UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 ———————
 FORM
10-KSB
 ———————
 
 x
              ANNUAL REPORTUNDERSECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended:
      December 31, 2007o
              TRANSITIONREPORTUNDERSECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGEACTOF1934For the transition period
      from  N/A to N/A
 
 ———————
 
 Bridgetech
Holdings International, Inc.
 (Name of small business
issuerin its
charter)
 
 ———————
 
 Delaware
              0-51697
              21-1992090(State
      or Other Jurisdiction
              (Commission
              (I.R.S.
      Employerof
      Incorporation)
              File
      Number)
              Identification
      No.)
  P.O.
Box 1072
 Cardiff,
CA  92007
 (Address
of principal executive offices)
  858-847-9090
 (Registrant’s
telephone number, including area code)
 
 ———————
 Securities registered pursuant to
      Section 12(b) of the Act:Title of each
      class
              
              Name of each exchange on which
      registeredNONESecurities registered pursuant to
      Section 12(g) of the
    Act:COMMON STOCK, $.001 PAR
      VALUE
              
              Over The Counter Bulletin
      Board(Title of
      Class)
 ———————
 Check whether the issuer(1) has filed all reports
required to be filed by Section 13 or 15(d) of
theSecurities Exchange Act of 1934 during
thepast12 months (or for such shorter period
that the registrant was
requiredto file such
reports), and (2) has been subject to such filing
requirements for the past 90 days.
 x o
 Check if there is nodisclosure of delinquent filersin responseto Item 405 of Regulation
S-Bcontainedin this form, andno disclosure willbe contained, to the best of
registrant’s knowledge, indefinitive proxy or
informationstatements
incorporated by reference in Part III of
thisForm 10-KSBor any amendment to this Form
10-KSB.
 o
 Indicateby check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Act).
 o 
Yes     x     No
  State issuer’s
      revenue for its most recent fiscal
      year.  $243,770State 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 ofa specified date
      within the past 60
    days.  $5,707,626Indicatethe number
      of shares outstanding of each of theissuer’s classes of
      common stock, as of the latest practicable
    date.31,852,030ISSUERSINVOLVED IN
      BANKRUPTCYPROCEEDINGS
      DURING THE PRECEDING FIVE
YEARS:
   Check whether the
      issuer has filed all documents and reports required to be filed by Section
      12, 13 or 15(d) of theSecurities Exchange Act of 1934 after
      the distribution of securities under a plan confirmed by a
      court.
              o
              Yes
              o
              No
  DOCUMENTS
      INCORPORATED BY REFERENCETransitional
      Small Business Disclosure Format (Check one):
              o
              Yes
              x
              No
 
 
 INDEX
 
 PART
      IItem
      1.
              Description of Business.
              2Item
      2.
              Description of Property.
              6Item
      3.
              Legal Proceedings.
              6Item
      4.
              Submission of Matters to a Vote of Security
      Holders.
              6PART
      IIItem
      5.
              Market for Common Equity and Related Stockholder Matters and
      Small Business Issuer Purchases of Equity Securities.
              6Item
      6.
              Managements’ Discussion and Analysis or Plan of
      Operation.
              7Item
      7.
              Financial Statements.
              19Item
      8.
              Changes in and Disagreements With Accountants on Accounting
      and Financial Disclosure.
              19Item
      8A.
              Controls and Procedures.
              19Item
      8B.
              Other Information.
              20PART
      IIIItem
      9.
              Directors, Executive Officers, Promoters, Control Persons
      and Corporate Governance; Compliance With Section 16(a) of the Exchange
      Act.
              21Item
      10.
              Executive Compensation.
              23Item
      11.
              Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters.
              33Item
      12.
              Certain Relationships and Related Transactions, and
      Director Independence.
              36Item
      13.
              Exhibits.
              37Item
      14.
              Principal Accounting Fees and Services.
              37SIGNATURES
              38CERTIFICATIONS
  i
 Index
  PART I
  ITEM 1.
              DESCRIPTION
      OF BUSINESS.
  CAUTION REGARDING FORWARD-LOOKING
INFORMATION
  Included in this prospectus are
"forward-looking" statements, as well as historical information. Although we
believe that the expectations reflected in these forward-looking statements are
reasonable, we cannot assure you that the expectations reflected in these
forward-looking statements will prove to be correct. Our actual results could
differ materially from those anticipated in forward-looking statements as a
result of certain factors, including matters described in the section titled
"Risk Factors." Forward-looking statements include those that use
forward-looking terminology, such as the words "anticipate," "believe,"
"estimate," "expect," "intend," "may," "project," "plan," "will," "shall,"
"should," and similar expressions, including when used in the negative. Although
we believe that the expectations reflected in these forward-looking statements
are reasonable and achievable, these statements involve risks and uncertainties
and we cannot assure you that actual results will be consistent with these
forward-looking statements.
  Such risks include, among others, the
following: demand for payment of our convertible notes outstanding under which
we are currently in default, our inability to obtain adequate financing to repay
the convertible notes,our ability to continue financing the
operations either through debt or equity
offerings,   international, national and local general economic
and market conditions: our ability to sustain, manage or forecast our growth;
raw material costs and availability; new product development and introduction;
existing government regulations and changes in, or the failure to comply with,
government regulations; adverse publicity; competition; the loss of significant
customers or suppliers; fluctuations and difficulty in forecasting operating
results; changes in business strategy or development plans; business
disruptions; the ability to attract and retain qualified personnel; the ability
to protect technology; and other factors referenced in this
filing.
  Consequently, all of the forward-looking
statements made in this Form 10-KSB are qualified by these cautionary statements
and there can be no assurance that the actual results anticipated by management
will be realized or, even if substantially realized, that they will have the
expected consequences to or effects on our business operations. We undertake no
obligation to update or revise these forward-looking statements, whether to
reflect events or circumstances after the date initially filed or published, to
reflect the occurrence of unanticipated events or otherwise.
  In this registration statement
references to "we," "us," "Company," and "our" refer to Bridgetech Holdings
International, Inc., a Delaware corporationand all of its
subsidiaries.
 
 Overview
 
 Our company, Bridgetech Holdings
International, Inc. (the “Company”) is a company was primarily in the business
of facilitating the transfer of medical drugs, devices and diagnostics from theUnited StatestoChinaand other international
locations.
 
 Corporate History
  The entity that is the original
predecessor of the Company was originally incorporated inDelawareon June 4, 1991. From 1991 through
2002, this predecessor, which was originally named “Huggie Heart, Inc.,” engaged
in several different businesses, a merger and several similar corporate
transactions, and changed its name several times. In November 2002, this entity
acquired Parentech, Inc., aDelawarecorporation, and changed its name to
“Parentech, Inc.”
  2
 Index
  From its acquisition of Parentech until
the end of 2004, the Company’s primary business was designing, developing and
marketing products intended to enhance the well-being of infants. In particular,
the Company developed and sold the “Nature’s Cradle Sound and Motion System,” an
infant environmental transition system designed to reduce the stress experienced
by infants in the post partum period by simulating certain aspects of their
pre-birth environment. This business, however, generated only minimal revenues
and could not support the Company’s ongoing operations. By the end of 2004, the
Company had begun to wind down its operations. By this time, those persons who
had served as officers and directors of Parentech, other than Scott Landow,
Parentech’s chief executive officer, had resigned, leaving Mr. Landow as the
sole director and officer of the Company. On December 20, 2004, the Company
filed notice of the termination of the registration of its common stock under
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
  On January 10, 2005, Herbert Wong and
Scott Landow formed Bridgetech Holdings International, Inc. under the laws of
the State ofFlorida(“Old Bridgetech”). Old Bridgetech,
which was privately-held, was formed to facilitate the transfer of medical
drugs, devices and diagnostics from theUnited StatestoChinaand other international
locations.
  Effective February 1, 2005, the Company
caused a 1-for-200 reverse split of its outstanding shares of common stock. This
reverse split resulted in a reduction of our outstanding shares of common stock
at that time from 42,401,593 to 212,008.
 
 In February 2005, the Company entered
into a transaction with Old Bridgetech whereby the Company issued 1,673,438
shares of common stock to the shareholders of Old Bridgetech in exchange for all
of the outstanding stock of Old Bridgetech. In connection with this transaction,
the Company changed its name to “Bridgetech Holdings International, Inc.” In
addition, following this transaction, the Company named Herbert Wong its
Executive Chairman, hired Michael D. Chermak to be its President and Chief
Executive Officer, and hired Thomas C. Kuhn III to be its Chief Financial
Officer. Mr. Landow, Parentech’s former President and Chief Executive Officer,
is no longer employed by the Company. In May of 2005, Mr. Wong resigned from the
Company’s board of directors. Concurrent with this resignation, Mr. Chermak was
elected Chairman of the Board and resigned from the position of President. Mr.
Kuhn was elected to fill the position of President and Chief Operating Officer.
Mr. Kuhn has since resigned his positions and is no longer with the
Company.
  In April, 2006, four new independent
directors were added to our Board of Directors.See “Directors,
Executive Officers and Control Persons,” below.On April 22, 2008 and April 15, 2008,
Blake Ingle, PhD., Mang Yu, PhD., Alan Paau, PhD, MBA, and Kenneth Goins, Jr.
resigned as members of directors of the Board of Directors of Bridgetech
Holdings International, Inc.  The Company filed a Form 8-K related to
these resignations on April 14, 2008.
  Recent Developments
  On March 1, 2007, the Company entered
into an Agreement and Plan of Merger, by and among ECash, Inc., aDelawarecorporation (“ECash”), ECSI Acquisition
Corp., aFloridacorporation (“Acquisition Corp.”), and
Clarity.
 
 As part of this two pronged Agreement,
Acquisition Corp. was intended to be merged with and into Clarity at which time
the separate legal existence of Acquisition Corp. would cease and Clarity would
became the surviving corporation in the First Merger.  Clarity would
then be merged with and into the Company (sometimes hereinafter referred to as
the “Surviving Corporation”), and thereafter the separate existence of Clarity
would cease to exist and at which time the ECash would succeed to all of the
rights, privileges, powers and property, including,without limitation, all rights,
privileges, franchises, patents, trademarks, licenses, registrations, bank
accounts, contracts, patents, copyrights and other assets of every kind and
description of Clarity and continue its corporate existence under the laws of
the State of Delaware.  As a result of the merger, the Company
retained a 72.5% interest in Clarity.
  3
 Index
  On April 5, 2007 the Company entered
into a termination agreement with Amcare under which all obligations of the
agreement for both parties were terminated and the agreement was dissolved. The
contract contemplated the forming of new agreement which better suited the
implementation of the proposed operations.  However, the new
agreements were never completed because, upon subsequent review, the Company
determined that the proposed agreement would not be economically viable. The
Company has no further obligations under the termination
agreement.
 
 On February 27, 2006, the Company
entered into two separate agreements with the Wu Jieping Medical Foundation of
Beijing (“WJMF”). The first agreement has been amended WJMF is a sponsor of the
portal. The second agreement is a 10-year agreement in which the Company’s
products would be distributed by WJMF to hospital facilities throughoutChina.
 
 In April 2006, we entered into an
agreement with Latitude Pharmaceuticals, Inc. pursuant to which we
purchased exclusive distribution rights for four intravenous emulsion
formulations to be used in the treatment of cancer and infectious diseases inChina, Hong Kong, Macau andTaiwan. Dr. Chen, the President of Latitude
Pharmaceuticals, Inc., developed and owns all rights to these
formulations.  This agreement was subsequently terminated for none
performance
 
 In 2006, Bridgetech formed Bridgetech
Medical Technologies Research & Development Ltd. (“BMT”), in conjunction
with theUniversityofHong Kong(“CUHK”).   Bridgetech
Medical Technologies Research & Development Ltd. is an entity that is
operating to provide clinical trial services.  Bridgetech acquired a 51
percent ownership in BMT with an initial funding of $50,000 in the form of a
loan.  CUHK did not contribute any material assets to BMT for its 49
percent ownership.   Bridgetech is obligated under the BMT
Agreement to provide 100 percent of the funding requirements of BMT, including
additional financing over a three-year period.   Any and all
future financing will be in the form of loans which are eliminated in
consolidation.
 
 On March
27, 2008, BMT R&D terminated its operating agreement with
CUHK.  Funding was not available or anticipated for the continuation
of the joint operations.
 
 On
February 6, 2008, Bridgetech China entered into an equity interest purchase
agreement with Richard Propper pursuant to which Bridgetech China is selling a
fifty-one percent (51%) equity interest in Guangzhou Bridgetech Medical
Technologies Development Limited to Mr. Propper for an aggregate purchase price
of $300,000 (the “Equity Interest
Purchase Agreement”).  Guangzhou Bridgetech Medical
Technologies Development Limited holds the assets related to the JK1 healthcare portal, which is an
international, non-profit collaboration between leading healthcare institutions
and organizations inChinaand theUnited States.The aggregate purchase price is
to be paid as follows:  $100,000 due upon signing and $50,000 per
month due at the end of the month starting on February 29, 2008.  In
addition, within the ninety
(90)-day period after closing on February 11, 2008, or until Mr. Propper pays in
excess of fifty percent (50%) of the aggregate purchase price, BridgetechChinahas the option to repurchase the equity
interest for an aggregate amount equal to 125% of the aggregate purchase price
paid as of the repurchase date.
  The
Company’s wholly-owned subsidiary, Bridgetech Asia Limited, is the parent
company and sole owner of Bridgetech China.  Mr. Propper currently
holds a security interest on all the assets of Bridgetech Holdings
International, Inc. with the exception of the security interest granted to Ms
Yuen.
  4
 Index
  On
February 6, 2008, Bridgetech Holdings International, Inc. (the “Company”)
issued (i) a promissory note for a principal amount of up to $300,000 to
Bridgetech China Limited (“Bridgetech
China”) (the “Bridgetech China
Note”) and (ii) a secured note payable in the principal amount of
$400,000 to Carrie Yuen (the “Yuen
Note”).  The initial principal of the Bridgetech China Note was
$100,000 and will increase by $50,000 at the end of each month for additional
funds provided by Bridgetech China to the Company.  The Bridgetech
China Note accrues interest at a rate of eight percent (8%) per annum and is
required to be repaid on or before February 10, 2009. The Company’s
wholly-owned subsidiary, Bridgetech Asia Limited, is the parent company and sole
owner of Bridgetech China.
  The Yuen
Note accrues interest at a rate of eight percent (8%) per annum and is required
to be repaid on or before May 6, 2008.  The Yuen Note will be secured
by a first priority interest in fifty-one percent (51%) of Bridgetech Asia
Limited, the Company’s wholly-owned subsidiary, as evidenced by a UCC filing.
Ms. Yuen is the president of the Company’s Asia operations.
  On March
12, 2008, the Company acknowledged its violation of a technical condition of the
note and thereby defaulted on that certain $400,000 note due Carrie Yuen dated
February 6, 2008.  As a result, Ms. Yuen was able to purchase
fifty-one percent of Bridgetech Asia limited in exchange for the forgiveness of
the $400,000 note.  Additionally, Ms. Yuen was granted the option to
purchase the remaining forty-nine percent for $1.00.
  Bridgetech
Holdings International, Inc. announced on March 4, 2008 that it will spin off
two wholly - owned subsidiaries, International MedLink, Inc., a Texas
corporation and Retail Pilot, Inc., a California
corporation.       Bridgetech Holdings
International, Inc. will announce the record date in which shareholders of
Bridgetech Holdings International, Inc. will receive pro rata shares of the spun
off entity for each share of Bridgetech Holdings International, Inc. held on the
record date. Completion of the proposed spin-off is subject to numerous
conditions, including the filing of a registration statement on Form
10.  Bridgetech Holdings International, Inc. will announce this
information as soon as it is available, but management anticipates that the spin
offs will occur before the end of the second quarter of this year.
 
 Bridgetech has formed two Wholly Owned
Foreign Enterprises (WOFE) which have beenapproved inChina. These areChinadomiciled legal entities also referred
to as special purpose vehicles. The first WOFE (approved September 06) is
Guangzhou Bridgetech Medical Technologies Development Company Limited (GBMT).
This WOFE was organized to handle regulatory registration of drugs and medical
devices with the SFDA. The second WOFE (approved December 06) is called
Guangzhou Bridgetech Medicines Company Limited (‘GBM’). This WOFE was organized
to manage the wholesaling of drugs and medical devices withinChina.
  Bridgetech has limited operations and is
winding down operations in theUnited StatesandChinadue to lack of financing and funding to
sustain its operations.  As of March 12, 2008 the Company no longer
has any operations inChina.
  Employees
 
 As of March, 2008, the Company employed1full-time
personnel.
  5
 Index
  ITEM 2.
              DESCRIPTION
      OF PROPERTY.
 
 The Companyhasterminated itsleaseinSan Diego,CAand will attempt to find suitable
quarters else ware under more favorable financial conditions under month to
month terms.
 
 Due to lack of financing the Company no
longer owns or operates any of theleasedspace in Hong Kongor inChinaat all.  The Company still
has an existing lease that is now terminated due to lack of rental payments and
we are uncertain the outcome of that terminated lease
arrangement.
 
 Future minimum lease payments under
operating leases, as of December 31, 2007, are as follows:
  Operating
                Leases2008
              
              $
              218,1802009
              
              
              171,8932010
              
              
              131,5302011
              
              
              43,968Total minimum lease
      payments
              
              $
              565,571
 
 
 ITEM
      3.
              LEGAL
      PROCEEDINGS.
  The Company is not a party to any
litigation and, to its knowledge, no action, suit or proceeding has been
threatened against the Company except with threatened litigation in regard to
unpaid debt obligations, and one employee claiming unlawful termination. No
actions regarding the unpaid debt have been initiated as of this
date.   The Company also believes that the wrongful termination
suit has no merit.  There are no material proceedings to which any
director, officer or affiliate of the Company or security holder is a party
adverse to the Company or has a material interest adverse to the
Company.
 
 
 ITEM
      4.
              SUBMISSION OF MATTERS TO A VOTE OF
      SECURITY HOLDERS.
  None
 PART II
  ITEM
      5.
              MARKET FOR COMMON EQUITY AND
      RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
      SECURITIES.
  The Company’s common stock has been
quoted over the counter on the Pink Sheets over the counter quotation service
under the symbol “BGTH.PK” since February 18, 2005. Effective March 13, 2008 the
Common Stock will be quoted on the OYC Bulletin Board.  From January
1, 2007 to March 11, 2008 the Company’s high bid was $3.70 and the low bid was
$.15. The Company considers its common stock to be thinly traded and that any
reported bid or sale prices may not be a true market-based valuation of the
Common Stock. As of the date of the filing of this registration filing, there
were approximately 643record holders of the Company’s Common
Stock.
  On March 11, 2008 the closing bid price
per share of our common stock was $.04
 
 Periods
              
              High
              
              
              LowFiscal
      Year 2006First
      Quarter
              
              
              5.50
              
              
              
              2.50Second
      Quarter
              
              
              4.00
              
              
              
              1.80Third
      Quarter
              
              
              2.30
              
              
              
              1.50Fourth
      Quarter
              
              
              3.30
              
              
              
              1.70Fiscal
      Year 2007First
      Quarter
              
              
              3.70
              
              
              
              1.55Second
      Quarter
              
              
              1.85
              
              
              
              0.90Third
      Quarter
              
              
              1.02
              
              
              
              0.27Fourth
      Quarter
              
              
              0.50
              
              
              
              0.15Fiscal
      Year 2008January
      1 to March 11
              
              
              0.06
              
              
              
              0.06
  6
 Index
  ITEM
      6.
              MANAGEMENTS’ DISCUSSION AND
      ANALYSIS OR PLAN OF
OPERATION.
  THE FOLLOWING DISCUSSION OF OUR
FINANCIAL CONDITION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH
OUR CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS INCLUDED
ELSEWHERE IN THIS STATEMENT. IN ADDITION TO THE HISTORICAL CONSOLIDATED
FINANCIAL INFORMATION, THE FOLLOWING DISCUSSION AND ANALYSIS CONTAINS
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES.
  OUR ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN
THIS STATEMENT.
  Overview and Plan of
Operations
 
 While the Company has begun to generate
revenue from its sole operations, it is an early stage company that is not yet
profitable. The company has a single revenue model which is our imaging
operations which is not generating enough revenue to cover our costs. While we
believe that the CRO strategic alliance and related distribution of medical
products planned for China has the greatest long-term potential and is most
important to the long-term plans of the Company, this business is at an earlier
stage of development and, unlike our other business units, is not currently
generating revenues. We also believe that this business has the greatest
governmental and regulatory risk.
  The Company has incurred an accumulated
deficit of approximately $56,279,880 as of December 31, 2007 as compared to
$40,958,890 through the period ended December 31, 2006, and current liabilities
exceeded current assets by approximately $8,740,002 as of December 31, 2007 as
compared to $1,917,675 at December 31, 2006. We cannot assure you that we will
be successful in these fundraising activities.We are currently in
default on our convertible notes outstanding and have been unable to raise the
capital to pay such notes. Should the note holders call their notes, we would be
unable to pay them.
  Critical Accounting
Policies
 
 Principle of
Consolidation
 
 We prepare our consolidated financial
statements in accordance with accounting principles generally accepted in theUnited States of
America. The preparation of
these financial statements requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Our
management periodically evaluates theestimates and judgments made. Management
bases its estimates and judgments on historical experience and on various
factors that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates as a result of different assumptions or
conditions.
  7
 Index
  Revenue
Recognition
 
 Revenue Recognition -Revenue from
product sales is recognized upon shipment to customers at which time such
customers are invoiced. Units are shipped under the terms of FOB shipping point
when determination is made that collection is probable. Revenues for services
are recognized upon completion of the services. For consulting services and
other fee-for-service arrangements, revenue is recognized upon completion of the
services.  The Company has adopted the Securities and Exchange Commission’s
Staff Accounting Bulletin (SAB) No. 104, which provides guidance on the
recognition, presentation and disclosure of revenue in financial
statements.
  Product
Segments
  Our product segments provide management
with a comprehensive financial view of our key businesses. The segments provide
a framework for the alignment of strategies and objectives across the
development, sales, marketing, and services functions, and for the timely and
rational allocation of development, sales, marketing, and services resources
within businesses. The segments also help focus strategic planning efforts on
key objectives and initiatives across our broad businesses. Due to our
integrated business structure, operating costs included in one segment may
benefit other segments. Therefore, these segments are not designed to measure
operating income or loss that is directly related to the products included in
each segment. Our four product segments are: Asset Management, Medical Imaging,
Nurse Recruitment and Training, and Medical Technology
Transfer.
 
 Asset
Management
 
 Asset Management uses electronic article
surveillance equipment and radio frequency identification solutions (RFID) to
track retail assets and manage mobile hospital-based assets, including patients
and staff in hospitals and healthcare facilities. The segment is comprised of
Retail Pilot, Inc. and HealthCare Pilot, Inc. both of which was wound down in
late 2005 and were reported as discontinued operations beginning in
2007.  The Asset Management revenue model focused on designing,
providing and installing asset management and tracking products for hospitals
and other health care facilities.  Revenues decreased to $42,404 in
2006 from $211,247 in 2005, a net change of $169,045.  The operating
loss decreased to $406,431 in 2006 from $1,070,637 in 2005, a net change of
$664,206.  The decrease in revenue and operating loss is due to the
winding down of this segment which was discontinued on January 1,
2007.
 
 2007
              
              
              2006
              
              
              Net ChangeRevenue
              
              
              
              
              
              
              42,202
              
              
              
              (42,202
              )Operating
    Loss
              
              
              
              
              
              
              (406,431
              )
              
              
              (406,431
              )
 
 Medical
Imaging:
 
 Medical Imaging is an important segment
of the domestic healthcare market. We acquired Clarity Imaging which did not
generate income in prior years.   Revenues decreased to $167,561 in
2007 from $201,946 in 2006, a net decrease of $34,385. The revenue decrease
was due to a decreased level of consulting activities and related fee revenue in
2007, compared to 2006, along with a lower level of medical imaging
activity.   The operating loss increased to $717,941 in 2007 from
$231,659 in 2006, a net change of $486,282, primarily as a result of the
expansion in staff and equipment to support anticipated higher imaging activity,
coupled with the reduced contribution from the lower revenues.Clarity Imaging was never able to
successfully gain a critical mass in the imaging arena and the operations
of Clarity Imaging were merged into ECash, Inc. in March 2007.  ECash,
Inc. is a publicly traded corporation. The decision was made to better access
financial markets and to establish a larger critical mass for operations.
  8
 Index
  
 2007
              
              
              2006
              
              
              Net ChangeRevenue
              
              
              167,561
              
              
              
              201,946
              
              
              
              (34,385
              )Operating
    Loss
              
              
              (717,941
              )
              
              
              (231,659
              )
              
              
              (486,282
              )
 
 Nurse
Recruitment and Training
 
 According to the American Hospital
Association and the American Nursing Association, theU.S.is currently experiencing a shortage of
qualified nurses.  Revenue decreased to $68,400 in 2007 from $192,901
in 2006, a net decrease of $124,501.  The revenue decrease resulted from an
unexpected difficulty in identifying qualified nurse candidates in thePhilippinesand obtaining commitments to the
program, the Company’s sole source of nurses.In addition, the higher
costs of travel, training, lodging, examination and certification fees on the
weakness of the US dollar .negatively impacted both revenue and the cost
structure of this segment.  The operating loss increased to $82,988 in
2007 from an operating loss of $45,597in 2006 for a net change of
$37,391.  The decrease in revenues and the worsening of the operating
loss in 2007 resulted from the Company’s inability to establish a critical mass
operation in the hiring, training and placement of nurses from thePhilippines.   As a result of the
performance over the past several years, the Company has decided to sell the
operations to the original owner and discussions toward this objective commenced
late in 2007.
 
 2007
              
              
              2006
              
              
              Net ChangeRevenue
              
              
              68,400
              
              
              
              192,901
              
              
              
              (124,501
              )Operating
    Loss
              
              
              (82,988
              )
              
              
              (45,597
              )
              
              
              (37,391
              )
  Medical
Technology Transfer
 
 The Company’s Medical Technology
Transfer segment includes all of the activities and expenses related to the
identification and purchase of drugs and diagnostics for distribution and sale
in Asia, primarilyChina. Initial operating revenues were
recorded in 2007, and the expenses to date relate to hiring of personnel, the
establishment of organizations and the development of necessary business
relationships inChina.  Revenues of $7,809 were
reported in 2007, compared to no revenues in 2006.  The operating loss
increased to $2,161,387 from $765,433 in 2006 for a net increase of
$1,395,954The increase in operating loss is due to the formation of numerous
operating entities in China, each of which will focus on a distinct area of the
Chinese medical market and all of which require separate charters, organizations
and, in some cases, separate facilities and support personnel.  As of
December 31, 2007, there were eight distinct operating organizations in the
Asian group, compared to six a year earlier on December 31,
2006.  Many of the six entities at year end 2006 did not operate for a
full year in 2006; costs in 2007 reflect the full year impact of these larger
Asian operations.
 
 2007
              
              
              2006
              
              
              Net ChangeRevenue
              
              
              7,809
              
              
              __
              
              
              
              7,809Operating
    Loss
              
              
              (2,161,387
              )
              
              
              (765,433
              )
              
              
              (1,395,954
              )
 
 Corporate-Level
Expenses
 
 2007
              
              
              2006
              
              
              Net ChangeCorporate Level
      Expenses
              
              
              (12,303,440
              )
              
              
              (15,405,010
              )
              
              
              3,101,570
  9
 Index
  Certain corporate-level expenses are not
allocated to our segments. Those expenses primarily include corporate operations
related to broad-based sales and marketing, product support services, human
resources, legal, finance, information technology, corporate development and
procurement activities, research and development and other costs, including
interest expense and stock and options issued for
compensation.
 
 The value of common shares granted for
services rendered and commissions in 2006 totaled $9,043,108 compared to
$4,433,711 recorded in 2007.  The decrease of $4,609,397 was due to a
lower level of shares awarded coupled with a significantly lower price per share
granted in 2007.  This decrease was partially offset by $1,295,100
recorded for options granted in the second quarter of 2007; no options were
granted in 2006.  In addition, corporate level interest expense in
2007 totaled $2,369,304, up $1,472,774 from interest expense of $896,530
recorded in 2006, providing a further unfavorable offset
 
 In 2007, cash compensation costs, travel
expenses and legal fees also were down by a total of $1,142,286 from 2006
levels, on slightly reduced staff and lower activity.
 
 Share-Based
Payment
 
 In December 2004, the FASB issued a
revision of SFAS 123 ("SFAS 123(R)") that requires compensation costs related to
share-based payment transactions to be recognized in the statement of
operations. With limited exceptions, the amount of compensation cost will be
measured based on the grant-date fair value of the equity or liability
instruments issued. In addition, liability awards will be re-measured each
reporting period. Compensation cost will be recognized over the period that an
employee provides service in exchange for the award. SFAS 123(R) replaces SFAS
123 and is effective as of the beginning of January 1, 2006. Based on the number
of shares and awards outstanding as of December 31, 2005 (and without giving
effect to any awards which may be granted in 2006), we do not expect our
adoption of SFAS 123(R) in January 2006 to have a material impact on the
financial statements.
 
 FSP FAS 123(R)-5 was issued on October
10, 2006. The FSP provides that instruments that were originally issued as
employee compensation and then modified, and that modification is made to the
terms of the instrument solely to reflect an equity restructuring that occurs
when the holders are no longer employees, then no change in the recognition or
the measurement (due to a change in classification) of those instruments will
result if both of the following conditions are met: (a). There is no increase in
fair value of the award (or the ratio of intrinsic value to the exercise price
of the award is preserved, that is, the holder is made whole), or the
antidilution provision is not added to the terms of the award in contemplation
of an equity restructuring; and (b). All holders of the same class of equity
instruments (for example, stock options) are treated in the same manner. The
provisions in this FSP shall be applied in the first reporting period beginning
after the date the FSP is posted to the FASB website. The Company has adopted SP
FAS 123(R)-5, which will have a material impact on the consolidated results of
operations and financial condition. .
 
 Accounting Policies and
Estimates
 
 The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States of America requires our management to
make certain estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Our management periodically evaluates
the estimates and judgments made. Management bases its estimates and judgments
on historical experience and on various factors that are believed to be
reasonable under the circumstances. Actual results may differ from these
estimates as a result of differentassumptions or
conditions.
  10
 Index
  As such,
in accordance with the use of accounting principles generally accepted in the
United States of America, our actual realized results may differ from
management’s initial estimates as reported.  A summary of significant
accounting policies are detailed in notes to the financial statements which are
an integral component of this filing.
  RESULTS
OF OPERATIONS
  Fiscal
Year End December 31, 2007, Compared to December 31, 2006
 
 Revenues
  Consolidated Revenues decreased to
$243,770 in 2007 from $437,049 reported in 2006, a decrease of $193,279. On
January 1, 2007, the Company discontinued the operations of its Asset Management
businesses.  In addition, during 2007,the Company was unsuccessful in
implementing the growth of both the Medical Imaging operations and the Nurse
Recruitment and Training segment.  Both of these businesses suffered
revenue declines.  The Company initiated the merger of Clarity Imaging
Inc into ECash, Inc. in an effort to attract additional capital and expand
imaging activities into states other thanTexas. The merger was completed in June 2007
and, although the expansion of this segment commenced, there has not been
sufficient time to record any significant financial benefits from this
merger.
 
 As a result of the discontinuance of the
Asset Management operations and the failure to reach growth objectives in
Medical Imaging and Nurse Recruitment and Training, the Company focused on the
expansion of a business base inAsia.  No revenues from Asset
Management activities were reported in 2007 on the discontinuance of these
operations.  This segment recorded revenues of $42,202 in
2006.
 
 Revenues in the Medical Imaging segment
declined to $167,561 in 2007 from $201,945 in 2006.Nurse Recruitment and Training revenues
decreased to $68,400 in 2007 from $192,901in 2006.  As mentioned, both
of these businesses did not achieve the traction that was expected in their
respective markets in 2007.  The Company effected a merger of Clarity
Imaging International into ECash, Inc., in order to expand the size of the
operations, and is in the process of negotiating the sale of the Nurse
Recruitment business.
  Cost of Goods Sold
 
 Cost of Goods Sold increased to $210,432
in 2007 from $199,019 in 2006, an increase of $11,413.  The increase
in cost of goods, in the face of declining revenues, was caused by the one-time
write down in the amount of $64,800 in the inventoried value of ESO pills at
Clarity Imaging Inc. and $80,000 of costs incurred inAsiadue to the start-up of clinical
activities.  The inventory adjustment at Clarity was due to the fact
that the pills were beyond their expiration dates due to the delay in initiating
imaging programs.
  Cost of Goods Sold in 2007 was 86
percent of revenues. Cost of Goods Sold in 2006 was 462 percent of
revenues.
  Research and
Development
 
 Research and Development expenses in
2007 totaled $75,000 and solely represented the second-year maintenance costs
for the MD Anderson program.
 
 11
 Index
  Research and Development
expenditures totaled $676,749 in 2006 and consisted of costs incurred on the
Agreements with Latitude Pharmaceuticals, Inc. and MD Anderson for the
identification and development of new pharmaceuticals.  The Company
contracted with Latitude Pharmaceuticals and MD Anderson in 2006 to acquire
rights for several emerging of drugs and diagnostics under both of these
contracts.  However, since the drugs are subject to lengthy review and
approval processes, with a good deal of uncertainty, the Company is expensing
all costs as Research and Development
 
 General &
Administrative
 
 General and Administrative Costs
(“SG&A”) totaled $12,588,513 in 2007, compared to $15,330,202 in
2006. SG&A costs in 2007 included non-cash transactions totaling
$8,675,532 related to the costs of stock issued for services, the issuance of
warrants and the cost of options issued.  SG&A costs in 2006
included non-cash transactions of $10,274,934of stock issued for services
and commissions, and the issuance of warrants.
  The decrease of $2,741,689 in
SG&A costs from 2006 to 2007 reflects a $1,599,402 decrease in the non-cash
components of SG&A from 2006 to 2007, coupled with a decline in cash costs
of $1,142,287. SG&A cash costs at Bridgetech Corporate decreased by
$2,344,007 from $3,419,837 in 2006 to $1,075,830 in 2007, due to a reduction in
personnel, travel and many related costs.  The decline in SG&A
costs at corporate was partially offset by SG&A costs in Asia which
increased from $764,467 in 2006 to $1,934,009 in 2007 on the increased number of
operational cost centers and personnel in Asia.
 
 The number of full-time employees was 28
on December 31, 2006, and1as of the date of this
report
 
 Depreciation
 
 Depreciation and Amortization expense
increased from $181,983 in 2006 to $351,596 in 2007.  The
increase of $169,613 was due to a year-to-year increase of depreciation inAsiaof $151,527, as a result of the opening
of new operations and administrative centers in 2007. Depreciation at the parent
company increased by $33,712 from $159,284 in 2006 to $192,996in 2007due to full
-year costs associated with the new corporate office in San Diego, including
leasehold improvements, furniture, computer equipment and servers, and the
telephone system.
 
 Interest Expense
 
 Interest Expense increased to $2,369,304
in 2007 compared to $903,226 in 2006. Interest Expense in 2007 included non-cash
interest expense of $2,015,324 related to theamortization of debt
discount associated with the warrants issued and beneficial conversion features
of the notes, valued using the Effective Conversion Rate Method. The resulting
amounts were amortized over the life of the notes using the Effective Interest
Rate method. The notes and the calculations are more fully described in the
Liquidity section and in Note 10 to the financial statements
 
 Interest Expense in 2006 included
$120,868 of interest paid and accrued on four Promissory Notes with principal
balances totaling $2,200,000, along with loans from employees. In addition, the
Company recorded non-cash interest expense of $782,358 related to theamortization of debt discount associated with the warrants issued and
beneficial conversion features of the notes.
 
 LIQUIDITY AND CAPITAL
RESOURCES
 
 We do not presently generate
sufficient revenue to fund our operations and the planneddevelopment of our business. In order to
sustain our current operations and develop our business plan, we will require
funds for working capital.We are attempting to raise additional
working capital through the sale of equity, debt or a combination of equity and
debt. We do not presently have any firm commitments for additional working
capital and there are no assurances that such capital will be available to us
when needed or upon terms and conditions which are acceptable to us. If we are
able to secure additional working capital through the sale of equity securities,
the ownership interests of our current stockholders will be diluted. If we raise
additional working capital through the issuance of debt our future interest
expense will increase.We are currently in
default on our convertible notes outstanding and have been unable to raise the
capital to pay such notes. Should the note holders call their notes, we would be
unable to pay them.
  12
 Index
  The Company financed operations
principally through private sales of equity securities in 2005 and early
2006.  Commencing in the latter half of 2006 and into 2007, the
Company was unable to access the equity market and financed the Company through
the issuances of debt, much of which carried convertible features and attached
warrants.  The Company raised $6,469,437 from the sale of common stock
during 2006 and issued one promissory note and two convertible notes to three
investors as of December 31, 2006. During 2007, the Company raised $56,000 from
the sale of common stock and $4.4 million from the issuance of
debt.  The sales of common stock were completed at a price of $1.00
per share. This price represented a discount to the price per share of common
stock quoted on the pink sheets. This discount was attributable to the lack of
liquidity of the shares, our need for working capital and other
considerations.
 
 As of December 31, 2007, Bridgetech had
borrowings of $6,676,881which include principal and interest at
8% per annum. Of this total, $5,704,172 represented twenty-three promissory
notes to nineteen outside investors, and $972,709 was comprised of loans from
four employees.   A year earlier onDecember 31, 2006, Bridgetech had
borrowings of $1,952,703which include principal and interest at
8% per annum. Of this total, $1,742,126 represented one promissory note and two
convertible notes to three outside investors, and $210,577 was comprised of
loans from twoemployees.
 
 The promissory note at December 31, 2006
was in the amount of $500,000 from Richard Propper, due on October 26, 2006 at
8% interest rate per annum, which note was in default at year end 2006 and
continues to be in default.  This note, originally dated April 27,
2006, included 200,000 warrants to purchase common stock at $1.00 per share
which expire on May 23, 2012. The Company recorded non-cash interest expense of
$262,069 related to the amortization of the debt discount associated with the
warrants, valued using the Effective Conversion Rate Method.  The note
with Mr. Propper was in default on December 31, 2006 and the Company accrued
$66,498 as an estimated liability to compensate Mr. Propper for this
default.
 
 On November 14, 2006, the Company
borrowed $600,000 from Skyway Development at an 8% interest rate, on a
convertible note, which is due on April 14, 2007. Under the terms of the note,
Skyway Development could convert the unpaid principal and interest into the
Company’s Common Stock at an exercise price of $1.50 per
share.    Skyway was also issued 600,000 warrants, as additional
consideration for this note, at a strike price of $1.50 per share. The warrants
will expire in two years on November 14, 2008.We first allocated the
$600,000 proceeds to the note and warrants based upon their relative fair
values. Then we assessed the Beneficial Conversion Features using the Effective
Conversion Rates of the note, based on the market price of the stock on the date
of the note. This resulted in an allocation of $231,113 to the Beneficial
Conversion Feature of the note and $368,887 to the warrants. The resulting
amounts were amortized over the life of the note using the Effective Interest
Rate method.
 
 In addition to the warrants, Skyway
was granted 600,000 common shares (which are subject tocertain restrictions on resale) as
consideration for the transaction as well as compensation to assist the
Company in identifying additional sources of investment capital inAsia. These shares were valued at a total of
$1,740,000, based on a market price of $2.90 per share and equity commission in
this amount was recorded on November 14, 2006.
  13
 Index
  On December 18, 2006, the Company
borrowed $600,000 from Margaret Kwok at an 8% interest rate, also on a
convertible note, which is due on June 15, 2007 which will be extended for 90
days from the due date. Under the terms of the note, Kwok could convert the
unpaid principal and interest into the Company’s Common Stock at an exercise
price of $1.50 per share. Margaret Kwok was also issued 400,000 warrants that
convert at $1.50 per share. These warrants will expire in two years on December
16, 2008.  We recorded non-cash interest expense of $404,010 related
to the amortization of the debt discount associated with the beneficial
conversion features and warrants.Then we assessed the Beneficial
Conversion Features using the Effective Conversion Rates of the note, based on
the market price of the stock on the date of the note. This resulted in an
allocation of $262,505 to the Beneficial Conversion Feature of the note and
$142,505 to the warrants. The resulting amounts were amortized over the life of
the note using the Effective Interest Rate method.
 
 Lastly, on May 29, 2006, theCompany borrowed $500,000 from Reliable
Technologyon a Convertible
Note with an 8% interest rate per annum, due on or before December 31, 2006.
Under the terms of the note, Reliable Technology could convert the unpaid
principal and interest into the Company’s Common Stock at an exercise price of
$1.50 per share. Reliable Technology was also
issued 200,000 warrants at $1.50 per share, expiring in two years in conjunction
with this note. We recorded as non-cash interest expense $500,000 related to the
amortization of the debt discount associated with the beneficial conversion features and
warrants.We recorded as non-cash interest expense of $500,000
related to the amortization of the debt discount associated with the beneficial
conversion features and warrants. We first allocated the $500,000 proceeds to
the note and warrants based upon their relative fair values. Then we assessed
the Beneficial Conversion Features using the Effective Conversion Rates of the
note, based on the market price of the stock on the date of the note. This
resulted in an allocation of $404,234 to the Beneficial Conversion Feature of
the note and $95,766 to the warrants. The resulting amounts were amortized over
the life of the note using the Effective Interest Rate method.  This
note was paid in full, along with accrued interest, on December 20, 2006 from
the proceeds of the Margaret Kwok note.
 
 The
Company borrowed $1,000,000 from Pinot Co., Ltd. On January 22, 2007 at an 8%
interest rate of 8 % on a convertible note, due on July 22, 2007. The balance of
this note was reduced to $900,000 in July 2007 with a payment of $100,000. Pinot
Co. Ltd. could convert the unpaid principal and interest into the Company’s
Common Stock at a conversion price of $1.50 per share.  Pinot Co. Ltd.
was issued 660,000 warrants that convert an exercise price of $1.50 per
share.  These warrants will expire in two years on January 22,
2008.  The Company recorded non-cash interest expense of $1,000,000
related to the amortization of the debt discount associated with the beneficial
conversion features and warrants.  We first allocated the $1,000,000
proceeds to the note and warrants based upon their relative fair values. Then we
assessed the Beneficial Conversion Features using the Effective Conversion Rates
of the note, based on the market price of the stock on the date of the note.
This resulted in an allocation of $582,843 to the Beneficial Conversion Feature
of the note and $417,157 to the warrants. The resulting amounts were amortized
over the life of the note using the Effective Interest Rate method.
 
 The
Company borrowed $200,000 from Redwood Consulting on April 2, 2007 at an 8%
interest rate which is due on April 1, 2008.  The note, and any
accrued interest, is convertible into the Company’s Common Stock at $1.50 per
share, at any time.  The note did not have any warrants
attached.  On April 26, 2007, the Company borrowed $600,000 from
Margaret Kwok at an 8% interest rate, also on a convertible note, which is due
on April 25, 2008.  The principal balance of this note, along with any
unpaid interest, is convertible into the Company’s Common shares at $1.50 per
share at any time.   Kwok was issued 400,000 warrants that
convert at $1.50 per share.  Using the Effective Conversion Rate
Method, the Company determined that the warrants and conversion features had
negative value.  The Company recorded as non-cash interest expense
$130,910 related to the amortization of the discount attributable to the
beneficial conversion features and warrants.  We first allocated the
$600,000 proceeds to the note and warrants based upon their relative fair
values. Then we assessed the Beneficial Conversion Features using the Effective
Conversion Rates of the note, based on the market price of the stock on the date
of the note. This resulted in an allocation of $25,455 to the Beneficial
Conversion Feature of the note and $105,455 to the warrants. The resulting
amounts were amortized over the life of the note using the Effective Interest
Rate method.
  14
 Index
  The
Company borrowed $500,000 from Jade Treasure on April 30, 2007 at an 8% interest
rate, also on a convertible note, which is due in two years on April 29,
2009.  Jade Treasure was issued 500,000 warrants that convert at $1.50
strike price. These warrants will expire in two years on April 30,
2009.  The note with Jade Treasure, and any unpaid interest, is
convertible into the Company’s Common shares at $1.50 per share at any time. The
Company recorded as non-cash interest expense $38,011 related to the
amortization of the discount attributable to the beneficial conversion features
and warrants.  We first allocated the $500,000 proceeds to the note
and warrants based upon their relative fair values. Then we assessed the
Beneficial Conversion Features using the Effective Conversion Rates of the note,
based on the market price of the stock on the date of the note. This resulted in
an allocation of $22,384 to the Beneficial Conversion Feature of the note and
$15,627 to the warrants. The resulting amounts were amortized over the life of
the note using the Effective Interest Rate method.
 
 During
the quarter ended September 2007, the Company issued twelve convertible notes
with principal ranging from $37,500 to $100,000 and aggregating $748,500. The
conversion terms were all for $.50 per share and all had an interest rate of 8%.
The terms of the notes are from three to twelve months, with one at twenty-four
months. All can convert the principal and interest into the Company’s Common
Stock at an exercise price of $.50. The Company recorded as non-cash interest
expense $301,093 related to the amortization of the discount attributable to the
beneficial conversion features valued using the Effective Conversion Rate
Method.
 
 During
the fourth quarter of 2007, the Company borrowed a total of $650,000 from
Richard Propper in two convertible notes, one in the amount of $450,000 dated
November 14, 2007 and the second in the amount of $200,000 dated December 3,
2007.  The notes were due and payable on May 9, 2008 and June 3, 2008,
respectively, and both were at 8 percent interest rates.  Both notes
are convertible into the Company’s Common stock at $.25 per share.
 
 The
Company, in accordance with EITF 98-5, EITF 00-27, and APB 21, we accounted for
the convertible notes under the Effective Conversion Rate Method, in order to
recognize the value attributable to the Beneficial Conversion right Feature
(“BCF”), which affected the amount allocated to the value of the warrants.
Additionally, the Company changed its amortization of the resulting debt
discount to the Effective Interest Rate Method and amortized the discount over
the original term of the note.
 
 The
following table shows the amount allocated to warrants and BCF’s for each of the
notes along with warrants issued for consulting.
  15
 Index
  Warrant Activity in
      2006
              
              
              Black-Scholes
              
              
              Amount Allocated to
      the
              
              
              Discount Allocated toWarrants
              
              
              
              
              
              Valuation
of
              
              
              
              
              
              NoteIssued to
              Purpose
              
              Issued
              
              
              Warrants
              
              
              Warrants
              
              
              Amount
              
              
              BCF
              
              
              WarrantFour Directors
      (1)
              Compensation
              
              
              200,000
              
              
              
              677,961
              
              
              $
              677,961
              
              
              
              
              
              
              -
              
              
              
              677,961Richard
    Propper
              Promissory
    Note
              
              
              200,000
              
              
              
              550,723
              
              
              
              262,069
              
              
              
              500,000
              
              
              
              
              
              
              
              262,069Reliable
      Technology
              Convertible
      Note
              
              
              200,000
              
              
              
              118,453
              
              
              
              95,766
              
              
              
              500,000
              
              
              
              404,234
              
              
              
              95,766Redwood
      Consulting
              Consulting
              
              
              400,000
              
              
              
              139,766
              
              
              
              139,766Skyway
      Development
              Convertible
      Note
              
              
              600,000
              
              
              
              957,681
              
              
              
              368,887
              
              
              
              600,000
              
              
              
              231,113
              
              
              
              368,887Han Chiu
              Consulting
              
              
              40,000
              
              
              
              16,552
              
              
              
              16,552Margaret
    Kwok
              Convertible
      Note
              
              
              400,000
              
              
              
              186,849
              
              
              
              142,505
              
              
              
              600,000
              
              
              
              262,505
              
              
              
              142,505Propper "Warrant
      Penalty"
              
              
              
              
              
              
              
              
              
              
              
              66,498Value of Warrants
      Issued
              
              
              
              2,040,000
              
              
              
              2,647,985
              
              
              $
              1,770,004
              
              
              
              2,200,000
              
              
              
              897,852
              
              
              
              1,547,188Allocated to
      BCF
              
              
              
              
              
              
              
              
              
              
              
              897,852MCC Global
              Cancellation of Agreement
              
              
              (2,500,000
              )
              
              
              (1,436,030
              )
              
              
              (1,436,030
              )Total Value of Warrants
      Activity
              
              
              
              (460,000
              )
              
              
              1,211,955
              
              
              
              1,231,826
 
 (1)On April 22, 2008 and April 15, 2008,
Blake Ingle, PhD., Mang Yu, PhD., Alan Paau, PhD, MBA, and Kenneth Goins, Jr.
resigned as members of directors of the Board of Directors of Bridgetech
Holdings International, Inc.  The Company filed a Form 8-K related to
these resignations on April 14, 2008.
  16
 Index
  Warrant Activity in
      2007Black-Scholes
              
              
              Amount Allocated to
      the
              
              
              DiscountWarrants
              
              
              Valuation
of
              
              
              
              
              
              Note
              
              
              Allocated
toIssued to
              Purpose
              
              Issued
              
              
              Warrants
              
              
              Warrants
              
              
              Amount
              
              
              BCF
              
              
              WarrantPinot Co
    Ltd,
              Convertible
      Note
              
              
              660,000
              
              
              
              715,728
              
              
              $
              417,157
              
              
              
              1,000,000
              
              
              
              582,843 -
              
              
              
              417,157Pinot Co
    Ltd.
              Allocated to
      BCF
              
              
              
              
              
              
              
              
              
              
              582,843Jade
    Treasure
              Convertible
      Note
              
              
              500,000
              
              
              
              16,131
              
              
              
              15,627
              
              
              
              500,000
              
              
              
              22,384
              
              
              
              15,627Margaret
    Kwok
              Compensation
              
              
              400,000
              
              
              
              127,942
              
              
              
              105,455
              
              
              
              600,000
              
              
              
              25,455
              
              
              
              105,455Johnson Lau
              Consulting
              
              
              2,000,000
              
              
              
              1,312,412
              
              
              
              1,312,412
              
              
              
              
              
              
              
              
              
              
              
              1,312,412Johnson Lau
              Allocated to
      BCF
              
              
              
              
              
              
              
              
              
              
              47,839
              
              
              
              
              
              
              
              47,839AgreementTotal Value of Warrants
      Activity
              
              
              
              3,560,000
              
              
              
              2,172,213
              
              
              
              2,481,333
              
              
              
              2,100,000
              
              
              
              679,521
              
              
              
              1,850,651
 
 The balance of these notes also includes
accrued interest of $42,126 as of December 31, 2006.
 
 Loans from investors and employees
totaled $972,709 as of December 31, 2007 and were comprised of loans from four
employees and one outside investor.  The loans bear interest at an 8
percent annual rate and all have no certain due date.  The total of
$972,709 includes the several loans made by Mr. Chermak to the Company and its
Retail Pilot subsidiary in 2004, as described below.
 
 The Chairman of the Company, Michael
Chermak, guaranteed several loans to Retail Pilot, Inc. aggregating to $341,442
in 2004. The loans were made by Indy Mac Bank to Retail Pilot, Inc., one of
Bridgetech’s wholly-owned subsidiaries, and are guaranteed by the Company’s CEO
Michael Chermak.
 As of December 31, 2006, Bridgetech had
loans from two employees totaling $210,577. Both of these loans are unsecured.
One loan, in the amount of $140,000, bears interest of 8% per
annum.
 
 On November 13, 2007 and November 18,
2007, the Company borrowed $8,000 and $20,000 respectively, using 8% demand
notes, from Scott Landow, the former CEO of the Company. As part of the
transactions, the Company appointed Mr. Landow as the sole director of two
inactive subsidiaries; International MedLink, Inc. and Retail Pilot,
Inc.
 
 At December 31, 2007, the Company has
cash available of $156,535, compared to available cash of $551,183 on December
31, 2006.
 
 We entered into three agreements that
required us to make minimum payments to third parties, regardless of the levels
of business activity under those agreements. Our agreement with Sovereign
Tracking Systems, LLC (STS) requires that we purchase inventory in the amount of
$237,620 (which amount shall increase over time at a rate of ten percent per
year); if we purchase less than this amount of inventory, we must pay STS an
amount of cash equal to the shortfall. In July 2006, the Company made the
payment to STS and commenced taking delivery of inventory in that amount. After
receiving the entire inventory required under the agreement, the two parties
signed an agreement to terminate the Distributor Contract. No further payments
are required.
  Our agreement with MD Anderson required
a one-time documentation fee of $126,749, paid in 2006, and payment of annual
maintenance fees for three years (2006 to 2008), regardless of whether we sell
any of the products that we license from MD Anderson: $50,000 in
November 2006, $75,000 in November 2007 and $90,000 in
November 2008.  The Company is delinquent in the payment of the
$75,000 due in November 2007. The milestone fees, which are contingent depending
on the success of the following activities, include the payment of $50,000
upon receipt of regulatory approval of a licensed product for human diagnostic
use in theUnited
Statesand $70,000 upon regulatory
approval of a licensed product for human diagnostic use in any country other
than theUnited
States. In addition, we
have a contingent obligation to pay royalties of $100,000 per year following the
first sale of a licensed product and 5% of net sales attributable to licensed
products.Andersonwill have the right to terminate the
agreement if we have not made a sale of a licensed product by October
2008
  17
 Index
  Finally, our agreement with Latitude
Pharmaceuticals, Inc included payments totaling $1,500,000, of which $500,000
was made in May 2006. Under the terms of the Agreement, the Company acquired the
exclusive distribution rights to four intravenous emulsion formulations to be
used in the treatment of cancer and infectious diseases inChina, Hong Kong, Macau andTaiwan.  The contract required that we
pay Latitude Pharmaceuticals, Inc. $1,000,000 in April 2007, with such amount to
be paid in either cash or by the issuance of 335,000 shares of our common stock,
at the discretion of the company’s President, Dr. ChenIn September 2007,
the Company and Dr. Chen terminated the agreement to purchase exclusive
distribution rights.  No further payments were made beyond the
$500,000 paid on the execution of the agreement in April 2006, which amount was
expensed as Research and Development Expense, and the Company relinquished all
claims to any rights under the agreement.
 
 All of the costs incurred with regard to
the MD Anderson and the Latitude Agreements have been reported as Research and
Development Expenses in 2006 totaling $676,749.
 
 The Company made three acquisitions in
2005, all which subsequently failed.  These three acquisitions
included Retail Pilot, Inc., International MedLink, Inc., and Clarity Imaging
International, Inc.  The acquisition agreements between the Company
and the former owners of these three operating entities included earn-out
provisions that provided additional shares of Common stock had certain
performance targets been achieved.  First, the Company evaluated the
future cash flow projections for each entity, then the net present value of
future cash flows for three years was calculated, and common stock was to be
granted in an amount equal to 40% of this present value
calculation.  All three entities failed to perform at the structured
performance levels and those trigger points and contingencies have expired and
are no longer valid.  The earn-out obligation to issue additional
common stock for these entities; IML, Clarity, Retail Pilot has been abandoned
and expired.  No further stock has been issued or will be issued under
the earn-out provisions.
 
 Other
Considerations
 
 There are
numerous factors that affect the business and the results of its
operations.  Sources of these factors include general economic and
business conditions, federal and state regulation of business activities, the
level of demand for product services, the level and intensity of competition in
the health drink industry, and the ability to develop new services based on new
or evolving technology and the market's acceptance of those new services, the
Company’s ability to timely and effectively manage periodic product transitions,
the services, customer and geographic sales mix of any particular period, and
our ability to continue to improve our infrastructure including personnel and
systems to keep pace with the Company’s anticipated rapid
growth.
  18
 Index
  ITEM 7.  FINANCIAL STATEMENTS
 
 BRIDGETECH
HOLDINGS INTERNATIONAL, INC.
 
 TABLE OF
CONTENTS
 
 PageINDEPENDENT
      REGISTERED PUBLIC ACCOUNTING FIRM:
              F-2Jewett,
      Schwartz, Wolfe & AssociatesCONSOLIDATED
      FINANCIAL STATEMENTS:Balance
      Sheet at December 31, 2007
              F-3Statements
      of Operations for the years endedDecember
      31, 2007 and 2006
              F-4Statements
      of Stockholders’ Equity for the years endedDecember
      31, 2007 and 2006
              F-5Statements
      of Cash Flows for the years endedDecember
      31, 2007 and 2006
              F-6NOTES
      TO FINANCIAL STATEMENTS
              F-7
  F-1
 Index
  
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
 
  To the Board of Directors and
Stockholders of
 BRIDGETECH HOLDINGS INTERNATIONAL,
INC.
 
 We have audited the accompanying
consolidated balance sheet of Bridgetech Holdings International, Inc. and
Subsidiaries as of December 31, 2007, and the related consolidated statements of
operations, changes in shareholders' deficiency and cash flows for the year then
ended. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provided a reasonable basis for our
opinion.
 
 In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects,
the financial position of Bridgetech Holdings, Inc. and Subsidiaries, as of
December 31, 2007, and the results of their operations and their cash flows for
the period then ended in conformity with accounting principles generally
accepted in theUnited
States of America.
 
 These consolidated financial statements
have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 2 to the consolidated financial statements, the Company has
operating and liquidity concerns, has incurred an accumulated deficit of
approximately $56,279,880  through the period ended December 31, 2007,
and current liabilities exceeded current assets by approximately $8,740,002 at
December 31, 2007. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans as to these matters
are also described in Note 2. The consolidated financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of these
uncertainties.
 
 
 JEWETT, SCHWARTZ, WOLFE &
      ASSOCIATESHollywood,FloridaMarch 24,
    2008
 
 2514 HOLLYWOOD BOULEVARD, SUITE
508●HOLLYWOOD,FLORIDA33020● TELEPHONE (954) 922-5885 ● FAX (954)
922-5957
 MEMBER - AMERICAN INSTITUTE OF CERTIFIED
PUBLIC ACCOUNTANTS ● FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION OF
THE AICPA ● REGISTERED WITH THE PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD OF THE
SEC
  F-2
 Index
 BRIDGETECH
HOLDINGS INTERNATIONAL, INC.
 CONSOLIDATED
BALANCE SHEETS
  December
      31,2007ASSETSCURRENT
      ASSETSCash
      and cash equivalents
              
              $
              156,535Accounts
      receivable net of allowance for bad debt
              
              
              73,716Minority
      interest
              
              
              84,166Inventory
              
              
              21,421Deposits
              
              
              174,225Prepaid
      expenses
              
              
              100,822Total
      current assets
              
              
              610,885Property
      and equipment - net
              
              
              683,430TOTAL
      ASSETS
              
              $
              1,294,315LIABILITIES
      AND STOCKHOLDERS' DEFICIT:CURRENT
      LIABILITIES:Accounts
      payable and Accrued Liabilities
              
              $
              2,293,497Accrued
      Compensation
              
              
              882,670Notes
      Payable - Affiliate
              
              
              972,709Notes
      Payable - current
              
              
              5,202,011Total
      current liabilities
              
              
              9,350,887Minority
      interest
              
              
              20,325Total
      liabilities
              
              
              9,371,212COMMITMENTS
      AND CONTINGENCIES
              
              
              -STOCKHOLDERS'
      DEFICIT:Series
      A 8% cumulative convertible preferred stock, $.002 par value: 10,000,000
      shares authorized, 100,000 issued as of December 31, 2007
              
              
              200Common
      Stock, par value $.001, 50,000,000 shares authorized, 30,852,030 shares
      issued as of December 31, 2007
              
              
              30,852Additional
      Paid in Capital
              
              
              48,171,931Accumulated
      deficit
              
              
              (56,279,880
              )Total
      stockholders' deficit
              
              
              (8,076,897
              )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              1,294,315
 
 The
accompanying notes are an integral part of these
consolidated  financial statements
  F-3
 Index
  BRIDGETECH
HOLDINGS INTERNATIONAL, INC.
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 
 December
      31,2007
              
              
              2006REVENUES:Revenues
              
              $
              243,770
              
              
              $
              437,049Cost
      of goods sold
              
              
              210,432
              
              
              
              199,019Gross
      profit
              
              
              33,338
              
              
              
              238,030OPERATING
      EXPENSES:General
      and administrative
              
              
              12,589,249
              
              
              
              15,330,202Depreciation
      and amortization
              
              
              351,596
              
              
              
              181,983Research
      and development
              
              
              75,000
              
              
              
              676,749Total
      operating expenses
              
              
              13,015,845
              
              
              
              16,188,934OPERATING
      LOSS
              
              
              (12,982,507
              )
              
              
              (15,950,904
              )OTHER
      (INCOME) AND EXPENSESInterest
      and other income
              
              
              (34,768
              )
              
              
              -Interest
      expense
              
              
              2,369,304
              
              
              
              903,226Total
      other expense
              
              
              2,334,536
              
              
              
              903,226LOSS
      BEFORE DISCONTINUED OPERATIONS
              
              
              (15,317,043
              )
              
              
              (16,854,130
              )LOSS
      FROM DISCONTINUED OPERATIONS
              
              
              38,413
              
              
              
              -LOSS
      BEFORE INCOME TAXES
              
              
              (15,355,456
              )
              
              
              (16,854,130
              )NET
      LOSS
              
              
              (15,355,456
              )
              
              
              (16,854,130
              )Other
      comprehensive (income) loss:Foreign
      currency translation adjustment
              
              
              5,534
              
              
              
              -Minority
      interest
              
              
              (84,166
              )
              
              
              -TOTAL
      COMPREHENSIVE (LOSS) INCOME
              
              
              (15,265,756
              )
              
              $
              (16,854,130
              )NET
      LOSS PER SHARE:Basic:
              
              $
              (0.52
              )
              
              $
              (0.60
              )Diluted:
              
              $
              (0.49
              )
              
              $
              (0.56
              )Weighted
      Average Common SharesOutstanding
      basic and dilutedBasic
              
              
              29,608,048
              
              
              
              28,129,560Diluted
              
              
              31,648,048
              
              
              
              30,169,560
 
 The
accompanying notes are an integral part of these consolidated financial
statements
  F-4
 Index
  
 BRIDGETECH
      HOLDINGS INTERNATIONAL, INC.CONSOLIDATED
      STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCYFOR
      THE YEARS ENDED DECEMBER 31, 2007 AND 2006Additional
              
              
              
              
              
              TotalPreferred
      Stock
              
              
              Common
      Stock
              
              
              Paid
              
              
              Accumulated
              
              
              Stockholders'Shares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              In
      Capital
              
              
              Deficit
              
              
              DeficitDecember
      31, 2005
              
              
              -
              
              
              $
              -
              
              
              
              18,348,049
              
              
              $
              18,348
              
              
              $
              23,145,697
              
              
              $
              (24,104,760
              )
              
              $
              (940,715
              )Issuance
      of Stock for Services
              
              
              -
              
              
              
              -
              
              
              
              2,649,761
              
              
              
              2,650
              
              
              
              7,300,458
              
              
              
              
              
              
              
              7,303,108Issuance
      of Warrants
              
              
              -
              
              
              
              -
              
              
              
              
              
              
              
              -
              
              
              
              1,231,826
              
              
              
              -
              
              
              
              1,231,826Issuance
      of Stock for Cash
              
              
              -
              
              
              
              -
              
              
              
              6,531,750
              
              
              
              6,532
              
              
              
              6,462,905
              
              
              
              -
              
              
              
              6,469,437Issuance
      of Stock for Commission
              
              
              -
              
              
              
              -
              
              
              
              600,000
              
              
              
              600
              
              
              
              1,739,400
              
              
              
              -
              
              
              
              1,740,000Capital
      Raising Costs
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (536,965
              )
              
              
              -
              
              
              
              (536,965
              )Net
      (loss) for the year
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (16,854,130
              )
              
              
              (16,854,130
              )December
      31, 2006
              
              
              
              
              
              
              
              
              
              
              28,129,560
              
              
              
              28,130
              
              
              
              39,343,321
              
              
              
              (40,958,890
              )
              
              
              (1,587,439
              )Issuance
      of Stock for Services
              
              
              -
              
              
              
              -
              
              
              
              2,666,470
              
              
              
              2,666
              
              
              
              4,431,045
              
              
              
              -
              
              
              
              4,433,711Issuance
      of Warrants
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,946,721
              
              
              
              -
              
              
              
              2,946,721Issuance
      of Stock for Cash
              
              
              -
              
              
              
              -
              
              
              
              56,000
              
              
              
              56
              
              
              
              55,944
              
              
              
              -
              
              
              
              56,000Issuance
      of Options
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,295,100
              
              
              
              -
              
              
              
              1,295,100Issuance
      of preferred stock
              
              
              100,000
              
              
              
              200
              
              
              
              -
              
              
              
              -
              
              
              
              99,800
              
              
              
              -
              
              
              
              100,000Equity
      adjustment - ECash merger
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (55,234
              )
              
              
              (55,234
              )Net
      Loss for the year
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (15,265,756
              )
              
              
              (15,265,756
              )December
      31, 2007
              
              
              100,000
              
              
              $
              200
              
              
              
              30,852,030
              
              
              $
              30,852
              
              
              $
              48,171,931
              
              
              $
              (56,279,880
              )
              
              $
              (8,076,897
              )
 
 The
accompanying notes are an integral part of these consolidated financial
statements
  F-5
 Index
  BRIDGETECH
HOLDINGS INTERNATIONAL, INC.
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 FOR
YEARS ENDED DECEMBER 31, 2007 AND 2006
 
 2007
              
              
              2006CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (loss)
              
              $
              (15,265,756
              )
              
              $
              (16,854,130
              )Adjustments
      to reconcile net income to net cash(used in) operating
      activities:Minority
      Interest
              
              
              20,325
              
              
              
              -Equity
      adjustment - ECash merger
              
              
              (55,234
              )
              
              
              -Depreciation
      and amortization
              
              
              351,596
              
              
              
              181,983Stock
      issued for services
              
              
              4,433,711
              
              
              
              7,303,108Issuance
      of options
              
              
              1,295,100
              
              
              
              -Stock
      issued for acquisition
              
              
              -
              
              
              
              -Issuance
      of warrants & beneficial conversion features
              
              
              2,946,721
              
              
              
              1,231,826Stock
      issued for commission
              
              
              -
              
              
              
              1,740,000Changes
      in assets and liabilities:Accounts
      Receivable
              
              
              (8,088
              )
              
              
              (45,817
              )Minority
      interest receivable
              
              
              (84,166
              )
              
              
              -Inventory
              
              
              253,559
              
              
              
              (274,980
              )Accounts
      payable and Accrued Liabilities
              
              
              979,510
              
              
              
              814,010Accrued
      Compensation
              
              
              97,782
              
              
              
              655,115Deposits
              
              
              45,632
              
              
              
              (94,728
              )Other
      Assets
              
              
              -
              
              
              
              32,285Prepaid
      Expenses
              
              
              (63,289
              )
              
              
              (37,533
              )Net
      cash  (used in) operating activities
              
              
              (5,052,597
              )
              
              
              (5,348,861
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Property
      and equipment
              
              
              (363,348
              )
              
              
              (816,100
              )Net
      cash (used in) provided by investing activities
              
              
              (363,348
              )
              
              
              (816,100
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from investors' loans
              
              
              420,690
              
              
              
              -Repayment
      of notes payable
              
              
              -
              
              
              
              (928,840
              )Proceeds
      from notes payable
              
              
              4,444,607
              
              
              
              1,679,808Proceeds
      from issuance of common stock
              
              
              56,000
              
              
              
              -Proceeds
      from issuance of preferred stock
              
              
              100,000
              
              
              
              5,932,473Net
      cash provided by financing activities
              
              
              5,021,297
              
              
              
              6,683,441(DECREASE)
      INCREASE IN CASH
              
              
              (394,648
              )
              
              
              518,480CASH,
      BEGINNING OF YEAR
              
              
              551,183
              
              
              
              32,703CASH,
      END OF YEAR
              
              $
              156,535
              
              
              $
              551,183Supplemental
      DisclosuresIncome
      Taxes
              
              $
              800
              
              
              $
              1,600Interest
      Paid
              
              $
              21,003
              
              
              $
              75,548
 
 The
accompanying notes are an integral part of these consolidated financial
statements
  F-6
 Index
  BRIDGETECH HOLDINGS INTERNATIONAL,
INC.
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENT
  NOTE 1.
              BASIS OF
      PRESENTATION
  The consolidated financial statements of
Bridgetech Holdings International, Inc. include the accounts of its wholly owned
subsidiaries, Retail Pilot, Inc. D/B/A Healthcare Pilot (“Retail”),
International MedLink, Inc. (“MedLink”), and Clarity Imaging International, Inc.
(“Clarity”).
 
 On January 10, 2005, Bridgetech Holdings
International, Inc. (the “Company or Bridgetech”) was incorporated inFlorida. The Company primarily focuses on
facilitating the transfer of medical drugs, devices and diagnostics from theUnited StatestoChinaand other international locations. In
February 2005, Parentech acquired Bridgetech Holdings International, Inc.,
issuing 1,673,438 shares of Parentech common stock to the shareholders of
Bridgetech. In February 2005, Parentech changed its name to Bridgetech and
ceased all activities associated with designing, developing and marketing
products intended to enhance the well being of infants in order to focus on the
principle business of facilitating the transfer of medical drugs, devices and
diagnostics from theUnited
StatestoChinaand other international
locations
  In March 2005, Bridgetech acquired 80%
of the outstanding capital of Retail. In June 2005, Bridgetech acquired the
remaining 20% of the outstanding capital of Retail. Retail’s principal business
is designing, providing and installing asset management and tracking products
for hospitals and other health care facilities in theUnited States.
  In May 2005,Bridgetechacquired 100% of MedLink. Medlink’s
principal business is providing hospitals and other healthcare facilities with
nurses from thePhilippineswho are properly accredited to practice
as nurses in theUnited
States.
  In June 2005, Bridgetech acquired 100%
of Clarity. Clarity manages diagnostic imaging centers inTexas.
 The Agreement and Plan of Merger by and
between Clarity Imaging International, Inc., ECSI Acquisition Corp., and ECash,
Inc. dated March 1, 2007 was filed on Form 8-K on March 5, 2007.  The
transaction was not effective until April 2007.  As a result of the
merger, the Company retained a 72.5% interest in Clarity.  On June 30,
2007, the Company recorded a minority interest in the amount of $20,325
reflecting the value of the ECash common stock contributed by ECash,
Inc.Subsequent to the completion of the merger on June
30, 2007, Clarity Imaging, Inc. reported a loss of $306,059 for the six months
ended December 31, 2007. As a result, the Company recorded a minority interest
gain of $84,166 and a related receivable to recover our partner’s 27.5 percent
share of these losses for the six month period.
 
 The
Clarity Imaging International, Inc. Balance Sheet and related Statement of
Operations, Statement of Shareholder’s Equity and Statement of Cash Flows for
the period of Inception to December 31, 2006 together with the Report of the
Independent Auditors, and the Un-audited Pro Forma Combined  Financial
Statements for Clarity Imaging International. Inc. and ECash, Inc. were filed on
Form 8-K/A on June 12, 2007.
 
 In April 2005, Bridgetech formed Amcare
and owns 67% of Amcare. Amcare is not an operating entity presently and upon
approval will operate a CRO and lab inChina. The Amcare transaction was never
implemented and the corporate entity was abandoned. Bridgetech has been the sole
funding source ofAmcare
  F-7
 Index
  In 2006, Bridgetech formed Bridgetech
Medical Technologies Research & Development Ltd. (“BMT”), in conjunction
with theUniversityofHong Kong(“CUHK”).  Bridgetech Medical
Technologies Research & Development Ltd.is an entity that is operating to provide
clinical trial services.  Bridgetech acquired a 51 percent ownership
in BMT with an initial funding of $50,000 in the form of a loan.  CUHK
did not contribute any material assets to BMT for its 49 percent
ownership.  Bridgetech is obligated under the BMT Agreement to provide
100 percent of the funding requirements of BMT, including additional financing
over a three-year period. The financial statements of BMT have been fully
consolidated into the Company’s financial statements.
 
 NOTE 2.
              GOING
    CONCERN
  The
accompanying consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America
which contemplate continuation of the Company as a going concern.  The
Company has year end losses from operations for 2007 and 2006.  During
the year ended December 31, 2007 the Company recorded an accumulated deficit of
$56,279,880.  Further, the Company has inadequate working capital to
maintain or develop its operations, and is dependent upon funds from private
investors and the support of certain stockholders.
 
 These
factors raise substantial doubt about the ability of the Company to continue as
a going concern.  The financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.  In this regard, Management is planning to raise any
necessary additional funds through loans and additional sales of its common
stock. There is no assurance that the Company will be successful in raising
additional capital.
 
 NOTE 3.
              SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES
  Principles
of Consolidation
  The consolidated financial statements
include the accounts of Bridgetech, its wholly owned subsidiaries, and minority
interests. All material intercompany accounts and transactions are eliminated in
consolidation.
 
 Use of
Estimates
  The preparation of financial statements
in conformity with accounting principles generally accepted in theU.S.requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. On an ongoing basis, Bridgetech evaluates its estimates and
assumptions including, but not limited to, the estimated useful lives of
property and equipment and the allowance for doubtful accounts. Actual results
may differ from those estimates.
  Reclassifications
  Certain prior year amounts have been
reclassified to conform to the current period presentation for comparative
purposes.
  Revenue
Recognition
 
 Revenue includes product sales,
consulting service income and fee-for-service arrangements.
Bridgetechrecognizes revenue from product sales at
the time customers are invoiced upon shipment, provided title and risk of loss
has passed to the customer, evidence of an arrangement exists, fees are
contractually fixed or determinable, collection is reasonably assured through
historical collection results and regular credit evaluations, and there are no
uncertainties regarding customer acceptance. Revenue from consulting services
and fee-for-service arrangements is recognized when the services are completed.
Fee-for -service arrangements includes the placement of nurses in theU.S., recruited from thePhilippines. Revenue is recognized and invoiced at
each stage of the identification, approval, training and placement
process.
  F-8
 Index
  Cash and
Cash Equivalents
  Bridgetech considers currency on hand,
demand deposits, and all highly liquid investments with an original purchase
maturity of three months or less to be cash and cash equivalents. The carrying
amounts of cash and cash equivalents approximate estimated fair value because of
the short-term maturities of those financial instruments.
  Accounts
Receivable
 
 Substantially all of Bridgetech’s
accounts receivable balance relate to trade receivables. Trade accounts
receivable are recorded at the invoiced amount and do not bear interest. The
allowance for doubtful accounts is Bridgetech’s best estimate of the amount of
probable credit losses in its existing accounts receivable. Bridgetech maintains
allowances for doubtful accounts for estimated losses resulting from the
inability of its customers to make required payments for products and services.
Accounts with known financial issues are first reviewed and specific estimates
are recorded. The remaining accounts receivable balances are then grouped in
categories by the amount of days the balance is past due, and the estimated loss
is calculated as a percentage of the total category based upon past history.
Account balances are charged off against the allowance when it is probable the
receivable will not be recovered. The Company wrote off $3,243 of bad
receivables in 2006.  No bad debts were written off in 2007. There was
no allowance for doubtful accounts as of December 31, 2007 and 2006. During
2006, there were some minimal reversals of sales at Retail Pilot due to a
failure to satisfy customers on installation
 
 Inventories
  Inventories are stated at the lower of
average cost or market. On a quarterly basis, Bridgetech assesses the
realizability of all inventories to determine whether adjustments for impairment
are required. Inventorythat is obsolete or in excess of
forecasted usage is written down to its estimated realizable value based on
assumptions about future demand and market conditions.  Inventory at
December 31, 2007 totaled $21,421 and consisted of $10,000 of transmitters and
radio-frequency asset tracking tags and $11,421 of reagents and medical products
in the Company’s Asian subsidiaries.  Inventory totaled $274,980 at
December 31, 2006 and consisted of $211,980 of radio-frequency asset tracking
tags and transmitters at Retail Pilot and $63,000 of esophageal capsule
endoscopy products at Clarity Imaging, Inc.  In 2007, the Company
wrote the value of the transmitters and asset tracking tags down by $177,178 to
$10,000, after shipping products costing $87,800.  The operations of
Retail Pilot, Inc. were discontinued as of January 1, 2007, and the Company had
attempted to sell this inventory unsuccessfully during 2007.  Also,
during 2007, the Company wrote off the inventory of ESO pills at Clarity Imaging
Inc. as the pills remaining in inventory had reached their expiration
dates.
 
 Property and
Equipment
  Property and equipment is recorded at
cost and depreciated over the estimated useful lives of the assets using
principally the straight-line method. When items are retired or otherwise
disposed of, income is charged or credited for the difference between net book
value and proceeds realized.Ordinarymaintenance and repairs are charged to
expense as incurred, and replacements and betterments are
capitalized.
  F-9
 Index
  The range of estimated useful lives used
to calculated depreciation for principal items of property and equipment are as
follow:
 
 Asset
    Category
              
              Depreciation/
                Amortization
      PeriodFurniture and
      Fixture
              
              3
    YearsOffice
      equipment
              
              3 YearsLeasehold
      improvements
              
              5
    Years
 
 Goodwill and
Other Intangible Assets
  Goodwill is the excess of the purchase
price paid over the fair value of the net assets of the business acquired. In
accordance with the provisions of the Financial Accounting Standards Board
(“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 142,
“Goodwill and Other Intangible Assets,” goodwill is not amortized but is
reviewed at least annually for impairment. The test is performed by deducting
the fair value of all assets and liabilities from the total estimated fair value
to determine residual goodwill. As of December 31, 2005, Bridgetech completed
its annual goodwill impairment test and determined that impairments
existed.
 
 Intangible assets at December 31, 2006
consist of the Vanderbilt agreement. At December 31, 2005, Bridgetech completed
an intangible asset impairment test and determined that impairment existed and
wrote off $196,389 which consisted of the payments to Sovereign Tracking Systems
and BioField.  No intangible assets were written off in 2007 or
2006.  Intangible assets are amortized over their estimated useful
lives.
  Impairment
of Long-Lived Assets and Long-Lived Assets
 
 In accordance with SFAS No. 144,
long-lived assets, such as property, plant, and equipment, and purchased
intangibles, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Goodwill and other intangible assets are tested for
impairment.Recoverability of assets to be held and
used is measured by a comparison of the carrying amount of an asset to estimated
undiscounted future cash flows expected to be generated by the asset. If the
carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized by the amount by which the carrying amount of
the asset exceeds the fair value of the asset.  There were no events
or changes in circumstances that necessitated an impairment of long lived
assets.
 
 Income
Taxes
  Deferred income taxes are provided based
on the provisions of SFAS No. 109, "Accounting for Income Taxes"
("SFASNo.109"), to reflect the tax consequences
in future years of differences between the tax bases of assets and liabilities
and their financial reporting amounts based on enacted tax laws and statutory
tax rates applicable to the periods in which the differences are expected to
affect taxable income.  Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be
realized.
  F-10
 Index
  Concentration of Credit Risk
  Financial instruments that potentially
expose Bridgetech to concentrations of credit risk consist principally of trade
accounts receivable, and cash investments. Bridgetech performs ongoing credit
evaluations and generally does not require collateral from its customers. As of
December 31, 2007 two customers accounted for $60,479 and 82 percent of the
total accounts receivable balance. In 2006 the customer base has grown to
eliminate the customer concentration and there was no concentration of credit
risk at December 31, 2006.
  In 2007, revenue from one customer
accounted for$126,487 and 52 percent of Bridgetech’s total revenues. Revenues
from ten customers represented 100 percent of total revenues in
2007.
  The carrying amounts of cash and cash
equivalents approximate estimated fair value because of the short-term
maturities of those financial instruments. Cash equivalents at December 31, 2007
and 2006were $156,535 and $551,183,respectively. Cash and cash equivalents
are invested with one financial institution. Such funds are not insured by the
Federal Deposit Insurance Corporation; however Bridgetech considers its credit
risk associated with cash and cash equivalents to be
minimal.
  Bridgetech is dependent on continued
financing from investors to sustain the operating activities. On an ongoing
basis, management seeks financing in order to fund future activities. There is
no assurance, however, that such financing will be available, if and when
needed, or if available, such financing will be completed on commercially
favorable terms, or that such operating activities in connection with products
will be successful.
  Earnings Per
Share
  Basic earnings per share is computed by
dividing net income (loss) available to common shareholders by the weighted
average number of common shares outstanding during the reporting period. Diluted
earnings per share reflects the potential dilution that could occur if stock
options and other commitments to issue common stock were exercised or equity
awards vest resulting in the issuance of common stock that could share in the
earnings of the Company.  As of December 31, 2007, there were no
potential dilutive instruments that could result in share
dilution.
 
 Fair Value
of Financial Instruments
  The fair value of a financial instrument
is the amount at which the instrument could be exchanged in a current
transaction between willing parties other than in a forced sale or
liquidation.
 
 The carrying amounts of the Company’s
financial instruments, including cash, accounts payable and accrued liabilities,
income tax payable and related party payable approximate fair value due to their
most maturities.
 
 Recent Accounting
Pronouncements
 
 On December 21, 2007 the Securities and
Exchange Commission staff issued Staff Accounting Bulletin No. 110 (SAB 110),
which, effective January 1, 2008, amends and replaces SAB 107, Share-Based
Payment. SAB 110 expresses the views of the SEC staff regarding the use of a
"simplified" method in developing an estimate of expected term of "plain
vanilla" share options in accordance with FASB Statement No. 123(R), Share-Based
Payment. Under the "simplified" method, the expected term is calculated as the
midpoint between the vesting date and the end of the contractual term of the
option. The use of the "simplified" method, which was first described in Staff
Accounting Bulletin No. 107, was scheduled to expire on December 31, 2007. SAB
110 extends the use of the "simplified" method for "plain vanilla" awards in
certain situations. The SEC staff does not expect the "simplified" method to be
used when sufficient information regarding exercise behavior, such as historical
exercise data or exerciseinformation from external sources,
becomes available. The Company is currently evaluating the potential impact that
the adoption of SAB 110 could have on its financial
statements.
 
 F-11
 Index
  In
December 2007, the Financial Accounting Standards Board Statement of Financial
Accounting Standards issued SFAS No. 141(R), “Business Combinations”. This
Statement replaces SFAS No. 141, Business Combinations, and requires an acquirer
to recognize the assets acquired, the liabilities assumed, including those
arising from contractual contingencies, any contingent consideration, and any
noncontrolling interest in the acquiree at the acquisition date, measured at
their fair values as of that date, with limited exceptions specified in the
statement. SFAS No. 141(R) also requires the acquirer in a business combination
achieved in stages (sometimes referred to as a step acquisition) to recognize
the identifiable assets and liabilities, as well as the noncontrolling interest
in the acquiree, at the full amounts of their fair values (or other amounts
determined in accordance with SFAS No. 141(R)). In addition, SFAS No. 141(R)'s
requirement to measure the noncontrolling interest in the acquiree at fair value
will result in recognizing the goodwill attributable to the noncontrolling
interest in addition to that attributable to the acquirer.  SFAS No.
141(R) amends SFAS No. 109, Accounting for Income Taxes, to require the acquirer
to recognize changes in the amount of its deferred tax benefits that are
recognizable because of a business combination either in income from continuing
operations in the period of the combination or directly in contributed capital,
depending on the circumstances. It also amends SFAS No. 142, Goodwill and Other
Intangible Assets, to, among other things; provide guidance on the impairment
testing of acquired research and development intangible assets and assets that
the acquirer intends not to use. SFAS No. 141(R) applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. The Company is currently evaluating the potential impact that the
adoption of SFAS No. 141(R) could have on its financial statements.
 
 In
December 2007, Financial Accounting Standards Board Statement of Financial
Accounting Standards issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements” (“SFAS No. 160”), which amends Accounting
Research Bulletin 51, Consolidated Financial Statements, to establish accounting
and reporting standards for the noncontrolling interest in a subsidiary and for
the deconsolidation of a subsidiary. It also clarifies that a noncontrolling
interest in a subsidiary is an ownership interest in the consolidated entity
that should be reported as equity in the consolidated financial statements. SFAS
No. 160 also changes the way the consolidated income statement is presented by
requiring consolidated net income to be reported at amounts that include the
amounts attributable to both the parent and the noncontrolling interest. It also
requires disclosure, on the face of the consolidated statement of income, of the
amounts of consolidated net income attributable to the parent and to the
noncontrolling interest. SFAS No. 160 requires that a parent recognize a gain or
loss in net income when a subsidiary is deconsolidated and requires expanded
disclosures in the consolidated financial statements that clearly identify and
distinguish between the interests of the parent owners and the interests of the
noncontrolling owners of a subsidiary. SFAS No. 160 is effective for fiscal
periods, and interim periods within those fiscal years, beginning on or after
December 15, 2008. The Company does not expect the adoption of SFAS No. 160 to
have a material impact on its financial statements.
 
 In February 2007,Financial
Accounting Standards Board Statement of Financial Accounting Standardsissued SFAS No. 159,
“The Fair Value Option for
Financial Assets and Financial Liabilities”(“SFAS No. 159”), which provides
companies with an option to report selected financial assets and liabilities at
fair value with the changes in fair value recognized in earnings at each
subsequent reporting date. SFAS No. 159 provides an opportunity to mitigate
potential volatility in earnings caused by measuring related assets and
liabilities differently, and it may reduce the need for applying complex hedge
accounting provisions. If elected, SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007. Management is currently evaluating
the impact that this statement may have on the Company results ofoperations and financial position, and
has yet to make a decision on the elective adoption of SFAS
No. 159.
  F-12
 Index
  In
September 2006, the Financial Accounting Standards Board Statement of Financial
Accounting Standards issued SFAS No. 157, "Fair Value Measurements" (SFAS No.
157). SFAS No. 157 provides guidance for using fair value to measure assets and
liabilities. SFAS No. 157 addresses the requests from investors for expanded
disclosure about the extent to which companies measure assets and liabilities at
fair value, the information used to measure fair value and the effect of fair
value measurements on earnings. SFAS No. 157 applies whenever other standards
require (or permit) assets or liabilities to be measured at fair value, and does
not expand the use of fair value in any new circumstances. SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007 and will be adopted by the Company in the first quarter of
fiscal year 2009. The Company is unable at this time to determine the effect
that its adoption of SFAS No. 157 will have on its results of operations and
financial condition.
 
 In July
2006, the FASB Interpretation No. 48, "Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statement No. 109" (FIN 48). FIN 48 clarifies
the accounting for uncertainty in income taxes by prescribing the recognition
threshold a tax position is required to meet before being recognized in the
financial statements. It also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. The cumulative effects, if any, of applying FIN 48
will be recorded as an adjustment to retained earnings as of the beginning of
the period of adoption. FIN 48 is effective for fiscal years beginning after
December 15, 2006, and the Company is required to adopt it in the first quarter
of fiscal year 2008. The Company is currently evaluating the effect that the
adoption of FIN 48 will have on its results of operations and financial
condition and is not currently in a position to determine such effects, if
any.
 
 In June
2006, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 06−3 (EITF
06-3), “How Taxes Collected from Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That Is, Gross versus
Net Presentation).” EITF 06−3 applies to any tax assessed by a governmental
authority that is directly imposed on a revenue producing transaction between a
seller and a customer. EITF 06−3 allows companies to present taxes either gross
within revenue and expense or net. If taxes subject to this issue are
significant, a company is required to disclose its accounting policy for
presenting taxes and the amount of such taxes that are recognized on a gross
basis. EITF 06−3 is required to be adopted during the first quarter of fiscal
year 2008. The Company is a development stage and taxes are currently not
material to the Company’s financial statements.
 
 In March 2006, the FASB issued
SFAS No. 156, “Accounting for Servicing of Financial
Assets — an amendment of FASB Statement No. 140”(“SFAS No. 156”). SFAS No. 156
requires an entity to recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering into a
servicing contract in specific situations. Additionally, the servicing asset or
servicing liability is initially measured at fair value; however, an entity may
elect the “amortization method” or “fair value method” for subsequent reporting
periods. SFAS No. 156 is effective beginning Fiscal year 2008. The Company
does not expect the adoption of SFAS No. 156 to have a material effecton its results of operations and financial condition.
 
 NOTE 4.
              ACQUISITIONS AND
      AGREEMENTS
  In April 26, 2006, Clarity compensated
the services of two individuals engaged in the marketing and distribution of
gastro-intestinal endoscopy products and services in accordance with the
agreements.  The individuals were primarily engaged in the business of
providing esophageal pill camera examinations, under the name Advanced Capsule
Endoscopy Services, LLC (ACES).  The total cost included
cashpayments totaling $530,000 and 354,000
shares of Bridgetech stock which are subject to certain restrictions on resale.
The fair market value of $2.80 as of that date was $991,200. The total purchase
price in cash and stocks was $1,521,200. The cost was expensed in
2006.  The first cash payment of $265,000 was made in April 2006 and
the second identical payment of $265,000 was scheduled for January 2007. This
second payment was delayed and is now being made on a scheduled basis per agreed
terms.ACES services were acquired solely to
obtain access to the products, and the marketing and distribution capabilities
of these two individuals and were recorded as compensation to
them.  ACES had no assets and liabilities at the time of
purchase.
  F-13
 Index
  The Company valued the shares of its
common stock at the market prices reported on the dates of the respective
acquisitions and agreement.
 
 In February of 2006, the company amended
its agreement with Sovereign Tracking Systems. The exclusive distributor
agreement was terminated and a new, non exclusive distributor agreement was
signed. The minimum purchase requirements were reduced to $237,620. We
terminated the agreement in 2007.
  NOTE 5.
              COMMON AND PREFERRED
      STOCK
  In the year ended 2007, the Company sold
56,000 shares of $.001 par value common stock for $56,000, and issued 2,666,470
shares of $.001 par value common stock for services.  In addition, the
Company issued 100,000 shares of $.002 par value Series A Preferred shares to
Mr. Chermak in lieu of payment of deferred compensation of
$100,000.
  In year ended 2006, the Company sold
6,531,750 shares of $.001 par value common stock for $6,469,437, issued
2,649,761 shares of $.001 par value common stock for services, and issued
600,000 shares of $.001 par value common stock for
commission.
 
 NOTE 6.
              OPTIONS
 
 The Company has two stock option plans:
the 2001 Stock Option Plan (the “2001 Plan”) and the 2005 Stock Option Plan (the
“2005 Plan”). There are currently no options outstanding under the 2001 Plan,
and as a result of the 1-for-200 reverse split of the Company’s outstanding
stock earlier this year and the corresponding adjustment to the 2001 Plan, only
10,000 options remain available for future issuance under the 2001 Plan. The
Company does not intend to grant any more options under the 2001 Plan. The
Company’s 2005 Plan, which was implemented after the reverse split, provides for
the grant of options to purchase up to 5,000,000 shares of the Company’s common
stock at consideration to be determined from time-to-time by the Company’s Board
of Directors. Both plans have been approved by the Company’s Board of Directors
and shareholders.
 
 Number of Securities to be issued
      upon exercise of outstanding options, warranties and
      rights
                (a)
              
              
              Weighted average exercise price of
      outstanding options, warrants and rights
                (b)
              
              
              Number of securities remaining
      available for future issuance under equity compensation plans (excluding
      securities reflected in column (a))
                (c)Equity Compensation plans approved
      by security holders
              
              
              0
              
              
              $
              -
              
              
              
              5,000,000Equity compensation plans not
      approved by security holders
              
              
              0
              
              
              
              -
              
              
              
              -Total
              
              
              0
              
              
              $
              -
              
              
              
              5,000,000
  F-14
 Index
  2005
Plan.A total of 5,000,000
shares were reserved for issuance from time to time under the 2005 Plan. This
number would be adjusted in the event of any change in the outstanding common
stock of the Company by reason of any stock dividend, stock split or similar
corporate change. If an option granted under the 2005 Plan expires or otherwise
terminates without having been exercised, the shares of common stock subject to
such option shall be available for grant again under the 2005 Plan. In July
2007, the Company granted 4,660,000 options under the 2005
Plan.
 
 The 2005 Plan is administered by the
Company’s Board of Directors. The Board of Directors may grant options to any
employee, consultant or director of the Company or any of its subsidiaries. On
the date of grant, the board of directors will determine the vesting schedule,
expiration date and option exercise price for each option. The per-share
exercise price of any incentive stock option, or ISO, may not be less than the
fair market value of a share of the Company’s stock on the date of grant, as
determined in accordance with the terms of the 2005 Plan. The per-share exercise
price of any non-qualified stock option, or NSO, may not be less than 85% of the
fair market value of a share of the Company’s common stock on the date of
grant.  Any increase in the maximum number of shares for which options
may be granted under the 2005 Plan must be approved by the Company’s
shareholders.
 
 Eligibility
 
 The persons who shall be eligible to
receive Options shall be employees, directors, or consultants of the Company or
any of its Affiliates ("Optionees"). The term consultant shall mean any person
who is engaged by the Company to render services and is compensated for such
services, and any director of the Company whether or not compensated for such
services; provided that, if the Company registers any of its securities pursuant
to the Securities Act of 1933, as amended (the "Act"), the term consultant shall
thereafter not include directors who are not compensated for their services or
are paid only a director fee by the Company.
 
 The Plan authorizes the granting of both
incentive stock options, as defined under Section 422 of the Internal Revenue
Code of 1986 ("ISO"), and non-statutory stock options ("NQO") to purchase Common
Stock. All employees of the Company and its affiliates are eligible to
participate in the Plan. The Planalso authorizes the granting of NQO's to
non-employee Directors and others performing services to the
Company.
 
 Any Incentive Stock Option granted to a
person who at the time the Option is granted owns stock possessing more than ten
percent (10%) of the total combined voting power of value of all classes of
stock of the Company, or of any Affiliate, ("Ten Percent Holder") shall have an
Option Price of no less than one hundred ten percent (110%) of the fair market
value of the common stock as of the date of grant. Incentive Stock Options
granted to a person who at the time the Option is granted is not a Ten Percent
Holder shall have an Option price of no less than one hundred percent (100%) of
the fair market value of the common stock as of the date of grant. Nonstatutory
Options granted to a person who at the time the Option is granted is not a Ten
Percent Holder shall have an Option Price determined by the Board as of the date
of grant.
  F-15
 Index
  No option granted pursuant to the Plan
is transferable otherwise than by will or the laws of descent and distribution.
If there is a stock split, stock dividend, or other relevant change affecting
the Company's shares, appropriate adjustments would be made in the number of
shares that could be issued in the future and in the number of shares and price
under all outstanding grants made before the event. Future options may also
cover such shares as may cease to be under option by reason of total or partial
expiration, termination or voluntary surrender of an option.
 
 The aggregate fair market value
(determined at the time an option is granted) of the Common Stock with respect
to which ISO's are exercisable for the first time by any person during any
calendar year under the Plan shall not exceed $100,000. Any Option granted to an
Employee of the Company shall become exercisable over a period of no longer than
ten (10) years, and no less than twenty percent (20%) of the shares covered
thereby shall become exercisable annually. No Option shall be exercisable, in
whole or in part, prior to one (1) year from the date it is granted unless the
Board shall specifically determine otherwise, as provided herein. In no event
shall any Option be exercisable after the expiration of ten (10) years from the
date it is granted. Unless otherwise specified by the Board or the Committee in
the resolution authorizing such option, the date of grant of an Option shall be
deemed to be the date upon which the Board or the Committee authorizes the
granting of such Option.
 
 The fair value of each option grant was
estimated on the date of grant using the Black-Scholes option pricing model with
the following assumptions:
 
 Expected life
      (years)
              3.0Risk-Free interest
      rate
              4.9%Expected
      Volatility
              113%Expected Dividend
      Yield
              0.00%
 
 At September 30, 2007 we had 4,660,000
options outstanding with an exercise price of $.80, an expected life of three
years and vested from immediately upon grant to three years on a quarterly
basis. Of those granted  2,325,833 have vested. All such Common Stock
Equivalents have been excluded from the diluted per share calculations for three
and nine month periods ended September 30, 2007 because the result would have
been anti-dilutive.
  The Black-Scholes option valuation model
was developed for use in estimating the fair value of traded options, which have
no vesting restrictions and are fully transferable. In addition, option
valuation models require the input of highly subjective assumptions including
the expected stock volatility. Because the Company’s employee stock options have
characteristics significantly different from those of traded options, and
because changes in subjective input assumptions can materially affect the fair
value estimate,in management’s opinion, the existing
models do not necessarily provide a reliable single measure of the fair value of
its employee stock options. Compensation cost which is based on the fair value
of options granted is recognized as they vest. During the quarter ended
September, the Company recorded expense of $1,295,100 related to the issuance of
the 4,660,000 options.
 
 NOTE 7.
              WARRANTS
  The Company has issued warrants in
connection with certain debt and equity transactions, as well as in conjunction
with several consulting arrangements.  Warrants outstanding are
summarized as follows:
 
 In 2007, the Company issued 1,560,000
warrants in conjunction with the issuance of convertible debt to three separate
creditors.  In addition, the Company issued 2,000,000 warrants to one
individual as part of a finder’s fee agreement to raise additional capital for
the Company.  The latter warrants were reported as compensation
expense.
  F-16
 Index
  Warrant
    Parties
              
              Number of
              
              ExerciseWarrants
              
              Price
              
              ExpirationTotal Outstanding at beginning of
      year
              
              
              2,040,000Pinot
              
              
              660,000
              
              
              $
              1.50
              
              1/22/2009Jade
    Treasure
              
              
              500,000
              
              
              $
              1.50
              
              4/30/2009Margaret
      Kwok
              
              
              400,000
              
              
              $
              1.50
              
              4/26/2009Johnson
      Lau
              
              
              2,000,000
              
              
              $
              1.50
              
              6/30/2008Total Outstanding December 31,
      2007
              
              
              5,600,000
 
 The exercise prices of the warrants
range from $.50 to $4.00.  The fair value of each warrant grant is
estimated on the date of grant using the Black-Scholes option-pricing
model.
 
 The Company valued the warrants usingBlack-Scholes
option-pricing model.  The assumptions under Black Scholes are based
on the market value of the stock price at the time of issuance, the exercise
price ofthe warrants,
life, volatility, risk free interest rate of the
warrants.The
Black Scholes option-price model was the best determinable value of the warrants
that the Company “knew up
front”when issuing the
warrants in accordance with EITF 96-18.  Thewarrants had no vesting schedule and
could be exercised at the option of the parties receiving the warrants until
either terminated by contract or expiration.
 
 In 2006, the Company issued 2,040,000 in
warrants and recorded it as compensation expense and also recorded the MCC
Global Healthcare termination agreement.
  Warrants
              
              Number of
              
              
              ExerciseParties
              
              Warrants
              
              
              Price
              
              ExpirationTotal Outstanding at the beginning
      of year
              
              
              2,500,000Redwood
              
              
              400,000
              
              
              $
              3.00
              
              9/18/2008Directors
              
              
              200,000
              
              
              
              0.50
              
              nonePropper
              
              
              200,000
              
              
              
              1.00
              
              4/27/2011Margaret
    Kwok
              
              
              400,000
              
              
              
              1.50
              
              12/16/2008Reliable
              
              
              200,000
              
              
              
              1.50
              
              5/29/2008Skyway
              
              
              600,000
              
              
              
              1.50
              
              11/14/2008Chui
              
              
              40,000
              
              
              $
              1.50
              
              noneTotal Terminated per
      agreement
              
              
              (2,500,000
              )Total Outstanding December 31,
      2006
              
              
              2,040,000
  F-17
 Index
  In 2005, the Company issued 2,500,000 in
warrants in conjunction with issuance of common stock and recorded it as
compensation expense.  In April 2006 the company terminated the
contract and the warrants were terminated.  In 2006, the Company then
recorded the termination of the warrants at the date of
termination.
 
 Warrant
    Parties
              
              Number of
              
              ExerciseWarrants
              
              Price
              
              ExpirationTotal Outstanding at beginning of
      year
              
              
              0MCC Global
      Healthcare
              
              
              1,500,000
              
              
              $
              2.50
              
              Terminated in
      2006MCC Global
      Healthcare
              
              
              1,000,000
              
              
              $
              4.00
              
              Terminated in
      2006Total Outstanding December 31,
      2005
              
              
              2,500,000
 
 NOTE 8.
              PROPERTY AND
      EQUIPMENT
  The components of property and equipment
are as follows:
  Property and
      Equipment
              Useful
              
              December31,
              
              
              December 31,Life
              
              2007
              
              
              2006Computer equipment, peripherals
      and Software
              3 years
              
              $
              231,857
              
              
              $
              170,122Office
              5 years
              
              
              153,439
              
              
              
              107,545Machinery and
      Equipment
              7 years
              
              
              343,718
              
              
              
              318,718Leasehold
      Improvements
              5 years
              
              
              467,180
              
              
              
              249,227Totals
              
              
              
              1,196,194
              
              
              
              845,612Accumulated
      Depreciation
              
              
              
              (512,764
              )
              
              
              (176,436
              )Net Fixed
      Assets
              
              
              $
              683,430
              
              
              $
              669,176
 
 Depreciation expense $349,094 and
$171,985 for 2007 and 2006, respectively. There were no capital leases as of
December 31, 2007 or 2006.
  NOTE 9.
              GOODWILL AND OTHER INTANGIBLE
      ASSETS
 
 In 2005, the Company executed two
Purchase Agreements which were recorded as Intangible assets. One with Sovereign
Tracking Systems, (STS), was a non-exclusive distribution agreement for the sale
of assettracking systems into health care
facilities for $170,000, and the second with BioField to acquire equipment with
specific applications to laboratory analysis inAsiafor $50,000. The Company amortized the
STS Purchase Agreement in 2005 and, after incurring amortization expense of
$23,611 in that year, wrote off the unamortized balance of $146,389. The market
applications and potential of the products acquired from STS were not sufficient
to justify continuing with Agreement. Both parties executed a mutual termination
letter early in 2007. The Company also wrote off the BioField cost, after
concluding that the market inAsiafor the equipment was very
limited.
 
 In May 2005, IML entered into an
agreement withVanderbiltUniversitypursuant to which IML will train nurses
in thePhilippinesusing instruction courses and materials
designed by the faculty of the Vanderbilt School of Nursing. Under this
Agreement, Vanderbilt has granted IML a limited exclusive license to use
Vanderbilt videotaped courses and materials in connection with IML’s training
program in thePhilippines. This arrangement commenced in April
2005. IML paid Vanderbilt an up-front fee of $53,500 and pays Vanderbilt (i) a
fee $500 per student for each student enrolled in a program using the Vanderbilt
materials, and (ii) an additional fee of $500 per student for each student who
passes a specified nursing certification exam. This agreement expires in March
2007 unless mutually extended by the parties, and is subject to early
termination by either party upon 30-day notice. To date, IML has established
nurse training programs in thePhilippinesusing the Vanderbilt training materials
and begun to recruit qualified nurses in thePhilippines. The initial payment has been amortized
over 24 months.
  F-18
 Index
  Goodwill and Intangible
      Assets2007
              
              
              2006Purchase
      AgreementsGoodwillVanderbilt
      Agreement
              
              
              46,004
              
              
              
              46,004Total Goodwill and Intangibles
      Assets
              
              
              46,004
              
              
              
              46,004Impairment of Goodwill and
      Intangible AssetsAccumulated
      Amortization
              
              
              (46,004
              )
              
              
              (43,502
              )Net Goodwill and Intangible
      Assets
              
              
              0
              
              
              
              2,502
 
 The amortization expense for all
intangible assets is grouped with the depreciation expense for the related
reporting period, and reported in the Statements of Operations and the
Statements of Cash Flows as “Depreciation and amortization” expense. The
weighted average of the average amortization period, in total and by major
intangible asset class is ten years in accordance with the agreements with the
above intangible assets. The company had total amortization expense
of $2,502 and $17,497 in 2007 and 2006
respectively.
 
 NOTE 10.
              NOTES
    PAYABLE
 
 As of December 31, 2007, Bridgetech had
borrowings of $6,676,881which include principal and interest at 8% per annum. Of this
total, $5,704,172 represented twenty-three promissory notes to nineteen outside
investors, and $972,709 was comprised of loans from four
employees.   A year earlier onDecember 31, 2006, Bridgetech had
borrowings of $1,952,703which include principal and interest at
8% per annum. Of this total, $1,742,126 represented one promissory note and two
convertible notes to three outside investors, and $210,577 was comprised of
loans from two employees.
  The promissory note at December 31, 2006
was in the amount of $500,000 from Richard Propper, due on October 26, 2006 at
8% interest rate per annum, which note was in default at year end 2006 and
continues to be in default.  This note, originally dated April 27,
2006, included 200,000 warrants to purchase common stock at $1.00 per share
which expire on May 23, 2012. The Company recorded non-cash interest expense of
$262,069 related to the amortization of the debt discount associated with the
warrants, valued using the Effective Conversion Rate Method.  The note
with Mr. Propper was in default on December 31, 2006 and the Company accrued
$66,498 as an estimated liability to compensate Mr. Propper for this
default.
 
 On November 14, 2006, the Company
borrowed $600,000 from Skyway Development at an 8% interest rate, on a
convertible note, which is due on April 14, 2007. Under the terms of the note,
Skyway Development could convert the unpaid principal and interest into the
Company’s Common Stock at an exercise price of $1.50 per
share.    Skyway was also issued 600,000 warrants, as additional
consideration for this note, at a strike price of $1.50 per share. The warrants
will expire in two years on November 14, 2008.We first allocated the
$600,000 proceeds to the note and warrants based upon their relative fair
values. Then we assessed the Beneficial Conversion Features using the Effective
Conversion Rates of the note, based on the market price of the stock on the date
of the note. This resulted in an allocation of $231,113 to the Beneficial
Conversion Feature of the note and $368,887 to the warrants. The resulting
amounts were amortized over the life of the note using the Effective Interest
Rate method.
  F-19
 Index
  In addition to the warrants, Skyway
was granted 600,000 common shares (which are subject to certain
restrictions on resale) as consideration for the transaction as well as
compensation to assist the Company in identifying additional sources of
investment capital inAsia. These shares were valued at a total of
$1,740,000, based on a market price of $2.90 per share and equity commission in
this amount was recorded on November 14, 2006.
 
 On December 18, 2006, the Company
borrowed $600,000 from Margaret Kwok at an 8% interest rate, also on a
convertible note, which is due on June 15, 2007 which will be extended for 90
days from the due date. Under the terms of the note, Kwok could convert the
unpaid principal and interest into the Company’s Common Stock at an exercise
price of $1.50 per share. Margaret Kwok was also issued 400,000 warrants that
convert at $1.50 per share. These warrants will expire in two years on December
16, 2008.  We recorded non-cash interest expense of $404,010 related
to the amortization of the debt discount associated with the beneficial
conversion features and warrants.Then we assessed the Beneficial
Conversion Features using the Effective Conversion Rates of the note, based on
the market price of the stock on the date of the note. This resulted in an
allocation of $262,505 to the Beneficial Conversion Feature of the note and
$142,505 to the warrants. The resulting amounts were amortized over the life of
the note using the Effective Interest Rate method.
 
 On May 29, 2006, theCompany borrowed $500,000 from Reliable
Technology on a Convertible Note with an 8% interest rate per annum, due on or before
December 31, 2006. Under the terms of the note, Reliable Technology could
convert the unpaid principal and interest into the Company’s Common Stock at an exercise price of
$1.50 per share. Reliable Technology was also issued 200,000 warrants at $1.50 per share,
expiring in two years in conjunction with this note. We recorded as non-cash
interest expense $500,000 related to the amortization of the debt discount
associated with the beneficial conversion features and warrants.We recorded as
non-cash interest expense of $500,000 related to the amortization of the debt
discount associated with the beneficial conversion features and warrants. We
first allocated the $500,000 proceeds to the note and warrants based upon their
relative fair values. Then we assessed the Beneficial Conversion Features using
the Effective Conversion Rates of the note, based on the market price of the
stock on the date of the note. This resulted in an allocation of $404,234 to the
Beneficial Conversion Feature of the note and $95,766 to the warrants. The
resulting amounts were amortized over the life of the note using the Effective
Interest Rate method.  This note was paid in full, along with accrued
interest, on December 20, 2006 from the proceeds of the Margaret Kwok
note.
 
 The
Company borrowed $1,000,000 from Pinot Co., Ltd. On January 22, 2007 at an 8%
interest rate of 8 % on a convertible note, due on July 22, 2007. The balance of
this note was reduced to $900,000 in July 2007 with a payment of $100,000. Pinot
Co. Ltd. could convert the unpaid principal and interest into the Company’s
Common Stock at a conversion price of $1.50 per share.  Pinot Co. Ltd.
was issued 660,000 warrants that convert an exercise price of $1.50 per
share.  These warrants will expire in two years on January 22,
2008.  The Company recorded non-cash interest expense of $1,000,000
related to the amortization of the debt discount associated with the beneficial
conversion features and warrants.  We first allocated the $1,000,000
proceeds to the note and warrants based upon their relative fair values. Then we
assessed the Beneficial Conversion Features using the Effective Conversion Rates
of the note, based on the market price of the stock on the date of the note.
This resulted in an allocation of $582,843 to the Beneficial Conversion Feature
of the note and $417,157 to the warrants. The resulting amounts were amortized
over the life of the note using the Effective Interest Rate
method.
  F-20
 Index
  The
Company borrowed $200,000 from Redwood Consulting on April 2, 2007 at an 8%
interest rate which is due on April 1, 2008.  The note, and any
accrued interest, is convertible into the Company’s Common Stock at $1.50 per
share, at any time.  The note did not have any warrants
attached.
 
 On April
26, 2007, the Company borrowed $600,000 from Margaret Kwok at an 8% interest
rate, also on a convertible note, which is due on April 25, 2008.  The
principal balance of this note, along with any unpaid interest, is convertible
into the Company’s Common shares at $1.50 per share at any
time.   Kwok was issued 400,000 warrants that convert at $1.50
per share.  Using the Effective Conversion Rate Method, the Company
determined that the warrants and conversion features had negative
value.  The Company recorded as non-cash interest expense $130,910
related to the amortization of the discount attributable to the beneficial
conversion features and warrants.  We first allocated the $600,000
proceeds to the note and warrants based upon their relative fair values. Then we
assessed the Beneficial Conversion Features using the Effective Conversion Rates
of the note, based on the market price of the stock on the date of the note.
This resulted in an allocation of $25,455 to the Beneficial Conversion Feature
of the note and $105,455 to the warrants. The resulting amounts were amortized
over the life of the note using the Effective Interest Rate method.
 
 The
Company borrowed $500,000 from Jade Treasure on April 30, 2007 at an 8% interest
rate, also on a convertible note, which is due in two years on April 29,
2009.  Jade Treasure was issued 500,000 warrants that convert at $1.50
strike price. These warrants will expire in two years on April 30,
2009.  The note with Jade Treasure, and any unpaid interest, is
convertible into the Company’s Common shares at $1.50 per share at any time. The
Company recorded as non-cash interest expense $38,011 related to the
amortization of the discount attributable to the beneficial conversion features
and warrants.  We first allocated the $500,000 proceeds to the note
and warrants based upon their relative fair values. Then we assessed the
Beneficial Conversion Features using the Effective Conversion Rates of the note,
based on the market price of the stock on the date of the note. This resulted in
an allocation of $22,384 to the Beneficial Conversion Feature of the note and
$15,627 to the warrants. The resulting amounts were amortized over the life of
the note using the Effective Interest Rate method.
 
 During
the quarter ended September 2007, the Company issued twelve convertible notes
with principal ranging from $37,500 to $100,000 and aggregating $748,500. The
conversion terms were all for $.50 per share and all had an interest rate of 8%.
The terms of the notes are from three to twelve months, with one at twenty-four
months. All can convert the principal and interest into the Company’s Common
Stock at an exercise price of $.50. The Company recorded as non-cash interest
expense $301,093 related to the amortization of the discount attributable to the
beneficial conversion features valued using the Effective Conversion Rate
Method.
 
 During
the fourth quarter of 2007, the Company borrowed a total of $650,000 from
Richard Propper in two convertible notes, one in the amount of $450,000 dated
November 14, 2007 and the second in the amount of $200,000 dated December 3,
2007.  The notes were due and payable on May 9, 2008 and June 3, 2008,
respectively, and both were at 8 percent interest rates.  Both notes
were convertible into the Company’s Common stock at $.25 per share.
 
 The
Company, in accordance with EITF 98-5, EITF 00-27, and APB 21, we accounted for
the convertible notes under the Effective Conversion Rate Method, in order to
recognize the value attributable to the Beneficial Conversion right Feature
(“BCF”), which affected the amount allocated to the value of the warrants.
Additionally, the Company changed its amortization of the resulting debt
discount to the Effective Interest Rate Method and amortized the discount over
the original term of the note.
  F-21
 Index
  The
following table shows the amount allocated to warrants and BCF’ for each of the
notes along with warrants issued for consulting.
 
 
 Warrant Activity in
      2007
              
              
              
              
              Black-Scholes
              
              
              Amount
      Allocated
                to the
              
              
              DiscountWarrants
              
              
              Valuation
of
              
              
              
              
              
              Note
              
              
              Allocated
toIssued to
              Purpose
              
              Issued
              
              
              Warrants
              
              
              Warrants
              
              
              Amount
              
              
              BCF
              
              
              WarrantsPinot Co
    Ltd,
              Convertible
      Note
              
              
              660,000
              
              
              
              715,728
              
              
              $
              417,157
              
              
              
              1,000,000
              
              
              
              582,843
              
              
              
              417,157Pinot Co
    Ltd.
              Allocated to
      BCF
              
              
              
              
              
              
              
              
              
              
              582,843Jade
    Treasure
              Convertible
      Note
              
              
              500,000
              
              
              
              16,131
              
              
              
              15,627
              
              
              
              500,000
              
              
              
              22,384
              
              
              
              15,627Margaret
    Kwok
              Compensation
              
              
              400,000
              
              
              
              127,942
              
              
              
              105,455
              
              
              
              600,000
              
              
              
              25,455
              
              
              
              105,455Johnson Lau
              Consulting
              
              
              2,000,000
              
              
              
              1,312,412
              
              
              
              1,312,412
              
              
              
              
              
              
              
              
              
              
              
              1,312,412Johnson Lau
              Allocated to BCFAgreement
              
              
              
              
              
              
              
              
              
              
              47,839
              
              
              
              
              
              
              
              47,839Total Value of Warrants
      Activity
              
              
              3,560,000
              
              
              
              2,172,213
              
              
              
              2,481,333
              
              
              
              2,100,000
              
              
              
              679,521
              
              
              
              1,850,651
  Warrant Activity in
      2006
                
                
                
                
                Black-Scholes
                
                
                Amount
      Allocated
                
                
                DiscountValuation
                
                
                to the
                
                
                Allocated
toWarrants
                
                
                of
                
                
                
                
                
                NoteIssued to
                Purpose
                
                Issued
                
                
                Warrants
                
                
                Warrants
                
                
                Amount
                
                
                BCF
                
                
                WarrantsFour
    Directors
                Compensation
                
                
                200,000
                
                
                
                677,961
                
                
                $
                677,961
                
                
                
                
                
                
                -
                
                
                
                677,961Richard
    Propper
                Promissory
    Note
                
                
                200,000
                
                
                
                550,723
                
                
                
                262,069
                
                
                
                500,000
                
                
                
                
                
                
                
                262,069Reliable
      Technology
                Convertible
      Note
                
                
                200,000
                
                
                
                118,453
                
                
                
                95,766
                
                
                
                500,000
                
                
                
                404,234
                
                
                
                95,766Redwood
    Consulting
                Consulting
                
                
                400,000
                
                
                
                139,766
                
                
                
                139,766Skyway
      Development
                Convertible
      Note
                
                
                600,000
                
                
                
                957,681
                
                
                
                368,887
                
                
                
                600,000
                
                
                
                231,113
                
                
                
                368,887Han Chiu
                Consulting
                
                
                40,000
                
                
                
                16,552
                
                
                
                16,552Margaret
    Kwok
                Convertible
      Note
                
                
                400,000
                
                
                
                186,849
                
                
                
                142,505
                
                
                
                600,000
                
                
                
                262,505
                
                
                
                142,505Propper "Warrant
      Penalty"
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                66,498Value of Warrants
      Issued
                
                
                2,040,000
                
                
                
                2,647,985
                
                
                $
                1,770,004
                
                
                
                2,200,000
                
                
                
                897,852
                
                
                
                1,547,188Allocated to
      BCF
                
                
                
                
                
                
                
                
                
                
                897,852MCC Global
                Cancellation ofAgreement
                
                
                (2,500,000
                )
                
                
                (1,436,030
                )
                
                
                (1,436,030
                )Total Value of Warrants
      Activity
                
                
                (460,000
                )
                
                
                1,211,955
                
                
                
                1,231,826
 F-22
 Index
  NOTE 11.
              INVESTOR AND EMPLOYEE
      LOANS
 
 Loans from investors and employees
totaled $972,709 as of December 31, 2007 and were comprised of loans from four
employees and one outside investor.  The loans bear interest at an 8
percent annual rate and all have no certain due date.  The total of
$972,709 includes the several loans made by Mr. Chermak to the Company and its
Retail Pilot subsidiary in 2004, as described below.
 
 The Chairman of the Company, Michael
Chermak, guaranteed several loans to Retail Pilot, Inc. aggregating to $341,442
in 2004. The loans were made by Indy Mac Bank to Retail Pilot, Inc., one of
Bridgetech’s wholly-ownedsubsidiaries and is payable on
demand.
  As of December 31, 2006, Bridgetech had
loans from two employees totaling $210,577. Both of these loans are unsecured.
One loan, in the amount of $140,000, bears interest of 8% per
annum.
  NOTE 12.
              INCOME
  TAXES
  The
provision (benefit) for income taxes from continued operations for the years
ended December 31, 2007 and 2006 consist of the following:
  December
      31,
              
              
              December
      31,2007
              
              
              2006Current:
              
              
              -
              
              
              
              --
              
              
              
              -Deferred
      benefit:
              
              $
              6,579,000
              
              
              
              7,247,2756,579,000
              
              
              
              7,247,275Valuation
      allowance
              
              
              (6,579,000
              )
              
              
              (7,247,275
              )(Benefit)
      provision for income taxes, net
              
              $
              -
              
              
              
              -
  F-23
 Index
  The
difference between income tax expense computed by applying the federal statutory
corporate tax rate and actual income tax expense is as follows:
  December
      31,
              
              
              December
      31,2007
              
              
              2006Combined
      statutory income tax rate
              
              
              43.00
              %
              
              
              43.00
              %Valuation
      allowance
              
              
              (43.00
              )%
              
              
              (43.00
              )%Effective
      tax rate
              
              
              -0-
              
              
              
              -0-
 
  Deferred
income taxes result from temporary differences in the recognition of income and
expenses for the financial reporting purposes and for tax purposes. The tax
effect of these temporary differences representing deferred tax asset and
liabilities result principally from the
following:
  December
      31,
              
              
              December
      31,2007
              
              
              2006Net
      operating loss carryforward
              
              
              6,579,000
              
              
              
              7,247,275Valuation
      allowance
              
              
              (6,579,000
              )
              
              
              (7,247,275
              )Deferred
      income tax asset
              
              $
              -
              
              
              
              -
 
 The
Company has a net operating loss carryforward of approximately $15,300,000
available to offset future taxable income through 2028.
  Bridgetech
does not intend to reverse the valuation allowance at this time. Bridgetech
provides for income taxes in accordance with SFAS No. 109, “Accounting for
Income Taxes,” using an asset and liability based approach and requires that
deferred tax assets be reduced by a valuation allowance if it is more likely
than not that a portion of the deferred tax asset will not be realized.
On a quarterly basis, Bridgetech evaluates both the positive and negative
evidence bearing upon the realizability of its deferred tax assets. Bridgetech
considers future taxable income, ongoing prudent and feasible tax planning
strategies, and the ability to utilize tax losses and credits in assessing
the need for a valuation allowance. Should Bridgetech determine that it is not
able to realize all or part of its other deferred tax assets in the future, a
valuation allowance would be required resulting in an expense recorded within
the provision for income taxes in the Statement of Operations in the period in
which such determination was made. It is reasonably possible that the amount of
the deferred tax asset considered realizable could be reduced in the
near term if future taxable income is reduced.
  NOTE 13.
              LEASE
      COMMITMENTS
  F-24
 Index
  Bridgetech leases various office
facilities under lease agreements that expire at various dates. Future minimum
lease payments under operating leases, as of December 31, 2007, are as
follows:
  Operating
                Leases2008
              
              $
              218,1802009
              
              
              171,8932010
              
              
              131,5302011
              
              
              43,968Total minimum lease
      payments
              
              $
              565,571
  Rental expense for 2006 was $ 92,789 and
$411,505 for 2007.  The Company is presently in negotiations with a
third party under which the Companyhasterminatedits lease inSan Diegoand assigns the balance of the lease
obligation to the third party.
  NOTE 14.
              COMMITMENTS, CONTINGENCIES AND
      GUARANTEES
 
 Bridgetech enters into purchase order
commitments in the normal course of business. The Company had no open purchase
orders as of December 31, 2007.As of December 31, 2005, Bridgetech had an
obligation for future products of approximately $ 237,620 with Sovereign
Tracking System under a purchase agreement. During 2006, cash in the above
amount was paid to Sovereign Tracking Systems and inventory was received under
the purchase agreement. On February 26, 2007, Bridgetech and Sovereign Tracking
Systems signed an agreement to terminate the Distributor Contract. No further
payments are required. .
  NOTE 15.
              EARNINGS PER
      SHARE
 
 Earnings per share is calculated using
the weighted average number of shares of common stock outstanding during the
year. The Company has adopted the provisions of SFAS No. 128Earnings Per
Share. The Company issued
4,660,000 options in July 2007 and has issued 5,600,000 warrants that are
reflected in our diluted earnings per share calculation in accordance with SFAS
128.
 
 NOTE 16.
              RESEARCH AND
      DEVELOPMENT
 
 Research and Development Expense in 2007
totaled $75,000 and represents an accrual for the maintenance fee for the second
year (2007) under the Company’s agreement with MD Anderson.
  Research and Development expenditures
totaled$ 676,749 in 2006 and consisted of $500,000 paid to Dr. Chen on
the execution of the agreement with Latitude in April 2006 and $176,749 of costs
related to the agreement with MD Anderson.
 
 The Company acquired rights for the
delivery of drugs and diagnostics under both of these
contracts.  However, since the drugs are subject to lengthy review and
approval processes, with a good deal of uncertainty, the Company is expensing
all current costs as Research and Development.  For the year ended
December 31, 2005, Research and Development costs totaled $150,511 and were
related to the Company’s modifications and changes to RFID products, and some
development work on new products for controlling assets for customers in the
retail trade. Research and Development costs include salaries, fees paid to
contractors and consultants and development materials.
  F-25
 Index
 
 NOTE
      17.
              PRODUCT
      SEGMENTS
 Our
product segments provide management with a comprehensive financial view of our
key businesses. The segments provide a framework for the alignment of strategies
and objectives across the development, sales, marketing, and services functions,
and for the timely and rational allocation of development, sales, marketing, and
services resources within businesses. The segments also help focus strategic
planning efforts on key objectives and initiatives across our broad businesses.
Due to our integrated business structure, operating costs included in one
segment may benefit other segments. Therefore, these segments are not designed
to measure operating income or loss that is directly related to the products
included in each segment. Our four product segments are: Asset Management,
Medical Imaging, Nurse Recruitment and Training and Medical Technology
Transfer.
  Segment
revenue and operating income/ (loss) was as follows:
  Year
      Ended December 31
              
              2007
              
              
              2006RevenueAsset
      Management
              
              $
              0
              
              
              $
              42,202Medical
      Imaging
              
              
              167,561
              
              
              
              201,946Nurse
      Recruitment and Training
              
              
              68,400
              
              
              
              192,901Medical
      Technology Transfer
              
              
              7,809
              
              
              
              0Reconciling
      amountsConsolidated
              
              $
              243,770
              
              
              $
              437,049
 
 Year
      Ended December 31
              
              2007
              
              
              2006Operating
      Income/(Loss)Asset
      Management
              
              $
              
              
              
              $
              (406,431
              )Medical
      Imaging
              
              
              (717,941
              )
              
              
              (231,659
              )Nurse
      Recruitment and Training
              
              
              (82,988
              )
              
              
              (45,597
              )Medical
      Technology Transfer
              
              
              (2,161,387
              )
              
              
              (765,433
              )Reconciling
      amounts
              
              
              (12,303,440
              )
              
              
              (15,405,010
              )Consolidated
              
              $
              (15,265,756
              )
              
              $
              (16,854,130
              )
 
 SFAS
No. 131, Disclosures
about Segments of an Enterprise and Related Information, establishes
standards for reporting information about operating segments. This standard
requires segmentation based on our internal organization and reporting of
revenue and operating income based upon internal accounting methods. Our
financial reporting systems present various data for management to operate the
business, including internal profit and loss statements prepared on a basis not
consistent with U.S. GAAP. Operating segments are defined as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker, or decision making
group, in deciding how to allocate resources and in assessing performance. Our
chief operating decision maker is our Chief Executive Officer. Our four segments
are Asset Management, Medical Imaging;  Nurse Recruitment and
Training, and Medical Technology Transfer.  The types of products and
services provided by each segment are summarized below:
  F-26
 Index
  Asset
Management:
 
 Asset
Management uses electronic article surveillance and radio frequency
identification (RFID) technologies to track retail assets and mobile assets in
medical facilities. The operations of this segment were discontinued as of
January 1, 2007.
 
 Medical
Imaging:
 
 Medical
Imaging is the fastest growing segment of the domestic healthcare markets. We
acquired Clarity Imaging which did not generate income in prior years. The
operations of Clarity Imaging were merged into ECash, Inc. in March
2007.  ECash, Inc. is a publicly traded corporation. The decision was
made to better access financial markets and to establish a larger critical mass
for operations.
 
 Nurse Recruitment and
Training:
 
 According
to the American Hospital Association and the American Nursing Association, the
U.S. is currently experiencing a shortage of qualified nurses. The operations of
International MedLink were acquired to participate in this market by training
nurses in the Philippines and placing them in qualified medical facilities in
the US. The operations never materialized due to a lack of personnel and
funding.
 
 Medical Technology
Transfer
  The
Company’s Medical Technology Transfer segment includes all of the activities and
expenses related to the identification and purchase of drugs and diagnostics for
distribution and sale in Asia, primarily China. No revenues have been recorded
and the expenses to date relate to hiring of personnel, the establishment of
organizations and the development of necessary business relationships in
China.
  Because
of our integrated business structure, operating costs included in one segment
may benefit other segments, and therefore these segments are not designed to
measure operating income or loss directly related to the products included in
each segment. Inter-segment cost commissions are estimated by management and
used to compensate or charge each segment for such shared costs. Management will
continually evaluate the alignment of product development organizations, sales
organizations, and inter-segment commissions for segment reporting purposes,
which may result in changes to segment allocations in future
periods.
 
 Medical Technology Transfer
(continued)
  Assets
are not allocated to segments for internal reporting presentations. A portion of
amortization and depreciation is included with various other costs in an
overhead allocation to each segment and it is impracticable for us to separately
identify the amount of amortization and depreciation by segment that is included
in the measure of segment profit or loss.
 
 Reconciling
amounts and corporate-level activity not specifically attributed to a segment.
In addition, certain revenue and expenses are excluded from segments or included
in corporate-level activity including certain legal settlements and accruals for
legal contingencies.
  F-27
 Index
  Significant
reconciling items were as follows:
  Year
      Ended December 31
              
              2007
              
              
              2006Operating
      income reconciling amounts:Research
      and Development
              
              $
              (75,000
              )
              
              $
              (676,749
              )Stock-based
      compensation expense
              
              
              (4,066,565
              )
              
              
              (8,357,086
              )Issuance
      of warrants, net of reversal of MCC warrants in 2006
              
              
              (1,312,412
              )
              
              
              175,019Interest
      Expense
              
              
              (2,369,304
              )
              
              
              (903,226
              )Corporate-level
      expenses(1)
              
              
              (4,480,159
              )
              
              
              (5,642,968
              )Total
              
              $
              (12,303,440
              )
              
              $
              (15,405,010
              )
  (1)
              Corporate-level
      expenses exclude legal settlements and contingent liabilities, stock-based
      compensation expense, and revenue reconciling amounts presented separately
      in those line items.
 
 NOTE 18
              DISCONTINUED
      OPERATIONS
 
 On
December 31, 2007, the Company ceased operations of its China operations and
decided to look for a new merger opportunity.  The financial
statements have been prepared to show the operations of the China Operations as
discontinued for the years ended December 31, 2007.
 
 This
abandonment of that operations has been accounted for as a discontinued
operation in accordance with Statement of Financial Accounting Standards
(“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-lived
Assets.  The results of the discontinued operations of the China
operations was 38,413.
 
 * * * * *
* *
 
 ITEM 8.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.
  We have
had no disagreements on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures with any of our
accountants for the year ended December 31, 2007.
  We have
not had any other changes in nor have we had any disagreements, whether or not
resolved, with our accountants on accounting and financial disclosures during
our two recent fiscal years or any later interim period.
  ITEM8A.
              CONTROLS
      AND PROCEDURES
 
 (a)
              Evaluation
      of disclosure controls and
procedures
  19
 Index
  Based
upon an evaluation of the effectiveness of the Company’s disclosure controls and
procedures performed by the Company’s management, with participation of the
Company’s Chief Executive Officer, Chief Operating Officer, and its Chief
Accounting Officer as of the end of the period covered by this report, the
Company’s Chief Executive Officer, Chief Operating Officer, and its Chief
Accounting Officer concluded that the Company’s disclosure controls and
procedures have been effective in ensuring that material information relating to
the Company, including its consolidated subsidiary, is made known to the
certifying officers by others within the Company and the Bank during the period
covered by this report.
 
 As used
herein, “disclosure controls and procedures” mean controls and other procedures
of the Company that are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Securities Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission’s rules and
forms.  Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
Securities Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
 
 (b)
              Management’s
      Report on Internal Control Over Financial
  Reporting
 
 Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act Rule 13a-15(f)
under the Securities Exchange Act of 1934.  Under the supervision and
with the participation of the Chief Executive Officer, the Chief Operating
Officer and the Chief Accounting Officer, we conducted an evaluation of the
effectiveness of our control over financial reporting based on the framework in
Internal Control-Integrated
Frameworkissued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”).  Based on our evaluation under the
framework, management has concluded that our internal control over financial
reporting was effective as of December 31, 2007.
 
 This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management’s report in this annual report.
 
 (c)
              Changes
      in Internal Control over Financial
Reporting
  There
have not been any changes in the Company’s internal controls or in other factors
that occurred during the Company’s last fiscal quarter ended December 31, 2007
that have materially affected or are reasonably likely to materially affect the
Company’s internal control over financial reporting.
 
 ITEM8B.
              OTHER
      INFORMATION.
  None.
  20
 Index
  PART III
  ITEM
      9.
              DIRECTORS, EXECUTIVE OFFICERS,
      PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH
      SECTION 16(A) OF THE EXCHANGE
ACT.
  Set forth below are the directors and
officers of the Company as of March.
 
 Name
              
              Age
              
              PositionsMichael D.
      Chermak
              
              47
              
              Chairman and Chief Executive
      Officer and DirectorMichael L.
    Jeub
              
              65
              
              Chief Financial
      OfficerBlake Ingle,
      Ph.D.
              
              60
              
              DirectorMang Yu,
    Ph.D.
              
              51
              
              DirectorAlan Paau,
      Ph.D.
              
              51
              
              DirectorKenneth Goins,
      Jr.
              
              48
              
              Director
 
 On April22, 2008 and April 15, 2008, Blake Ingle,
PhD., Mang Yu, PhD., Alan Paau, PhD, MBA, and Kenneth Goins, Jr. resigned as
members of directors of the Board of Directors of Bridgetech Holdings
International, Inc.  The Company filed a Form 8-K related to these
resignations on April 14, 2008.
 
 Michael D. Chermak has been the Chairman
of the Board of Directors and Chief Executive Officer of the Company since May
2, 2005. From June, 2004 through May, 2005, Mr. Chermak was the Chairman of the
Board of Directors and Chief Executive Officer of Retail Pilot, the parent of
Shop GuardUSA, a private company located inSan Diego,Californiathat markets tracking and security
devices to the retail industry. From August 2003 to June 2004, Mr. Chermak was
the Chief Executive Officer Carttronics, LLC, which made and marketed loss
prevention solutions for retailers. From June 2001 to July 2002, Mr. Chermak was
the chief executive officer of First Opinion Corp. which develops software used
to assist healthcare providers in making differential diagnoses of
patients.
 
 Michael
L. Jeub has been Chief Financial Officer of the Company since June 2007. Mr.
Jeub has thirty plus years of experience serving as a financial management
executive and as a CFO of public companies including Immune Response
Corporation, Jenny Craig International, Inc., a $400 Million NYSE Company and
National Health Laboratories, a $800 Million NYSE Company. Most recently Mr.
Jeub served as interim CFO of Averion International Corp., a public $40 million
CRO.  Mr. Jeub has  served on several public boards including
Clini-Therm Corporation, a medical device company , MedInc Corp., a $20MM chain
of medical imaging centers and 360 Global Wines, a $25MM Napa California based
public wine and distribution company.
  Blake Ingle, Ph.D. has been a director
of the Company since April 2006. Dr. Ingle is currently a managing general
partner of Inglewood Ventures founded in 1999. Prior toInglewoodhe served as CEO and Chairman of Canji,
Inc. A gene therapy company specializing in oncology later sold to Shering
Plough .He served as CEO of Imcera Group, President and CEO of Pitman Moore and
Vice President of R&D at Miles Laboratories. He has served on a variety of
public company boards including IMC Fertilizer, Inc, Telios Pharmaceutical,
Corvas Pharmaceuticals, Inex Pharmaceuticals, Symbiotic, and Vical. He is
currently on the board of Dendreon, (an oncology company). He has served on
several nonprofit boards including Trustee and Chairman of the Burnham Institute
(a leading cancer and aging research operation).
  21
 Index
  Mang Yu, Ph.D. has been a director of
the Company since April 2006.  Dr. Yu is currently the President &
Chief Executive Officer of NexBio which is a private biopharmaceutical company
inSan Diego. Prior to founding NexBio in 2003, Dr.
Yu was a co-founder and Executive Vice President of Perlan Therapeutics, another
private biopharmaceutical company focusing on the development of treatments for
the common cold. Prior to founding Perlan in 1998, Dr. Yu was a scientific
co-founder of Immusol, Inc. where he served as Director of Target Discovery
& Gene Therapy. Dr. Yu holds a Ph.D. in Biochemistry & Molecular Biology
fromIndianaUniversity,SchoolofMedicine, and completed his post-doctoral
training atUniversityofCalifornia,San Diegowith a world-renowned virologist, Dr.
Flossie Wong-Staal. Dr. Yu was a founding board member of BayHelix, an
organization of leaders of Chinese origin in the global life sciences and
healthcare community.
  Alan Paau, PhD, MBA, has been a director
of the Company since April 2006. Dr. Paau is Vice Provost for Technology
Transfer and Economic Development atCornellUniversityand Executive Director of theCornellCenterfor Technology,Enterpriseand Commercialization as of Jan. 1,
2007. Previously, since 1998, Dr. Paau served as the Assistant Vice Chancellor
UCSD. As an intellectual property and a licensing executive Dr. Paau has
supervised the execution of over 800 licenses and option agreements and the
formation of over 85 startup companies using university innovations. Prior to
joining UCSD, Dr. Paau was Executive Director of the Iowa State University
Research Foundation, Inc. and Director of Intellectual Property & Technology
Transfer at Iowa State University (Ames, IA). Previously, he was Associate
Director of theBiotechnologyCenterat theOhioStateUniversity. Dr. Paau held faculty appointments
while atIowaStateUniversityin the departments of Preventive
Medicine, Immunology & Microbiology, and Genetics & Zoology, and at theOhioStateUniversityin the departments of Microbiology, and
Plant Pathology. Before returning to the academic environment, Dr. Paau held
research and management positions in the Cetus Corporation and the W.R. Grace
& Co. organization for twelve years. He earned his Ph.D. in Biological
Sciences and also has an MBA. He holds eightU.S.patents and has contributed thirty
peer-reviewed research articles to scientific journals and six invited
reviews/chapters to technical books. Dr. Paau currently also serves on the Board
of Directors of NanBioNexus and Vivo Development, Ltd.
 
 Kenneth M. Goins, Jr. has been a
director of the Company since April 2006. Since the spring of 2005, Mr. Goins
has been the Senior Vice President of Land America Financial Group, Inc. (“LandAmerica”), and the Chief Operating Officer of
Land America Lender Services, which is one of four divisions within LandAmerica. From September 2003 to the spring of
2005, Mr. Goins served as President of Land America Credit Services, Inc., a
wholly owned subsidiary of LandAmericain the Lender Services Division where
he planned, developed and executed on the business plan of Land America Credit
Services, Inc. In September 2003, LandAmericaacquired INFO 1 Holding Company, Inc.
(“IHC”) and changed its name to Land America Credit Services, Inc. At that time
Mr. Goins was Chief Executive Officer of IHC. Prior to this position Mr. Goins
held many senior management positions in various public companies in the
healthcare, financial services, and insurance industries. Mr. Goins was a Cum
Laude and Phi Beta Kappa graduate of theUniversityofSouth Carolinawhere he earned aBachelor of Science degree in Business
Administration. He is also a Certified Public Accountant.
 
 The Board of Directors has not yet
established any committees. All functions of the nominating committee, audit
committee and compensation committee are currently performed by the full Board
of Directors. Independent board members include Mr. Ingle, Mr. Yu., Mr. Paau and
Mr. Goins.
 
 22
 Index
  Compensation of
Directors
  Our bylaws provide that, unless
otherwise restricted by our certificate of incorporation, our board of directors
has the authority to fix
the compensation of directors. The directors may be paid their expenses, if any,
related to attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or astated salary as our director. Our bylaws
further provide that no such payment will preclude any director from serving our
company in any other capacity and receiving compensation therefore. Further,
members of special or standing committees may be given compensation for attending committee
meetings.
 
 As of the date herein, as compensation
for serving on the Board, each director receives $2,500.00 per attended
meeting. All directors receive reimbursement for out-of-pocket expenses in
attending meetings of the Board of Directors. From time to time the Company may
engage certain members of the Board of Directors to perform services on behalf
of the Company and will compensate such persons for such
services.
 
 On April22, 2008 and April 15, 2008, Blake Ingle,
PhD., Mang Yu, PhD., Alan Paau, PhD, MBA, and Kenneth Goins, Jr. resigned as
members of directors of the Board of Directors of Bridgetech Holdings
International, Inc.  The Company filed a Form 8-K related to these
resignations on April 14, 2008.
 
 Code
of Ethics
  The
Company has adopted a code of business conduct and ethics for its directors,
officers and management employees.
  SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  Section
16(a) of the Securities Exchange Act of 1934 requires the Company's directors
and executive officers, and persons who own more than 10% of a registered class
of the Company's equity securities, to file with the Securities and Exchange
Commission (the “Commission”) initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater-than 10% shareholders are required by the
Commission's regulations to furnish the Company with copies of all Section 16(a)
forms they file. Based solely on its review of Forms 3, 4 and 5 received by the
Company, transactions involving the Company and review of stockholder records,
the Company believes, during the fiscal year ended December 31, 2004, all filing
requirements under Section 16(a) of the Securities Exchange Act of 1934
applicable to officers, directors and 10% shareholders were not
satisfied.
 
 ITEM
      10.
              EXECUTIVE
      COMPENSATION.
 
 Summary Compensation
Table
 
 The following table sets forth the cash
compensation paid by the Company to its Chief Executive Officer and to all other
executive officers for services rendered from January 1, 2006 through December
31, 2007. Currently, Michael D. Chermak is the Chairman and Chief Executive
Officer of the Company;and Thomas C. Kuhn III was the President
and Chief Operating Officer, and resigned January 17,
2007.
  23
 Index
  
 2006
and 2007 SUMMARY COMPENSATION TABLE
  Name
      and Principal Position
              
              Year
              
              Salary ($)
              
              
              Bonus ($)
              
              
              Stock
                Awards
                ($)
              
              
              Option
                Awards
                ($)
              
              
              Non-Equity
                Incentive
      Plan
                Compensation
                ($)
              
              
              Change
      in
                Pension
                Value
      and
                Nonqualified
                Deferred
                Compensation
                Earnings
                ($)
              
              
              All
      Other
                Compensation
                ($)
              
              
              Total
                ($)CEOMichael
      Chermak
              
              2006
              
              
              261,890
              
              
              
              0
              
              
              
              772,007
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              1,039,0972007
              
              
              275,000
              
              
              
              0
              
              
              
              751,800
              
              
              
              696,250
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              1,723,050CFOThomas
      C. Kuhn III
              
              2006
              
              
              160,000
              
              
              
              0
              
              
              
              298,754
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              458,754CFOMichael
      L. Jeub
              
              2007
              
              
              68,270
              
              
              
              0
              
              
              
              0
              
              
              
              557,000
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              625,270CFOA.
      Noel DeWinter
              
              2007
              
              
              56,250
              
              
              
              0
              
              
              
              0
              
              
              
              55,700
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              111,950
 
 (1) Compensation for Mr. Chermak
included consulting fees.  Mr. Chermak’s cash compensation was below
that of the $400,000 annually, provided in his Employment Agreement executed on
May 14, 2005.  As a result, Mr. Chermak had deferred compensation of $
326,357 on December 31, 2007.
 
 (2) Compensation for Mr. Kuhn included
consulting fees. Mr. Kuhn resigned on January 17, 2007. One million shares of
restricted stocks were returned to the Company. Mr. Kuhn’s employment agreement
was also terminated at that date.
 
 2007
GRANTS OF PLAN-BASED AWARDS TABLE
 Estimated Future Payouts
      Under
                  Non-Equity Incentive Plan Awards
                
                
                Estimated Future Payouts Under
                  Equity Incentive Plan
      AwardsName
                
                Grant
                  Date
                
                Approval
                  Date
                Number of
                  Non-Equity
                  Incentive Plan
                  Units
      Granted
                  (#)
                
                Threshold
                  ($)
                
                
                Target
                  ($)
                
                
                Maximum
                  ($)
                
                
                Threshold
                  (#)
                
                
                Target
                  (#)
                
                
                Maximum
                  (#)
                
                
                All Other
                  Stock Awards:
                  Number of
                  Shares of
                  Stock or
                  Units
                  (#)
                
                
                All Other
                  Option Awards:
                  Number of
                  Securities
                  Underlying
                  Options
                  (#)
                
                
                Exercise or
                  Base Price
                  of Option
                  Awards
                  ($ / Sh)
                
                
                Closing
                  Price on
                  Grant
                  Date
                  ($ / Sh)Michael
      Chermak
                
                June
      4, 2007
                
                June
      4, 2007
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,250,000
                
                
                
                .80
                
                
                
                .80Michael
      L.Jeub
                
                June
      4, 2007
                
                June
      4, 2007
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,000,000
                
                
                
                .80
                
                
                
                .80A.
      Noel DeWinter
                
                July
      26, 2007
                
                July
      26, 2007
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                100,000
                
                
                
                .80
                
                
                
                .80
 24
 Index
  2007
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
  Option
      Awards
              
              Stock
    AwardsNumber
      of
                Securities
                Underlying
                Unexercised
                Options
                (#)
              
              
              Number
      of
                Securities
                Underlying
                Unexercised
                Options
                (#)
              
              
              Equity
                Incentive
                Plan Awards:
                Number
      of
                Securities
                Underlying
                Unexercised
                Unearned
                Options
                (#)
              
              
              Option
                Exercise
                Price
                ($)
              
              Option
                Expiration
                Date
              
              Number of
                Shares
      or
                Units
      of
                Stock That
                Have
      Not
                Vested
                (#)
              
              
              Market
                Value of
                Shares or
                Units
      of
                Stock That
                Have
      Not
                Vested
                ($)
              
              
              Equity Incentive
                Plan
      Awards:
                Number
      of
                Unearned
                Shares,
      Units
                or
      Other
                Rights
      That
                Have
      Not
                Vested
                (#)
              
              
              Equity
                Incentive
                Plan Awards:
                Market
      or
                Payout
      Value
                of
      Unearned
                Shares,
      Units
                or
      Other
                Rights
      That
                Have
      Not
                Vested
                ($)Name
              
              Exercisable
              
              
              UnexercisableMichael
      Chermak
              
              
              1,250,000
              
              
              
              0
              
              
              
              0
              
              
              
              .80
              
              May
      2017
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0Michael
      L. Jeub
              
              
              500,000
              
              
              
              500,000
              
              
              
              0
              
              
              
              .80
              
              July
      2017
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0A.
      Noel DeWinter
              
              
              100,000
              
              
              
              0
              
              
              
              0
              
              
              
              .80
              
              July
      2017
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
  25
 Index
  2007
OPTION EXERCISES AND STOCK VESTED TABLE
  Option
      Awards
              
              
              Stock
    AwardsName
              
              Number of Shares
                Acquired on Exercise
                (#)
              
              
              Value Realized
                on
      Exercise
                ($)
              
              
              Number of Shares
                Acquired on Vesting
                (#)
              
              
              Value Realized
                on
      Vesting
                ($)Michael
      Chermak
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0Michael
      L. Jeub
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0A.
      Noel DeWinter
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
  26
 Index
  2007
PENSION BENEFITS TABLE
  Name
              
              Plan Name
              
              
              Number of Years
                Credited
      Service
                (#)
              
              
              Present Value
                of Accumulated
                Benefit
                ($)
              
              
              Payments During Last
                Fiscal
      Year
                ($)(1
              )Michael
      ChermakMichael
      L. JeubA
      Noel DeWinter
 
 (1) The Company has not established a
pension program for any of its employees.
  27
 Index
  2007
NONQUALIFIED DEFERRED COMPENSATION TABLE  (1)
  Name
              
              Executive Contributions
                in
      Last Fiscal Year
                ($)
              
              
              Registrant
                Contributions in Last
                Fiscal
      Year
                ($)
              
              
              Aggregate Earnings
                in
      Last Fiscal Year
                ($)
              
              
              Aggregate
                Withdrawals /
                Distributions
                ($)
              
              
              Aggregate Balance at
                Last
      Fiscal Year-End
                ($)Michael
      ChermakMichael
      L. JeubA.
      Noel DeWinter
 
 (1)
              The Company has not established a
      nonqualified deferred compensation
plan.
  28
 Index
  2007
DIRECTOR COMPENSATION TABLE
  Name
              
              Fees Earned or
                Paid in Cash
                ($)
              
              
              Stock Awards
                ($)
              
              
              Option Awards
                ($)
              
              
              Non-Equity
                Incentive
      Plan
                Compensation
                ($)
              
              
              Change
                in
      Pension
                Value
      and
                Nonqualified
                Deferred
                Compensation
                Earnings
                ($)
              
              
              All
      Other
                Compensation
                ($)
              
              
              Total
                ($)Kenneth
      Goins, Jr.
              
              
              0
              
              
              
              0
              
              
              
              55,700
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              55,700Dr.
      Mang Yu
              
              
              0
              
              
              
              0
              
              
              
              55,700
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              55,700Dr.
      Alan Paau
              
              
              0
              
              
              
              0
              
              
              
              55,700
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              55,700Blake
      Ingle
              
              
              0
              
              
              
              0
              
              
              
              55,700
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              55,700
  On April 14, 2008 and April 15, 2008,
Blake Ingle, PhD., Mang Yu, PhD., Alan Paau, PhD, MBA, and Kenneth Goins, Jr.
resigned as members of directors of the Board of Directors of Bridgetech
Holdings International, Inc.  The Company filed a Form 8-K related to
these resignations on April 14, 2008.
  29
 Index
  2007 ALL OTHER COMPENSATION
TABLE
  Name
              
              Year
              
              
              Perquisites
                and
      Other
                Personal
                Benefits
                ($)
              
              
              Tax
                Reimbursements
                ($)
              
              
              Insurance
                Premiums
                ($)
              
              
              Company
                Contributions
                to Retirement and
                401(k)
      Plans
                ($)
              
              
              Severance
                Payments /
                Accruals
                ($)
              
              
              Change
                in Control
                Payments /
                Accruals
                ($)
              
              
              Total ($)Michael
      Chermak
              
              2007
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0Michael
      L. Jeub
              
              2007
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0A.
      Noel DeWinter
              
              2007
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
  30
 Index
  2007
PERQUISITES TABLE
  Name
              
              Year
              
              
              Personal Use of
                Company
                Car/Parking
              
              
              Financial Planning/
                Legal
      Fees
              
              
              Club Dues
              
              
              Executive Relocation
              
              
              Total Perquisites and
                Other Personal BenefitsMichael
      Chermak
              
              2007
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0Michael
      L. Jeub
              
              2007
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0A.
      Noel DeWinter
              
              2007
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
  31
 Index
  
 2007
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
  Name
              
              Benefit
              
              Before Change in
                  ControlTermination
                w/o Cause
      or for
                Good
      Reason
              
              After Change in
                  ControlTermination
                w/o Cause
      or
                for Good Reason
              
              Voluntary
                Termination
              
              Death
              
              Disability
              
              Change in
                ControlMichael
      Chermak
              
              NoneMichael
      L. Jeub
              
              NoneA.
      Noel DeWinter
              
              None
 
 Employment Contracts; Termination of
Employment and Change-in-Control Arrangements
 
 The Company has entered into written
employment contracts with Mr. Chermak, Carrie Yuen andMichael Jeub.
 
 The Company’s agreement with Mr. Chermak
was entered into on May 1, 2005 and has a three-year term, which is
automatically renewed each year for three years from the date of renewal, unless
terminated by either party upon 30 days notice or otherwise terminated in
accordance with its terms. The agreement provides an annual base salary for Mr.
Chermak of $400,000. If the Company terminates his employment without cause, or
upon certain changes in control of the Company, Mr. Chermak would be entitled to
a one-time severance payment in an amount equal to his then-current base salary
plus an amount equal to a 100% bonus for the remaining term of his contract. Mr.
Chermak is also entitled to an annual cash bonus and annual options grants in
amounts to be determined by the Compensation Committee or the entire Board of
Directors, as appropriate. Mr. Chermak is entitled to a monthly car allowance of
$1,000, as well as participation in the Company’s health and other benefit
plans.  Subject to certain exceptions, Mr. Chermak is prohibited from
competing with the Company for one year after the termination of his employment
with the Company.
  The Company’s agreement with Mr. Jeub
was entered into on June 4, 2007 and has a two-year term, which is automatically
renewed each year for two years from the date of renewal, unless terminated by
either party upon 30 days notice or otherwise terminated in accordance with its
terms. The agreement provides a base salary for Mr. Jeub of $150,000 annually.
If the Company terminates his employment without cause, or upon certain changes
in control of the Company, Mr. Jeub would be entitled to a one-time severance
payment in an amount equal to his then-current base salary for the remaining
term of his contract. Mr. Jeub is entitled to participate in the Company’s
health and other benefit plans which is an annual cost for medical and
dental.  Mr. Jeub may also participate in the Company’s employee stock
option plan and will be granted from time to time options at the discretion of
the compensation committee and Chairman of the Board.Mike Jeub resigned as
officer and Director on April 22, 2008.
 
 The Company’s agreement with Ms. Yuen
was entered into on March 1, 2006 and has a three-year term, which is
automatically renewed each year for three years from the date of renewal, unless
terminated by either party upon 30 days notice or otherwise terminated in
accordance with its terms. The agreement provides a base salary for Ms. Yuen of
$200,000 annually. If the Company terminates her employment without cause, or
upon certain changes in control of the Company, Ms. Yuen would be entitled to a
one-time severance payment in an amount equal to her then-current base salary
plus an amount equal to a 100% bonus for the remaining term of her contract. Ms.
Yuen is also entitled to anannual cash bonus and annual options
grants in amounts to be determined by the Compensation Committee or the entire
Board of Directors, as appropriate. Ms. Yuen is entitled to participate in the
Company’s health and other benefit plans which is an annual cost for medical and
dental. Under the terms of the agreement, Ms. Yuen may take up to 50% of her
salary common stock in lieu of cash. Ms. Yuen may also participate in the
Company’s employee stock option plan and will be granted from time to time
options at the discretion of the compensation committee and Chairman of the
Board. Subject to certain exceptions, Ms. Yuen is prohibited from competing with
the Company for one year after the termination of her employment with the
Company.Carrie
Yuen resigned as of April 15, 2008.
  32
 Index
  ITEM
      11.
              SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS.
  The following table sets forth certain
information regarding the beneficial ownership of the shares of common stock as
of February 22, 2008, by (i) each person who is known by the Company to be the
beneficial owner of more than five percent (5%) of the issued and outstanding
shares of common stock, (ii) each of the Company’s directors and executive
officers and (iii) all directors and executive officers as a
group.
 
 Based upon 31,852,030 shares of common
stock outstanding on February 22, 2008, the amounts and percentage of common
stock beneficially owned are reported on the basis of regulations of the
Securities and Exchange Commission (the "Commission"). Under the rules of the
Commission, a person is deemed to be a beneficial owner of a security if that
person has or shares “voting power,” which includes the power to vote or direct
the voting of the security, or “investment power,” which includes the power to
dispose of or direct the disposition of the security. Except as indicated by
footnote, and subject to community property laws where applicable, the persons
named in the table above have sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them. In addition,
in determining the number and percentage of shares beneficially owned by
each person pursuant to options exercisable within 60 days after termination,
resignation or death, shares issuable upon exercise of such options are deemed
outstanding for the purpose of determining the total number outstanding for such
person and are not deemed outstanding for such purpose for all other
stockholders. Under these rules, more than one person may be deemed a beneficial
owner of the same securities and a person may be deemed a beneficial owner of
securities as to which he has no economic interest.
 
 NAME AND ADDRESS (1)
    (2)
                
                
                AMOUNT AND NATURE
                  OF BENEFIECIAL
                  OWNERSHIP (2)
                
                
                PERCENTAGE OF
                  CLASS BENEFICIALLY
                  OWNEDCOMMON
      STOCK, PAR VALUE $.001EXECUTIVE
      OFFICERS AND DIRECTORS:Michael
      Chermak
                
                
                3,858,023
                
                
                
                (3)10
                )
                
                
                12.11
                %Noel
      DeWinter
                
                
                399,519
                
                
                
                (4
                )
                
                
                1.25
                %Michael
      Jeub
                
                
                500,000
                
                
                
                (5
                )
                
                
                1.57
                %Carrie
      Yuen
                
                
                2,000,000
                
                
                
                (6
                )
                
                
                6.28
                %Blake
      Engle (11)
                
                
                100,000
                
                
                
                (7
                )
                
                
                *Alan
      Paau (11)
                
                
                100,000
                
                
                
                (8
                )
                
                
                *Kenneth
      Goings, Jr. (11)
                
                
                
                
                
                
                
                
                
                
                *Mang
      Yu (11)
                
                
                100,000
                
                
                
                (9
                )
                
                
                *All
      directors and executiveofficers
      as a group ( 7 persons )
                
                
                7,057,542
                
                
                
                
                
                
                
                22.16
                %5%
      SHAREHOLDERS:Estate
      of Herbert Wong
                
                
                2,659,230
                
                
                
                
                
                
                
                8.35
                %
 *    Indicates
      ownership of less than 1% of outstanding
shares
 33
 Index
  (1)
      The address of all executive officers and directors is:402
      W. Broadway, Suite 2600,San
      Diego, CA 92101(2)
      Each person listed in the group has sole voting power and sole investment
      power with respect to the shares owned by such person, except as indicated
      below.(3)
      Includes 1,250,000 exercisable stock options(4)
      Includes 100,000 exercisable stock options(5)
      Consists entirely of exercisable stock options(6)
      Includes 1,000,000 exercisable stock options(7),
      (8), (9)  Consists entirely of exercisable stock
      options(10)
      Includes Preferred Stock conversion scheduled belowSERIES
      A 8% CUMMULATIVE CONVERTIBLE PREFERRED STOCK, $.002PAR
      VALUEMichael
      Chermak
              
              100,000
      (1)
              
              100%
 
 (1)
              Each
      share is convertible into one share of Common Stock and for voting
      purposes represents 500 shares of Common
Stock.
 (11)
              On April 14, 2008 and April 15,
      2008, Blake Ingle, PhD., Mang Yu, PhD., Alan Paau, PhD, MBA, and Kenneth
      Goins, Jr. resigned as members of directors of the Board of Directors of
      Bridgetech Holdings International, Inc.  The Company filed a
      Form 8-K related to these resignations on April 14,
      2008.
 
 Changes
in Control
  We are
not aware of any arrangements that may result in a change in control of the
Company.
  DESCRIPTION
OF SECURITIES
  General
  Our
authorized capital stock consists of 50,000,000 shares of common stock, par
value $ .001, and 10,000,000 shares of preferred stock
  34
 Index
  Common Stock
  The
shares of our common stock presently outstanding, and any shares of our common
stock issues upon exercise of stock options and/or warrants, will be fully paid
and non-assessable. Each holder of common stock is entitled to one vote for each
share owned on all matters voted upon by shareholders, and a majority vote is
required for all actions to be taken by shareholders. In the event we liquidate,
dissolve or wind-up our operations, the holders of the common stock are entitled
to share equally and ratably in our assets, if any, remaining after the payment
of all our debts and liabilities and the liquidation preference of any shares of
preferred stock that may then be outstanding. The common stock has no preemptive
rights, no cumulative voting rights, and no redemption, sinking fund, or
conversion provisions. Since the holders of common stock do not have cumulative
voting rights, holders of more than 50% of the outstanding shares can elect all
of our Directors, and the holders of the remaining shares by themselves cannot
elect any Directors. Holders of common stock are entitled to receive dividends,
if and when declared by the Board of Directors, out of funds legally available
for such purpose, subject to the dividend and liquidation rights of any
preferred stock that may then be outstanding.  The Company had
30,852,030 common shares issued and outstanding as of December 31,
2007.
  Voting
Rights
 
 Each holder of Common Stock is entitled
to one vote for each share of Common Stock held on all matters submitted to a
vote of stockholders.
 
 Dividends
 
 Subject to preferences that may be
applicable to any then-outstanding shares of Preferred Stock, if any, and any
other restrictions, holders of Common Stock are entitled to receive ratably
those dividends, if any, as may be declared from time to time by the Company’s
board of directors out of legally available funds. The Company and its
predecessors have not declared any dividends in the past. Further, the Company
does not presently contemplate that there will be any future payment of any
dividends on Common Stock.
  Preferred
Stock
  We are
authorized to issue 10,000,000 shares of preferred stock, $.001 par value, of
which 100,000 are issued and outstanding as of December 31, 2007.
  Dividend
Policy
  We have
never declared or paid any cash dividends on our common stock. We currently
intend to retain future earnings, if any, to finance the expansion of our
business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
  35
 Index
  Options
and Warrants:
  As
of December 31, 2007 there were no options and 3,100,000 warrants issued to
acquire shares of the Company’s common stock outstanding.
  Convertible
Securities
  At
December 31, 2007, the Company converted all convertible notes to common stock
at $.25 per share.
  Amendment
of our Bylaws
  Our
bylaws may be adopted, amended or repealed by the affirmative vote of a majority
of our outstanding shares. Subject to applicable law, our bylaws also may be
adopted, amended or repealed by our board of directors.
  Transfer
Agent
  In 2005,
the Company engaged Colonial Transfer Agent to serve in the capacity of transfer
agent. Their mailing address and telephone number Colonial Stock Transfer, 66
Exchange Place, Salt Lake City, UT 84111 - Phone is (801) 355-5740.
  ITEM12.
              CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS, AND DIRECTORINDEPENDENCE.
  In March of 2005, the Company purchased
80% of Retail Pilot. Then, in June 2005, we amended our agreement with Retail
Pilot to provide that we would acquire 100% of the outstanding stock. Pursuant
to the amendment, we agreed to issue 585,406 shares of the Company’s common
stock to Mr. Chermak, the sole shareholder of Retail Pilot. Up to the point of
the initial transaction in March 2005,Michael Chermakwas the Chairman of the Board of
Directors and the Chief Executive Officer of Healthcare Pilot. Mr. Chermak has
guaranteed a loan to Retail Pilot by Indy Mac Bank in the principal amount of
$341,442, the entire amount of which remains outstanding. The loan bears
interest at a rate of 8.5% and is payable on demand.That note is still
outstanding.
 
 During
the fourth quarter of 2007, the Company borrowed a total of $650,000 from
Richard Propper in two convertible notes, one in the amount of $450,000 dated
November 14, 2007 and the second in the amount of $200,000 dated December 3,
2007.  The notes were due and payable on May 9, 2008 and June 3, 2008,
respectively, and both were at 8 percent interest rates.  Both notes
were convertible into the Company’s Common stock at $.25 per share.
 
 Bridgetech
Holdings International, Inc. announced on March 4, 2008 that it will spin off
two wholly - owned subsidiaries, International MedLink, Inc., a Texas
corporation and Retail Pilot, Inc., a California
corporation.       Bridgetech Holdings
International, Inc. will announce the record date in which shareholders of
Bridgetech Holdings International, Inc. will receive pro rata shares of the spun
off entity for each share of Bridgetech Holdings International, Inc. held on the
record date. Completion of the proposed spin-off is subject to numerous
conditions, including the filing of a registration statement on Form
10.  Bridgetech Holdings International, Inc. will announce this
information as soon as it is available, but management anticipates that the spin
offs will occur before the end of the second quarter of this
year.  These spin offs will be controlled by Scott
Landow.
  36
 Index
  ITEM 13 .  EXHIBITS
  Exhibits
 3.1
              
              Articles
      of Incorporation amended (1)3.2
              
              Amendments
      to Articles of Incorporation (1)3.1
              
              Bylaws
      of the Corporation (1)10.1
              
              Promissory
      Note of Bridgetech China Limited (3)10.2
              
              Promissory
      Note of Bridgetech Asia Limited (3)31.1
              
              Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act. (2)31.2
              
              Certification
      of Principal Financial and Accounting Officer Pursuant to Section 302 of
      the Sarbanes-Oxley Act. (2)32.1
              
              Certification
      of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act.  (2)32.2
              
              Certification
      of Chief Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act.  (2)
 __________________________________________________
 (1)
              Incorporated
      by reference to exhibit 3(i) to the Company's Form 10-SB/12g filed on
      February 13, 2008.
 (2)
              Filed
    herein
 (3)
              Incorporated by reference as an
      exhibit in February 11, 2008 8K
filing
 
 Reports on
Form 8-K
  June 14,
2007 Reports as the Hiring of our CFO Mike Jeub
 October
24, 2007 Reports the Resignation of our Director John Relic
 February
11, 2008 Reports Entry of a Material Definitive Agreement and Dispositions of
Assets
 March 5,
2008 Reports the spin off of two wholly owned subsidiaries
 April 22,
2008 Reports the resignation of our directors Blake Ingle, Mang Yu, Alan Paau,
and Kenneth Goins and resignation of our CFO Mike Jeub and appointment of
Michael Chermak of CFO
 
 ITEM
      14.
              PRINCIPAL ACCOUNTING FEES AND
      SERVICES.
  Jewett,
Schwartz, Wolfe, and Associates, LLC (“JWSA”) was hired to audit the Company’s
annual financial statements.  Fees related to services performed by
JSWA in 2006 and were as follows:
  2007
              
              
              2006Audit
      Fees (1)
              
              $
              42,000
              
              
              $
              26,300Audit-Related
      FeesTax
      Fees (2)All
      Other Fees (3)
              
              $
              
              
              
              $Total
              
              $
              
              
              
              $
 
 (1)
              Audit
      fees represent fees for professional services provided in connection with
      the audit of our financial statements and review of our quarterly
      financial statements.
  (2)
              Tax
      fees principally included tax advice, tax planning and tax return
      preparation.
 
 (3)
              Other
      fees related to Registration Statement Reviews and
    Comments.
 37
 Index
  The Board
of Directors has reviewed and discussed with the Company's management and
auditors the audited consolidated financial statements of the Company contained
in the Company's Annual Report on Form 10-KSB for the Company's 2007 fiscal
year. The Board has also discussed with the auditors the matters required to be
discussed pursuant to SAS No. 61 (Codification of Statements on Auditing
Standards, AU Section 380), which includes, among other items, matters related
to the conduct of the audit of the Company's consolidated financial
statements.
  The Board
has received and reviewed the written disclosures and the letter from JSWA
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and has discussed with its auditors its
independence from the Company. The Board has considered whether the provision of
services other than audit services is compatible with maintaining auditor
independence.
  Based on
the review and discussions referred to above, the Board approved the inclusion
of the audited consolidated financial statements be included in the Company's
Annual Report on Form 10-KSB for its 2007 fiscal year for filing with the
SEC.
  Pre-Approval
Policies
  The
Board's policy is now to pre-approve all audit services and all permitted
non-audit services (including the fees and terms thereof) to be provided by the
Company's independent auditor; provided, however, pre-approval requirements for
non-audit services are not required if all such services (1) do not aggregate to
more than five percent of total revenues paid by the Company to its accountant
in the fiscal year when services are provided; (2) were not recognized as
non-audit services at the time of the engagement; and (3) are promptly brought
to the attention of the Board and approved prior to the completion of the
audit.
  On April22, 2008 and April 15, 2008, Blake Ingle,
PhD., Mang Yu, PhD., Alan Paau, PhD, MBA, and Kenneth Goins, Jr. resigned as
members of directors of the Board of Directors of Bridgetech Holdings
International, Inc.  The Company filed a Form 8-K related to these
resignations on April 14, 2008.
  ITEM15.  SIGNATURES
 
 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, there unto duly authorized.
 
 Registrant
              
              Bridgetech
      Holdings International, IncDate:
      May 1,
      2008
              
              By:
      /s/ Michael ChermakMichael
      ChermakChairman,
      President Chief Executive Officer(Principle
      Executive Officer)
 
 Date:
      May 1,
      2008
              
              By:
      /s/ Michael ChermakMichael
      ChermakPrinciple
      Financial Officer
   38