obtained licenses is available from third parties, barriers to entry for our competitors may be lower than if we owned exclusive
rights to these technologies. On the other hand, if a competitor enters into an exclusive arrangement with any of our third-party technology providers, our ability to develop and sell products
containing that technology could be severely limited. Our success depends in part on our continued ability to have access to these technologies on commercially reasonable terms. If we do not continue
to hold or obtain licenses to use necessary technologies, we may be forced to acquire or develop alternative technology that may be of lower quality or performance standards. This could limit and
delay our ability to offer competitive products and increase our costs of production. As a result, our profitability and market share could be harmed.

Our products are complex and may contain undetected and unexpected defects, errors or failures.

Substantial
product defects could result in product recalls, repairs or an increased amount of product returns, loss of market acceptance and damage to our reputation, which in turn
could increase our costs, cause us to lose sales and have a material adverse effect on our profitability. Product defects might also result in claims against us by our customers or others. In
addition, the occurrence of any defects or errors in these products could result in cancellation of orders, difficulty in collecting accounts receivable, increased service and warranty costs in excess
of our estimates, diversion of resources, and increased insurance costs and other losses to our business or to end-users.

Incompatibilities,
defects or bugs in our products may not be detected until our customers begin to install the products or later. We may need to modify the design of our new or improved
products if they have incompatibilities, defects or bugs, which could result in significant expenditures, delays in product purchases or canceled orders.

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Because we often sell our products on a purchase order basis, we are subject to uncertainties and variability in demand from our customers.

We sell our mobile workstations and other devices on a purchase order basis rather than pursuant to long-term contracts or contracts with minimum
purchase requirements. Consequently, the level and timing of our sales are subject to variations in demand from our customers. Orders can be cancelled, reduced or delayed due to customer budget
cycles, the introduction or anticipated introduction of new products or technologies or general economic conditions. Generally, sales are sequentially down in the first quarter from the fourth
quarter, higher in the second quarter, flat or slightly higher or lower in the third quarter, and strongest in the fourth quarter. If we are unable to anticipate and respond to the demands of our
customers, our business, financial position and operating results may be adversely affected.

Our products are subject to certain government regulations and noncompliance with, or a change in, those regulations could have a material adverse
effect on our business, financial condition, and results of operations.

Our products are subject to regulation by federal, state and local agencies in the U.S. and agencies in certain foreign countries where our products are
manufactured or sold. There can be no assurance that we will be able to maintain compliance with these regulations, particularly if they were to change. Regulatory changes may require us to make
modifications to certain of our products in order for us to continue to be able to manufacture and market our products, which could result in unanticipated costs and delays. Our failure to comply with
these regulations, or delays resulting from modifications in order to come into compliance, could have a material adverse effect on our business, financial condition and results of operations.

Our growth objectives may depend on our ability to manage successfully potential international expansion.

We intend to expand our geographic presence to non-U.S. markets, including Europe, the Middle East, Asia, and other emerging centers of healthcare and
commercial activity. This expansion will require significant management attention and financial resources. We currently have
limited experience in marketing and distributing our products internationally and in developing versions of products that comply with local standards and languages. We may also not be able to maintain
or increase international market demand for our products. International operations are subject to other inherent risks, including foreign government regulation of technology or unexpected changes in
regulatory and customs requirements, difficulty and delays in accounts receivable collection, difficulties and costs of staffing and managing foreign operations, reduced protection for intellectual
property rights, foreign currency exchange rate fluctuations, and tax consequences.

Armed hostilities, terrorism, natural disasters, or public health issues could harm our business.

Armed hostilities, terrorism, natural disasters, or public health issues, whether in the U.S. or abroad, could cause damage or disruption to us, our suppliers or
customers, or could create political or economic instability, any of which could harm our business. Any such events could, among other things, cause further instability in financial markets and could
directly, or indirectly through reduced demand, negatively affect our facilities and operations or those of our customers or suppliers. If our customers experience any disruptions in the solutions
that we provide to them as a result of any such events, we may not be successful in alleviating the disruptions, particularly if many customers are affected by any of these events.

Our directors and executive officers beneficially own a substantial number of shares of our common stock, which give them significant control over
certain major decisions.

As of December 31, 2007, our directors and executive officers beneficially own, in the aggregate, approximately 39.7% of our outstanding common stock. The
interests of these stockholders may differ from the interests of other stockholders. As a result of their significant ownership, these stockholders will

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have
significant control over all corporate actions requiring stockholder approval, irrespective of how our other stockholders may vote, including the following actions:



The
stock ownership of our directors and executive officers may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn
could reduce our stock price or prevent our stockholders from realizing a premium over the market price of our stock.

We recently became subject to the reporting requirements of the Securities Exchange Act of 1934, which can be expensive.

We recently became a public reporting company and, accordingly, we are subject to the information and reporting requirements of the Securities Exchange Act of
1934 and other federal securities laws, including compliance with the Sarbanes-Oxley Act. The costs of preparing and filing annual, quarterly and periodic reports, proxy statements and other
information required by the SEC (including legal and accounting fees) and furnishing audited reports to stockholders have caused our expenses to be higher than they would have been if we were a
privately-held company.

It
may be time consuming, difficult and costly for us to implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional
financial reporting, internal controls and other finance personnel in order to implement and sustain required internal controls and reporting procedures. If we are unable to comply with the internal
controls requirements of the Sarbanes-Oxley Act, we may not be able to obtain the independent accountant certifications required by the Sarbanes-Oxley Act.

Risks Relating to Our Indebtedness

The covenants in our credit facility may restrict our operations, which could inhibit our ability to execute our growth strategy and have a negative
effect on our results of operations.

We have entered into a loan and security agreement that provides us with an $11.0 million line of credit as well as three term loans with an aggregate
principal amount of $4.5 million. The line of credit must be repaid on March 16, 2009. The term loans are repayable in equal consecutive monthly installments with a final balloon payment
due on March 16, 2011. The loan and security agreement contains restrictions and covenants and requires us to maintain specified financial ratios and tests. For example, the loan and security
agreement restricts our ability, among other things, to incur additional indebtedness, to acquire other companies or the assets of other companies and to pay dividends without the lender's consent. If
we fail to meet or satisfy any of the restrictions, covenants, financial ratios or financial tests, we would be in default under the loan and security agreement. The loans are secured by all of our
assets and the assets of our subsidiaries, as well as a pledge of the common stock of InfoLogix Systems Corporation (which is the entity through which we conduct substantially all of our operations).
We have also provided the lender with a security interest in a company investment account that must maintain a minimum balance of $2.6 million. An event of default under the loan and security
agreement would give the lender the right to declare all amounts outstanding under the credit facility due and payable and enforce its rights to foreclose on the collateral securing the loans.

At
December 31, 2007, we were not in compliance with certain of the covenants of the loan and security agreement. However, on March 26, 2008 we entered into an amendment to the
loan and security agreement which waived certain covenants that we were not in compliance with at December 31, 2007. As amended, the loan covenants include: (i) a minimum annual net
income requirement of $500,000 for the

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twelve
month period ending December 31, 2008 and for each fiscal year thereafter, (ii) a minimum quarterly net income requirement of at least $0 for the fiscal quarter ending
June 30, 2008 and as of the end of each of the first three fiscal quarterly thereafter, measured on a year-to-date basis, (iii) a fixed charge coverage ratio of
not less than 1.0 to 1.0 as of the fiscal quarter ending June 30, 2008, and 1.0 to 1.0 as of the fiscal quarter ending September 30, 2008 measured on a
year-to-date basis, and 1.2 to 1.0 as of the end of the fiscal quarter ending December 31, 2008 and as of the end of each fiscal quarter thereafter, measured on a
rolling four quarter basis, and (iv) maintaining cash equivalents of at least $4.0 million at all times.

The
restrictions contained in the loan and security agreement could inhibit our ability to obtain financing and engage in other business activities that are important to our business and
growth strategies, which could inhibit our ability to operate our business and increase our revenues.

Our indebtedness could adversely impact our financial condition.

As of December 31, 2007, we had approximately $30.2 million of total indebtedness, including short-term debt and approximately
$10.0 million under our credit facility. We may increase the amount of our indebtedness in the future, which could have an important impact on our stockholders. An increase in our indebtedness
could:



If
any of the foregoing were to occur, our ability to execute our growth strategy would be impaired and our results of operations could be harmed.

Risks Relating to our Common Stock

Applicable SEC rules governing the trading of "penny stocks" may limit the liquidity of our common stock which may affect its trading price.

Our common stock may be considered a "penny stock" and be subject to SEC rules and regulations that impose limitations upon the manner in which our shares may be
publicly traded. These regulations require the delivery, before any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the associated risks. Under
these regulations, certain brokers who recommend penny stocks to persons other than established customers or certain accredited investors must make a special written suitability determination
regarding the purchaser and receive the purchaser's written agreement to a transaction before a sale. These regulations could have the effect of limiting the trading activity of our common stock and
reducing the liquidity of an investment in our common stock. Therefore, our stockholders may find it difficult to obtain accurate quotations of our common stock and/or to sell their shares.

The market price of our common stock is likely to be highly volatile and subject to wide fluctuations.

The market price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond
our control, including:



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If a substantial number of our shares of common stock become available for sale and are sold in a short period of time, the market price of our shares
of common stock could decline.

Although our common stock is listed on the NASDAQ Capital Market, it does not have a high average trading volume. For example, since we became listed on NASDAQ in
September 2007, our average daily trading volume was approximately 34,000 shares. Prior to our listing on NASDAQ, we were traded on the Over-the-Counter Bulletin Board and our
average daily trading volume from January 1, 2007 through the date of our listing on NASDAQ was 15,000 shares. Our low trading volume may cause the price of our common stock to be volatile. The
last reported sale price of our common stock on NASDAQ on March 24, 2008 was $1.66.

Certain
of our directors, executive officers, advisors and existing stockholders are subject to agreements that restrict their ability to transfer all or a portion of their shares until
November 28, 2008. David Gulian, Richard Hodge, Craig Wilensky and certain of our existing stockholders became eligible to transfer, subject to compliance with applicable securities laws, up to
50% of the shares beneficially owned by them on November 28, 2007, but remain subject to contractual restrictions affecting their ability to sell the remaining shares owned by them until
November 28, 2008. We may waive these restrictions and allow these stockholders to sell their shares at any time. After all of these agreements expire, an aggregate of approximately
3.3 million shares currently subject to such lock-ups will be eligible for sale, excluding shares that they may acquire upon the exercise of warrants and options. The market price
of our shares of common stock may drop significantly when the restrictions lapse. A decline in the price of shares of our common stock might impede our ability to raise capital through the issuance of
additional shares of our common stock or other equity securities.

There may be a limited public market for our securities.

Although we are listed on the NASDAQ Capital Market, there can be no assurance that the trading of our common stock will be sustained. If our common stock fails
to qualify for continued listing on the NASDAQ Capital Market or for listing on another registered stock exchange, trading, if any, in our common stock would be conducted on the
Over-the-Counter Bulletin Board or in what are commonly referred to as "pink sheets." As a result, our stockholders may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of our common stock, and our common stock would become substantially less attractive for margin loans, for investment by financial institutions, as
consideration in future capital raising transactions or other purposes. An active public market for shares of our common stock may not develop, or if one should develop, it may not be sustained.
Therefore, our stockholders may not be able to find purchasers for their shares of our common stock.

We do not expect to pay dividends for the foreseeable future.

We currently intend to retain any future earnings to support the development and expansion of our business and do not anticipate paying cash dividends in the
foreseeable future. Any payment of future dividends will be at the discretion of our board of directors after taking into account various factors, including but not limited to our financial condition,
operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Our loan agreement currently restricts our ability to pay dividends on our
common stock. Accordingly, our stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only way to make a positive return on their investment.
Investors seeking cash dividends should not purchase our common stock.

Failure to achieve and maintain effective internal controls could have a material adverse effect on our business, operating results and stock price.

Effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important in
helping prevent financial fraud. If we are unable to

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achieve
and maintain adequate internal controls, our business and operating results could be harmed. We completed our first year of documentation and testing of our internal control procedures to
satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the related rules of the Securities and Exchange Commission, which require, among other things, our management to
assess annually the effectiveness of our internal controls over financial reporting beginning with this Form 10-K for the year ended December 31, 2007. Our registered public
accounting firm will be required to issue a report on management's assessment beginning with our Form 10-K for the year ended December 31, 2008. If our management or our
registered public accounting firm were to conclude in their 2008 reports that our internal control over financial reporting was inadequate, our stockholders could lose confidence in our reported
financial information and the price of our stock could drop significantly.

Provisions in our organizational documents and under Delaware law may delay or prevent attempts by our stockholders to change our management and hinder
efforts to acquire a controlling interest in us.

Certain provisions of our bylaws are intended to strengthen our board of director's position in the event of a hostile takeover attempt. These provisions have the
effect of providing our board of directors with the sole power to fill vacancies on our board of directors and providing that stockholders
may only call a special meeting by the request, in writing, of stockholders owning individually or together ten percent or more of our entire capital stock outstanding and entitled to vote.

In
addition, Section 203 of the Delaware General Corporation Law prohibits a publicly held Delaware corporation from engaging in a business combination with an interested
stockholder, generally a person which together with its affiliates owns or within the last three years has owned 15% of our voting stock, for a period of three years after the date of the transaction
in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. Accordingly, Section 203 may discourage, delay or prevent a change in
control of our company.

Item 1B.    Unresolved Staff Comments

Not applicable.

Item 2.    Properties

Our headquarters are located in Hatboro, Pennsylvania in approximately 40,000 square feet of leased space. This facility accommodates our executive office,
customer support, warehouse, development and shipping operations. On October 8, 2004, we entered into a lease agreement to rent approximately 25,000 square feet. The initial annual base rent
under the lease was approximately $167,000, and increases 2% annually effective on the annual anniversary of the lease commencement date each year. The initial term of the lease agreement is
85 months, with an option to extend the lease term for up to one additional period of five years. On May 1, 2007, we entered into a sub-lease agreement to rent approximately
15,000 square feet of additional space. The initial annual base rent under the sub-lease is approximately $178,000, and is increased 4% annually effective on the annual anniversary of the
sub-lease commencement date each year. The sub-lease agreement expires on December 29, 2009. We are also responsible for payments of common area operating expenses for
the premises under the lease and sub-lease agreement.

On
May 10, 2007, we entered into a sub-lease agreement with AMTSystems, Inc., and share access to approximately 8,000 square feet in an office complex in
Cheshire, Connecticut. The monthly rent is fixed at $2,500 for the term of the sub-lease, which expires on September 30, 2009.

Item 3.    Legal Proceedings

We are not a party to any legal proceedings, the adverse outcome of which, individually or in the aggregate, management believes would have a material adverse
effect on our business, financial condition or results of operations.

29

---





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

None.

PART II

Item 5.    Market for the Company's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Market Information

Our common stock is listed on the NASDAQ Capital Market under the symbol "IFLG." The tables below set forth the high and low sale prices of our common stock
during each quarter ending in 2007 and 2006:

Quarter endedYear ended December 31, 2007

March

June

September

DecemberPrice range of common shares:High

$
5.17

$
4.11

$
4.20

$
3.70Low


3.45


3.35


3.60


1.91


|
|

Quarter endedYear ended December 31, 2006

March

June

September

DecemberPrice range of common shares:High

$
N/A

$
1.57

$
0.63

$
8.75Low


N/A


0.02


0.16


0.17


Our
common stock commenced trading on the NASDAQ Capital Market on September 24, 2007. From the second quarter of 2006 until September 21, 2007, our common stock was quoted
on the Over-the-Counter Bulletin Board. The quotations set forth in the table above for the period of time when our common stock was quoted on the
Over-the-Counter Bulletin Board reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual
transactions. Our common stock was not quoted on the Over-the-Counter Bulletin Board during 2005 or the first quarter of 2006.

Holders of Common Stock

As of March 20, 2008, we had approximately 154 holders of record of common stock and 24,919,301 shares of common stock outstanding.

Dividends

We have not paid cash dividends and do not anticipate paying cash dividends in the foreseeable future. The declaration and payment of dividends is restricted in
accordance with covenants related to our $11.0 million asset-based credit facility with Sovereign Bank which we initially entered into in March 2006 and which expires in March 2011. The
restriction on dividends will remain during the term of the loan agreement. We expect to utilize any future earnings to finance our operations. The actual amount of any dividends that may be paid in
the future will be subject to the discretion of our board of directors and will depend on our operations, financial and business requirements and other factors.

30

---



Unregistered Offerings

On December 10, 2007 we issued 10,000 shares of our common stock to Alliance Advisors, Inc. in exchange for investor relations services, which was
valued at $27,884. The shares of common stock were issued under exemptions provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering.

Item 6.    Selected Financial Data

The following table presents selected financial data for the last five years of the operation of our business. This information should be read in conjunction with
the Consolidated Financial Statements and Notes thereto in Item 8 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7. The selected
financial data for fiscal years 2003, 2004, 2005, 2006 and 2007 have been derived from our financial statements which have been audited by independent auditors. The proforma data is derived from New
Age Translation, Inc.'s (the predecessor to InfoLogix, Inc.) unaudited financial statements for the nine month period ended August 31, 2006, and InfoLogix' audited financial
statements for the years ended December 31, 2006 and InfoLogix' audited financial statements for the years ended December 31, 2007.

Fiscal Year2003

2004

2005

2006

2007(in thousands, except per share data)CONSOLIDATED STATEMENT OF OPERATIONS DATA (audited):Revenues

$
28,877

$
47,087

$
56,399

$
62,113

$
78,774Cost of sales


22,749


35,765


43,532


47,163


58,049Gross profit


6,128


11,322


12,867


14,950


20,725Operating income (loss)


(457
)

1,146


1,206


(2,948
)

(4,486
)Income (loss) before income taxes


(672
)

864


681


(3,556
)

(4,901
)CONSOLIDATED PRO FORMA DATA (unaudited):Provision for income taxes(1)


(262
)

372


313


(1,399
)

(1,712
)Net income (loss)


(410
)

492


368


(2,157
)

(3,189
)Net income (loss) per common share(2)


(0.03
)

0.04


0.03


(0.16
)

(0.13
)Weighted average shares outstanding


12,500


12,500


12,500


13,503


24,173OTHER DATA:Dividends(3)

$
363

$
20

$
170

$
740





|
|

As of December 31,2003

2004

2005

2006

2007(audited)BALANCE SHEET DATA:Total assets

8,985

12,171

15,167

31,813

48,697Long-term debt and capital lease

730

921

533

1,325

6,912Total stockholders' Equity

(609
)
235

745

15,888

18,476


---

31

---



Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations is intended to assist you in understanding our financial condition and
results of operations. This discussion and analysis should be read in conjunction with our financial statements and the notes thereto included elsewhere in this report. Many of the amounts and
percentages presented in this discussion and analysis have been rounded for convenience of presentation.

Overview

InfoLogix is a provider of enterprise mobility and radio frequency identification (RFID) solutions. Our wholly owned operating subsidiary, InfoLogix Systems
Corporation, was formed in 2001. On
November 29 2006, InfoLogix Systems Corporation merged with New Age Translation, Inc., a public reporting company, and New Age Translation Inc. changed its name to
InfoLogix, Inc. and became a holding company for InfoLogix Systems Corporation. Concurrent with the merger, InfoLogix, Inc. completed a private placement of shares of its common stock
that resulted in net proceeds of approximately $15.0 million. For more information with respect to the merger transaction, see Note A to our consolidated financial statements included
elsewhere in this report.

We
provide solutions to our customers by utilizing a combination of products and services, including consulting, application software, managed services, mobile workstations and devices,
and wireless infrastructure. Our solutions are designed to allow the real time usage of data throughout a customer's enterprise in order to enhance workflow, improve customer service, increase revenue
and reduce costs. We sell wireless communication and computing devices, including mobile workstations, that connect to a customer's wireless network so that information can be accessed from any
location within the enterprise. We also implement customized software applications and provide RFID technology, a data-exchange method using transponders that store and remotely send or
retrieve information, to enable the transmission and processing of that information between the customer's information system and its wireless communication and computing devices. We also offer
professional services that support and complement a customer's wireless computing systems, including consulting, managed services, training, engineering, technical support, and network monitoring.

Historically,
the sale of mobile workstations and other wireless devices has represented a majority of our revenues. In the past two years, we have been transitioning our business to
provide more software applications and professional services. With our new focus on selling software and services, we believe that we can offer more comprehensive enterprise mobility solutions that
provide greater value to our customers and generate higher and more recurring revenue for our business.

We
conduct substantially all of our operations through our wholly-owned subsidiary, InfoLogix Systems Corporation. We own certain patents and patent applications through our wholly-owned
subsidiaries OPT Acquisition LLC, Embedded Technologies, LLC and InfoLogix-DDMS, Inc. We consolidate OPT Acquisition LLC, Embedded Technologies, LLC,
InfoLogix-DDMS, Inc. and InfoLogix Systems Corporation for financial reporting purposes.

32

---



2007 Acquisitions

In April 2007, we acquired a portfolio of patents from DDMS Holdings, LLC, a privately held Florida company. The acquired assets consist of five U.S.
patents issued, and four patents issued in foreign countries, along with one published U.S. patent application and five pending foreign patent
applications. We believe this acquisition will provide us with protections related to our on-going sales and development of radio frequency identification, or RFID, technologies and
mobility solutions across our business.

In
May 2007, we acquired certain assets of AMT Systems, Inc., or AMT. The acquired assets include the rights to existing relationships with customers, vendors and partners, and
the intellectual property rights behind AMT's clinical and financial mobility solutions for healthcare. We believe that the addition of professional staff from AMT will enable us to enhance our
software development capabilities and increase our barcode and RFID technology sales. The focus of this acquisition is on the integration of clinical and financial systems through software
applications that operate on mobile computing devices. Our mobile solutions are thereby enhanced by supporting materials management, patient charge capture, and patient identification. We realized
revenue and gross profit in the third and fourth quarters of 2007 as the result of our re-selling third-party thermal wristbands and printers to existing and newly acquired healthcare
customers, and we believe these sales opportunities will continue to expand as we further develop these offerings.

In
September 2007, we acquired certain assets and liabilities of Healthcare Informatics Associates, Inc., or HIA. The acquired assets include the rights to existing relationships
with customers, vendors and partners. All of the employees of HIA were transitioned to us. The employees are a team of senior healthcare informatics consultants who are also certified healthcare
practitioners, and include registered nurses, pharmacists, ancillary clinicians, physician assistants, revenue cycle personnel, administrative systems personnel, technical interface/report writing
personnel, clinical transformation specialists, engineers specializing in return on investment, benefits realization, and work redesign and certified project managers. We realized approximately
$3.2 million in revenue and realized approximately 38% in gross profit in the fourth quarter of 2007 as a result of this acquisition. We believe the acquisition of HIA will allow us to expand
the products and services we offer to hospitals and other healthcare providers.

For
more information with respect to these transactions, see Notes N, O, and P to our audited consolidated financial statements included elsewhere in this report.

Characteristics of our revenue and expenses

We generate our revenue through the resale of wireless and mobile hardware and systems, including mobile workstations, computers, peripherals, and related
products under which the revenue is recognized. Sales revenue on product is recognized when both the title and risk of loss transfer to the customer, generally upon shipment. We also generate revenue
from the sale of extended warranties on certain components. Revenue from the sale of component warranties is recognized upon execution of the warranty agreement. There is no associated warranty risk
as we have contracted with a third party to fully assume all risks and obligations. We also generate revenue from professional services on either a fixed fee or time and expense basis. Revenue from
our professional consulting services is recognized on a time and expense basis at the time the service is delivered and the expenses are incurred. Revenue from the sale of our proprietary learning
technologies and any professional consulting or engineering
services provided on a fixed-fee basis is recognized according to a proportionate performance method of revenue recognition.

Payments
received in advance of services performed are recorded as deferred revenue. Certain contract payment terms may result in customer billing occurring at a pace slower than revenue
recognition.

33

---



The
resulting revenue recognized in excess of amounts billed and project cost is included in unbilled revenue on our balance sheet.

Cost
of sales consists of all expenses that are directly attributable to the costs associated with the purchase, for resale, of wireless and mobile hardware and systems, including
computers, peripherals, and related products. Fluctuations in our gross margin may occur due to changes in our ability to obtain discounts on product sales or our ability to negotiate higher margins
on sales contracts with large customers. Cost of sales also consists of the direct costs associated with those employees or sub-contractors that perform our professional consulting
services on behalf of our customers.

Selling
expenses primarily consist of the salaries, benefits, travel and other costs of our regional and national account sales representatives, sales management and business development
expenses. General and administrative expenses primarily consist of the costs attributable to the support of our operations, such as: costs related to information systems, salaries, expenses and office
space costs for executive management, inside sales and customer support, warehousing, technical support, financial accounting, purchasing, administrative and human resources personnel, insurance,
recruiting fees, legal, accounting and other professional services.

Critical Accounting Estimates and Policies

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Critical accounting policies are those that require the application of management's most difficult, subjective, or complex judgments, often because of the need to make
estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparing the consolidated financial statements, management has made estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. In
preparing the financial statements, management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming
its estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize
different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses. We believe that of our significant accounting policies, the following
may involve a higher degree of judgment and estimation.

Accounts receivable

We grant credit, generally without collateral, to our customers, which are primarily in the healthcare and commercial markets. Consequently, the Company is
subject to potential credit risk related to changes in economic conditions within those markets. However, we believe that our billing and collection policies are adequate to minimize the potential
credit risk.

We
have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable credit losses in our existing accounts receivable. We periodically review
our accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt,
including historical experience and current economic and market conditions. Account balances that we deem to be uncollectible are charged to the allowance after we have exhausted all means of
collection and when the potential for recovery is considered remote.

34

---



Intangible assets

We account for intangible assets in accordance with Statement of Financial Accounting Standards (SFAS) 142,Goodwill and Other Intangible
Assets. The costs of successful registrations for patents are amortized over the estimated useful lives of the assets, which is generally sixteen years, using the
straight-line method. The costs of unsuccessful registrations are charged to expense. Acquired technology is recorded at its fair value at the date of acquisition and amortized over the
estimated useful lives of the assets, which averages four years, using the straight-line method. Developed technology is also amortized using the straight-line method,
generally over five years. License fees are amortized over the license period using the straight-line method. The goodwill attributable to customer lists is amortized over a period of six
to ten years.

Revenue recognition

Revenue is generated through product sales, warranty and maintenance agreements, professional consulting, programming and engineering services,
long-term support services, and educational learning programs. Revenue from product sales is recognized when both the title and risk of loss transfer to the customer, generally upon
shipment. Warranty revenue is recognized upon execution of the warranty agreement. We do not believe there is any associated warranty risk as we have contracted with other parties to fully assume all
risks and obligations. We also generate revenue from professional services on either a fee-for service or fixed fee basis. Revenue from our professional consulting services is contracted
as fee-for-service and is recognized in the period in which the services are performed. Direct costs for travel and accommodations are reimbursable in accordance with the
contract terms and are recognized as revenue in the period the related expense is incurred. Revenue from the sale of our proprietary learning technologies and those professional consulting or
engineering services provided on a fixed-fee basis is recognized ratably over the contract period based upon actual project hours as compared to budgeted project hours.

Income taxes

We account for income taxes in accordance with SFAS 109,Accounting for Income Taxes. Under
SFAS 109, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, and
are measured at the prevailing enacted tax rates that will be in effect when these differences are settled or realized. SFAS 109 also requires that deferred tax assets be reduced by a valuation
allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. We believe it is more likely than not that the deferred tax asset is realizable as the
result of achieving taxable income in the applicable periods prior to related expiration dates.

Stock based compensation

Effective January 1, 2006, we adopted the provisions of SFAS 123(R),Share-Based Payment, under the
modified prospective method. SFAS 123(R) eliminates accounting for share-based compensation transactions using the intrinsic value method prescribed under APB Opinion 25, Accounting for Stock Issued to
Employees, and requires instead that such transactions be accounted for using a fair-value-based method.
Under the modified prospective method, we are required to recognize compensation cost for share-based payments to employees based on their grant-date fair value from the beginning of the
fiscal period in which the recognition provisions are first applied. For periods prior to adoption, the financial statements are unchanged, and the pro forma disclosures previously required by
SFAS 123, as amended by SFAS 148, will continue to be required under SFAS 123(R) to the extent those amounts differ from those in the statement of operations.

35

---





Results of Operations

Results of operations expressed as a percentage of revenues were as follows:

Years EndedDecember 31, 2007

December 31, 2006

December 31, 2005Revenues

100
%
100
%
100
%Cost of sales

74
%
76
%
77
%Gross profit

26
%
24
%
23
%Selling, general, and administrative expenses

32
%
29
%
21
%Operating income (loss)

(6
%)
(5
%)
2
%Interest and other, net

(1
%)
(1
%)
(1
%)Income tax benefit

2
%
3
%
Net income (loss)

(4
%)
(3
%)
1
%


Year ended December 31, 2007 Compared with the Year Ended December 31, 2006

Revenues were $78.8 million for the year ended December 31, 2007, compared to $62.1 million for the year ended December 31, 2006, an
increase of $16.7 million or 26.9%. The increase in revenue was due to the continued expansion of sales of our mobile point-of-care solutions in healthcare, an increase
in the resale of wireless hardware and related professional services in our commercial business, and revenue contributed through the acquisitions of the businesses from AMTSystems, Inc. and
Healthcare Informatics Associates, Inc.

Our
cost of sales was $58.0 million for the year ended December 31, 2007, compared to $47.2 million for the year ended December 31, 2006, an increase of
$10.8 million, or 22.9%. Our gross profit was $20.7 million for the year ended December 31, 2007, compared to $14.9 million for the year ended December 31, 2006, an
increase of approximately $5.8 million or 38.9%, resulting in a gross margin of 26.3% in 2007, up from 24.0% in 2006. The increase in our gross margin is the result of increased sales of our
more profitable mobile workstation hardware and consulting services, partially offset by an increase in sales of lower margin third-party hardware.

Our
selling, general and administrative expenses were $25.2 million for the year ended December 31, 2007, compared with $17.9 million for the year ended
December 31, 2006, an increase of $7.3 million, or 40.9%. The increase in our selling, general and administrative expenses for the comparable periods was primarily attributable to
approximately $3.3 million increase in wages, commissions, and travel expenses related to an increase in the number of sales personnel hired in 2007; approximately $0.5 million increase
in salaries related to the addition of key members of our management and professional
services staff hired in 2007; an approximate $0.9 million increase in professional fees related to legal and accounting expenses for Sarbanes-Oxley compliance; an increase of
$0.4 million related to one-time expenses for recording certain write-offs at year end; the addition of $0.7 million in administrative expenses in the fourth
quarter of 2007 as the result of the HIA acquisition; a decrease of $1.9 million of FAS 123(R) compensation expenses incurred as the result of recording one-time expenses in
2006 as the result of issuing warrants to executives related to bonuses due as the result of the reverse merger in 2006 and private placement transactions, warrants issued to certain of our advisors
as the result of the reverse merger in 2006, and non-qualified stock options granted to members of our Board of Directors.

Our
net interest expense, which is derived from our credit line and term loans and stockholders' loans, and off-set by interest earned on cash and cash equivalents was
$0.4 million for the year ended December 31, 2007, compared to $0.6 million for the year ended December 31, 2006, a decrease of $0.2 million or 33.3%. The decrease
in net interest expense is a result of higher interest income as the

36

---



result
of increased cash balance from a previous financing, partially offset by higher amounts outstanding under our asset-based line of credit facility and term loans.

Our
depreciation and amortization expense increased to $1.7 million for the year ended December 31, 2007 from $1.3 million for the year ended December 31,
2006, an increase of $0.4 million or 30.8% as the result of a greater number of demonstration units deployed to our expanded sales force, and amortization expense related to our recent
acquisitions of intangible assets from AMTSystems and HIA.

Our
net loss was $3.2 million for the year ended December 31, 2007, compared with net loss of $1.9 million for the year ended December 31, 2006, an increase
of approximately $1.3 million or 68.4%. Net loss increased primarily due to the increased salary, commission and travel expenses related to expanding our sales force, and increased salaries as
the result of increasing the number and experience level of our management team.

As
of December 31, 2007, we had net operating losses ("NOLs") of approximately $1.5 million which will be available to offset future taxable income. Our NOLs include losses
of $65,000 generated by New Age Translation, Inc., the predecessor to InfoLogix, Inc., which are subject to restrictions under Internal Revenue Code Section 382, due to the change
in ownership in that entity. Therefore, we have recorded a valuation allowance against the net operating losses generated by New Age Translation, Inc. If not used, the NOL's will
expire beginning in the year 2025. Our state NOL's will also be subject to expiration in varying years starting in 2013 through 2026.

Year ended December 31, 2006 Compared with the Year Ended December 31, 2005

Revenues were $62.1 million for the year ended December 31, 2006, compared to $56.4 million for the year ended December 31, 2005, an
increase of $5.7 million or 10.1%. The increase in revenue was partially due to the continued expansion of sales of our mobile point-of-care solutions in healthcare and
our e-Learning services, and partially offset by a decrease in the overall number of third-party wireless hardware implementations in our commercial business.

Our
cost of sales was $47.2 million for the year ended December 31, 2006, compared to $43.5 million for the year ended December 31, 2005, an increase of
$3.7 million or 8.5%. Our gross profit was $14.9 million for the year ended December 31, 2006, compared to $12.9 million for the year ended December 31, 2005, an
increase of approximately $2.0 million or 16.2%, resulting in a gross margin of 24.6% in 2006, up from 23.2% in 2005. The increase in our gross margin is the result of increased sales of our
more profitable mobile workstation hardware, offset by a decrease in the sale of third-party hardware.

Our
selling, general and administrative expenses were $17.9 million for the year ended December 31, 2006, compared with $11.7 million for the year ended
December 31, 2005, an increase of $6.2 million or 53.5%. These expenses increased in 2006 as the result of approximately $0.8 million related to the merger with New Age
Translation (including one-time bonuses paid to executives as the result of the reverse merger and financing transactions), and $2.8 million of FAS 123R compensation expenses
incurred as the result of issuing warrants to executives related to bonuses earned from completion of the reverse merger and financing transactions, warrants issued to certain of our advisors as the
result of the merger, and incentive stock options granted to employees.

Our
net interest expense, which is derived from our credit line and term loan and stockholders' loans, and off-set by interest earned on cash and cash equivalents was
$0.6 million for the year ended December 31, 2006, compared to $0.5 million for the year ended December 31, 2005, an increase of $0.1 million or 15.9%. Net interest
expense increased as a result of greater amounts outstanding under our asset-based line of credit facility and increasing our term loans. Interest expense was partially offset by interest income in
2006 as the result of an increase in cash due to the previously discussed financing transaction.

37

---



Our
depreciation and amortization expense increased to $1.3 million for the year ended December 31, 2006 from $1.0 million for the year ended December 31,
2005, an increase of $0.3 million or 30.0% as the result of a greater number of demonstration units deployed to our expanded sales force.

Our
net loss was $1.9 million for the year ended December 31, 2006, compared with net income of $0.6 million for the year ended December 31, 2005, a decrease
of approximately $2.5 million. Net income declined primarily due to the merger, one-time bonuses paid to executives as a result of the merger and financing transactions, and
FAS 123R compensation expenses incurred as the result of issuing warrants to executives related to bonuses due as the result of the reverse merger and private placement transactions, warrants
issued to certain advisors to the Company as the result of the merger, and incentive stock options granted to employees.

In
the year ended December 31, 2006 and through November 29, 2006, our operating subsidiary InfoLogix Systems Corporation elected to be taxed under the provisions of
Sub-Chapter S of the Internal Revenue Code whereby our individual stockholders reported their share of the corporate income on their personal federal and state income tax returns.
For the years ended December 31, 2006 and 2005, we distributed $0.7 million and $0.2 million respectively to our stockholders for the payment of taxes. As a result of the merger,
InfoLogix Systems Corporation Sub-Chapter S Corporation status was terminated on November 30, 2006. In accordance with SFAS 109, when a company changes its tax status
from a nontaxable corporation to a taxable corporation, deferred tax assets and liabilities are recognized for timing differences at the date that a nontaxable enterprise becomes a taxable enterprise.
As a result, we recorded a net deferred tax asset of $151,760 with the offset being recorded as an income tax benefit in the statement of operations for the year ended December 31, 2006.

Liquidity and Capital Resources

At December 31, 2007, we had cash and cash equivalents of $6.1 million, compared to $12.9 million at December 31, 2006. Under our loan
and security agreement with Sovereign Bank, we are required to maintain a minimum balance of $2.6 million in an investment account in which Sovereign Bank has a security interest. We have used,
and plan to use, our unrestricted cash for general corporate purposes, including working capital as well as acquisitions. We have funded our growth primarily through the private sale of equity
securities and through long term debt and working capital. At December 31, 2007, our total liabilities were $30.2 million and was comprised mostly of term debt and borrowings outstanding
under our credit line, and outstanding accounts payable. Net cash used in operating activities for the year ended December 31, 2007 was $6.9 million, primarily the result of net losses
from operations and investment in accounts receivable due to higher revenue, partially offset by an increase in our accounts payable and other accrued expenses. Net cash used in investing activities
was $5.1 million for the year ended December 31, 2007, primarily to acquire the patent portfolio from DDMS Holdings, LLC and business assets from AMTSystems, Inc. and HIA,
as previously described, to purchase demonstration equipment, and to increase our investment in software and technology. Net cash provided by financing activities was $5.2 million for the year
ended December 31, 2007, primarily due to net borrowings from our credit line, the proceeds from a term loan from our senior lender, offset by principal payments under the terms of our
senior-secured notes.

38

---



As
of December 31, 2007, our significant contractual obligations were as follows:

Payments due by periodContractual Obligations

Total

Less than
1 Year

13 Years

35 Years

More than 5 YearsLong-term debt obligations

$
8,765,396

$
926,138

$
6,046,154

$
1,793,104


0Capital lease obligations


258,193


155,952


102,241


0


0Operating lease obligations


1,509,249


507,771


780,189


221,289


0Vendor obligations


6,000,000


1,500,000


3,000,000


1,500,000


0Total

$
16,532,838

$
3,089,861

$
9,928,584

$
3,514,393

$
0


Given
the amount of our current cash and cash equivalents, short-term investments, accounts receivable and funds available under our line of credit, we believe that we will
have sufficient liquidity to meet our capital requirements for at least the next 12 months. We may increase our expenditures consistent with the anticipated growth of our business and we may
seek to acquire complementary businesses or technologies, which may require us to raise additional funds sooner than expected. We may seek to raise additional funds through the sale of equity or debt
securities or obtaining additional credit facilities. The sale of equity securities or issuance of equity securities in future acquisitions could result in dilution to our stockholders and the
incurrence of debt would result in an increase in our interest expense. Any debt financing obtained by us in the future could involve restrictive covenants similar to those contained in our current
loan and security agreement relating to capital raising activities and other financial and operational matters that might make it more difficult for us to pursue business opportunities, including
potential acquisitions. There can be no assurance that we will be able to sell additional equity or debt securities, or be able to obtain financing on acceptable terms, if at all.

Line of Credit and Term Loan

In March 2006, we executed a Loan and Security Agreement with a bank. Under the terms of the agreement and subsequent amendments, the bank provided us with an
$8.5 million line of credit and two term loans amounting to $1.5 million, and $1.0 million respectively. The proceeds from the loans were used to pay off existing loans and to
provide working capital. The loans are collateralized by all of the tangible and intangible assets of the Company. The Loan and Security Agreement contains certain financial covenants with which we
must comply including: minimum annual and quarterly net income tests, a fixed-charge coverage ratio, and maximum annual capital expenditures.

In
connection with the closing of the acquisition of HIA, on September 30, 2007, we entered into an amendment to the Loan and Security Agreement pursuant to which the bank
increased our line of credit to $11.0 million and provided a new $2.0 million term loan. In exchange for the increased line of credit and new term loan, the bank received a security
interest in a Company cash account which we are required to maintain a balance of $2.6 million.

The
line of credit and the term loans mature on March 16, 2011. The bank agreed to postpone principal payments for two term loans until a final balloon payment due at maturity,
or, based upon available cash, and at the bank's option, the Company may be required to make an additional annual principal payment from excess available cash flow. We are obligated to repay the third
term loan in equal consecutive monthly installments of $55,555 on the first day of each month commencing on March 1, 2008 with any remaining balance due on the maturity date. If at any time the
lender does not have a lien against the pledged account, we will become obligated to repay each of the other term loans in equal consecutive monthly installments of $41,667 and $27,778 beginning on
the first day of the month following the date on which the lender ceases to have a lien on the account.

On
March 26, 2008 we entered into an amendment to the Loan and Security Agreement which waived the net income and fixed charge coverage ratio covenants that we were not in
compliance with at

39

---



December 31,
2007. The amended loan covenants include: (i) a minimum annual net income requirement of $500,000 for the twelve month period ending December 31, 2008 and for each
fiscal year thereafter, (ii) a minimum quarterly net income requirement of at least $0 for the fiscal quarter ending June 30, 2008 and as of the end of each of the first three fiscal
quarterly thereafter, measured on a year-to-date basis, (iii) a fixed charge coverage ratio of not less than 1.0 to 1.0 as of the fiscal quarter ending June 30,
2008, and 1.0 to 1.0 as of the fiscal quarter ending September 30, 2008 measured on a year-to-date basis, and 1.2 to 1.0 as of the end of the fiscal quarter ending
December 31, 2008 and as of the end of each fiscal quarter thereafter, measured on a rolling four quarter basis, and (iv) maintaining cash equivalents of at least $4.0 million at
all times.

Inflation

To date, the effects of inflation on our financial results have not been significant; however, we cannot be certain that inflation will not affect us materially
in the future.

Off Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements.

Recent accounting pronouncements:

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial
LiabilitiesIncluding an Amendment of FASB Statement No. 115" (SFAS 159). SFAS No. 159 permits entities to choose to measure many financial
instruments and certain other items at fair value and is effective for fiscal years beginning after November 15, 2007. We are in the process of evaluating the impact of this pronouncement on
our consolidated financial statements.

In
September 2006, the FASB issued Statement of Financial Accounting Standards No. 157,Fair Value Measurements(SFAS 157),
which defines fair value, establishes a framework for measuring fair value
and expands disclosures about fair value measurements. The provisions of SFAS 157 are effective as of the beginning of our 2008 fiscal year. We are in the process of evaluating the impact of
this pronouncement on our consolidated financial statements.

In
December 2007, the FASB issued SFAS No. 141(R)Business Combinations(SFAS 141(R)). This Statement replaces the original
FASB Statement No. 141. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for
all business combinations and for an acquirer to be identified for each business combination. The objective of this
SFAS 141(R) is to improve the relevance, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To
accomplish that, SFAS 141(R) establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities
assumed, and any non-controlling interest in the acquiree, recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and determines what
information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This Statement applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and may not be applied before that date.

In
December 2007, the FASB issued SFAS No. 160Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB
No. 51(SFAS 160). This Statement amends the original Accounting Review Board (ARB) No. 51 "Consolidated Financial Statements" to establish accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in
the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is effective for

40

---



fiscal
years and interim periods within those fiscal years, beginning on or after December 15, 2008 and may not be applied before that date. We are unable at this time to determine the effect
that its adoption of SFAS 160 will have on our results of operations and financial condition.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

41

---





Item 8.    Financial Statements and Supplementary Data

INFOLOGIX, INC.    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firms

43Consolidated Balance Sheets as of December 31, 2007 and 2006

45Consolidated Statements of Operations for the Years Ended December 31, 2007, 2006 and 2005

46Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2007, 2006 and 2005

47Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005

48Notes to Consolidated Financial Statements

49


42

---





Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
InfoLogix, Inc.

We
have audited the consolidated balance sheet of InfoLogix, Inc. and subsidiaries as of December 31, 2007, and the related consolidated statements of operations,
stockholders' equity and cash flows for the year then ended. Our audit also includes the financial statement schedule of InfoLogix, Inc. listed in Item 15(a). These financial statements
and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of InfoLogix, Inc. and subsidiaries as of
December 31, 2007, and the results of their operations and their cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth
therein.

We
were not engaged to examine management's assertion about the effectiveness of InfoLogix, Inc.'s internal control over financial reporting as of December 31, 2007
included in the accompanying Management's Report on Internal Control Over Financial Reporting and, accordingly, we do not express an opinion thereon.

/S/ MCGLADREY & PULLEN, LLP

Blue Bell, Pennsylvania
March 28, 2008

43

---





Report of Independent Registered Public Accounting Firm

The Board of Directors
InfoLogix, Inc
Hatboro, Pennsylvania

We have audited the accompanying consolidated balance sheets ofInfoLogix, Inc.(the "Company") as of
December 31, 2006 and the consolidated statements of operations and stockholders' equity and cash flows for each of the two years ended December 31, 2006. These consolidated financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of InfoLogix, Inc.as of December 31, 2006
and the consolidated results of its operations and cash flows for each of the two years in the
period ended December 31, 2006 are in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the financial statement schedule, when
considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

| |  | ASHER & COMPANY, Ltd.
| |  | ---------------------

Philadelphia, Pennsylvania
March 23, 2007, except Note A,Reclassifications,and Note U, which date is March 27,
2008.

44

---





INFOLOGIX, INC.        CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                            |                                                                                                                                                                             | December 31, 2007          |                                            | December 31, 2006 |           
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ----------------- | ----------
|ASSETS                                                                                                                                                                      |                                                                                                                                                                             |                            |                                            |                   |           
|Currents assets:                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           
|                                                                                                                                                                            | Cash and cash equivalents                                                                                                                                                   |                            | $                                          | 6,100,995         |           
|                                                                                                                                                                            | Accounts and other receivables (net of allowance for doubtful accounts in the amount of approximately $409,000 and $120,000 as of December 31, 2007 and 2006, respectively) |                            |                                            | 20,301,369        |           
|                                                                                                                                                                            | Unbilled revenue                                                                                                                                                            |                            |                                            | 1,052,154         |           
|                                                                                                                                                                            | Inventory, net                                                                                                                                                              |                            |                                            | 1,898,870         |           
|                                                                                                                                                                            | Prepaid expenses and other current assets                                                                                                                                   |                            |                                            | 603,017           |           
|                                                                                                                                                                            | Deferred tax assetscurrent                                                                                                                                                 |                            |                                            | 451,263           |           
|                                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           
|                                                                                                                                                                            |                                                                                                                                                                             | Total current assets       |                                            |                   | 30,407,668
|Property and equipment, net                                                                                                                                                 |                                                                                                                                                                             |                            | 1,246,827                                  |                   |           
|Intangible assets, net                                                                                                                                                      |                                                                                                                                                                             |                            | 5,668,227                                  |                   |           
|Goodwill                                                                                                                                                                    |                                                                                                                                                                             |                            | 8,361,516                                  |                   |           
|Deferred tax assetslong-term                                                                                                                                               |                                                                                                                                                                             |                            | 2,955,822                                  |                   |           
|Deferred financing costs                                                                                                                                                    |                                                                                                                                                                             |                            | 57,224                                     |                   |           
|                                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           
|                                                                                                                                                                            |                                                                                                                                                                             | Total assets               |                                            | $                 | 48,697,284
|                                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                        |                                                                                                                                                                             |                            |                                            |                   |           
|Current liabilities:                                                                                                                                                        |                                                                                                                                                                             |                            |                                            |                   |           
|                                                                                                                                                                            | Accounts payable                                                                                                                                                            |                            | $                                          | 8,650,237         |           
|                                                                                                                                                                            | Line of credit                                                                                                                                                              |                            |                                            | 9,958,944         |           
|                                                                                                                                                                            | Current portion of notes payable                                                                                                                                            |                            |                                            | 626,988           |           
|                                                                                                                                                                            | Current portion of capital lease obligations                                                                                                                                |                            |                                            | 139,335           |           
|                                                                                                                                                                            | Sales tax payable                                                                                                                                                           |                            |                                            | 299,246           |           
|                                                                                                                                                                            | Accrued expenses                                                                                                                                                            |                            |                                            | 3,560,152         |           
|                                                                                                                                                                            | Deferred revenue                                                                                                                                                            |                            |                                            | 74,680            |           
|                                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           
|                                                                                                                                                                            |                                                                                                                                                                             | Total current liabilities  |                                            |                   | 23,309,582
|Notes payablenet of current maturities                                                                                                                                     |                                                                                                                                                                             |                            | 6,817,631                                  |                   |           
|Capital lease obligations, net of current maturities                                                                                                                        |                                                                                                                                                                             |                            | 93,968                                     |                   |           
|                                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           
|                                                                                                                                                                            |                                                                                                                                                                             | Total liabilities          |                                            |                   | 30,221,181
|                                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           
|Commitments and contingencies (Note K)                                                                                                                                      |                                                                                                                                                                             |                            |                                            |                   |           
|Stockholders' equity:                                                                                                                                                       |                                                                                                                                                                             |                            |                                            |                   |           
|Preferred stock, par value $0.00001; authorized 10,000,000 shares; none issued or outstanding                                                                               |                                                                                                                                                                             |                            |                                           |                   |           
|Capital stock, par value $0.0001; authorized 100,000,000 shares; issued and outstanding 24,909,301 shares and 23,595,663 shares at December 31, 2007 and 2006, respectively |                                                                                                                                                                             |                            | 249                                        |                   |           
|Additional paid in capital                                                                                                                                                  |                                                                                                                                                                             |                            | 23,579,533                                 |                   |           
|Retained earnings                                                                                                                                                           |                                                                                                                                                                             |                            | (5,103,679                                 | )                 |           
|                                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           
|                                                                                                                                                                            |                                                                                                                                                                             | Total stockholders' equity |                                            |                   | 18,476,103
|                                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           
|                                                                                                                                                                            |                                                                                                                                                                             |                            | Total liabilities and stockholders' equity |                   | $         
|                                                                                                                                                                            |                                                                                                                                                                             |                            |                                            |                   |           

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

45

---





INFOLOGIX, INC.        CONSOLIDATED STATEMENTS OF OPERATIONS

|                                             |                   | December 31,
2007                       |            | December 31,
2006 |            | December 31,
2005 |           
|-------------------------------------------- | ----------------- | --------------------------------------- | ---------- | ----------------- | ---------- | ----------------- | ----------
|Revenues                                     |                   | $                                       | 78,773,564 |                   | $          | 62,112,744        |           
|Cost of sales                                |                   |                                         | 58,049,011 |                   |            | 47,162,881        |           
|                                             |                   |                                         |            |                   |            |                   |           
|                                             |                   | Gross profit                            |            |                   | 20,724,553 |                   |           
|Selling, general and administrative expenses |                   |                                         | 25,210,547 |                   |            | 17,897,567        |           
|                                             |                   |                                         |            |                   |            |                   |           
|                                             |                   | Operating (loss) income                 |            |                   | (4,485,994 | )                 |           
|Interest expense                             |                   |                                         | (872,600   | )                 |            | (664,534          | )         
|Interest income                              |                   |                                         | 457,642    |                   |            | 55,788            |           
|                                             |                   |                                         |            |                   |            |                   |           
|                                             |                   | Income (loss) before income tax benefit |            |                   | (4,900,952 | )                 |           
|Income tax benefit                           |                   |                                         | 1,711,621  |                   |            | 1,686,964         |           
|                                             |                   |                                         |            |                   |            |                   |           
|                                             |                   | Net (loss) income                       |            | $                 | (3,189,331 | )                 | $         
|                                             |                   |                                         |            |                   |            |                   |           
|(Loss) earnings per share:                   |                   |                                         |            |                   |            |                   |           
|                                             | Basic             |                                         | $          | (0.13             | )          | $                 | (0.14     
|                                             |                   |                                         |            |                   |            |                   |           
|                                             | Diluted           |                                         | $          | (0.13             | )          | $                 | (0.14     
|                                             |                   |                                         |            |                   |            |                   |           
|Weighed average shares outstanding:          |                   |                                         |            |                   |            |                   |           
|                                             | Basic and diluted |                                         |            | 24,173,182        |            |                   | 13,503,170
|                                             |                   |                                         |            |                   |            |                   |           

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

46

---





INFOLOGIX, INC.        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Capital
Stock

Shares

Additional
Paid in
Capital

Retained
Earnings
(deficit)

TotalBalance at January 1, 2005

$
125

12,500,000

$
49,875

$
184,716

$
234,716Net income










680,563


680,563Dividends paid to Stockholders










(170,127
)

(170,127
)Balance at December 31, 2005


125

12,500,000


49,875


695,152


745,152Issuance of stock in connection with reverse merger


26

2,595,663








26Issuance of common shares for cash


85

8,500,000


14,979,064





14,979,149Stock based compensation expense







2,253,421





2,253,421Issuance of warrants for services







520,013





520,013Dividends paid to Stockholders










(740,015
)

(740,015
)Net (loss)










(1,869,486
)

(1,869,486
)Balance at December 31, 2006


236

23,595,663


17,802,373


(1,914,349
)

15,888,260Issuance of stock in connection with asset purchases


13

1,293,638


4,883,250





4,883,263Issuance of stock in connection with service rendered.




20,000


66,085





66,085Stock based compensation expense







827,826





827,826Net (loss)










(3,189,331
)

(3,189,331
)Balance at December 31, 2007

$
249

24,909,301

$
23,579,533

$
(5,103,680
)
$
18,476,103


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

47

---





INFOLOGIX, INC.        CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                  |                                                                    | December 31,
2007                                  |                                                     | December 31,
2006 |            | December 31,
2005 |           
|------------------------------------------------- | ------------------------------------------------------------------ | -------------------------------------------------- | --------------------------------------------------- | ----------------- | ---------- | ----------------- | ----------
|Operating activities:                             |                                                                    |                                                    |                                                     |                   |            |                   |           
|                                                  | Net income (loss)                                                  |                                                    | $                                                   | (3,189,331        | )          | $                 | (1,869,486
|                                                  | Adjustments to reconcile net income (loss) to operating cash flow: |                                                    |                                                     |                   |            |                   |           
|                                                  |                                                                    | Depreciation and amortization                      |                                                     |                   | 1,666,826  |                   |           
|                                                  |                                                                    | Allowance for doubtful accounts receivable         |                                                     |                   | 91,170     |                   |           
|                                                  |                                                                    | Inventory obsolescence                             |                                                     |                   | 285,978    |                   |           
|                                                  |                                                                    | Amortization of deferred financing costs           |                                                     |                   | 10,696     |                   |           
|                                                  |                                                                    | Accrued interest added to note payable             |                                                     |                   | 78,750     |                   |           
|                                                  |                                                                    | Loss on disposition of property and equipment, net |                                                     |                   | 273,864    |                   |           
|                                                  |                                                                    | Stock based compensation and other payments        |                                                     |                   | 893,910    |                   |           
|                                                  |                                                                    | Deferred income tax benefit                        |                                                     |                   | (1,720,121 | )                 |           
|                                                  | Changes in:                                                        |                                                    |                                                     |                   |            |                   |           
|                                                  |                                                                    | Accounts receivable and unbilled revenue           |                                                     |                   | (8,595,274 | )                 |           
|                                                  |                                                                    | Unbilled revenue                                   |                                                     |                   | (1,052,154 | )                 |           
|                                                  |                                                                    | Inventory                                          |                                                     |                   | 107,305    |                   |           
|                                                  |                                                                    | Prepaid expenses and other current assets          |                                                     |                   | 238,826    |                   |           
|                                                  |                                                                    | Accounts payable                                   |                                                     |                   | 1,893,532  |                   |           
|                                                  |                                                                    | Sales tax payable                                  |                                                     |                   | (42,818    | )                 |           
|                                                  |                                                                    | Accrued expenses                                   |                                                     |                   | 2,133,352  |                   |           
|                                                  |                                                                    | Deferred revenue                                   |                                                     |                   | 74,680     |                   |           
|                                                  |                                                                    |                                                    |                                                     |                   |            |                   |           
|                                                  |                                                                    |                                                    | Net cash provided by (used in) operating activities |                   |            | (6,850,807        | )         
|                                                  |                                                                    |                                                    |                                                     |                   |            |                   |           
|Investing activities:                             |                                                                    |                                                    |                                                     |                   |            |                   |           
|                                                  | Cash acquisition AMT, HIA, DDMS business assets                    |                                                    |                                                     | (3,158,602        | )          |                   |          
|                                                  | Acquisition of property, equipment and intangibles                 |                                                    |                                                     | (1,917,550        | )          |                   | (1,382,535
|                                                  |                                                                    |                                                    |                                                     |                   |            |                   |           
|                                                  |                                                                    |                                                    | Net cash used in investing activities               |                   |            | (5,076,152        | )         
|                                                  |                                                                    |                                                    |                                                     |                   |            |                   |           
|Financing activities:                             |                                                                    |                                                    |                                                     |                   |            |                   |           
|                                                  | Proceeds from long-term debt                                       |                                                    |                                                     | 2,000,000         |            |                   | 2,500,000 
|                                                  | Repayment of long-term debt                                        |                                                    |                                                     | (801,412          | )          |                   | (1,160,597
|                                                  | Net borrowings from line of credit                                 |                                                    |                                                     | 4,004,271         |            |                   | 1,511,345 
|                                                  | Deferred financing costs                                           |                                                    |                                                     | (56,949           | )          |                   |          
|                                                  | Repayment of notes payablestockholders                            |                                                    |                                                     |                  |            |                   | (800,000  
|                                                  | Common stock issued for cash, net of offering costs                |                                                    |                                                     |                  |            |                   | 14,979,149
|                                                  | Dividends paid to stockholders                                     |                                                    |                                                     |                  |            |                   | (740,015  
|                                                  |                                                                    |                                                    |                                                     |                   |            |                   |           
|                                                  |                                                                    |                                                    | Net cash provided by financing activities           |                   |            | 5,145,910         |           
|                                                  |                                                                    |                                                    |                                                     |                   |            |                   |           
|Net change in cash and cash equivalents           |                                                                    |                                                    | (6,781.049                                          | )                 |            | 12,434,143        |           
|Cash and cash equivalents at beginning of year    |                                                                    |                                                    | 12,882,044                                          |                   |            | 447,901           |           
|                                                  |                                                                    |                                                    |                                                     |                   |            |                   |           
|Cash and cash equivalents at end of year          |                                                                    | $                                                  | 6,100,995                                           |                   | $          | 12,882,044        |           
|                                                  |                                                                    |                                                    |                                                     |                   |            |                   |           
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                                    |                                                    |                                                     |                   |            |                   |           
|                                                  | Cash paid for interest                                             |                                                    | $                                                   | 872,600           |            | $                 | 664,543   
|                                                  |                                                                    |                                                    |                                                     |                   |            |                   |           

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

48

---





INFOLOGIX, INC.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE ASUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



InfoLogix, Inc. (the "Company") provides mobile workforce technology solutions by enabling real time data communications anywhere in an enterprise. The
Company provides wireless network design, hardware, software, consulting, system integration and network management solutions. The Company is headquartered in Hatboro, Pennsylvania, and has an
additional office in Cheshire, Connecticut.

On
November 29, 2006, New Age Translation, Inc. ("New Age") entered into an Agreement and Plan of Merger (the "Merger Agreement") with InfoLogix, Inc., a privately
held Delaware corporation ("InfoLogix"), pursuant to which InfoLogix became a wholly owned subsidiary of New Age (the"Merger"). Pursuant to the terms and conditions of the Merger Agreement, each share
of InfoLogix common stock prior to the closing of the Merger was converted into the right to receive 25,000 shares of New Age common stock. As a result, 12,500,000 shares of common stock were issued
to the shareholders of InfoLogix. Immediately after closing of the Merger on November 29, 2006, there were 15,095,663 shares of New Age common stock issued and outstanding, approximately 82.8%
of which shares are currently held by the former stockholders of InfoLogix.

On
November 29, 2006, concurrent with the Merger, the Company closed on a private placement of 8,500,000 shares of its common stock to accredited investors. The shares were sold
for an aggregate purchase price of $17,000,000 before costs associated with the private placement of $2,020,825. The private placement was exempt from registration under the Securities Act of 1933 as
amended. See Note Q for additional information. In connection with the closing of the merger, the Company made grants of 1.5 million warrants to purchase common stock to certain
executives pursuant to their employment agreements with the Company, and approximately 1.2 million warrants to purchase common stock to certain advisors pursuant to their advisory agreements
with the Company. The warrants to purchase the Company's common stock were granted at an exercise price of $2.00 per share.

The
Merger was accounted for under the purchase method of accounting as a reverse acquisition in accordance with accounting principles generally accepted in the United States of America.
Under this method of accounting, New Age was treated as the "acquired" company for financial reporting purposes. In accordance with guidance applicable to these circumstances, this merger was
considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Merger was treated as the equivalent of InfoLogix issuing stock for the net monetary assets of New Age,
accompanied by a recapitalization. All historical share and per share amounts have been retroactively adjusted to give effect to the reverse acquisition of InfoLogix and related recapitalization.



The consolidated financial statements include the accounts of InfoLogix, Inc. and our wholly-owned subsidiaries InfoLogix Systems Corporation, OPT
Acquisition, LLC, Embedded Technologies, LLC, and InfoLogixDDMS, Inc. All significant intercompany balances and transactions have been eliminated in consolidation



For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less to be cash
equivalents.

49

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INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE ASUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



The Company used the following methods and assumptions in estimating the fair value disclosures for financial instruments:

Cash
and cash equivalents: The carrying value approximates fair value due to the current maturity of these instruments.

Long-
and short-term debt: The carrying value of the debt is considered to approximate fair value because the underlying interest rates approximate market rates
at the balance sheet date.



Financial instruments that subject the Company to credit risk consist of cash equivalents and accounts receivable.

The
Company's policy is to limit the amount of credit exposure to any one financial institution, and place investments with financial institutions evaluated as being creditworthy, or in
short-term money market funds which are exposed to minimal interest rate and credit risk. The Company maintains its cash primarily in investment accounts within large financial
institutions. The Federal Deposit Insurance Corporation insures these balances up to $100,000 per bank. The Company has not experienced any losses on its bank deposits and management believes these
deposits do not expose the Company to any significant credit risk.

The
Company grants credit, generally without collateral, to its customers, which are primarily in the healthcare and commercial markets. Consequently, the Company is subject to potential
credit risk related to changes in economic conditions within those markets. However, management believes that its billing and collection policies are adequate to minimize the potential credit risk.

The
Company has a policy of reserving for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company
periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an
account may be in doubt including historical experience and current economic and market conditions. Account balances deemed to be uncollectible are charged to the allowance after all means of
collection have been exhausted and the potential for recovery is considered remote.



Inventory is stated at the lower of cost or market. Cost is determined using the first in, first out method.

The
Company periodically reviews its inventories and makes provisions as necessary for estimated obsolescence and slow-moving goods. The Company marks down inventory in an
amount equal to the difference between cost of inventory and the estimated market value based upon assumptions about future demands, selling prices and market conditions. The creation of such
provisions results in a write-down of inventory to net realizable value and a charge to cost of goods sold.



Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed over the lesser of the estimated useful lives or the lease
term of the related assets using the straight line method. Maintenance and repairs that neither add materially to the value of the asset nor

50

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INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE ASUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

appreciably
prolong its useful life are charged to expense as incurred. Gains or losses on the disposal of property and equipment are included in the determination of income. Useful lives of property
and equipment are as follows:

Demonstration and evaluation equipment

3 yearsEquipment

3 to 5 yearsFurniture and fixtures

5 yearsLeasehold improvements

5 years




Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is subject to annual impairment
testing. Other intangible assets, which consist primarily of non-contractual customer relationships, sales contracts, patents and technology, are amortized over their estimated useful
lives. The Company accounts for goodwill in accordance with Statement of Financial Accounting Standards (SFAS) No. 142,Goodwill and Other
Intangible Assets(SFAS 142), issued by the Financial Accounting Standards Board (FASB). SFAS 142 establishes standards for the accounting of intangible assets
that are acquired individually or with a group of other assets and the accounting for goodwill and other intangible assets after they have been initially recognized in the financial statements. In
accordance with SFAS 142, amortization of goodwill is not permitted. Goodwill and other intangible assets are tested at least annually for impairment by comparing the fair value of the recorded
assets to their carrying amount. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized. The annual evaluation of intangible assets require the use of
estimates about future operating results of each reporting unit to determine their estimated fair value. Changes in forecasted operations can materially affect these estimates. Once an impairment of
an intangible asset has been recorded, it cannot be reversed.

The
Company accounts for its other intangible assets in accordance with SFAS 142. In accordance with SFAS 142, intangible assets that have a definite-life are
amortized on a straight-line basis over their estimated useful lives. The Company reviews the carrying value of all intangible assets for possible impairment whenever events or changes in
circumstances indicate that their carrying value may not be recoverable. If the carrying amounts of the intangible assets that have a definite-life exceed their fair value, an impairment
loss is recognized.

The
weighted average remaining useful lives for financial purposes are as follows:

Weighted average
remaining
useful lifePatents

13Computer software

3Developed technology

4License fees

4Customer lists

7Non-compete agreements

3Trademarks and trade names

InfiniteOther

5Goodwill

Infinite


51

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE ASUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



Deferred financing costs that are incurred by the Company in connection with the issuance of debt are deferred and amortized to interest expense over the life of
the underlying indebtedness, adjusted to reflect any early repayments.



The Company assesses the potential impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may
not be recoverable. An asset's value is impaired if management's estimate of the aggregate future cash flows, undiscounted and without interest charges, to be generated by the asset are less than the
carrying value of the asset. Such cash flows consider factors such as expected future operating income and historical trends, as well as the effects of demand and competition. To the extent impairment
has occurred, the loss is measured as the excess of the carrying amount of the asset over the estimated fair value of the asset. Such estimates require the use of judgment and numerous subjective
assumptions, which, if actual experience varies, could result in material differences in the requirements for impairment charges.



The Company capitalizes certain costs related to the acquisition and development of software and amortizes these costs using the straight-line method
over the estimated useful life of the software which is three to five years. In accordance with SFAS 86,Accounting for the Costs of Compute
Software to be Sold, Leased or Otherwise Marketed, the Company expenses as incurred those costs incurred prior to achieving technological feasibility.



Revenue is generated through product sales, warranty and maintenance agreements, professional consulting, programming and engineering services,
long-term support services, and educational learning programs. Revenue from product sales is recognized when both the title and risk of loss transfer to the customer, generally upon
shipment. Warranty revenue is recognized upon execution of the warranty agreement. The Company does not believe there is any associated warranty risk as we have contracted with other parties to fully
assume all risks and obligations. The Company also generates revenue from professional services on either a fee-for service or fixed-fee basis. Revenue from professional
consulting services is contracted as fee-for-service and is recognized in the period in which the services are performed. Direct costs for travel and accommodations, which are
reimbursable in accordance with the contract terms, are recognized as revenue in the period the related expense is incurred. Revenue from the sale of proprietary learning technologies and those
professional consulting or engineering services provided on a fixed-fee basis is recognized ratably over the contract period based upon actual project hours as compared to budgeted project
hours.

The
Company records amounts billed to their customers for shipping and handling fees as revenue in accordance with EITF 00-10,Accounting for
Shipping and Handling Fees and Costs.The EITF requires that all amounts billed in a sale transaction related to shipping and handling represents revenues earned for the goods
provided and should be classified as revenue. The associated costs are included in the cost of sales.

52

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INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE ASUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



Advertising costs are expensed when incurred and approximated $914,000, $367,000 and $117,000 for the years ended December 31, 2007, 2006 and 2005,
respectively.

In
accordance with Emerging Issues Task Force (EITF) 02-16,Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a
Vendor, certain cooperative advertising reimbursements are netted against specific, identifiable costs incurred in connection with the selling of the vendor's product.
Cooperative advertising reimbursements of approximately $86,000, $92,000, and $167,000 for the years ended December 31, 2007, 2006 and 2005, respectively, were recorded as a reduction of
advertising expense with the net amount included in selling, general and administrative expense in the consolidated statement of operations.



The Company accounts for income taxes in accordance with SFAS 109,Accounting for Income Taxes. Under
SFAS 109, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, and
are measured at the prevailing enacted tax rates that will be in effect when these differences are settled or realized. SFAS 109 also requires that deferred tax assets be reduced by a valuation
allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company believes it is more likely than not that the deferred tax asset is
realizable as the result of achieving taxable income in the applicable periods prior to related expiration dates.

The
Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48,Accounting for Uncertainty in Income
Taxes, on January 1, 2007. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. As a result of the implementation of FIN 48, the Company determined that there were no material liabilities for tax benefits for past
years and the current period.

The
Company has determined that any future interest accrued, related to unrecognized tax benefits, will be included in interest expense. In the event the Company must accrue for
penalties as a result of FIN 48, they will be included as an operating expense.

Prior
to the Merger discussed in Note A, the Company filed its Federal and State Income Tax Returns as a Sub-Chapter S Corporation. Therefore, any income tax
liability from its operations was payable directly by its shareholders. The Company's Sub-Chapter S Corporation status was terminated on November 29, 2006, the date of the
Merger.



Effective January 1, 2006, the Company adopted the provisions of SFAS 123(R),Share-Based Payment,
under the modified prospective method. SFAS 123(R) eliminates accounting for share-based compensation transactions using the intrinsic value method prescribed under APB Opinion No. 25, Accounting for Stock Issued to
Employees, and requires instead that such transactions be accounted for using a fair value-based method. Under the
modified prospective method, the Company is required to recognize compensation cost for share-based payments to employees based on their grant date fair-value from the beginning of the
fiscal period in which the recognition provisions are first applied. For periods prior to adoption, the financial statements are unchanged, and the pro forma disclosures previously required by
SFAS 123, as

53

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE ASUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

amended
by SFAS 148, will continue to be required under SFAS 123(R) to the extent those amounts differ from those in the statement of operations.



The cost of stock based compensation awards issued to non-employees for services are recorded at either the fair value of the services rendered or the
instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in EITF 96-18, Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services.



The Company has adopted the provisions of SFAS 128,Earnings per Share. Basic earnings per share is
computed by dividing income or loss available to common stockholders by the weighted average number of common shares outstanding during the period. SFAS 128 also requires a dual presentation of
basic and diluted earnings per share on the face of the statement of operations for all companies with complex capital structures. Diluted earnings per share reflects the amount of earnings for the
period available to each share of common stock outstanding during the reporting period, while giving effect to all dilutive potential common shares that were outstanding during the period, such as
common share equivalents that could result from the potential exercise into common stock. The computation of diluted earnings per share does not assume exercise of securities that would have an
anti-dilutive effect on per share amounts (i.e., increasing earnings per share or reducing
loss per share). The dilutive effect of outstanding options are reflected in dilutive earnings per share by the application of the treasury stock method which recognizes the use of proceeds that could
be obtained upon the exercise of options and warrants in computing diluted earnings per share. It assumes that any proceeds would be used to purchase common stock at the average market price during
the period. Options will have a dilutive effect only when the average market price of the common stock during the period exceeds the exercise price of the options.



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period.

Significant
estimates are required in accounting for inventory costing, asset valuations and amortization. Actual results could differ from those estimates.



In 2007, the Company reclassified amounts billed to their customers for shipping and handling fees as revenue in accordance with EITF 00-10, Accounting for
Shipping and Handling Fees and Costs.The EITF requires that all amounts billed to a customer in a sale transaction related to shipping
and handling represents revenues earned for the goods provided and should be classified as revenue. Reclassifications have been made to all prior period financial statements to conform to the current
year presentation as more fully described in Note U. The selected consolidated quarterly financial data in Note T has also been changed to reflect this reclassification.

54

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INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE ASUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial
LiabilitiesIncluding an Amendment of FASB Statement No. 115("SFAS 159"). SFAS No. 159 permits entities to choose to measure many financial
instruments and certain other items at fair value and is effective for fiscal years beginning after November 15, 2007. The Company is in the process of evaluating the impact of this
pronouncement on its consolidated financial statements.

In
September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), which defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value measurements. The provisions of SFAS157 are effective as of the beginning of the Company's 2008 fiscal year. The Company is
currently evaluating the effect of adopting SFAS 157 on its consolidated financial statements.

In
December 2007, the FASB issued SFAS No. 141(R)Business Combinations(SFAS 141(R)). This Statement replaces the original
FASB Statement No. 141. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for
all business combinations and for an acquirer to be identified for each business combination. The objective of this
SFAS 141(R) is to improve the relevance, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To
accomplish that, SFAS 141(R) establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities
assumed, and any noncontrolling interest in the acquiree, recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and determines what information to
disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This Statement applies prospectively to business combinations for which
the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and may not be applied before that date.

In
December 2007, the FASB issued SFAS No. 160Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB
No. 51(SFAS 160). This Statement amends the original Accounting Review Board (ARB) No. 51Consolidated Financial
Statementsto establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is effective for
fiscal years and interim periods within those fiscal years, beginning on or after December 15, 2008 and may not be applied before that date. The Company is unable at this time to determine the
effect that its adoption of SFAS 160 will have on its results of operations and financial condition.

NOTE BINVENTORY

Inventory consists of the following:

December 31, 2007

December 31, 2006Finished goods

$
2,373,308

$
2,426,166Work in progress


10,505


64,952Less: allowance for slow moving and obsolete inventory


(484,943
)

(198,965
)$
1,898,870

$
2,292,153


55

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE CPROPERTY AND EQUIPMENT

Property and equipment consists of the following:

December 31, 2007

December 31, 2006Demonstration and evaluation equipment

$
1,009,450

$
2,477,581Equipment


825,918


593,721Furniture and fixtures


433,423


295,425Leasehold improvements


58,113


40,5872,326,904


3,407,314Less: accumulated depreciation


(1,080,077
)

(2,206,634
)$
1,246,827

$
1,200,680


Depreciation
expense was $687,854, $796,250, and $710,810 for the years ended December 31, 2007, 2006 and 2005, respectively. Depreciation expenses were included in selling,
general and administration expense.

NOTE DINTANGIBLE ASSETS

Intangible assets consist of the following:

December 31, 2007

December 31, 2006Patents

$
2,563,153

$
639,879Computer software


1,691,025


791,708Developed technology


457,058


457,525License fees


515,468


515,000Customer Lists


3,707,810


Non compete agreements


173,000


Trademarks and trade names


1,400,000


Other


125,455


10,632,969


2,404,112Less accumulated amortization


(2,271,453
)

(1,292,480
)Total net intangible assets

$
8,361,516

$
1,111,632


Amortization
expense related to intangible assets was $978,972, $523,595, and $334,093 for the years ended December 31, 2007, 2006 and 2005, respectively. Amortization expense
were included in selling, general and administrative expense.

Amortization
expense subsequent to the year ended December 31, 2007 is expected to be as follows:

Years ended December 31:

Amount2008

$
1,404,5972009


1,270,3212010


889,6502011


705,7272012


693,204


56

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE EDEBT

In March 2006, the Company executed a Loan and Security Agreement with a bank. Under the terms of the agreement and subsequent amendments, the bank provided the
Company with an $8.5 million line of credit and two term loans amounting to $1.5 million and $1.0 million, respectively. On September 30, 2007, the bank amended the
agreement and extended the line of credit up to a total availability of $11.0 million, and added a new $2 million term loan. The loans are collateralized by a first security interest in
all of the Company's tangible and intangible assets and in the Company's cash account equal to $2.6 million, as well as a pledge of all of the common stock of InfoLogix Systems Corporation. The
loan agreement requires the Company's compliance with certain loan covenants. At
December 31, 2007, the Company was not in compliance with certain of the covenants, however, on March 26, 2008 the Company entered into an amendment to the Loan and Security Agreement
which waived the non-compliance with these covenants.



At December 31, 2007, the outstanding balance of the line of credit was approximately $10.0 million and bears interest at 8.50% which is 1.25% above
the bank's prime rate under the credit facility (7.25%). At December 31, 2006, the outstanding balance of the loan was approximately $6.0 million.



Notes payable consist of the following:

December 31, 2007

December 31, 2006Amounts payable pursuant to the asset purchase agreement with AMTSystems, Inc. (Note O), in monthly installments of $8,766, interest included, at a rate of 7.84%, maturing May 31, 2013

$
463,092

$
Convertible note payable ($3.5million) pursuant to the asset purchase agreement (Note P) with Healthcare Informatics Associates, Inc. Principal and interest payable at 9.0% is due September 30,
2010


3,578,750


Note payable, bank, principal payable $55,556 monthly over thirty-six months commencing March 2008; interest payable monthly, at prime rate plus 1.5% (8.75% at December 31, 2007), maturing March 16,
2011


2,000,000


Note payable, bank, principal payable $41,667 monthly over seventeen months commencing April 2006 and continuing through and including August 1, 2007, and one final payment of remaining principal balance on
March 16, 2011. Interest payable monthly at the prime rate plus 1.0% (8.25% at December 31, 2007)


708,333


1,083,333Note payable, bank, principal payable $27,778 monthly over nine months commencing December 2006 and continuing through and including August 2007, and one final payment of remaining balance on March 16, 2011.
Interest payable monthly at the prime rate plus 1.0% (8.25% at December 31, 2007)


694,444


944,445Total notes payable


7,444,619


2,027,778Less: current maturities


626,988


833,333Total long term notes payable

$
6,817,631

$
1,194,445


57

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INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE EDEBT (Continued)

Aggregate
maturities of notes payable are as follows at December 31, 2007:

Years ending December 31:2008

$
626,9882009


743,9032010


4,328,9272011


1,604,1852012


97,6322013


42,984




At December 31, 2007 and December 31, 2006 the Company had contingent liabilities under letters of credit of $350,000 and $161,458 respectively.

NOTE FCAPITAL LEASE OBLIGATION

Equipment acquired under capital lease obligations is classified as property and equipment in the accompanying consolidated financial statements and consisted of
the following:

December 31, 2007

December 31, 2006Equipment

$
564,486

$
439,031Less: accumulated depreciation


(295,538
)

(188,945
)$
268,948

$
250,086


The
capital lease obligations expire in 2010 and bear interest at 10.3% imputed based on the lessor's implicit rate of return. Future minimum capital lease payments are as follows:

Amount2008

$
155,9522009


58,2462010


43,995Total


258,193Less: amount representing interest


24,890Net present value of minimum lease payments


233,303Less: current portion


139,335$
93,968


NOTE GLEASE COMMITMENTS

The Company leases its facilities in Pennsylvania and Connecticut under agreements expiring between 2007 and 2011. Total rent expense for all leases was
approximately $468,255, $270,552, and $303,469 for the years ended December 31, 2007, 2006, and 2005, respectively.

58

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INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE GLEASE COMMITMENTS (Continued)

Future minimum lease payments required under the operating leases in effect subsequent to December 31, 2007 are approximately as follows:

Amount2008

$
507,7712009


512,2392010


267,9502011


221,289


NOTE HRELATED PARTY TRANSACTIONS



The Company was indebted to certain stockholders considered related parties, that was fully repaid in 2006. Interest paid to the stockholders was approximately
$70,800 and $52,500 for the years ended December 31, 2006, and 2005, respectively.



A stockholder of the Company was considered a related party for the years ended December 31, 2006 and 2005, this stockholder owns another entity which
provided the Company with shared occupancy, accounting, office and administrative services for the years ended December 31, 2006, and 2005 at costs of $0, and $184,000, respectively.

An
entity owned by a stockholder and former officer of the Company provided the Company with shared occupancy, accounting, and office and administrative services for the year ended
December 31, 2005 at a cost of $184,000; however these services were not provided in 2006 or 2007. In addition, beginning in 2004, the Company has an agreement with that entity to provide
extended warranties and technical support services on behalf of certain of the Company's customers. Under the agreement, the Company made payments of approximately $2,798,000, $1,601,000, and $903,000
for the years ended December 31, 2007, 2006 and 2005, respectively. Also, beginning in May 2006, the Company entered into an agreement with this stockholder's company to provide the Company
with consulting services with respect to software development. Payments under this agreement were approximately $186,000 and $116,000 for the years ended December 31, 2007 and 2006,
respectively. Pursuant to the terms of the two agreements, the Company has a minimum annual commitment to purchase services of $700,000 in 2006 and was increased in August 2007 to $1,500,000 per year
through 2011.

During
the years ended December 31, 2006, and 2005, a stockholder considered a related party for the years ended December 31, 2006 and 2005 performed legal services for the
Company at costs of approximately $36,000, and $134,000, respectively.



During the years ended December 31, 2007, 2006 and 2005, the Company maintained a business relationship with Gulian & Associates, which is owned by
the wife of David T. Gulian, the President and Chief Executive Officer and director and stockholder. Under the terms of the arrangement, Gulian & Associates provides the Company with
retainer-based professional recruiting services, on a non-exclusive basis. Gulian & Associates is paid a success fee of 20% of a newly hired person's annual base salary for

59

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INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE HRELATED PARTY TRANSACTIONS (Continued)

employees
introduced to the Company by Gulian & Associates; one-third of the fee is invoiced at the time the hiring request is made, the remainder is invoiced only upon successful
placement of a candidate into the role.

In
2007, 2006 and 2005, the Company paid Gulian & Associates approximately $159,000, $106,000 and $38,600 respectively in success fees.



There was approximately $104,000 due from a related party at December 31, 2006 for the sale of certain hardware products. Such amount is classified as
accounts receivable in the accompanying financial statements.

NOTE IEMPLOYEE BENEFIT PLAN

The Company has a defined contribution plan covering substantially all employees. As allowed under Section 401(K) of the Internal Revenue Code, the plan
provides tax deferred salary deductions for eligible employees. Company contributions are at the discretion of the board of directors. The Company did not make a contribution to the plan for the years
ended December 31, 2007, 2006 or 2005.

NOTE JCONCENTRATIONS OF CREDIT RISK

At December 31, 2007 and 2006, the Company had significant customer accounts receivable as follows:

2007

2006Company A

17%

0%Company B

10%

0%


For
the years ended December 31, 2007, 2006 and 2005, the Company had sales to significant customers as follows:

2007

2006

2005Company A

12%

13%

11%Company B

12%

0%

0%Company C

0%

0%

14%


NOTE KCOMMITMENTS AND CONTINGENCIES



The Company is involved in disputes or legal actions arising in the ordinary course of business. Management does not believe the outcome of such legal actions
will have a material adverse effect on the Company's financial position, results of operations or cash flows.



The Company has entered into employment agreements with executives of the Company. The employment contracts expire in December 2008 and 2009. In addition to the
payment of total annual

60

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INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE KCOMMITMENTS AND CONTINGENCIES (Continued)

salaries
of approximately $1.3 million, in the aggregate, the employment agreements allow for the granting of 1,500,000 options and 1,500,000 warrants to purchase the Company's common stock at
an exercise price between $2.00 and $4.04 per share; which the company granted on November 29, 2006 and December 18, 2007 respectively. The agreements also call for the payment of
discretionary bonuses based upon revenue and net income targets that are set by the compensation committee of the board of directors.

NOTE LNONCASH INVESTING AND FINANCING

Noncash investing and financing activities consist of the following:

Issuance of shares in connection with DDMS patent acquisition, April 2007

$
1,520,000Acquisition of AMTSystems, Inc., May 2007Issuance of common shares

$
500,000Issuance of long-term debt


500,000$
1,000,000Acquisition of Healthcare Informatics Associates, Inc., September 2007Issuance of common shares

$
2,863,262Issuance of long-term debt


3,500,000$
6,363,262Common stock issued for services, July 2007

$
38,200Common stock issued for services, December 2007


27,885$
66,085


|
|

2007

2006

2005Additional non cash investing and financing information:Capital lease obligation incurred for new equipment purchases

$
125,455

$


$
439,000


NOTE MINCOME TAXES

The Company accounts for income taxes in accordance with SFAS No. 109. Accordingly deferred income tax assets and liabilities are recognized for the
estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.

The
Company has net operating loss carryforwards available in certain jurisdictions to reduce future taxable income. Future tax benefits for net operating loss carryforwards are
recognized to the extent that realization of these benefits is considered more likely than not. This determination is based on the expectation that related operations will be sufficiently profitable
or various tax, business and other planning strategies will enable us to utilize the operating loss carryforwards. We cannot be assured that we

61

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE MINCOME TAXES (Continued)

will
be able to realize these future tax benefits or that future valuation allowances will not be required. To the extent that available evidence raises doubt about the realization of a deferred
income tax asset, a valuation allowance is established.

As
of December 31, 2007, the Company has net operating losses of approximately $3,944,000 which will be available to offset future taxable income. Included in the net operating
losses are losses of $65,000 generated by New Age Translation, Inc. which are subject to restrictions under Internal Revenue Code Section 382, due to change in ownership in that entity.
Therefore, the Company has recorded a valuation allowance against the net operating losses generated by New Age Translation, Inc. If not used, the net operating losses will expire beginning
after 2024. The Company's state net operating losses will also be subject to expiration in varying years starting in 2013 through 2027.

The
provision for income taxes for the years ended December 31, 2007, 2006 and 2005 is as follows:

2007

2006

2005Current income tax expense (benefit):Federal

$


$


$
State


8,500





8,500





Deferred income tax expense (benefit):Federal


(1,487,369
)

(1,452,070
)

State


(232,752
)

(234,894
)

(1,720,121
)

(1,686,964
)

Income tax expense (benefit)

$
(1,711,621
)
$
(1,686,964
)
$



The
Company's deferred tax assets and liabilities are as follows:

2007

2006Allowance for doubtful accounts

$
161,848

$
47,100Inventory reserve and uniform capitalization


236,028


49,919Net operating loss carryforward





240,134Accrued expenses


53,387


Valuation allowance





(25,675
)Deferred tax assets-current


451,263


311,478Property and equipment


473


125,561Intangible assets


15,050


(86,604
)Operating loss carry forwards


1,548,046


Stock based compensation


1,417,957


1,336,529Valuation allowance


(25,704
)

Net deferred tax assets-long-term


2,955,822


1,375,486Total net deferred tax asset

$
3,407,085

$
1,686,964


62

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE MINCOME TAXES (Continued)

A
reconciliation of the United States statutory income tax rate to the effective income tax rate for the twelve month periods ended December 31, 2007 and 2006 is as follows:

2007



2006Tax at the Federal statutory rate

$
(1,655,631
)
34.0
%
$
(1,427,570
)
34.0
%State taxes


(224,895
)
4.6
%

(213,504
)
5.1
%Permanent differences


10,907

(.2
%)

196,564
)
(4.7
%)Other


157,998

(3.3
%)



Income taxable to S Corp. period







(90,694
)
2.2
%Impact of change from S to C Corporate tax status







(151,760
)
3.6
%Effective tax rate

$
(1,711,621
)
35.1
%
$
(1,686,964
)
40.2
%


The
following unaudited pro-forma tax provision was prepared as if the Company was a taxable entity for each of the periods ended December 31, 2006, and 2005.

Year Ended December 312006

2005Amount

Rate

Amount

Rate(Unaudited)Tax at the Federal statutory rate

$
(1,427,570
)
34.0
%
$
231,391

34.0
%Permanent differences


223,445

(5.3
%)

37,928

5.6
%Federal tax provision


(1,204,125
)
28.7
%

269,319

39.6
%State & local tax provision (Net of Federal benefit)


(194,875
)
4.6
%

43,681

6.4
%Total tax provision

$
(1,399,000
)
33.3
%
$
313,000

46.0
%


Prior
to the Merger discussed in Note A, the Company filed its Federal and State income tax returns as a Sub-Chapter S Corporation. Therefore, any income tax
liability from its operations was payable directly by its shareholders. As a result of the Merger, the Company's Sub-Chapter S Corporation status was terminated on
November 30, 2006. In accordance with SFAS 109, when the Company changes its tax status from a nontaxable Sub-Chapter S Corporation to a taxable C Corporation,
deferred tax assets and liabilities shall be recognized for timing differences at the date that a nontaxable enterprise becomes a taxable enterprise. As a result, the Company recorded a net deferred
tax asset of $151,760 with the offset being recorded as an income tax benefit in the statement of operations for the year ended December 31, 2006.

NOTE NACQUISITION OF DDMS

On April 9, 2007, the Company acquired DDMS Holdings, LLC, a privately held Florida company through a merger of DDMS Holdings, LLC with the
Company's newly formed wholly-owned subsidiary InfoLogix-DDMS, Inc. After the merger, InfoLogix-DDMS, Inc. was the surviving wholly-owned subsidiary of the
Company. The acquired assets consisted of five US patents, along with one published US patent application and four foreign patents issued and five foreign patents that are currently pending.
Consideration given for all of the shares of DDMS Holdings, LLC included $200,000 in cash and the

63

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE NACQUISITION OF DDMS (Continued)

issuance
of 400,000 shares of the Company's common stock. Under the terms of the merger agreement, the Company agreed to commit funds as it deems necessary toward the maintenance and expansion of the
patents and patent applications acquired in the merger, including a minimum of $250,000 before April 9, 2008. The 400,000 shares of common stock are subject to a one-year
lock-up period. This acquisition of the DDMS patents was accounted for in accordance with SFAS 142.

The
Company also entered into a ten-year consulting agreement with LM Consulting LLC, an entity wholly owned by the former shareholders of DDMS. Under the consulting
agreement, LM Consulting will provide up to 20 hours of consulting services per month. The consulting services will be rendered by the former shareholders of DDMS, who are the original
inventors of the patents, and will consist of services related to the commercialization and development of the patents and other intellectual property acquired from DDMS. LM Consulting is entitled to
receive a consulting fee during the term of the consulting agreement equal to 36% of the revenue generated by the patents after deducting (i) certain expenses related to the generation of those
revenues and (ii) a portion of the funds expended by us in maintaining and expanding the patents.

Cash paid

$
200,000Common stock issued (400,000 shares)


1,520,000Acquisition costs


95,000$
1,815,000


The
value of the common stock issued above was based on the average closing market price of the Company's common stock for the period three days before and three days after the date of
issuance of the common stock.

The
purchase price was allocated to patents and patent applications and based on their fair values on the date of acquisition of $1,815,000.

NOTE OACQUISITION OF CERTAIN ASSETS OF AMTSYSTEMS, INC.

On May 10, 2007, the Company, through its wholly-owned subsidiary InfoLogix Systems Corporation, acquired certain assets of AMTSystems, Inc. (AMT)
pursuant to an asset purchase agreement. The acquired assets include the rights to existing relationships with customers, vendors and partners, and the intellectual property rights behind AMT's
clinical and financial mobility solutions for healthcare. The purchase price paid by the Company consisted of $100,000 in cash, 138,160 shares of the Company's common stock at closing, and $500,000
installment payments, payable in 72 equal monthly installments of $8,766 plus interest. The issuance of the shares of common stock was unregistered and the shares are subject to a two-year
lock-up. The acquisition was accounted for under SFAS 141 "Business Combinations" and results have been included in the statement of operations from May 10, 2007 through
December 31, 2007.

Cash paid

$
100,000Common stock issued (138,160 shares)


500,000Installment payments


500,000Acquisition costs


208,000$
1,308,000


64

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE OACQUISITION OF CERTAIN ASSETS OF AMTSYSTEMS, INC. (Continued)

The value of the common stock issued above was based on the average closing market price of the Company's common stock for the ten trading days prior to the
closing date per the asset purchase agreement.

The
acquired assets consisted primarily of software and customer lists. The purchase price was allocated to the assets and based on their fair values on the date of acquisition as
follows:

Furniture and fixtures

$
3,850Technology


100,000Customer relationships


956,810Non-compete agreement


75,000Goodwill


172,340$
1,308,000


The
Company increased the value of goodwill by approximately $73,000 in the fourth quarter for 2007, as the result of adjustments made to the purchase price allocation.

NOTE PACQUISITION OF ASSETS OF HEALTHCARE INFORMATICS ASSOCIATES, INC.

On September 30, 2007, the Company, through its wholly-owned subsidiary, InfoLogix Systems Corporation, acquired substantially all of the operating assets
and assumed certain liabilities of Healthcare Informatics Associates, Inc. (HIA) pursuant to an asset purchase agreement. The assets acquired relate to HIA's business of providing software
implementation and consulting services, and included cash, accounts receivable, the rights to existing relationships with customers, vendors and partners, certain tangible personal property and
certain intangible rights and property. The liabilities assumed consist of current accounts payable and accrued expenses.

The
purchase price paid by the Company consisted of cash, shares of the Company's common stock, and a convertible promissory note. In addition, HIA is eligible to receive additional
contingent consideration under an earn-out agreement. The acquisition was accounted for under SFAS 141. The results of operations from the business acquired from HIA were included
in the statement of operations beginning October 1, 2007. The total purchase price paid by the Company is as follows:

Cash paid

$
4,583,483Common stock issued (755,478 shares)


2,863,263Convertible note payable


3,500,000Acquisition costs


683,276$
11,630,022


In
addition to the cash paid at closing, HIA and the Company deposited $900,000 into an escrow account to fund a portion of certain employee retention payments to be made to HIA's
employees over a three year period after the closing. In addition, the parties deposited $1,556,586 from the HIA cash account into an escrow account to be used to fund any working capital adjustment
payable under the asset purchase agreement, of which $1,481,172 and $75,414 was released to HIA and the Company, respectively, on January 31, 2008. The Company also deposited $83,483 into an
escrow account, which was payable to HIA upon the collection of certain outstanding customer invoices due to HIA within 60 days after the

65

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE PACQUISITION OF ASSETS OF HEALTHCARE INFORMATICS ASSOCIATES, INC. (Continued)

closing
and remittance of those amounts to the Company. The full amount of this escrow was released to HIA on January 31, 2008.

At
closing, the Company issued 755,478 shares of common stock, which was valued at $2,863,263 for accounting purposes. This value of the common stock was based on the average closing
market price of the Company's common stock from September 26, 2007 through October 3, 2007. The issuance of the shares of common stock was unregistered and the shares are subject to a
one-year lockup.

In
addition, the Company issued a convertible promissory note (the "Note") to HIA with a principal amount of $3,500,000. The Note bears interest at a rate of 9% per annum, compounding
annually from the date of the Note until the principal amount is paid in full. The principal amount of the Note and all accrued interest are payable in full on September 30, 2010. The
outstanding unpaid principal amount of the Note is convertible at the option of HIA into unregistered shares of the Company's common stock at a conversion price of $5.50 per share.

The
Company may require HIA to convert all or any portion of the outstanding unpaid principal of the Note into the Company's common stock at a conversion price of $5.50 per share if the
closing bid price of the Company's common stock for at least 45 consecutive trading days equals or exceeds $8.00 per share. Any accrued but unpaid interest on the Note at the time of any conversion
will be paid, at the Company's option, either in cash or in additional shares of the Company's common stock at a conversion price of $5.50 per share.

The
Note grants HIA the right to require the Company to redeem a portion of the unpaid and outstanding principal of the Note if the Company engages in an offering of its equity
securities, the primary purpose of which is to raise capital. HIA may also, at its option, declare the Note payable in full upon the occurrence of a Change of Control (as defined in the Note) of
InfoLogix Systems Corporation. The Note also contains customary events of default that would allow HIA to accelerate the amounts payable under the Note, including any default on the Company's senior
debt. The Note is subject to a subordination agreement with the Company's senior lender.

The
Company and HIA entered into an Earn-out Agreement pursuant to which HIA is eligible to earn additional consideration in respect of the two years (each year, an "Earn Out
Period") after the closing of the transaction. HIA can earn up to $2,000,000 in the first Earn Out Period and up to $2,500,000 in the second Earn Out Period upon satisfaction of certain financial
milestones described in the Earn Out Agreement. To the extent HIA exceeds the defined milestones, it may earn additional consideration equal to 25% of such excess. The additional cash consideration
will not be accounted for by the Company until such time as the consideration, if any, is earned pursuant to the terms of the Earn Out Agreement. At the point the consideration is earned, the Company
will record the cash paid as an adjustment to the purchase price.

66

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE PACQUISITION OF ASSETS OF HEALTHCARE INFORMATICS ASSOCIATES, INC. (Continued)

The
purchase price was allocated to the assets acquired and liabilities based on their fair values on the date of acquisition, as follows:

Assets acquired, excluding cash:Accounts receivable

$
2,667,123Computer equipment


44,242Goodwill


5,495,707Customer relationships


2,751,000Trademarks/trade names


1,400,000Non-compete agreement


98,000Total assets acquired


12,456,072Liabilities assumed:Current liabilities


826,050Net assets acquired

$
11,630,022


The
following unaudited pro forma financial information was prepared in accordance with SFAS 141 and assumes the acquisition had occurred at the beginning of the
periods presented. The unaudited pro forma information is provided for informational purposes only. These pro forma results are based upon the respective historical financial statements of the
respective companies, and do not incorporate, nor do they assume, any benefits from cost savings or synergies of operations of the combined company. The pro forma results of operations do not
necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of the periods presented or the results that may occur in the future. The pro forma adjustments
principally reflect the preliminary allocation of the purchase price to the difference between the fair value and book value of property and equipment, resulting in increases or decreases to
historical depreciation expense, and the allocation to identifiable intangible assets discussed above, resulting in increased amortization expense. In addition the pro forma adjustments also reflect
the additional debt issued in connection with the acquisition resulting in increased interest expense.

Year Ended
December 31,2007

2006In thousands, expect
per share informationRevenue

$
85,996

$
71,680Net (loss)

$
(2,732
)
$
(838
)(Loss) per share:Basic

$
(0.11
)
$
(0.06
)Diluted

$
(0.11
)
$
(0.06
)


NOTE QEQUITY

On November 29, 2006, concurrent with the merger discussed in Note A, the Company closed a private placement of 8,500,000 shares of its common stock
to accredited investors. The shares were sold for an aggregate purchase price of $17,000,000, before costs associated with the private placement of $2,020,825. The private placement was exempt from
registration under the Securities Act of 1933 as amended (Securities Act), and Regulation D promulgated thereunder.

67

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE QEQUITY (Continued)

In
connection with the private placement, the Company entered into a registration rights agreement with investors in the private placement, and certain consultants and advisors to the
Company whereby it agreed, to the extent permissible, to file within 90 days after the closing of the private placement a shelf registration statement with the U.S. Securities and Exchange
Commission (SEC) covering the resale of (i) all shares of common stock issued in connection with the private placement and certain other transactions, and (ii) the shares of common stock
underlying the warrants issued to certain consultants and advisors. The Company was obligated to maintain the effectiveness of the registration statement from its effective date through and until the
first anniversary of the closing of the private placement, unless all securities registered under the registration statement have been sold or are otherwise able to be sold pursuant to
Rule 144(k) of the Securities Act. The Company also agreed to use its best efforts to have the registration statement declared effective by the SEC as soon as possible following filing.
However, there are no specific penalty provisions in connection with the registration rights agreement and therefore the investors in the private placement are not entitled to receive any extra
benefit if the registration does not occur. The Company filed the registration statement on November 21, 2007.

NOTE RSTOCK BASED COMPENSATION EXPENSE

In November 2006, the board of directors of New Age Translation approved the 2006 Equity Compensation Plan (Plan). In accordance with the plan, the board of
directors may grant options to purchase shares of the Company's common stock to employees, officers, consultants and non-employee directors. The Plan provides for the issuance of options
to purchase up to 3,860,000 shares of the Company's common stock. On November 29, 2006, the Company granted 617,000 incentive stock options to purchase common stock to employees at $2.00 per
share. In addition, on November 29, 2006, the Company granted 1,495,000 nonqualified stock options to purchase the Company's common stock to executive officers, directors and a consultant of
the Company at $2.00 per share. The incentive stock options and the nonqualified stock options expire November 29, 2016.

The
Plan also provides that employees, consultants and non-employee directors are eligible to receive nonqualified stock options, while only employees are eligible to receive
incentive stock options. The incentive stock options offer employees certain tax advantages that are not available under nonqualified stock options. The board of directors, or a committee thereof
whose members are appointed by the Board, administers the Plan, and has discretion in setting the terms of options granted to employees, consultants and non-employee directors.

Upon
the closing of the Merger and the private placement as discussed in Notes A and Q, the Company granted 2,650,000 warrants to purchase shares of the Company's common stock at
$2.00 per share to certain officers, directors and consultants to the Company. The warrants vest 100% on the grant date and are exercisable 25% on the first anniversary and the remainder ratably on a
monthly basis over the following three years.

Under
SFAS 123(R), the Company estimated the fair value of stock options and warrants granted using the Black-Scholes valuation model and straight-line amortization.
This model utilizes the estimated fair value of common stock and requires that, at the date of grant, we use the expected term of the option, the expected volatility of the price of our common stock,
risk free interest rates and expected dividend yield of our common stock. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which
is generally the vesting period. Employee options typically vest with respect to 25% of the shares one year after the options' grant date and the remainder ratably on an annual basis over the
following three years. Director options typically vest with respect to 50% of the shares six

68

---



INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE RSTOCK BASED COMPENSATION EXPENSE (Continued)

months
after the options' grant date and the remainder ratably on a monthly basis over the following three years. Fully vested warrants that become exercisable ratably on a monthly basis over the
following four years were granted to employees and non-employee consultants. These fully vested warrants were fully expensed as of December 31, 2006.

The
fair value of options granted were estimated at the date of grant using the following assumptions:

|                                        |  | November 29, 2006 |           | November 6, 2007 |   | December 18, 2007 |  
|--------------------------------------- |  | ----------------- | --------- | ---------------- | - | ----------------- | -
|Employee and Non-employee Stock Options |  |                   |           |                  |   |                   |  
|Expected life in years                  |  |                   | 5.00      |                  |   | 5.00              |  
|Risk-free interest rate                 |  |                   | 4.41      | %                |   | 3.99              | %
|Volatility                              |  |                   | 66.63     | %                |   | 57.87             | %
|Dividend yield                          |  |                   | 0.00      | %                |   | 0.00              | %
|Fair value of grants                    |  | $                 | 1.47      |                  | $ | 1.37              |  
|Number of Shares                        |  |                   | 2,112,000 |                  |   | 185,000           |  

The
expected term represents the period that stock-based awards are expected to be outstanding, giving consideration to the contractual terms of the stock-based awards, vesting schedules
and expectations of future employee behavior as influenced by changes to the terms of our stock-based awards. The simplified method of determining the expected term was elected as permitted by SEC
Staff Accounting Bulletin 107. The computation of expected volatility is based on the historical volatility of comparable companies from a representative peer group selected based on industry and
market capitalization data. As required by SFAS 123(R), management estimates expected forfeitures and is recognizing compensation costs only for those equity awards expected to vest.

For
the years ended December 31, 2007 and 2006 the recognized compensation cost for stock options and warrants granted to employees was approximately $828,000 and $2,253,000
respectively. At December 31, 2007, and, 2006 the total compensation cost related to stock options granted under SFAS 123(R) to employees and directors but not yet recognized was
approximately $2,661,000 and $2,642,000, net of estimated forfeitures, respectively. This cost will be amortized on a straight-line basis over the vesting period, which is typically four
years. For the years ended December 31, 2007 and 2006 the recognized compensation cost for warrants issued to consultants was $0 and $520,013 respectively. In addition, the Company has recorded
a total income tax benefit for 2007 and 2006 of approximately $1,418,000 and $1,337,000 related to the granting of the nonqualified options and warrants. See Note M for additional information.

|         |                                  | Shares |           | Weighted
Average
Exercise Price |   | Weighted Average
Remaining
Life (years) |  | Aggregate
Intrinsic Value
|-------- | -------------------------------- | ------ | --------- | ------------------------------- | - | --------------------------------------- |  | -------------------------
|Options: |                                  |        |           |                                 |   |                                         |  |                          
|         | Outstanding at January 1, 2006   |        | 2,112,000 |                                 | $ | 2.0000                                  |  | 9.92                     
|         | Granted                          |        | 635,000   |                                 |   | 2.7290                                  |  |                          
|         | Forfeited                        |        | (36,500   | )                               |   | 2.0000                                  |  |                          
|         | Expired                          |        |          |                                 |   |                                        |  |                          
|         | Exercised                        |        |          |                                 |   |                                        |  |                          
|         |                                  |        |           |                                 |   |                                         |  |                          
|         | Outstanding at December 31, 2007 |        | 2,710,500 |                                 | $ | 2.2627                                  |  | 9.27                     
|         |                                  |        |           |                                 |   |                                         |  |                          
|         | Exercisable at December 31, 2007 |        | 732,480   |                                 | $ | 2.0000                                  |  | 8.92                     
|         |                                  |        |           |                                 |   |                                         |  |                          

The
intrinsic value of stock options is the amount by which the market price of the stock on a given date, such as at the end of the period or on the day of exercise,
exceeded the market price of stock on the date of grant.

69

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INFOLOGIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE TSELECTED CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED)

|2007 Quarter Ended                  |  | Dec 31, |            | Sep 30, |   | Jun 30,    |   | Mar 31, |           
|----------------------------------- |  | ------- | ---------- | ------- | - | ---------- | - | ------- | ----------
|Revenues                            |  | $       | 23,332,012 |         | $ | 20,455,143 |   | $       | 21,812,252
|Gross profit                        |  |         | 6,266,951  |         |   | 5,462,500  |   |         | 5,654,414 
|Net (loss)                          |  |         | (1,255,646 | )       |   | (465,991   | ) |         | (367,365  
|Basic net (loss) per share          |  | $       | (0.05      | )       | $ | (0.02      | ) | $       | (0.02     
|Diluted net (loss) per share        |  | $       | (0.05      | )       | $ | (0.02      | ) | $       | (0.02     
|Weighted average shares outstanding |  |         | 24,902     |         |   | 24,152     |   |         | 24,040    
|Weighted average shares outstanding |  |         | 24,902     |         |   | 24,152     |   |         | 24,040    

Note:
Net loss per share for year December 31, 2007 is $0.13; a calculation of each individual quarter results in the sum equal to a net loss per share of $0.14 due to rounding differences.

|2006 Quarter Ended                  |  | Dec 31, |            | Sep 30, |   | Jun 30,    |  | Mar 31,
|----------------------------------- |  | ------- | ---------- | ------- | - | ---------- |  | -------
|Revenues                            |  | $       | 16,741,133 |         | $ | 16,252,048 |  | $      
|Gross profit                        |  |         | 3,748,676  |         |   | 4,238,620  |  |        
|Net (loss) income                   |  |         | (2,529,712 | )       |   | 169,675    |  |        
|Basic net (loss) income per share   |  | $       | (0.15      | )       | $ | 0.01       |  | $      
|Diluted net (loss) income per share |  | $       | (0.15      | )       | $ | 0.01       |  | $      
|Weighted average shares outstanding |  |         | 16,480     |         |   | 12,500     |  |        
|Weighted average shares outstanding |  |         | 16,480     |         |   | 12,500     |  |        

Note:
Net loss per share for year December 31, 2006 is $0.14; a calculation of each individual quarter results in the sum equal to a net loss per share of $0.10, as the result of rounding
differences.

NOTE URECLASSIFICATIONS

The Company reclassified shipping and handling revenue as originally reported for the fiscal years ended December 31, 2006 and December 31, 2005 in
the amount of $1.3 million and $0.9 million, respectively. Prior to the reclassification, shipping and handling revenue had been netted with freight expense in the selling, general and
administration expense section of the Consolidated Statements of Operations. These amounts were reclassified to sales revenue and the matching shipping costs were reclassified to cost of sales.

The
following table summarizes the changes to originally reported amounts and subtotals in the 2006 and 2005 Consolidated Statements of Operations:

|                                                               |                                                                                           | As Originally
Reported
2006 |        | As
Reclassified
2006 |   | As Originally
Reported
2005 |        | As
Reclassified
2005
|-------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------- | ------ | -------------------- | - | --------------------------- | ------ | --------------------
|
|Revenues                                                       |                                                                                           | $                           | 60,786 |                      | $ | 62,113                      |        | $                   
|Cost of sales                                                  |                                                                                           |                             | 45,837 |                      |   | 47,163                      |        |                     
|                                                               |                                                                                           |                             |        |                      |   |                             |        |                     
|                                                               | Gross profit (not reclassified for presentation only)                                     |                             |        | 14,950               |   |                             | 14,950 |                     
|Selling, general and administrative expenses                   |                                                                                           |                             | 17,898 |                      |   | 17,898                      |        |                     
|                                                               |                                                                                           |                             |        |                      |   |                             |        |                     
|                                                               | Income (loss) from operations (not reclassified, for presentation only)                   |                             |        | (2,948               | ) |                             | (2,948 | )                   
|Interest expense net (not reclassified, for presentation only) |                                                                                           |                             | 609    |                      |   | 609                         |        |                     
|                                                               | Income (loss) before provision for income taxes (not reclassified, for presentation only) |                             | $      | (3,557               | ) | $                           | (3,557 | )                   

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Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A.    Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is
accumulated and communicated to our Company's management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and
procedures.

Our
Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were (a) designed to ensure that the information we are required to
disclose in its reports under the Exchange Act is recorded, processed and reported in an accurate manner and on a timely basis and the information that the Company is required to disclose in its
Exchange Act reports is accumulated and communicated to management to permit timely decisions with respect to required disclosure, and (b) operating in an effective manner.

Management's Report on Internal Control Over Financial Reporting

Management of InfoLogix, Inc. (the "Company") is responsible for establishing and maintaining adequate internal control over financial reporting. As
required by SEC Rule 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2007. As defined in the rules of the Securities and Exchange
Commission, internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of
Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external
purposes in accordance with U.S. generally accepted accounting principles.

Our
internal control over financial reporting includes those policies and procedures that:



Because
of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and
presentation and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are

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subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In
connection with the preparation of our annual consolidated financial statements, management has conducted an assessment of the effectiveness of our internal control over financial
reporting based on the framework set forth inInternal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO). Management's assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those
controls. Based on this evaluation, we have concluded that, as of December 31, 2007, our internal control over financial reporting was effective to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

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

Item 9B.    Other Information

None.

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PART III

Item 10.    Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated by reference to, and will be contained in, our definitive proxy statement, which we anticipate will be filed
no later than April 29, 2008, and thus we have omitted this information in accordance with General Instruction G(3) to Form 10-K.

Item 11.    Executive Compensation

The information required by this item is incorporated by reference to, and will be contained in our definitive proxy statement, which we anticipate will be filed
no later than April 29, 2008, and thus we have omitted this information in accordance with General Instruction G(3) to Form 10-K.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated by reference to, and will be contained in, our definitive proxy statement, which we anticipate will be filed
no later than April 29, 2008, and thus we have omitted this information in accordance with General Instruction G(3) to Form 10-K.

Item 13.    Certain Relationships, Related Transactions, and Director Independence

The information required by this item is incorporated by reference to, and will be contained in, our definitive proxy statement, which we anticipate will be filed
no later than April 29, 2008, and thus we have omitted this information in accordance with General Instruction G(3) to Form 10-K.

Item 14.    Principal Accountant Fees and Services

The information required by this item is incorporated by reference to, and will be contained in, our definitive proxy statement, which we anticipate will be filed
no later than April 29, 2008, and thus we have omitted this information in accordance with General Instruction G(3) to Form 10-K.

PART IV

Item 15.    Exhibits and Financial Statement Schedules

(a)   Financial Statements and Schedules

The following financial statements and schedules listed below are included in this Form 10-K.

Consolidated
Financial Statements (See Item 8 in Part II of this report)

Reports
of Independent Registered Public Accounting Firms

Consolidated
Balance Sheets as of December 31, 2007 and 2006

Consolidated
Statements of Operations for the Years Ended December 31, 2007, 2006 and 2005

Consolidated
Statements of Stockholders' Equity for the Years Ended December 31, 2007, 2006, and 2005

Consolidated
Statements of Cash Flows for the Years Ended December 31, 2007, 2006, and 2005

Notes
to Consolidated Financial Statements

Financial
Statement Schedules

Schedule IIValuation
and Qualifying Account

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INFOLOGIX, INC.    SCHEDULE IIVALUATION AND QUALIFYING ACCOUNT

Allowance for
Doubtful
Receivables and
Sales Returns

Reserve for Excess
and Obsolete
InventoryBalance at December 31, 2005

$
100,000

$
75,000Charges to operations


20,000


123,965Deductions


0


0Balance at December 31, 2006


120,000


198,965Charges to operations


99,960


285,978Acquired in asset purchase


198,097Deductions


(8,790
)

Balance at December 31, 2007

$
409,267

$
484,943


(b) Exhibits

Exhibit No.

Description2.1

Agreement and Plan of Merger between New Age Translation, Inc., INFLX Acquisition Corp. and InfoLogix, Inc. dated as of November 29, 2006 (incorporated herein by reference to Exhibit 2.1 of our Current
Report on Form 8-K dated December 5, 2006).2.2

Asset Purchase Agreement by and among InfoLogix, Inc., InfoLogix Systems Corporation, Healthcare Informatics Associates, Inc. and the stockholders of HIA dated as of September 30, 2007 (incorporated herein by reference to
Exhibit 2.1 of our Current Report on Form 8-K filed October 4, 2007).3.1

Certificate of Incorporation of New Age Translation, Inc. (incorporated herein by reference to Exhibit 3.1 of our Current Report on Form 8-K dated November 28, 2006).3.2

Certificate of Amendment of New Age Translation, Inc. changing corporate name to InfoLogix, Inc (incorporated herein by reference to Exhibit 3.2 of our Current Report on Form 8-K dated December 5, 2006).3.3

By-laws of New Age Translation, Inc. (incorporated herein by reference to Exhibit 3.2 of our Current Report on Form 8-K dated November 28, 2006).4.1

Warrant dated as of November 29, 2006 between InfoLogix, Inc. and Warren V. Musser (incorporated herein by reference to Exhibit 4.1 of our Current Report on Form 8-K dated December 5, 2006).4.2

Warrant dated as of November 29, 2006 between InfoLogix, Inc. and Michael M. Carter (incorporated herein by reference to Exhibit 4.2 of our Current Report on Form 8-K dated December 5, 2006).4.3

Warrant dated as of November 29, 2006 between InfoLogix, Inc. and Karen Keating Mara (incorporated herein by reference to Exhibit 4.3 of our Current Report on Form 8-K dated December 5, 2006).4.4

Warrant dated as of November 29, 2006 between InfoLogix, Inc. and David T. Gulian (incorporated herein by reference to Exhibit 4.3 of our Current Report on Form 8-K dated December 5, 2006).


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4.5

Warrant dated as of November 29, 2006 between InfoLogix, Inc. and Richard D. Hodge (incorporated herein by reference to Exhibit 4.5 of our Current Report on Form 8-K dated December 5, 2006).4.6

Warrant dated as of November 29, 2006 between InfoLogix, Inc. and Craig A. Wilensky (incorporated herein by reference to Exhibit 4.6 of our Current Report on Form 8-K dated December 5, 2006).4.7

Warrant dated as of November 29, 2006 between InfoLogix, Inc. and Fairmount Partners LP (incorporated herein by reference to Exhibit 4.7 of our Current Report on Form 8-K dated December 5, 2006).10.1

Registration Rights Agreement dated as of November 29, 2006 by and among InfoLogix, Inc. and the investors set forth on the signature pages thereto (incorporated herein by reference to Exhibit 10.1 of our Current Report on
Form 8-K dated December 5, 2006).10.2

Employment Agreement dated as of July 17, 2006 by and between David T. Gulian and InfoLogix, Inc. (incorporated herein by reference to Exhibit 10.2 of our Current Report on Form 8-K dated December 5, 2006).10.3

Employment Agreement dated as of September 18, 2006 by and between John A. Roberts and InfoLogix, Inc. (incorporated herein by reference to Exhibit 10.3 of our Current Report on Form 8-K dated December 5, 2006).10.4

Employment Agreement dated as of July 17, 2006 by and between Richard D. Hodge and InfoLogix, Inc. (incorporated herein by reference to Exhibit 10.4 of our Current Report on Form 8-K dated December 5, 2006).10.5

Employment Agreement dated as of July 17, 2006 by and between Craig A. Wilensky and InfoLogix, Inc. (incorporated herein by reference to Exhibit 10.5 of our Current Report on Form 8-K dated December 5, 2006).10.6

Employment Agreement dated as of November 29, 2007 by and between Eric N. Rubino and InfoLogix, Inc.*10.7

New Age Translation, Inc. 2006 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.1 of our Current Report on Form 8-K dated November 28, 2006).10.8

Consulting Agreement effective as of July 17, 2006 by and between Corrugated Service Corp. d/b/a Amtech and InfoLogix, Inc (incorporated herein by reference to Exhibit 10.7 of our Current Report on Form 8-K dated December 5,
2006).10.9

Services Agreement effective as of July 17, 2006 by and between Futura Services, Inc. and InfoLogix, Inc (incorporated herein by reference to Exhibit 10.8 of our Current Report on Form 8-K dated December 5, 2006).10.10

Amendment dated October 9, 2006 to Services Agreement dated as of July 17, 2006 by and between Futura Services, Inc. and InfoLogix, Inc (incorporated herein by reference to Exhibit 10.9 of our Current Report on Form 8-K dated
December 5, 2006).10.11

Second Amendment dated as of August 20, 2007 to the Services Agreement, dated as of July 17, 2006, as amended on October 9, 2006, by and between Futura Services, Inc. and InfoLogix, Inc. (incorporated herein by reference to
Exhibit 10.1 of our Current Report on Form 8-K filed August 23, 2007).


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10.12

Advisory Agreement dated as of July 17, 2006 by and between Warren V. Musser and InfoLogix, Inc (incorporated herein by reference to Exhibit 10.10 of our Current Report on Form 8-K dated December 5, 2006).10.13

Form of Lock-up Agreement between the former stockholders of InfoLogix, Inc. and InfoLogix, Inc (incorporated herein by reference to Exhibit 10.11 of our Current Report on Form 8-K dated December 5, 2006).10.14

Loan and Security Agreement between InfoLogix Inc., OPT Acquistion LLC, Embedded Technologies, LLC and Sovereign Bank dated March 16, 2006 (incorporated herein by reference to Exhibit 10.12 of our Current Report on
Form 8-K dated December 5, 2006).10.15

First Amendment to Loan and Security Agreement between InfoLogix Inc., OPT Acquisition LLC, Embedded Technologies, LLC and Sovereign Bank (incorporated herein by reference to Exhibit 10.13 of our Current Report on Form 8-K
dated December 5, 2006).10.16

Second Amendment to Loan and Security Agreement between InfoLogix Inc., OPT Acquisition LLC, Embedded Technologies, LLC and Sovereign Bank (incorporated herein by reference to Exhibit 10.14 of our Current Report on Form 8-K
dated December 5, 2006).10.17

Securities Pledge Agreement between New Age Translation, Inc. and Sovereign Bank (incorporated herein by reference to Exhibit 10.15 of our Current Report on Form 8-K dated December 5, 2006).10.18

Surety Agreement between New Age Translation, Inc. and Sovereign Bank (incorporated herein by reference to Exhibit 10.16 of our Current Report on Form 8-K dated December 5, 2006).10.19

Third Amendment to Loan and Security Agreement between InfoLogix Inc., OPT Acquisition LLC, Embedded Technologies, LLC and Sovereign Bank. (incorporated herein by reference to Exhibit 10.17 on our Annual Report on Form 10-K
for the fiscal year ended December 31, 2006).10.20

Fourth Amendment and Modification to Loan and Security Agreement by and among InfoLogix Systems Corporation, Opt Acquisition LLC, Embedded Technologies, LLC and Sovereign Bank dated as of September 30, 2007.(incorporated herein by
reference to Exhibit 10.5 of our Form 10-Q filed November 14, 2007).10.21

Fifth Amendment and Modification to Loan and Security Agreement by and among InfoLogix Systems Corporation, Opt Acquisition LLC, Embedded Technologies, LLC and Sovereign Bank dated as of March 26, 2008.*10.22

Securities Pledge Agreement between InfoLogix Systems Corporation and Sovereign Bank (incorporated herein by reference to Exhibit 10.18 on our Annual Report on Form 10-K for the fiscal year ended December 31, 2006).10.23

Employment Agreement by and between InfoLogix Systems Corporation and Gerry Bartley dated as of September 30, 2007 (incorporated herein by reference to Exhibit 10.1 of our Current Report on Form 8-K filed October 4,
2007).10.25

Earn Out Agreement by and between InfoLogix Systems Corporation and Healthcare Informatics Associates, Inc. dated as of September 30, 2007 (incorporated herein by reference to Exhibit 10.2 of our Current Report on Form 8-K filed
October 4, 2007).


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10.26

Promissory Note executed in favor of Healthcare Informatics Associates, Inc. by InfoLogix Systems Corporation dated as of September 30, 2007 (incorporated herein by reference to Exhibit 10.3 of our Current Report on Form 8-K filed
October 4, 2007).21

Direct and Indirect Subsidiaries of the Registrant.*23.1

Consent of McGladrey & Pullen LLP, Independent Registered Public Accounting Firm.*23.2

Consent of Asher & Company Ltd., Independent Registered Public Accounting Firm.*31.1

Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2

Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2

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


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SIGNATURES

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned; thereunto duly authorized, in Hatboro, Pennsylvania on March 28, 2008.

| | INFOLOGIX, INC.
| | ---------------
| | By:            

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities indicated on March 28, 2008.

|Signatures                              |  | Title(s)                                                                     
|--------------------------------------- |  | -----------------------------------------------------------------------------
|                                        |  |                                                                              
|/s/WARREN V. MUSSERWarren V. Musser     |  | Chairman of the Board of Directors                                           
|/s/DAVID T. GULIANDavid T. Gulian       |  | President, Chief Executive Officer and Director (Principal Executive Officer)
|/s/JOHN A. ROBERTSJohn A. Roberts       |  | Chief Financial Officer (Principal Financial and Accounting Officer)         
|/s/WAYNE D. HOCHWayne D. Hoch           |  | Director                                                                     
|/s/RICHARD D. HODGERichard D. Hodge     |  | Director                                                                     
|/s/THOMAS C. LYNCHThomas C. Lynch       |  | Director                                                                     
|/s/THOMAS O. MILLERThomas O. Miller     |  | Director                                                                     
|/s/JAKE STEINFELDJake Steinfeld         |  | Director                                                                     
|/s/CRAIG A. WILENSKYCraig A. Wilensky   |  | Director                                                                     
|/s/RICHARD A. VERMEILRichard A. Vermeil |  | Director                                                                     

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