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

                                   FORM 10-KSB

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

                    For the fiscal year ended: July 31, 2006

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

                 For the transition period from _____ to ______

                        Commission File Number 333-130295

                          WELLSTAR INTERNATIONAL, INC.
                 (Name of small business issuer in its charter)


                                Nevada 20-1834908
 -------------------------------------------------------------------------------
           (State of incorporation) (IRS Employer Identification No.)



                 6911 Pilliod Road
                   Holland, Ohio                                43528
     -------------------------------------------------        ----------
        (Address of principal executive offices)              (Zip Code)

                    Issuer's telephone number: (419) 865-0069

                                   Copies to:
                                  Darrin Ocasio
                       Sichenzia Ross Friedman Ference LLP
                     1065 Avenue of the Americas, 21st Floor
                               New York, NY 10018

       Securities registered under Section 12(b) of the Exchange Act: NONE

       Securities registered under Section 12(g) of the Exchange Act: NONE

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

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X] -

State the issuer's revenues for the most recent fiscal year: $21,475.

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold,  or the average bid and asked price of such common  equity,  as of October
25, 2006 was approximately $3,380,620.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable  date:  84,850,000 shares of common stock,
$.001 par value per share, as of October 25, 2006.

Transitional Small Business Disclosure Format (check one): Yes [_] No [X]
<PAGE>



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

                                     PART I

Item 1.     DESCRIPTION OF BUSINESS..........................................2
Item 2.     DESCRIPTION OF PROPERTY..........................................8
Item 3.     LEGAL PROCEEDINGS................................................8
Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............8


                                    PART II

Item 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........9
Item 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION........10
Item 7.     FINANCIAL STATEMENTS.............................................F-1
Item 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE..............................23
Item 8A.    CONTROLS AND PROCEDURES..........................................23


                                    PART III

Item 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
            PERSONS; COMPLIANCE WITH SECTION 16(b) OF THE EXCHANGE ACT.......23
Item 10.    EXECUTIVE COMPENSATION...........................................25
Item 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT.......................................................26
Item 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................27
Item 13.    EXHIBITS AND REPORTS ON FORM 8-K.................................27
Item 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES...........................28

SIGNATURES  .................................................................29



                                     PART I

Item 1. DESCRIPTION OF BUSINESS

Corporate History

Wellstar  International,  Inc.  ("Wellstar"  or the "Company") was formed in the
State of Nevada on December 5, 1997.  Wellstar was a  development  stage company
with no operating  activities.  On July 12, 2005,  Wellstar entered into a share
exchange  agreement with Trillennium  Medical Imaging,  Inc.  ("Trillennium"  or
"TMI"),  a development  stage company  formed in June,  2005. As a result of the
share exchange agreement, Trillenium became a subsidiary of Wellstar.

Wellstar International,  Inc., through its Trillennium subsidiary,  is dedicated
to developing and licensing the use of advanced  thermal  imaging  technology in
the consumer health care and veterinary markets throughout the United States.

Introduction

Wellstar is one of the only  companies  currently in North  America that has the
rights to market a thermal imaging camera using infrared  technology approved by
the FDA as an  adjunctive  diagnostic  device and software  for thermal  imaging
pursuant to an  exclusive  supplier  contract  with the  camera's  manufacturer.
Mikron  Instrument,  Inc.  (Wellstar does not  manufacture  the thermal  imaging
cameras). Our camera and software technology is known as the TMI Thermal Imaging
System.  TMI is well  positioned to take advantage of the thermal imaging market
and to assist in the delivery of health care services . Our current  competitive
advantage  is  derived  from the state of the art  technology  of the camera and
software  we  are  utilizing,   combined  with  an  intimate  knowledge  of  and
relationships  in the thermal  imaging  market.  Wellstar plans to grow in these
markets by expanding its imaging  capabilities  through the  acquisition  of new
imaging technologies. In addition to human imaging, Wellstar plans to compete in
the equine imaging market.

                                       2
<PAGE>
The TMI Infrared Technology and software is approved by the FDA as an Adjunctive
Diagnostic  screening procedure for early breast cancer detection and adjunctive
diagnosis  of  pain  dysfunctions,   such  as  Reflex   Sympathetic   Dystrophy,
Neuromuscular  Skeletal Syndromes and Neurological  disorders.  As an Adjunctive
Diagnostic Screening procedure,  the TMI Infrared Technology is to be used as an
additional  diagnostic tool in  supplementation of other methods of establishing
medical  diagnosis  such as  mammography,  X-Ray,  CT, and MRI.  This  screening
modality  provides a  differential  diagnosis  to justify  additional  screening
procedures to ensure successful patient outcome assessment. Thermal Imaging is a
low cost, non-contact,  non-radioactive  diagnostic screening procedure designed
for clinical  evaluation.  In addition,  thermal imaging  provides an ability to
track the  progress of  therapies  being  utilized  in a low cost,  non-invasive
manner.  Our thermal imaging system is intended to supplement other  established
clinical detection methods and is not intended for stand alone use.

The TMI Infrared  Technology  fills a need that  currently  exists in diagnostic
medicine today.  Thermal imaging  provides  information  that is specific to the
physiological  and functional  activity in the body.  This  information  becomes
invaluable in that  conventional  diagnostic  screening  utilizes  tests such as
X-Ray,  MRI and CT Scans.  All  aspects of these  tests are  concerned  with the
anatomical  and  structural  problems of the body.  Many problems arise from not
combining both diagnostic modalities of structure and physiology, in that people
are  mis-diagnosed  and  considered  healthy  and well  when  the  physiological
information  provides an earlier  outcome or risk  assessment  of future  health
predictors than the structural modalities. The TMI Infrared Technology reads the
differential  temperature  emitted at the surface of the skin. This differential
temperature or variance in skin temperature from point-to-point, is a reflection
of  the  metabolic  activity  underlying  the  skin  surface.  As an  adjunctive
diagnostic device, the TMI Infrared  Technology  provides the diagnostician with
an image reflecting metabolic changes underlying the skin surface in addition to
those  structural  changes  read by  traditional  mammography,  CT or MRI,  thus
providing more diverse  information to the practitioner on which to diagnosis of
patient conditions.

The TMI Thermal Imager in regards to breast health provides  physiological  data
or risk  indicators for early vascular  changes (blood flow) that can precede or
feed a  developmental  mass in  breast  tissue up to 15  years.  By  comparison,
conventional  diagnostic  screening  tests such as  mammography,  CT, MRI of the
breast  seek to  identify a mass or tumor that is already  established.  One can
immediately understand the need to identify those women at higher risk and begin
early treatment  intervention  when cell changes are taking place but a tumor is
not yet  established.  As cell changes take place this  produces  changes in the
body's  energy  production  and the rate at which  the  body  transfers  energy,
thereby  producing  temperature  changes  due to changes in heat and blood flow,
which can be measured on the surface of the skin. These temperature measurements
can be identified using the TMI Thermal Technology. While there is always a risk
of  misdiagnosis  in the clinical  setting,  the TMI  Technology is not a "stand
alone" diagnostic tool. Accordingly,  a medical procedure or course of treatment
would not be based exclusively on the findings  generated by our thermal imaging
studies thereby  ameliorating the risk of a malpractice  claim based upon errors
in the use of the TMI Technology.

The TMI Thermal  Imager in regards to pain  dysfunctions  will work in a similar
manner  providing  immediate  diagnostic  feed back to  determine  physiological
components to pain. By comparison,  conventional diagnostic screening tests such
as X-Ray, MRI, CT scan provide for structural or anatomical  information with no
clinical findings.

The end result is that people can live longer and healthier lives while reducing
overall medical costs and lost productivity. This personalized medicine approach
results in early detection of cancer and a differential diagnosis for pain. This
personalized medicine approach is predicted to transform and innovate the health
care industry.

Major markets such as University Research Centers, Hospitals,  Multidisciplinary
Physician  practices,  Pain Centers, and alternative medical centers support the
need for this type of screening  modality.  Organizations such as the Anti-Aging
and the American  Academy for The  advancement of Wellness are examples of large
organizations  designed  to educate  both the  physicians  and the  consumer  on
preventative measures to ensure greater health.

In summary,  Trillennium  Medical Imaging has created an innovative new business
model that is  expected  to give it an early  market  advantage.  The company is
leveraging  this advantage  through a new paradigm shift that is capitalizing on
the large market potential of the working  Americans,  baby boomers and retirees
who require specialized health care.

Overview of Medical Infrared

Homeostasis or balance is necessary for the human body to function at an optimal
level. The production of energy - cellular metabolism produces heat. Homeostasis
depends on the  regulation  of this heat. A primary site of heat  regulation  is
through the largest organ of the human body - the skin. The  measurement of body
heat production through the skin has been done since the time of Hippocrates and
is an indirect measurement of metabolic activity in the body.

                                       3
<PAGE>
The  sophisticated  measurement of body  temperature by infrared  imaging is the
most  efficient  technique  for  the  study  of skin  temperature  distribution.
Infrared  thermal imaging is a  non-invasive,  imaging  procedure  involving the
detection and recording of skin thermal  patterns using  instruments,  which can
provide visual and quantitative documentation of these temperature measurements.
The  interpretation of these  temperatures and thermal patterns can be important
in the  development  of a diagnosis.  Because  Infrared  Imaging can display the
variations in skin temperature  patterns and these variations are scientifically
documented as reliable indicators of metabolic information, it may be used as an
integral part of the physical examination.

Infrared  Imaging is  appropriate  whenever  the treating  professional  feels a
physiological  imaging test is needed for diagnosis or case management.  Thermal
imaging  provides  information  on the normal and  abnormal  functioning  of the
sympathetic   nervous  system.   This  can  include   neurological  or  vascular
dysfunction,  diffuse patterns of muscular and connective tissue, usually in the
form of inflammation or heat and inflammatory  processes in breast tissue.  This
may  point  to the  type  of  functional  disorder  as  well  as  assist  in the
determination  of the most  effective  course  of  treatment  through  continual
evaluation.

The diagnosis of  neurological  and  musculoskeletal  abnormalities  by Infrared
Imaging  is  based on  comparative  temperature  asymmetry  between  normal  and
abnormal sites. A change in normal  temperature  contra  laterally - outside the
known standard range of deviation - is a signal of abnormal function.  A variety
of challenges can be performed to determine the extent of  sympathetic  response
remaining  in the  abnormal  region.  This will  substantiate  the  presence  of
disruption  of signals  through the nervous  system which is typical of the pain
response.

Clinical Use of Infrared

There are major  influences on skin temperature  other than neurogenic  control.
When  performing  Infrared  Imaging,  each of the  influences  must be evaluated
clinically to determine the cause of any asymmetry that may be present. Although
evaluation of the body with Infrared  Imaging is a safe,  easy and effective way
to visualize  the  physiological  response of the body,  interpretation  of this
information  requires an in-depth knowledge of the human physiological  response
to  pathology.  Unlike x-ray,  a thermal  image is not a stand-alone  diagnostic
picture.  A thorough clinical history and exam must be correlated to the thermal
picture to provide any significant information.

Performance of thermal exams must be done in a controlled  environment following
specifically  outlined  procedural  steps. This will ensure that the information
recorded is that coming from the body and not extraneous environmentally induced
abnormalities.  Often  infrared  images  are  sent to a  distant  physician  for
interpretation.  Exact  protocol  ensures  that  each  exam  is  performed  in a
consistent manner and provides  information that physician can accurately report
on.

The Imaging Industry

The demand for  personalized  health  care is  expected  to increase as consumer
awareness of  preventative  methods are understood.  Ultimately,  it will be the
consumer that both drives the alternative markets  productivity and the need for
the  trained  physician  to  embrace  and help  revolutionize  the  health  care
industry.

Infrared  thermal  (IR)  imaging as an  adjunctive  testing  model  provides  an
effective screening device for physiological or autonomic dysfunction. With this
capability,   the  two  primary   health   areas  that  can  most  benefit  from
incorporating IR screening are breast health evaluation as a screening modality,
and evaluation of nonspecific or undiagnosed pain problems.

Current Method Of Detecting Breast Cancer

Each year,  thousands of women are  diagnosed  with breast  cancer in the United
States alone, and it is the most common form of cancer found in women worldwide.
X-Ray or Digital  Mammography  screening is the current  method for detection of
breast cancer.  Mammography  provides the anatomical or structural reference for
the already established tumor or micro calcification. This process of developing
cancer is a progressive  and  developmental  process over 10 to 20 years.  It is
during these years that many  physiological  and biochemical  changes take place
that can't be seen with a structural test.

                                       4
<PAGE>
Thermal imaging  provides us an adjunctive tool (as approved by the FDA) to view
the  physiological  changes  taking  place as cells are changing and mutating in
this  developmental  phase of breast cancer.  Thermography is able to detect the
possibility of breast cancer much earlier, because it can image the early stages
of  angiogenesis.  Angiogenesis  is the formation of a direct supply of blood to
cancer  cells,  which is a  necessary  step  before they can grow into tumors of
size.  Thermographic  breast  screening  is  brilliantly  simple.   Thermography
measures  the  radiation  of  infrared  heat from our body and  translates  this
information into anatomical  images.  Our normal blood  circulation is under the
control of our  autonomic  nervous  system,  which  governs  our body  functions
without our conscious will. There is no compression or radiation to the cells of
the body and provides a non-contact, non-invasive test.

Current Method Of Detecting Pain

X-Ray,  MRI or CT scanning is the current  method to evaluate the pain  process.
Each of these imaging  techniques  measures the anatomical or structural aspects
of pain. Such as disc herniations, spinal problems, stress fractures, etc.

Thermal  Imaging  provides us an adjunctive  screening  tool (as approved by the
FDA) to view the physiological  processes to pain when the structural  screening
tools fail to identify the problem.  Pain  disorders  such as the neuralgias and
neuropathies  that affect  nerves  throughout  the body,  and damage the central
nervous  system (the brain and spinal  cord),  as well as pain where no physical
cause  can be found -  psychogenic  pain -  increase  the  utility  for  thermal
imaging.

Thermal  imaging  can provide an indirect  reading of  physiological  changes by
detecting the emission of autonomic information in the form of variations in the
skins surface  temperature for many who suffer pain with no anatomical  clinical
diagnosis.  It is in this  manner  that  thermal  imaging  can  then  offer to a
physician  a  differential  diagnosis  as to the  etiology of pain and provide a
physician with a road map to the cause and possible solution to the problem.

Competition

Compared to other imaging modalities such as CTs, MRIs and PETs, the TMI thermal
imaging  cameras and software  exhibit lower up-front and  maintenance  costs to
hospitals, clinics and other healthcare providers and, as a result, a lower cost
per  procedure.  Examinations  utilizing  the TMI  thermal  imaging  camera  are
non-invasive,  non-toxic and  patient-friendly.  TMI's equipment and software is
easy for technicians to operate.  We believe that a less  expensive,  functional
imaging  tool  like  the TMI  system  will  enable  the use of many of the  new,
targeted  cancer  therapies that are being produced,  as they require  accurate,
lower cost functional imaging  techniques to ascertain early tumor response.  We
also believe that use of the TMI system in the management of pain will assist in
more accurate  identification  of the source of pain and the enhanced ability to
target patient treatment.

Our  competitive  advantage  arises  from  the  clarity  of the  thermal  images
generated  by our  thermal  imaging  cameras as  compared  to  similarly  priced
equipment.  For example,  our thermal  imaging  cameras,  manufactured  under an
exclusive agreement for us by Mikron Instrument Company,  Inc., generate thermal
images comprised of 70,000 pixels.  Competitive thermal imaging cameras, such as
those  manufactured by Flir Corporation and Medical Monitoring Systems Pty. Ltd.
produce thermal images comprised of approximately  50,000 pixels.  Each pixel is
an  individually  referenced  measurement  of  skin  temperature,  which  can be
compared  with each of the other pixels in the image.  Because of the  increased
number of pixels in our thermal images, our technology  provides a more accurate
thermal image, which provides us with a competitive advantage in a marketplace.

Our marketing strategy is to absorb the initial capital costs of thermal imaging
cameras, related equipment and software. Our revenue stream will be based upon a
per patient imaging fee arising from the ongoing usage of our equipment in third
party locations.

Markets

In view of TMI's  attributes  and cost  advantages,  large  and  growing  global
healthcare  expenditures,   and  the  vast  number  of  imaging  procedures  and
applications  for which the TMI thermal imaging  cameras are suited,  we believe
that  we  will  attract   market  share.   Our  plan  is  to  initially   target
revenue-generating  opportunities in the following three high-value areas: oPain
Clinics; oMammography; o Equine scanning for ligament damage and pain.

                                       5
<PAGE>
The level of FDA approval  required for use of the TMI  Technology  is different
from that required for use of traditional  X-Ray,  CT or MRI because the thermal
imaging  techniques are non-invasive and non-toxic.  TMI Technology's  strengths
lay in the fact that compared to X-Ray, CT and MRI it is low cost,  non-invasive
and non-toxic.  Through the use of education in our marketing  presentations  to
clinical  practitioners  and third party payors, we will continue to stress that
the TMI Technology is an adjunctive  procedure,  not a replacement  for existing
diagnostic tools on which practitoners have traditionally relied.

We will  implement the first phase of our business  strategy by  addressing  the
diagnostics/screening market, which includes pain management,  breast, cervical,
skin   and   other   cancers,   and   diabetes.   We   plan   to   address   the
diagnostics/screening  market by entering into License Agreements with hospitals
and  pain  clinics  and by  acquiring  new  thermal  imaging  technologies.  The
technologies  available  today to  screen  and  diagnose  cancer  vary  greatly.
According  to  the  specific  form  of  the  disease  being  considered,   X-ray
mammography  is the most widely used method of diagnosing  breast cancer despite
the technology's limitations.  For skin cancer detection, there are no effective
diagnostic  means other than  surgical  biopsy,  and for  cervical  cancer,  the
inaccuracies of routinely  conducted "pap smears" result in tens of thousands of
unnecessary  cervical  biopsies.  We  recognize  that,  despite the  substantial
potential  in this  market  segment,  there  are many  clinical  regulatory  and
marketing  hurdles to overcome in order to establish TMI thermal imaging systems
as the standard of care in this fragmented and complex  market.  We believe that
the  TMI  thermal  imaging  system  can  potentially   provide  an  easy-to-use,
significantly lower cost, completely  non-invasive,  patient-friendly  method of
cancer detection in each of these areas.

Research, Development, and Technology

We do not manufacture  the thermal  imaging cameras  utilized in the TMI thermal
imaging  system.  The  manufacturer  of our  cameras  is the  Mikron  Instrument
Company.  Our contract with Mikron  provides for the exclusive use and marketing
of the cameras in the medical and veterinary fileds in the United States, Canda,
Mexico and the Middle East. The expiration date of the contract is June 4, 2011.

We rely on the research  and  development  of our  suppliers to keep us equipped
with  state of the art  technology.  We  continue  to  research  the  market for
emerging  advances in  infrared  imaging and seek to  incorporate  leading  edge
technology in our system through strategic  alliances and marketing  agreements.
We are developing  software for implementation of imaging data acceptable to the
fmedical community for diagnostic purposes.

Our software offers seamless  integration from capture to port generation,  with
all functions performed in one format. Our camera offers a Microbolometer with a
30 frame  per  second  capture  rate.  This real time  imager  provides  thermal
sophistication for both clinicians and researchers.  Additonial features include
real time video capture and  playback;  export  functions to excel  spreadsheets
and; auto calculation of average temperature deltas.

Environment and Regulation

FDA  Regulation.  Our  products  and  manufacturing  activities  are  subject to
regulation  by the  U.S.  Food  and Drug  Administration,  or FDA,  and by other
federal,  state, local and foreign authorities.  Pursuant to the Food, Drug, and
Cosmetic  Act of  1938,  commonly  known as the FD&C  Act,  and the  regulations
promulgated  under it, the FDA  regulates  the  development,  clinical  testing,
manufacture, packaging, labeling, storage, distribution and promotion of medical
devices. Before a new device can be introduced into the market, the manufacturer
must generally obtain marketing  clearance through a Section 510(k) notification
or approval through a Premarket Approval, or PMA.

Classification  of  Medical  Devices.  In the  United  States,  medical  devices
intended for human use are classified into three categories, Class I, II or III,
on the basis of the controls  deemed  reasonably  necessary by the FDA to assure
their safety and  effectiveness  with Class I requiring the fewest  controls and
Class III the most. Class I, unless exempted,  and Class II devices are marketed
following FDA clearance of a Section 510(k) pre-market notification. Since Class
III devices  (e.g.,  implantable  devices and life  sustaining  devices) tend to
carry the greatest risks, the  manufacturer  must demonstrate that such a device
is safe and effective for its intended use by submitting a PMA application.  PMA
approval  by the FDA is  required  before a Class  III  device  can be  lawfully
marketed in the United States.  Usually,  the PMA process is significantly  more
time consuming and costly than the 510(k) process.

                                       6
<PAGE>
Breast cancer  screening  devices that use infrared  detection  instrumentation,
such as that used in the TMI thermal  imaging  system,  which are intended to be
used by  physicians as an adjunct  (supplement)  to other  established  clinical
detection  methods  for breast  disease,  are  currently  classified  as Class I
devices,  requiring  clearances  under  Section  510(k) before  marketing.  Such
devices  that  are  intended  for  stand-alone  use,  i.e.,  for  use  as a sole
diagnostic  screening  tool for detection of breast  cancer,  are  classified as
either Class II or Class III devices, requiring PMA before marketing.

Changes in Approved  Devices.  The FD&C Act  requires  device  manufacturers  to
obtain  a new FDA  510(k)  clearance  when  there  is a  substantial  change  or
modification  in the  intended use of a legally  marketed  device or a change or
modification,  including product enhancements and, in some cases,  manufacturing
changes, to a legally marketed device that could significantly affect its safety
or  effectiveness.  Supplements for approved PMA devices are required for device
changes,   including  some   manufacturing   changes,   that  affect  safety  or
effectiveness.  For  devices  marketed  pursuant  to  510(k)  determinations  of
substantial  equivalence,  the  manufacturer  must  obtain  FDA  clearance  of a
new510(k)  notification  prior to  marketing  the modified  device.  For devices
marketed with PMA, the manufacturer  must obtain FDA approval of a supplement to
the PMA prior to marketing the modified device.

Good  Manufacturing  Practices  and  Reporting.  TMI  does not  manufacture  the
infrared cameras used in its thermal imaging system. Nevertheless,  the FD&C Act
requires  device  manufacturers  to  comply  with Good  Manufacturing  Practices
regulations.  The regulations require that medical device  manufacturers  comply
with  various  quality  control  requirements  pertaining  to  design  controls,
purchasing   contracts,   organization  and  personnel,   including  device  and
manufacturing process design,  buildings,  environmental  control,  cleaning and
sanitation;  equipment and calibration of equipment;  medical device components;
manufacturing  specifications and processes;  reprocessing of devices;  labeling
and packaging;  in-process and finished device inspection and acceptance; device
failure  investigations;  and record keeping  requirements  including  complaint
files and device tracking. We are in compliance with the above requirements.

Current  Regulatory  Status.  The FDA found that the cameras utilized in the TMI
thermal  imaging  system are  substantially  equivalent  to an existing  legally
marketed   device,   thus   permitting   them  to  be  marketed  as  an  adjunct
(supplemental)  screening/diagnostic  device. The cameras utilized in our system
first  received  510(k)  clearance in September 2001 and  subsequently  in March
2003.  Together with our proprietary  software we, are marketing the TMI thermal
imaging system as an adjunct  (supplemental)  method for the diagnosis of breast
cancer and other  diseases  affecting the perfusion or  reperfusion  of blood in
tissue or organs.

Reimbursement  by  Third-Party  Payors.  Most  purchasers  and users of  medical
devices such as physicians, hospitals and imaging centers rely on reimbursements
from third-party payors including,  by way of example,  private indemnity health
insurers,  managed  care health  insurers,  federal  health  insurance  programs
(e.g.,Medicare),  and state administered programs (e.g.,  Medicaid).  Therefore,
decisions by  third-party  payers  concerning  reimbursement  for use of the TMI
thermal  imaging  system are likely to affect  its use.  Use of the TMI  thermal
imaging  system  for  its  current  FDA  cleared  uses  is  not  covered  by any
third-party  insurer.  Failure  to secure  third-party  coverage,  or failure to
maintain coverage after it is received, could have an material adverse impact on
our operations.

Favorable  coverage  determinations  for a medical  device do not  automatically
follow FDA approval or clearance of the medical device. Rather, manufacturers of
medical devices must affirmatively seek favorable coverage  determinations  from
private and public  insurers.  A coverage  determination  usually  involves  two
fundamental   decisions.   First,   the  insurer   decides   whether  there  are
circumstances  under which it will pay for a procedure  involving  the device or
will pay an  additional  amount  for use of the  device,  where the device is an
adjunct to an already  covered  procedure.  Second,  if there are  circumstances
where  coverage  would be  appropriate,  the  insurer  sets  out the  conditions
necessary to support coverage (e.g.,  medical history).  The coverage conditions
can be broad  allowing many patients to qualify for coverage or so narrow,  that
few patients qualify for coverage. Following a favorable coverage determination,
the insurer  sets a level of  reimbursement  or a formula for  determining  that
level.

                                       7
<PAGE>
Coverage determinations by private and public insurers can proceed slowly; their
outcomes are uncertain  and can vary even within a single  program owing in part
to the fact  that  many  determinations  are made  regionally,  locally  or on a
case-by-case  basis, rather than nationally.  This is even so for Medicare,  the
federal  health  insurance  program for the aged,  disabled,  and single largest
third-party payor.

Through  compilation of a HIPPA compliant data base images, we plan to develop a
statistically  verifiable  basis upon which  practioners  can base their patient
evaluations  thereby providing the data upon which we believe we will be able to
obtain approval for third party reimbursement.

Permits and Inspections

The  manufacturer  of the thermal  imaging  cameras  utilized in the TMI thermal
imaging system is subject to compliance with Good Manufacturing  Practices under
the FD&C Act, as described  above.  The  manufacturer  is subject to  government
inspection  and failure to comply with all  applicable  standards  can result in
suspension or termination  of its ability to manufacture  cameras for use in our
system. In that event we would be compelled to seek thermal imaging cameras from
other manufacturers.

Users of the TMI thermal  imaging  system are required to utilize  protocols for
accurate  thermal  imaging such as the "Technical  Protocols for High Resolution
Infrared  Imaging"  approved by the ACCII 5-15-99.  Failure to comply with these
requirements  can  result  in  suspension  or  termination  of  the  facilities'
authority  to  utilize  our  thermal  imaging  system.  In that  event  we would
experience a disruption  in revenue while we removed our equipment and sought to
install it in another location.

Research and Development

We  continue to  interface  with  equipment  manufacturers  and  medical  device
research  and  development  firms to seek out state of the art  thermal  imaging
technology.

In addition, we are in the process of creating a Data Collection division.  This
will enable us to keep data and compare  results of images taken from all of our
cameras.  This  will  then  lead  to  definitive  conclusions  for  the  medical
community.   Through   a   HIPPA-compliant   database   we  plan  to   gather  a
statistically-verifiable  data set from our patient  population  from all of our
participating  facilities.  This information will be compared to currently known
statistics  and  provide  additional  verification  regarding  the  efficacy  of
infrared imaging in a variety of applications.  The medical  community  requires
"evidence" to back the use or implementation  of all  technologies.  TMI expects
that its thermal  imaging  operations  will yield  significant  data.  This will
supply the data needed to support  evidenced-based  practice. This data can then
be compared to the patient  outcome-information  held by each practitioner.  The
combined data can be presented when petitioning the reimbursement  approval from
third-party payers.

Item 2. DESCRIPTION OF PROPERTY

We maintain our  principal  office at 6911 Pilliod Road,  Holland OH 43528.  Our
telephone  number at that office is (419)  865-0069 and our facsimile  number is
(419) 867-0829.

Item 3. LEGAL PROCEEDINGS

We may  become  involved  in a lawsuit  or legal  proceeding  at any time in the
ordinary  course of business.  Litigation is subject to inherent  uncertainties,
and an  unexpected  adverse  result  may arise  that may  adversely  affect  our
business. We are currently not aware of any litigation pending or threatened for
any reason.  We are not aware of any additional  legal proceeding or claims that
we believe  will have,  individually  or in the  aggregate,  a material  adverse
affect on our business, financial condition or operating results.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There was no matter submitted to a vote of the Company's security holders during
the fourth quarter of the fiscal year ended July 31, 2006.

                                       8
<PAGE>
                                     PART II

Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is quoted on the Pink Sheets under the symbol "WLSI."

For the periods  indicated,  the following table sets forth the high and low bid
prices per share of common stock. These prices represent inter-dealer quotations
without retail markup, markdown, or commission and may not necessarily represent
actual transactions.


Particularly   since   our   common   stock   is   traded   infrequently,   such
over-the-counter  market quotations reflect inter-dealer prices, without markup,
markdown or commissions and may not necessarily represent actual transactions or
a liquid trading market.



 Quarter Ended           High           Low
------------------     ---------     ---------
October 31, 2004         3.20          1.80
------------------     ---------     ---------
January 31, 2005         0.015         0.10
------------------     ---------     ---------
April 30, 2005           0.015         0.015
------------------     ---------     ---------
July 31, 2005            0.82          0.015
------------------     ---------     ---------
October 31, 2005         0.43          0.09
------------------     ---------     ---------
January 31, 2006         0.28          0.075
------------------     ---------     ---------
April 30, 2006           0.28          0.085
------------------     ---------     ---------
July 31, 2006            0.29          0.165
------------------     ---------     ---------
October 31, 2006         0.225         0.031
------------------     ---------     ---------


Number of Stockholders

As of October 25, 2006,  there were  approximately  72,125,000  shares of common
stock outstanding, of which 72,1265,000 shares were restricted under Rule 144 of
the Securities Act of 1933.

As of October 25, 2006, there were approximately 85 active holders of our common
stock.  The number of record  holders  was  determined  from the  records of our
transfer  agent and does not  include  beneficial  owners of common  stock whose
shares  are  held  in the  names  of  various  security  brokers,  dealers,  and
registered clearing agencies.  The transfer agent of our common stock is Pacific
Stock Transfer.

Dividend Policy

Historically,  we have not paid any dividends to the holders of our common stock
and we do not expect to pay any such dividends in the  foreseeable  future as we
expect to retain our future  earnings for use in the  operation and expansion of
our business.  In addition,  any future determination to pay cash dividends will
be at the  discretion of the Board of Directors  and will be dependent  upon our
financial condition, results of operations, capital requirements, and such other
factors as the Board of Directors deem relevant.

                                       9
<PAGE>
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following  discussion  should be read in conjunction  with our  consolidated
financial  statements and notes to those  statements.  In addition to historical
information,  the  following  discussion  and other parts of this annual  report
contain forward-looking information that involves risks and uncertainties.

General Overview

Trillennium  Medical  Imaging's  business model is based upon clinical  research
that proves  disease is a 10-20 year  progression  prior to the  development  of
symptoms and ultimately  tumor growth in the form of cancer.  Pain  dysfunctions
affecting Americans not able to be identified with conventional  imaging such as
MRI, CT or X-Ray provide an additional market for physiological thermal imaging.
Trillennium  Medical Imaging utilizes the latest  technology,  including medical
infrared  camera  equipment  and  advanced  TMI V 5.0  interfaced  software,  to
identify the disease process early so that lifestyle  modification and immediate
medical interventions can offset years of potential poor health,  staggering out
of pocket  health  care  costs and  untimely  death due to late  diagnosis  in a
disease process.

Plan of Operation

We  have  been  developing  our  market   opportunity  since  the  inception  of
Trillennium Medical Imaging, Inc. and initially positioned our equipment in pain
clinics and acute care facilities  pursuant to agreements  with  Surgicenters of
America,  Inc.,  a subsidiary  of Triad  Hospital  Group,  and with Primary Care
Practitioners, which operates pain clinics.

We have  terminated the License with Primary Care  Practioners  for late payment
and are currently negotiating resolution of their outstanding receivable owed to
us. The thermal  imaging  infrared  camera  previously  provided to Primary Care
Practioners has been relocated to Spineonumics Health Center in Orlando, Florida
where it is being used in clinical trials and through which it will be the focus
of a presentation  at the Florida  Chiropractic  Society  convention in Orlando,
Florida on December 2nd/3rd, 2006.

While we continue to develop our plan to penetrate  the equine  market,  we have
not yet entered into any license agreements in this industry.

In addition,  we have entered into a verbal agreement for the use of our thermal
imaging  cameras with Natural  Horizons  Wellness  Center  Fairfax,  in Fairfax,
Virginia.

We have  refocused  our  plan  of  operation  from  placement  of our  equipment
primarily in pain and breast cancer  screening  clinics to development of market
demand through the use of advanced medical  research to develop  verifiable data
evidencing the usefulness of our thermal imaging  cameras in adjunctive  medical
diagnostic screening environments.

In addition,  we are  continuing  to seek  qualified  directors,  employees  and
consultants,  and to pursue  Marketing and License  Agreements  with pain clinic
owners and operators.

Surgicenters of America Contract

TMI has entered  into a contract  with  Surgicenters  of America,  the  surgical
division of Triad  Hospitals,  Inc., one of the largest  hospital  groups in the
United States. The initial phase of the contract anticipates the installation of
two of our  thermal  imaging  units at  facilities  owned and  managed  by Triad
Hospitals.  Training  and site survey for  in-facility  installation  of cameras
began in January,  2006,  however  actual  installation  has been delayed due to
management changes within the Surgicenters organization.

                                       10
<PAGE>
Surgicenter's responsibilities under the contract are as follows:

o To provide space for our cameras without charge;
o To bill and collect for a 3% fee;
o Comply with the Health Insurance Portability and Accountability Act;
o Provide the  personnel to image the patients at a true pass through cost (If a
technician/nurse hourly rate is $20.00, and an image took one hour, TMI would be
billed services for $20.00);
o The net proceeds to TMI after an image, would be the cost per patient session,
less a 3% billing and collection fee, less the man-hour cost. TMI anticipates to
receive in excess of 85% of all images billed;

o Have $1 million occurrence/ $3 million dollars aggregate of insurance;

Trillennium's responsibilities under the contract are as follows:

o Provide an FDA approved camera;
o Provide training to staff;
o Comply with the Health Insurance Portability and Accountability Act; o Have $1
million occurrence/ $3 million dollars aggregate of insurance;

Acquisition of the Assets of Micro Health Systems

We acquired  the assets of Micro  Health  Systems  ("Micro  Health" or "MHS") in
December  2005.  Pursuant to the agreement,  TMI obtained the  following:  MHS's
customer lists; the assignment of MHS' exclusive  supplier  contract with Mikron
Instrument  Co.,  which  supplies  our thermal  imaging  cameras,  and all other
intangibles such as FDA rights; and tangible assets.

                                       11
<PAGE>
The purchase price  consisted of $600,000 cash and 2,000,000  shares of Wellstar
common stock.  The $600,000 portion of the purchase price is payable as follows:
$400,000  cash at  closing;  $200,000  in the  form of a  promissory  note  with
interest at 8%;  $100,000 with accrued  interest due within 180 days of the note
signing and the balance with interest due within 365 days from closing.

The exclusive supplier  agreement between the Company and Mikron Infrared,  Inc.
("Mikron")(formerly Mikron Instrument Company, Inc.) provides the Company with a
supply of the Company's  primary  product - thermal  imaging  cameras  utilizing
infrared imaging technology for use in the medical and veterinary  markets.  The
Company's  obligation  to market Mikron  manufactured  thermal  imaging  cameras
utilizing  infrared imaging technology is on a "best efforts" basis and does not
contain a minimum  purchase  requirement.  While the Company  prefers to utilize
Mikron  manufactured  equipment,   it  is  not  contractually   restricted  from
purchasing  thermal imaging cameras utilizing  infrared imaging  technology from
other  manufacturers.  The Company has had  preliminary  discussions  with other
manufacturers  and  although  there are no  contractual  arrangements  in place,
management believes it would be able to obtain thermal imaging cameras utilizing
infrared imaging  technology from alternative  suppliers  without no more than a
deminimus  disruption  in supply.  Accordingly,  in the event of a disruption in
supply from Mikron, the Company would not be materially impaired from continuing
to supply its existing customer base or from expanding its market share.

In addition to obtaining the exclusive North American,  European and Middle East
rights to market  the FDA  approved  thermal  imaging  cameras  manufactured  by
Mikron,  the Company also acquired  related  software from Mikron.  The software
provides images allowing for fast, accurate interpretation of the data collected
by the thermal  imaging  cameras.  By obtaining the rights to market the thermal
imaging  cameras that have been  approved by the FDA and by  obtaining  software
that is  acceptable  in the  marketplace,  the  Company  believes  it has  saved
significant  development  time and  expense,  thereby  allowing  the  Company to
immediately  go to market  with FDA  approved  equipment.  This has  enabled the
Company to enter into a written License  Agrement with  SurgiCenters of America,
Inc., a verbal agreement with Natural  Horizons  Wellness Center Fairfax and, to
enter into a Marketing Agreements with Allevia Medical, LLC and Advanced Medical
Solutions,  Ltd.,  and to have its  equipment  and software  utilized in ongoing
research studies at Duke University  Medical Center, at a chain of Nursing Homes
throughout Ohio and at Tria Orthopedic Center in Minneapolis, Mn.

The  Company's  current  financial  projections  are  based  solely  upon  these
contracts. The Company's acquisition of Micro Health Systems did not include the
assumption of any existing  contracts with prior  purchasers of thermal  imaging
cameras and hence no pre-existing revenue base was acquired from the acquisition
of Micro Health Systems.

Research Studies

There are currently three studies underway at the Duke University Medical Center
utilizing the TMI Thermal  Imaging System  (equipment and software) in the areas
of:

     a. Breast Imaging;
     b. Oestoarthritis; and
     c. Sports Medicine.

Nursing Home Study

This study utilizing the TMI Thermal Imaging System  (equipment and software) is
being  conducted to determine the viability of the TMI Thermal Imaging System in
the early detection of pressure ulcers and for wound care.

Results of Operations for the Fiscal Year Ended July 31, 2006

Revenues

For the year ended July 31,  2006,  we had  revenues of $21,475 from our medical
imaging  business.  Revenues were generated from two pieces of imaging equipment
placed at one pain clinic owned and operated by Primary Care  Practitioners.  We
have since terminated our agreement with Primary Care Practitioners.

                                       12
<PAGE>
Net Loss

For the year ended July 31, 2006, we had a net loss of $4,781,103.  The net loss
was principally due to the following:

o The acquisition of the assets of Micro Health Systems;
o Costs associated with the installation of our thermal imaging cameras;
o A derivative  expense of $2,329,349  incurred in  connection  with our October
2005 Secured Convertible Note and Warrant financing.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses totaled $1,724,693 for the year
ended July 31, 2006. This amount  included the following:  salaries for officers
and  employees  totaling  $939,591,   and  professional  fees  for  consultants,
attorneys and auditors totaling $344,286.

Depreciation and Amortization

For the year ended July 31, 2006, our deprecation and  amortization  expense was
$314,396.  This charge  represents a charge to operations for  depreciating  the
imaging  equipment  and the office  equipment,  which has a cost of $457,977 and
$144,085  respectively.  The depreciable assets have been assigned a useful life
of five years.  It also  includes a charge for  amortizing  the  covenant not to
compete,  manufacturing and distribution  agreement,  loan acquisition costs and
software  and  manuals,  which have a cost of $20,000,  $ 700,000,  $190,025 and
$80,000 respectively with a life of 2 to 5.5 years.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles
generally  accepted in the United States  requires that management make a number
of  assumptions  and  estimates  that  affect  the  reported  amounts of assets,
liabilities,  revenues and expenses in our consolidated financial statements and
accompanying notes. Management bases its estimates on historical information and
assumptions  believed to be reasonable.  Although  these  estimates are based on
management's best knowledge of current events and circumstances  that may impact
the Company in the future, actual results may differ from these estimates.

Our critical accounting policies are those that affect our financial  statements
materially and involve a significant level of judgment by management.

The  Company  has  adopted  the policy of  capitalizing  the cost of its imaging
equipment  and  depreciating  the cost against  earnings  over the straight line
method using an estimated useful life of five years.  Because the useful life of
any new technology is difficult to estimate due to factors such as  competition,
obsolescence,   government  regulations,   etc.,  this  accounting  estimate  is
reasonably  likely to change from period to period with a material impact on our
financial  statements.  The  significance  of  the  accounting  estimate  to the
Company's  financial  statements  is that the  equipment on the balance sheet is
stated at cost less accumulated amortization and the corresponding  depreciation
is an expense on the statement of operations. The estimate as to the useful life
of these assets will  directly  affect the carrying  amount on the balance sheet
and the  expense  for  depreciation  recorded in the  statement  of  operations.
Accordingly, shareholders' equity and earnings will be materially affected.

Revenue Recognition

Revenue will be recognized as earned per the licensing  agreements which provide
for a fixed fee for each  thermal  imaging  camera we  install.  The  revenue is
recognized in the month that the camera is in use at the customer's facility.

Derivative Instruments

                                       13
<PAGE>
In connection with the sale of debt or equity  instruments,  we may sell options
or  warrants to  purchase  our common  stock.  In certain  circumstances,  these
options or warrants may be classified as derivative liabilities,  rather than as
equity.  Additionally,  the debt or  equity  instruments  may  contain  embedded
derivative   instruments,   such  as  conversion   options,   which  in  certain
circumstances  may  be  required  to be  bifurcated  from  the  associated  host
instrument and accounted for separately as a derivative instrument liability.

The  identification of, and accounting for,  derivative  instruments is complex.
Our derivative instrument liabilities are re-valued at the end of each reporting
period,  with changes in the fair value of the derivative  liability recorded as
charges  or credits to income,  in the period in which the  changes  occur.  For
options,  warrants and bifurcated  conversion  options that are accounted for as
derivative  instrument  liabilities,  we  determine  the  fair  value  of  these
instruments  using the  Black-Scholes  option pricing model. That model requires
assumptions related to the remaining term of the instruments and risk-free rates
of return,  our current common stock price and expected  dividend yield, and the
expected  volatility  of our common  stock  price  over the life of the  option.
Because of the limited  trading  history for our common stock, we have estimated
the future volatility of our common stock price based on not only the history of
our stock price but also the experience of other entities considered  comparable
to us. The identification of, and accounting for, derivative instruments and the
assumptions  used  to  value  them  can   significantly   affect  our  financial
statements.

Registration Rights Agreements

In  connection  with the sale of debt or equity  instruments,  we may enter into
Registration Rights Agreements.  Generally,  these Agreements require us to file
registration  statements with the Securities and Exchange Commission to register
common shares that may be issued on conversion  of debt or preferred  stock,  to
permit  re-sale  of  common  shares  previously  sold  under an  exemption  from
registration  or to  register  common  shares  that may be issued on exercise of
outstanding options or warrants.

The Agreements  usually require us to pay penalties for any time delay in filing
the required registration statements, or in the registration statements becoming
effective,  beyond dates specified in the Agreement. These penalties are usually
expressed as a fixed  percentage,  per month, of the original amount we received
on issuance of the debt or preferred stock, common shares,  options or warrants.
We account for these penalties as a contingent liability and not as a derivative
instrument.  Accordingly,  we recognize the penalties  when it becomes  probable
that they will be incurred.  Any penalties are expensed over the period to which
they relate.

Recent Accounting Pronouncements

Emerging Issues Task Force Pronouncement 00-27,  relating to certain convertible
instruments,  requires  the  discounting  of certain debt  instruments  when the
conversion feature meets certain criteria. FASB 123R, Stock Options To Employees
And  Consultants.  This  pronouncement  relates to employees and consultants who
receive stock based pay.

The Company will account for the fair value of employee and non-employee options
and warrants in accordance with SFAS No. 123R,  "Share-Based Payment",  which is
effective for options and warrants during the annual  reporting period beginning
after December 15, 2005. The compensation  cost will be measured after the grant
date based on the value of the reward and is recognized over the service period.
The fair value of each option  grant is estimated on the date of the grant using
the Black-Scholes  stock option pricing model. The Company has not yet adopted a
stock  option plan but is  evaluating  the affect of a stock  option plan on its
financial position and results of operations in future periods.

Liquidity and Capital Resources

                                       14
<PAGE>
As of  July  31,  2006  we  had  a  working  capital  deficit  of  approximately
$5,693,000, and cash of approximately $245,000. Through the end of July 2006, we
have  generated  minimal  revenues and have incurred  operating  losses in every
quarter. We plan to achieve positive cash flow by obtaining additional financing
and by installing additional thermal imaging equipment units under our Licensing
Agreements  with Primary Care  Practitioners  and  Surgicenters  of America.  We
expect significant camera expenditures during the next 12 months,  which we will
fund  out of  cash  flows,  company  reserve,  or by  raising  additional  funds
specifically  for the  purchase of cameras.  By  adjusting  our  operations  and
development  to the  level of  capitalization,  we  believe  we have  sufficient
capital  resources to meet our projected  cash flow  projections.  We anticipate
that we will  be able to  satisfy  our  cash  requirements  with  our  currently
available resources through the second quarter of our 2007 fiscal year.

We anticipate that our  acquisition of Micro Health Systems,  which includes the
assignment of an exclusive  supplier  contract with Mikron  Instrument  Co., the
supplier of our thermal imaging  cameras,  will enable us to achieve our revenue
objectives.

The liquidity impact of our outstanding debt is as follows:

Our secured  convertible note with Andrew W. Thompson (the "Thompson  Note"), in
the  principal  amount  of  $400,000,  matured  on April  11,  2006 and  remains
outstanding.  We are in  default  pursuant  to the terms of the  Thompson  Note,
although we have not received a notice of default from Mr. Thompson, nor has Mr.
Thompson  indicated  to the  Company  that he  intends  to place the  Company in
default under the loan  agreement.  Interest on the Thompson Note is at the rate
of 8% plus the prevailing margin rate charged to the lender,  which is currently
7.625%. If these rates remain at these levels,  the accrued interest at maturity
will exceed $43,980. The lender has the option of converting the loan into fully
registered common stock at a discount of 40% on the day of conversion,  which is
the prepayment date or the due date, whichever occurs first.  Additionally,  the
lender also  received  warrants to purchase  1,000,000  shares of the  company's
fully  registered  common stock at an exercise price of $0.50 per share.  If the
lender  converts,  the Company will issue the  appropriate  number of shares and
will not be  required  to use cash to  liquidate  the  debt.  Additionally,  the
Company will  receive the cash  proceeds in the amount of $500,000 if the lender
exercises  the $0.50  warrants.  On November  10, 2006,  the  Thompson  Note was
amended to include a provision  stipulating  that the holder may not convert the
secured  convertible  note if such conversion or exercise would cause him to own
more than 9.99% of our outstanding common stock.  However, this restriction does
not prevent the holder from converting a portion of the note and then converting
the rest of the note.  In this way,  the holder  could sell more than this limit
while never holding more than this limit.


Our  unsecured  demand note with Michael  Sweeney (the "Sweeney  Note"),  in the
principal amount of $150,000, matured on August 1, 2006 and remains outstanding.
In addition to the outstanding  principal,  we also owe accrued  interest in the
amount of $9,000 at  maturity.  We are in default  pursuant  to the terms of the
Sweeney  Note,  although  we have not  received  a notice  of  default  from Mr.
Sweeney,  nor has Mr. Sweeney  indicated to the Company that he intends to place
the Company in default under the note.

Our  unsecured  demand note with Micro Health  Systems  (the "MHS Note"),  dated
December 21, 2005 in the principal  amount of $200,000,  with interest at 8% per
annum,  has two  maturity  dates:  at the 180th day and the 365th day  following
issuance. A payment of $100,000.00 is due at each maturity date. We did not make
the  first  payment.  There  is  an  acceleration  provision  in  the  MHS  Note
stipulating  that the entire  $200,000.00 was due upon  non-payment of the first
$100,000.  The  interest  rate then goes to the highest  rate allowed by Florida
law.  We have not  received  a notice  of  default  from MHS,  although  MHS has
expressed  serious concern about  non-payment.  No threat of litigation has been
received to date.  The MHS Note is secured by a pledge of 1.5 million  shares of
the Company's treasury stock.


To obtain  funding  for our ongoing  operations,  we entered  into a  Securities
Purchase  Agreement  with four  accredited  investors - AJW  Partners,  LLC, AJW
Qualified Partners,  LLC, AJW Offshore, Ltd. and New Millennium Partners II, LLC
on October 31, 2005 for the sale of (i) $3,000,000 in secured  convertible notes
and (ii)  warrants  to buy  5,000,000  shares  of our  common  stock.  The gross
financing  proceeds  were paid to the  Company  in three  separate  tranches  of
$1,000,000  each.  The  first  tranche  of  the  financing,  in  the  amount  of
$1,000,000,  was received by the Company upon  closing.  The second  tranche was
received  on January  20,  2006.  The third  tranche  was  received  as follows:
$500,000 in July 2006 and $500,000 in August 2006.

                                       15
<PAGE>
The secured  convertible  notes issued  pursuant to our October 2005  Securities
Purchase  Agreement  bear  interest at 8%,  mature  three years from the date of
issuance,   and  are   convertible   into  our  common  stock,  at  the  selling
stockholders'  option,  at the lower of (i) $0.12 or (ii) a 40%  discount to the
average of the three lowest  intraday  trading  prices for the common stock on a
principal market for the 20 trading days before but not including the conversion
date. As of October 25, 2006, the average of the three lowest  intraday  trading
prices for our common stock during the  preceding 20 trading days as reported on
the  Over-The-Counter  Bulletin Board was $.038 and,  therefore,  the conversion
price for the  secured  convertible  notes was $.023.  Based on this  conversion
price, the $2,860,000  outstanding  principal amount of the secured  convertible
notes,  excluding  interest,  were  convertible into  approximately  124,000,000
shares of our common stock.The stock purchase warrants have an exercise price of
$0.50 per share. If the lender converts,  the Company will issue the appropriate
number of shares and will not be  required  to use cash to  liquidate  the debt.
Additionally, the Company will receive cash proceeds in the amount of $2,500,000
if the lender exercises the $0.50 warrants. If the lender converts,  the Company
will issue the appropriate  number of shares and will not be required to use the
cash to liquidate the debt.

The  registration  statement  we filed to  register  the shares  underlying  the
convertible  notes and  warrants  was  declared  effective  by the  Securities &
Exchange Commission on August 4, 2006 (File No. 333-130295).

We presently do not have any available credit,  bank financing or other external
sources of  liquidity.  Due to our brief  operating  history  and  startup,  our
operations  have  not  been a  source  of  liquidity.  We will  need  to  obtain
additional  capital  in order to expand  operations.  We  estimate  that we will
require  additional cash  resources,  based on our current  operating  plans, in
order to expand our operations.  We are currently  investigating other financial
alternatives,  including  additional  equity and/or debt financing.  In order to
obtain  capital,  we may need to sell  additional  shares of our common stock or
borrow funds from private lenders.  However, there can be no assurance that that
any additional financing will become available to us, and if available, on terms
acceptable to us.

RISK FACTORS

An  investment  in our shares  involves a high degree of risk.  Before making an
investment decision, you should carefully consider all of the risks described in
this  prospectus.  If any of the risks  discussed  in this  prospectus  actually
occur,  our business,  financial  condition  and results of operations  could be
materially  and  adversely  affected.  If this were to happen,  the price of our
shares  could  decline  significantly  and  you may  lose  all or a part of your
investment.  The risk  factors  described  below  are not the only ones that may
affect us. Our forward-looking  statements in this prospectus are subject to the
following risks and  uncertainties.  Our actual results could differ  materially
from those anticipated by our forward-looking statements as a result of the risk
factors below. See "Forward-Looking Statements."

Risks Relating to Our Business:

We Have a Limited Operating History,  Which May Negatively Impact Our Ability to
Achieve Our Business Objectives.

We have no  operating  history.  We cannot  assure  you that we can  achieve  or
sustain  profitability on a quarterly or annual basis in the future.  As of July
31, 2006,  we had an  accumulated  deficit of  $4,404,591.  Our  operations  are
subject to the risks and competition inherent in the establishment of a business
enterprise.   Unanticipated  problems,   expenses,  and  delays  are  frequently
encountered  in  establishing  a  new  business  and  marketing  and  developing
products.  These  include,  but are not  limited  to,  competition,  the need to
develop customers and market expertise, market conditions,  sales, marketing and
governmental regulation.  Our failure to meet any of these conditions would have
a  materially  adverse  effect upon us and may force us to reduce or curtail our
operations. There can be no assurance that future operations will be profitable.
Revenues  and  profits,  if any,  will depend upon  various  factors,  including
whether we will be able to continue expansion of our thermal imaging operations.
We may not achieve our business objectives and the failure to achieve such goals
would have an adverse impact on us.

                                       16
<PAGE>
If We Are Unable to Obtain Additional  Funding,  Our Business Operations Will be
Harmed.  In  Addition,  Section  4e of  the  October  2005  Securities  Purchase
Agreements Contains Certain  Restrictions and Limitations on Our Ability to Seek
Additional Financing.  If We Do Obtain Additional  Financing,  Our Then Existing
Shareholders May Suffer Substantial Dilution.

We will require  additional  funds to sustain and expand our sales and marketing
activities.  Additional  capital  will be  required to  effectively  support the
operations and to otherwise implement our overall business strategy. In order to
implement our business  strategy over the next 12 months,  we anticipate that we
will  require  approximately  $9.4  million  dollars  in  additional  funds.  We
anticipate  that these  additional  funds would be used to restructure  existing
debt  ($4.6  million),  purchase  additional  thermal  imaging  equipment  ($2.4
million) and for working capita ($2.4 million).

Without the prior written consent of a majority-in-interest of the investors for
a period  ending on the later of (i) 270 days from the closing date, or (ii) 180
days from the date that this registration statement is declared effective by the
SEC,  Section 4e of our October 2005 Securities  Purchase  Agreement  limits our
ability to seek additional financing,  including negotiating or contracting with
any party to obtain additional  equity financing  (including debt financing with
an equity component) which involves the following:

o the  issuance of shares of our common  stock at a discount to the market price
on the date of issuance;

o  the  issuance  of  convertible   securities  that  are  convertible  into  an
indeterminate number of shares of our common stock; or

o the issuance of warrants to purchase shares of our common stock.

There can be no  assurance  that  financing  will be  available in amounts or on
terms acceptable to us, if at all, or if a majority-in-interest of the investors
under our October 2005  Securities  Purchase  Agreement will provide their prior
written consent for us to engage in additional  financing involving the issuance
of our securities as set forth above. The inability to obtain additional capital
will  restrict  our  ability to grow and may reduce our  ability to  continue to
conduct business operations. If we are unable to obtain additional financing, we
will  likely be  required to curtail our  marketing  and  development  plans and
possibly  cease our  operations.  Any  additional  equity  financing may involve
substantial dilution to our then existing shareholders.

If We Are Unable to Retain the  Services of John  Antonio or If We Are Unable to
Successfully  Recruit Qualified Personnel Having Experience in Business,  We May
Not Be Able to Continue Our Operations.

Our success depends to a significant  extent upon the continued  service of John
Antonio,  our  current  President  and a Director.  Loss of the  services of Mr.
Antonio  could have a  material  adverse  effect on our  growth,  revenues,  and
prospective  business.  We have applied for a "key man" life insurance policy on
the life of Mr.  Antonio in the amount of $3,000,000.  In addition,  in order to
successfully  implement and manage our business plan, we will be dependent upon,
among  other  things,   successfully   recruiting   qualified  personnel  having
experience in business.  Competition for qualified individuals is intense. There
can be no assurance  that we will be able to find,  attract and retain  existing
employees  or  that  we will be able  to  find,  attract  and  retain  qualified
personnel on acceptable terms.

In  addition,  each  of our  executive  officers  is  involved  in the  business
activities of other companies.  As a result,  each of our executive officers may
not be able to devote  their full  time,  attention  and energy to our  Company,
which could have a negative  impact on their ability to  effectively  manage our
Company.

                                       17
<PAGE>
If We Are Not Able to  Successfully  Market  and Gain  Public  Awareness  of Our
Products and Services,  We May Sustain Substantial Losses Which Could Require Us
to Curtail or Cease Our Operations.

Achieving  market  awareness and acceptance  for products  being  introduced and
under  development  requires  substantial  marketing  efforts and expenditure of
significant marketing and advertising funds. There is uncertainty as to the rate
of sales expansion and the degree of market acceptance of our products.  Because
of this, we are currently developing and evaluating, and anticipate that we will
continue  to  develop,  marketing  and  advertising  for  such new  products  or
services; we will devote resources, financial and otherwise to such efforts. The
failure of these efforts could result in substantial losses.

We May Not Be Able To Compete Successfully.

A number of companies have developed, or are expected to develop,  products that
compete or will compete with our  products.  Many of these  competitors  offer a
range of products in areas other than those in which we compete,  which may make
such  competitors  more  attractive to  hospitals,  radiology  clients,  general
purchasing organizations and other potential customers. In addition, many of our
competitors  and  potential  competitors  are larger and have greater  financial
resources  than we do and offer a range of products  broader than our  products.
Some of the  companies  with which we now  compete or may  compete in the future
have  or  may  have  more  extensive   research,   marketing  and  manufacturing
capabilities and significantly greater technical and personnel resources than we
do, and may be better  positioned  to continue to improve  their  technology  in
order to compete in an evolving industry.

Our Delay or  Inability  To Obtain Any  Necessary  U.S.  or  Foreign  Regulatory
Clearances Or Approvals For Our Products Could Harm Our Business And Prospects.

Our  medical  imaging  products  are the  subject of a high level of  regulatory
oversight.  Any delay in our  obtaining or our inability to obtain any necessary
US or foreign regulatory  approvals for new products could harm our business and
prospects.  There is a  limited  risk that any  approvals  or  clearances,  once
obtained, may be withdrawn or modified which could create delays in shipping our
product,  pending  re-approval.  Medical  devices  cannot be  marketed in the US
without  clearance  or approval by the FDA. Our business and the business of our
key  suppliers,  including  the  manufacturers  of the thermal  imaging  cameras
marketed  by us,  must be operated  in  compliance  with FDA Good  Manufacturing
Practices,  which  regulate  the  design,  manufacture,   packing,  storage  and
installation of medical devices. These manufacturing facilities and our business
practices are subject to periodic  regulatory audits and quality  certifications
and we do self audits to monitor our compliance. In general,  corrective actions
required  as a result of these  audits do not have a  significant  impact on our
supplier's manufacturing operations; however there is a limited risk that delays
caused by a potential response to extensive  corrective actions could impact our
operations. Virtually all of our products manufactured or sold overseas are also
subject to approval and regulation by foreign regulatory and safety agencies. If
we do not  obtain  these  approvals,  we could be  precluded  from  selling  our
products or required to make  modifications  to our  products  which could delay
bringing our products to market.

We Must Rapidly Develop New Products In Order To Compete Effectively.

Technology  in our  industry,  particularly  in the  x-ray and  medical  imaging
businesses,  evolves rapidly, and making timely product innovations is essential
to our  success in the  marketplace.  Also,  our  technology  is  approved as an
adjunctive  medical  procedure to be used in conjunction  with other  diagnostic
techniques  such  as  mammography,  X-Ray,  CT and  MRI,  not as a  stand  alone
diagnostic  tool. The  introduction by our competitors of products with improved
technologies  or  features  may  render  our  existing   products  obsolete  and
unmarketable.  If we cannot  develop  products in a timely manner in response to
industry  changes,  or if our  products do not perform  well,  our  business and
financial  condition  will be  adversely  affected.  Also,  our new products may
contain defects or errors which give rise to product liability claims against us
or cause the products to fail to gain market  acceptance.  Additionally,  market
acceptance  is a  function  of the  acceptance  of  thermograph  as an  emerging
technology by field practioners. Accuracy in imaging, development of a data base
from which  practitioners  can draw  statistically  verifiable  conclusions  and
market resistance to change all impact on our ability to compete effectively.

                                       18
<PAGE>
Our  Success is  Dependant  Upon Our  Ability to  Adequately  Protect  Our Trade
Secrets, Know-How, Patents and Trademarks.

We own the following  intellectual  property:  proprietary  software controlling
image quality,  data compilation and facility billing information.  Where patent
protection is not available, we rely for protection of our intellectual property
on trade secret law and  nondisclosure and  confidentiality  agreements with our
employees  and  others.  There can be no  assurance  that such  agreements  will
provide meaningful  protection for our trade secrets or proprietary  know-how in
the  event of any  unauthorized  use or  disclosure  of such  trade  secrets  or
know-how.  In addition,  others may obtain  access to or  independently  develop
technologies or know-how similar to ours.

Our success will also depend on our ability to avoid  infringement  of patent or
other proprietary  rights of others. We are not aware that we are infringing any
patent or other such rights,  nor are we aware of  proprietary  rights of others
for  which we will be  required  to  obtain a license  in order to  develop  our
products.  However,  there  can  be no  assurance  that  we are  not  infringing
proprietary  rights of others,  or that we will be able to obtain any technology
licenses we may require in the future.

We  Rely  on  Contractual  Relationships.  The  Loss  of One or  More  of  These
Contractual Relationships Could Have an Adverse Effect On Our Business.

We rely on key contractual  relationships with our customers,  including Natural
Horizons   Wellness   Center  Fairfax,   Surgicenters   of  America,   Inc.  and
Spineonumics.  We also rely on a key contractual  relationship with the supplier
of our thermal imaging  equipment,  Mikron Instrument Co. If we were to lose any
or all of these contractual  relationships,  our ability to maintain or increase
revenues  could be adversely  affected.  There can be no assurance  that our key
contractual relationships will continue to exist.

Any  Future  Acquisitions  Could  Disrupt  Our  Existing  Business  and Harm Our
Financial Position.

An element of our growth strategy includes the acquisition of companies which we
believe have synergistic business models.  Acquisitions entail a number of risks
that could materially and adversely affect business and operating results.  Such
risks would include problems integrating the acquired  operations,  technologies
or products;  diversion of management's time and attention from core businesses;
difficulties in retaining business relations with suppliers and customers of the
acquired company; risks associated with entering markets in which our management
lacks prior  experience,  and potential  loss of key employees from the acquired
company.

If healthcare  providers do not receive  adequate  reimbursement  for procedures
using our products,  the market may not accept our products and our revenues may
decline.

The  success  of our  products  will  depend  upon  the  ability  of  healthcare
providers,  such as physicians,  hospitals, pain clinics and imaging centers, to
obtain  satisfactory  reimbursement for medical  procedures in which our thermal
imaging  systems are used. Use of the TMI thermal imaging system for its current
FDA  approved  uses is not covered by any  third-party  insurer.  If  healthcare
providers are unable to obtain reimbursement from third-party payors, the market
may not accept our  products and our  revenues  may  decline.  Moreover,  we are
unable to predict what additional legislation or regulation, if any, relating to
the health care  industry  or  third-party  coverage  and  reimbursement  may be
enacted in the future, or what effect such legislation or regulation would have.

                                       19
<PAGE>
Risks Relating to Our Current Financing Arrangement:

There Are a Large Number of Shares Underlying Our Secured  Convertible Notes and
Warrants  That May be Available for Future Sale and the Sale of These Shares May
Depress the Market Price of Our Common Stock.

As of October  25,  2006 we had  84,850,000  shares of common  stock  issued and
outstanding, secured convertible notes outstanding that may be converted into an
estimated  124,000,000  shares of common  stock based on a  conversion  price of
$.023, and related  warrants to purchase  6,000,000 shares of common stock at an
exercise  price of $0.50.  In  addition,  the  number of shares of common  stock
issuable  upon  conversion  of the  outstanding  secured  convertible  notes may
increase if the market price of our stock  declines.  All of the shares issuable
upon conversion of the secured  convertible notes issued pursuant to our October
2005  Securities  Purchase  Agreement and upon exercise of our warrants,  may be
sold  without  restriction.  The sale of these shares may  adversely  affect the
market price of our common stock.

The Continuously  Adjustable Conversion Price Feature of the Secured Convertible
Notes Issued Pursuant to Our October 31, 2005 Private Placement Could Require Us
to Issue a Substantially  Greater Number of Shares, Which Will Cause Dilution to
Our Existing Stockholders.

Our obligation to issue shares upon conversion of our secured  convertible notes
is essentially limitless. The following is an example of the amount of shares of
our common stock that are issuable,  upon conversion of the principal  amount of
our secured convertible notes, based on market prices 25%, 50% and 75% below the
market price as of July 26, 2006 of $0.20.


                                                  Number             % of
   % Below    Price Per     With Discount       of Shares        Outstanding
    Market      Share          at 40%            Issuable           Stock

     25%        $.15            $.09           33,333,333            41%
     50%        $.10            $.06           50,000,000            61%
     75%        $.05            $.03          100,000,000           122%

As illustrated, the number of shares of common stock issuable upon conversion of
our secured  convertible  notes will  increase if the market  price of our stock
declines, which will cause dilution to our existing stockholders.

The Continuously  Adjustable Conversion Price Feature of our Secured Convertible
Notes May Have a Depressive Effect on the Price of Our Common Stock.

The secured  convertible  notes issued  pursuant to our October 2005  Securities
Purchase  Agreement  and our October 2005  Convertible  Term Loan  Agreement are
convertible  into  shares of our common  stock at a 40%  discount to the trading
price of the common  stock prior to the  conversion.  The  significant  downward
pressure on the price of the common  stock as the selling  stockholders  convert
and sell  material  amounts of common stock could have an adverse  effect on our
stock price. In addition,  not only the sale of shares issued upon conversion or
exercise of secured convertible notes and warrants, but also the mere perception
that these sales  could  occur,  may  adversely  affect the market  price of the
common stock.

                                       20
<PAGE>
The  Issuance of Shares Upon  Conversion  of the Secured  Convertible  Notes and
Exercise of Outstanding Warrants May Cause Immediate and Substantial Dilution to
Our Existing Stockholders.

The  issuance of shares upon  conversion  of the secured  convertible  notes and
exercise of warrants  may result in  substantial  dilution to the  interests  of
other  stockholders  since the selling  stockholders may ultimately  convert and
sell the full amount  issuable on  conversion.  Although AJW Partners,  LLC, AJW
Qualified Partners, LLC, AJW Offshore, Ltd., and New Millennium Partners II, LLC
may not convert their secured  convertible  notes and/or exercise their warrants
if such  conversion  or exercise  would cause them to own more than 4.99% of our
outstanding  common stock, this restriction does not prevent AJW Partners,  LLC,
AJW Qualified Partners, LLC, AJW Offshore, Ltd., and New Millennium Partners II,
LLC from converting and/or exercising some of their holdings and then converting
the rest of their  holdings.  In this way,  AJW  Partners,  LLC,  AJW  Qualified
Partners,  LLC, AJW Offshore,  Ltd., and New  Millennium  Partners II, LLC could
sell more than this limit while never holding more than this limit.  There is no
upper  limit on the  number of shares  that may be  issued  which  will have the
effect of further diluting the proportionate equity interest and voting power of
holders of our common stock, including investors in this offering.

In The Event That Our Stock Price Declines, The Shares Of Common Stock Allocated
For Conversion Of The Secured  Convertible Notes and Registered  Pursuant To Our
Registration  Statement on Form SB-2 (File No.  333-130295)  May Not Be Adequate
And We May Be  Required to File A  Subsequent  Registration  Statement  Covering
Additional Shares. If The Shares We Have Allocated And Are Registering  Herewith
Are  Not  Adequate  And We Are  Required  To  File  An  Additional  Registration
Statement, We May Incur Substantial Costs In Connection Therewith.

Based on our current market price and the potential decrease in our market price
as a result of the issuance of shares upon conversion of the secured convertible
notes,  we have made a good faith  estimate as to the amount of shares of common
stock that we are  required to  register  and  allocate  for  conversion  of the
secured  convertible  notes.  In the event that our stock price  decreases,  the
shares  of  common  stock  we  have  allocated  for  conversion  of the  secured
convertible  notes and are  registering  hereunder  may not be adequate.  If the
shares we have allocated to the  registration  statement are not adequate and we
are  required  to  file  an  additional  registration  statement,  we may  incur
substantial  costs  in  connection  with  the  preparation  and  filing  of such
registration statement.

If We Are Required for any Reason to Repay Our Outstanding  Secured  Convertible
Notes,  We Would Be Required to Deplete Our Working  Capital,  If Available,  Or
Raise Additional Funds. Our Failure to Repay the Secured  Convertible  Notes, If
Required,  Could Result in Legal Action Against Us, Which Could Require the Sale
of Substantial Assets.

In October 2005, we entered into a Securities Purchase Agreement for the sale of
an aggregate of $3,000,000  principal  amount of secured  convertible  notes, of
which $2,860,000 remains outstanding.  The secured convertible notes are due and
payable, with 8% interest, three years from the date of issuance,  unless sooner
converted  into  shares of our common  stock.  Any event of default  such as our
failure to repay the principal or interest when due, our failure to issue shares
of common  stock upon  conversion  by the  holder,  our failure to timely file a
registration  statement or have such registration  statement declared effective,
breach of any covenant,  representation  or warranty in the Securities  Purchase
Agreement or related  convertible  note,  the  assignment  or  appointment  of a
receiver to control a substantial  part of our property or business,  the filing
of a money  judgment,  writ or similar  process against our company in excess of
$50,000,  the  commencement  of  a  bankruptcy,  insolvency,  reorganization  or
liquidation  proceeding against our company could require the early repayment of
the secured  convertible notes,  including a default interest rate of 15% on the
outstanding  principal balance of the notes if the default is not cured with the
specified  grace  period.  We  anticipate  that the full  amount of the  secured
convertible  notes  will be  converted  into  shares  of our  common  stock,  in
accordance with the terms of the secured  convertible notes. If we were required
to repay the secured  convertible notes, we would be required to use our limited
working capital and raise additional funds. If we were unable to repay the notes
when  required,  the note holders  could  commence  legal action  against us and
foreclose on all of our assets to recover the amounts due. Any such action would
require us to curtail or cease operations.

                                       21
<PAGE>
If an Event of Default Occurs under the Securities Purchase  Agreement,  Secured
Convertible  Notes,  Warrants,   Security  Agreement  or  Intellectual  Property
Security  Agreement,  the  Investors  Could  Take  Possession  of all Our Goods,
Inventory, Contractual Rights and General Intangibles,  Receivables,  Documents,
Instruments, Chattel Paper, and Intellectual Property.

In connection with the Securities Purchase Agreements we entered into in October
2005, we executed a Security  Agreement and an  Intellectual  Property  Security
Agreement in favor of the  investors  granting  them a first  priority  security
interest  in  all  of our  goods,  inventory,  contractual  rights  and  general
intangibles,   receivables,   documents,   instruments,   chattel   paper,   and
intellectual   property.  The  Security  Agreements  and  Intellectual  Property
Security Agreements state that if an even of default occurs under the Securities
Purchase Agreement,  Secured Convertible Notes, Warrants, Security Agreements or
Intellectual Property Security Agreements,  the Investors have the right to take
possession of the collateral, to operate our business using the collateral,  and
have the right to assign, sell, lease or otherwise dispose of and deliver all or
any part of the  collateral,  at public or private  sale or otherwise to satisfy
our obligations under these agreements.

Risks Relating to Our Common Stock:

Our  Common  Stock is  Subject  to the  "Penny  Stock"  Rules of the SEC and the
Trading Market in Our  Securities is Limited,  Which Makes  Transactions  in Our
Stock Cumbersome and May Reduce the Value of an Investment in Our Stock.

The Securities and Exchange  Commission has adopted Rule 15g-9 which establishes
the  definition  of a "penny  stock,"  for the  purposes  relevant to us, as any
equity  security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions.  For
any transaction involving a penny stock, unless exempt, the rules require:

o that a broker or dealer approve a person's  account for  transactions in penny
stocks; and
o the broker or dealer  receive  from the  investor a written  agreement  to the
transaction,  setting  forth the  identity and quantity of the penny stock to be
purchased.

In order to approve a person's  account for  transactions  in penny stocks,  the
broker or dealer must:

o obtain  financial  information  and  investment  experience  objectives of the
person; and
o make a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prescribed by the Commission relating to
the penny stock market, which, in highlight form:
o sets forth the basis on which the broker or dealer made the suitability
determination; and
o that the  broker  or dealer  received  a signed,  written  agreement  from the
investor prior to the transaction.

Generally,  brokers may be less willing to execute  transactions  in  securities
subject  to the  "penny  stock"  rules.  This  may  make it more  difficult  for
investors to dispose of our common stock and cause a decline in the market value
of our stock.

Disclosure  also has to be made about the risks of  investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative,  current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock  transactions.  Finally,  monthly  statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.


Item 7. FINANCIAL STATEMENTS

All financial information required by this Item is attached hereto beginning on
Page F-1.

                                       22
<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2006 AND 2005





                     CONTENTS


                                                                     PAGE

         REPORT OF INDEPENDENT REGISTERED
          PUBLIC ACCOUNTING FIRM                                     F-i

         CONSOLIDATED BALANCE SHEET                                  F-1, F-2

         CONSOLIDATED STATEMENT OF OPERATIONS                        F-3

         CONSOLIDATED STATEMENT OF CHANGES IN
                  STOCKHOLDERS' EQUITY (DEFICIT)                     F-4

         CONSOLIDATED STATEMENT OF CASH FLOWS                        F-5, F-6

         NOTES TO CONSOLIDATED FINANCIAL STATEMENT                   F-7 to F-18










<PAGE>
To The Board of Directors
Wellstar International, Inc.
Holland, Ohio 43528


             Report of Independent Registered Public Accounting Firm

We have audited the accompanying consolidated balance sheet of Wellstar
International, Inc. and Subsidiary as of July 31, 2006 and 2005 (a development
stage corporation) and the related consolidated statements of operations,
changes in stockholders' equity (deficit) and cash flows for the years ended
July 31, 2006 and 2005. The financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
financial statement based on our audit.

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

In our opinion, the financial statements referred to above presents fairly, in
all material respects, the financial position of Wellstar International, Inc.
and Subsidiary as of July 31, 2006 and 2005 (a develop-ment stage corporation),
and the results of its operations and its cash flows for the years ended July
31, 2006 and 2005 in conformity with accounting principles generally accepted in
the United States of America.

     The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
11 to the consolidated financial state-ments, the Company had a net loss of
$4,781,103 and a negative cash flow from operations of $1,721,921 for the year
ended July 31, 2006, negative working capital of $1,151,455, and a stockholders'
deficiency of $4,404,591 at July 31, 2006. These matters raise substantial doubt
about the Company's ability to continue as a going concern. Management's plan in
regards to these matters is also described in Note 11. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.



Simontacchi & Company, LLP
Rockaway, New Jersey
October 17, 2006

                                       F-i




<PAGE>



                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                             JULY 31, 2006 AND 2005
<TABLE>
<CAPTION>

                                     ASSETS


                                                                                        2006                2005
                                                                                        ----                ----
                                                                                                  (A Development Stage Corp)

<S>                                                                                     <C>                    <C>
       Current Assets:
           Cash                                                                         $ 245,268              $ 149,987
           Accounts Receivable                                                              6,100
            Prepaid Expenses                                                               12,124
            Rent Refund Receivable                                                          1,174
                                                                                       ----------             ----------
                 Total Current Assets                                                     264,666                149,987
                                                                                       ----------             ----------

       Fixed Assets:
           Imaging Equipment                                                              457,977
           Office Equipment and Fixtures                                                  148,166
                                                                                       ----------
                  Subtotal                                                                606,143

       Less: Accumulated Depreciation                                                      68,525
                                                                                       ----------
                  Net Fixed Assets                                                        537,618
                                                                                       ----------

       Intangible Assets:
           Covenant Not To Compete                                                         20,000
           Manufacturing and Distribution Agreement                                       700,000
                                                                                       ----------
                   Subtotal                                                               720,000

        Less: Accumulated Amortization                                                     83,868
                                                                                       ----------
                  Net Intangible Assets                                                   636,132
                                                                                       ----------

       Other Assets:
           Loan Acquisition Cost (net of amortization of $137,565)                         57,460
           Software and Manuals (net of amortization of $24,438)                           55,562
           Security Deposit                                                                 1,580
                                                                                       ----------
                 Total Other Assets                                                       114,602
                                                                                       ----------

                 Total Assets                                                          $1,553,018              $ 149,987
                                                                                       ==========             ==========

</TABLE>
      See Accountants' Report and Accompanying Notes to Financial Statement

                                       F-1

<PAGE>


                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                             JULY 31, 2006 AND 2005
<TABLE>
<CAPTION>


                     LIABILITIES LESS SHAREHOLDERS' DEFICIT
                     --------------------------------------


                                                                                        2006                    2005
                                                                                        ----                    ----
                                                                                                       (A Development Stage Corp)

<S>                                                                                      <C>                     <C>
       Current Liabilities:
           Accounts Payable                                                              $   35,757
           Accrued Expenses                                                                 332,503
           Loan Payable - Officer                                                                 -           $       50
           Notes Payable                                                                    750,000
           Derivative Instrument Liability  - Loan                                          295,861
                                                                                         ----------           ----------
                 Total Current Liabilities                                                1,414,121                   50
                                                                                         ----------           ----------

       Long Term Liabilities:
           Note Payable                                                                           -              150,000
                                                                                         ----------           ----------
           Convertible Debt                                                                  11,536
           Derivative Instrument Liability - Convertible Notes                            3,781,773
           Derivative Instrument Liability - Warrants                                       750,179
                                                                                         ----------
                 Total Long-Term Liabilities                                              4,543,488
                                                                                         ----------

                 Total Liabilities                                                        5,957,609
                                                                                         ----------

       Stockholders' Equity:
           Common Stock
           Authorized 200,000,000 Shares, par value .001 per share
           Issued Shares, 81,600,000 - Outstanding Shares, 80,100,000 (2006)
               and 75,000,000 (2005)                                                         80,100               75,000
           Paid in Surplus                                                                  461,475               90,000
           Retained Earnings (Deficit)                                                   (4,946,166)            (165,063)
                                                                                         ----------           ----------
                   Total Shareholders' Deficit                                           (4,404,591)                 (63)
                                                                                         ----------           ----------

                   Total Liabilities Less Stockholder's Deficit                          $1,553,018           $  149,987
                                                                                         ==========           ==========


</TABLE>
      See Accountants' Report and Accompanying Notes to Financial Statement

                                       F-2
<PAGE>



                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF OPERATIONS
                   FOR THE YEARS ENDED JULY 31, 2006 AND 2005
<TABLE>
<CAPTION>

                                                                                        2006                     2005
                                                                                        ----                     ----
                                                                                                     (A Development Stage Corp)

Income:
<S>                                                                                    <C>                        <C>
   Revenue from Medical Imaging                                                        $    21,475           $     - 0 -
   Cost of Sales                                                                           140,795                     -
                                                                                       -----------           -----------
          Gross Loss                                                                      (119,320)                - 0 -
                                                                                       -----------           -----------

Operating Expenses:
   Selling, General and Administrative                                                   1,724,693                16,982
   Depreciation and Amortization                                                           314,396                     -
                                                                                       -----------           -----------
          Total Operating Expenses                                                       2,039,089                16,982
                                                                                       -----------           -----------

Loss from Operations                                                                    (2,158,409)              (16,982)
                                                                                       -----------           -----------

Other Expense (Income):
   Purchase Price in Acquisition of TMI                                                                           50,000
   Interest Income                                                                          (3,279)
   Interest Expense                                                                        106,624
   Derivative Instrument Expense, Net                                                    2,339,349
   Delinquent Stock Registration
          Penalty - Convertible Debentures                                                 180,000
                                                                                       -----------           -----------
           Total Other Expenses (Income)                                                 2,622,694                50,000
                                                                                       -----------           -----------

Loss before Provision for Taxes                                                         (4,781,103)             ( 66,982)
   Provision for Taxes                                                                           -                     -
                                                                                       -----------           -----------
           Net Loss                                                                                          $   (66,982)
                                                                                                             ===========
                                                                                       $(4,781,103)
Net Loss Per Share, Basic and Diluted                                                                        $     - 0 -
                                                                                                             ===========
                                                                                       $      (.06)
Weighted Average Number of Common Shares
    Outstanding, Basic and Diluted                                                      78,143,288            30,475,000
                                                                                       ===========           ===========

</TABLE>

      See Accountants' Report and Accompanying Notes to Financial Statement

                                       F-3
<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CHANGES IN
                         STOCKHOLDERS' EQUITY (DEFICIT)
                        FOR THE YEAR ENDED JULY 31, 2006
                   AND 2005 (A Development Stage Corporation)

<TABLE>
<CAPTION>

                                                           Common Stock

                                                                                Additional Paid   Accumulated
                                                       Shares        Amount      in Capital         Deficit           Total
--------------------------------------------------- ------------- ------------- ---------------- ---------------   ---------------
<S>           <C> <C>                                  <C>        <C>                   <C>      <C>                      <C>
Balance, July 31, 2004                                 10,000,000 $      10,000 $         90,000 $       (98,081)  $         1,919

Common Stock Issued for Outside
   Consulting Services                                 15,000,000        15,000                                             15,000

Common Stock Issued in Acquisition of
    Trillennium Medical Imaging, Inc. (TMI)            50,000,000        50,000                                             50,000

Net Loss for the Year Ended July 31, 2005                                                                (66,982)          (66,982)
--------------------------------------------------- ------------- ------------- ---------------- ---------------   ---------------

Balance, July 31, 2005                                                   75,000                         (165,063)              (63)
                                                       75,000,000                         90,000
Common Stock - Issued for Services                                        2,100                                             56,575
                                                        2,100,000                         54,475
Common Stock - Issued in Acquisition                                      2,000                                            200,000
                                                        2,000,000                        198,000
Common Stock - Issued as Loan Acquisition Costs                           1,000                                            120,000
                                                        1,000,000                        119,000
Net Loss for the Period                                                                               (4,781,103)       (4,781,103)
--------------------------------------------------- ------------- ------------- ---------------- ---------------   ---------------

Balance, July 31, 2006                                 80,100,000      $ 80,100 $        461,475   $  (4,946,166)  $    (4,404,591)
                                                    ============= ============= ================ ===============   ===============

</TABLE>
      See Accountants' Report and Accompanying Notes to Financial Statement

                                       F-4


<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                        FOR THE YEAR ENDED JULY 31, 2006
                   AND 2005 (A Development Stage Corporation)
<TABLE>
<CAPTION>
                                                                                       2006                      2005
                                                                                                      (A Development Stage Corp)
                                                                                    ------------             ------------
<S>                                                                                 <C>                      <C>
Cash Flows from Operating Activities:
   Net Loss                                                                         $(4,781,103)             $   (66,982)
   Adjustments to Reconcile Net Loss to Net Cash used
      in Operating Activities:
          Depreciation and Amortization                                                  314,396
          Delinquent Registration Penalty Convertible
                Debentures                                                               180,000
          Services Paid in Stock                                                          56,575                   15,000
          Acquisition - Paid in Stock                                                          -                   50,000
          Derivative Instrument Expense, Net                                           2,339,349
   Changes in Operating Assets and Liabilities:
          Increase (Decrease) In:
              Accounts Receivable                                                        (6,100)
              Prepaid Expenses                                                          (12,124)
              Rent Refund Receivable                                                     (1,174)
              Accounts Payable                                                            35,757
              Accrued Expenses                                                           152,503
                                                                                    ------------             ------------
   Net Cash Used in Operating Activities                                             (1,721,921)                  (1,982)
                                                                                    ------------             ------------

Cash Flows from Investing Activities:
   Purchase of Equipment                                                               (606,143)
   Security Deposit                                                                      (1,580)
   Acquisition of Assets                                                               (400,000)
                                                                                    ------------             ------------
   Net Cash Used in Investing Activities                                             (1,007,723)
                                                                                    ------------             ------------

Cash Flows From Financing Activities:
   Payments of Financing Costs                                                          (75,025)
   Proceeds from Issuance of Notes                                                                                150,000
   Proceeds from Issuance of Convertible Notes                                         2,900,000
   Officer's Loan                                                                           (50)                       50
                                                                                    ------------             ------------
   Net Cash Provided by Financing Activities                                           2,824,925                  150,050
                                                                                    ------------             ------------

Net Increase in Cash                                                                      95,281                  148,068

Cash at Beginning of Period                                                              149,987                    1,919
                                                                                    ------------             ------------
Cash at End of Period                                                               $    245,268             $    149,987
                                                                                    ============             ============

Cash Paid for Interest                                                              $      - 0 -             $      - 0 -

Cash Paid for Taxes                                                                 $      - 0 -             $      - 0 -

</TABLE>
      See Accountants' Report and Accompanying Notes to Financial Statement

                                       F-5
<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                        FOR THE YEAR ENDED JULY 31, 2006
                   AND 2005 (A Development Stage Corporation)




Supplemental Disclosure of Non-Cash Investing and Financing Activities:


1.   During the year ended July 31, 2006, stock purchase warrants exercisable
     for 4,166,667 shares of Common Stock were issued in connection with a
     closing on $2,500,000 of convertible notes had no cash effect.

2.   Delinquent Registration Penalty, no cash expended is an expense of
     $180,000.

3.   5,100,000 shares of Common Stock was issued in the following transactions;
     an acquisition, for services and for a loan fee. The amount was $376,575.

4.   Note payable of $200,000 in Acquisition of Assets resulted in no cash being
     expended as of July 31, 2006.

5.   During the year ended July 31, 2005, the Company issued 15,000,000 shares
     of Common Stock for services and also issued 50,000,000 shares of Common
     Stock in the acquisition of Trillennium Medical Imaging, Inc. The total
     stock issued was recorded at $65,000, no cash was received.


                                       F-6

<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)




NOTE 1    The Company
---------------------

     a)   Wellstar International, Inc. (the "Company") was incorporated December
          15, 1997, under the laws of the State of Nevada. The Company was in
          the development stage and has had no operating activities. On July 12,
          2005, the Company entered into an agreement to acquire Trillennium
          Medical Imaging, Inc. ("TMI"), a start up development stage company
          formed in June 2005.

          The purchase price was the issuance by the Company of 50,000,000
          shares, 144 restricted shares, in exchange for all of the issued and
          outstanding shares of TMI. The Company upon the execution of this
          agreement had no assets and no operations. TMI became an operating,
          wholly owned subsidiary of the Company.

     b)   TMI, on the date of the acquisition, had no operations. TMI began
          operations on August 1, 2005. TMI has executed agreements to place
          imaging equipment in a medical center in Virginia and operations at
          the center began in June 2006.

NOTE 2    Summary of Significant Accounting Policies
----------------------------------------------------

          Revenue Recognition
          The Company recognizes revenues utilizing the accrual method of
          accounting. More specifically, the Company enters into licensing
          agreements for its advanced thermal imaging technology. Under the
          licensing agreements, the Company supplies the camera equipment,
          related software and training for each facility. Once the facility is
          operational, the licensing agreement provides for a fixed fee monthly
          fee for the use of the camera. Accordingly, the revenue is recognized
          in the month that the camera is in use at the customer's facility,
          which represents the Company's right to receive the fixed fee. The
          Company's revenue recognition policy is in compliance with the
          provisions of EITF 00-21.

          Use of Estimates
          The preparation of financial statements in conformity with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect the amounts reported in the financial
          statements and accompanying notes. Although these estimates are based
          on management's knowledge of current events and actions it may
          undertake in the future, they may ultimately differ from actual
          results.

          Cash
          For the purpose of the Statement of Cash Flows, cash is defined as
          balances held in corporate checking accounts and money market
          accounts.


                                       F-7

<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)



NOTE 2    Summary of Significant Accounting Policies (cont'd)
------------------------------------------------------------

          Income Taxes

          The Company will provide for income taxes based on the provisions of
          Financial Accounting Standards Board ("FASB") Statement of Financial
          Accounting Standards No. 109 ("SFAS No. 109"), "Accounting for Income
          Taxes", which requires recognition of deferred tax assets and
          liabilities for the expected future tax consequences of events that
          have been included in the financial statements and tax returns in
          different years. Under this method, deferred income tax assets and
          liabilities are determined based on the difference between the
          financial statement and tax basis of assets and liabilities using
          enacted tax rates in effect for the year in which the differences are
          expected to reverse.

          Concentration of Credit Risk
          Financial instruments which potentially subject the Company to
          concentrations of credit risk consists of a checking account with a
          financial institution in excess of insured limits. The excess above
          insured limits is approximately $151,800. The Company does not
          anticipate non-performance by the financial institution.

          Fair Value of Financial Instruments
          Carrying amounts of certain of the Company's financial instruments,
          including cash and cash equivalents, accounts receivable and accounts
          payable approximate fair value because of their short maturities.

          Equipment
          Imaging and office equipment are recorded at cost and depreciated on
          the straight line method with an estimated life of five (5) years.
          Imaging equipment is at the customers facility where the equipment is
          used or stored by the Company until placed in use. The Company retains
          title to the imaging equipment while it is at the customers location.
          Depreciation expense for the year ended July 31, 2006 was $68,525.

          Intangible Assets
          Loan acquisition costs are stated at cost and relate to the costs of
          acquiring the convertible notes (see Note 3) and to obtaining the
          $400,000 Note Payable (see Note 4). Amortization is provided for under
          the straight line method over three (3) years, which is the term of
          the convertible notes and six months for the original term of the Note
          Payable. Total amortization for the year ended July 31, 2006 is
          $137,565.

          Software and manuals, Covenant Not To Compete and Manufacturing &
          Distribution Agreement acquired in the acquisition of Micro Health
          Systems, Inc. (See Note 6) with cost of $80,000, $20,000 and $700,000
          respectively are being amortized over a 24 month period for the
          software and the Covenant and 5 1/2 years for the manufacturing and
          distribution agreement. The total amortization expense for the year
          ended July 31, 2006 is $108,306.

                                       F-8

<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)




NOTE 2    Summary of Significant Accounting Policies (cont'd)
-------------------------------------------------------------

          Loss Per Share
          Basic and diluted net loss per common share for the years ended July
          31, 2006 and 2005 are computed based upon the weighted average number
          of common shares outstanding. The assumed conversion of Common Stock
          equivalents was not included in the computation of diluted loss per
          share because the assumed conversion and exercise would be
          anti-dilutive due to the net loss incurred. Based on the conversion
          formula in the Agreements (see Note 3 and 4) on the conversion of its
          convertible notes would have resulted in the issuance of additional
          common shares in the amount of 25,655,292, on July 31, 2006..

          Stock Based Compensation
          Stock based compensation will be valued in accordance with SFAS 123
          under the Fair Valued based method. Compensation cost is measured at
          the grant date based on the value of the award and is recognized over
          the service period which is usually the vesting period. Transactions
          with non-employees shall be accounted for based on the Fair Value of
          the consideration received or Fair Value of the equity installments
          issued, whichever is more reliably measurable.

          Derivative Instruments
          In connection with the sale of debt or equity instruments, we may sell
          options or warrants to purchase our Common Stock. In certain
          circumstances, these options or warrants may be classified as
          derivative liabilities, rather than as equity. Additionally, the debt
          or equity instruments may contain embedded derivative instruments,
          such as conversion options, which in certain circumstances may be
          required to be bifurcated from the associated host instrument and
          accounted for separately as a derivative instrument liability.

          The identification of, and accounting for, derivative instruments is
          complex. Our derivative instrument liabilities are re-valued at the
          end of each reporting period, with changes in the fair value of the
          derivative liability recorded as charges or credits to income, in the
          period in which the changes occur. For options, warrants and
          bifurcated conversion options that are accounted for as derivative
          instrument liabilities, we determine the fair value of these
          instruments using the Black -Scholes option pricing model. That model
          requires assumptions related to the remaining term of the instrument
          and risk-free rates of return, our current Common Stock price and
          expected dividend yield, and the expected volatility of our Common
          Stock price over the life of the option.



                                       F-9

<PAGE>



                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)




NOTE 2    Summary of Significant Accounting Policies (cont'd)
-------------------------------------------------------------

          Derivative Instruments (cont'd)
          Because of the limited trading history of our Common Stock, we have
          estimated the future volatility of our Common Stock price based on not
          only the history of our stock price but also the experience of other
          entities considered comparable to us. The identification of, and
          accounting for, derivative instruments and the assumptions used to
          value them can significantly affect our financial statements.

          Registration Rights Agreements
          In connection with the sale of debt or equity instruments, we may
          enter into Registration Rights Agreements. Generally, these Agreements
          require us to file registration statements with the Securities and
          Exchange Commission to register common shares that may be issued on
          conversion of debt or preferred stock, to permit re-sale of common
          shares previously sold under an exemption from registration or to
          register common shares that may be issued on exercise of outstanding
          options or warrants.

          The Agreements usually require us to pay penalties for any time delay
          in filing the required registration statements, or in the registration
          statements becoming effective, beyond dates specified in the
          Agreement. These penalties are usually expressed as a fixed
          percentage, per month, of the original amount we received on issuance
          of the debt or preferred stock, common shares, options or warrants. We
          account for these penalties as a contingent liability and not as a
          derivative instrument. Accordingly, we recognize the penalties when it
          becomes probable that they will be incurred. Any penalties are
          expenses over the period to which they relate.

NOTE 3    Convertible Notes
---------------------------

          On October 31, 2005, the Company entered into a Securities Purchase
          Agreement with AJW Partners, LLC and its related entities for the sale
          of $3,000,000 of 8% secured convertible notes, each advance is
          evidenced by a note which is due three years from the date of the
          advance, and for stock purchase warrants exercisable for a total of
          5,000,000 shares of Common Stock each issuance of warrants expiring on
          the fifth anniversary from the date of issue. The warrants are issued
          at the time funds are advanced at 1,666,667 per $1 million advanced.
          The notes are convertible, at the holder's option, into shares of
          Common Stock, in whole or in part, at any time after the original
          issue date. No interest shall be due and payable for any month in
          which the Company's stock trading price is greater than $0.1125 for
          each trading day of the month.




                                      F-10

<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)



NOTE 3    Convertible Notes (cont'd)
-----------------------------------

          The number of shares of Common Stock issuable upon a conversion is to
          be determined by dividing the outstanding principal amount of the
          notes to be converted, plus related accrued interest, by the
          conversion price. The conversion price in effect on any conversion
          date will be at the selling stockholder's option, at the lower of(i)
          $0.12 or (ii) a 40% discount to the average of the three lowest
          intraday trading prices for the Common Stock on a principal market for
          the twenty trading days preceding, but not including, the conversion
          date. The total shares at July 31, 2006 were 22,291,807.

          The stock purchase warrants have an exercise price of $0.50 per share.

          Through July 31, 2006, the Company closed on $2,500,000 of the
          $3,000,000 of convertible notes contemplated by the Securities
          Purchase Agreement and issued stock purchase warrants exercisable for
          4,166,667 shares of Common Stock in connection therewith. The dates of
          the advance of the funds of $1 million each were October 31, 2005 and
          January 20, 2006 and $500,000 on July 25, 2006. The Company was to
          file a registration statement within 30 days of the October 31, 2005
          closing, registering sufficient underlying shares to be reserved for
          issuance upon conversion of the convertible notes and exercise of the
          stock purchase warrants. If not filed by the filing date or declared
          effective by the SEC on or after 105 days from the date of closing, or
          if effective and sales of all the registerable securities cannot be
          made pursuant to the registration statement or the Common Stock is not
          listed or included for quotation on an exchange for the Company's
          securities, then the Company shall pay to each holder of the notes or
          registerable securities an amount equal to the then outstanding
          principal amount of the notes multiplied by the applicable percentage
          as defined in the Registration Rights Agreement. The registration was
          not timely and the Company has accrued a stock registration
          delinquency penalty of $180,000 per a provision of the secured
          convertible note. The stock registration was effective August 4, 2006.

          In connection with the aforementioned issuance of the $1,000,000 of
          convertible notes, of which the Company received net proceeds of
          $910,000 on October 31, 2005, after payment of fees and costs, a
          refund of $19,975 was received in February 2006 resulting in cost of
          $70,025, the Company granted a first priority security interest in all
          the assets of the Company. The issuance of convertible notes resulted
          in conversion features being accounted for as embedded derivative
          liabilities in accordance with EITF00-19 and SFAS 133 (see Note 5).
          Interest due of $41,266 is included in Accrued Expenses.


                                      F-11


<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)




NOTE 4    Notes Payable
-----------------------

     (A)  The Company has borrowed $150,000 from an unrelated individual. The
          Note is dated August 1, 2005, the funds were deposited July 29, 2005.
          The outstanding balance of the loan shall bear monetary interest at
          the fixed rate of six percent (6%) simple, non-compounding interest
          payable in arrears per annum. The outstanding balance of principal and
          interest is due and payable on demand on or after August 1, 2006. All
          payments shall apply first to interest accrued and then principal. The
          Company may prepay all or part without a pre-payment penalty. The loan
          was not paid on August 1, 2006 and was extended under the same terms
          by mutual agreement. Interest due of $9,000 is included in Accrued
          Expenses.

          The 500,000 shares of one-year Restricted Common Stock issued to the
          holder of the $150,000 note in November 2005 were issued pursuant to
          the Share Exchange Agreement between Trillennium and Wellstar.
          Accordingly, the issuance of stock is a separate transaction from the
          note and EITF 00-27 was not applied.

          Default shall occur upon (1) failure to make payment on the note or
          transfer of stock when due, (2) Company institutes bankruptcy or
          solvency proceedings or make an assignment for the benefit of
          creditors.

                      Note Payable - Current  $150,000

     (B)  The Company has entered into a loan agreement with an unrelated
          individual. The note is dated October 11, 2005. The note provides for
          a total loan of $400,000, the Company received $190,000 by October 31,
          2005. The balance of $210,000 was subsequently received on November
          29, 2005. The note bears interest at a fixed rate of 8%, plus the
          prevailing variable margin rate charged to the lender. As of July 31,
          2006, the margin rate was 7.625%. The lender was paid a loan
          acquisition cost on December 5, 2005, in Common Stock of 1 million
          shares.

          The cost was recorded at market value at the date of the loan which
          was $ .12 per share, for a total of $120,000. The outstanding balance
          of principal and accrued interest was due and payable on April 11,
          2006. The note has been extended by mutual agreement under the current
          terms and interest is being accrued. At July 31, 2006, $43,980 of
          interest expense is included in Accrued Expenses. As security for the
          loan, the Company has pledged all of its tangible and intangible
          assets. Commencing on January 1, 2006, the Company shall establish an
          escrow account and shall deposit 25% of all proceeds generated by the
          thermal imaging cameras purchased with $210,000 of proceeds from the
          loan. The funds shall remain in escrow for use in paying all sums due
          to the lender. To July 31, 2006, no funds have been put into escrow.

                                      F-12

<PAGE>



                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)




NOTE 4    Note Payable (cont'd)
-----------------------------

          In addition, the lender has the option to convert the loan into fully
          registered, unsecured Common Stock of the Company at a conversion
          price on the day of conversion, minus 40%. The total shares at July
          31, 2006 were 3,363,485. The lender shall have the right to convert on
          the prepayment date or the due date, whichever occurs first. The
          issuance of the notes and warrants resulted in conversion features
          being accounted for as embedded derivative liabilities in accordance
          with EITF00-19 and FASB 133 (see Note 5).

              Balance due at July 31, 2006     $400,000


NOTE 5    Derivative Financial Instrument Liabilities
-----------------------------------------------------

          We use the Black-Scholes option pricing model to value options and
          warrants, and the embedded conversion option components of any
          bifurcated embedded derivative instruments that are recorded as
          derivative liabilities. See Note 2 related to embedded derivative
          instruments accounting policy.

          In valuing the options and warrants and the embedded conversion option
          components of the bifurcated embedded derivative instruments, at the
          time they were issued and at July 31, 2006, we used the market price
          of our Common Stock on the date of valuation, an expected dividend
          yield of 0% and the remaining period to the expiration date of the
          options or warrants or repayment date of the convertible debt
          instrument. All options, warrants and conversion options can be
          exercised by the holder at any time.

          Because of the limited historical trading period of our Common Stock,
          the expected volatility of our Common Stock over the remaining life of
          the options and warrants has been estimated at 123%, based on a review
          of the historical volatility and of entities considered by management
          as comparable. The risk-free rates of return used ranged from 4.41% to
          4.93%, based on constant maturity rates published by the U.S. Federal
          Reserve, applicable to the remaining life of the options or warrants.




                                      F-13
<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)



NOTE 5          Derivative Financial Instrument Liabilities (cont'd)
--------------------------------------------------------------------

                  At July 31, 2006, the following derivative liabilities related
                  to Common Stock options and warrants and embedded derivative
                  instruments were outstanding (see Notes 3 and 4):
<TABLE>
<CAPTION>
---------------------- ------------- ---------------- ----------------- ----------------- ---------------- -----------------

                                                                     Exercise Price
   Issue Date     Expiry Date       No. of Warrants    Issued To        Per Share      Value - Issue      Value - July 31,
 ------------- ---------------- ----------------- ----------------- ---------------- ----------------- ---------------------

<S>                <C>              <C>                 <C>            <C>                                   <C>           <C>
  10/11/05         04/11/06         1,000,000      Thompson               $ .50                $41,526              $ 68,780

  10/31/05         10/31/10         1,666,667      AJW Partners           $ .50                169,629               266,590

  01/20/06         01/20/11         1,666,667      AJW Partners           $ .50                 81,321               272,507

  07/25/06         07/25/11           833,333      AJW Partners           $ .50                146,197               142,302
                                                                                     ----------------- ---------------------

                  Fair value of derivative instrument liabilities for warrants                $438,673              $750,179
                                                                                     ================= =====================



                                                                    Exercise Price
   Issue Date     Expiry Date       No. of Warrants    Issued To        Per Share      Value - Issue      Value - July 31,
 ------------- ---------------- ----------------- ----------------- ---------------- ----------------- ---------------------

  10/11/05         04/11/06            400,000           Loan            Various              $370,189             $ 295,861

  10/31/05         10/31/08         1,000,000        Convertible
                                                        Notes            Various             2,681,204             1,482,758
  01/20/06         01/20/09         1,000,000        Convertible
                                                        Notes            Various             1,363,058             1,512,854
  07/25/06         07/25/09            500,000       Convertible
                                                        Notes            Various               791,994               786,161

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

                  Fair value of bifurcated embedded derivative instrument liabilities       $5,206,445            $4,077,634

                  Total derivative financial instruments                                    $5,645,118            $4,827,813
</TABLE>
                                      F-14
<PAGE>


                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)



NOTE 6 Acquisition

          On December 21, 2005, the Company completed the purchase of certain
          assets of Micro Health Systems, Inc. ("MHS") under a definitive
          agreement. The Company purchased from MHS the exclusive right to
          market, sell and otherwise promote thermal imaging cameras and related
          software manufactured by Mikron Instrument Co., Inc. in the medical
          and veterinary markets within the United States, Canada, Mexico and
          the Middle East. They have also purchased proprietary software for use
          with the thermal imaging cameras with supporting manuals for use in
          marketing and distribution of the Mikron Instrument Co. thermal
          imaging cameras. Additionally, the Company purchased MHS's customer
          list, FDA registrations and all other intellectual property and a
          covenant not-to-compete for 24 months.

          Total consideration paid by the Company was $600,000, plus 2,000,000
          shares of Restricted Common Stock. The Company paid $400,000 at
          closing. A promissory note was executed for $200,000 with interest at
          8% per annum. $100,000 is due with accrued interest on or before the
          180th day following the date of the Note which is December 21, 2005,
          with the balance of principal and interest due and payable on or
          before the 365th day following the date of the note. The 2,000,000
          share of Restricted Common Stock were issued on December 21, 2005 and
          priced at the market price of $ .10 per share for a total value of
          $200,000. The cost was allocated as follows:

            Mikron Manufacturing Distribution Agreement
                   Customer List and Intangible Assets                $700,000
            Tangible Assets                                             80,000
            Covenant Not-To-Compete                                     20,000
                                               Total                  $800,000
                                                                      ========

          In addition, 1,500,000 shares of Restricted Common Stock are being
          held in escrow as security for the note payable of $200,000. These
          shares have been shown as issued but not outstanding. The Company is
          in default on $100,000 of the Note Payable and interest of $4,000
          which was due June 19, 2006. Due to the default, the interest charged
          from June 19, 2006 is 18% on the $200,000 Note Payable. Interest
          expense of $11,968 is included in Accrued Expenses.

            Balance of Note due at July 31, 2006                      $200,000
                                                                      ========




                                      F-15

<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)



NOTE 7    Stockholders' Equity (Deficit)
---------------------------------------

          On December 5, 2005, the Company issued 1,875,000 shares of Restricted
          Common Stock to various individuals and a company for professional and
          consulting services. The stock was issued for the fair value of the
          services. The total recorded as Common Stock was $1,875 and additional
          paid in capital of $9,700. The amount of $11,575 is reflected as an
          expense in the Statement of Operations.

          On April 12, 2006, the Company issued 225,000 shares of Restricted
          Common Stock for legal services. The stock was recorded at the fair
          value of the service, $45,000 and is reflected as legal fees in the
          Statement of Operations.


Note 8    Derivative Instruments Expense, Net
---------------------------------------------

          Derivative instruments expense of $2,339,349 represents the net
          unrealized (non-cash) change during the year ended July 31, 2006, in
          the fair value of our derivative instrument liabilities related to
          certain warrants and embedded derivatives in our convertible debt that
          have been bifurcated and accounted for separately.


Note 9    Compensated Absences
------------------------------

          There has been no liability accrued for compensated absences as in
          accordance with Company policy, all compensated absences, accrued
          vacation and sick pay must be used by December 31. At July 31, 2006,
          any amount for accrual is not material and has not been computed.


Note 10   Acquisition
---------------------

          On July 12, 2005, the Company acquired 100 percent of the outstanding
          Common Stock of Trillennium Medical Imaging, Inc. ("TMI")(see note 1).
          At the time of the acquisition, TMI had no operations.

          The purchase price was 50 million shares of Common Stock valued at par
          value $0.001 per share, the same value used by prior management in a
          proposed acquisition which was canceled. In accordance with Paragraph
          8 of SFAS 123, the par value is considered to be the fair value of the
          consideration received. TMI had no assets or liabilities at the time
          of the acquisition. The TMI transaction has been accounted for as an
          acquisition of assets as described in EITF 98-3 and as there were no
          specific assets that qualify to be recorded as assets on the balance
          sheet, the purchase price of $50,000 was expensed.


                                      F-16

<PAGE>

                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)


Note 11   Going Concern
-----------------------

          The accompanying consolidated financial statements have been prepared
          on a going concern basis, which contemplates the realization of assets
          and the settlement of liabilities and commitments in the normal course
          of business.

          As reflected in the accompanying consolidated financial statements,
          the Company had a net loss of $4,781,103 and a negative cash flow from
          operations of $1,721,921 for the year ended July 31, 2006, negative
          working capital of $1,151,455, and a stockholders' deficiency of
          $4,404,591 at July 31, 2006. The ability of the Company to continue as
          a going concern is dependent on the Company's ability to raise
          additional funds and implement its business plan. The accompanying
          consolidated financial statements do not include any adjustments that
          might be necessary if the Company is unable to continue as a going
          concern.

          Management's plans include the raising of additional capital through
          private or public transactions and implementation of its business and
          marketing plan to increase revenues.


Note 12   Recently Issued Accounting Pronouncements
---------------------------------------------------

          Share-based Payment
          In December 2004, the FASB issued SFAS No. 123 (R), "Share-Based
          Payment", which is a revision of SFAS No. 123, "Accounting for
          Stock-Based Compensation". Statement 123(R) supersedes Accounting
          Principles Board Opinion ("APB) No. 25, "Accounting for Stock Issued
          to Employees", and amends SFAS No 95, "Statement of Cash Flows".
          Generally, the approach in Statement 123 (R) is similar to the
          approach described in Statement 123. However, Statement 123 (R)
          requires all share-based payments to employees, including grants of
          employee stock options, to be recognized in the income statement based
          on their fair values. Pro forma disclosure is no longer an
          alternative. The Statement is effective for interim and annual periods
          for fiscal year beginning after December 15, 2005.

          Statement 123 (R) permits public companies to adopt its requirements
          using one of two methods:

     (A)  "Modified prospective" method in which compensation cost is recognized
          beginning with the effective date (a) based on the requirements of
          Statement 123 (R) for all share-based payments granted after the
          effective date and (b) based on the requirements of Statement 123 for
          all awards granted to employees prior to the effective date of
          Statement 123 (R) that remain unvested on the effective date.

     (B)  "Modified retrospective" method which includes the requirements of the
          modified prospective method described above, but also permits entities
          to restate, based on the amounts previously recognized under Statement
          123 for purposes of pro forma disclosures, either (a) all prior
          periods presented or (b) prior interim periods of the year of
          adoption.

                                      F-17


<PAGE>



                   WELLSTAR INTERNATIONAL, INC. AND SUBSIDIARY
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENT
            JULY 31, 2006 AND 2005 (A Development Stage Corporation)





Note 12   Recently Issued Accounting Pronouncements (cont'd)
------------------------------------------------------------

          The Company will adopt Statement 123 (R) on August 2006 using the
          modified prospective method.

          In June 2005, the FASB published Statement of Financial Accounting
          Standards No. 154, "Accounting Changes and Error Corrections" ("SFAS
          154"). SFAS 154 establishes new standards on accounting for changes in
          accounting principles. Pursuant to the new rules, all such changes
          must be accounted for by retrospective application to the financial
          statements of prior periods unless it is impracticable to do so. SFAS
          154 completely replaces Accounting Principles Bulletin No. 20 and SFAS
          3, though it carries forward the guidance in those pronouncements with
          respect to accounting for changes in estimates, changes in the
          reporting entity, and the correction of errors. The requirements in
          SFAS 154 are effective for accounting changes made in fiscal years
          beginning after December 15, 2005. The Company will apply these
          requirements to any accounting changes after the implementation date.
          The application of this pronouncement is not expected to have an
          impact on the Company's consolidated financial position, results of
          operations, or cash flows.


Note 13   Subsequent Events
--------------------------
     A)   On August 4, 2006, the Company's SB2 stock registration became
          effective for 32,540,789 shares of Common Stock.

     B)   On August 8, 2006, the Company received the final $500,000 on its loan
          agreement (See Note 3)

     C)   AJW Partners, LLC and related entities converted a portion of their
          notes (See Note 3) into 2,500,000 million shares of Common Stock
          during the period August 7, 2006 through October 17, 2006.



                                      F-18
<PAGE>
Item  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

Not applicable.

Item 8A. CONTROLS AND PROCEDURES

(a)  Evaluation  of  Disclosure  Controls and  Procedures:  As of the end of the
period covered by this report, we conducted an evaluation, under the supervision
and with the  participation  of our chief executive  officer and chief financial
officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e)
and Rule 15d-15(e) of the Exchange Act). Based upon this  evaluation,  our chief
executive  officer and chief financial officer concluded that the our disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  by us in the reports that we file or submit under the Exchange Act is
recorded, processed,  summarized and reported, within the time periods specified
in the  Commission's  rules and forms.  There was no  significant  change in our
internal  controls or in other  factors  that could  significantly  affect these
controls subsequent to the date of the evaluation.

(b)  Limitations  on  Effectiveness  of  Disclosure   Controls  and  Procedures:
Disclosure   controls  and  procedures  cannot  provide  absolute  assurance  of
achieving financial reporting objectives because of their inherent  limitations.
Disclosure  controls and procedures is a process that involves  human  diligence
and  compliance  and is subject to lapses in judgment and  breakdowns  resulting
from human failures. Disclosure controls and procedures also can be circumvented
by collusion or improper management override. Because of such limitations, there
is a risk that  material  misstatements  may not be  prevented  or detected on a
timely basis by disclosure  controls and  procedures.  However,  these  inherent
limitations are known features of the financial reporting process. Therefore, it
is  possible  to design  into the  process  safeguards  to  reduce,  though  not
eliminate, this risk.


                                    PART III

Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers

The  following  table sets forth  current  information  regarding  our executive
officers and directors:

   Name                  Position                          Position Held Since
   -----                  ---------                        -------------------
   John Antonio           President, Chief Executive       June   2005
                          Officer, Director
   Ken McCoppen           Senior Vice President, Director  June   2005
   Howard Bielski         Chief Financial Officer          August 2005
   Dr, Michael Shen       Director                         July   2005
   Dr. McKinley Boston    Director                         July   2005

For  directors,  the  term of  office  is  until  the  next  annual  meeting  of
shareholders.  For officers, the term of office is until the next annual meeting
of the Board of Directors,  presently scheduled to be held immediately following
the annual meeting of the shareholders.

John Antonio,  President, Chief Executive Officer and Director. John Antonio has
served as our  President,  Chief  Executive  Officer,  and a Director since June
2005.  From March of 2004 until  present,  Mr.  Antonio has been involved in the
establishment of Trillennium Medical Imaging,  Inc. and its merger with Wellstar
International,  Inc. From January 2003 until  present,  Mr. Antonio has been the
Vice  President of Have Network  Technologies  International,  Inc. From 1996 to
present Mr.  Antonio has been the manager of Intertel  LLC,  which is engaged in
the  distribution of prepaid phone cards in Mexico.  Mr. Antonio  graduated from
Bowling Green State University with a BLS Degree.

                                       23
<PAGE>
Ken McCoppen, Senior Vice President and Director. Ken McCoppen has served as our
Senior Vice President and a Director since June 2005.  From September 2002 until
September  2004,  Mr.  McCoppen was Executive Vice President of Sales for Arista
Communications,  a provider of telecommunications services. From June 1999 until
September 2002, Mr. McCoppen was Vice President of the National Partners Program
for Qwest  Communications.  From 1982 to 1999, Mr. McCoppen held sales positions
at the following companies: Toshiba America; Samsung America; Micronics; Mantech
International; and GTE.

Howard  Bielski,  Chief Financial  Officer.  Mr. Bielski has served as our Chief
Financial  Officer  since August  2005.  Mr.  Bielski is the managing  member of
Bielski & Bielski, LLC, an accounting firm located in Fairfield,  New Jersey and
is a member of the American  Institute of Certified  Public  Accountants and the
New Jersey Society of Certified Public Accountants.

Dr. Michael Y. H. Shen,  Director.  Dr. Shen has served as a Director since July
2005.  Since October 2004,  Dr. Shen has been the Head of the Section of Cardiac
Imaging and a Staff Physician at the Cleveland Clinic Florida.  Since June 2003,
Dr.  Shen has been the Head of the  Section  of Nuclear  Cardiology  and a Staff
Physician at the Cleveland  Clinic  Florida.  From July 1999-May  2003, Dr. Shen
held the following positions at the Cooper  Hospital/University  Medical Center:
Director,   Nuclear   Cardiology   and  Director,   Center  for   Cardiovascular
Informatics.  Also from July 1999-May 2003, Dr. Shen was an Assistant  Professor
of Medecine at the UMDNJ Robert Wood Johnson Medical School South Campus.

Dr. McKinley  Boston,  Director.  Dr. Boston has served as a Director since July
2005.  Since December 2004, Dr. Boston has served as Athletic  Director and Vice
President of New Mexico State  University.  Since September 2000, Dr. Boston has
served as an Education  Consultant  at the  Consortium of  Minneapolis  Board of
Education, Minneapolis Youth Coordinating Board, and Minneapolis Park Board.

Audit Committee

At present we do not have an audit committee and  consequently  the entire Board
serves as the audit committee. The Board presently consists of 4 members, two of
whom are independent.  We have interviewed several qualified individuals for the
position of Audit Committee Financial Expert on the Board of Directors. All have
declined to serve,  with the primary  reason being  personal  liability  issues,
especially the perceived view that being the  "financial  expert"  increases the
individual's personal exposure over that of being a regular Board member.

Code of Ethics

The Board of  Directors  has not adopted a Code of  Business  Conduct and Ethics
that is applicable to our directors,  principal executive and financial officer,
principal  accounting  officer or  controller,  and persons  performing  similar
functions.

Compliance with Section 16(a) of the Exchange Act

Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended (the "1934
Act") requires  officers and directors of a company with  securities  registered
pursuant to Section 12 of the 1934 Act, and persons who own more than 10% of the
registered  class  of such  company's  equity  securities,  to file  reports  of
ownership and changes in ownership with the  Securities and Exchange  Commission
(the "SEC"). Officers,  directors and greater than 10% stockholders are required
by SEC  regulation  to furnish  the subject  company  with copies of all Section
16(a) forms filed. During our fiscal year ended July 31, 2006, "), our officers,
directors  and  greater  than 10%  stockholders  were not  subject to the filing
requirements of Section 16(a) of the 1934 Act.

                                       24
<PAGE>
Item 10. Executive Compensation

The following  table sets forth the cash  compensation  (including cash bonuses)
paid or accrued by us for our years  ended July 31,  2006,  2005 and 2004 to (i)
our Chief Executive Officer and (ii) our four most highly compensated  officers,
other than our Chief  Executive  Officer,  whose total  annual  salary and bonus
exceeded $100,000.
<TABLE>
<CAPTION>
                           Summary Compensation Table

                                                   Annual Long-term     Compensation Compensation
                                              -----------------------   --------------------------
                                                                           Awards       Payouts
                                                                        -------------- -----------
                                                                         Securities
                                                                         Underlying       LTIP        All Other
                                       Fiscal     Salary       Bonus      Options/      Payouts      Compensation
Name and Principal Position             Year        ($)         ($)       SARs (#)        ($)            ($)
------------------------------------- --------- ------------ ---------- -------------- ----------- -----------------
<S>                                     <C>      <C>            <C>      <C>           <C>      <C>
John Antonio                            2006     $240,000     $61,133       --             --            --
President & CEO                         2005        --          --          --             --            --


Ken McCoppen                            2006     $240,000     $74,550       --             --            --
Vice President & Secretary              2005                                --             --            --
</TABLE>
Options Grants in Last Fiscal Year

None.

Aggregate Option Exercises In Last Fiscal Year and Fiscal Year End Option Values

None.

Employment Agreements

On August 5, 2005, we entered into separate  employment  agreements with John A.
Antonio, our President and CEO; and Kenneth B. McCoppen,  our Vice President and
Corporate  Secretary.  These  agreements  provide  for base  annual  salaries of
$240,000. Further, each agreement has a base term of five (5) years.


                                       25
<PAGE>
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table  indicates  beneficial  ownership of our common stock as of
November 1, 2006 by each person or entity known by us to  beneficially  own more
than 5% of the  outstanding  shares of our common  stock;  each of our executive
officers and  directors;  and all of our  executive  officers and directors as a
group.

                                                                       Percent
     Name and                            Common Shares                    of
     Address of                          Beneficially                    Class
     Beneficial Owner (1)(2)              Owned (1)       Total           (3)
     --------------------                ------------     -----        ---------

     John A. Antonio (4)                  11,725,000    11,725,000       13.8%

     Howard Bielski                        1,000,000     1,000,000        1.2%

     McKinley Boston                         500,000       500,000           *

     Ken McCoppen                         10,605,000    10,605,000       12.4%

     Michael Shen                          4,000,000     4,000,000        4.7%

     Andrew M. Thompson (5)                8,349,206     8,349,206        9.8%

     J-400 Holdings Ltd.                   4,940,000     4,940,000        5.8%
     Unit 431 230-1210 Summit Dr.
     Kamloops, BC, Canada V2C6M1

     Scott Bridge Capital Ltd.             4,940,000     4,940,000        5.8%
     615 Mount Paul Way
     Kamloops, BC Canada V2H 1L9

     Valparaiso LLC                        5,090,000    5,090,000         5.9%
     774 Mays Blvd. #10180
     Incline Village, NV 89541

     Cede & Co.                            10,975,000   10,975,000       12.9%




     All directors and Executive           27,830,000   27,830,000       32.7%


*Less than 1%

(1)  Beneficial  Ownership is  determined  in  accordance  with the rules of the
Securities and Exchange  Commission and generally  includes voting or investment
power with respect to  securities.  Shares of common stock subject to options or
warrants  currently  exercisable or  convertible,  or exercisable or convertible
within  60 days of June 19,  2006  are  deemed  outstanding  for  computing  the
percentage  of the person  holding  such  option or  warrant  but are not deemed
outstanding for computing the percentage of any other person.

(2) Unless  otherwise  indicated,  the address of each  beneficial  owner is c/o
Wellstar International, Inc., 6911 Pilliod Road, Holland, Ohio 43528.

(3) Based on 84,850,000 shares issued and outstanding as of October 25, 2006.


(4) Includes (i) 7,725,000  shares of common stock owned by Mr. Antonio and (ii)
4,000,000 shares of common stock held by Mr. Antonio's wife.

(5) Includes (i) 6,349,206  shares of common stock underlying a $400,000 Secured
Convertible  Note (ii)  1,000,000  shares of  common  stock and (iii)  1,000,000
shares of common stock underlying warrants.

                                       26
<PAGE>
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None of the following  parties has, during the last two years,  had any material
interest,  direct or indirect,  in any transaction with Wellstar  International,
Inc. or in any presently proposed transaction that has or will materially affect
Wellstar International, Inc.:

- Any of our directors or officers;
- Any person proposed as a nominee for election as a director;
- Any person who beneficially owns, directly or indirectly, shares carrying more
than 5% of any class of our voting securities;
- Any of our promoters;
- Any relative or spouse of any of the foregoing  persons who has the same house
as such person.

Item 13. EXHIBITS

(a) Exhibits



  Exhibit

3.1  Articles of Incorporation of Wellstar International, Inc. **

3.2  Certificate  of  Amendment  to  Articles  of   Incorporation   of  Wellstar
     International, Inc.*****

3.3  Bylaws of Wellstar International, Inc. **

10.1 Securities Purchase Agreement dated October 31, 2005, by and among Wellstar
     International  Inc. and the investors named on the signature pages thereto.
     ****

10.2 Form of Callable Secured Convertible Note dated October 31, 2005. **

10.3 Form of Stock Purchase Warrant dated October 31, 2005. **

10.4 Registration Rights Agreement dated October 31, 2005, by and among Wellstar
     International  Inc. and the investors named on the signature pages thereto.
     **

10.5 Security   Agreement   dated  October  31,  2005,  by  and  among  Wellstar
     International  Inc. and the investors named on the signature pages thereto.
     **

10.6 Intellectual  Property  Security  Agreement  dated October 31, 2005, by and
     among Wellstar  International Inc. and the investors named on the signature
     pages thereto. **

10.7 Technical  Services Agreement by and between  Trillennium  Medical Imaging,
     Inc. and Surgicenters of America, Inc. dated October 4, 2005.**


10.9 Term Loan Agreement dated October 11, 2005. **

10.10 Commercial Cognovit Promissory Note dated October 17, 2005. **

                                       27
<PAGE>
10.11 Commercial Cognovit Promissory Note dated November 28, 2005. **

10.12 Security Agreement dated October 11, 2005. **

10.13 Demand Note dated August 1, 2005. **

10.14 Employment Agreement by and between Wellstar International,  Inc. and John
      A. Antonio * *

10.15 Employment Agreement by and between Wellstar  International,  Inc. and Ken
      McCoppen**

10.16 Definitive  Agreement  dated  December  12,  2005,  by and among  Wellstar
      International,  Inc.,  Micro  Health  Systems,  Robert  Barnes  and  Terri
      Cmorey.***

10.17 Marketing Agreement between Trillennium Medical Imaging, Inc., and Allevia
      Medical.*

10.18 Addendum  to  Commercial   Cognovit   Promissory  Note  between   Wellstar
      International,  Inc.,  Trillennium  Medical  Imaging,  Inc., and Andrew M.
      Thompson.*

31.1 Certification  of Chief Executive  Officer pursuant to Rule 13a-14 and Rule
     15d-14(a),  promulgated  under the  Securities and Exchange Act of 1934, as
     amended. *

31.2 Certification  of Chief Financial  Officer pursuant to Rule 13a-14 and Rule
     15d-14(a),  promulgated  under the  Securities and Exchange Act of 1934, as
     amended. *

32.1 Certification  pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer). *

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

* Filed herewith.

**  Incorporated by reference to Form SB-2 filed with the Commission on December
13, 2005.

***  Incorporated  by  reference  to Form SB-2/A  filed with the  Commission  on
February 1, 2006.

**** Incorporated by reference to Form SB-2/A filed with the Commission on April
4, 2006.

***** Incorporated by reference to Form SB-2/A filed with the Commission on June
20, 2006.

Item 14. Principal Accounting Fees and Services

Audit fees

The aggregate fees billed for professional  services rendered by our independent
auditors  for the audit of our  financial  statements,  for the  reviews  of the
financial  statements included in our annual report on Form 10KSB, and for other
services normally provided in connection with statutory filings were $46,236 and
$3,997 for the years ended July 31, 2006 and July 31, 2005, respectively.

Audit-Related Fees

No  audit-related  fees were incurred for the years ended July 31, 2006 and July
31, 2005.

Tax Fees

No tax fees were incurred for the years ended July 31, 2006 and July 31, 2005.

All Other Fees

We did not  incur  any fees for  other  professional  services  rendered  by our
independent auditors during the years ended July 31, 2006 and July 31, 2005.

                                       28
<PAGE>
                                   SIGNATURES

In accordance  with 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.

                          WELLSTAR INTERNATIONAL, INC.





Dated:   November 13, 2006          By:  /s/ John Antonio
                                        -----------------
                                        John Antonio
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)



Dated:   November 13, 2006          By:  /s/ Howard Bielski
                                        -------------------
                                        Howard Bielski
                                        Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)




PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT
HAS BEEN  SIGNED BY THE  FOLLOWING  PERSONS IN THE  CAPACITIES  AND ON THE DATES
INDICATED:

            NAME                      TITLE                            DATE
--------------------------------------------------------------------------------

By: /s/ John Antonio         President and Chief Executive     November 13, 2006
    ----------------         Officer, Director
    John Antonio             (Principal Executive Officer)

By: /s/ Ken McCoppen         Senior Vice President, Director   November 13, 2006
    ----------------
    Ken McCoppen

By:                          Director
    ----------------
    Michael Shen

By: /s/ McKinley Boston      Director                          November 13, 2006
    -------------------
    McKinley Boston



                                       29