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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-K

[ x ] Annual Report Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934 For the fiscal year ended December 31,
2007

Commission File Number0-26065

BANYAN CORPORATION(Exact
name of registrant as specified in its charter)

|Oregon                                                            | 84-1346327         
|----------------------------------------------------------------- | -------------------
|(State or other jurisdiction of                                   | (IRS Employer      
|Incorporation or organization)                                    | Identification No.)
|                                                                  |                    
|                                                                  |                    
|9025 Wilshire Blvd., Penthouse Suite 500, Beverly
      Hills, CA | 90211              
|(Address of Principal Executive offices)                          | (Zip Code)         

Registrant's telephone number, including area code: (800)
808-0899

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

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value

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

Indicate by check mark whether the registrant is not required to
  file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ x ] No
  [ ]

Indicate by check mark whether the registrant (1) filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
  1934 during the past 12 months (or for such shorter period that the registrant
  was required to file such reports), and (2) has been subject to such filing
  requirements for the past 90 days. Yes [ x ] No [ ]

Indicate by check mark if disclosure of delinquent filers in response
  to Item 405 of Regulation S-K (§229.405 of this Chapter) is not contained
  herein, and will not be contained, to the best of Registrant's knowledge, in
  definitive proxy or information statements incorporated by reference in Part
  III of this Form 10-K or any amendment to this Form 10-K. Yes [ ] No [x]

Indicate by check mark if 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. 
  Check one: Large accelerated filer [ ] Accelerated filer [ ] Smaller reporting
  company [x]

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

State the aggregate market value of the voting and non-voting common
  equity held by non-affiliates by reference to the price at which the common
  equity was last sold, or the average bid and asked price of such common equity,
  as of the last business day of the registrants most recently completed
  second fiscal quarter: $11,865,689 as of June 30, 2007.

Number of shares outstanding of issuers Common Stock, no par
  value outstanding as of April 2, 2008: 333,716,484

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List hereunder the following documents if incorporated by reference
  and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document
  is incorporated: (1) Any annual report to security holders; (2) Any proxy or
  information statement; and (3) Any prospectus filed pursuant to Rule 414(b)
  or (c) under the Securities Act of 1933. The listed documents should be clearly
  described for identification purposes (e.g., annual report to security holders
  for fiscal year ended December 24, 1980). None.

TABLE OF CONTENTS
  (Omits inapplicable items)

PART IItem 1.
      Business
      3Item 2.
      Property
      6Item 3.
      Legal Proceedings
      6PART IIItem 5.
      Market for Common Equity and Related Stockholder
        Matters
      7Item 7.
      Managements Discussion and Analysis
        of Financial Condition and Results of Operations
      9Item 8.
      Financial Statements and Schedules
      11Item 9A.
      Controls and Procedures
      12PART IIIItem 10.
      Directors and Executive Officers; Corporate
        Governance
      13Item 11.
      Executive Compensation
      15Item 12.
      Security Ownership of Certain Beneficial
        Owners and Management and Related Stockholder Matters
      17Item 13.
      Certain Relationships and Related Transactions
        and Director Independence
      17Item 14.
      Principal Accountant Fees and Services
      20.
      PART IVItem 15.
      Exhibits and Financial Statement Schedules
      21


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We want to provide you with more
meaningful and useful information. This Annual Report on Form 10-K contains
certain "forward-looking statements". These statements reflect our current
expectations regarding our possible future results of operations, performance
and achievements. These forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.

Wherever possible, we have tried
  to identify these forward-looking statements by words such as anticipate,
  believe, estimate, expect, plan,
  intend and similar expressions. These statements reflect our current
  beliefs and are based on information currently available to us. Accordingly,
  these statements are subject to certain risks, uncertainties, and contingencies,
  which could cause our actual results, performance, or achievements to differ
  materially from those expressed in, or implied by, such statements. These risks,
  uncertainties and contingencies include, without limitation, the factors set
  forth under Item 7. Managements Discussion and Analysis of Financial
  Condition and Results of Operations.

PART I

Item 1. Business.

We are a holding company focused
on investing in and building a network of subsidiaries engaged in diagnostic
testing, the franchising and licensing of Chiropractic USA branded chiropractic
clinics, providing practice development training and assistance to
chiropractors, and offering franchise support and related services to our
franchisees and licensees. We were incorporated in Oregon in 1978.We
currently have twenty full time employees,including two in management,
fifteen in diagnostic testing, two in franchise sales and support operations,
and one in administration.

Premier Medical Group.
Premier Medical Group is our diagnostic testing business, offering Nerve
Conduction Velocity (NCV) testing to patients through health care
professionals such as doctors and chiropractors, including our chiropractic
franchisees. NCV testing measures the transmission of nerve impulses through the
body, identifies problems in the nervous system, and helps to substantiate the
benefit and cost of treatment to patients and their insurers.

Premier Medical Group sets up blocks
  of patient testing appointments and then arranges for one of its certified neurological
  technicians to bring test equipment to the doctors’ offices and perform
  the scheduled tests. The business, which is based in Boca Raton, Florida, has
  fifteen employees servicing an estimated 300 active customers. Premier Medical
  Group performed approximately 6,235 tests in 2007. The number of tests declined
  approximately 20% in 2007. The decline was primarily attributable to changes
  in coverage and reimbursement policies for NCV testing. We expect that the number
  of tests will decline in 2008 as a result of a restructuring of Premier designed
  to make it profitable. See – *Management’s Discussion and Analysis
  of Financial Condition and Results of Operations*.

A significant advance in our NCV
  testing business occurred in February 2006, when we purchased substantially
  all of the outstanding equity securities of the constituent entities of Premier
  Medical Group’s testing business, Premier Medical Group, Inc., Premier
  Imaging, LLC and Premier Health Services, LLC from Dr. Brad Goldstein (“Dr.
  Goldstein”) their founder, owner and operator. As a result of the acquisition,
  all of the assets and liabilities of the business have been transferred to us.
  See *Certain Relationships and Related Transactions and Director Independence
  – Premier Acquisition*. The source of funds for the acquisition was
  the securities purchase agreement described herein in *Certain Relationships
  and Related Transactions and Director Independence – Securities Purchase
  Agreements – 2006 Securities Purchase Agreement*.

Virtual Medical Systems.Virtual Medical Systems is our subsidiary that manufactures and markets the
VT3000, a nerve testing system originally developed by Premier Health Services.
The Food and Drug Administration granted marketing approval for the VT3000 on
October 27, 2005. We manufacture the system through a third party, Scientific
Imaging Inc., located in Atlanta, Georgia, under a supply contract, and market
it to physicians and chiropractors through a three person sales force that is
part of Premier Medical Group. In 2007 we sold 32 systems in addition to the 60
systems we sold in 2006. We do not maintain an inventory of systems.

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The VT3000 is a point-of-service
solution for the diagnosis of neuropathies, which are diseases of the peripheral
nerves and parts of the spine, as well as nerve irritation and other damage to
the nervous system of a patient. With the VT3000 doctors and chiropractors can
conveniently perform a comprehensive series of nerve tests, including NCV tests
and F-wave/H-reflex tests, while the patient is in the office, and have results
from the tests within twenty-four hours. The VT3000 allows optional live viewing
and physician interaction at a remote location by video feed through its digital
camera, Internet connectivity and on-line chat features. This permits real time,
on demand supervision and analysis of the tests by a board certified
neurologist, physiatrist or other qualified physician and nationally registered
technicians as needed. We believe that the VT3000 and adoption of our new
protocol should result in accurate diagnoses, improved testing efficiency,
increased testing, and greater revenue and profitability for our customers.

Competition and Regulation in
Nerve Testing. It is estimated that approximately two million nerve
conduction studies are performed on patients annually in the United States. This
includes traditional nerve conduction studies such as electromyography (EMG)
performed by neurologists and a relatively small number of point-of-service
tests performed by primary care physicians, such as those we offer. The number
of nerve conduction studies could increase with the development of more
economical and convenient point-of-service test protocols such as ours.

We expect to encounter
substantial competition from an automated testing system developed by
Neurometrix, Inc. that has reportedly been used on more than 1,000,000 patients
during the past few years and is currently used by more than 5,500 active
customers. Neurometrix reported $44 million in revenue for fiscal 2007. We also
expect to encounter indirect competition with manufacturers of traditional
testing systems who typically market their equipment to neurologists, including
Viasys Healthcare Inc., Cadwell Laboratories, Inc., and Xltec, Inc. Other
companies not presently in the market may decide to enter our market.

All of the companies mentioned
have extensive experience in the design, development, manufacture and marketing
of nerve conduction study systems and possess financial, technological and human
resources far greater than ours. In consideration of this and of barriers to
entry into the market created by government regulation and the medical
communitys preference for established systems, these companies have a
competitive advantage over us.

In addition, there are a large
number of mobile diagnostic testing companies that are in direct competition
with Premier Medical Group.

The FDA regulates the
development, testing, manufacture and marketing of medical devices, including
nerve-testing equipment. Under FDA regulations, medical device manufacturers are
required to register with the FDA and to adhere to certain good manufacturing
practices and good laboratory practices, which prescribe recordkeeping
procedures and provide for the unscheduled inspection of facilities.
Manufacturers of new medical devices must comply with FDA pre-marketing testing,
analysis and approval requirements. Proof of safety and effectiveness in the
form of extensive clinical data must be submitted to and pre-market approval
granted by the FDA prior to general marketing. A new pre-market approval
application or supplement may be required if the device is modified or for
changes to its labeling, intended use or manufacturing process.

We anticipate that revenue in
the nerve-testing segment will depend on reimbursement of the cost incurred by
patients by third party payers to the doctors. Third party payers include
private insurance companies, managed care organizations, and government programs
such as Medicare and Medicaid. Their coverage and reimbursement policies will
affect our ability to sell our products and services. From time to time third
party payers limit and restrict NCV testing. Third party payers may deny
reimbursement should they determine that NCV testing is not medically necessary
or appropriate, or that our system is unacceptable. Managed care organizations
often require pre-approval of patient testing. Reimbursement is based on an
authorization code that is submitted to insurers; these codes may be changed to
adversely affect us. There can be no assurance that our NCV testing will
continue to be reimbursed by third party payers.

Proposed changes by the American
  Medical Association that may be effective in 2009 would limit or eliminate reimbursement
  from government programs by eliminating any specified reimbursement values for
  NCV testing on the physician reimbursement schedule. This might also have a
  material adverse effect on reimbursement by other third party payers that use
  the reimbursement values as a reference.

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Chiropractic USA. There
are approximately 80,000 chiropractors in the United States and Canada.
Approximately 2,000 new graduates enter the field each year. An estimated
20,000,000 Americans are expected to visit a chiropractor each year, and
expenses for the treatment of lower back pain are expected to exceed
approximately $50 billion. The aging of the population, continued population
growth, advanced chiropractic treatments, increased health care, and greater
health consciousness are trends that assure the chiropractic industry a future
of expanding services. Despite the size and potential of the chiropractic
market, there had been no national brand.

Management believes these
factors have created a unique and significant business opportunity: to establish
the first national brand in the burgeoning chiropractic market and to provide
ancillary services to chiropractors. Chiropractic USA was formed to develop
Chiropractic USA brand chiropractic clinics throughout North America under the
Chiropractic USA trademark and uniform operating systems and practices.

We have embarked on two main
development strategies: offering licenses that permit the use of our brand and
provide practice development and training assistance to chiropractors and direct
marketing of franchises.

We have begun to offer licenses
to chiropractors as an alternative to franchises since the fourth quarter of
2007. Under our license agreement, an established practice, new practice or
recently graduated chiropractor, for a monthly fee, acquires the right to use
the Chiropractic USA brand under our guidelines and receives practice
development and training assistance for less than the cost of a franchise. As of
the date hereof, we have entered into license agreements with nineteen
chiropractors. Effective March 10, 2008, we entered into an agreement with
Chiropractic Coaching, Inc., a corporation owned and controlled by one of our
area developers, to market our licenses and provide practice and development
training and assistance on a turnkey basis to licensees. Under the agreement, we
retain a percentage of our licensing revenue and Chiropractic Coaching the
majority of it.

We developed our network of
franchised clinics through conversion of established practices to franchised
Chiropractic USA brand clinic locations and franchising new practitioners.
Established practices that convert receive a corporate identity  logos,
banners, name recognition, marketing capability, a uniform operating and
business format, practice development services, and other services available
through us. These conversions established a basis for our operations and enabled
us to build up our brand. We have also been marketing to new practitioners and
recently graduated chiropractic students. As additional services to new
practitioners, we offer site selection consultation, lease negotiation, practice
design and other services.

We have franchise agreements
covering fifty-five locations. Our franchise agreements provide for payment of
percentage royalties, contribution to an advertising fund, and charges for
additional services selected by the franchisee. Some franchise agreements cover
more than one location.

The present number of franchised
locations reflects a decrease of approximately fifty percent. This was the
result of the conclusion of our contract under which Team WLP and C.J. Mertz
endorsed our franchise and had franchise support and training responsibilities
to our franchisees. We depended on the endorsement of Team WLP for overall
franchise expansion. At the conclusion of our business relationship on July 31,
2006, we lost the endorsement. We successfully reconstituted our franchise
support. On October 2, 2006, we entered into a new three-year contract to employ
a new company owned by one of our area developers, to oversee CUSAs marketing
and operations, and to develop, implement and conduct CUSAs training. Although
we have successfully recruited six new franchisees, our revenue from franchise
operations has declined substantially from its peak. We have encountered reduced
royalty collections from the failure of certain franchisees to honor their
franchise agreements. In 2007 we received litigation settlements from two former
franchisees and we are in legal proceedings to collect royalties with three
former franchisees.

In the middle of 2003, we
completed development of our uniform franchise offering materials and began the
rollout of our franchising program through direct marketing to existing
practitioners and chiropractic students.

-5-

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In order to continue marketing franchises under the rules of
the Federal Trade Commission rules, it will be necessary for us to revise and
update our franchise offering related materials. We have not begun this revision
and do not have any timetable for completion.

We recruit area developers to
  increase the number of franchises and licenses within an exclusive territory.
  An area developer receives a portion of the percentage royalty we collect from
  the territory or, if the area developer is also a franchisee, an offset equal
  to their portion against their franchise fees. Since 2004, we have entered into
  fourteen area representative agreements covering twenty-four states. Eight of
  these area developers have recruited one or more active franchisees or licensees.

Item 1A. Risk Factors.

Not applicable.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Property.

We have a trademark registered
with the United States Patent and Trademark Office for the Chiropractic USA
logo.

We sublease our executive offices
  in Beverly Hills for a monthly rental of $100 plus expenses.

We sublease additional executive
offices in Calgary, Alberta for a monthly rental of $4,160 under a lease
expiring April 30, 2011.

For Premier Medical Group and Virtual
  Medical Systems, we lease 3,000 square feet in Boca Raton, Florida at a monthly
  cost of $7,200 under a lease expiring June 30, 2008.

Item 3. Legal Proceedings.

On September 23, 2005, the Supreme
  Court of Alabama reversed dismissal of a case originally filed against us on
  January 8, 2004, in Mobile County, Alabama, by a former employee of a former
  subsidiary, Bruce Leithead. The complaint seeks money damages for breach of
  an alleged employment contract to issue 4,000 shares of common stock to the
  employee on termination and for his inability to exercise 4,000 options. We
  deny any liability and continue to vigorously defend this suit.

On August 4, 2006, the District
Court for the City and County of Denver, Colorado re-entered judgment in favor
of four note holders and against us for $275,000 plus interest at 22% accruing
from and after October 15, 2005. The judgment had previously been vacated. In
addition, on December 9, 2006, the Court awarded attorneys fees and costs in
the aggregate amount of $89,127. On January 26, 2007, this case was dismissed
pursuant to that certain settlement agreement dated January 10, 2007 described
herein (the Settlement Agreement).

On December 5, 2005, Lloyd
Parrish, a former director, and his wife, Carol Parrish, filed suit in the
District Court for El Paso County, Colorado. The complaint sought money damages
for failure to pay in full certain promissory notes in the aggregate principal
amount of $86,588, plus accrued interest and costs, including attorney fees. On
January 22, 2007, this case was also dismissed pursuant to the Settlement
Agreement.

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Pursuant to the Settlement
Agreement, we paid $250,000 to the four note holders, the Parrishes and their
counsel collectively, and agreed to pay $160,000 to them in equal monthly
installments of $10,000 beginning on the first business day of July 2007 and the
first business day of each subsequent month until paid in full. In the event we
default on payment of these installments, we signed a confession of judgment in
favor of said counsel for $350,000 less the installments we pay.

On April 27, 2006, we were served
with a complaint in an action in the Superior Court of Pima County, Arizona by
State Farm Mutual Automobile Insurance Company against us and other businesses
and individuals. The complaint seeks to recover the plaintiffs alleged
over-reimbursement for allegedly false, excessive and medically inappropriate
diagnostic tests, treble damages and other damages. We do not know of any tests
that were reimbursed by State Farm to us and are vigorously defending this
suit.

We are a respondent in a proceeding
  captioned *Hand v. Chiropractic USA, Inc.* pending in the United States
  District Court for the Northern District of Texas, that has been ordered to
  arbitration. The plaintiff, a franchisee, seeks a declaratory judgment to terminate
  his franchise agreement and damages for fraud, breach of contract, failure to
  disclose franchise requirements, deceptive trade practices, exemplary damages
  and attorney’s fees. We do not know of any false or misleading statement
  to the franchisee or breach of contract. We are vigorously defending this proceeding
  and pursuing our claims against the plaintiff for breach of contract and any
  unpaid franchise fees.

We are a defendant in a proceeding
  captioned *Golden v. Chiropractic USA, Inc.* served on December 6, 2007
  pending in the Circuit Court of the Sixth Judicial District of the Sate of Florida.
  The plaintiff, a franchisee seeks unspecified damages for fraud in the inducement
  in connection with a franchise agreement. We originally instituted this action
  in arbitration against the franchisee for breach of the franchise agreement
  and any unpaid franchise fees. The proceeding was removed to the state court.
  We do not know of any false or misleading statement to the franchisee or breach
  of contract and are vigorously defending this suit. We are pursuing our claim
  against the franchisee for breach of contract and any unpaid franchise fees.

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

Not applicable

PART II

Item 5. Market for Common Equity and Related Stockholder
Matters.

Our Common Stock is traded on
  the National Association of Securities Dealers, Inc. (the NASD)
  OTC Bulletin Board under the symbol "BANY. The following are the high
  and low bid prices for each quarter within the last two fiscal years and the
  current fiscal year to date:

Year
    Quarter
    Bid PriceHigh
    Low2008
    First 
        Second (through April 7, 2008)
      $.0026
        $.0007
      $.0002
        $0.00032007
    First Second Third * Fourth
      $.4700 
        $.1400
        $.0400
        $.0074
      $.1000 
        $.0300
        $.0030
        $.00072006
      First 
        Second 
        Third 
        Fourth
      $.24
        $.28
        $.12
        $.045
      $.10
        $.04
        $.02
        $.005


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* The stock was reverse split
  one for one hundred effective September 5, 2007.

As of the date hereof, there were approximately 550 record
holders of our Common Stock. This does not reflect an estimated 1,800
shareholders that hold their shares in street name.

No dividends were declared since
December 31, 2005. We presently intend to retain our earnings to fund
development of our business. Decisions concerning dividend payments in the
future will depend on income and cash requirements. Holders of common stock are
entitled to receive such dividends as may be declared by our board of directors.
There are no contractual restrictions on our ability to pay dividends to our
shareholders.

Securities authorized for issuance under equity compensation
plans.

The following is provided with
respect to compensation plans (including individual compensation arrangements)
under which equity securities are authorized for issuance as of the fiscal year
ending December 31, 2007. The disclosure refers to options or warrants under our
2004 Human Resources Incentive Plan unless otherwise specifically stated.

Equity Compensation Plan Information

Plan category
    Number of securities to be
      issued upon exercise of outstanding
      options, warrants and rights (a)
    Weighted-average exercise price
      of outstanding options, warrants and rights
      (b)
    Number of securities remaining
      available for future issuance under equity
      compensation plans (excluding securities reflected
      in column (a) (c)Equity compensation plans approved by security
      holders
    486,000
    $1.58
    9,514,000Equity compensation plans not approved by security holders
    -0-
    N/A
    N/ATotal
    486,000
      $1.58
    9,514,000


Please refer to Item 11. Executive Compensation  Equity
Compensation Plan Informationfor additional information regarding
securities authorized for issuance under our 2004 Human Resources Incentive
Plan.

Recent Sales of Unregistered Securities

2005.We issued an
aggregate of 23,000 shares to three management and marketing consultants for
services rendered and to be rendered in 2005, valued at $22 per share. We sold
6,000 shares for $60,000 to area developers and franchisees, and we sold 50,000
shares for $5,000 to an investor. We issued an aggregate of 12,777 shares to
seven consultants for services rendered valued at $139,717, an average of $11
per share. We sold 3,400 shares for $34,000, an average of $10 per share to
three franchisees and area developers. We sold to one investor

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1,000 shares at $10 per share. In addition, we issued 3,000
shares upon the exercise of options under our 2004 Human Resources Incentive
Plan for services rendered valued at the $14 per share exercise price. We issued
24,547 shares to partially settle threatened legal proceedings. On July 13,
2005, the Company issued 10,000 shares for software development services under
software consulting agreement for which an $85,000 account payable was recorded
at June 30, 2005 and 3,500 shares for legal consulting services. On August 12,
2005, an additional 2,500 shares were given under the software consulting
agreement and an additional 5,000 shares were given for legal consulting
services to adjust for a decline in the market price of the shares. These shares
were registered under the Securities Act of 1933 on August 25, 2005. On
September 13, 2005, we issued 20,000 shares for services valued at $80,000 under
the consulting agreement. We sold an aggregate of 31,833 shares: 7,500 shares to
four consultants for services rendered valued at $23,250, an average of $3 per
share; and 24,333 shares for $49,000, an average of $2 per share to three
franchisees and an area developer. We issued 30,000 shares for legal consulting
services. The shares were registered under the Securities Act of 1933 on
December 16, 2005. We sold additional convertible notes and warrants to certain
purchasers. See Certain Relationships and Related Transactions  Securities
Purchase Agreements  2004 Securities Purchase Agreement.

2006.We
issued 22,000 shares to two investors upon conversion of $110,000 in outstanding
convertible notes. We issued 142,857 shares in connection with the business
acquisition described in Certain Relationships and Related Transactions 
Premier Acquisition and 10,000 shares as compensation to our former Chief
Operating Officer. See Management  Executive Compensation
Employment and Other Compensation-Related Agreements with Management. We
issued 12,333 shares to two investors to adjust the subscription price to
reflect a decline in market price of the shares. We issued 26,542 shares to four
individuals for services rendered valued at an aggregate of $26,543 or $1 per
share. We issued 2,500 shares to an investor for $10,000 that we received in
December 2003. In addition, we granted 1,000 options exercisable at $1 per share
to an individual pursuant to a consulting agreement for services to be rendered.
We sold additional convertible notes and warrants to certain purchasers in the
transactions described in Certain Relationships and Related Transactions 
Securities Purchase Agreements  2006-2007 Securities Purchase Agreement and
2006 Securities Purchase Agreement.

**2007.**We issued 16,500 shares to management for services rendered valued at an
  aggregate of $495,000 or $0.31 per share. See Management  Executive
  Compensation Employment and Other Compensation-Related Agreements
  with Management.We sold additional convertible notes and warrants to certain
  purchasers in the transactions described in Certain Relationships and Related
  Transactions  Securities Purchase Agreements  2006-2007 Securities
  Purchase Agreement and 2006 Securities Purchase Agreement.

Basis of exemption from
registration.We relied on the exemptions from registration afforded by
Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D of the
General Rules and Regulations thereunder for the sales of shares to investors,
the sale of the convertible notes and warrants and the issues to pay debt and
for services. We complied with the manner of sale, access to information and
investor accreditation requirements of such exemptions, except that in
connection with certain sales totaling 18,340 shares to sixteen investors for
$184,805 in cash, we do not have reasonable grounds to believe that the
investors were actually accredited. No claims are pending or have been asserted
with respect to any of these sales.

Item 6. Selected Financial Data.

Not applicable.

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

Plan of Operation for 2008

Our operating activities have not
yet generated a positive cash flow. We do not expect that they will generate a
positive cash flow by the end of 2008. Decreases in revenues are not being
offset by decreases in expenses. We will require $500,000 or more of additional
financing from external sources in 2008 in order to be able to continue in
operation as a going concern. We have not identified any sources for these
funds. There can be no assurance that we can attract financing to fulfill our
requirements.

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In the fourth quarter of 2004,
  we entered into a series of agreement that has to date provided $8,560,000 from
  the sale of convertible notes to an investment group, including $1,650,000 in
  2007. The proceeds were used to acquire our diagnostic testing business and
  as working capital for operating expenses and accounts payable. We do not expect
  this investment group to provide additional financing.

As of March 31, 2008, the investment
  group has converted to stock $1,200,000 of the notes issued in 2004, $1,740,561
  of the notes issued in 2005, and $137,647 of the notes issued in 2006. The aggregate
  outstanding principal amount of the remaining convertible notes was $6,167,448
  as of that date. We believe without assurance that the investment group will
  continue to convert the notes to stock. However, the rate of conversion has
  slowed as a result of the decrease in our stock price, to which the rate of
  conversion is tied. It is not likely that all of the remaining debt will be
  converted when the remaining convertible notes begin to come due December 31,
  2008. We intend to refinance, extend or otherwise restructure this debt before
  it becomes due. In the event we are unable to do so, we may have to file for
  protection under the federal bankruptcy laws and we may be unable to continue
  in operation as a going concern.

During the first quarter of 2006,
  we acquired all of the diagnostic testing business that is now operated as a
  wholly owned subsidiary. To date, we have paid $3,220,000 for this acquisition,
  including $2,000,000 at the closing, and $1,220,000 in deferred payments. The
  acquisition increased the number of employees by approximately 45. Revenue from
  the diagnostic testing business declined approximately six percent as a result
  of fewer tests and lower sales of our diagnostic testing device.

At the beginning of 2008, we
implemented a force reduction to one-third of former levels in the diagnostic
testing business so the business could become profitable and defray our
corporate expenses. We also restructured our payout to the doctor from whom we
acquired the business and his compensation. See Item 13. Certain
Relationships and Related Transactions and Director Independence  Premier
Acquisition.

In conjunction with the acquisition
  of the diagnostic testing business in the first quarter of 2006, we acquired
  manufacturing and marketing rights to a new diagnostic testing device that has
  FDA pre-marketing approval. Sales of the testing device have not contributed
  as expected to our revenue and profitability, and declined to $184,188 in 2007
  from $353,827 in 2006. The Company re-designed its testing protocol in response
  to changes in reimbursement procedures in an effort to regain sales.

Revenue from chiropractic franchising
  and licensing has declined approximately 30% from its peak, and in 2007 was
  25% less than in 2006. In the fourth quarter of 2007 we began to offer licenses
  to complement franchising as a revenue source. We have entered into license
  agreements for nineteen locations. We lost approximately half of our franchised
  locations at the conclusion or our arrangement with Team WLP and the loss of
  its endorsement. We have since gained six new franchised locations, and now
  have a total of fifty-five.

Effective December 31, 2004 we
disposed of former Company-owned chiropractic clinics in Louisiana. Under
deferred payment terms of a note issued by the purchaser, we received $244,000
in 2007 and $358,438 will be due in 2009.

Our plan of operation for the remainder
of fiscal 2008 is as follows:

To make an effort at establishing
positive momentum in the diagnostic testing business;

To aggressively market our new
licenses;

To revise and update our franchise
offering materials and offer franchises; and,

To obtain additional debt and equity
financing to fund our working capital deficiency.

To date our operations have not
  been self-sustaining. Our independent registered public accounting firm issued
  a report to the effect that certain conditions raise substantial doubt about
  our ability to continue as a going concern because we incurred net losses during
  2006 and had a working capital deficiency at year end. We continue to have net
  losses. Should we be unable to implement our plan of operation, our expansion
  plans may be curtailed, and we may not be able to continue in operation.

-10-

---

Financial condition at December 31, 2006 and
2007

**2007**. Stockholders
  deficit was $15,509 and we had a working capital deficiency of $99,822. Principal
  sources of liquidity in 2007 included net proceeds of $1,650,000 from the sale
  of convertible notes and $5,105,535 in revenue from operations.

**2006**. Stockholders
  equity was $793,498 and working capital deficiency was $162,759. Principal sources
  of liquidity in 2006 included the sale of $3,845,000 in convertible notes and
  $5,801,419 in revenue from operations.

Results of operations  Year Ended December 31, 2006
  and 2007

Loss from operations more than
  doubled to $1,593,882 in 2007 from $796,021 in 2006.

Revenue decreased to $5,003,690
  in 2007 from $5,490,997 in 2006. Revenue from the diagnostic testing business
  decreased $263,119 as a result of fewer tests and a decline in sales of our
  diagnostic testing system. Revenue from franchised operations decreased $184.188
  as a result of franchise terminations, and decreased collections from franchisees.

Selling, general and administrative
  expenses increased to $6,597,572 in 2007 from $6,247,018 in 2006 mainly as a
  result of an increase in expenses related to the diagnostic testing business
  and investor relations expenses incurred in 2007. Other expenses also increased,
  including an increase in management compensation from $747,304 in 2006 to $950,593
  in 2007 as a result of stock issued to management valued at $495,000.

We also incurred interest expense
of $2,267,864 mainly from the issuance of additional convertible notes and the
conversion of convertible notes. This represents an increase from $2,199,078 in
2006. Giving effect to interest expense, overall net loss increased from
$4,083,102 in 2006 to $5,483,021 in 2007.

**Results of operations  Years Ended December
  31, 2005 and 2006**

Loss from operations decreased
from $1,021,631 in 2005 to $796,021 in 2006. Revenue increased to $5,450,997 in
2006 from $1,090,790 in 2005. The diagnostic testing business produced
$4,453,181 of the increase. Revenue from franchised operations decreased to
$779,288 in 2006 from $872,262 in 2005 as a result of franchise terminations.
Selling, general and administrative expenses increased to $6,247,018 in 2006
from $2,008,466 in 2005 as a result of an increase in the number of employees
due to the acquisition of the diagnostic testing business and increased legal
and accounting fees resulting from the acquisition. Management compensation
increased from $462,000 in 2005 to 747,304 in 2006 as a result of an increase in
management fees and the addition of one new executive officer. Stock
compensation decreased from $997,211 in 2005 to $553,041in 2006. We also
incurred interest expense of $2,199,078 mainly from the conversion of
convertible notes. Giving effect to interest expense, overall net loss decreased
from $4,645,817 in 2005 to $4,083,102 in 2006.

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

Not applicable.

Item 8. Financial Statements and Supplementary Data.

-11-

---

BANYAN CORPORATIONCONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006TOGETHER WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM(Amounts expressed in US Dollars)

TABLE OF CONTENTS

|Report of Independent Registered
      Public Accounting Firm                                                 | F-1       
|------------------------------------------------------------------------------------------------------------- | ----------
|                                                                                                              |           
|Consolidated financial statements:                                                                            |           
|                                                                                                              |           
|Consolidated balance sheets as of December 31, 2007 and
      2006                                            | F-2       
|                                                                                                              |           
|Consolidated statements of operations for the years ended
      December 31, 2007 and 2006                    | F-3       
|                                                                                                              |           
|Consolidated statements of stockholdersequity (deficit)
      for the years ended December 31, 2007 and 2006 | F-4       
|                                                                                                              |           
|Consolidated statements of cash flows for the years ended
      December 31, 2007 and 2006                    | F-5 - F-6 
|                                                                                                              |           
|Notes to consolidated financial statements                                                                    | F-7 - F-24

---

|Schwartz Levitsky Feldman llp                    
|-------------------------------------------------
|C H A R T E R E D A C C O U N T A N T S          
|L I C E N S E D P U B L I C A C C O U N T A N T S
|T O R O N T O · M O N T R E A L                  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
  Banyan Corporation

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

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audit to obtain reasonable assurance about whether
  the consolidated financial statements are free of material misstatement. An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the consolidated financial statements. An audit also includes
  assessing the accounting principles used and significant estimates made by management,
  as well as evaluating the overall consolidated 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 financial position of
  Banyan Corporation as at December 31, 2007 and 2006 and the results of its operations
  and its cash flows for the years ended December 31, 2007 and 2006 in accordance
  with generally accepted accounting principles in the United States of America.

The accompanying consolidated financial statements have been
  prepared assuming the Company will continue as a going concern. As discussed
  in note 1 to the consolidated financial statements, the Company has suffered
  recurring losses from operations, and has a working capital deficiency and net
  stockholders deficit that raise substantial doubt about its ability to
  continue as a going concern. Managements plans in regard to these matters
  are also described in note 1. The consolidated financial statements do not include
  any adjustments that might result from the outcome of this uncertainty.

SCHWARTZ LEVITSKY FELDMAN LLP

|1167 Caledonia Road     
|------------------------
|Toronto, Ontario M6A 2X1
|Tel: 416 785 5353       
|Fax: 416 785 5663       

|Toronto, Ontario, Canada
      April 14, 2008 | Chartered Accountants
      Licensed Public Accountants
|--------------------------------------------- | -------------------------------------------------------

F-1

---

BANYAN CORPORATIONCONSOLIDATED BALANCE SHEETDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|                                                                            |   | 2007        |   |   | 2006        |  
|--------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                            |   |             |   |   |             |  
|ASSETS                                                                      |  
|Current assets:                                                             |   |             |   |   |             |  
|Cash and cash equivalents                                                   | $ | 52,861      |   | $ | 130,272     |  
|Accounts receivable                                                         |   | 1,795,264   |   |   | 1,897,109   |  
|Prepaid expenses (Note 15)                                                  |   | 139,027     |   |   | 124,155     |  
|Current portion of note receivable (Note
      5)                           |   | -           |   |   | 69,682      |  
|                                                                            |   |             |   |   |             |  
|Total current assets                                                        |   | 1,987,152   |   |   | 2,221,218   |  
|                                                                            |   |             |   |   |             |  
|Note receivable (Note 5)                                                    |   | 437,327     |   |   | 667,162     |  
|Property and equipment (Note 6)                                             |   | 56,600      |   |   | 88,920      |  
|Intangible Asset - customer list (Note 4)                                   |   | 163,870     |   |   | 339,167     |  
|Deferred finance fees (Note 11)                                             |   | 21,518      |   |   | 75,044      |  
|Goodwill (Note 4)                                                           |   | 1,821,495   |   |   | 1,821,495   |  
|Other assets, net                                                           |   | 14,963      |   |   | 18,764      |  
|                                                                            |   |             |   |   |             |  
|                                                                            | $ | 4,502,925   |   | $ | 5,231,770   |  
|                                                                            |   |             |   |   |             |  
|                                                                            |   |             |   |   |             |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                              |  
|Current liabilities:                                                        |   |             |   |   |             |  
|Accounts payable and accrued liabilities
      (Note 15)                    | $ | 445,161     |   | $ | 666,842     |  
|Accrued interest                                                            |   | 96,602      |   |   | 387,148     |  
|Other liabilities (Note 16)                                                 |   | 217,237     |   |   | 199,300     |  
|Debt settlement (Note 10)                                                   |   | 100,000     |   |   | 160,000     |  
|Current portion of convertible note (Note
      11)                         |   | 75,621      |   |   | -           |  
|Current portion of obligations
      under capital lease (Note 12)          |   | 11,203      |   |   | 21,690      |  
|Notes payable (Note 13)                                                     |   |             |   |   |             |  
|Related parties                                                             |   | 1,006,150   |   |   | 803,997     |  
|Others                                                                      |   | 135,000     |   |   | 145,000     |  
|                                                                            |   |             |   |   |             |  
|Total current liabilities                                                   |   | 2,086,974   |   |   | 2,383,977   |  
|                                                                            |   |             |   |   |             |  
|Convertible note (Note 11)                                                  |   | 2,396,437   |   |   | 1,997,677   |  
|Obligations under capital lease (Note 12)                                   |   | 35,023      |   |   | 56,618      |  
|                                                                            |   |             |   |   |             |  
|                                                                            |   | 4,518,434   |   |   | 4,438,272   |  
|Going concern (Note 1)                                                      |   |             |   |   |             |  
|Commitments and contingencies (Notes
      7, 8, 10, 12, 13, 15, 16 and 19) |   |             |   |  
|Related party transactions (Note 15)                                        |   |             |   |   |             |  
|                                                                            |   |             |   |   |             |  
|Stockholders' equity (deficit) (Notes 4, 11, 14, 15 and 19)                 |   |             |   |   |             |  
|Preferred stock; no par value; 1,000,000,000
      shares authorized, none  |   | -           |   |   | -           |  
|issued and outstanding                                                      |   |             |   |   |             |  
|Common stock; no par value; 40,000,000,000
      shares authorized;         |   |             |   |   |             |  
|218,140,084 (2006 - 9,359,963) shares issued
      and outstanding          |   | 17,719,684  |   |   | 15,396,737  |  
|Additional paid-in capital                                                  |   | 8,591,774   |   |   | 6,256,028   |  
|Deferred compensation costs                                                 |   | (12,000     | ) |   | (25,300     | )
|Common stock to be issued; 6,735,200 (2006
      - Nil) shares              |   | 2,021       |   |   | -           |  
|Accumulated deficit                                                         |   | (26,316,988 | ) |   | (20,833,967 | )
|                                                                            |   |             |   |   |             |  
|Total stockholders' equity (deficit)                                        |   | (15,509     | ) |   | 793,498     |  
|                                                                            |   |             |   |   |             |  
|                                                                            | $ | 4,502,925   |   | $ | 5,231,770   |  

The accompanying notes are an integral part of these consolidated
  financial statements
  F-2

---

BANYAN CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONSYEARS ENDED DECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|                                             |   | 2007         |   |   | 2006        |  
|-------------------------------------------- | - | ------------ | - | - | ----------- | -
|                                             |   |              |   |   |             |  
|Revenue from franchised clinics              | $ | 595,100      |   | $ | 779,288     |  
|Revenue from diagnostic business             |   | 4,408,590    |   |   | 4,671,709   |  
|                                             |   |              |   |   |             |  
|                                             |   | 5,003,690    |   |   | 5,450,997   |  
|                                             |   |              |   |   |             |  
|Selling, general and administrative expenses |   | 6,597,572    |   |   | 6,247,018   |  
|                                             |   |              |   |   |             |  
|Loss from operations                         |   | (1,593,882   | ) |   | (796,021    | )
|                                             |   |              |   |   |             |  
|Other expense                                |   |              |   |   |             |  
|                                             |   |              |   |   |             |  
|Management compensation                      |   | (950,593     | ) |   | (747,304    | )
|Finance charge                               |   | (240,571     | ) |   | (30,351     | )
|Amortization expense                         |   | (209,549     | ) |   | (354,456    | )
|Debt increase (Note 4)                       |   | (230,619     | ) |   | -           |  
|Loss on disposal of assets                   |   | (11,609      | ) |   | -           |  
|Interest income                              |   | 21,666       |   |   | 44,108      |  
|Interest expense:                            |   |              |   |   |             |  
|Related parties                              |   | (21,369      | ) |   | (12,647     | )
|Other                                        |   | (2,246,495   | ) |   | (2,186,431  | )
|                                             |   |              |   |   |             |  
|Net loss                                     | $ | (5,483,021   | ) | $ | (4,083,102  | )
|                                             |   |              |   |   |             |  
|Net loss per common share:                   |   |              |   |   |             |  
|                                             |   |              |   |   |             |  
|Basic and diluted                            | $ | (0.10        | ) | $ | (1.27       | )
|                                             |   |              |   |   |             |  
|Weighted average number of common            |   |              |   |   |             |  
|shares- outstanding - basic and diluted      |   | * 53,060,939 |   |   | * 3,203,914 |  

* After giving retroactive effect to a 100 for 1 reverse stock
  split on September 4, 2007

The accompanying notes are an integral part of these consolidated
  financial statements
  F-3

---

BANYAN CORPORATIONCONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)YEARS ENDED DECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|                                                 |  |              |   |   |            |   |   |                 |  |   |              |   |   | Common      |   |   |             |   |   |                  |  
|------------------------------------------------ |  | ------------ | - | - | ---------- | - | - | --------------- |  | - | ------------ | - | - | ----------- | - | - | ----------- | - | - | ---------------- | -
|                                                 |  |              |   |   |            |   |   |                 |  |   |              |   |   | stock       |   |   |             |   |   | Stock-           |  
|                                                 |  | Common stock |   |   | Additional |   |   | Deferred        |  |   | to be        |   |   | Accumulated |   |   | holders'    |  
|                                                 |  | Shares       |   |   | Amount     |   |   | paid-in capital |  |   | compensation |   |   | issued      |   |   | deficit     |   |   | equity (deficit) |  
|                                                 |  | *            |   |   |            |   |   |                 |  |   |              |   |   |             |   |   |             |   |   |                  |  
|Balances at January 1, 2006                      |  | 1,598,723    |   | $ | 13,729,553 |   | $ | 2,346,028       |  | $ | (108,479     | ) | $ | 82,250      |   | $ | (16,750,865 | ) | $ | (701,513         | )
|Issuance of common stock for services            |  |              |   |   |            |   |   |                 |  |   |              |   |   |             |   |   |             |   |   |                  |  
|(Note 14)                                        |  | 492,587      |   |   | 272,983    |   |   |                 |  |   |              |   |   |             |   |   |             |   |   | 272,983          |  
|Stock compensation plans (Note 14)               |  |              |   |   | 346,980    |   |   |                 |  |   | (25,300      | ) |   |             |   |   |             |   |   | 321,680          |  
|Issuance of common stock for acquisition         |  |              |   |   |            |   |   |                 |  |   |              |   |   |             |   |   |             |   |   |                  |  
|of Premier Medical (Notes 4 and 14)              |  | 142,857      |   |   | 142,857    |   |   |                 |  |   |              |   |   |             |   |   |             |   |   | 142,857          |  
|Conversion of convertible notes (net of finance  |  |              |   |   |            |   |   |                 |  |   |              |   |   |             |   |   |             |   |   |                  |  
|fees of $10,257) (Notes 11 and 14)               |  | 6,672,174    |   |   | 715,035    |   |   |                 |  |   |              |   |   |             |   |   |             |   |   | 715,035          |  
|Stock subscribed issued during the year          |  | 32,834       |   |   | 82,250     |   |   |                 |  |   |              |   |   | (82,250     | ) |   |             |   |   | -                |  
|Exercise of options for services (Note 14)       |  | 130,000      |   |   | 78,000     |   |   |                 |  |   |              |   |   |             |   |   |             |   |   | 78,000           |  
|Exercise of warrants for cash (Note 14)          |  | 290,788      |   |   | 29,079     |   |   |                 |  |   |              |   |   |             |   |   |             |   |   | 29,079           |  
|Amortization of deferred compensation            |  |              |   |   |            |   |   |                 |  |   | 108,479      |   |   |             |   |   |             |   |   | 108,479          |  
|Beneficial conversion (Note 11)                  |  |              |   |   |            |   |   | 3,494,226       |  |   |              |   |   |             |   |   |             |   |   | 3,494,226        |  
|Warrants issued with convertible notes (Note 11) |  |              |   |   |            |   |   | 415,774         |  |   |              |   |   |             |   |   |             |   |   | 415,774          |  
|Net loss                                         |  |              |   |   |            |   |   |                 |  |   |              |   |   |             |   |   | (4,083,102  | ) |   | (4,083,102       | )
|Balances at December 31, 2006                    |  | 9,359,963    |   |   | 15,396,737 |   |   | 6,256,028       |  |   | (25,300      | ) |   | -           |   |   | (20,833,967 | ) |   | 793,498          |  
|Issuance of common stock for services            |  |              |   |   |            |   |   |                 |  |   |              |   |   |             |   |   |             |   |   |                  |  
|(Note 14)                                        |  | 116,616,667  |   |   | 1,032,500  |   |   |                 |  |   |              |   |   |             |   |   |             |   |   | 1,032,500        |  
|Stock compensation plans (Note 14)               |  |              |   |   | -          |   |   |                 |  |   | 13,300       |   |   |             |   |   |             |   |   | 13,300           |  
|Conversion of convertible notes (net of finance  |  |              |   |   |            |   |   |                 |  |   |              |   |   |             |   |   |             |   |   |                  |  
|fees of $14,163) (Notes 11
      and 14)         |  | 98,898,654   |   |   | 1,292,468  |   |   |                 |  |   |              |   |   |             |   |   |             |   |   | 1,292,468        |  
|Stock to be issued                               |  | (6,735,200   | ) |   | (2,021     | ) |   |                 |  |   |              |   |   | 2,021       |   |   |             |   |   | -                |  
|Beneficial conversion (Note 11)                  |  |              |   |   |            |   |   | 2,264,911       |  |   |              |   |   |             |   |   |             |   |   | 2,264,911        |  
|Warrants issued with convertible notes (Note 11) |  |              |   |   |            |   |   | 70,835          |  |   |              |   |   |             |   |   |             |   |   | 70,835           |  
|Net loss                                         |  |              |   |   |            |   |   |                 |  |   |              |   |   |             |   |   | (5,483,021  | ) |   | (5,483,021       | )
|Balances at December 31, 2007                    |  | 218,140,084  |   | $ | 17,719,684 |   | $ | 8,591,774       |  | $ | (12,000      | ) | $ | 2,021       |   | $ | (26,316,988 | ) | $ | (15,509          | )

* After giving retroactive effect to a 100 for 1 reverse stock
  split on September 4, 2007

The accompanying notes are an integral part of these consolidated
  financial statements
  F-4

---

BANYAN CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|                                                                    |   | 2007       |   |   | 2006       |  
|------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                                    |   |            |   |   |            |  
|Cash flows from operating activities                                |   |            |   |   |            |  
|Net loss                                                            | $ | (5,483,021 | ) | $ | (4,083,102 | )
|Adjustments to reconcile net loss to net cash                       |   |            |   |   |            |  
|used in operating activities:                                       |   |            |   |   |            |  
|Stock and options issued for services                               |   | 993,348    |   |   | 564,762    |  
|Amortization of deferred compensation                               |   | 13,300     |   |   | 108,479    |  
|Amortization of assets                                              |   | 270,022    |   |   | 491,194    |  
|Loss on disposal of assets                                          |   | 11,609     |   |   | -          |  
|Amortization of beneficial conversion                               |   | 1,894,502  |   |   | 1,578,642  |  
|Foreign exchange on note payable                                    |   | 28,360     |   |   | 3,910      |  
|Increase on note payable                                            |   | 318,793    |   |   | -          |  
|Changes in assets and liabilities from
      continuing operations: |   |            |   |   |            |  
|Accounts receivable                                                 |   | 101,845    |   |   | 366,021    |  
|Prepaid expense                                                     |   | (14,872    | ) |   | (65,766    | )
|Other assets                                                        |   | (1,466     | ) |   | -          |  
|Accounts payable, accrued expenses
      and debt settlement        |   | 57,119     |   |   | 199,178    |  
|                                                                    |   |            |   |   |            |  
|Net cash used in operating activities                               |   | (1,810,461 | ) |   | (836,682   | )
|                                                                    |   |            |   |   |            |  
|Cash flows from investing activities:                               |   |            |   |   |            |  
|Proceeds on note receivable                                         |   | 278,407    |   |   | 62,680     |  
|Business acquisition (Note 4)                                       |   | -          |   |   | (1,818,832 | )
|Purchase of property and equipment                                  |   | (25,764    | ) |   | (1,082     | )
|Acquisition of other assets                                         |   | -          |   |   | (9,600     | )
|                                                                    |   |            |   |   |            |  
|Net cash provided (used) in investing activities                    |   | 252,643    |   |   | (1,766,834 | )
|                                                                    |   |            |   |   |            |  
|Cash flows from financing activities                                |   |            |   |   |            |  
|Net procceds from notes payable, related parties                    |   | (140,000   | ) |   | 57,009     |  
|Proceeds from convertible notes                                     |   | 1,650,000  |   |   | 3,845,000  |  
|Payments on long term debt and notes payable                        |   | (29,593    | ) |   | (1,199,506 | )
|Proceeds from issuance of common stock
      and exercise           |   |            |   |   |            |  
|of options and warrants                                             |   | -          |   |   | 29,079     |  
|                                                                    |   |            |   |   |            |  
|Net cash provided by financing activities                           |   | 1,480,407  |   |   | 2,731,582  |  
|                                                                    |   |            |   |   |            |  
|Net (decrease) increase in cash and cash equivalents                |   | (77,411    | ) |   | 128,066    |  
|                                                                    |   |            |   |   |            |  
|Cash and cash equivalents, beginning of year                        |   | 130,272    |   |   | 2,206      |  
|                                                                    |   |            |   |   |            |  
|Cash and cash equivalents, end of year                              | $ | 52,861     |   | $ | 130,272    |  

(continued)

The accompanying notes are an integral part of these consolidated
  financial statements
  F-5

---

BANYAN CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS (continued)YEARS ENDED DECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|                                                              |   | 2007      |   |   | 2006      |  
|------------------------------------------------------------- | - | --------- | - | - | --------- | -
|Supplemental disclosures of cash flow information:            |   |           |   |   |           |  
|                                                              |   |           |   |   |           |  
|Cash paid for interest                                        | $ | 10,582    |   | $ | 12,735    |  
|                                                              |   |           |   |   |           |  
|Supplemental disclosure of net proceeds
      from            |   |           |   |   |           |  
|long term debt:                                               |   |           |   |   |           |  
|                                                              |   |           |   |   |           |  
|Convertible note                                              |   |           |   |   |           |  
|Convertible note, issued                                      | $ | 1,650,000 |   | $ | 3,910,000 |  
|Finance fees capitalized                                      |   | -         |   |   | (65,000   | )
|                                                              |   |           |   |   |           |  
|                                                              | $ | 1,650,000 |   | $ | 3,845,000 |  
|                                                              |   |           |   |   |           |  
|Supplemental disclosure of non-cash investing and             |   |           |   |   |           |  
|financing activities:                                         |   |           |   |   |           |  
|                                                              |   |           |   |   |           |  
|Obligation under capital leases                               |   |           |   |   |           |  
|Capital leases                                                | $ | -         |   | $ | 99,654    |  
|Property and equipment acquired                               |   | -         |   |   | (80,654   | )
|Prepaid expense included in obligation                        |   | -         |   |   | (19,000   | )
|                                                              |   |           |   |   |           |  
|                                                              | $ | -         |   | $ | -         |  
|                                                              |   |           |   |   |           |  
|Property and equipment transferred in lieu of payment         |   |           |   |   |           |  
|of note payable and reduction
      of obligation under       |   |           |   |   |           |  
|capital leases                                                | $ | 12,489    |   | $ | 75,300    |  
|                                                              |   |           |   |   |           |  
|Supplemental disclosure of changes in accounts                |   |           |   |   |           |  
|payable, accrued expenses
      and debt settlement:          |   |           |   |   |           |  
|                                                              |   |           |   |   |           |  
|Change in accounts payable, accrued expenses
      and debt   |   |           |   |   |           |  
|settlement per balance sheet                                  | $ | (554,290  | ) | $ | 164,671   |  
|Non-cash items affecting accounts payable,
      accrued      |   |           |   |   |           |  
|expenses and debt settlement:                                 |   |           |   |   |           |  
|Notes payable transferred
      to settlement of debt         |   | -         |   |   | (33,840   | )
|Business acquisition                                          |   | -         |   |   | (116,529  | )
|Shares issued in
      lieu of payment of accounts payable    |   | 39,152    |   |   | 68,513    |  
|Interest on convertible notes converted
      into shares and |   |           |   |   |           |  
|convertible
      notes                                       |   | 572,257   |   |   | 116,363   |  
|                                                              |   |           |   |   |           |  
|                                                              | $ | 57,119    |   | $ | 199,178   |  

The accompanying notes are an integral part of these consolidated
  financial statements
  F-6

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|1. | Organization, principles of consolidation, restatement,
        going concern, results of operations and managements plans: Organization
        and principles of consolidation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Banyan Corporation (the Company), an Oregon
        corporation, was incorporated on June 13, 1978. The Company operates in
        two segments of the health care industry: diagnostic imaging and provide
        practice development and training assistance to chiropractors and direct
        marketing of franchises of our brand Chiropractic USA and offering licenses
        that permit the use of our brand. All clinics are operated by independent
        entrepreneurs under the terms of franchise arrangements (franchisees)
        or license agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The consolidated financial statements include the accounts
        of Banyan Corporation, its wholly-owned subsidiaries, Diagnostic USA,
        Inc., Banyan Financial Services, Inc., Franchise Support Network, Inc.,
        Premier Medical Group, Inc., Atlas Medical Group, Century Neurological,
        Inc., Comprehensive Medical, Neurological Medical Associates of N.J, LLC,
        Neurological Consultants, LLC, Neurological Services, Inc., Optimal Medical
        Group, LLC, Premier Health Services, LLC, Premier Imaging, LLC, Premier
        Professional Services, LLC, Providers Medical Group, LLC, Prism Diagnostics,
        Inc., West Center Medical Group, Inc., Premier SD, LLC and Virtual Medical
        Systems, LLC, its majority-owned (99%) subsidiaries Premier Integra Services,
        LLC and Premier National, LLC and its majority-owned (90%) subsidiary,
        Chiropractic USA, Inc. (CUSA) and the accounts of Southern
        Diagnostics, Inc. in accordance with guidelines established under Emerging
        Issue Task Force 97-2 Application of FASB Statement No. 94 and APB
        Opinion 16 to Physician Practice Management Entities and Certain Other
        Entities with Contractual Management Arrangements.The Company meets
        all six of the requirements for a controlling financial interest that
        results in the consolidation of Southern Diagnostics, Inc. All significant
        intercompany accounts and transactions have been eliminated in consolidation.
        Banyan Financial Services, Inc., Franchise Support Network Inc. and Diagnostic
        USA, Inc. have not commenced operations. Losses attributable to the minority
        interest in Chiropractic USA, Inc. have been consolidated into the Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Going concern, results of operations and managements
        plans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company has incurred operating losses for several
        years. These losses have caused the Company to operate with limited liquidity
        and have created an accumulated deficit and working capital deficiencies
        of $26,316,988 and $99,822, respectively, as at December 31, 2007. These
        conditions raise substantial doubt about the Companys ability to
        continue as a going concern. Managements plans to address these
        concerns include the conversion of outstanding debt to equity, additional
        equity financing, sales of franchises, and increasing collections of receivables
        from franchisees, developing the diagnostic imaging business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The accompanying financial statements do not include
        any adjustments relating to the recoverability and classification of assets
        or the amounts of liabilities that might be necessary should the Company
        be unsuccessful in implementing these plans, or otherwise be unable to
        continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2. | Summary of significant accounting policies:
      Use of estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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 accounting estimates used in the Companys financial
        statements include accounts receivable and allowance for doubtful accounts,
        valuations of intangible assets and goodwill, valuation of beneficial
        conversion on convertible note, valuations of options and warrants, and
        the valuation allowance on the deferred tax assets. Actual results could
        differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-7

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2006 AND 2005(Expressed in US Dollars)

|2. | Summary of significant accounting policies (continued):
|-- | -------------------------------------------------------

Cash and cash equivalents:

The Company considers all highly liquid
  investments with an original maturity of three months or less to be cash equivalents.

Property and equipment:

Property and equipment are recorded at
  cost, less accumulated amortization. Expenditures for major betterments and
  improvements that extend the lives of the assets are capitalized, while repairs
  and maintenance that do not improve or extend the lives of the assets are charged
  to expense currently. Amortization is provided principally on accelerated methods
  over the estimated useful lives of the assets which are as follows:

Office furniture and fixtures
      5 to 7 yearsComputer software
      3 yearsComputer and testing equipment
      5 to 7 yearsTransportation equipment
      5 yearsOther
      5 years


Goodwill

Goodwill, arising from the acquisition
  of Premier Medical Group, Inc., represents the purchase price in excess of the
  fair value of assets acquired. The Company follows the Statement of Financial
  and Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible
  Assetsto record goodwill. SFAS No. 142 requires that these assets be reviewed
  for impairment at least annually, or whenever there is an indication of impairment.
  The Company performed a goodwill impairment test in the fourth quarter of 2007
  and determined that there was no goodwill impairment as of that testing date.
  A goodwill impairment test will be performed annually in the fourth quarter
  or upon significant changes in the Companys business environment.

Revenue recognition:

Fees from franchised clinics include
  initial franchise fees and continuing franchise and marketing fees. Initial
  fees are recognized as revenue on the opening of a clinic when the Company has
  performed substantially all initial services required by the franchise arrangement.
  Continuing fees for franchise and marketing are recognized as revenue based
  on a percentage of cash collected.

Revenue from diagnostic imaging services
  is calculated on an overall percentage of what can be expected to be collected
  from all outstanding gross billings based on the last five years of billing
  history. Gross billings are discounted principally due to the fact that levels
  of coverage by the insurance companies for patients vary from policy to policy
  and from insurance company to insurance company. This estimate is reviewed periodically,
  and, as adjustments become necessary, they are reported in earnings in the period
  in which they become known.

Accounts receivable:

Accounts receivable are uncollateralized
  and consist primarily of receivables from franchisees and diagnostic services.
  Management reviews accounts receivable periodically for collectibility, establishes
  an allowance for doubtful accounts and records bad debt expense when deemed
  necessary. At year end, no allowance for doubtful accounts was considered necessary.

Comprehensive income:

SFAS No. 130, Reporting Comprehensive
  Income,establishes accounting and reporting requirements for comprehensive
  income. During the years ended December 31, 2007 and 2006, there are no differences
  between comprehensive loss and net loss as reported.

F-8

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BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|2. | Summary of significant accounting policies (continued):
|-- | -------------------------------------------------------

Foreign currency translation:

Operating revenue and expenses arising
  from foreign currency transactions are translated into US dollars at exchange
  rates in effect on the date of the transactions. Monetary assets and liabilities
  are translated into US dollars at the exchange rate in effect on the date of
  the balance sheet. Gains or losses arising from the translations are included
  in earnings.

Income taxes:

The Company follows the provisions of
  SFAS No. 109, Accounting for Income Taxes. SFAS No. 109 requires an asset
  and liability based approach in accounting for income taxes.

Deferred income tax assets and liabilities
  are recorded to reflect the tax consequences on future years of temporary differences
  of revenue and expense items for financial statement and income tax purposes.
  Valuation allowances are established against assets that are not likely to be
  realized.

Intangibles and impairment of long-lived
  assets:

Intangible asset, which is comprised
  of a customer list (see Note 4), is amortized in a straight-line basis over
  ten years. Management reviews long-lived assets for impairment whenever events
  or changes in circumstances indicate that the carrying amount of an asset may
  not be recoverable. Recoverability of assets to be held and used is measured
  by a comparison of the carrying amount of an asset to future net cash flows
  expected to be generated by that asset. If such assets are considered impaired,
  the impairment to be recognized is measured by the amount by which the carrying
  amount of the assets exceeds the fair value of the assets. The Company performed
  the impairment test in the fourth quarter of 2006 and 2007 and determined that
  long-lived assets were impaired as of that testing date. As a result, the Company
  recorded an impairment loss of $135,000 for the year ended December 31, 2007
  (2006 - $250,000).

Advertising:

Advertising costs are expensed as incurred.
  For the years ended December 31, 2007 and 2006, advertising costs were approximately
  $100,000 and $150,000, respectively.

Net loss per share:

Basic net loss per share is computed
  by dividing the net loss applicable to common stockholders by the weighted-average
  number of shares of common stock outstanding for the year. Diluted net loss
  per share reflects the potential dilution that could occur if dilutive securities
  were exercised or converted into common stock or resulted in the issuance of
  common stock that shared in the earnings of the Company, unless the effect of
  such inclusion would reduce a loss or increase earnings per share. For the years
  ended December 31, 2007 and 2006, the effect of the inclusion of dilutive shares
  would have resulted in a decrease in loss per share. Accordingly, the weighted
  average shares outstanding have not been adjusted for dilutive shares.

Stock-based compensation:

The Company applies SFAS No. 123R, Shares-Based
  Payment. SFAS No. 123R requires all public and non-public companies to measure
  and recognize compensation expense for all stock-based payments for services
  received at the grant-date fair value, with the cost recognized over the vesting
  period (or the requisite service period).

Business segments:

The Company has adopted SFAS No. 131,
  Disclosures About Segments of an Enterprise and Related Information,
  which establishes reporting and disclosure standards for an enterprises
  operating segments. Operating segments are defined as components of an enterprise
  for which separate financial information is available and regularly reviewed
  by the Companys senior management. During 2007 and 2006, the Company operated
  in two business segments: franchising chiropractic clinics and diagnostic services.
  (See Note 18)

F-9

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|2. | Summary of significant accounting policies (continued):
        Recently issued accounting pronouncements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In February 2006, the FASB issued SFAS No. 155, Accounting
        for Certain Hybrid Financial Instruments - an amendment of FASB Statement
        No. 133 and 140. SFAS No. 155 resolves issues addressed in Statement
        133 Implementation Issue No. D1, Application of Statement 133 to Beneficial
        Interests in Securitized Financial Assets. SFAS No. 155 is effective
        for all financial instruments acquired or issued after the beginning of
        the first fiscal year that begins after September 15, 2006. As such, the
        Company was required to adopt these provisions at the beginning of the
        fiscal year ending December 31, 2007. SFAS No. 155 did not have an impact
        on the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In March 2006, the FASB issued SFAS No. 156, Accounting
        for Servicing of Financial Assetsan amendment of FASB Statement
        No. 140. SFAS No. 156 amends FASB Statement No. 140, Accounting
        for Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities,with respect to the accounting for separately recognized
        servicing assets and servicing liabilities. SFAS No. 156 is effective
        at the beginning of the first fiscal year that begins after September
        15, 2006. As such, the Company was required to adopt these provisions
        at the beginning of the fiscal year ending December 31, 2007. SFAS No.
        156 did not have an impact on the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In September 2006, the FASB issued SFAS No. 157, Fair
        Value Measurements.SFAS No. 157 defines fair value, establishes a
        framework for measuring fair value in generally accepted accounting principles
        (GAAP), and expands disclosures about fair value measurements.
        SFAS No. 157 is effective for financial statements issued for fiscal years
        beginning after November 15, 2007, and interim periods within those fiscal
        years. As such, the Company is required to adopt these provisions at the
        beginning of the fiscal year ending December 31, 2008. The Company is
        currently evaluating the impact of SFAS No. 157 on its financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In September 2006, the FASB issued SFAS No. 158, EmployersAccounting
        for Defined Benefit Pension and Other Postretirement Plansan amendment
        of FASB Statements No. 87, 88, 106, and 132(R).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | SFAS No. 158 improves financial reporting by requiring
        an employer to recognize the overfunded or underfunded status of a defined
        benefit postretirement plan (other than a multiemployer plan) as an asset
        or liability in its statement of financial position and to recognize changes
        in that funded status in the year in which the changes occur through comprehensive
        income. The requirement to recognize the funded status of a benefit plan
        (paragraph 4) and the disclosure requirements (paragraph 7) is effective
        for an employer with publicly traded equity securities as of the end of
        the fiscal year ending after December 15, 2006, the requirement to measure
        plan assets and benefit obligations as of the date of the employers
        fiscal year-end statement of financial position (paragraphs 5, 6, and
        9) is effective for fiscal years ending after December 15, 2008. As such,
        the Company is required to adopt the paragraphs 4 and 7 on December 31,
        2006, and the paragraph 5, 6 and 9 at the beginning of the fiscal year
        ending December 31, 2008. Management does not expect the adoption of SFAS
        No. 158 to have a significant impact on the financial position or results
        of operations of the Company.

F-10

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|2. | Summary of significant accounting policies (continued):
        Recently issued accounting pronouncements (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 No. 159 permits entities
        to choose to measure many financial instruments and certain other items
        at fair value. The objective is to improve financial reporting by providing
        entities with the opportunity to mitigate volatility in reported earnings
        caused by measuring related assets and liabilities differently without
        having to apply complex hedge accounting provisions. SFAS No. 159 is effective
        as of the beginning of an entitys first fiscal year that begins
        after November 15, 2007. As such, the Company is required to adopt these
        provisions at the beginning of the fiscal year ending December 31, 2008.
        The Company is currently evaluating the impact of SFAS No. 159 on its
        financial statements.

In December 2007, the FASB revised SFAS
  No. 141, Business Combinations.SFAS No. 141 (revised 2007) improves
  the relevance, representational faithfulness, and comparability of the information
  that a reporting entity provides in its financial reports about a business combination
  and its effects. SFAS No. 141 (revised 2007) is effective 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, an entity may not
  apply it before that date. As such, the Company is required to adopt these provisions
  during the fiscal year ending December 31, 2009. The Company is currently evaluating
  the impact of SFAS No. 141 (revised 2007) on its financial statements.

In December 2007, the FASB issued SFAS
  No. 160, Noncontrolling Interests in Consolidated Financial Statements an
  amendment of ARB No.51.SFAS No. 160 improves the relevance, comparability,
  and transparency of the financial information that a reporting entity provides
  in its consolidated financial statements by establishing accounting and reporting
  standards. SFAS No. 160 is effective for fiscal years, and interim periods within
  those fiscal years, beginning on or after December 15, 2008, earlier adoption
  is prohibited. As such, the Company is required to adopt these provisions at
  the beginning of the fiscal year ending December 31, 2009. The Company is currently
  evaluating the impact of SFAS No. 160 on its financial statements.

In March 2008, the FASB issued SFAS No.
  161, Disclosures about Derivative Instruments and Hedging Activities an
  amendment of FASB Statement No. 133.SFAS No. 161 requires enhanced disclosures
  about an entitys derivative and hedging activities and thereby improves
  the transparency of financial reporting. SFAS No. 161 is effective for fiscal
  years, and interim periods within those fiscal years, beginning after November
  15, 2008, with early application encouraged. As such, the Company is required
  to adopt these provisions at the beginning of the fiscal year ending December
  31, 2009. The Company is currently evaluating the impact of SFAS No. 161 on
  its financial statements.

|3. | Change in accounting policy:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On January 1, 2006, the Company adopted SFAS No. 123R,
        Shares-Based Payment. SFAS No. 123R requires all public and non-public
        companies to measure and recognize compensation expense for all stock-based
        payments for services received at the grant-date fair value, with the
        cost recognized over the vesting period (or the requisite service period).
        Previously, the Company didnt recognize compensation expense for
        options granted to employees at fair value.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | As permitted by SFAS No. 123R, the change in accounting
        policy has been applied prospectively. The effect of the new accounting
        policy has to increase expenses regarding options granted to employees
        by $160,000 during the year ended December 31, 2006.                                                                                                                                                                                                                                     

F-11

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|4. | Business acquisitions:
|-- | ----------------------

On February 10, 2006, the Company purchased
  substantially all of the outstanding equity securities of the constituent entities
  of a diagnostic imaging business, Premier Medical Group, Inc., Atlas Medical
  Group, Comprehensive Medical, Neurological Medical Associates of N.J, LLC, Neurological
  Consultants, LLC, Neurological Services, Inc., Optimal Medical Group, LLC, Premier
  Health Services, LLC, Premier Imaging, LLC, Premier Professional Services, LLC,
  Providers Medical Group, LLC, Prism Diagnostics, Inc., West Center Medical Group,
  Inc., Premier SD, LLC and Premier Integra Services, LLC (hereinafter collectively
  referred to as Premier) from Dr. Brad Goldstein (Dr. Goldstein)
  the founder, owner and operator of Premier. As a result of the purchase, all
  of the assets and liabilities of the business have been transferred to the Company.
  The Company completed the acquisition of Premier pursuant to a Stock Purchase
  Agreement with Dr. Goldstein. Under the agreement, the Company paid Dr. Goldstein
  $2,000,000 in cash at closing plus 142,857 shares of common stock valued at
  $142,857. The Company also agreed to pay Dr. Goldstein an additional $100,000
  and an amount equal to the pre-closing accounts receivable that are actually
  collected, estimated at $1,789,381, once Premiers cash flow permits these
  additional payments to be made. Dr. Goldstein entered a new one-year employment
  agreement with Premier effective February 10, 2006 for an annual salary of $200,000.
  In March 2007, the Company entered into an addendum to reduce the amount owed
  on the acquisition of Premier. Under the terms of the addendum, the Company
  agreed to pay a lump sum of $250,000 in April 2007. The payment was not made
  because of a shortage of working capital. The Company has renegotiated the addendum
  and restored the agreement to its original state. Accordingly, $230,619 has
  been expensed during year.

The acquisition was recorded under the
  purchase method and the results of operations of the subsidiary are included
  in the consolidated income as of the date of acquisition. The net assets purchased
  for an amount of $4,032,238, including cash of $181,168, are allocated as follows:

| | Current assets         | $ | 2,201,168 | 
| | ---------------------- | - | --------- | 
| | Property and equipment |   | 116,722   | 
| | Other assets           |   | 9,382     | 
| | Goodwill               |   | 1,821,495 | 
| |                        |   | 4,148,767 | 
| |                        |   |           | 
| | Current liabilities    |   | 116,529   | 
| |                        |   |           | 
| |                        | $ | 4,032,238 | 

Had the acquisition of Premier Medical
  Group, Inc. taken into effect on January 1, 2006, the Companys results
  for the year would have been changed to the pro forma amounts indicated below:

| |                                             |   | 2006       |  
| | ------------------------------------------- | - | ---------- | -
| | Total revenue                               | $ | 6,350,592  |  
| | Net loss                                    | $ | (4,117,434 | )
| | Basic and diluted loss per share, pro forma | $ | (0.01      | )

F-12

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|4. | Business acquisitions (continued):
|-- | ----------------------------------

In March 2005, the Company entered into
  an agreement with Nationwide Diagnostic Solutions, Inc. (Nationwide)
  to acquire all their shares. On May 27, 2005, the Companys wholly-owned
  subsidiary, Diagnostic USA, Inc. assigned its right to acquire Nationwide to
  Southern Diagnostics, Inc. (Southern) a newly formed Colorado holding
  company with no other assets, in exchange for a management agreement. Southern
  is wholly owned by the Companys chief executive and chief financial officer.
  In May 2005, Southern completed the acquisition of Nationwide for $700,000 paid
  in cash. The $700,000 represents the value of the customer list and is amortized
  over a ten-year period, which is the period of the management agreement.

| | The net book value of the customer list is as follow: |   | 2007     |   |   | 2006     |  
| | ----------------------------------------------------- | - | -------- | - | - | -------- | -
| | Customer list purchased                               | $ | 700,000  |   | $ | 700,000  |  
| | Less: accumulated amortization                        |   | (151,130 | ) |   | (110,833 | )
| | Less: impairment loss (Note 2)                        |   | (385,000 | ) |   | (250,000 | )
| |                                                       |   |          |   |   |          |  
| |                                                       | $ | 163,870  |   | $ | 339,167  |  

|   | Amortization expense for each of the five years ended
        after December 31, 2007 is expected to be $22,095.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|5. | Note receivable:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | During the year, the Company entered into a new agreement
        on its note receivable. Under the agreement, the Company received $244,000
        as a partial payment of the note. Furthermore, the borrower now has no
        obligation to make monthly payments, no interest will accrue and no royalty
        fees will be payable for the following 24 months. At the end of the 24
        months the borrower has the option to pay the remaining balance discounted
        by $100,000. In the event the balance is not paid after 24 months, then
        the discount will not apply, interest will accrue and the obligation to
        make royalty payments will commence. The resulting discount is being amortized
        over the 24 month interest free period.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|6. | Property and equipment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Property and equipment, which are stated at cost, at
        December 31, 2007 and 2006, consists of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                                |   | 2007     |   |   | 2006     |  
| | ---------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                |   |          |   |   |          |  
| | Computer software                              | $ | 13,362   |   | $ | 13,362   |  
| | Office furniture and fixtures                  |   | 23,065   |   |   | 23,065   |  
| | Computer and testing equipment                 |   | 141,332  |   |   | 115,568  |  
| | Transportation equipment                       |   | 6,164    |   |   | 6,164    |  
| | Leased assets                                  |   | 43,000   |   |   | 80,654   |  
| |                                                |   | 226,923  |   |   | 238,813  |  
| |                                                |   |          |   |   |          |  
| | Less accumulated amortization                  |   | (147,963 | ) |   | (133,762 | )
| | Less accumulated amortization on leased assets |   | (22,360  | ) |   | (16,131  | )
| |                                                | $ | 56,600   |   | $ | 88,920   |  

Amortization expenses on leased assets of $19,784 (2006 - $16,131)
  have been included in amortization expense.
  F-13

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|7. | Franchise Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | As of December 31, 2007, CUSA has entered into approximately
        forty-five franchise agreements covering forty-five locations. Franchise
        agreements are for ten-year terms. The franchise agreements provide for
        payment of percentage royalties, contribution to a national advertising
        fund, and charges for additional services selected by the franchisee.
        New practitioners pay a franchise fee in addition to these charges. Some
        franchise agreements cover more than one location.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | As of December 31, 2007, CUSA has entered into fifteen
        area developer agreements. Area developer agreements are for five-year
        terms. An area developer is responsible for developing a number of additional
        CUSA franchised locations within an exclusive territory. Area developers
        are paid a percentage of the royalties collected in the territory. An
        area developer typically enters into one or more franchise agreements.                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|8. | Lease commitments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company leases office space in Boca Raton, Florida
        and in Alberta, Canada. The leases in Florida are on a year renewal, the
        lease in Alberta expires on April 30, 2011. Total commitment as at December
        31, 2007 is approximately $206,200. The commitments in each of the next
        four fiscal years are as follows:                                                                                                                                                                                  

| | 2008 |   | 92,100  | 
| | ---- | - | ------- | 
| | 2009 |   | 48,900  | 
| | 2010 |   | 48,900  | 
| | 2011 |   | 16,300  | 
| |      | $ | 206,200 | 

|9. | Income taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company did not incur income tax expense for the
        years ended December 31, 2007 and 2006. The difference between the expected
        tax benefit computed at the federal statutory income tax rate of 34% and
        the effective tax rate for the years ended December 31, 2007 and 2006
        was due primarily to the tax effect of the change in the valuation allowance.                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company recognizes deferred tax liabilities and
        assets for the expected future tax consequences of events that have been
        recognized in the financial statements or tax returns. Under this method,
        deferred tax liabilities and assets are determined based on the difference
        between the financial statement carrying amounts and tax bases of assets
        and liabilities using enacted tax rates in effect in the years in which
        the differences are expected to reverse.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The following is a summary of the Companys deferred
        tax assets and liabilities arising from differences in financial statement
        and income tax bases for the following assets as of December 31, 2007
        and 2006:                                                                                                                                                                                                                                                                                    

| |                                        |   | 2007       |   |   | 2006       |  
| | -------------------------------------- | - | ---------- | - | - | ---------- | -
| | Net operating loss carry forward       | $ | 5,270,000  |   | $ | 5,324,400  |  
| | Deferred tax asset valuation allowance |   | (5,270,000 | ) |   | (5,324,400 | )
| |                                        | $ | -          |   | $ | -          |  

F-14

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|9. | Income taxes (continued):
|-- | -------------------------

At December 31, 2007 the Company has
  approximately $15,500,100 of unused federal net operating loss carry forwards,
  which expire from 2021 through 2027 as follows:

2021
      
      $
      1002022
      
      
      1,000,0002023
      
      
      3,400,0002024
      
      
      3,100,0002025
      
      
      3,100,0002026
      
      
      1,800,0002027
      
      
      3,100,000Total
      
      $
      15,500,100


A valuation allowance has been provided
  to reduce the deferred tax assets to zero, as realization is not likely. Of
  the total losses, $3,100,000 have not yet been assessed by the IRS. The Company
  may have tax filing obligations in Canada which is currently being evaluated.

|10. | Debt settlement:
|--- | ----------------

On July 13, 2005, the Company settled
  a dispute over certain debt instruments. The Company paid $250,000 in December
  2006 and agreed to pay $160,000 in ten equal monthly installments of $10,000
  beginning on July 2, 2007. In the event the Company defaults on payment of these
  installments, the Company signed a confession of judgment for $350,000 less
  installments paid.

|11. | Convertible note and other assets:
|--- | ----------------------------------

| |                            |   | 2007       |   |   | 2006       |  
| | -------------------------- | - | ---------- | - | - | ---------- | -
| |                            |   |            |   |   |            |  
| | Face value of note         | $ | 6,185,691  |   | $ | 5,270,067  |  
| | Less: unamortized discount |   | (3,713,633 | ) |   | (3,272,390 | )
| | Less: current portion      |   | (75,621    | ) |   | -          |  
| |                            |   |            |   |   |            |  
| |                            | $ | 2,396,437  |   |   | 1,997,677  |  

Effective December 31, 2007, the Company
  entered into a Securities Purchase Agreement (December 2007 note).
  Under this agreement, the Company agreed to convert interest payable for a total
  of $685,746 in callable secured convertible notes for three years with 2% annual
  interest payable quarterly. The notes are convertible into shares of the Companys
  common stock at the holders option. The conversion price equals to the
  lesser of $0.57 or the average of the lowest three intra-day trading prices
  during the twenty trading days prior to the conversion date discounted by 50%.
  A beneficial conversion in the amount of $685,746 has been deducted from the
  face value of the notes and is amortized over the three-year term of the notes
  as interest expense.

The Company entered into six Securities
  Purchase Agreements during the year ended December 31, 2007. Under the agreements,
  the Company agreed to sell a total of $1,650,000 in callable secured convertible
  notes due between January 19, 2010 and September 26, 2010 with 8% annual interest
  payable quarterly. The notes are convertible into shares of the Companys
  common stock at the holders option. The conversion price will be equal
  to the lesser of $0.57 and the average of the lowest three intra-day trading
  prices during the twenty trading days prior to the conversion date discounted
  by 50%. Attached to the notes, lenders received 600,000 warrants to purchase
  one share of the Companys common stock per warrant. Warrants have a seven-year
  term from the date of issuance with an exercise price of $0.10 per share.

F-15

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|11. | Convertible note and other assets (continued):
|--- | ----------------------------------------------

As a result of the advances of the amount
  $1,650,000 on account of the convertible notes, a beneficial conversion in the
  amount of $1,579,165 has been deducted from the face value of the notes and
  is amortized over the three-year term of the notes as interest expense. The
  warrants are valued at $70,835 based on the Black-Scholes option-pricing model
  with the following assumptions: Dividend yield (Nil); expected volatility ranging
  from 226% to 254%; risk free interest of 4.75%; and expected term of 7 years.

Effective December 15, 2006, the Company
  entered into a Securities Purchase Agreement (December 2006 note).
  Under this agreement, the Company agreed to sell a total of $660,000 in callable
  secured convertible notes for three years with 8% annual interest payable quarterly.
  The notes are convertible into shares of the Companys common stock at
  the holders option. The conversion price equals to the lesser of $0.57
  or the average of the lowest three intra-day trading prices during the twenty
  trading days prior to the conversion date discounted by 50%. Attached to the
  notes, lenders received 10,000,000 warrants to purchase one share of the Companys
  common stock per warrant. Warrants have a five-year term from the date of issuance
  with an exercise price of $0.001 per share.

As a result of the advances of the amount
  $660,000 on account of the convertible notes, a beneficial conversion in the
  amount of $627,666 has been deducted from the face value of the notes and is
  amortized over the three-year term of the note as interest expense. The warrants
  are valued at $32,334 based on the Black-Scholes option-pricing model with the
  following assumptions: Dividend yield (Nil); expected volatility of 244%; risk
  free interest rates of 4.5%; and expected term of 5 years. Effective November
  10, 2006, the Company entered into a Securities Purchase Agreement (November
  2006 note). Under this agreement, the Company agreed to sell a total of
  $250,000 in callable secured convertible notes for three years with 8% annual
  interest payable quarterly. The notes are convertible into shares of the Companys
  common stock at the holders option. The conversion price equals to the
  lesser of $0.57 or the average of the lowest three intra-day trading prices
  during the twenty trading days prior to the conversion date discounted by 50%.
  Attached to the notes, lenders received 2,000,000 warrants to purchase one share
  of the Companys common stock per warrant. Warrants have a seven-year term
  from the date of issuance with an exercise price of $0.009 per share.

As a result of the advances of the amount
  $250,000 on account of the convertible notes, a beneficial conversion in the
  amount of $248,016 has been deducted from the face value of the notes and is
  amortized over the three-year term of the note as interest expense. The warrants
  are valued at $1,984 based on the Black-Scholes option-pricing model with the
  following assumptions: Dividend yield (Nil); expected volatility of 181%; risk
  free interest rates of 4.5%; and expected term of 7 years. Effective February
  8, 2006, the Company entered into a Securities Purchase Agreement (February
  2006 note). Under this agreement, the Company agreed to sell a total of
  $3,000,000 in callable secured convertible notes for three years with 8% annual
  interest payable quarterly. The notes are convertible into shares of the Companys
  common stock at the holders option. The conversion price equals to the
  lesser of $0.57 or the average of the lowest three intra-day trading prices
  during the twenty trading days prior to the conversion date discounted by 50%.
  Lenders receive for each $1.00 of notes fifteen warrants to purchase one share
  of the Companys common stock. Warrants have a five-year term from the
  date of issuance with an exercise price of $0.001 per share. Warrants were issued
  as notes were sold.

F-16

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|11. | Convertible note and other assets (continued):
|--- | ----------------------------------------------

Attached to above advance, 95,000,000
  warrants were issued. These warrants include an additional 50,000,000 warrants
  in consideration for the Company receiving the November and December proceeds
  in advance. The warrants are valued at $381,456 based on the Black-Scholes option-pricing
  model with the following assumptions: Dividend yield (Nil); expected volatility
  ranging from 157% to 181%; risk free interest rates of 4.5%; and expected term
  of 5 years. Financing fees related to the advances amounted to $65,000. The
  fees were capitalized and are being amortized over the three-year term of the
  note. The notes are due from February 2009 through October 2009.

As a result of the advances of the amount
  $3,000,000 on account of the convertible notes, a beneficial conversion in the
  amount of $2,618,544 has been deducted from the face value of the notes and
  is amortized over the three-year term of the note as interest expense.

Effective November 8, 2004, the Company
  entered into a Securities Purchase Agreement (2004 note). Under
  this agreement, the Company agreed to sell a total of $3,000,000 in convertible
  notes for two years with 10% annual interest. Four months of interest was paid
  upon issuance. Interest that was not paid in advance is payable monthly. In
  any month in which the stock price is greater than $0.22, the interest for that
  month shall be zero. The notes are convertible into shares of the Companys
  common stock at the holders option. The conversion price equals to the
  lesser of $0.22 and the average of the lowest three intra-day trading prices
  during the twenty trading days prior to the conversion date discounted by 40%.
  Effective February 8, 2006, the Company agreed to increase the discount to 50%.
  During 2004, the first advance of the $1,200,000 was received, and 1,200,000
  warrants were issued, valued at $75,351 based on the Black-Scholes option-pricing
  model. Financing fees related to the first advance amounted to $182,956. The
  fees were capitalized and being amortized over the two-year term of the note.
  The note was fully converted into common shares during 2006. During 2005, the
  second and third advance of $800,000 and $1,000,000 respectively were received,
  and 1,800,000 warrants were issued, valued at $135,045 based on the Black-Scholes
  option-pricing. The second advance was fully converted into common shares during
  the year. Financing fees related to the second and the third advance amounted
  to $241,454. The fees were capitalized and are being amortized over the two-year
  term of the notes. The notes are due in December 2008.

As of December 31, 2007 and 2006, the
  net book value of the finance fees is as follow:

| |                                |   | 2007     |   |   | 2006     |  
| | ------------------------------ | - | -------- | - | - | -------- | -
| | Finance fees capitalized, net  | $ | 222,372  |   | $ | 250,637  |  
| | Less: accumulated depreciation |   | (200,854 | ) |   | (175,593 | )
| |                                | $ | 21,518   |   | $ | 75,044   |  

During the year, $1,306,631 of the 2004
  note and 2006 note was converted into 98,898,654 common shares. Unamortized
  finance fees in the amount of $14,163 were deducted from the face value of the
  notes converted. In 2006, $615,291 of the 2004 note (including interest in the
  amount of $95,785) was converted into 6,650,174 common shares. Unamortized finance
  fees in the amount of $10,257 of were deducted from the face value of the notes
  converted.

Two other convertible notes were issued
  during the year ended December 31, 2005 for a total of $110,000. The notes were
  for a term of six months and did not bear interest. The notes were converted
  into 22,000 shares in 2006.

F-17

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|12. | Obligations under capital leases:
|--- | ---------------------------------



| |                                                                     |   | 2007   |  |   | 2006    | 
| | ------------------------------------------------------------------- | - | ------ |  | - | ------- | 
| |                                                                     |   |        |  |   |         | 
| |                                                                     |   |        |  |   |         | 
| | Computer and testing equipment lease contract, of a total           |   |        |  |   |         | 
| | amount of $62,000, repayable in monthly instalments of $1,527       |   |        |  |   |         | 
| | including interest calculated at 17%, maturing
      in April 2011  | $ | 61,117 |  | $ | 79,452  | 
| | Computer and testing equipment lease contracts, of a total          |   |        |  |   |         | 
| | amount of $37,654, repayable in monthly instalments
      of $1,119 |   |        |  |   |         | 
| | including interest calculated at 7%, equipments returned during     |   |        |  |   |         | 
| | the year                                                            |   | -      |  |   | 24,243  | 
| | Total amount of future minimum lease payment                        |   | 61,117 |  |   | 103,695 | 
| | Interest included in instalments                                    |   | 14,891 |  |   | 25,387  | 
| |                                                                     |   | 46,226 |  |   | 78,308  | 
| | Current portion                                                     |   | 11,203 |  |   | 21,690  | 
| |                                                                     | $ | 35,023 |  | $ | 56,618  | 

Future minimum lease payments under the capital leases for subsequent
  years are as follows: 2008, $11,203; 2009, $13,318; 2010, $15,806; 2011, $5,899.



|13. | **Notes payable:**
|--- | ------------------



| | As of December 31, 2007 and 2006 notes payable consist
      of the following:                                                                      |   |           |  |  
| | --------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------- |  | -
| | Related Parties                                                                                                                                     |   |           |  |  
| |                                                                                                                                                     |   | 2007      |  |  
| |                                                                                                                                                     |   |           |  |  
| | Note payable, family member of the chief executive
      and chief financial officers; unsecured; interest at 10%; due January 2006,
      past due | $ | 60,000    |  | $
| |                                                                                                                                                     |   |           |  |  
| | Note payable, entity controlled by chief executive
      and chief financial officers; unsecured; interest at 7%; due January 2008                  |   | 136,436   |  |  
| |                                                                                                                                                     |   |           |  |  
| | Note payable, following the acquisition of
      Premier, payable on monthly basis per excess of monthly cash flow (see Note
      4)               |   | 809,714   |  |  
| |                                                                                                                                                     |   |           |  |  
| |                                                                                                                                                     | $ | 1,006,150 |  | $
| | Other current                                                                                                                                       |   |           |  |  
| |                                                                                                                                                     |   |           |  |  
| | Note payable; unrelated entity, unsecured;
      interest at 10%, due June 2002, past due                                                           | $ | 5,000     |  | $
| |                                                                                                                                                     |   |           |  |  
| | Note payable; unrelated party, unsecured; interest
      at 10%, due April 2005, past due                                                           |   | 40,000    |  |  
| |                                                                                                                                                     |   |           |  |  
| | Note payable; unrelated party, unsecured; interest
      at 5%, due June 2008                                                                       |   | 90,000    |  |  
| |                                                                                                                                                     |   |           |  |  
| |                                                                                                                                                     | $ | 135,000   |  | $

F-18

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|14. | Stockholdersequity (deficit):
|--- | ------------------------------

Preferred stock:

The Company has 1,000,000,000 shares
  of no par value preferred stock authorized. As of December 31, 2007, none are
  issued and outstanding.

Common stock:

On September 4, 2007, the Companys
  articles of incorporation were amended to increase its authorized capital stock
  from 5,000,000,000 to 40,000,000,000 shares of common stock. In addition, the
  Company underwent a one for one hundred reverse stock split. All shares and
  per share amounts presented herein have been adjusted retroactively to reflect
  the reverse stock split.

The Company has 40,000,000,000 shares
  of no par value common stock authorized. As of December 31, 2007, there were
  218,140,084 shares issued and outstanding. In addition, the Company had 486,000
  outstanding options, 1,409,213 outstanding warrants and 6,735,200 shares to
  be issued for conversion notice received before December 31, 2007.

Stock transactions:

During the year ended December 31, 2007,
  the Company issued 98,898,654 shares as a result of conversion of convertible
  notes (see Note 11).

During the year ended December 31, 2007,
  the Company issued 116,616,667 shares for services, valued at $1,032,500, which
  was equal to the market price on the date of the agreement.

During the year ended December 31, 2006,
  the Company issued 6,650,174 shares as a result of conversion of convertible
  notes (see Note 11).

During the year ended December 31, 2006,
  the Company issued 22,000 shares as a result of conversion of $110,000 in short
  term convertible notes.

During the year ended December 31, 2006,
  the Company issued 492,587 shares for services, valued at $272,983, which was
  equal to the market price on the date of the agreement.

During the year ended December 31, 2006,
  290,788 warrants were exercised for $29,079 cash.

In February 2006, the Company issued
  142,857 shares valued to $142,857 in connection with the acquisition of Premier
  Medical Group, Inc. (see Note 4).

In February 2006, 130,000 options were
  exercised for services valued at $78,000.

Stock Options:

On October 28, 2004 the Board of Directors
  adopted the 2004 Human Resources Incentive Plan (the "Incentive Plan") to provide
  incentive compensation to employees, directors, officers and others. The Incentive
  Plan provides for the granting of up to 10,000,000 options and shares to our
  personnel. Generally, stock options granted under the Incentive Plan are for
  a maximum term of ten years and unless otherwise provided in the specific award
  document vest and are exercisable immediately. Unless otherwise provided, the
  options expire within one year after termination of service or three months
  if termination is for cause. The Board of Directors administers the Incentive
  Plan. The Incentive Plan may be amended by the directors except where required
  by the Internal Revenue Code as to any increase in the total number of underlying
  shares and the class of persons eligible to receive options or as otherwise
  required by any applicable law or regulation.

The Incentive Plan supercedes all previous
  stock option plans and any ad hoc issuance of options. In connection with the
  adoption of the Incentive Plan, the Company converted the options issued to
  our management, area developers, franchisees, employees, consultants and one
  investor, into options subject to the Incentive Plan. The Company cancelled
  any other outstanding options.

F-19

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|14. | Stockholdersequity (deficit) (continued): Stock
        Options (continued):
|--- | -----------------------------------------------------------------------------

During the year ended December 31, 2007,
  27,667 options vested for recognition of $13,300 as compensation expense.

During the year ended December 31, 2007,
  35,450 options expired and 8,400 options were cancelled. During the year ended
  December 31, 2006, the Company granted options to purchase 444,100 shares of
  the Companys common stock at an average price of $1.70 per share. The
  Company valued these options based on the Black-Scholes pricing model, resulting
  in recognition of compensation expense of $288,790, of which $25,300 were deferred
  as the options were not vested at December 31, 2006. The Black-Scholes assumptions
  used was: Dividend yield (Nil); expected volatility ranging from 159% to 173%;
  risk free interest rates of 4.5%; and expected term ranging from 2 months to
  5 years. The weighted-average grant-date fair value of options During the year
  ended December 31, 2006, the Company re-priced 70,400 options at $1.00 per share
  to reflect a decline in the market price of the Companys common stock,
  resulting in recognition of compensation expense of $58,190.

During the year ended December 31, 2006,
  17,900 options expired, 52,700 options were cancelled and 130,000 options were
  exercised with no intrinsic value.

A summary of options activity for the
  years ended December 31, 2007 and 2006 is as follows:

| |                   |  |                 |   |   | Weighted average | 
| | ----------------- |  | --------------- | - | - | ---------------- | 
| |                   |  | Weighted shares |   |   | exercise price   | 
| |                   |  |                 |   |   |                  | 
| | January 1, 2006   |  | 286,350         |   | $ | 6.60 *           | 
| | Granted           |  | 444,100         |   | $ | 1.70             | 
| | Exercised         |  | (130,000        | ) | $ | 0.60             | 
| | Cancelled         |  | (52,700         | ) | $ | 13.80            | 
| | Expired           |  | (17,900         | ) | $ | 5.40             | 
| |                   |  |                 |   |   |                  | 
| | December 31, 2006 |  | 529,850         |   | $ | 2.00             | 
| |                   |  |                 |   |   |                  | 
| | Granted           |  | -               |   | $ | -                | 
| | Exercised         |  | -               |   | $ | -                | 
| | Cancelled         |  | (8,400          | ) | $ | 5.11             | 
| | Expired           |  | (35,450         | ) | $ | 7.17             | 
| |                   |  |                 |   |   |                  | 
| | December 31, 2007 |  | 486,000         |   | $ | 1.58             | 

| |  | After giving effect to the re-pricing of 130,000
      options granted to the chief executive officer and the president and chief
      financial officer.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

The weighted average fair value of options granted during the
  year is $- (2006 - $0.65) .

F-20

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|14. | Stockholdersequity (deficit) (continued): Stock
        Options (continued):
|--- | -----------------------------------------------------------------------------

The following table summarizes information
  about stock options outstanding at December 31, 2007.

Weighted
      
      
      Weightedaverage
      Weighted
      
      averageRange of
      Number
      remaining
      average
      Number
      exercisableexercise price
      outstanding
      contractual life
      exercise price
      exercisable
      price$0.20-4.90
      485,500
      2.86 years
      $1.56
      448,833
      $1.65$5.00-10.00
      -
      -
      $-
      -
      $-$11.00-20.00
      500
      0.33 year
      $20.00
      500
      $20.00486,000
      
      
      449,333


Warrants

A summary of warrants activity for the
  years ended December 31, 2007 and 2006 is as follows:

| |                   |  |                   |   |   | Weighted average     | 
| | ----------------- |  | ----------------- | - | - | -------------------- | 
| |                   |  | Weighted warrants |   |   | exercise
      price | 
| | January 1, 2006   |  | 30,000            |   | $ | 40.00                | 
| | Granted           |  | 1,070,000         |   | $ | 1.10                 | 
| | Exercised         |  | (290,788          | ) | $ | 0.10                 | 
| | December 31, 2006 |  | 809,212           |   | $ | 2.90                 | 
| | Granted           |  | 600,000           |   | $ | 0.10                 | 
| | December 31, 2007 |  | 1,409,212         |   | $ | 1.71                 | 

|15. | Related party transactions:
|--- | ---------------------------

As of December 31, 2007, included in
  prepaid expenses is $47,020, representing advances to the Companys chief
  executive officer, president and chief financial officer and a corporation owned
  by them.

During the year ended December 31, 2007,
  the Company issued to its chief executive officer and its president and chief
  financial officer 16,500,000 shares (8,250,000 each) to settle bonuses of $39,152
  that were included in accounts payable as at January 1, 2007 and $455,848 for
  signing personally several guaranty and pledge agreements since 2004 with respect
  to the convertible notes (see note 11). The Company entered into a management
  agreement with its chief executive officer and its president and chief financial
  officer in 2006. Under the agreement they are entitled to receive management
  fees in the amount of $240,000 each, per annum a 10% bonus on Premiers
  net cash income and were granted 300,000 options (150,000 each) exercisable
  at $2.00 per share for five years. During the year, the Company expensed $480,000
  (2006 - $480,000) in salary, $455,848 (2006 - $-) as compensation for guaranty
  and pledge and $- (2006 - $39,152) in bonus.

F-21

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|15. | Related party transactions (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company retains the law partnership of its chief
        executive officer and its president and chief financial officer, Britannia
        Law Firm, to serve as its general counsel and special Canadian counsel.
        The Company pays Britannia a monthly retainer of $15,000. During 2007
        and 2006, the Company paid approximately $180,000 each year to Britannia
        for these services.                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | As of December 31, 2006, included in accounts payable
        and accrued liabilities is $111,243, due to the Companys chief executive
        officer, president and chief financial officer and to a corporation owned
        by them. The payables do not bear interest and have no specific term of
        repayment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On February 15, 2006, the Company issued to its chief
        executive officer and its president and chief financial officer 70,000
        shares (35,000 each) as payment of $42,000 bonuses that was included in
        accounts payable as at January 1, 2006. The Company also issued 130,000
        shares to its chief executive officer and its president and chief financial
        officer (65,000 each) valued at $78,000 pursuant the exercise of their
        options for services rendered to the Company.                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|16. | Commitments and contingencies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On September 23, 2005, the Supreme Court of Alabama
        reversed dismissal of a case originally filed against the Company on January
        8, 2004, in Mobile County, Alabama, by a former employee of a former subsidiary.
        The complaint seeks money damages for breach of an alleged employment
        contract to issue 4,000 shares of common stock to the employee on termination
        and for his inability to exercise 4,000 options. The Company denies any
        liability and continues to vigorously defend this suit.                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | As of December 31, 2007 the Company owed $217,237 (2006
        - $199,300) including accrued interest at the rate of 9% per annum with
        respect to a stipulated money judgment in favor of a broker-dealer. The
        judgment was entered in Multnomah County, Oregon pursuant to a settlement
        agreement entered into in January 2001. This legal proceeding arose from
        the alleged failure to deliver a stock certificate to the broker-dealer.                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | During the years ended December 31, 2003 through 2005,
        the Company sold stock for cash. The sales were made in offerings pursuant
        to Section 4(2) of the Securities Act of 1933 and Regulation D there under.
        In connection with the sale of 18,340 shares to 16 investors for $184,805
        in cash, the Company does not have reasonable grounds to believe that
        the investors were accredited investors. The investors have not asserted
        any claims or instituted any legal proceedings with respect to the sales;
        the potential loss of $184,805 has not been recorded in the financial
        statements.                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On April 27, 2006, the Company was served with a complaint
        in an action in the Superior Court of Pima County, Arizona by a health
        insurance company. The complaint seeks to recover the plaintiffs
        alleged over-reimbursement for allegedly false, excessive and medically
        inappropriate diagnostic tests, treble damages and other damages. The
        Company does not know of any tests that were reimbursed by the insurer
        to the Company and is vigorously defending this suit.                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company is a defendant in arbitration proceedings
        pending before the American Arbitration Association. The plaintiff, a
        franchisee, seeks a declaratory judgment to terminate his franchise agreement
        and damages for fraud, breach of contract, failure to disclose franchise
        requirements and deceptive trade practices, exemplary damages and attorneys
        fees. The Company does not know of any false or misleading statement to
        the franchisee or breach of contract and is vigorously defending this
        suit and is pursuing its claim against the plaintiff for any unpaid franchise
        fees. The United States District Court for the Northern District of Texas,
        where the matter was initially pending, ordered the parties to arbitrate.

F-22

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|16. | Commitments and contingencies (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The Company is a respondent in a counterclaim in an
        arbitration proceeding served on December 6, 2007. The Company originally
        instituted this action against the franchisee for breach of the franchise
        agreement and any unpaid franchise fees. The franchisee seeks unspecified
        damages for fraud in the inducement. The Company does not know of any
        false or misleading statement to the franchisee or breach of contract
        and is vigorously defending this suit and is pursuing its claim against
        the franchisee for breach of contract and any unpaid franchise fees.                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | A franchise development consultant claims that CUSA
        owes approximately $270,000 in fees. There are no legal proceedings pending
        in connection with this dispute. The Company believes that the franchise
        development consultant breached its agreement by failing to render various
        services and failing to perform certain duties. Accordingly, the Company
        has reversed an amount payable by approximately $260,000 relating to consulting
        fees to the franchise development consultant during the year ended December
        31, 2006.                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|17. | Fair value of financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The fair value of a financial instrument is the current
        amount that would be exchanged between willing parties, other than in
        a forced liquidation. Fair value is best determined based upon quoted
        market prices. However, in many instances, there are no quoted market
        prices for the Companys various financial instruments. In cases
        where quoted market prices are not available, fair values are based on
        estimates using present value or other valuation techniques. Those techniques
        are significantly affected by the assumptions used, including the discount
        rate and estimates of future cash flows. Accordingly, the fair value estimates
        may not be realized in an immediate settlement of the instrument. Accordingly,
        the aggregate fair value amounts presented may not necessarily represent
        the underlying fair value of the Company.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The fair value of cash and cash equivalents, accounts
        receivable, accounts payable, notes payable and notes payable to related
        parties approximate their carrying amounts because of the short maturities
        of these instruments. The note receivable is recorded as its fair value.
        The fair value of the convertible note is impractical to estimate because
        of their conversion characteristics and high volatility of the Company
        stocks. Notes payable to non-related parties are impractical to approximate
        because of their past due status.                                                                                                                                                                                                                                                                                                                                          

F-23

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2007 AND 2006(Expressed in US Dollars)

|18. | Segment information:
|--- | --------------------

The Company operates in two business
  segments: franchising chiropractic clinics and diagnostic testing. The accounting
  policies of the segments are the same as those described in the summary of significant
  accounting policies (See Note 2). Both segments operate throughout the United
  States. The Company evaluates performance based on operating earnings of the
  respective business units.

As of and during the years ended December
  31, 2007 and 2006, the segment results are as follows:

| |                                       | 2007 |             
| | ------------------------------------- | ---- | ------------
| |                                       |      |             
| |                                       |      | Chiropractic
| |                                       |      | franchising 
| |                                       |      |             
| | Revenues                              | $    | 595,100     
| | Internal income (expenses)            |      | (900,000    
| | Segment operating income (loss)       |      | 119,013     
| | Total assets                          |      | 560,864     
| | Amortization of assets                |      | 21,111      
| | Non-cash stock compensation           |      | 47,050      
| | Interest expense                      |      | 4,667       
| | Amortization of beneficial conversion |      | -           

| |                                       | 2006
| | ------------------------------------- | ----
| |                                       |     
| |                                       |     
| |                                       |     
| |                                       |     
| | Revenues                              | $   
| | Internal income (expenses)            |     
| | Segment operating income (loss)       |     
| | Total assets                          |     
| | Amortization of assets                |     
| | Non-cash stock compensation           |     
| | Amortization of deferred compensation |     
| | Interest expense                      |     
| | Amortization of beneficial conversion |     

|19. | Subsequent events:                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Effective January 1, 2008, as part of a restructuring
        of Premiers operations, our agreements with Dr. Goldstein were amended
        so that until the amount we owe for the accounts receivable is paid in
        full, we will pay him 60% of the operating income of the diagnostic testing
        business, subject to a minimum payment of $20,000, and his salary and
        bonus has been eliminated.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | After December 31, 2007, the Company issued 84,707,200
        shares upon the conversion of $19,671 relating to the 2004 note.                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On February 9, 2008, the Company entered into a consulting
        agreement in which 40,000,000 shares were issued, valued at $37,500, which
        were equal to the market price on the date of the agreement.                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|20. | Comparative figures                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Certain of the prior years comparative figures
        have been reclassified to conform to the current years presentation.                                                                                                                                                                                                                                                                                            

F-24

---

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

Not applicable.

Item 9A. Controls and Procedures.

Disclosure controls and
procedures are designed to ensure that information required to be disclosed in
the reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC's rules
and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in the reports filed under the Exchange Act is accumulated and
communicated to management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. Within the 90 days prior to the filing of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based upon and as of the date of
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed in the reports the Company
files and submits under the Exchange Act is recorded, processed, summarized and
reported as and when required, except as follows: None.

There were no other changes in
our internal controls or in other factors that could have significantly affected
those controls subsequent to the date of our most recent evaluation.

**Management’s Report on Internal Control over Financial
  Reporting**

Management of the Company is
  responsible for establishing and maintaining adequate internal control over
  financial reporting as defined in Rule 13a-15(f) under the Securities Exchange
  Act of 1934. We have assessed the effectiveness of those internal controls as
  of December 31, 2007, using the Committee of Sponsoring Organizations of the
  Treadway Commission (“COSO”) Internal Control – Integrated
  Framework as a basis for our assessment.

Because of inherent limitations,
  internal control over financial reporting may not prevent or detect misstatements.
  Projections of any evaluation of effectiveness to future periods are subject
  to the risk that controls may become inadequate because of changes in conditions,
  or that the degree of compliance with the policies and procedures may deteriorate.
  All internal control systems, no matter how well designed, have inherent limitations.
  Therefore, even those systems determined to be effective can provide only reasonable
  assurance with respect to financial statement preparation and presentation.

A material weakness in internal
  controls is a deficiency in internal control, or combination of control deficiencies,
  that adversely affects the Company’s ability to initiate, authorize, record,
  process, or report external financial data reliably in accordance with accounting
  principles generally accepted in the United States of America such that there
  is more than a remote likelihood that a material misstatement of the Company’s
  annual or interim financial statements that is more than inconsequential will
  not be prevented or detected. In the course of making our assessment of the
  effectiveness of internal controls over financial reporting, we identified one
  material weakness in our internal control over financial reporting. This material
  weakness consisted of inadequate staffing within the accounting operations of
  our company. The small number of employees who are responsible for accounting
  functions (more specifically, one) prevents us from segregating duties within
  our internal control system. The inadequate segregation of duties is a weakness
  because it could lead to the untimely identification and resolution of accounting
  and disclosure matters or could lead to a failure to perform timely and effective
  reviews.

| | Respectfully submitted,
      Board of Directors of Banyan Corporation
        /s/ Michael J. Gelmon
        /s/ Cory H. Gelmon
        April 14, 2007
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

Item 9B. Other Information.

Not applicable.

-12-

---

PART III

Item 10. Directors, Executive Officers and Corporate
Governance.

Directors and Executive Officers; Corporate
Governance

Name
    Age
      PositionsMichael J. Gelmon
      43
    Chief Executive Officer and DirectorCory H. Gelmon
      48
    President, Chief Financial Officer, Director


Our Board of Directors is
comprised of three directors of one class. Each director is elected to hold
office until the next annual meeting of shareholders and until his successor has
been elected and qualified. Presently there is a vacancy on the Board of
Directors. The Board of Directors intends to appoint a nominee for director to
fill this vacancy as soon as possible. We have been unable to identify a nominee
or appointee for this vacancy since it arose given concerns about our financial
condition and pending litigation. Marshall F. Wilmot resigned as chief operating
officer on February 1, 2007 effective February 28, 2007.

Officers are elected annually by
the Board of Directors and hold office until successors are duly elected and
qualified.

Michael J. Gelmon and Cory H.
Gelmon are brothers.

The following is a brief account
of the business experience of each director and executive officer.

Michael J. Gelmon.Mr.
Gelmon is an experienced franchising entrepreneur and executive as well as a
real estate lawyer. He has been our Chief Executive Officer and a director since
2001. From 1993 through 1997, Mr. Gelmon was a founding shareholder, director,
as well as head of acquisitions and real estate for Domino's Pizza of Canada
Ltd., the Domino's Pizza master franchisor in Canada. He was an integral part of
the team that was responsible for growing the Domino's Pizza chain to 200 stores
throughout Canada. Since 1999 Mr. Gelmon has also practiced law with his brother
in a law partnership, Britannia Law Firm. Mr. Gelmon received his Bachelor of
Laws with honors from the University of London in 1988 and a Bachelor of Arts
from the University of Calgary in 1988.

Cory H. Gelmon. During
Cory H. Gelmons long career in franchising, he has been an owner, promoter,
executive and a franchise lawyer. Mr. Gelmon has been our president and chief
financial officer since 2001. Since 1999 Mr. Gelmon has also practiced law with
his brother in a law partnership, Britannia Law Firm. From 1993 until 1997, he
was chief operating officer and general counsel of Dominos Pizza of Canada Ltd.
Mr. Gelmon was largely responsible for growing the Domino's Pizza chain to 200
stores throughout Canada. He received his Bachelor of Laws with honors from the
University of London in 1987 and a Bachelor of Arts from the University of
Calgary in 1984.

Committees of the Board of Directors

Audit Committee.We have
no audit committee of the Board of Directors. We believe that the better
practice is to form an Audit Committee. During 2004, we adopted an Audit
Committee Charter that provides for an audit committee consisting of three or
more directors, each of whom shall satisfy the independence, financial literacy
and experience requirements of Section 10A of the Exchange Act and any other
regulatory requirements. We need to expand our Board of Directors and make
appropriate compensation arrangements with them. As of the date hereof we have
not identified potential candidates. We are exempt from the Securities and
Exchange Commission requirements for a separate audit committee.

-13-

---

No Compensation Committee.We
  have no compensation committee of the Board of Directors. The entire board acts
  as our compensation committee. Transactions between the Gelmons, members of
  their immediate families and the entities they own and control and us are not
  conducted at arm's-length. These include their compensation arrangements set
  forth in Item 11. Executive Compensation and the transactions set forth
  in Item 13. Certain Relationships and Related Transactions and Director Independence
  below. The Gelmons without any independent authorization, review or oversight
  set the terms of these arrangements and transactions. There can be no assurance
  that the terms thereof are comparable to those that would be negotiated at arm's-length
  or otherwise fair and reasonable, despite the good faith belief of the Gelmons
  that they are.

Meetings of Directors

There were no formal meetings of
the Board of Directors and no formal meeting of committees thereof in 2007. The
board acted by unanimous consent nine times in 2007. We have adopted a policy
that all directors must attend the annual meeting of directors following the
shareholders meeting and two-thirds of all other meetings of directors. Both
directors attended the annual shareholders meeting on September 4, 2007.

Codes of Ethics

During 2004, we adopted a Code
of Business Conduct and Ethics that addresses, among other things, conflicts of
interest, corporate opportunities, confidentiality, fair dealing, protection and
use of company assets, compliance with laws (including insider trading laws),
and reporting of unethical behavior. The Code of Business Conduct and Ethics is
applicable to our directors, officers and all employees.

In addition, we have adopted a
Finance Code of Ethics that requires honest and ethical business conduct, full,
accurate and timely financial disclosures, compliance with all laws, rules and
regulations governing our business, and prompt internal reporting of any
violations of the code. The Finance Code of Ethics is applicable to our Chief
Executive Officer, Chief Financial Officer, Controller (there is no Controller
at this time) and all finance employees. We intend to satisfy the disclosure
requirements under Item 10 of Form 8-K regarding any amendment to or waiver of
the Code of Ethics with respect to our Chief Executive Officer, Chief Financial
Officer, Controller, and persons performing similar functions, by posting such
information on our website.

Compliance with Section 16(a) of the Exchange
Act

Our directors and executive officers
  failed to file on a timely basis reports required by Section 16(a), including
  Forms 3, 4 and 5 during the three most recent fiscal years and the year to date.
  With respect to Michael J. Gelmon there were twelve late reports covering fourteen
  transactions that were not reported on a timely basis. With respect to Cory
  H. Gelmon, there were thirteen late reports covering fourteen transactions that
  were not reported on a timely basis. With respect to Richard J. Doran, a former
  director, there were two late reports covering two transactions that were not
  reported on a timely basis. With respect to Marshall Wilmot, there were three
  late reports covering two transactions that were not reported on a timely basis.
  As of the date hereof, all reports required by Section 16(a) have been filed
  and are available on our web site www.chiropracticusa.net.

-14-

---



Item 11. Executive Compensation.

Summary Compensation Table

The following table sets forth
  certain information about the compensation paid to management during the 2006
  through 2007 fiscal years:

|                                                                                                   | Annual Compensation | Long Term Compensation  
|-------------------------------------------------------------------------------------------------- | ------------------- | ------------------------
|Name and principal position                                                                        | Year                | **Salary** ($)          
|                                                                                                   |                     |                         
|Michael Gelmon 
      Chief Executive 
      Officer and 
      Director                           | 2006 
      2007    | $240,000 
      $240,000
|Cory Gelmon 
      President, Chief 
      Financial Officer, 
      Secretary and 
      Director | 2006 
      2007    | $240,000 
      $240,000

* Consists of bonuses described
below inEmployment and Other Compensation-Related Agreements with
Management.

Employment and Other Compensation-Related Agreements with
Management

Our Management Agreements with
the Gelmons, as amended, provide for payment of compensation of $240,000 per
year, and a yearly bonus of ten percent of (net) operating income before income
taxes, other expenses (including any management fees) and extraordinary items,
of our diagnostic testing business segment as set forth in our audited financial
statements. The Management Agreements expire on December 31, 2010.

We retained the Gelmons law
partnership, the Britannia Law Firm, to serve as our general counsel and special
Canadian counsel particularly in the areas of franchising, mergers and
acquisitions, Canadian corporate law, real estate law, and other matters. The
Company pays the Britannia Law Firm a monthly retainer of $15,000. Total
retainer payments to the Brittania Law Firm were $180,000 in 2006 and 2007.

On February 15, 2006, Cory Gelmon
  and Michael Gelmon waived their annual bonuses payable with respect to our diagnostic
  testing business segment for 2005 in exchange for 350,000 shares of common stock
  each valued at $19,637.

On June 28, 2007, Cory Gelmon and
  Michael Gelmon were issued 8,250,000 shares of common stock each in consideration
  for services rendered valued at at $237,500 ($.03 per share), including the
  waiver of their annual bonuses payable with respect to our diagnostic testing
  business segment for 2006, and personally signing several guaranty and pledge
  agreements since 2004 described inCertain Relationships and Related Transactions
  Securities Purchase Agreements  Provisions Common to the 2004, 2006
  and 2006-2007 Securities Purchase Agreements. The purpose of the guaranty
  and pledge agreements and the benefit to our shareholders was to provide guarantees
  and additional collateral security for repayment to investors of Convertible
  Notes and the performance of other terms and conditions of the loan transaction,
  with a pledge of all the Gelmons shares of the Company.

-15-

---

No bonuses are payable to the Gelmons
  with respect to Premier for 2007.

Equity Compensation Plan Information

On October 28, 2004 the Board of
  Directors adopted the 2004 Human Resources Incentive Plan (the "Incentive
  Plan") to provide incentive compensation to employees, directors, officers
  and others who serve us. The Incentive Plan provides for the granting of up
  to 10,000,000 options and shares to our personnel. Generally, stock options
  granted under the Incentive Plan are for a maximum term of ten years and unless
  otherwise provided in the specific award document vest and are exercisable immediately.
  Unless otherwise provided, the options expire within one year after termination
  of service or three months if termination is for cause. The Board of Directors
  administers the Incentive Plan. The Incentive Plan may be amended by the directors
  except where required by the Internal Revenue Code as to any increase in the
  total number of underlying shares and the class of persons eligible to receive
  options, or as otherwise required by any applicable law or regulation. As of
  the date hereof, 486,000 options have been granted, of which 449,333 are outstanding.
  An aggregate of 444,100 options were granted in 2007.

Option Grants to Management in 2007

There were no option grants to
management during 2007.

Option Exercises and Year-End Values

The following table sets forth
certain values with respect to stock options held by management at the end of
2007:

Name
      Share Acquired on
      Exercise (#)
      Value Realized
      Number of Securities
      Underlying Unexercised Options/SARs at
      FY-end (#) Exercisable/ Unexercisable
      Value of Unexercised
      In-the-Money Options/SARs at FY-end (S)
      Exercisable/ UnexercisableMichael Gelmon, 
        Chief Executive Officer and
      Director
      -0-
      N/A
      150,000/0
      $0/0Cory Gelmon, 
        President, Chief Financial Officer,
      Secretary and Director
      -0-
      N/A
      150,000/0
      $0/0


-16-

---

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

The following table sets forth
information, as of April 2, 2008, with respect to the beneficial ownership of
our common stock by each person known to be the beneficial owner of more than
five percent of the outstanding common stock, and by our two directors and
executive officers, individually and as a group.

Name and Address
    Numbers of Shares Beneficially
      Owned
      %Cory H. Gelmon 3019 Roxboro Glen Road S.W. Calgary,
      Alberta, Canada T2S 1T9
      8,651,872(1)
      2.59%Michael J. Gelmon 8 Fishermans Point Elbow Valley
      Rocky View MD No 44 Calgary, Alberta, Canada T3Z 1B1
      8,646,233(2)
      2.59%Directors and Executive Officers as a group (2 persons)
      17,298,105(3)  5.18%


| | (1) | Includes 150,000 immediately exercisable options, 8,501,233
        shares pledged as security for a loan, and 639 shares owned by members
        of his immediate family. (See Item 11.  Executive Compensationand Certain Relationships and Related Transactions and Director
        Independence  Securities Purchase Agreements).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Includes 150,000 immediately exercisable options and
        8,496,233 shares pledged as security for a loan. (See Item 11. 
        Executive Compensationand Certain Relationships and Related
        Transactions and Director Independence  Securities Purchase Agreements).                                                      
| | (3) | Includes 300,000 immediately exercisable options.                                                                                                                                                                                                                                                                                        

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

Loans

Management and members of their
immediate families have loaned us funds to pay our debts from time to time.

During 2001, Eva Gelmon, the
mother of the Gelmons, loaned us $60,000. The note is not secured and bears
simple interest at 10% per annum. The note was due January 1, 2006. As of
December 31, 2007, we owed Eva Gelmon $60,000 pursuant to this note.

From and after 2002, 860538
Alberta Ltd., which is owned and controlled by the Gelmons, loaned us funds. As
of January 1, 2006, we issued a new advance promissory note to refinance and
evidence our indebtedness to 860538 Alberta Ltd. for our obligations for prior
and possible additional advances of up to $200,000 from 860538 Alberta Ltd. The
note bears interest at 7% and was due December 31, 2007. As of the date hereof,
we owed $136,646 pursuant to this note.

-17-

---

Contribution of Shares

On July 10, 2007, Cory H. Gelmon
returned 8,250,000 shares to us for cancellation. On August 21, 2007, Michael J.
Gelmon returned 8,250,000 shares to us for cancellation. They made these
contributions to reduce the number of shares issued and outstanding. The benefit
to the shareholders was to make 16,500,000 shares available to us to meet our
obligations to issue shares we sold to certain investors for cash and agreed to
pay for services provided to us. As repayment, we issued to the Gelmons
8,250,000 shares each November 1, 2007.

Premier Acquisition

On February 10, 2006, we completed
  the acquisition of Premier Health Services LLC and the other constituent entities
  of its diagnostic testing business pursuant to a Stock Purchase Agreement with
  Dr. Goldstein. Under the agreement, we paid Dr. Goldstein $2,000,000 in cash
  at closing plus 142,857 shares of our common stock that, at that time, resulted
  in Dr. Goldstein owning more than five percent of our outstanding stock. We
  also agreed to pay Dr. Goldstein an additional $100,000 and an amount equal
  to the pre-closing accounts receivable that are actually collected, once Premier’s
  cash flow permits these additional payments to be made. As of December 31, 2007,
  we had paid an additional $1,220,00 to Mr. Goldstein with respect to pre-closing
  accounts receivable that were collected, and owed an additional $809,714 with
  respect to these accounts receivable. For as long as Dr. Goldstein continues
  to hold shares received in the transaction that are subject to restriction,
  Michael J. Gelmon, our Chief Executive Officer, and Cory H. Gelmon, our Chief
  Financial Officer and President, have agreed that if there is an offer to purchase
  any of their stock in Banyan, Dr. Goldstein has the right to sell his shares
  on the same terms and conditions as the Gelmons.

During 2007, Dr. Goldstein was
  paid a salary of $244,616. Effective January 1, 2008, as part of a restructuring
  of Premier’s operations, our agreements with Dr. Goldstein were amended
  so that until the amount we owe for the accounts receivable is paid in full,
  we will pay him 60% of the operating income of the diagnostic testing business,
  subject to a minimum payment of $20,000, and his salary and bonus has been eliminated.

Securities Purchase Agreements

2006-2007 Securities Purchase Agreement

Effective November 15, 2006, we
entered into a series of Securities Purchase Agreements (hereinafter
collectively referred to as the 2006-2007 Securities Purchase Agreement) with
AJW Partners, Inc., AJW Offshore, Ltd., AJW Qualified Partners, LLC, and New
Millennium Capital Partners II, LLC (hereinafter collectively referred to as the
"Investors") and ancillary agreements. Under the 2006-2007 Securities Purchase
Agreement, we agreed each month to sell the Investors Callable Secured
Convertible Notes (the "2006-2007 Convertible Notes") in varying amounts as
necessary. The 2006-2007 Convertible Notes are due in three years and bear
interest at 8% annual interest payable quarterly. The Investors may convert the
2006-2007 Convertible Notes into shares at the lower of $.57 per share or 50% of
the three lowest intraday trading prices during the twenty trading days prior to
conversion.

The Investors have purchased
$2,560,000 of the 2006-2007 Convertible Notes. We also issued to the Investors
for no additional cash consideration Stock Purchase Warrants (the "2006-2007
Warrants") to purchase an aggregate of 718,200 shares at $.10 per share. The
2006-2007 Warrants expire seven years from the date issued, except for 100,000
that expire in five years.

$250,000 of the proceeds was used
to make a settlement payment to resolve certain litigation. The balance of
$2,310,000 was used for accrued salaries, working capital and expenses.

Based on the conversion price of
$.0002 on March 11, 2008 the 2006-2007 Convertible Notes can be converted into a
minimum of 25,600,000 shares. Additional shares may be issued if accrued
interest is converted. Management believes that the actual conversion price may
be lower and more than the minimum number of shares that may be issued when the
Convertible Notes are converted.

-18-

---

2006 Securities Purchase Agreement

Effective February 8, 2006, we
entered into a Securities Purchase Agreement (the 2006 Securities Purchase
Agreement) with the Investors and ancillary agreements. Under the 2006
Securities Purchase Agreement, we sold the Investors a total of $3,000,000 in
Callable Secured Convertible Notes (the "2006 Convertible Notes") due February
8, 2009 with 8% annual interest payable quarterly. The Investors may convert the
2006 Convertible Notes into shares at the lower of $.57 per share or 50% of the
three lowest intraday trading prices during the twenty trading days prior to
conversion. We issued the Investors for no additional cash consideration Stock
Purchase Warrants (the "2006 Warrants") to purchase an aggregate of 659,213
shares at $.10 per share. The 2006 Warrants expire five years from the date
issued.

$2,000,000 of the proceeds from
the 2006 Convertible Notes was used for the acquisition of diagnostic imaging
businesses. The balance of $1,000,000 was used for working capital and expenses.

Based on the conversion price of
  $.0002 on March 11, 2008 the remaining principal amount of 2006 Convertible
  Notes can be converted into a minimum of 28,623,530,000 shares. Additional shares
  may be issued if accrued interest is converted. Management believes that the
  actual conversion price may be lower and more than the minimum number of shares
  may be issued when the Convertible Notes are converted.

2004 Securities Purchase Agreement

Effective November 8, 2004, we
entered into a Securities Purchase Agreement (the 2004 Securities Purchase
Agreement) with the Investors and ancillary agreements. Under the 2004
Securities Purchase Agreement, we sold the Investors a total of $3,000,000 in
Callable Secured Convertible Notes (the "2004 Convertible Notes") due beginning
November 8, 2006 with 10% annual interest payable quarterly, the first four
months interest to be prepaid from proceeds of the Convertible Notes. The due
date for the 2004 Convertible Notes that remain outstanding has been extended
through December 31, 2008. The Investors may convert the Convertible Notes into
shares at the lower of $.22 per share or 50% of the three lowest intraday
trading prices during the twenty trading days prior to conversion.

We agreed to issue to the
Investors for no additional cash consideration 30,000 Stock Purchase Warrants
(the "2004 Warrants") to purchase one share at $.40 per share for each one
dollar of Convertible Notes purchased by the Investors. The 2004 Warrants expire
five years from the date issued.

Based on the conversion price of
  $.0002 on March 11, 2008 the remaining principal amount of 2004 Convertible
  Notes can be converted into a minimum of 593,900,000 shares. Additional shares
  may be issued if accrued interest is converted. Management believes that the
  actual conversion price may be lower and more than the minimum number of shares
  may be issued when the Convertible Notes are converted.

The proceeds from the Convertible
Notes were used to prepay the balance of $584,930 on a term loan and related
installment note due July 31, 2005 in the original principal amount of
$1,000,000 that was personally guaranteed by the Gelmons and others and $69,000
was used to repay a loan from 860538 Alberta Ltd. that is owned by the Gelmons.
We also used the proceeds to repay principal and interest on other outstanding
notes and accounts payable, fees, and business development purposes, including
$700,000 to enter the diagnostic imaging business.

Common Provisions of the 2004, 2006 and 2006-2007 Transaction
  Agreements

To date, the Investors have converted
  approximately $3,000,000 in Convertible Notes into approximately 190,000,000
  shares, an average of $.016 per share.

The Investors will be entitled to
exercise the Warrants on a cashless basis if the shares of common stock
underlying the Warrants are not then registered pursuant to an effective
registration statement. In the event that an Investor exercises the Warrants on
a cashless basis, then we will not receive any proceeds. In addition, the
exercise price of the Warrants will be adjusted in the event we issue common
stock at a price below market, with the exception of any securities issued as of
the date of the Warrant or issued in connection with the Convertible Notes

-19-

---

issued pursuant to the Securities Purchase Agreement. Upon the
issuance of shares of common stock below the market price, the exercise price of
the Warrants will be reduced accordingly. The market price is determined by
averaging the last reported sale prices for our shares of common stock for the
five trading days immediately preceding such issuance as set forth on our
principal trading market. The exercise price shall be determined by multiplying
the exercise price in effect immediately prior to the dilutive issuance by a
fraction. The numerator of the fraction is equal to the sum of the number of
shares outstanding immediately prior to the offering plus the quotient of the
amount of consideration received by us in connection with the issuance divided
by the market price in effect immediately prior to the issuance. The denominator
of such issuance shall be equal to the number of shares outstanding after the
dilutive issuance.

In addition, the conversion price
of the Convertible Notes and the exercise price of the Warrants will be adjusted
in the event that we issue common stock at a price below the fixed conversion
price or below market price, with the exception of any securities issued in
connection with the Securities Purchase Agreement. The conversion price of the
Convertible Notes and the exercise price of the Warrants may be adjusted in
certain circumstances such as if we pay a stock dividend, subdivide or combine
outstanding shares of common stock into a greater or lesser number of shares, or
take such other actions as would otherwise result in dilution of the Investors
positions.

Payment of the Convertible Notes
is secured by all of our assets pursuant to a Security Agreement and an
Intellectual Property Security Agreement.

Pursuant to a Registration
Rights Agreement we agreed to file a registration statement to register on
request by the Investors the shares underlying the Notes and Warrants. We have
registered a total of 20,900,000 shares in accordance with the Registration
Rights Agreement, and intend to register additional shares as soon as
practicable. All the shares that were registered have been issued.

Michael Gelmon, our Chief
Executive Officer, and Cory Gelmon, our President and Chief Operating Officer,
each entered into a Guaranty and Pledge Agreement to provide additional security
for our performance of the Transaction Agreements. Cory Gelmon pledged to the
Investors 8,501,233 shares he owns of record. Michael Gelmon pledged to the
Investors 8,496,233 shares he owns of record.

We will be subject to the payment
of certain penalties and damages in the event we do not satisfy our obligations
under the Transaction Agreements including those with respect to registration of
the shares underlying the Convertible Notes and Warrants.

Item 14. Principal Accountant Fees and Services.

The following table presents fees
for professional services rendered by Schwartz Levitsky Feldman LLP to Banyan
Corporation for 2007 and 2006:

Types of Fees
    Year Ended December 31, 2007
    Year Ended December 31, 2006Audit Fees (a)
      $110,371
    $100,235Tax Fees (b)
    -0-
    -0-Other Fees (c)
    -0-
    -0-


To safeguard the continued independence
  of the independent auditors, the Board has adopted a policy that expands our
  existing policy preventing our independent auditors from providing services
  to us that are prohibited under Section 10A(g) of the Securities Exchange Act
  of 1934, as amended. This policy also provides that independent auditors are
  only permitted to provide services to the Company that have been pre-approved
  by the Board of Directors. Pursuant to the policy, all audit services require
  advance approval by the directors. All other services by the independent auditors
  that fall within certain designated dollar thresholds, both per engagement as
  well as annual aggregate, have been pre-approved under the policy. Different
  dollar thresholds apply to the three categories of pre-approved services specified
  in the policy (Audit Related services, Tax services and other services). The
  directors must approve all services that exceed the dollar thresholds in advance.

-20-

---

PART IV

Item 15. Exhibits, Financial Statement Schedules.

|No.   | Description                                                                                                                                                  
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                              
|3.1   | Restated Articles of Incorporation
      with Amendments (1)                                                                                                 
|      |                                                                                                                                                              
|3.1.2 | Amendment to the Restated Articles
      of Incorporation (7)                                                                                                
|      |                                                                                                                                                              
|3.2   | Bylaws (1)                                                                                                                                                   
|      |                                                                                                                                                              
|4.2   | Securities Purchase Agreement dated
      as of November 8, 2004 by and between the Registrant and the investors named
      therein (3)                     
|      |                                                                                                                                                              
|4.3   | Form of Convertible Notes due November
      2006 (3)                                                                                                        
|      |                                                                                                                                                              
|4.4   | Form of Common Stock Purchase Warrant
      dated as of November 8, 2004 (3)                                                                                 
|      |                                                                                                                                                              
|4.5   | Registration Rights Agreement dated
      as of November 8, 2004 by and between the Registrant and the investors named
      therein (3)                     
|      |                                                                                                                                                              
|4.6   | Security Agreement dated as of
      November 8, 2004 between the Registrant and the secured parties named therein
      (3)                                 
|      |                                                                                                                                                              
|4.7   | Intellectual Property Security
      Agreement dated as of April 19, 2004 between the Registrant and the secured
      parties named therein (3)             
|      |                                                                                                                                                              
|4.8   | Securities Purchase Agreement dated
      as of February 8, 2006 by and between the Registrant and the investors named
      therein (9)                     
|      |                                                                                                                                                              
|4.9   | Form of Convertible Notes due February
      2009 (8)                                                                                                        
|      |                                                                                                                                                              
|4.10  | Form of Common Stock Purchase Warrant
      dated as of February 8, 2006 (8)                                                                                 
|      |                                                                                                                                                              
|4.11  | Registration Rights Agreement dated
      as of February 8, 2006 by and between the Registrant and the investors named
      therein (8)                     
|      |                                                                                                                                                              
|4.12  | Security Agreement dated as of
      February 8, 2006 between the Registrant and the secured parties named therein
      (8)                                 
|      |                                                                                                                                                              
|4.13  | Intellectual Property Security
      Agreement dated as of February 8, 2006 between the Registrant and the secured
      parties named therein (8)           
|      |                                                                                                                                                              
|4.14  | Form of letter agreement re
      conversion price adjustment dated as of February 8, 2006, between the
      Registrant and the investors named therein (14)
|      |                                                                                                                                                              
|4.15  | Form of Securities Purchase Agreement
      dated as of November 15, 2006 between the registrant and the investors named
      therein (15)                  
|      |                                                                                                                                                              
|4.16  | Form of Convertible Notes due three
      years from date (15)                                                                                               

-21-

---

|4.17 | Form of Common Stock Purchase
      Warrant of even date with the Convertible Notes (15)                                                                      
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                               
|4.18 | Registration Rights Agreement
      of even date with the Convertible Notes between the Registrant and the
      investors named therein (15)                 
|     |                                                                                                                                                               
|4.19 | Security Agreement of even date
      with the Convertible Notes between the Registrant and the secured parties
      named therein (15)                      
|     |                                                                                                                                                               
|4.20 | Intellectual Property Security
      Agreement of even date with the Convertible Notes between the Registrant
      and the secured parties named therein (15)
|     |                                                                                                                                                               
|4.21 | Letter dated March 29, 2007
      regarding certain extensions and waivers from the Registrant to the
      investors named therein (15)                      
|     |                                                                                                                                                               
|10.1 | Offer to Purchase Intellectual
      Property (4)                                                                                                             
|     |                                                                                                                                                               
|10.2 | Offer to Purchase Franchise
      Support Network Inc. (4)                                                                                                    

|10.3   | Amendment to Management
      Agreement between the Registrant and Cory Gelmon made effective April 1,
      2005 (6)                                             
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                   
|10.4   | Amendment to Management
      Agreement between the Registrant and Michael Gelmon effective April 1,
      2005 (6)                                               
|       |                                                                                                                                                                   
|10.5   | Advance
      Promissory Note from the Registrant to 860538 Alberta Ltd.
(1)                                                                                      
|       |                                                                                                                                                                   
|10.6   | Promissory Note from the
      Registrant to Eva Gelmon (1)                                                                                                       
|       |                                                                                                                                                                   
|10.7   | 2004 Human Resources Incentive
      Plan (1)                                                                                                                     
|       |                                                                                                                                                                   
|10.7.1 | Amendment to 2004 Human
      Resources Incentive Plan (7)                                                                                                        
|       |                                                                                                                                                                   
|10.8   | Limited Liability Company Purchase
      Agreement with exhibits (1)                                                                                              
|       |                                                                                                                                                                   
|10.9   | Agreement re: Sale and Purchase
      of Assets, between the Registrant and LSI Group, LLC. effective December
      31, 2004 with exhibits (6)                   
|       |                                                                                                                                                                   
|10.9.1 | Agreement dated July 16, 2007
      between the Registrant and LSI Group, LLC (18)                                                                                
|       |                                                                                                                                                                   
|10.10  | Purchase Agreement among the Registrant,
      Nationwide Diagnostic Solutions, Inc., and Jeff and Constance Rebarcak dated
      March 18, 2005 with exhibits (6)
|       |                                                                                                                                                                   
|10.11  | Software Consulting Agreement between
      the Registrant and Fred Johanessen dated June 29, 2005 (10)                                                           
|       |                                                                                                                                                                   
|10.12  | Management Agreement between
      the Registrant and Southern Diagnostics, Inc. dated May 27, 2005 (10)                                                          
|       |                                                                                                                                                                   
|10.13  | Settlement and Mutual Release Agreement
      among the Registrant and Cameron Yost, Lyle Yost, Winston Yost and Byron
      Yost (10)                            
|       |                                                                                                                                                                   
|10.14  | Purchase Agreement by and among
      Southern Diagnostics, Inc. and Jeff and Constance Rebarcak and Nationwide
      Diagnostic Solutions, Inc., dated May       
|       |                                                                                                                                                                   
|10.15  | Operating Agreement of Premier
      SD, LLC between Premier Health Services, LLC and Southern Diagnostics, Inc.,
      dated June 8, 2005 (10)                   
|       |                                                                                                                                                                   
|10.16  | Consulting Agreement between the
      Registrant and Alvin Gelmon, dated August 15, 2005 (11)                                                                    
|       |                                                                                                                                                                   
|10.17  | Stock Purchase Agreement between
      the Registrant and Brad Goldstein et al., dated January 6, 2006 (9)                                                        
|       |                                                                                                                                                                   
|10.18  | Addendum to Stock Purchase
      Agreement between the Registrant and Dr. Brad Goldstein et al.,
      dated February 7, 2006 (8)                                 
|       |                                                                                                                                                                   
|10.19  | Employment Agreement between the
      Registrants subsidiary Premier Health Services, LLC and Dr. Brad Goldstein
      dated as of February 10, 2006 (8)        

-22-

---

|10.19.1 | Amending Agreement Re: Employment
      Agreement between the Registrants subsidiary Premier Health Services,
      LLC and Dr. Brad Goldstein dated December 15, 2006 (2)
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                            
|10.19.2 | Omnibus
      Amending Agreement effective January 1, 2008 between the Registrant and
      Dr. Brad Goldstein (to be filed by amendment)                                  
|        |                                                                                                                                                                            
|10.20   | Letter
      agreement re offer of employment between the Registrant and Marshall Wilmot
      effective as of February 1, 2006 (8)                                        
|        |                                                                                                                                                                            
|10.21   | Management Agreement between the
      Registrant and Michael Gelmon effective April 10, 2006 (7)                                                                          
|        |                                                                                                                                                                            
|10.22   | Management Agreement between the
      Registrant and Cory Gelmon effective April 10, 2006 (7)                                                                             

|10.23 | Advance Promissory Note from the
      Registrant to 860538 Alberta Ltd. dated as of January 1, 2006 (14)                                           
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                     
|10.29 | Asset Purchase Agreement dated
      as of March 7, 2007 between the Registrant and Medical Resources, Inc (15)                                     
|      |                                                                                                                                                     
|10.30 | Assignment dated as of March 7,
      2007 from Medical Resources, Inc. to the Registrant (15)                                                      
|      |                                                                                                                                                     
|10.31 | Noncompetition and Confidentiality
      Agreement dated as of March 7, 2007 between Hunter Reynolds and the Registrant
      (15)                  
|      |                                                                                                                                                     
|10.32 | Guaranty dated as of March 7,
      2007 from the Registrants subsidiary Premier Medical Group, Inc. in
      favor of Medical Resources, Inc. (15)
|      |                                                                                                                                                     
|10.33 | Independent Contractor Agreement
      dated as of March 1, 2007 between the Registrant and Willowbrook Corporation
      (15)                      
|      |                                                                                                                                                     
|10.34 | Settlement Agreement dated January
      10, 2007 by and among Registrant and the several litigants named therein
      (16)                        
|      |                                                                                                                                                     
|23.1  | Consent
      of Schwartz Levitsky Feldman LLP dated April 15, 2008 (2)                                                                             
|      |                                                                                                                                                     
|31.1  | Certification
      of Periodic Report  Michael Gelmon (2)                                                                                         
|      |                                                                                                                                                     
|31.2  | Certification
      of Periodic Report  Cory Gelmon (2)                                                                                            
|      |                                                                                                                                                     
|32.1  | Certifications
      Pursuant to 18 U.S.C. Section 1350  Michael Gelmon (2)                                                                        
|      |                                                                                                                                                     
|32.2  | Certifications
      Pursuant to 18 U.S.C. Section 1350  Cory Gelmon (2)                                                                           

|(1) | Incorporated by reference to the Registrants Form
        SB-2 filed with the Securities and Exchange Commission on February 14,
        2005.  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Filed herewith.                                                                                                                                  
|(3) | Incorporated by reference to the Registrants Form
        10-QSB filed with the Securities and Exchange Commission on November 22,
        2004.
|(4) | Incorporated by reference to the Registrants Current
        Report on Form 8-K filed June 7, 2001.                                             
|(5) | Incorporated by reference to the Registrants Form
        10-KSB filed with the Securities and Exchange Commission on May 17, 2004.             

-23-

---

|(6)  | Incorporated by reference to the Registrants Form
        10-KSB filed with the Securities and Exchange Commission on April 28,
        2005.                          
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7)  | Incorporated by reference to the Registrants Schedule
        14A filed with the Securities and Exchange Commission on March 10, 2006.                                 
|(8)  | Incorporated by reference to the Registrants Form
        SB-2 filed with the Securities and Exchange Commission on February 14,
        2006.                         
|(9)  | Incorporated by reference to the Registrants Form
        8-K filed with the Securities and Exchange Commission on February 14,
        2006.                          
|(10) | Incorporated by reference to the Registrants Form
        10-QSB filed with the Securities and Exchange Commission on August 19,
        2005.                         
|(11) | Incorporated by reference to the Registrants Form
        10-KSB filed with the Securities and Exchange Commission on April 28,
        2005.                          
|(12) | Incorporated by reference to the Registrants Form
        10-QSB filed with the Securities Exchange Commission on May 19, 2006.                                        
|(13) | Incorporated by reference to the Registrants Form
        10-QSB filed on August 21, 2006.                                                                             
|(14) | Incorporated by reference to the Registrants Schedule
        14A filed with the Securities and Exchange Commission on March 10, 2006.                                 
|(15) | Incorporated by reference to the Registrants Form
        10-QSB filed with the Securities and Exchange Commission on February 14,
        2006.                       
|(16) | Incorporated by reference to the Registrants Form
        10-K filed with the Securities and Exchange Commission on April 17, 2006.                                    
|(17) | Incorporated by reference to the Registrants Form
        8-K filed with the Securities and Exchange Commission on March 30, 2007,
        as amended on April 3, 2007.
|(18) | Incorporated by reference to the Registrants Form
        10-QSB filed with the Securities Exchange Commission on June 11, 2007.                                       

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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.

|April 14, 2008 |                    |                                
|-------------- | ------------------ | -------------------------------
|               | BANYAN CORPORATION
|               |                    |                                
|               | By:                | /s/ Michael Gelmon             
|               |                    | Michael Gelmon, Chief Executive
|               |                    | Officer and Director           

Pursuant to the requirements of
the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and dates
indicated.

|April 14, 2008 |     |                                            
|-------------- | --- | -------------------------------------------
|               |     |                                            
|               | By: | /s/ Michael Gelmon                         
|               |     | Michael Gelmon, Chief Executive Officer and
|               |     | Director                                   
|               |     |                                            
|               |     |                                            
|April 14, 2008 |     |                                            
|               |     |                                            
|               | By: | /s/ Cory Gelmon                            
|               |     | Cory Gelmon, President, Chief Financial    
|               |     | Officer, Secretary and Director (Principal 
|               |     | Accounting and Financial Officer)          

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