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|   | Colorado                                                               |   | 26-3161860****                                |   |
|--------|------------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|   | (State or other jurisdiction         of incorporation or organization) |   | I.R.S. Employer         Identification number |   |

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| Large accelerated filer **o** | Accelerated filer **o** | Non-accelerated filer **o**        (Do not check if         a smaller reporting company) | Smaller reporting         company **x****************** |
|-------------------------------|-------------------------|------------------------------------------------------------------------------------------|---------------------------------------------------------|

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|             |                                                                                                                        |
|------------------|-----------------------------------------------------------------------------------------------------------------------------|
|                  | ****Part        I****                                                                                                       | ** ** |
| **Item      1**  | **Description of Business**                                                                                                 |   |
| **Item      1A** | **Risk      Factors**                                                                                                       |   |
| **Item      1B** | **Unresolved      Staff Comments**                                                                                          |   |
| **Item      2**  | **Description      of Property**                                                                                            |   |
| **Item      3**  | **Legal      Proceedings**                                                                                                  |   |
| **Item      4**  | **Submission      of Matters to a Vote of Security Holders**                                                                |   |
|             |                                                                                                                        |   |
|             |  **Part        II**                                                                                                    |   |
|             |                                                                                                                        |   |
| **Item      5**  | **Market      for Registrant's Common Equity, Related Shareholders matters and Issuer      Purchases of Equity Securities** |   |
| **Item      6**  | **Selected      Financial Data**                                                                                            |   |
| **Item      7**  | **Management's      Discussion and Analysis of Financial Condition and Results of Operations**                              |   |
| **Item      8**  | **Financial      Statements**                                                                                               |   |
| **Item      9**  | **Changes      in and Disagreements with Accountants on Accounting and Financial Disclosure**                               |   |
| **Item      9A** | **Controls      and Procedures**                                                                                            |   |
| **Item      9B** | **Other      Information**                                                                                                  |   |
|             |                                                                                                                        |   |
|             |   **Part        III**                                                                                             |   |
| **Item      10** | **Directors,      Executive Officers and Corporate Governanc**                                                              |   |
| **Item      11** | **Executive      Compensation**                                                                                             |   |
| **Item      12** | **Security      Ownership of Certain Beneficial owners and Management and Related Stockholders      Matter**                |   |
| **Item      13** | **Certain      Relationships and Related Transactions and Director Independence**                                           |   |
| **Item      14** | **Principal      Accounting Fees and Services**                                                                             |   |
|             |                                                                                                                   |    |
|             |    **Part        IV**                                                                                        |  |
| **Item      15** | **Exhibits      and Financial Statement Schedules**                                                                         |   |
|             | **Signatures**                                                                                                              |  |

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|   | • | Features support other data management configurations        |
|--------|--------|--------------------------------------------------------------|
|   | • | LED displayed in any language                                |
|   | • | Runs with either 110V or 220V standard electrical      power |
|   | • | CSA and CE rated against worldwide standards                 |
|   | • | Labels can be printed in any language                        |

|   | 1. | Patient Care |
|--------|----|--------------|

|   | • | Medical Offices            |
|--------|--------|----------------------------|
|   | • | Dental Offices             |
|   | • | Urgent Care Centers        |
|   | • | Nursing Homes              |
|   | • | Assisted Living Facilities |

|   | 2. | Health Care |
|--------|----|-------------|

|   | • | School health Clinics    |
|--------|--------|--------------------------|
|   | • | Public Health Facilities |
|   | • | First Aid Stations       |
|   | • | Home Health Care         |
|   | • | Pharmacies               |

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|   | • | Military                                                                                                     |
|--------|--------|--------------------------------------------------------------------------------------------------------------|
|   | • | Public Health: Airports, Hospitality, Cruise      Ships, Train Stations, and Sports and Entertainment Arenas |
|   | • | Developing World Healthcare                                                                                  |

|   | 3. | Veterinary Care |
|--------|----|-----------------|

|   | • | Veterinary Hospitals      |
|--------|--------|---------------------------|
|   | • | Emergency Veterinary Care |
|   | • | Livestock Medicine        |
|   | • | Equine Medicine           |
|   | • | Zoos                      |
|   | • | Sanctuaries               |

|   | • | Primary users of sharps and red bad waste such      as medical practitioners, dentists, veterinarians and medical facilities      providing long term care;                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Specialty markets that need to accommodate      sharps and red bag disposal use by others as either invited guests such      as hotels, sports facilities, government facilities and/or because the facility      also treats personnel on the premises such as professional sports players,      military personnel and the like. This segment also includes pharmacies with      treatment clinics, emergency response (ambulance) companies as well as governmental      and quasi governmental organizations and non-profits that make available      certain treatments; |
|   | • | Other medical waste disposal companies and/or      companies in the waste management business;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | • | Home health care market;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|   | • | Doctor, Dentist and Veterinarian offices and      facilities mostly sold thru medical and dental equipment distributors.                                                                     |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Public facilities such as Coors Field in Denver,      CO, home to the Colorado Rockies professional major league baseball team      for both public disposal in bathrooms and in the clinic. |
|   | • | United States Military bases;                                                                                                                                                                |
|   | • | Indian Reservations                                                                                                                                                                          |
|   | • | Multiple locations with an Ambulance Services      Company                                                                                                                                   |
|   | • | Nursing Homes                                                                                                                                                                                |

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|   | • | A Pharmacy in Krogers super market chains. |
|--------|--------|--------------------------------------------|
|   | • | Large health care organizations.           |

|   | • | BMTS has started developing a green version      of the Demolizer® technology, the Demolizer® II G. This upgraded      model will allow for the complete recycling of the sharps waste load significantly      limiting the amount of waste that is eventually deposited in a landfill. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | BMTS has started developing a low-cost version      of our Demolizer® technology to address the needs of the growing Home      Health/Consumer Market.                                                                                                                                       |
|   | • | BMTS also has plans to complete development      of an international portable system in order to address third world health      care needs in remote locations.                                                                                                                                  |

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|   | • | No assurance can be given that any patent will      be issued or that the scope of any patent protection will exclude competitors      or that any patent, if issued, will be held valid if subsequently challenged. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | • | When we apply for registration of trademarks      and registered domain names in an effort to protect them, we cannot be sure      of the nature or extent of the protection afforded, since trademark registration      does not assure any enforceable rights under many circumstances and there      exists significant uncertainty surrounding legal protections of domain names.                 |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | There can be no assurance that any steps BMTS      takes in this regard will be adequate to deter misappropriation of its proprietary      rights or independent third parties developing functionally equivalent products.      Despite precautions, unauthorized parties may attempt to engineer, reverse      engineer, copy, or obtain and use BMTS's products or other information.              |
|   | • | Although management of BMTS believes that BMTS'      products do not infringe on the intellectual property rights of others,      there can be no assurance that an infringement claim will not be asserted      in the future. The prosecution or defense of any intellectual property litigation      can be extremely expensive and would place a material burden upon BMTS'      working capital. |

|   | • | Sterilizes and safely disposes of sharps *and*      typical red bag waste;                                                                                                                             |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Completely sterilizes medical waste in a 2-2.5-hour      cycle, including the destruction of pathogens, bacteria, spores, and viruses,      with the processed collectors disposed of as common trash; |
|   | • | Reduces biomedical waste hauling costs up to      100%;                                                                                                                                                |

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|   | • | Meets all EPA, CDC and OSHA standards and is      either formally approved or meets the requirements for medical waste treatment      and disposal in 48 U.S. states after comprehensive review by 78 governmental      agencies at the federal, state and local (city/county) level; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Incorporates a one-of-a-kind, integrated quality      control system that meets or exceeds all U.S. requirements for documentation      and performance monitoring;                                                                                                                   |
|   | • | Is easy to use with no special facility requirements;      and                                                                                                                                                                                                                        |
|   | • | Designed to operate in any country by virtue      of its CE rating.                                                                                                                                                                                                                   |

|   | • | Reduces the amount of medical waste incinerated      worldwide, helping to reduce the effects of global warming; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|
|   | • | Reduces dioxin and other hazardous emissions;                                                                    |
|   | • | Prevents dangerous reuse of sharps;                                                                              |
|   | • | Prevents accidental "needle sticks" from improper      disposal; and                                             |
|   | • | Eliminates the disposal of bio-hazardous waste      in landfills.                                                |

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|   | • | the failure of a supplier to deliver needed      components on a timely basis or with acceptable quality; |
|--------|--------|-----------------------------------------------------------------------------------------------------------|
|   | • | lack of sufficient capacity;                                                                              |
|   | • | equipment failures;                                                                                       |
|   | • | manufacturing personnel shortages;                                                                        |
|   | • | labor disputes;                                                                                           |
|   | • | transportation disruptions;                                                                               |
|   | • | changes in import/export regulations;                                                                     |
|   | • | natural disasters;                                                                                        |
|   | • | acts of terrorism; and                                                                                    |
|   | • | political instability.                                                                                    |

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|   | • | patents will be issued from future applications;                                                                                                 |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | any future patents will be sufficient in scope      or strength to provide meaningful protection or any commercial advantage      to us;         |
|   | • | foreign intellectual property laws will protect      our intellectual property; or                                                               |
|   | • | others will not independently develop similar      products, duplicate our products or design around any patents which may      be issued to us. |

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|                                   |   | **Common Stock** |   |
|-----------------------------------|--------|------------------|--------|
|                              |   | **High**         |   |   |   | **Low** |   |
| **Year Ending December 31, 2009** |   |             |   |   |   |   |   |
| First Quarter                     |   | $0.99            |   |   |   | $0.35 |   |
| Second Quarter                    |   | $1.10            |   |   |   | $0.39 |   |
| Third Quarter                     |   | $1.15            |   |   |   | $0.42 |   |
| Fourth Quarter                    |   | $0.53            |   |   |   | $0.30 |   |
|                              |   |             |   |   |   |   |   |
| **Year Ending December 31, 2010** |   |             |   |   |   |   |   |
| First Quarter                     |   | $0.51            |   |   |   | $0.18 |   |
| Second Quarter                    |   | $0.50            |   |   |   | $0.14 |   |
| Third Quarter                     |   | $0.25            |   |   |   | $0.10 |   |
| Fourth Quarter                    |   | $0.30            |   |   |   | $0.17 |   |

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|                                                                        |   | **     Years        Ended December 31,** |   |
|------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
| ****                                                                   |   | **2010**                                                          |   |   | **2009** |
| Total Revenues                                                         |   | 100%                                                              |   |   |   | 100% |   |
|                                                                   |   |                                                              |   |   |   |   |   |
| Costs and expenses                                                     |   |                                                              |   |   |   |   |   |
|      Selling, general      and administrative |   | (52%                                                              | )      |   |   | (41% | ) |
|      Research      and development            |   | (14%                                                              | )      |   |   | (204% | ) |
|      Impairment of      Intangible assets     |   | (41%                                                              | )      |   |   | (26% | ) |
| Total Expenses                                                         |   | (252%                                                             | )      |   |   | (231% | ) |
| Operating Profit (Loss)                                                |   | (194%                                                             | )      |   |   | (172% | ) |
| Other Income (expense), net                                            |   | (6%                                                               | )      |   |   | (8% | ) |
| Net Income (Loss)                                                      |   | (200%                                                             | )      |   |   | (180% | ) |
|                                                                   |   |                                                              |   |   |   |   |   |

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| Leasehold improvements |   | 1.5 years |   |   |   |   |   |
|------------------------|--------|-----------|--------|--------|--------|--------|--------|
| Computer equipment     |   | 3 years   |   |   |   |   |   |
| Office equipment       |   | 3 years   |   |   |   |   |   |
| Furniture and fixtures |   | 5 years   |   |   |   |   |   |
| Molds and tools        |   | 5 years   |   |   |   |   |   |

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|                           |   | Years Ended December 31, |   |
|--------------------------------|--------|--------------------------|--------|
|                           |   | 2010                     |   |   |   | 2009 |   |
| Beginning of year balance      | $      | 52,249                   |   |   | $ | 35,116 |   |
| Cash received from customers   |   | 21,682                   |   |   |   | 24,513 |   |
| Revenue recognized in earnings |   | (4,799                   | )      |   |   | (7,480 | ) |
| End of year balance            | $      | 69,132                   |   |   | $ | 52,249 |   |

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|                             |   | Twelve Months Ended         December 31 |   |
|----------------------------------|--------|-----------------------------------------|--------|
|                             |   | 2010                                    |   |   |   | 2009 |   |
| Selling expense                  | $      | 200,631                                 |   |   | $ | 513,502 |   |
| General office expense           |   | 597,442                                 |   |   |   | 662,661 |   |
| Professional Fees                |   | 158,708                                 |   |   |   | 178,498 |   |
| Depreciation and amortization    |   | 38,152                                  |   |   |   | 96,158 |   |
| Bad debt expense                 |   | 111,000                                 |   |   |   | 193,859 |   |
| Travel expense                   |   | 5,937                                   |   |   |   | 54,574 |   |
| Stock Based Compensation expense |   | 286,836                                 |   |   |   | 248,716 |   |
|                             |   |                                    |   |   |   |   |   |
|                             | $      | 1,398,706                               |   |   | $ | 1,947,968 |   |
|                             |   |                                    |   |   |   |   |   |

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|   | 1.     | Report of Independent      Registered Public Accounting Firm                                                                 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                         |
|   | 2.     | Consolidated Balance Sheets      at December 31, 2010 and 2009                                                               |
|   |   |                                                                                                                         |
|   | 3.     | Consolidated Statements      of Operations for the years ended December 31, 2010 and 2009                                    |
|   |   |                                                                                                                         |
|   | 4.     | Consolidated      Statement of Changes in Shareholders' Equity (Deficit) from January 1, 2009      through December 31, 2010 |
|   |   |                                                                                                                         |
|   | 5.     | Consolidated Statements of      Cash Flows for the Years Ended December 31, 2010 and 2009                                    |
|   |   |                                                                                                                         |
|   | 6.     | Notes to Consolidated Financial      Statements                                                                              |

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| **Assets**                                                                                                                                                                                                                                                                                                                                                                                                      |   | **12/31/2010** |   |   |   | **12/31/2009** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|--------|----------------|--------|
| Current assets:                                                                                                                                                                                                                                                                                                                                                                                                 |   |           |   |   |   |           |   |
|       Cash                                                                                                                                                                                                                                                                                                                                                                        | $      | 5,521          |   |   | $      | 6,643          |   |
|       Accounts receivable,        net of allowance for doubtful accounts                                                                                                                                                                                                                                                                                                          |   | 52,153         |   |   |   | 261,619        |   |
|       Former        employee receivable                                                                                                                                                                                                                                                                                                                                           |   | 20,000         |   |   |   | -              |   |
|       Inventory                                                                                                                                                                                                                                                                                                                                                                   |   | 173,664        |   |   |   | 247,263        |   |
|       Prepaid        expenses                                                                                                                                                                                                                                                                                                                                                     |   | 33,169         |   |   |   | 44,661         |   |
|             Total        current assets                                                                                                                                                                                                                                                                                                             |   | 284,507        |   |   |   | 560,186        |   |
| Property and equipment, net of accumulated        depreciation                                                                                                                                                                                                                                                                                                                                                  |   | 18,490         |   |   |   | 43,308         |   |
| Intangible assets, net of accumulated amortization                                                                                                                                                                                                                                                                                                                                                              |   | 6,331          |   |   |   | 306,085        |   |
| Land held for development or sale                                                                                                                                                                                                                                                                                                                                                                               |   | 615,000        |   |   |   | 615,000        |   |
| Long term Accounts receivable                                                                                                                                                                                                                                                                                                                                                                                   |   | 5,699          |   |   |   | 9,197          |   |
| Deposits                                                                                                                                                                                                                                                                                                                                                                                                        |   | 5,000          |   |   |   | 5,000          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                            | $      | 935,027        |   |   | $      | 1,538,776      |   |
| **Liabilities and shareholders' (deficit)**                                                                                                                                                                                                                                                                                                                                                                     |   |           |   |   |   |           |   |
| Current liabilities:                                                                                                                                                                                                                                                                                                                                                                                            |   |           |   |   |   |           |   |
|       Notes        payable                                                                                                                                                                                                                                                                                                                                                        | $      | 300,885        |   |   | $      | 222,241        |   |
|       Notes        payable to related parties                                                                                                                                                                                                                                                                                                                                     |   | 144,410        |   |   |   | 144,410        |   |
|       Accounts        payable                                                                                                                                                                                                                                                                                                                                                     |   | 485,578        |   |   |   | 396,563        |   |
|       Accrued        payroll and other liabilities                                                                                                                                                                                                                                                                                                                                |   | 494,786        |   |   |   | 348,862        |   |
|       Deferred        income                                                                                                                                                                                                                                                                                                                                                      |   | 69,132         |   |   |   | 52,249         |   |
|             Total        current liabilities                                                                                                                                                                                                                                                                                                        |   | 1,494,791      |   |   |   | 1,164,325      |   |
|       Long        term liabilities                                                                                                                                                                                                                                                                                                                                                |   | 471,495        |   |   |   | 471,495        |   |
|             Total        liabilities                                                                                                                                                                                                                                                                                                                |   | 1,966,286      |   |   |   | 1,635,820      |   |
| Shareholders' (deficit)                                                                                                                                                                                                                                                                                                                                                                                         |   |           |   |   |   |           |   |
|       Series        A Convertible Preferred Stock, $0.001 par value                     10,000,000        authorized, 40,000 and 40,000 shares issued and                     outstanding        at December 31, 2010 and December 31, 2009, respectively |   | 40             |   |   |   | 40             |   |
|       Common        stock, $0.001 par value 100,000,000 shares authorized,                     31,957,398        and 28,846,315 shares issued and outstanding                     at        December 31, 2010 and December 31, 2009, respectively         |   | 31,957         |   |   |   | 28,846         |   |
| Additional paid in capital                                                                                                                                                                                                                                                                                                                                                                                      |   | 6,158,032      |   |   |   | 5,592,026      |   |
| Accumulated deficit                                                                                                                                                                                                                                                                                                                                                                                             |   | (7,221,288     | )      |   |   | (5,717,956     | )      |
|       Total        Shareholders' (deficit)                                                                                                                                                                                                                                                                                                                                        |   | (1,031,259     | )      |   |   | (97,044        | )      |
|                                                                                                                                                                                                                                                                                                                                                                                                            | $      | 935,027        |   |   | $      | 1,538,776      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                            |   |           |   |   |   |           |   |

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|                                                                                                              |   | December 31, |   |
|-------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                              |   | 2010         |   |   |   | 2009 |   |
|                                                                                                              |   |         |   |   |   |   |   |
|       Net      sales                                                                | $      | 748,064      |   |   | $ | 952,851 |   |
|       Cost of      sales                                                            |   | 392,136      |   |   |   | 391,176 |   |
|             Gross      profit                         |   | 355,928      |   |   |   | 561,675 |   |
|                                                                                                              |   |         |   |   |   |   |   |
| Other costs and expenses:                                                                                         |   |         |   |   |   |   |   |
|       Selling,      general and administrative        |   | 1,398,706    |   |   |   | 1,947,968 |   |
|       Research      and development expenses                                        |   | 102,961      |   |   |   | 251,357 |   |
|       Impairment      of intangible assets                                          |   | 304,172      |   |   |   | - |   |
|             Total      operating expenses             |   | 1,805,839    |   |   |   | 2,199,325 |   |
|                                                                                                              |   |              |   |   |   |  |   |
| Loss before non-operating income and      expense and income taxes                                                |   | (1,449,911   | )      |   |   | (1,637,650 | ) |
|                                                                                                              |   |         |   |   |   |   |   |
| Other income and (expense):                                                                                       |   |         |   |   |   |   |   |
|       Other Income                                                                  |   | 18           |   |   |   | 6,409 |   |
|       Interest      expense                                                         |   | (49,439      | )      |   |   | (43,818 | ) |
|                                                                                                              |   | (49,421      | )      |   |   | (37,409 | ) |
|                                                                                                              |   |         |   |   |   |   |   |
|             Net      loss before income taxes         |   | (1,499,332   | )      |   |   | (1,675,059 | ) |
| Income tax provision                                                                                              |   | -            |   |   |   | - |   |
|             Net      loss                             |   | (1,499,332   | )      |   |   | (1,675,059 | ) |
|                                                                                                              |   |         |   |   |   |   |   |
| Accretion of beneficial conversion feature,                                                                       |   |         |   |   |   |   |   |
|       Preferred      Stock                                                          |   | -            |   |   |   | (30,000 | ) |
| Preferred Stock Dividend                                                                                          |   | (4,000       | )      |   |   | (5,694 | ) |
|                                                                                                              |   |         |   |   |   |   |   |
|       Net loss      attributable to common stockholders                             | $      | (1,503,332   | )      |   | $ | (1,710,753 | ) |
|                                                                                                              |   |         |   |   |   |   |   |
| Basic and diluted loss per share                                                                                  | $      | (0.05        | )      |   | $ | (0.06 | ) |
|                                                                                                              |   |         |   |   |   |   |   |
| Weighted average common shares outstanding                                                                        |   | 31,159,815   |   |   |   | 28,468,009 |   |
|                                                                                                              |   |         |   |   |   |   |   |

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|                                                                                                             |                |   |             |   |          |                           |   |       |   |            |   |          |   |   |   |        |   |   |   |        |   |   |   |       |   |
|------------------------------------------------------------------------------------------------------------------|---------------------|--------|------------------|--------|---------------|--------------------------------|--------|------------|--------|-----------------|--------|---------------|--------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|------------|--------|
|                                                                                                             | **Preferred Stock** |   | **Common Stock** |   |          | **Additional         Paid-in** |   |       |   | **Accumulated** |   |          |   |   |   |
|                                                                                                             | **Shares**          |   |             |   | **Par Value** |                           |   | **Shares** |   |            |   | **Par Value** |   |   |   | **Capital** |   |   |   | **Deficit** |   |   |   | **Total**  |   |
| Balance at December      31, 2008                                                                                | -                   |   |             |   | -             |                           |   | 27,702,181 |   |            |   | 27,702        |   |   |   | 4,810,660   |   |   |   | (4,007,203  | )      |   |   | 831,159    |   |
|                                                                                                             |                     |   |             |   |               |                           |   |            |   |            |   |               |   |   |   |             |   |   |   |             |   |   |   |            |   |
| Sale of Series A Convertible         Preferred Stock, less $10,833         of offering costs | 437,500             |   |             |   | 438           |                           |   | -          |   |            |   | -             |   |   |   | 426,229     |   |   |   | -           |   |   |   | 426,667    |   |
| Stock based compensation                                                                                         | -                   |   |             |   | -             |                           |   | 405,600    |   |            |   | 406           |   |   |   | 248,310     |   |   |   | -           |   |   |   | 248,716    |   |
| Common Stock issued      in lieu          of wages                                                     | -                   |   |             |   | -             |                           |   | 125,000    |   |            |   | 125           |   |   |   | 49,875      |   |   |   | -           |   |   |   | 50,000     |   |
| Common Stock purchase                                                                                            | -                   |   |             |   | -             |                           |   | 80,645     |   |            |   | 80            |   |   |   | 24,920      |   |   |   | -           |   |   |   | 25,000     |   |
| Beneficial Conversion      - Series A                                                                            | -                   |   |             |   | -             |                           |   | -          |   |            |   | -             |   |   |   | 30,000      |   |   |   | -           |   |   |   | 30,000     |   |
| Conversion of Series A        Convertible Preferred Stock        to common stock             | (397,500            | )      |             |   | (398          | )                              |   | 532,889    |   |            |   | 533           |   |   |   | 2,032       |   |   |   | -           |   |   |   | 2,167      |   |
| Net loss                                                                                                         | -                   |   |             |   | -             |                           |   | -          |   |            |   | -             |   |   |   | -           |   |   |   | (1,710,753  | )      |   |   | (1,710,753 | )      |
|                                                                                                             |                     |   |             |   |               |                           |   |            |   |            |   |               |   |   |   |             |   |   |   |             |   |   |   |            |   |
|                                                                                                             |                     |   |             |   |               |                           |   |            |   |            |   |               |   |   |   |             |   |   |   |             |   |   |   |            |   |
| Balance at December 31, 2009                                                                                     | 40,000              |   |             | $      | 40            |                           |   | 28,846,315 |   |            | $      | 28,846        |   |   |   | 5,592,026   |   |   | $      | (5,717,956) | )      |   | $      | (97,044    | )      |
| Shares issued for      compensation                                                                              | -                   |   |             |   | -             |                           |   | 1,260,000  |   |            |   | 1,260         |   |   |   | 226,441     |   |   |   | -           |   |   |   | 247,701    |   |
| Shares issued to repay        12/31/09 payable                                                         | -                   |   |             |   | -             |                           |   | 18,750     |   |            |   | 19            |   |   |   | 7,481       |   |   |   | -           |   |   |   | 7,500      |   |
| Reversal of Common      Stock        issued in lieu of wages                                           | -                   |   |             |   | -             |                           |   | (125,000   | )      |            |   | (125          | )      |   |   | (49,875     | )      |   |   | -           |   |   |   | (50,000    | )      |
| Charges for vesting        options/warrants                                                            | -                   |   |             |   | -             |                           |   | -          |   |            |   | -             |   |   |   | 31,636      |   |   |   | -           |   |   |   | 51,637     |   |
| Sales of Common Stock      less          $3,720 of offering costs                                      | -                   |   |             |   | -             |                           |   | 1,757,333  |   |            |   | 1,957         |   |   |   | 300,322     |   |   |   | -           |   |   |   | 302,279    |   |
| Note holder conversion      to stock                                                                             |                |   |             |   |          |                           |   | 200,000    |   |            |   | 30,000        |   |   |   |        |   |   |   |        |   |   |   | 30,000     |   |
| Net loss (includes      preferred      dividend of $4000)                                                        | -                   |   |             |   | -             |                           |   | -          |   |            |   | -             |   |   |   | -           |   |   |   | (1,503,332  | )      |   |   | (1,523,332 | )      |
| Balance at December 31, 2010                                                                                     | 40,000              |   |             | $      | 40            |                           |   | 31,957,398 |   |            | $      | 31,957        |   |   |   | 6,158,032   |   |   | $      | (7,221,288  | )      |   | $      | (1,031,259 | )      |
|                                                                                                             |                |   |             |   |          |                           |   |       |   |            |   |          |   |   |   |        |   |   |   |        |   |   |   |       |   |

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**Table of Contents**

|                                                                             |   | 2010       |   |   |   | 2009       |   |
|----------------------------------------------------------------------------------|--------|------------|--------|--------|--------|------------|--------|
| Cash flows from operating activities:                                            |   |       |   |   |   |       |   |
|    Net loss                                                            | $      | (1,503,332 | )      |   | $      | (1,710,753 | )      |
| Adjustments to reconcile net loss to      net cash used by operating activities: |   |            |   |   |   |            |   |
| Depreciation and amortization                                                    |   | 38,152     |   |   |   | 96,158     |   |
| Stock (cancelled) issued in lieu of Deferred      Compensation                   |   | (50,000    | )      |   |   | 50,000     |   |
| Impairment                                                                       |   | 336,046    |   |   |   | -          |   |
| Stock based compensation expense                                                 |   | 286,836    |   |   |   | 248,716    |   |
| Beneficial Conversion Feature- Series A Convertible      Preferred Stock         |   | -          |   |   |   | 30,000     |   |
| Changes in operating assets and liabilities:                                     |   | -          |   |   |   | 2,166      |   |
| Decrease (increase) in accounts receivable                                       |   | 189,466    |   |   |   | (2,354)    |   |
| Decrease (increase) in prepaid expenses      and other current assets            |   | 11,492     |   |   |   | 45,995     |   |
| Decrease (increase) in Note Receivable                                           |   | -          |   |   |   | 146,000    |   |
| Decrease (increase) in inventories                                               |   | 73,599     |   |   |   | 163,253    |   |
| Decrease (increase) in long term accounts receivable                             |   | 3,498      |   |   |   | (9,197     | )      |
| Increase (decrease) in accounts payable                                          |   | 89,015     |   |   |   | 60,786     |   |
| Increase in accrued expenses                                                     |   | 145,924    |   |   |   | 231,654    |   |
| Increase in other liabilities                                                    |   | 16,883     |   |   |   | 17,133     |   |
|    Net cash (used in) operating activities                             | $      | (362,421   | )      |   | $      | (630,443   | )      |

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**Table of Contents**

|                                                                                                     |   | 2010     |   |   |   | 2009    |   |
|----------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|--------|---------|--------|
| Cash flows from investing activities:                                                                    |   |     |   |   |   |    |   |
|       Increase      in intangible assets                                   |   | (19,624  | )      |   |   | (25,529 | )      |
|       Acquisition      of property and equipment                           |   | -        |   |   |   | (17,018 | )      |
|    Net cash (used in) investing      activities                                           |   | (19,624  | )      |   |   | (42,547 | )      |
| Cash flows from financing activities:                                                                    |   |          |   |   |   |         |   |
|       Proceeds      from sale of Series A Convertible Preferred Stock, net |   | -        |   |   |   | 426,667 |   |
|       Proceeds      from sale of Common Stock                              |   | 302,279  |   |   |   | 25,000  |   |
|       Proceeds      from notes payable                                     |   | 199,439  |   |   |   | 233,800 |   |
|       Proceeds      from notes payable-related parties                     |   | -        |   |   |   | 89,410  |   |
|       Repayment of Notes      converted to Series A Convertible            |   | -        |   |   |   | (75,000 | )      |
|       Preferred      Stock Repayment of notes payable                      |   | (120,795 | )      |   |   | (44,531 | )      |
|       Repayment of notes      payable- related parties                     |   | -        |   |   |   | (5,000  | )      |
|    Net cash      provided by financing activities                                         |   | 380,923  |   |   |   | 650,346 |   |
|                                                                                                     |   |     |   |   |   |    |   |
| Increase (decrease) in cash                                                                              |   | (1,122   | )      |   |   | (22,644 | )      |
| Cash and cash equivalents, beginning of period                                                           |   | 6,643    |   |   |   | 29,287  |   |
| Cash and cash equivalents,      end of period                                                            | $      | 5,521    |   |   | $      | 6,643   |   |
|                                                                                                     |   |     |   |   |   |    |   |
| Supplemental cash flow information:                                                                      |   |     |   |   |   |    |   |
|       Cash paid for income      taxes                                      | $      | -        |   |   | $      | -       |   |
|       Cash      paid for interest                                          | $      | 22,691   |   |   | $      | 15,894  |   |
|                                                                                                     |   |     |   |   |   |    |   |
| Non-cash investing and financing      activities:                                                        |   |     |   |   |   |    |   |
|      Conversion of      $30,000 note with 200,000 shares of stock               | $      | 30,000   |   |   |   | -       |   |

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**Table of Contents**

|   | Level 1: | Quoted prices in active markets      for identical assets or liabilities.                                                                    |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------------------------|
|   | Level 2: | Quoted prices in active markets      for similar assets and liabilities and inputs that are observable for the      asset or liability.      |
|   | Level 3: | Unobservable inputs in which there      is little or no market data, which require the reporting entity to develop      its own assumptions. |

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**Table of Contents**

|   | Leasehold improvements |   | 1.5 years |   |   |   |   |
|--------|------------------------|--------|-----------|--------|--------|--------|--------|
|   | Computer equipment     |   | 3 years   |   |   |   |   |
|   | Office equipment       |   | 3 years   |   |   |   |   |
|   | Furniture and fixtures |   | 5 years   |   |   |   |   |
|   | Molds and tools        |   | 5 years   |   |   |   |   |

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**Table of Contents**

|                           |   | Years Ended        December 31, |   |
|--------------------------------|--------|---------------------------------|--------|
|                           |   | 2010                            |   |   |   | 2009 |   |
|                           |   |                            |   |   |   |   |   |
| Beginning of year balance      | $      | 52,249                          |   |   | $ | 35,116 |   |
| Cash received from customers   |   | 21,682                          |   |   |   | 24,513 |   |
| Revenue recognized in earnings |   | (4,799                          | )      |   |   | (7,480 | ) |
| End of year balance            | $      | 69,132                          |   |   | $ | 52,249 |   |

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| Cash                      | $      | 875,000   |   |   |   |   |   |
|---------------------------|--------|-----------|--------|--------|--------|--------|--------|
| Note receivable           |   | 146,000   |   |   |   |   |   |
| Land held for development |   | 615,000   |   |   |   |   |   |
|                      |   | 1,636,000 |   |   |   |   |   |
| Land note payable         |   | (471,496  | )      |   |   |   |   |
| Net assets                | $      | 1,164,504 |   |   |   |   |   |
|                      |   |      |   |   |   |   |   |

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**Table of Contents**

|            |   | December 31, |   |
|-----------------|--------|--------------|--------|
|            |   | 2010         |   |   |   | 2009 |   |
| Raw Materials   | $      | 78,996       |   |   | $ | 130,060 |   |
| Work-in-process |   | 38,076       |   |   |   | 36,581 |   |
| Finished Goods  |   | 79,094       |   |   |   | 104,369 |   |
| less: Allowance |   | (22,502      | )      |   |   | (23,747 | ) |
|            | $      | 173,664      |   |   | $ | 247,263 |   |
|            |   |         |   |   |   |   |   |

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**Table of Contents**

|                           |   | December 31, |   |
|--------------------------------|--------|--------------|--------|
|                           |   | 2010         |   |   |   | 2009 |   |
| Equipment leased to customers  | $      | 24,495       |   |   | $ | 24,495 |   |
| Computer equipment             |   | 53,941       |   |   |   | 53,941 |   |
| Office equipment               |   | 19,744       |   |   |   | 19,744 |   |
| Furniture and fixtures         |   | 11,874       |   |   |   | 11,874 |   |
| Molds and tools                |   | 71,605       |   |   |   | 71,605 |   |
| Computer software              |   | 23,433       |   |   |   | 23,433 |   |
| Leasehold improvements         |   | 5,524        |   |   |   | 5,524 |   |
|                           |   | 210,616      |   |   |   | 210,616 |   |
| Less: accumulated depreciation |   | (192,126     | )      |   |   | (167,308 | ) |
|                           | $      | 18,490       |   |   | $ | 43,308 |   |
|                           |   |         |   |   |   |   |   |

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**Table of Contents**

|                                   Limited-life      intangibles |   | December 31,        2010 |   |   |   | December 31,        2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|--------|--------------------------|--------|
| Patent                                                                                                                                                                                                                                    | $      | 83,256                   |   |   | $      | 83,256                   |   |
| Customer list                                                                                                                                                                                                                             |   | 15,000                   |   |   |   | 15,000                   |   |
|                                                                                                                                                                                                                                      |   | 98,256                   |   |   |   | 98,256                   |   |
| Less: accumulated depreciation and impairment                                                                                                                                                                                             |   | (92,925                  | )      |   |   | (83,555                  | )      |
|                                                                                                                                                                                                                                      |   | 5,331                    |   |   |   | 14,701                   |   |
|                                                                                                                                                                                                                                      |   |                          |   |   |   |                          |   |
| Patent Pendings                                                                                                                                                                                                                           |   | 139,597                  |   |   |   | 139,371                  |   |
| Less: impairment                                                                                                                                                                                                                          |   | (139,597                 | )      |   |   | -                        |   |
|                                                                                                                                                                                                                                      |   |                     |   |   |   |                     |   |
|                                 Indefinite-life      intangibles          |   |                     |   |   |   |                     |   |
| Trademark                                                                                                                                                                                                                                 |   | 46,993                   |   |   |   | 47,013                   |   |
| Licenses and permits                                                                                                                                                                                                                      |   | 105,000                  |   |   |   | 105,000                  |   |
| Less: impairment adjustment - Trademarks                                                                                                                                                                                                  |   | (46,493                  | )      |   |   | -                        |   |
| Less: impairment adjustment - Licenses and      permits                                                                                                                                                                                   |   | (104,500                 | )      |   |   | -                        |   |
|                                                                                                                                                                                                                                      |   | 1,000                    |   |   |   | 152,013                  |   |
|                                                                                                                                                                                                                                      | $      | 6,331                    |   |   | $      | 306,085                  |   |
|                                                                                                                                                                                                                                      |   |                     |   |   |   |                     |   |

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**Table of Contents**

|                                                                                                                                                                                       |   | December 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                 |   | 2010         |   |   |   | 2009 |   |
| Accrued Payroll                                                                                                                                                                            | $      | 399,838      |   |   | $ | 275,231 |   |
|                                                                                                                                                                                       |   |              |   |   |   |  |   |
| Accrued Interest Payable                                                                                                                                                                   |   | 43,807       |   |   |   | 17,059 |   |
| Accrued Professional Fees                                                                                                                                                                  |   | 27,747       |   |   |   | 36,168 |   |
| Accrued Other                                                                                                                                                                              |   | 23,394       |   |   |   | 20,404 |   |
|                                                                                                                                                                                       | $      | 494,786      |   |   | $ | 348,862 |   |
|                                                                                                                                                                                       |   |         |   |   |   |   |   |

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**Table of Contents**

|                                                                                                                                                                                       |   | Twelve Months Ended         December 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                 |   | 2010                                     |   |   |   | 2009 |   |
| Selling expense                                                                                                                                                                            | $      | 200,631                                  |   |   | $ | 513,502 |   |
| General office expense                                                                                                                                                                     |   | 597,442                                  |   |   |   | 662,661 |   |
| Professional Fees                                                                                                                                                                          |   | 158,708                                  |   |   |   | 178,498 |   |
| Depreciation and amortization                                                                                                                                                              |   | 38,152                                   |   |   |   | 96,158 |   |
| Bad debt expense                                                                                                                                                                           |   | 111,000                                  |   |   |   | 193,859 |   |
| Travel expense                                                                                                                                                                             |   | 5,937                                    |   |   |   | 54,574 |   |
| Stock Based Compensation expense                                                                                                                                                           |   | 286,836                                  |   |   |   | 248,716 |   |
|                                                                                                                                                                                       |   | -                                        |   |   |   | - |   |
|                                                                                                                                                                                       | $      | 1,398,706                                |   |   | $ | 1,947,968 |   |
|                                                                                                                                                                                       |   |                                     |   |   |   |   |   |

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**Table of Contents**

|                                                                                                                                                                                       |   | Amount   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|
|                                 |   | 2010     |   |   |   | 2009 |   |
| Deferred tax assets:                                                                                                                                                                       |   |     |   |   |   |   |   |
|      Long-term                                                                                                                                                    | $      | 570,957  |   |   | $ | 439,310 |   |
|           Total      deferred tax asset                                                                                                  | $      | 570,957  |   |   | $ | 439,310 |   |
|                                                                                                                                                                                       |   |          |   |   |   |  |   |
| Deferred tax liability:                                                                                                                                                                    |   |          |   |   |   |  |   |
|      Current                                                                                                                                                      |   | -        |   |   |   | - |   |
|      Long-term                                                                                                                                                    |   | (69,403  | )      |   |   | (122,747 |   |
|           Net      deferred tax asset                                                                                                    | $      | 501,554  |   |   | $ | 316,563 |   |
|                                                                                                                                                                                       |   |          |   |   |   |  |   |
| Valuation allowance                                                                                                                                                                        |   | (501,554 | )      |   |   | (316,563 |   |
| Total provision                                                                                                                                                                            | $      | -        |   |   | $ | - |   |
|                                                                                                                                                                                       |   |     |   |   |   |   |   |

|                                                              |   | 2009                        |   |   |   | 2010               |   |
|-------------------------------------------------------------------|--------|-----------------------------|--------|--------|--------|--------------------|--------|
|                                                              |   | Temporary        Difference |   |   |   | Tax         Effect |   |   |   | Temporary         Difference |   |   |   | Tax         Effect |   |
| Deferred assets:                                                  |   |                        |   |   |   |               |   |   |   |   |   |   |   |   |   |
|      Depreciation      timing difference | $      | 71,952                      |   |   | $      | 27,795             |   |   | $ | 183,114 |   |   | $ | 70,737 |   |
|      Net      operating loss carryovers  |   | 1,406,062                   |   |   |   | 543,162            |   |   |   | 1,315,101 |   |   |   | 508,024 |   |
| Total                                                             | $      | 1,478,014                   |   |   | $      | 570,957            |   |   | $ | 1,498,215 |   |   | $ | 578,761 |   |
|                                                              |   |                        |   |   |   |               |   |   |   |   |   |   |   |   |   |
|                                                              |   | 2009                        |   |   |   | 2010               |   |
|                                                              |   | Temporary        Difference |   |   |   | Tax         Effect |   |   |   | Temporary         Difference |   |   |   | Tax         Effect |   |
| Deferred liabilities:                                             |   |                        |   |   |   |               |   |   |   |   |   |   |   |   |   |
|      Depreciation      timing difference | $      | 179,660                     |   |   | $      | 69,403             |   |   | $ | - |   |   | $ | - |   |

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**Table of Contents**

|                                                                              |   | Years Ended December 31, |   |   |   |               |   |   |   |   |   |
|-----------------------------------------------------------------------------------|--------|--------------------------|--------|--------|--------|--------------------|--------|--------|--------|--------|--------|
|                                                                              |   | 2010                     |   |   |   | 2009               |   |   |   |   |   |   |   |   |   |
| U.S. statutory federal rate,      graduated.....                                  |   | 34.00%                   |   |   |   | 34.00%             |   |   |   |   |   |   |   |   |   |
| State income tax rate, net of federal....                                         |   |   3.06%        |   |   |   |   4.63%  |   |   |   |   |   |   |   |   |   |
| Temporary differences..........                                                   |   |  -4.55%             |   |   |   | -                  |   |   |   |   |   |   |   |   |   |
| Net operating loss (NOL) for which no tax benefit      is currently available.... |   | -32.51%                  |   |   |   | -38.63%            |   |   |   |   |   |   |   |   |   |
|                                                                              |   |    0.00%       |   |   |   |    0.00% |   |   |   |   |   |   |   |   |   |
|                                                                              |   |                     |   |   |   |               |   |   |   |   |   |   |   |   |   |

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**Table of Contents**

|                                                                                                                                                                                       |   | Years Ended         December 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                 |   | 2010                                  |   |   |   | 2009 |   |
| Selling, general and administrative expenses                                                                                                                                               | $      | 286,836                               |   |   | $ | 248,716 |   |
| Effect on pre-tax loss                                                                                                                                                                     |   | 286,836                               |   |   |   | 248,716 |   |
| Tax effect of stock-based compensation      expense                                                                                                                                        |   | -                                     |   |   |   | - |   |
| Effect on net loss                                                                                                                                                                         | $      | 286,836                               |   |   | $ | 248,716 |   |
|                                                                                                                                                                                       |   |                                  |   |   |   |   |   |

|                                  |   | Number of         Shares |   |   |   | Weighted         Average         Exercise         Price         Per Share |   |   |   | Weighted         Average        Remaining         Contractual         Life |   |   |   | Aggregate        Intrinsic         Value |   |
|---------------------------------------|--------|--------------------------|--------|--------|--------|---------------------------------------------------------------------------|--------|--------|--------|----------------------------------------------------------------------------|--------|--------|--------|------------------------------------------|--------|
| Outstanding at January 1,      2009   |   | 3604,181                 |   |   | $      | 0.50                                                                      |   |   |   | 5.15 years                                                                 |   |   | $      | -                                        |   |
| Granted                               |   | 365,000                  |   |   | $      | 0.99                                                                      |   |   |   | 6.08 years                                                                 |   |   |   | -                                        |   |
| Exercised                             |   | -                        |   |   |   | -                                                                         |   |   |   | -                                                                          |   |   |   | -                                        |   |
| Cancelled                             |   | (453,651                 | )      |   |   | 1.48                                                                      |   |   |   | -                                                                          |   |   |   | -                                        |   |
| Outstanding at December 31,      2009 |   | 3,515,530                |   |   | $      | 0.43                                                                      |   |   |   | 4.15 years                                                                 |   |   |   | -                                        |   |
| Granted                               |   | -                        |   |   | $      | -                                                                         |   |   |   | -                                                                          |   |   |   | -                                        |   |
| Exercised                             |   | -                        |   |   |   | -                                                                         |   |   |   | -                                                                          |   |   |   | -                                        |   |
| Cancelled                             |   | (805,000                 | )      |   | $      | 0.63                                                                      |   |   |   | -                                                                          |   |   |   | -                                        |   |
| Outstanding at December 31,      2010 |   | 2,710,530                |   |   | $      | 0.43                                                                      |   |   |   | 2.97 years                                                                 |   |   | $      | 268,224                                  |   |
|                                  |   |                     |   |   |   |                                                                      |   |   |   |                                                                       |   |   |   |                                     |   |
| Exercisable at December 31,      2010 |   | 2,710,530                |   |   | $      | 0.43                                                                      |   |   |   | 2.97 years                                                                 |   |   | $      | 268,224                                  |   |
|                                  |   |                     |   |   |   |                                                                      |   |   |   |                                                                       |   |   |   |                                     |   |

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**Table of Contents**

|   | Grant Date |   | Expiration         Date |   | Type                           |   | 2009        Post         Merger         Warrants |   | 2009        Strike         Price |   | 2009        Option         Grants |   | Series            |   | Total     |   |
|--------|------------|--------|-------------------------|--------|--------------------------------|--------|--------------------------------------------------|--------|----------------------------------|--------|-----------------------------------|--------|-------------------|--------|-----------|--------|
|   | 09/30/02   |   | 09/30/09                |   | non-plan                       |   | 1,453,787                                        |   | $0.34                            |   | 0                                 |   |                   |   | 1,453,787 |   |
|   | 09/30/02   |   | 09/30/09                |   | non-plan                       |   | 290,757                                          |   | $0.34                            |   | 0                                 |   |              |   | 290,757   |   |
|   | 11/15/02   |   | 11/15/09                |   | non-plan                       |   | 290,757                                          |   | $0.34                            |   | 0                                 |   |              |   | 290,757   |   |
|   | 12/31/02   |   | 12/31/09                |   | non-plan                       |   | 581,515                                          |   | $0.34                            |   | 50,000                            |   | 50,000            |   | 631,515   |   |
|   | 12/31/02   |   | 12/31/09                |   | non-plan                       |   | 290,757                                          |   | $0.34                            |   | 0                                 |   |              |   | 290,757   |   |
|   | 12/31/02   |   | 12/31/09                |   | non-plan                       |   | 72,689                                           |   | $0.34                            |   | 0                                 |   |              |   | 72,689    |   |
|   | 01/31/04   |   | 01/31/11                |   | non-plan                       |   | 72,689                                           |   | $0.69                            |   | 0                                 |   |              |   | 72,689    |   |
|   | 04/30/04   |   | 04/30/11                |   | non-plan                       |   | 29,076                                           |   | $0.69                            |   | 37,500                            |   | 37,500            |   | 66,576    |   |
|   | 08/03/04   |   | 08/03/11                |   | non-plan                       |   | 14,538                                           |   | $0.69                            |   | 0                                 |   |              |   | 14,538    |   |
|   | 08/03/04   |   | 08/03/11                |   | non-plan                       |   | 43,614                                           |   | $0.69                            |   | 0                                 |   |              |   | 43,614    |   |
|   | 08/03/04   |   | 08/03/11                |   | non-plan                       |   | 7,269                                            |   | $0.69                            |   | 0                                 |   |              |   | 7,269     |   |
|   | 08/03/04   |   | 08/03/11                |   | non-plan                       |   | 2,908                                            |   | $0.69                            |   | 0                                 |   |              |   | 2,908     |   |
|   | 08/03/04   |   | 08/03/11                |   | non-plan                       |   | 8,723                                            |   | $0.69                            |   | 0                                 |   |                   |   | 8,723     |   |
|   | 08/03/04   |   | 08/03/11                |   | non-plan                       |   | 1,454                                            |   | $0.69                            |   | 0                                 |   |              |   | 1,454     |   |
|   |       |   |                    |   |                           |   |                                             |   |                             |   |                              |   |              |   |      |   |
|   |       |   | Total @ 12/31/10        |   | 3,160,533                      |   |                                             |   |                             |   |                              |   |              |   |
|   |       |   |                    |   |                           |   |                                             |   |                             |   |                              |   |              |   |      |   |
|   |       |   |                    |   |                           |   |                                             |   |                             |   |                              |   |              |   |      |   |
|   | 01/04/05   |   | 01/04/12                |   | Plan                           |   |                                                  |   | $1.00                            |   | 25,000                            |   | 25,000            |   | 25,000    |   |
|   | 01/04/05   |   | 01/04/12                |   | Plan                           |   |                                             |   | $1.00                            |   | 20,000                            |   | 20,000            |   | 20,000    |   |
|   | 1/31/2005  |   | 01/31/12                |   | Plan                           |   |                                             |   | $1.00                            |   | 300,000                 |   |   6,250 |   | 306,250   |   |
|   | 1/31/2005  |   | 01/31/12                |   | Plan                           |   |                                             |   | $1.00                            |   | 10,000                            |   | 10,000            |   | 10,000    |   |
|   | 7/6/2005   |   |                    |   |                           |   |                                             |   | $1.00                            |   | 50,000                            |   | 50,000            |   | 50,000    |   |
|   |       |   |                    |   |                           |   |                                             |   |                                  |   |                              |   |              |   |      |   |
|   |       |   |                    |   | Other Series A Warrant Holders |   | $1.50                                            |   | 125,000                |   | 125,000                 |   | 125,000           |   |

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| Risk free interest rate        | .93% - 1.97%           |   |
|--------------------------------|------------------------|--------|
| Dividend yield                 | 0.00%                  |   |
| Volatility factor              | 98.75% -162.3%         |   |
| Weighted average expected life | 4 years                |   |
|                           |                        |   |
| Expected Term                  | 2.5 years to 6.5 years |   |

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|   | (1) The Company has not properly segregated      duties as one or two individuals initiate, authorize, and complete all transactions.      The Company has not implemented measures that would prevent the individuals      from overriding the internal control system.      (2) Due to a shortage in working capital, the Company has lacked the resources      to retain and maintain adequate human resources to implement formal systems      and documented procedures or conduct sufficient testing that permit the      timely accumulation of information and preparation of financial statements. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Name               | Age | Position                                | Director/Officer Since |
|--------------------|-----|-----------------------------------------|------------------------|
| Gex Richardson     | 46  | President, General Counsel and Director | 2005                   |
| William Tunkey     | 65  | Director                                | 2010                   |
| Robert Surdam      | 67  | Director                                | 2010                   |
| Severt Swenson III | 42  | Director                                | 2010                   |
| Jon Bricken        |     | CEO and Director                        | 2010                   |

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| (a) |   | had any petition under the federal bankruptcy      laws or any state insolvency law filed by or against, or a receiver, fiscal      agent or similar officer appointed by a court for the business or property      of, such person, or any partnership in which he was a general partner at      or within two years before the time of such filing, or any corporation or      business association of which he was an executive officer at or within two      years before the time of such filing; |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Been convicted in a criminal proceeding or      subject to a pending criminal proceeding;                                                                                                                                                                                                                                                                                                                                                                                                              |
| (c) |   | been subject to any order, judgment, or decree,      not subsequently reversed, suspended or vacated, of any court of competent      jurisdiction or any federal or state authority, permanently or temporarily      enjoining, barring, suspending or otherwise limiting his involvement in      any type of business, securities, futures, commodities or banking activities;      or                                                                                                                |
| (d) |   | been found by a court of competent jurisdiction      (in a civil action), the SEC or the Commodity Futures Trading Commission      to have violated a federal or state securities or commodities law, and the      judgment has not been reversed, suspended, or vacated.                                                                                                                                                                                                                              |

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|   | - | reviews with management, the external consultants      and the independent auditors policies and procedures with respect to internal      controls; |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------|
|   | - | reviews significant accounting matters;                                                                                                             |

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|   | - | approves any significant changes in accounting      principles of financial reporting practices;                           |
|--------|---|----------------------------------------------------------------------------------------------------------------------------|
|   | - | reviews independent auditor services; and                                                                                  |
|   | - | Recommends to the board of directors the firm      of independent auditors to audit our consolidated financial statements. |

|   | - | Recommends to the board of directors the compensation      and cash bonus opportunities based on the achievement of objectives set      by the compensation advisory committee with respect to our chairman of the      board and president, our chief executive officer and the other executive      officers; |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | - | administers our compensation plans for the      same executives;                                     |
|--------|---|------------------------------------------------------------------------------------------------------|
|   | - | determines equity compensation for all employees;                                                    |
|   | - | reviews and approves the cash compensation      and bonus objectives for the executive officers; and |
|   | - | reviews various matters relating to employee      compensation and benefits.                         |

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| Name and       Principal       Position | Year     | Salary ($) | Bonus  | Stock         Awards | Options         Awards | Non equity        Incentive Plan        Compensation | Nonqualified         Deferred         Compensation         Earnings | All Other        Compensation | Total    |
|-----------------------------------------|----------|------------|--------|----------------------|------------------------|------------------------------------------------------|---------------------------------------------------------------------|-------------------------------|----------|
| Gex F. Richardson,      President       | 2010     | 0          | $0     | $0                   | 0                      | 0                                                    | $0                                                                  | 0                             | 0        |
| Jonathan Bricken, CEO                   | 2010     | 0          | $0     | $0                   | 0                      | 0                                                    | $0                                                                  | 0                             | 0        |
| Donald Cox CEO                          | 2010     | $200,000   | $0     | $0                   | 0                      | 0                                                    | $0                                                                  | 0                             | $200,000 |
| 2009                                    | $200,000 | $0         | $0     | 0                    | 0                      | $0                                                   | 0                                                                   | $200,000                      |
| 2008                                    | $200,000 | $0         | $0     | 0                    | 0                      | $0                                                   | 0                                                                   | $200,000                      |
| David A. Kempf,            CFO/COO      | 2010     | $48,750    | $0     | $0                   | 0                      | 0                                                    | $0                                                                  | 0                             | $48,750  |
| 2009                                    | $174,231 | $0         | $1,275 | 300,000              | 0                      | $0                                                   | 0                                                                   | $175,506                      |

| Name           |        | Position        |        | Salary            |
|----------------|--------|-----------------|--------|-------------------|
| Donald G. Cox  |   | CEO             |   | $200,000 per year |
| David A. Kempf |   | CFO/COO         |   | $195,000 per year |
| Gex Richardson |   | General Counsel |   | None              |

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|           | Option Awards                                                                                         | Stock Awards                                                                                          |
|----------------|-------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|
| Name           | Number of        Securities        Underlying         Unexercised         Options         Exercisable | Number of        Securities         Underlying        Unexercised        Options        Unexercisable | 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 of        Units 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 |
| Donald Cox     | 131,515                                                                                               | 0                                                                                                     | 0 | $0.34 | 10/01/14 | 0 | 0 | 0 | 0 |
| Gex Richardson | 1,453,786                                                                                             | 0                                                                                                     | 0 | $0.34 | 10/01/13 | 0 | 0 | 0 | 0 |

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|                                                         | BENEFICIAL OWNERSHIP(1)  |   |
|--------------------------------------------------------------|--------------------------|--------|
| NAME AND ADDRESS OF       BENEFICIAL OWNER                   | NUMBER         OF SHARES |        | PERCENT OF         TOTAL(2) |  |
|                                                         |                     |   |  |   |
| Donald G. Cox                                                | 10,013,173               | (3)    | 31.11 |   |
| Jon Bricken                                                  | 6,033,214                |        | 18.82 |   |
| Gex Richardson                                               | 2,689,506                | (4)    | 8.02 |   |
| William Tunkey                                               | 843,196                  | (5)    | 2.63 |   |
| Severt Swenson, III                                          | 1,333,333                |   | 4.12 |   |
| Robert Surdam                                                | 71,900                   |   | 0.22 |   |
|                                                         |                          |   |  |   |
| Executive Officers and Directors as      a Group (5 persons) | 10,971,149               |   | 34.23 |   |

| (1) | Beneficial ownership is determined in accordance      with the rules of the Securities and Exchange Commission and generally includes      voting or investment power with respect to securities. Shares of Holdings'      common stock subject to options and warrants currently exercisable within      60 days of the date of this 10-K, are deemed outstanding for purposes of      computing the percentage of the person or entity holding such securities      but are not deemed outstanding for purposes of computing the percentage      of any other person or entity. 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. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Percentage of ownership is based on 32,051,708shares      of common stock outstanding as of April 14, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (3) | Includes warrants exercisable to purchase 131,515      shares of common stock at an exercise price of $0.34 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (4) | Includes warrants exercisable to purchase      1,453,787 shares of common stock at an exercise price of $0.34 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (5) | Shares held as Trustee under 401K Plan and      Trust to which filer disclaims any pecuniary interest in 83% of the shares      vested in the 401K Plan and Trust                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

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|   | **Plan category**                                                              |   |   |   | **Number of securities to         be issued upon exercise         of outstanding options,        warrants and rights** |   |   |   | **Weighted-average         exercise price of         outstanding options,         warrants and rights** |   |   |   | **Number of securities         remaining available         for future issuance under        equity compensation         plans (excluding securities         reflected in column (a))** |   |
|--------|--------------------------------------------------------------------------------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|---------------------------------------------------------------------------------------------------------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                           |   |   |   | (a)                                                                                                                    |   |   |   | (b)                                                                                                     |   |   |   | (c)                                                                                                                                                                                    |   |
|   | Equity compensation      plans      approved by security      holders (1), (2) |   |   |   | 3,515,530                                                                                                              |   |   |   | $0.43                                                                                                   |   |   |   | 1,589,400                                                                                                                                                                              |   |
|   | Equity      compensation plans      not approved by security      holders      |   |   |   | None                                                                                                                   |   |   |   |                                                                                                    |   |   |   | None                                                                                                                                                                                   |   |
|   | Total                                                                          |   |   |   | 3,515,530                                                                                                              |   |   |   | $0.43                                                                                                   |   |   |   | 1,589,400                                                                                                                                                                              |   |

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|                                                                  |   | December 31,         2010 |   |   |   | December 31,        2009 |   |
|-----------------------------------------------------------------------|--------|---------------------------|--------|--------|--------|--------------------------|--------|
|                                                                  |   |                      |   |   |   |                     |   |
| Audit Fees                                                            | $      | 52,029                    |   |   | $      | 39,046                   |   |
| Audit-Related Fees                                                    |   | -                         |   |   |   | -                        |   |
| Tax Fees                                                              |   | 0                         |   |   |   | 0                        |   |
| All Other Fees (audit of acquired subsidiary)                         |   | -                         |   |   |   | 5,250                    |   |
|          Total      fees | $      | 52,029                    |   |   | $      | 44,296                   |   |
|                                                                  |   |                      |   |   |   |                     |   |

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| **Exhibit No.** | **Title** |
|-----------------|-----------|
| *               | 2.1       | Indemnity Agreement |
| *               | 2.1       | Statement of Merger |
| *               | 2.1       | Certificate of Merger |
| *               | 2.1       | Amendment No. 1 to Merger Agreement |
| *               | 2.1       | Amendment No. 2 to Merger Agreement |
| *               | 3.1       | Articles of Incorporation |
| ****            | 3.1(ii)   | Certificate of Designations of Series A Preferred      Stock |
| *               | 3.2       | Bylaws |
| *****           | 4.0       | 2008 Equity Incentive Plan |
| *****           | 4.0       | Form of Employee Warrant |
| *****           | 5.0       | Opinion of Clifford L. Neuman PC |
| ***             | 10.1      | Promissory Note |
| ******          | 10.2      | Consultation and Securities Compensation Agreement |
| *******         | 10.3      | Agreement to Convert Debt - Cox |
| *******         | 10.4      | Agreement to Convert Debt - Kempf |
| +               | 10.5      | Amendment No. 1 to Malibu Consultation and      Securities Compensation Agreement |
| ++              | 10.6      | Valor Deed of Trust |
| ++              | 10.7      | Valor Promissory Note |
| +++             | 10.8      | Settlement Agreement with Malibu Holdings |
| +++             | 10.9      | Settlement Agreement with Valor / WED |
| ++++            | 10.10     | Agreement to Convert Debt - McMorris |
| ++++            | 10.11     | Consultation and Marketing Agreement - Kratos      Consulting |
| +++++           | 10.12     | Consultation and Marketing Agreement - AllPennyStocks.com |
| +++             | 14        | Code of Ethics |
| *****           | 23        | Consent of Cordovano & Honeck |
| #               | 31.       | Certification required by Section 13a-14(a)      of the Exchange Act. |

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| #  | 32.  | Certification pursuant to Section 906 of the      Sarbanes-Oxley Act of 2002 |
|----|------|------------------------------------------------------------------------------|
| ** | 99.1 | Audit Committee Charter                                                      |
| ** | 99.2 | Compensation Committee Charter                                               |
| ** | 99.3 | Nominating and Corporate Governance Committee      Charter                   |

|    |                                                                                                                                                          |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *       | Incorporated by reference to the Registrant's      Current Report on Form 8-K dated August 21, 2008 as filed with the Commission      on August 27, 2008.     |
| **      | Incorporated by reference to the Registrant's      Current Report on Form 8-K dated February 11, 2009 as filed with the Commission      on February 17, 2009. |
| ***     | Incorporated by reference to the Registrant's      Current Report on Form 8-K dated December 2, 2008 as filed with the Commission      on February 18, 2009.  |
| ****    | Incorporated by reference to the Registrant's      Annual Report on Form 10-K dated December 31, 2008 as filed with the Commission      on April 15, 2009.    |
| *****   | Incorporated by reference to the Registrant's      Form S-8 dated May 15, 2009 as filed with the Commission on May 15, 2009.                                  |
| ******  | Incorporated by reference to the Registrant's      Current Report on Form 8-K dated June 12, 2009 as filed with the Commission      on June 19, 2009.         |
| ******* | Incorporated by reference to the Registrant's      Current Report on Form 8-K dated June 17, 2009 as filed with the Commission      on June 24, 2009.         |
| +       | Incorporated by reference to the Registrant's      Quarterly Report on Form 10-Q dated June 30, 2009 as filed with the Commission      on August 13, 2009.    |
| ++      | Incorporated by reference to the Registrant's      Current Report on Form 8-K dated February 28, 2010 as filed with the Commission      on April 5, 2010.     |
| +++     | Incorporated by reference to the Registrant's      Annual Report on Form 10-K dated December 31, 2009 as filed with the Commission      on May 13, 2010.      |
| ++++    | Incorporated by reference to the Registrant's      Current Report on Form 8-K dated August 4, 2010 as filed with the Commission      on October 4, 2010.      |
| +++++   | Incorporated by reference to the Registrant's      Current Report on Form 8-K dated December 2, 2010 as filed with the Commission      on April 5, 2010.      |
| #       | Filed herewith.                                                                                                                                               |

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|                 | **BIOMEDICAL TECHNOLOGY SOLUTIONS      HOLDINGS, INC.**      (Registrant)                                                                                                         |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                                                                                                                                                                              |
| Date: April 15, 2011 | By:   */s/ Gex F. Richardson*                        |
|                 | Gex F. Richardson, President                                                                                                                                                      |

| By:   */s/ Gex F. Richardson*                                                                                    | Date: April 15, 2011 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|
| Gex F. Richardson, President,       General Counsel and Director                                                                                                                                                                              |                 |
|                                                                                                                                                                                                                                          |                 |
| By: *  /s/ Jon Bricken                                  * | Date: April 15, 2011 |
| Jon Bricken, Chief Executive Officer                                                                                                                                                                                                          |                 |
|                                                                                                                                                                                                                                          |                 |
| By:  */s/ Severt Swenson, III                       *                                                            | Date: April 15, 2011 |
| Severt Swenson III, Director                                                                                                                                                                                                                  |                 |
|                                                                                                                                                                                                                                          |                 |
| By:  */s/ William R. Tunkey                        *                                                        | Date: April 15, 2011 |
| William R. Tunkey, Director                                                                                                                                                                                                                   |                 |
|                                                                                                                                                                                                                                          |                 |
| By:  */s/ Robert L. Surdam                         *                                                   | Date: April 15, 2011 |
| Robert L. Surdam, Director                                                                                                                                                                                                                    |                 |

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