UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
               OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

              FOR THE FISCAL YEAR ENDED        COMMISSION FILE NO.
                   DECEMBER 31, 2006                000-23967


                        MEDICAL STAFFING SOLUTIONS, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)


           NEVADA                                        91-2135006
    --------------------                            --------------------
(State or other jurisdiction of              (I.R.S. EmployerIdentification No.)
incorporation or organization)


                         8150 LEESBURG PIKE, SUITE 1200
                             VIENNA, VIRGINIA 22182
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)


                    Issuer's telephone number: (703) 641-8890


         Securities registered under Section 12(g) of the Exchange Act:

                    COMMON STOCK, PAR VALUE $0.001 PER SHARE
                                (TITLE OF CLASS)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act |_|

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Medical Staffing's knowledge, in definite proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |X|

Medical Staffing's revenues for its most recent fiscal year: $18,849,163

Based on the closing sale price on April 16, 2007, the aggregate market
value of the voting common stock held by non-affiliates of Medical Staffing is
$270,639.

Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes |X| No |_|

As of April 16, 2007, Medical Staffing had 182,203,773 shares of common stock
outstanding.


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                                TABLE OF CONTENTS

PART  I
        FORWARD-LOOKING STATEMENTS                                             3
        ITEM 1. DESCRIPTION OF BUSINESS                                        3
        ITEM 2. DESCRIPTION OF PROPERTY                                        9
        ITEM 3. LEGAL PROCEEDINGS                                             10
        ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS           10
PART II
        ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS      11
        ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION     11
        ITEM 7. FINANCIAL STATEMENTS                                          19
        ITEM 8A.CONTROLS AND PROCEDURES                                       19
        ITEM 8B.OTHER INFORMATION                                             20
PART III
        ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT    20
        ITEM 10.EXECUTIVE COMPENSATION                                        20
        ITEM 11.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT AND RELATED STOCKHOLDER MATTERS                    22
        ITEM 12.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                22
        ITEM 13.EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K        22
        ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES                        29
SIGNATURE


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                                     PART I

                                INTRODUCTORY NOTE

FORWARD-LOOKING STATEMENTS

This annual report ("Annual Report") on Form 10-KSB contains "forward-looking
statements" relating to Medical Staffing Solutions, Inc. ("Medical Staffing" or
the "Company") which represent Medical Staffing's current expectations or
beliefs including, but not limited to, statements concerning Medical Staffing's
operations, performance, financial condition and growth. For this purpose, any
statements contained in this Annual Report on Form 10-KSB that are not
statements of historical fact are forward-looking statements. Without limiting
the generality of the foregoing, words such as "may", "anticipation", "intend",
"could", "estimate", or "continue" or the negative or other comparable
terminology are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainties, such as
credit losses, dependence on management and key personnel, variability of
quarterly results, and the ability of Medical Staffing to continue its growth
strategy and competition, certain of which are beyond Medical Staffing's
control. Should one or more of these risks or uncertainties materialize or
should the underlying assumptions prove incorrect, actual outcomes and results
could differ materially from those indicated in the forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement
is made, and Medical Staffing undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time and it is not
possible for management to predict all of such factors, nor can it assess the
impact of each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

ITEM 1. DESCRIPTION OF BUSINESS

Introduction

Medical Staffing was a developmental stage business and generated no revenue
from our inception in June 2001, until we acquired our wholly-owned subsidiary
TeleScience in September 2003. Under the terms of that certain share exchange
agreement, Medical Staffing acquired one hundred percent (100%) of the stock of
TeleScience in exchange for eighty percent (80%) of the outstanding shares of
Medical Staffing. Control of Medical Staffing was transferred to TeleScience and
the current President and Chief Executive Officer of TeleScience has become the
Chairman, President, Chief Executive Officer and Chief Financial Officer of
Medical Staffing.

Medical Staffing is now a government and non-government contracting firm. We
presently provide these services through two operating divisions, TeleScience
and Nurses Onsite Corporation. Through TeleScience, we provide health related
staffing services to Federal and State government clients. These clients include
the U.S. Military, Veterans Administration, Public Health Service and State
correctional and health and welfare facilities. The facilities include hospitals
and clinics. The services include both auxiliary care and professional care
staffing. These staffing positions include personnel in the dental, medical and
pharmacy areas. Occupational areas provided include nurses, nurse practitioners,
dental assistants, pharmacists and physicians. We are now providing similar
services, primarily nursing services, to non-government care facilities as
evidenced by the completion of our acquisition of Nurses PRN, LLC (hereinafter
referred to as "Nurses Onsite Corp." or "NOC") on July 1, 2005. The following
section provides a detailed description of the NOC business.

On December 27, 2006 the Registrant and two of its domestic subsidiaries filed
voluntary petitions for relief under Chapter 11 of the United States Bankruptcy
Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the
Eastern District of Virginia (Alexandria Division)("Bankruptcy Court"). Case
nos.: 06-11822, 06-11821, and 06-11823. Each of the Registrant and the
subsidiaries remains in possession of its assets and properties and continues to
operate its business as a "debtor-in-possession" under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of the
Bankruptcy Code and Orders of the Bankruptcy Court.

Historically, we have derived in excess of ninety-five percent (95%) of our
revenues and believe that in the immediate future we will continue to derive the
greatest percentage of our total revenues from medical staffing. We have
expanded this effort into the private health care area with the completion of
our acquisition of Nurses PRN, LLC on July 1, 2005 for this purpose. The main
medical staffing services we provide are nursing, dental assistants technicians,
therapists, pharmacists and doctors.

On March 13, 2006 (the "Transaction Date"), the Company entered into an Amended
and Restated Investment Agreement with Cornell Capital Partners, LP ("Cornell
Capital") pursuant to which the Company issued and sold to Cornell Capital, and
Cornell Capital purchased from the Company, Four Million Four Hundred Thousand
Dollars ($4,400,000) of Series A Preferred shares which shall be convertible
into shares of the Company's common stock, of which Three Million Dollars
($3,000,000) was previously funded pursuant to that certain Investment
Agreement, dated as of December 13, 2005, by and between the Company and Cornell
Capital and the remaining One Million Four Hundred Thousand Dollars ($1,400,000)
was funded on the Transaction Date. The Series A Preferred shares shall be
convertible into shares of the Company's common stock, which will be registered
pursuant to that certain Amended and Restated Investor Registration Rights
Agreement dated as of the Transaction Date.

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<PAGE>

The Series A Preferred shares have the designations, preferences and rights set
forth in the Amended and Restated Certificate of Designation as filed with the
Secretary of State for the State of Nevada effective March 13, 2006. The holders
of Series A Preferred shares have the sole right and discretion to elect
conversion at any time and from time to time into such number of fully paid and
non-assessable shares of common stock equal to the quotient of the Liquidation
Amount ($1.00) divided by the Conversion Price (as defined herein below),
subject to certain adjustments as is more fully set forth in the Certificate of
Designation. However, no holder of Series A Preferred shares shall be entitled
to convert the Series A Preferred shares to the extent, but only to the extent,
that such conversion would, upon giving effect to such conversion, cause the
aggregate number of shares of common stock beneficially owned by such holder to
exceed 4.99% of the outstanding shares of common stock following such conversion
(which provision may be waived by such holder by written notice from such holder
to the Company, which notice shall be effective sixty-one (61) days after the
date of such notice). The "Conversion Prices" is equal to ninety-five percent
(95%) of the lowest volume weighted average of the common stock for the thirty
(30) trading days immediately preceding the date of conversion, as quoted by
Bloomberg LP. The holders of Series A Preferred shares shall vote with the
holders of common stock on an as converted basis as of the time a vote is taken
and not as separate classes.

On March 13, 2006, the Company issued to Cornell Capital four (4) warrants to
purchase an aggregate of Eighty Million (80,000,000) shares of the Company's
common stock as follows: (i) a warrant to purchase Thirty Million (30,000,000)
shares of the Company's Common Stock for a period of five (5) years at an
exercise price of $0.005 per share; (ii) a warrant to purchase Thirty Million
(30,000,000) shares of the Company's Common Stock for a period of five (5) years
at an exercise price of $0.01 per share; (iii) a warrant to purchase Ten Million
(10,000,000) shares of the Company's Common Stock for a period of five (5) years
at an exercise price of $0.015 per share; and (iv) a warrant to purchase Ten
Million (10,000,000) shares of the Company's common stock for a period of five
(5) years at an exercise price of $0.02 per share. The shares of the Company's
common stock issuable upon exercise of the Buyer's Warrant shall have
"piggy-back" and demand registration rights and expire five (5) years from the
date of issuance, on or about March 13, 2011.

On March 13, 2006, the Parties entered into a Termination Agreement, pursuant to
which the Parties terminated that certain Escrow Agreement, dated December 13,
2005, by and among the Parties and David Gonzalez, Esq., as escrow agent.

The Nurses Onsite Corp. Business

Nurses Onsite Corp. is a provider of healthcare staffing services focusing on
the per diem segment. Per diem staffing, which has historically comprised the
majority of the temporary healthcare staffing industry, involves the placement
of locally-based healthcare professionals on daily (per diem) shift work, on an
as needed basis. We operate a network of fourteen (14) staffing locations in
eight (8) states, serving over two hundred (200) hospitals. We are headquartered
in Vienna, Virginia and employ over 1,000 nurses and respiratory therapists and
twenty (20) executive, management and administrative staff.

We offer medical staffing services to acute care facilities, rehabilitation
facilities and select other providers of health care throughout the country. The
primary disciplines offered under our current scope of services are Registered
Nurses (RNs), Licensed Practical Nurses (LPNs), referred to in certain states as
Licensed Vocational Nurses (LVNs), Certified Nursing Assistants (CNAs) and
Respiratory Therapists (RTs). Approximately eighty-five percent (85%) of our
revenue is derived from providing RNs to acute-care facilities. Many of our
nurses work per diem shifts, opting to maintain the flexibility of scheduling
and variety of work assignments, while others choose to accept both short- and
long-term contracts, which provide for a more predictable schedule.

Our strategy is to identify key markets throughout the country where our
services are needed, and then focus our resources in obtaining hospital
contracts, while at the same time have our medical staffing coordinators recruit
from among the nurse population. Once the contracts are awarded, we have a group
of readily available nurses that we can place on an immediate basis.

Our CEO has over 30 years experience in technology and medical services, and has
spent considerable time establishing relationships with hospital systems. As a
result of these relationships, we have been invited into many new markets by
hospitals that feel their current staffing providers are not meeting their
needs. We have been awarded many competitive bid contracts in markets where we
do not have an office because of the confidence placed in us by our hospital
clients.

Competitive Advantages

We believe that we have certain competitive advantages that differentiate us in
the health care staffing industry:

o Recognition In The Nurse Staffing Industry. Our management team has operated
in the per diem nurse staffing industry since the early 1990s. In addition, the
current positive impact that we created in the market has led to us being well
recognized among leading hospitals and healthcare facilities, as well as by
registered nurses and other healthcare professionals.

o Strong and Diverse Client Relationships. We provide staffing solutions to a
client base of over two hundred (200) hospitals and other healthcare providers
across eight (8) States.

o Recruiting. We have changed the recruiting process in the per diem staffing
industry by utilizing tele-recruiting that proactively calls nurses in a
specific market we are trying to penetrate. Our recruiters are responsible for
recruiting applicants, recording the applicant's information into our system,
and placing the applicant at a hospital. As part of the screening process, we
conduct in-depth telephone interviews with our applicants and verify references
to determine qualifications.

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<PAGE>

o We use a state-of-the-art web-based contact management system. With this
system, we are able to load the list of registered nurses by city into our
predictive dialer. The dialer automatically starts calling the list of nurses we
loaded. When it reaches a live voice, the recipient has the option of
transferring to one of our recruiters. Our recruiters will then work with the
candidate over the phone in order to collect all the appropriate information and
sign the candidate up under our program. The system also provides the
opportunity to leave a voicemail with details on job openings and contact
information which provides additional opportunities to recruit candidates. New
first quarter 2006 is our enhanced online application process. This feature not
only allows streamlined paperwork processing, but also opportunity for growth
into markets where we do not have a branch presence. Since it is no longer
necessary for a nurse to visit an office to sign up with NOC, this opens our
ability to work with any healthcare facility in the country as we can manage
these employees in a "virtual" environment.

o Temporary Staffing System (TSS). TSS is a web-based application that
schedules, tracks, confirms, pays and bills all orders placed by our clients.
Since the system is completely online, the Company's key management and branches
have real-time access to data. TSS helps our schedulers, through its
sophisticated database of positions, match assignment opportunities with the
experience, skills and geographic preferences of their candidates. Once an
assignment is selected, our account manager reviews the candidate's resume
package before submitting it to the client for review.

o Centralized Payroll and Billing. For payroll contract employees, we bill
clients at an hourly rate and assume all employee costs, including payroll,
withholding taxes, benefits and professional liability insurance and OSHA
requirements, as well as any travel and housing costs and arrangements. All of
our nurses are hourly employees of NOC and receive an agreement that specifies
the hourly rates they will be paid, as well as any benefits they are entitled to
receive from us. We are compensated for the services we provide at a
predetermined rate negotiated with our hospital client. Hours worked by field
employees are recorded by our payroll team into TSS, which then processes our
daily payroll. Billing is generated weekly at our headquarters, with invoices
detailing the activity by shift sent to each hospital. TSS ensures that the
entire payroll in the systems is billed to the client.

We offer our nurses three (3) alternative payment methods:

1. Weekly Check: we can remotely print checks at any of our branches;

2. Weekly Direct Deposit to a pre-defined bank account; or

3. Weekly Deposit to the Nurses Onsite Corp. Cash Card. The Cash Card is a bank
debit card that allows cash to be instantly deposited for subsequent withdrawing
of funds. The Payroll department, using a web-interface to the bank, instantly
completes this process. Many of the Company's nurses use this option for
payroll. This has proven to be a valuable advantage particularly in
geographically large areas as the nurse is saved the time of coming into one of
the offices as well as making a trip to the bank.

o Employee Retention. We believe we offer appealing assignments at prestigious
hospitals, competitive compensation packages, and other valuable benefits.

o Fees Paid Directly by Clients. Our fees are paid directly by our clients
rather than by government or other third party payors. As a result, we have no
direct exposure to Medicare or Medicaid reimbursements.

o Scalable and Efficient Operating Structure. The databases for our per diem
staffing businesses included approximately 4,400 registered nurses and other
healthcare professionals who completed job applications with us. Our size and
centralized staffing structure provide us with operating efficiencies in key
areas such as recruiting, advertising, marketing, training, and insurance
benefits. Our proprietary information systems enable us to manage virtually all
aspects of our travel nurse staffing operations. Our systems are designed to
accommodate significant future growth.

o Quality Assurance. Our quality assurance department is structured to ensure
that our healthcare clients receive professionals that are qualified to meet
their needs. Each new candidate that submits an application with us is screened
before being placed at a healthcare facility. Our internal screening process
requires that each new candidate meets our experience, skills, credentials,
education and licensing standards. Our quality assurance department also
verifies the work history and references of each candidate, and ensures that
each candidate meets the specific requirements of each hospital client
including, among other things, background checks, health records, drug
screening, continuing education and certifications. In addition, our quality
assurance department evaluates our candidates on a continual basis through a
written evaluation process. Our healthcare clients are typically required to
deliver evaluations to us after each professional completes an assignment so
that we have direct feedback from them.


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o Strong Management Team with Extensive Healthcare Staffing and Acquisition
Experience. Our management team, which averages more than ten (10) years of
experience in the staffing industry, has played a key role in the per diem
staffing industry and has consistently demonstrated the ability to successfully
identify and integrate strategic acquisitions.

Nurses Onsite Corp.'s Strategy

NOC's goal is to expand our leadership position within the temporary healthcare
staffing sector in the United States. The key components of our business
strategy include:

1. Expanding Our Network of Qualified Temporary Healthcare Professionals.
Through our recruiting efforts in the United States, we continue to expand our
network of qualified temporary healthcare professionals. We have exhibited
substantial growth in our temporary healthcare professional network over the
past three (3) years primarily through our innovative recruitment model,
referrals from our current and former temporary healthcare professionals, as
well as through advertising and Internet initiatives.

2. Strengthening and Expanding Our Relationships with Hospitals and Healthcare
Facilities. We continue to strengthen and expand our existing relationships with
our hospital and healthcare facility clients, and to develop new relationships.
Hospitals and healthcare facilities are seeking a strong business partner for
outsourcing who can fulfill the quantity and quality of their staffing needs and
help them develop strategies for the most cost-effective staffing methods. In
order to establish deeper and more collaborative partnerships, we have recently
expanded our client services and account management team. This expansion allows
us to better understand and serve the needs of our hospital and healthcare
facility clients. Furthermore, because we possess a network in many states of
temporary nurses, we are well positioned to offer our hospital and healthcare
facility clients effective solutions to meet their staffing needs.

3. Leveraging Our Business Model and Large Hospital and Healthcare Facility
Client Base to Increase Productivity. We seek to increase our productivity
through our proven recruiting strategy, network of temporary healthcare
professionals, established hospital and healthcare facility client
relationships, proprietary information systems, innovative marketing and
recruitment programs, training programs and centralized administrative support
systems. Our recruiting strategy allows a recruiter to take advantage of all of
our placement opportunities. In addition, our information systems and support
personnel permit our recruiters to spend more time focused on temporary
healthcare professionals' needs and placing them on appropriate assignments in
hospitals or healthcare facilities.

4. Providing Innovative Technology. By providing on-line tools to hospital and
healthcare clients, we help them streamline their communications and process
flow for securing staffing services. We utilize our Temporary Staffing System
(TSS), an online resource and tool to help our clients manage outsourced
staffing more efficiently. We are currently introducing a client communication
tool on TSS, which will allow clients to schedule their nurse needs online.

5. Virtual Markets. The travel nurse industry has proven that it is possible to
recruit, screen and hire nurses in remote markets without a physical location in
the market. This method of recruiting utilizes a blend of technology and
traditional methods, such as direct calling and direct mail. We have developed a
proprietary system in order to recruit per diem nurses in the same manner.
Accordingly, we plan to offer our per diem staffing services to hospitals in
markets where we do not have an office. We see this as an untapped opportunity
to expand our services well beyond our existing client base and target the
nation's 8,000 hospitals without the typical capital expenditures and operating
costs necessary to open offices near each facility. Our newly enhanced online
application process has now made this vision a reality. We have proven success
in three test markets and plan to implement a national strategy for business
development.

The Company's Business Strategy and Services

Medical Staffing's strategy is to provide an array of services to the government
market, primarily in the areas of medical staffing and health care information
technology. We intend to focus on the contract opportunities for medical
personnel services and products and we intend to take advantage of other
opportunities we may deem desirable.

Our ability to successfully expand requires significant revenue growth from
increased services performed for existing and new clients, as well as strategic
acquisitions and/or mergers and/or strategic relationships. The realization of
these events depends on many factors, including available financing, successful
strategic sales and marketing efforts and the identification and acquisition of
appropriate businesses. Any difficulties encountered in the expansion of the
Company through successful sales and marketing efforts and/or acquisitions could
have an adverse impact on our revenues and operating results.

The Company's Clients

Prior to our acquisition of Nurses PRN, LLC, our client base constituted
predominantly of Federal and State government agencies with medical staffing
needs. Federal clients include all branches of the U.S. Armed Services, the
Veterans Administration, and the Public Health Service. State clients include
California and Pennsylvania, where the Company places contract employees with
the corrections or health and human services departments. We have experience and
expertise in the successful completion of projects in the medical staffing and
information technology areas, and this is where we are concentrating our
marketing efforts.

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The Company's Marketing and Sales

In the latter part of 2005, the Company's marketing and sales efforts were
distinctly separated between Nurses Onsite Corp. and TeleScience. In 2006, a
more blended approach was used, leveraging the techniques of each subsidiary to
increase overall sales for Medical Staffing.

The Company procures its government business through the formal bid and proposal
process used by government contracting agencies. Typical marketing methods do
not normally apply in government contracting, where contracts are awarded on the
merit of the proposal. In 2006, the objective is to significantly increase the
number of bids that are placed to increase the win rates. In addition, new
pre-bid marketing methods will be applied.

The Company's commercial sector employs primarily relationship marketing and
direct sales presentations to increase its client base. In 2006, the commercial
sector used the Internet more aggressively to increase Nurses Onsite Corp.'s
brand awareness. New and innovative mass recruiting and marketing methods were
applied to increase sales in 2006. Sales and revenue can be increased most
directly by increasing the number of nurses recruited and placed. Due to the
nursing shortage, many outstanding orders are unable to be filled. Increasing
its workforce enables Nurses Onsite Corp. to grow sales and revenue.

Finally, the Company plans to more clearly define its brands: Medical Staffing,
TeleScience and Nurses Onsite Corp., and how they relate to each other. New
websites are planned to link together, and to leverage one another's
information. In addition, the sites will be geared towards improving shareholder
awareness and acting as improved recruiting tools for the Company.

Competition

The market for the medical staffing services that we provide is highly
competitive, includes a large number of competitors, and is subject to change.
This is offset by the increasing demand for medical professionals, especially
nurses, so that we believe there will be continued growth in this area. However,
due to the existing nursing shortage, we may require creative methods to attract
new hires and we have a long-term plan in place for such recruiting.

The main competitors of the Company are Spectrum Healthcare Resources, Sterling
Medical Services and Maxim Healthcare. They are larger and have more resources.
They may have greater name recognition, financial resources, service offerings
and marketing resources than the Company. We provide less than 1% of the entire
market currently.

The market for the information technology services that we provide is also
highly competitive, includes a large number of competitors, and is subject to
rapid change. Our strategy for these operations are to market to existing
customers, to take advantage of existing alliances, to develop niche markets,
and to provide the custom solutions and flexibility that our small size allows.

Our federal supply schedule contract with the Federal Government and our
presence on the vendor lists in California and Pennsylvania provide additional
opportunities for the Company.

Intellectual Property

Our intellectual property primarily consists of methodologies developed for use
in recruiting and staffing and in application development and systems
integration solutions. We do not have any patents and rely upon a combination of
trade secrets and contractual restrictions to establish and protect our
ownership of our proprietary methodologies. We generally enter into
nondisclosure and confidentiality agreements with our employees, partners,
consultants, independent sales agents and clients. As the number of competitors
providing services similar to the services of the Company increases, the
likelihood of similar methodologies being used by competitors increases.

Although our methodologies have never been subject to an infringement claim,
there can be no assurance that third parties will not assert infringement claims
against us in the future, that the assertion of such claims will not result in
litigation, or that we would prevail in such litigation or be able to obtain the
license for the use of any allegedly infringed intellectual property from a
third party on commercially reasonable terms. Further, litigation, regardless of
its outcome, could result in substantial cost to the Company and divert
management's attention from our operations.

Although we are not aware of any basis upon which a third party could assert an
infringement claim, any infringement claim or litigation against us could
materially adversely affect our business, operating results and financial
condition.

Personnel

As of March 31, 2006, the Company had a total of one hundred seventy-eight (178)
employees (full and part-time) working for the Company and located in nine (9)
states and the District of Columbia. In addition, we have over 4400 registered
nurses and other health care professionals in our database for per diem
staffing.

The Company also engaged three (3) consultants. The principal (but not all) job
categories are physicians (0), registered nurses (RNs) (26), licensed vocational
nurses or licenses practical nurses (LPN's) (13), dental assistants and
hygienists (9), certified nursing assistants (18) and management (12). The
principal (but not all) locations are California (31), Louisiana (23), Virginia
(14) and the District of Columbia (14) (the numbers within parentheses in this
paragraph refer to the number of employees in the category or location). The
Company also periodically employs additional consultants and additional
temporary employees.

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As of January 1, 2006, an additional twenty-three (23) employees have been
employed in connection with the acquisition of Nurses PRN, LLC (hereinafter
referred to as "Nurses Onsite Corp.") in fourteen (14) active locations
nationwide. These Nurses Onsite Corp. employees include four (4) employees in
the Atlanta, Georgia locations , five (5) employees in the West Palm Beach,
Florida office, two (2) employees in the Dallas, Texas office, one (1) employee
in the Houston, Texas office, one (1) employee in the Las Vegas, Nevada office,
one (1) employee in the Modesto, California office, one (1) employee in Phoenix,
Arizona, one (1) employee in the New Orleans, Louisiana office, one (1) employee
in the Oakland, California office, two (2) nurse recruiters, two (2) on-call
coordinators and two (2) employees who work in Medical Staffing's Vienna,
Virginia office. However, since the filing of our Chapter 11 bankruptcy, our
NOC's staff size has been reduced by 40% as we have closed our Florida, Phoenix
and Dallas offices to cut costs and reduce losses.

We believe that our future success will depend in part on our continued ability
to attract and retain highly skilled managerial, marketing, and support
personnel. There can be no assurance that we will be able to continue to attract
and retain personnel necessary for the development of its business. We generally
do not have employment contracts with our key employees. However, we do have
confidentiality and non-disclosure agreements with many of our key employees.
None of our employees is subject to a collective bargaining agreement, except
for those employees situated in Louisiana who elected to be represented by the
Service Employees International Union. We believe that our relations with our
employees are good.

Risks Related To Our Business

We are subject to various risks that may materially harm our business, financial
condition and results of operations. An investor should carefully consider the
risks and uncertainties described below and the other information in this filing
before deciding to purchase our common stock. If any of these risks or
uncertainties actually occurs, our business, financial condition or operating
results could be materially harmed. In that case, the trading price of our
common stock could decline.

Medical Staffing Has Historically Lost Money And Losses May Continue In
The Future, Which May Cause Us To Curtail Operations

Since our inception, we have not been profitable and have lost money on both a
cash and non-cash basis. For the year ended December 31, 2006, we incurred
losses of $3,950,196. Our accumulated deficit was $11,767,037 for the year
ended December 31, 2006, and $7,816,841 for the year ended December 31, 2005.
Future losses are likely to occur, as we are dependent on spending money to pay
for our operations. We may not be successful in reaching or maintaining
profitable operations. Accordingly, we may experience liquidity and cash flow
problems. If our losses continue, our ability to operate may be severely
impacted, which could cause Medical Staffing to curtail its operations.

We Have Been The Subject Of A Going Concern Opinion For December 31, 2006 and
December 31, 2005, From Our Independent Auditors, Which Means That We May Not Be
Able To Continue Operations Unless We Can Become Profitable Or Obtain Additional
Funding

Our independent auditors have added an explanatory paragraph to their audit
opinions issued in connection with our financial statements for the years ended
December 31, 2006 and December 31, 2005, which states that the financial
statements raise substantial doubt as to Medical Staffing's ability to continue
as a going concern. Our ability to make operations profitable or obtain
additional funding will determine our ability to continue as a going concern.
Our financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

We Are Subject To A Working Capital Deficit, Which Means That Our Current Assets
On December 31, 2006 Were Not Sufficient To Satisfy Our Current Liabilities And,
Therefore, Our Ability To Continue Operations Is At Risk

We had a working capital deficit of $6,487,159 at December 31, 2006, which means
that our current liabilities as of that date exceeded our current assets on
December 31, 2006 by $6,487,159. Current assets are assets that are expected to
be converted to cash within one (1) year and, therefore, may be used to pay
current liabilities as they become due. Our working capital deficit means that
our current assets on December 31, 2006, were not sufficient to satisfy all of
our current liabilities on that date. If our ongoing operations do not begin to
provide sufficient profitability to offset the working capital deficit, we may
have to raise capital or debt to fund the deficit or curtail future plans.

Medical Staffing Will Need To Raise Additional Capital Or Debt Funding To
Sustain Operations Which May Not Be Available And Which Could Be Materially
Harmful To Our Business

Unless Medical Staffing can become profitable with the existing sources of funds
we have available, we will require additional capital to sustain operations and
we may need access to additional capital or additional debt financing to grow
our sales. In addition, to the extent that we have a working capital deficit and
cannot offset the deficit from profitable sales we may have to raise capital to
repay the deficit and provide more working capital to permit growth in revenues.
Financing, whether from external sources or related parties, may not be
available if needed or on favorable terms. Our inability to obtain adequate
financing will result in the need to reduce the pace of business operations. Any
of these events could be materially harmful to our business and may result in a
lower stock price.

                                       8
<PAGE>

Trading In Our Common Stock Has Been Temporarily Halted by the Bankruptcy Court

As a result of our initiation of Chapter 11 bankruptcy proceedings, the Federal
Bankruptcy Court has issued a temporary stay for all trading in the equity and
debt of the Company. Pursuant to this order, the Bankruptcy Court has halted all
trading in our common stock until the submission of a plan and its confirmation.
At that point, the Company plans to do everything necessary to reinstitute
trading for its securities on a public market.

In the Future, When Our Stock Begins Trading Again, It May Be Affected By
Limited Trading Volume And May Fluctuate Significantly, Which May Affect
Shareholders' Ability To Sell Shares Of Our Common Stock

There has been a limited public market for our common stock and a more active
trading market for our common stock may not develop. An absence of an active
trading market could adversely affect our shareholders' ability to sell our
common stock in short time periods, or possibly at all. Our common stock has
experienced, and is likely to experience in the future, significant price and
volume fluctuations, which could adversely affect the market price of our common
stock without regard to our operating performance. In addition, we believe that
factors such as quarterly fluctuations in our financial results and changes in
the overall economy or the condition of the financial markets could cause the
price of our common stock to fluctuate substantially. These factors may
negatively impact shareholders' ability to sell shares of Medical Staffing's
common stock.

In the Future, When Our Stock Begins Trading Again, It May Be Affected By Sales
Of Short Sellers, Which May Affect Shareholders' Ability To Sell Shares Of Our
Common Stock

As stated above, our common stock has experienced, and is likely to experience
in the future, significant price and volume fluctuations. These fluctuations
could cause short sellers to enter the market from time to time in the belief
that Medical Staffing will have poor results in the future. The market for our
stock may not be stable or appreciate over time and the sale of our common stock
may negatively impact shareholders' ability to sell shares of Medical Staffing's
common stock.

In addition, the significant downward pressure on the price of the common stock
as Cornell Capital Partners sells material amounts of common stock could further
encourage short sales by third parties. This could place further downward
pressure on the price of our common stock.

Our Common Stock Is Deemed To Be "Penny Stock," Which May Make It More Difficult
For Investors To Sell Their Shares Due To Suitability Requirements

Our common stock is deemed to be "penny stock" as that term is defined in Rule
3a51-1 promulgated under the Securities Exchange Act of 1934, as amended ("the
"Exchange Act"). These requirements may reduce the potential market for our
common stock by reducing the number of potential investors. This may make it
more difficult for investors in our common stock to sell shares to third parties
or to otherwise dispose of them. This could cause our stock price to decline.
Penny stocks are stock:

o With a price of less than $5.00 per share;

o That are not traded on a "recognized" national exchange;

o Whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ
listed stock must still have a price of not less than $5.00 per share); or

o In issuers with net tangible assets less than $2.0 million (if the issuer has
been in continuous operation for at least three (3) years) or $10.0 million (if
in continuous operation for less than three (3) years), or with average revenues
of less than $6.0 million for the last three (3) years.

Broker/dealers dealing in penny stocks are required to provide potential
investors with a document disclosing the risks of penny stocks. Moreover,
broker/dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor.

We Could Fail To Attract Or Retain Key Personnel, Which Could Be Detrimental To
Our Operations

Our success largely depends on the efforts and abilities of our key executive,
Dr. Brajnandan B. Sahay. Dr. Sahay serves as our Chairman of the Board,
President, Chief Executive Officer and Acting Principal Financial Officer. The
loss of the services of Dr. Sahay could materially harm our business because of
the cost and time necessary to replace and train a replacement. Such a loss
would also divert management attention away from operational issues. We do not
presently maintain key-man life insurance policies on Dr. Sahay. We also have
other key employees who manage our operations and if we were to lose their
services, senior management would be required to expend time and energy to
replace and train replacements. To the extent that we are smaller than our
competitors and have fewer resources we may not be able to attract the
sufficient number and quality of staff.

Transfer Agent

The transfer agent for Medical Staffing common stock is Holladay Stock Transfer
Inc. Its address is 2939 North 67th Place, Scottsdale, Arizona, 85251 and its
telephone number is (480) 481-3940.

ITEM 2. DESCRIPTION OF PROPERTIES

Our principal executive office is located at 8150 Leesburg Pike, Suite 1200,
Vienna, Virginia. The space is subleased by Medical Staffing through July 2007.
The space consists of approximately 8,504 square feet. During the calendar year
2006 we paid rent of approximately $115,655.

                                       9
<PAGE>

We also lease a branch office located at 2573 Greenwood Avenue, Morro Bay,
California. We pay a portion of the rent equal to $575 per month. Our annual
rent in 2006 for this branch office was approximately $6,900.

NOC has six (6) staffing locations in six (6) states including Virginia. NOC's
principal corporate office is located at 8150 Leesburg Pike, Suite 1200, Vienna,
Virginia. The rent is approximately $5,000 per month. The annual rent in 2006
was approximately $60,000.

NOC also leases a branch office at the Hammond Center, 1155 Hammond Drive,
Atlanta, Georgia 30328. The rent is approximately $2,053 per month. The annual
rent in 2006 was approximately $24,636.

NOC also leases a branch office at Suite 116, 5373 West Alabama, Houston, Texas,
77056. The monthly base rent is approximately $953 and the annual rent in 2006
was approximately $11,160.

NOC also leases a branch office at Suite C, 4260 Sisk Road, Modesto, California
95356. The monthly rent is approximately $890 and the annual rent in 2006 was
approximately $10,680.

NOC also leases a branch office at 3027 North Causeway Boulevard, Metairie,
Louisiana 70002. The monthly rent was approximately $900 and the annual rent in
2006 was approximately $10,800.

We believe that we can obtain additional facilities required to accommodate our
projected needs without difficulty and at commercially reasonable prices,
although no assurance can be given that it will be able to do so.

ITEM 3. LEGAL PROCEEDINGS

Other than as noted below, Medical Staffing is not currently involved in any
material legal proceedings.

Further, we understand that by virtue of our bankruptcy filing, all cases are
subject to an automatic stay of further proceedings.

In 2003, the Company believed it had settled a claim by the Plaintiff who was a
former officer and investor of TeleScience. In satisfaction of that settlement,
2,655,678 restricted shares of Registrant common stock were delivered to
Plaintiff in November of 2003. The Plaintiff rejected the share tender and
demanded a cash settlement. The Registrant maintains the tender to have been
sufficient and binding. The parties engaged in legal proceedings in November
2003 and the case went forward for a jury trial. On November 16, 2005, the jury
returned a verdict in favor of TeleScience and at that time the Plaintiff moved
the Court to set aside the jury verdict.

On February 16, 2006, the Circuit Court of Fairfax County, Virginia (the "Trial
Court") entered a Final Order in favor of plaintiff Azmat Ali against
TeleScience, a wholly-owned subsidiary of the Company, Dr. Brajnandan B. Sahay
and Mrs. Rupa Sahay (TeleScience, Dr. Sahay and Mrs. Sahay are collectively
referred to herein as the "Defendant-Appellant"), in the matter Azmat Ali v.
TeleScience International, Inc., et al. (At Law No. 218574) as is more fully set
forth in the Company's Current Report on Form 8-K as filed with the SEC on March
6, 2006. This matter came to be heard on December 16, 2005, upon the Plaintiff's
motion to set aside the jury verdict entered in favor of the Defendants on
November 16, 2005, and the Court entered a judgment in favor of the Plaintiff in
the amount of $851,875 with interest at twelve percent (12%) from the date of
October 16, 2003. In response to the Trial Court's ruling, Defendant-Appellant
made a petition for appeal (the "Petition") with the Supreme Court of Virginia
in the City of Richmond (the "Supreme Court"). On September 8, 2006, the Supreme
Court, upon review of the record and consideration of the argument submitted in
support of and in opposition to the granting of an appeal, refused the Petition.
On November 17, 2006 the Virginia Supreme Court denied the Company's petition
for rehearing of its September 8, 2006 ruling denying the Company's appeal in
this case against the plaintiff.

In October 2004, The Roche Group sued the Company for pecuniary loss in
connection with an ex-dividend date of the Company's stock. The courts have
dismissed two (2) of the three (3) counts with prejudice. Plaintiffs are seeking
$125,000 in damages. The parties have agreed to mediation in an attempt to fully
resolve the litigation. The matter was settled for $50,000, and a settlement
agreement was executed by the parties on or about December 6, 2006.

In June 2006, Contemporary Nursing Solutions, Inc. (CNS) filed an amended
complaint/suit which included the Company and its subsidiaries and asked for
injunctive and other relief for hiring a former employee of CNS. The Company is
presently in the discovery phase of the proceeding. The Company believes the
case is without merit and, if necessary, intends to vigorously defend.

In June 2006, Mirza W. Ahmed and Asra Ahmed (together, the "Plaintiff") filed
suit against the Company and the Company's subsidiary Nurses Onsite (together,
the "Defendants") for failure to pay under a note which such note had allegedly
been assigned to Plaintiff by the original beneficiary, Aftab Adamjee
("Adamjee"). Plaintiff is seeking $250,000 plus accrued interest and expenses
including attorney's fees. Nurses Onsite has been advised by the Internal
Revenue Service (IRS) that the original beneficiary was liable to the IRS for an
amount in excess of the note amount and that payment to a third party should not
be made until the IRS deficiency is satisfied. The Company believes the attempt
to assign the note was an attempt to defraud the IRS. On or about July 19, 2006,
Defendants filed an Answer and Affirmative Defenses. Defendants deny the key
allegations of the Complaint and assert that they are not liable to Plaintiffs
for a variety of affirmative defenses including, but not limited to, Plaintiff's
lack of standing to assert the claims raised and that the note was made
fraudulently to avoid Nurses Onsite's restrictions on paying said note.
Plaintiff replied to the affirmative defenses denying the same. The attorneys
are not able to assess the likelihood of success on the merits for these claims
at this stage, but the Company does intend to defend them vigorously.

On January 19, 2007, the Company filed an adversary proceeding under its chapter
11 against Robert Murphy and others seeking enforcement of a repayment provision
in the asset purchase agreement involving Nurses PRN, LLC. The Company may
become involved in litigation, from time to time, in the ordinary course of
business.

On January 24, 2007, the Company filed an adversary proceeding under its chapter
11 against Medical Staff Management, Inc., seeking damages and a permanent
injunction to prevent the misappropriation of Company's intellectual property.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

None.

                                       10
<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER'S MATTERS

Market Information

Medical Staffing's common stock currently trades on the NASD Over-The-Counter
Bulletin Board ("OTC") under the trading symbol "MSSI.OB". Our shares of common
stock trade have traded on the OTC since May 19, 2000. The OTC is a network of
security dealers who buy and sell stock. A computer network that provides
information on current "bids" and "asks", as well as volume information,
connects the dealers.

The following table sets forth the highest and lowest bid prices for the common
stock for each calendar quarter and subsequent interim period since January 1,
2005, as reported by the National Quotation Bureau. It represents inter-dealer
quotations, without retail markup, markdown or commission and may not be
reflective of actual transactions.

                                       BID PRICES
                                   ------------------
                                    HIGH        LOW
                                   ------      ------
2004
First Quarter                       $0.27      $0.12
Second Quarter                      $0.38      $0.08
Third Quarter                       $0.03      $0.02
Fourth Quarter                      $0.10      $0.03

2005
First Quarter                       $0.06      $0.03
Second Quarter                      $0.03      $0.02
Third Quarter                       $0.06      $0.03
Fourth Quarter                      $0.03      $0.02

Medical Staffing presently is authorized to issue 1,500,000,000 shares of common
stock with $0.001 par value. As of December 31, 2006 there were one hundred
fifty-one (151) holders of record of Medical Staffing's common stock and
182,203,773 shares issued and outstanding.

Medical Staffing is authorized to issue 30,000,000 shares of $0.001 par value
preferred stock, of which 4,287,000 shares of Series A Preferred stock are
issued and outstanding as of December 31, 2006. The preferred stock, which is
commonly known as "blank check preferred", may be issued by the Board of with
rights, designations, preferences and other terms, as may be determined by the
Board in their sole discretion, at the time of issuance.

Dividends

Medical Staffing has not declared or paid cash dividends on its common stock
since its inception and does not anticipate paying such dividends in the
foreseeable future. The payment of dividends may be made at the discretion of
the Board and will depend upon, among other factors, Medical Staffing's
operations, its capital requirements, and its overall financial condition.

Recent Sales Of Unregistered Securities

None.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

General

The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and the Notes thereto included herein. The
information contained below includes statements of Medical Staffing's or
management's beliefs, expectations, hopes, goals and plans that, if not
historical, are forward-looking statements subject to certain risks and
uncertainties that could cause actual results to differ materially from those
anticipated in the forward-looking statements. For a discussion on
forward-looking statements, see the information set forth in the Introductory
Note to this Annual Report under the caption "Forward Looking Statements", which
information is incorporated herein by reference.

Business

Medical Staffing is a provider of specialty medical staffing services throughout
the country. We presently provide, through our wholly-owned subsidiary,
TeleScience, health related staffing services to Federal and State government
clients. These clients include the U.S. Military, Veterans Administration,
Public Health Service and State correctional and health and welfare facilities.
The facilities include hospitals and clinics. The services include both
auxiliary care and professional care staffing. These staffing positions include
personnel in the dental, medical and pharmacy areas. Occupational areas provided
include nurses, nurse practitioners, dental assistants, pharmacists and
physicians. Through our wholly-owned subsidiary, Nurses Onsite Corp., we provide
health related staffing services to private for-profit and non-profit acute care
facilities in ten (10) states. These clients include some of the largest
hospital chains in the country as well as small, single location facilities. We
provide Registered Nurses (RN), Licensed Practical Nurses (LPN), various types
of therapists and Certified Nursing Assistants (CAN's). the majority of our
health care workers in the NOC subsidiary are RN's.


                                       11
<PAGE>

The Nurses Onsite Corp. Business

Nurses Onsite Corp. is a provider of per diem nurses to private hospitals.
Nurses Onsite Corp. maintains a listing of nurses having a variety of skills and
who may be called upon to fill appropriate open shift positions at hospitals.
Nurses Onsite Corp. establishes relationships with various hospitals who call
upon Nurses Onsite Corp. to fulfill their needs for nurses due to vacancies
created by vacations, increased patient loads or similar need situations as well
as for extended periods.

Revenues have grown as a result of our acquisition of Nurses Onsite Corp., which
has aggregate revenues greater than Medical Staffing. Nurses Onsite Corp. has
substantially increased the Company's operations in the private healthcare
nursing sector. The acquisition has made a positive contribution and has
provided us an entry vehicle into the commercial nurse staffing arena. Nurses
Onsite Corp. is operating in fourteen (14) staffing locations in eight (8)
states (including Virginia) and has more than 1,000 nurses that it can call upon
to fulfill the needs of over two hundred (200) hospitals it presently services.

We attempt to price our contracts so that we can receive a reasonable profit. In
the competitive market in which we operate we have constraints at both ends of
our contract equation. If we price our services too high we either will not win
the contract or even if we are awarded the contract, since there are often
several successful awardees, our services will not be utilized since they could
be more expensive than the offerings of other successful awardees. At the same
time, if we price our contract too low, we will not have sufficient revenues to
attract the talent we need to provide the services while being profitable under
the contract. Without this talent we cannot achieve revenues with profits.

Going Concern

As reflected in the Company's financial statements for the year ended December
31, 2006, the Company's accumulated deficit of $11,767,037 and its working
capital deficiency of $6,487,159 raise substantial doubt about its ability to
continue as a going concern. The ability of the Company to continue as a going
concern is dependent on the Company's ability to raise additional debt or
capital. The financial statements for year ended December 31, 2006 do not
include any adjustments that might be necessary if the Company is unable to
continue as a going concern.

Critical Accounting Policies And Estimates

Our consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, or GAAP. These
accounting principles require us to make certain estimates, judgments and
assumptions. We believe that the estimates, judgments and assumptions upon which
we rely are reasonably based upon information available to us at the time that
these estimates, judgments and assumptions are made. These estimates, judgments
and assumptions can affect the reported amounts of assets and liabilities as of
the date of the financial statements, as well as the reported amounts of revenue
and expenses during the periods presented. To the extent there are material
differences between these estimates, judgments and assumptions and actual
results, our financial statements will be affected. The significant accounting
policies that we believe are the most critical to aid in fully understanding and
evaluating our reported financial results include the following:

o Revenue recognition;

o Allowance for doubtful accounts; and

o Accounting for income taxes.

In many cases, the accounting treatment of a particular transaction is
specifically dictated by GAAP and does not require management's judgment in its
application. There are also areas in which management's judgment in selecting
among available alternatives would not produce a materially different result.
Our senior management has reviewed these critical accounting policies and
related disclosures. See Notes to Consolidated Financial Statements, which
contain additional information regarding our accounting policies and other
disclosures required by GAAP.

Material Weaknesses in Internal Controls

A material weakness existed as of December 31, 2006, with regard to insufficient
personnel in the accounting and financial reporting function due to the size of
the Company which prevents the ability to employ sufficient resources to have
adequate segregation of duties within the internal control system. This material
weakness affected management's ability to effectively review and analyze
elements of the financial statement closing process and prepare consolidated
financial statements in accordance with U.S. GAAP.


                                       12
<PAGE>

In addition, a material weakness existed as of December 31, 2006, in controls
over closing procedures due to a number of adjustments made at the end of the
three-month period. There were deficiencies in the analysis and reconciliation
of equity accounts, which were indicative of a material weakness in controls
over the accounting and reporting of capital transactions.

In order to remediate this material weakness in our internal control over
financial reporting, management is in the process of designing and implementing
and continuing to enhance controls to aid in the correct preparation, review,
presentation and disclosures of our Consolidated Financial Statements. We are
continuing to monitor, evaluate and test the operating effectiveness of these
controls.

Revenue Recognition

Revenue on time-and-materials contracts is recognized based upon hours incurred
at contract rates plus direct costs. Revenue on fixed-price contracts is
recognized on the percentage-of-completion method based on costs incurred in
relation to total estimated costs. Anticipated losses are recognized as soon as
they become known. Provisions for estimated losses on uncompleted contracts are
made in the period in which such losses are determined.

Allowance For Doubtful Accounts

We determine our allowance by considering a number of factors, including the
length of time trade accounts receivable are past due, our previous loss
history, the customer's current ability to pay its obligation to us, and the
condition of the general economy and the industry as a whole. We make judgments
as to our ability to collect outstanding receivables based on these factors and
provide allowances for these receivables when collections become doubtful.
Provisions are made based on specific review of all significant outstanding
balances.

Accounting For Income Taxes

We account for income taxes in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). Under the
asset and liability method of SFAS No. 109, deferred income taxes are recognized
for the expected future tax consequences of temporary differences between
financial statement carrying amounts, and the tax bases of existing assets and
liabilities using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Any deferred tax asset has been reserved by the Company with an
offsetting valuation allowance adjustment.

Results of Operations For The Fiscal Year Ended December 31, 2006, Compared To
The Fiscal Year Ended December 31, 2005

                                    Revenues

Revenues for the fiscal year ended December 31, 2006 were $18,849,163, an
increase of $6,503,578, as compared to revenues of approximately $12,345,585 for
the fiscal ended December 31, 2005. The increase in revenues in 2006 was
attributable to the acquisition of Nurses Onsite Corp.

                                  Cost of Sales

Cost of sales for the year ended December 31, 2006, was $13,870,189 million, or
seventy-four percent (74%) of revenues, as compared to $8,379,213 or sixty-eight
percent (68%) of revenues, for the year ended December 31, 2005. The percentage
increase in cost of sales for the year ended December 31, 2006 was primarily
attributable to the fact that the margin on the Nurses Onsite Corp. contracts
are lower than those within the TeleScience part of the Company, and a full
year of operations for NOC was recorded in 2006 for the first time.

                                  Gross Profit

Gross profit for the year ended December 31, 2006, was $4,978,974, or twenty-six
percent (26%) of revenues, as compared to gross profit of $3,966,372 or
thirty-two percent (32%) of revenues, for the year ended December 31, 2005.

                               Operating Expenses

Operating expenses for the year ended December 31, 2006, were $8,575,531 or
forty-five percent (45%) of revenues, as compared to $6,207,131 or fifty percent
(50%) of revenues, for the year ended December 31, 2005. The increase in
operating expenses in 2006 was primarily attributable to increased cost of
general administrative expenses.

                             Other Income (Expense)

Other income (expense) for the year ended December 31, 2006, was $(353,639) as
compared to $(147,553) for the year ended December 31, 2005. The increase was
due to higher interest expenses incurred as result of increased sales volume.
Increased sales volume resulted in higher factoring costs, therefore more was
borrowed and a higher interest expense was incurred.


                                       13
<PAGE>

                                    Net Loss

The Company had a net loss of $3,950,196 for the year ended December 31, 2006,
compared to a net loss of $2,388,312 for the year ended December 31, 2005. The
increased loss of $1,561,884 was mainly attributable to settlement of a lawsuit.

Liquidity and Capital Resources

The Company's financial statements have been prepared on a going concern basis
that contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. The Company incurred a net
loss of $3,950,196 and $2,388,312 for the years ended December 31, 2006 and
2005, respectively, and had an accumulated deficit of $11,767,037 for the year
ended December 31, 2006. Management recognizes that they must generate
additional resources to enable them to continue operations. Management is
planning to obtain additional capital principally through the sale of equity
securities. The realization of assets and satisfaction of liabilities in the
normal course of business is dependent upon Medical Staffing obtaining
additional equity capital and ultimately obtaining profitable operations.
However, no assurances can be given that the Company will be successful in these
activities. Should any of these events not occur, the accompanying consolidated
financial statements will be materially affected.

Furthermore, as of December 31, 2006 TeleScience and Nurses Onsite are
delinquent in paying payroll taxes of $375,107 and $1,123,669 approximately
without penalty and interest, respectively. The Company is also deliquent in
paying state taxes of $300,000 approximately as of December 31, 2006. There can
be no assurance that the ultimate liability for these employee payroll costs
will not have a material adverse effect on the Company's financial condition,
result of operations or cash flows.

Cash used in operating activities was $1,581,128 for the year ended December 31,
2006, compared to $3,015,226 for the same period in 2005. Cash used in 2005
would have been higher due to the Nurses OnSite Corp. acquisition which closed
in July 2005.

Cash used in investing activities was $19,800 for the year ended December 31,
2006, compared to cash used by investing activities of $1,680,642 for the year
ended December 31, 2005. This increase was principally due to the acquisition of
Nurses OnSite Corp.

Net cash provided by financing activities was $1,323,842 for the year ended
December 31, 2006, compared to $4,964,018 during the same period in 2005. This
was mainly due to the funding through convertible debentures and the Standby
Equity Distribution Agreement.

Additionally, the Company maintains a small credit line with a bank. There was
no balance outstanding for the year ended December 31, 2005.

On January 1, 2005, Medical Staffing and Dr. Brajnandan B. Sahay entered into a
five (5) year employment agreement. Pursuant to the employment agreement, Dr.
Sahay shall serve as Medical Staffing's President and Chief Executive Officer or
other executive officer of Medical Staffing. Dr. Sahay will receive a salary of
$250,000 per year, four (4) weeks paid vacation, a car allowance and will be
reimbursed for business expenses. Dr. Sahay will receive additional
consideration of 3,000,000 options to purchase common stock of Medical Staffing
for the fiscal year 2005 at an exercise price of $0.06 per share. For each year
after 2005 and during the term of the employment agreement, Dr. Sahay shall be
entitled to receive 3,000,000 options to purchase common stock of Medical
Staffing at an exercise price equal to the average of the closing price of
Medical Staffing's common stock for the ten (10) days immediately preceding
September 30 of the applicable year.

On January 5, 2005, Medical Staffing received $2,000,000 in return for a
promissory note issued to Cornell Capital Partners which was subsequently
amended on June 7, 2005. On April 26, 2005, Medical Staffing received $500,000
in return for a promissory note issued to Cornell Capital Partners which was
amended on June 7, 2005. These promissory notes terminated on September 2, 2005
upon the issuance and sale to Cornell Capital Partners of the Convertible
Debenture as is more fully described below.

                                       14
<PAGE>

On July 1, 2005 we completed the Asset Purchase Agreement, whereby Medical
Staffing, through our wholly-owned subsidiary, NPRN, acquired the business of
Nurses PRN, LLC. As consideration for the purchased assets, Medical Staffing
agreed to issue and deliver 9,500,000 shares of our common stock to Nurses PRN,
LLC to be delivered to the members of Nurses PRN, LLC and 2,500,000 shares to a
creditor. NPRN paid Nurses PRN, LLC $1,600,000 as a cash consideration and
agreed to pay a contingent payment based on NPRN's achievement of certain
financial targets which shall not exceed $500,000. Medical Staffing also assumed
certain assumed liabilities including: (a) a $365,487 note payable issued to Mr.
Jeff Dowling by NPRN; (b) a $250,000 note payable to Mr. Aftab Adamjee by NPRN
and (c) certain general payables as set forth in the Purchase Agreement. We
incurred professional costs associated with the Purchase Agreement to our
lawyers and accountants in an amount equal to approximately $50,000. The
acquisition was funded by a promissory note.

Effective August 10, 2005, the Company issued to Cornell Capital Partners a
common stock purchase warrant (the "August Warrant") in connection with a
commitment for the $50,000,000 Standby Equity Distribution Agreement. The
Company and Cornell Capital Partners simultaneously terminated the August
Warrant upon the Company issuing the December Warrant on December 13, 2005, as
is more fully described herein below.

On September 2, 2005, the Company entered into a Securities Purchase Agreement
with Cornell Capital Partners whereby the Company issued and sold to Cornell
Capital Partners up to $2,113,332 of secured convertible debentures
(collectively, the "Convertible Debenture") which were convertible into shares
of the Company's common stock. The Convertible Debenture was fully paid off upon
entering into the Investment Agreement with Cornell Capital Partners on December
13, 2005.

On December 13, 2005, the Company entered into an Investment Agreement with
Cornell Capital Partners pursuant to which the Company issued and sold to
Cornell Capital Partners and Cornell Capital Partners purchased from the
Company, Three Million Dollars ($3,000,000) of Series A Preferred shares which
shall be convertible into shares of the Company's common stock and which amount
shall solely consist of (a) the surrendering of that certain Convertible
Debenture held by Cornell Capital as of September 2, 2005 equal to $2,184,201
($2,113,332) in principal plus $70,869 in accrued interest) and (b) an
additional cash amount equal to Eight Hundred Fifteen Thousand Seven Hundred
Ninety-Eight Dollars ($815,798), of which Four Hundred Thousand Dollars
($400,000) has been funded as of December 13, 2005 and the remaining Four
Hundred Fifteen Thousand Seven Hundred and Ninety-Eight Dollars ($415,798) has
been funded as of January 27, 2006 pursuant to the Investor Registration Rights
Agreement dated as of December 13, 2005.

The Series A Preferred shares have the designations, preferences and rights set
forth in the Certificate of Designation as filed with the Secretary of State for
the State of Nevada on December 16, 2005. The holders of Series A Preferred
shares have the sole right and discretion to elect conversion at any time and
from time to time into such number of fully paid and non-assessable shares of
common stock equal to the quotient of $1.00 per share divided by the Conversion
Price (as defined herein below), subject to certain adjustments as is more fully
set forth in the Certificate of Designation. However, no holder of Series A
Preferred shares shall be entitled to convert the Series A Preferred shares to
the extent, but only to the extent, that such conversion would, upon giving
effect to such conversion, cause the aggregate number of shares of common stock
beneficially owned by such holder to exceed 4.99% of the outstanding shares of
common stock following such conversion (which provision may be waived by such
holder by written notice from such holder to the Company, which notice shall be
effective sixty-one (61) days after the date of such notice).

The "Conversion Price" is equal to ninety-five percent (95%) of the lowest
volume weighted average of the common stock for the thirty (30) trading days
immediately preceding the date of conversion, as quoted by Bloomberg LP. At a
recent stock price of $0.025 per share, we would have to issue 126,315,790
shares of common stock if Cornell Capital Partners elected to convert the entire
3,000,000 shares of convertible Series A Preferred stock held by Cornell Capital
Partners pursuant to the Investment Agreement. However, our current Articles of
Incorporation authorize us to issue 300,000,000 shares of common stock. We are
registering 114,000,000 shares of our common stock pursuant to the Investment
Agreement. If we need to issue more than the 114,000,000 shares in order to
satisfy Cornell Capital Partner's election to convert the 3,000,000 shares of
Series A Preferred stock, we will have to obtain shareholder approval to amend
our Articles of Incorporation to increase our authorized common stock and we
will have to file a new registration statement covering any additional shares.

At the option of the holders if there are outstanding Series A Preferred shares
on December 13, 2008, each Series A Preferred share shall convert into shares of
common stock at the Conversion Price then in effect on December 13, 2008. The
holders of Series A Preferred shares shall vote with the holders of common stock
on an as converted basis as of the time a vote is taken and not as separate
classes.

On December 13, 2005, the Company issued to Cornell Capital Partners a common
stock purchase warrant (the "December Warrant") whereby Cornell Capital Partners
is entitled to purchase from the Company, upon exercise of the December Warrant,
Fifteen Million (15,000,000) fully paid and nonassessable shares of our common
stock at an exercise price of $0.03 (or as subsequently adjusted pursuant to the
terms of the December Warrant). The December Warrant has "piggyback"
registration rights and expires five (5) years from the date of issuance, on or
about December 13, 2010. Upon issuing the December Warrant on December 13, 2005
the Company and Cornell Capital Partners simultaneously terminated the August
Warrant.

On March 13, 2006 (the "Transaction Date"), the Company entered into an Amended
and Restated Investment Agreement with Cornell Capital Partners, LP ("Cornell
Capital") pursuant to which the Company issued and sold to Cornell Capital, and
Cornell Capital purchased from the Company, Four Million Four Hundred Thousand
Dollars ($4,400,000) of Series A Preferred shares which shall be convertible
into shares of the Company's common stock, of which Three Million Dollars
($3,000,000) was previously funded pursuant to that certain Investment
Agreement, dated as of December 13, 2005, by and between the Company and Carnell
Capital and the remaining One Million Four Hundred Thousand Dollars ($1,400,000)
was funded on the Transaction Date. The Series A Preferred shares shall be
convertible into shares of the Company's common stock, which will be registered
pursuant to that certain Amended and Restated Investor Registration Rights
Agreement dated as of the Transaction Date.


                                       15
<PAGE>

The Series A Preferred shares have the designations, preferences and rights set
forth in the Amended and Restated Certificate of Designation as filed with the
Secretary of State for the State of Nevada effective March 13, 2006. The holders
of Series A Preferred shares have the sole right and discretion to elect
conversion at any time and from time to time into such number of fully paid and
non-assessable shares of common stock equal to the quotient of the Liquidation
Amount ($1.00) divided by the Conversion Price (as defined herein below),
subject to certain adjustments as is more fully set forth in the Certificate of
Designation. However, no holder of Series A Preferred shares shall be entitled
to convert the Series A Preferred shares to the extent, but only to the extent,
that such conversion would, upon giving effect to such conversion, cause the
aggregate number of shares of common stock beneficially owned by such holder to
exceed 4.99% of the outstanding shares of common stock following such conversion
(which provision may be waived by such holder by written notice from such holder
to the Company, which notice shall be effective sixty-one (61) days after the
date of such notice). The "Conversion Prices" is equal to ninety-five percent
(95%) of the lowest volume weighted average of the common stock for the thirty
(30) trading days immediately preceding the date of conversion, as quoted by
Bloomberg LP. The holders of Series A Preferred shares shall vote with the
holders of common stock on an as converted basis as of the time a vote is taken
and not as separate classes.

On March 13, 2006, the Company issued to Cornell Capital four (4) warrants to
purchase an aggregate of Eighty Million (80,000,000) shares of the Company's
common stock as follows: (i) a warrant to purchase Thirty Million (30,000,000)
shares of the Company's Common Stock for a period of five (5) years at an
exercise price of $0.005 per share; (ii) a warrant to purchase Thirty Million
(30,000,000) shares of the Company's Common Stock for a period of five (5) years
at an exercise price of $0.01 per share; (iii) a warrant to purchase Ten Million
(10,000,000) shares of the Company's Common Stock for a period of five (5) years
at an exercise price of $0.015 per share; and (iv) a warrant to purchase Ten
Million (10,000,000) shares of the Company's common stock for a period of five
(5) years at an exercise price of $0.02 per share. The shares of the Company's
common stock issuable upon exercise of the Buyer's Warrant shall have
"piggy-back" and demand registration rights and expire five (5) years from the
date of issuance, on or about March 13, 2011.

On March 13, 2006, the Parties entered into a Termination Agreement, pursuant to
which the Parties terminated that certain Escrow Agreement, dated December 13,
2005, by and among the Parties and David Gonzalez, Esq., as escrow agent.

From time to time, the Company may evaluate potential acquisitions involving
complementary businesses, content, products or technologies. We currently do not
have any planned acquisitions. Medical Staffing is investigating other potential
acquisitions and co-ventures, and any such future engagements will be subject to
available financing.

Medical Staffing's future capital requirements will depend on many factors, such
as the success of our operations, economic conditions and other factors
including the results of future operations. If Medical Staffing is unable to
raise sufficient funds to meet its long-term capital needs, there is a risk that
Medical Staffing will be required to cease operations.

Plan Of Operations

Medical Staffing (through our wholly-owned subsidiary, Nurses Onsite Corp.)
provides:

o long-term per diem staffing of nurses (RNs,LPNs, CNAs and RTs) to provider
hospitals in Virginia, Maryland, D.C., Florida, Texas, Nevada, Arizona,
Louisiana, Georgia and California.

Medical Staffing (through our wholly-owned subsidiary, TeleScience) provides:

o medical staffing services, and

o information technology ("IT") and telecommunications services.

TeleScience provides two (2) categories of services:

o medical systems ("Medical Systems") and

o technology ("Technology").

The Medical Systems operations specialize in the long-term staffing of medical
personnel, including physicians, nurses, technicians, and dental assistants, for
various federal and state government medical facilities throughout the country.
The Company expanded its operations in 2005 to provide long-term staffing of
nurses (RNs and LPNs) to private hospitals. This expansion was accelerated by
our acquisition of Nurses PRN, LLC, which we completed on July 1, 2005.

                                       16
<PAGE>

The Technology operations specialize in long-term professional consulting and
staffing of experienced and qualified IT personnel in the government and private
sectors. We also provide systems integration and IT services.

In May 2002, the Company was awarded a three (3) year $2.6 million dollar
contract with the U.S. Department of Health and Human Services to provide
nursing staff to the U.S. Public Health Service in support of the National
Hansen's Disease Programs based in Louisiana. This is the second such contract
won by the Company. This contract has been extended through September 2006.

In October 2003, the Company extended their agreement with the California State
Department of Corrections for Contract Nursing Staff. This agreement has an
annual estimated value of $2.5 million dollars.

In September 2004, the Company signed new master contracts with the California
State Department of Corrections for Contract Nursing Staff. These contracts,
each with a multiple vendor award, have estimated ceiling values of $50 million
and $4.11 million, respectively, and are effective for three (3) years starting
October 1, 2004. These contracts allow the Company to compete for this amount of
business.

During 2004 the Company was awarded an extension of contracts for medical
services that the Company holds on a number of U.S. Air Force bases and on which
it has performed during the period ending December 31, 2005.

In July 2005, Medical Staffing through our wholly-owned subsidiary Nurses PRN
Acquisition Corp. (then "NPRN" and now "Nurses Onsite Corp.") completed our
acquisition of all of the assets of Nurses PRN, LLC, a per diem nurse provider
to private hospitals. Nurses Onsite Corp. extends the Company's operations into
the private healthcare nursing sector and will significantly increase the
Company's sales revenue.

In July and August 2005, Nurses Onsite Corp. opened new locations in Virginia
and Arizona, respectively.

The New Orleans location of Nurses Onsite Corp. was completely destroyed during
Hurricane Katrina in August 2005. This location had been contributing annual
revenues of approximately $1.5 million, all of which abruptly ended as a result
of the hurricane. The office was closed from August 2005 through and is expected
to reopen on March 30, 2006 on a part-time basis.

On January 1, 2006, Mr. Robert Murphy was appointed to serve as Chief Operating
Officer of the Company, Dr. L. Carl Jacobsen was appointed to serve as Vice
President - General Counsel and Ms. Reeba Magulick was appointed to serve as
Vice President - Corporate Marketing. Mr. Murphy, who is now subject to a
lawsuit, is no longer with the Company since December 28, 2006. Also, as a
result of reorganization, Dr. Jacobsen and Ms. Magulick are no longer corporate
officers.

Management Strategy

Medical Staffing's management has taken several initiatives to grow and expand
its current businesses of medical and technology services.

Management's Strategic Plan for Future Growth & Expansion

The Management's strategic plan for future growth and expansion is threefold:
(1) expand its medical services into the private sector; (2) enhance
recruitment; and (3) acquire suitable companies. Although the Company is a party
to that certain IDIQ Contract with Commonwealth of Pennsylvania for supplying
homeland security products and equipment, we are not actively pursuing such
business at this time. There have been no sales made pursuant to such IDIQ
Contract.

Expansion of Medical Services into the Private Sector. In January 2004, Medical
Staffing hired a seasoned executive to direct Medical Staffing's expansion of
its medical services into the private health care sector. This expansion will
provide long-term part-time staffing of registered nurses and licensed
professional nurses to private health care facilities in Virginia, Maryland and
Washington, D.C., as well as parts of Pennsylvania. Examples of such facilities
are hospitals, nursing homes, private clinics, and assisted living centers. This
expansion has been accelerated by our acquisition of Nurses PRN, LLC
(hereinafter "Nurses Onsite Corp.") which was completed on July 1, 2005. Over
the next twelve (12) months Nurses Onsite Corp. plans to establish operations in
several additional states and additional locales within the states in which it
operates.

Enhancing Recruitment. The Company is embarking on a long-range plan for
recruiting ancillary and professional-level staff for medical contracts. This
plan is geared toward expanding the business of Medical Staffing's most active
services, the Medical Systems operations. The Medical Systems operations
presently provide long-term medical staffing services for a wide array of
military, federal, and state government health care facilities, such as
hospitals and clinics. Medical Staffing is also moving towards entering into
similar staffing arrangements with its private sector clients. The long-range
recruiting plans will support both of these initiatives. These initiatives arise
from the recognition of the opportunities provided by the well known and chronic
shortage of health care professionals - specially registered nurses in the
United States. Subsequent to our acquisition of Nurses Onsite Corp., the Company
opened a national recruiting office and is also recruiting through the Nurses
Onsite Corp. office.

Overseas Recruiting of Registered Nurses. One of the largest shortages in terms
of vacancies and intractability of recruiting domestic personnel exists in the
nursing profession. This profession, historically dominated by women, is
experiencing nurse shortages that are closely related to the opening of many
alternative career fields to a younger generation of women. This situation is
unlikely to change, leading to the intractability of attracting a large number
of American women into nursing. Medical Staffing perceives an opportunity in
this situation, which can provide business expansion for many years. It is
Medical Staffing's plan to aggressively recruit nurses from suitable countries
overseas over the next few years.


                                       17
<PAGE>

Domestic Recruiting of Health Care Professionals. Medical Staffing has a
constant need for recruiting medical and non-medical professionals for filling
positions created by newly won contracts or for filling vacancies caused by
turnover, terminations, or relocations. Medical Staffing has established a
recruiting division for the recruitment of health care professionals to rectify
such turnover and to meet such employment needs on a regular basis, as well as
its future contract requirements on a proactive basis. The Company also uses
newspaper and internet media extensively for this purpose. NOC's website was
recently enhanced to provide for online applications for jobs open or for future
upcoming positions.

Subsequent Events

On February 22, 2007, the Company which was previously being funded by Systran
Financial Services through factoring of its account receivables, entered into an
agreement to refinance its existing pre-petition and post-petition factoring
indebtedness with AmeriSource, a new factoring company for factoring its
existing and future pre-petition and post-petition account receivables.
AmeriSource provided the company a maximum of $5,000,000 credit limit with
automatic increase as business grows, 92% advance rate on billed invoices and a
fee of 0.043% daily rate for the first 95 days; 0.100% daily rate thereafter.

The Company is partially delinquent in making its first quarter payroll taxes in
the amount of approximately $180,000. The Company has made arrangements with
AmeriSource, its funding company, to eliminate this delinquency as funds are
received from services previously rendered by the Company.

On December 27, 2006 the Registrant and two of its domestic subsidiaries filed
voluntary petitions for relief under Chapter 11 of the United States Bankruptcy
Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the
Eastern District of Virginia (Alexandria Division) ("Bankruptcy Court"). Case
nos.: 06-11822, 06-11821, and 06-11823. Each of the Registrant and each of the
subsidiaries remains in possession of its assets and properties and continues to
operate its business as a "debtor-in-possession" under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of the
Bankruptcy Code and Orders of the Bankruptcy Court.

Recent Accounting Pronouncements


                                       18
<PAGE>

On December 16, 2004, FASB issued Statement of Financial Accounting Standards
No. 153, Exchanges of Non-monetary Assets, an amendment of APB Opinion No. 29,
Accounting for Non-monetary Transactions ("SFAS 153"). This statement amends APB
Opinion 29 to eliminate the exception for non-monetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
non-monetary assets that do not have commercial substance. Under SFAS 153, if a
non-monetary exchange of similar productive assets meets a commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at fair value resulting in recognition of any gain or loss. SFAS 153 is
effective for non-monetary transactions in fiscal periods that begin after June
15, 2005. The Company does not anticipate that the implementation of this
standard will have a material impact on its financial position, results of
operations or cash flows.

In March 2005, the FASB issued Statement of financial Accounting Standards
Interpretation Number 47 ("FIN 47"), Accounting for Conditional Asset Retirement
Obligation." FIN 47 provides clarification regarding the meaning of the term
"conditional asset retirement obligation" as used in SFAS 143, "Accounting for
Asset Retirement Obligations." Fin 47 is effective for the year ended December
31, 2005. The implementation of this standard did not have a material impact on
its financial position, results of operation or cash flows.

In May 2005, the FASB issued FAS 154, "Accounting for Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3."
FAS154 changes the requirements with regard to the accounting for and reporting
a change in an accounting principle. The Provisions of FAS 154 require, unless
impracticable, retrospective application to prior periods presented in financial
statements for all voluntary changes in an accounting principle and changes
required by the adoption of a new accounting pronouncement in the unusual
instance that the new pronouncement does not indicate a specific transition
method. FAS 154 also requires that a change in depreciation, amortization or
depletion method for long-lived, non-financial assets be accounted for as a
change in an accounting estimate, which requires prospective application of new
method. FAS 154 is effective for all changes in an accounting principle made in
fiscal years beginning after December 15, 2005. The Company plans to adopt FAS
154 beginning January 1, 2006. Because FAS 154 is directly dependent upon future
events, the Company cannot determine what effect, if any, the expected adoption
of FAS 154 will have on its financial condition, results of operations or cash
flows.

In February 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting (FAS) No. 155, Accounting for Certain Hybrid
Financial Instruments. FAS No 155 replaces FAS No 133 Accounting for Derivative
Instruments and Hedging Activities, and FAS No. 140 Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities. FAS No. 155
resolves issues in Statement 133 Implementation Issue No. DI, "Application of
Statement 133 to Beneficial Interest in Securitized Financial Assets,", This
statement will be effective for all financial instruments acquired or issued
after the beginning of an entity's fiscal year that begins September 15, 2006.
The Company is currently analyzing whether this new standard will have impact on
its financial position and results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets, an amendment of FASB Statement No. 140." SFAS No. 156 requires
an entity to recognize a servicing asset or liability each time it undertakes an
obligation to service a financial asset by entering into a servicing contract
under a transfer of the servicer's financial assets that meets the requirements
for sale accounting, a transfer of the servicer's financial assets to a
qualified special-purpose entity in a guaranteed mortgage securitization in
which the transferor retains all of the resulting securities and classifies them
as either available-for-sale or trading securities in accordance with SFAS No.
115, "Accounting for Certain Investments in Debt and Equity Securities" and an
acquisition or assumption of an obligation to service a financial asset that
does not relate to financial assets of the servicer or its consolidated
affiliates.

Additionally, SFAS No. 156 requires all separately recognized servicing assets
and servicing liabilities to be initially measured at fair value, permits an
entity to choose either the use of an amortization or fair value method for
subsequent measurements, permits at initial adoption a one-time reclassification
of available-for-sale securities to trading securities by entities with
recognized servicing rights and requires separate presentation of servicing
assets and liabilities subsequently measured at fair value and additional
disclosures for all separately recognized servicing assets and liabilities. SFAS
No. 156 is effective for transactions entered into after the beginning of the
first fiscal year that begins after September 15, 2006. The Company is currently
evaluating the effect the adoption of SFAS No. 156 will have on its financial
position, results of operations and cash flows.

In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157, Fair Value Measurements,("FAS 157"). This Standard defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles and expands disclosures about fair value measurements. FAS
157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007 and interim periods within those fiscal years. The
adoption of FAS 157 is not expected to have a material impact on the Company's
financial position, results of operations or cash flows.

The FASB also issued in September 2006 Statement of Financial Accounting
Standards No. 158, Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans -- an amendment of FASB Statement No. 87, 88, 106 and
132(R), ("FAS 158"). This Standard requires recognition of the funded status of
a benefit plan in the statement of financial position. The Standard also
requires recognition in other comprehensive income certain gains and losses that
arise during the period but are deferred under pension accounting rules, as well
as modifies the timing of reporting and adds certain disclosures. FAS 158
provides recognition and disclosure elements to be effective as of the end of
the fiscal year after December 15, 2006 and measurement elements to be effective
for fiscal years ending after December 15, 2008. The Company has not yet
analyzed the impact FAS 158 will have on its financial condition, results of
operations, cash flows or disclosures.

ITEM 7. FINANCIAL STATEMENTS

The Consolidated Financial Statements of Medical Staffing required by Item
310(a) of Regulation S-B are attached to this Annual Report. Reference is made
to Item 13 below for an index to such Consolidated Financial Statements.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

There were no changes in accountants or any disagreements with our accountants
on accounting and financial disclosures.

ITEM 8A. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized,
accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.

Based upon their evaluation as of the end of the period covered by this report,
the Company's Chief Executive Officer/Chief Financial Officer has concluded
that, the Company's disclosure controls and procedures are not effective to
ensure that information required to be included in the Company's periodic SEC
filings is recorded, processed, summarized and reported within the time periods
specified in the SEC rules and forms.

A material weakness is a significant deficiency or a combination of significant
deficiencies that result in a more than remote likelihood than a material
misstatement of the annual or interim financial statements will not be prevented
or detected.

Bagell, Josephs, Levine and Company, LLC, our independent registered public
accounting firm, has advised management and the Board of Directors that it had
identified the following material weaknesses in our internal controls:

A material weakness exists as of December 31, 2006, with regard to insufficient
personnel in the accounting and financial reporting function due to the size of
the Company which prevents the ability to employ sufficient resources to have
adequate segregation of duties within the internal control system. This material
weakness affects management's ability to effectively review and analyze elements
of the financial statement closing process and prepare consolidated financial
statements in accordance with U.S. GAAP.

In addition, a material weakness exists as of December 31, 2006, in controls
over closing procedures due to a number of adjustments made at the end of the
three-month period. There were deficiencies in the analysis and reconciliation
of equity accounts, which were indicative of a material weakness in controls
over the accounting and reporting of capital transactions.

In order to remediate this material weakness in our internal control over
financial reporting, management is in the process of designing and implementing
and continuing to enhance controls to aid in the correct preparation, review,
presentation and disclosures of our Consolidated Financial Statements. We are
continuing to monitor, evaluate and test the operating effectiveness of these
controls.

Other than indicated above, there were no changes in the Company's internal
control over financial reporting that occurred during the last fiscal quarter
that have materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting.

Limitations on the Effectiveness of Controls

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.


                                       19
<PAGE>

ITEM 8B. OTHER INFORMATION

None.

                                    PART III

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

The Directors and executive officers of Medical Staffing, their age, positions
in Medical Staffing, the dates of their initial election or appointment as
Directors or executive officers, and the expiration of the terms are as follows:

Name of Director/
Executive Officer       Age     Position                Period Served
---------------------   ---     ---------------------   ------------------------
Brajnandan B. Sahay      62     Chairman of the Board   September 25, 2003 to
                                of Directors,           date
                                President, Chief
                                Executive Officer and
                                Interim Principal
                                Financial Officer


Dr. Sahay is not a director of any company that files reports with the SEC, nor
has he been involved in any personal bankruptcy proceedings, criminal
proceedings, any proceeding involving any possibility of enjoining or suspending
Dr. Sahay from engaging in any business, securities or banking activities, and
has not been found to have violated, nor been accused of having violated, any
federal or state securities or commodities laws.

Medical Staffing's Directors are elected at the annual meeting of shareholders
and hold office until their successors are elected. Medical Staffing's officers
are appointed by the Board of Directors (the "Board") and serve at the pleasure
of the Board and are subject to employment agreements, if any, approved and
ratified by the Board.

Medical Staffing does not currently have an audit committee, and the Board
serves this function. Further, the Board does not have a financial expert, as
defined by Regulation S-B Item 401. Medical Staffing has not been able to
attract a financial expert to serve on its Board since the date of the share
exchange transaction due to the lack of necessary capital. Medical Staffing
intends to seek a candidate to serve in this role.

Brajnandan B. Sahay. Dr. Sahay has served as President, Chief Executive Officer,
Director and Interim Principal Financial Officer of Medical Staffing since
September 25, 2003. He earned his doctorate in 1973 in Control Systems, Science,
and Engineering from Washington University (St. Louis, Missouri). Dr. Sahay
founded TeleScience in 1987, which began operations in 1992. Prior to 1992, Dr.
Sahay held various engineering, management and advisory positions with Contel,
IBM Satellite Business Systems, MCI, and MITRE Corporation. Since 1992, he has
been with TeleScience, as chairman and chief executive officer.

Section 16(a) Beneficial Ownership

                              Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended and the rules
there under require Medical Staffing's officers and Directors, and persons who
beneficially own more than ten percent (10%) of a registered class of Medical
Staffing's equity securities, to file reports of ownership and changes in
ownership with the SEC and to furnish Medical Staffing with copies.

Based on its reviews of the copies of the Section 16(a) forms received by it, or
written representations from certain reporting persons, Medical Staffing
believes that, during the last fiscal year, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten percent
(10%) beneficial owners were complied with.

                                 Code Of Ethics

On March 29, 2004, the Board adopted a written Code of Ethics designed to deter
wrongdoing and promote honest and ethical conduct, full, fair and accurate
disclosure, compliance with laws, prompt internal reporting and accountability
to adherence to the Code of Ethics. This Code of Ethics has been filed with the
SEC on April 9, 2004.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth, for the fiscal year ended December 31, 2006,
2005, and 2004, certain information regarding the compensation earned by Medical
Staffing's Chief Executive Officer and each of Medical Staffing's most highly
compensated executive officers whose aggregate annual salary and bonus for
fiscal 2006 exceeds $100,000 with respect to services rendered by such persons
to Medical Staffing and its subsidiaries.

                                       20
<PAGE>

<TABLE>
<CAPTION>

                                                 ANNUAL COMPENSATION                            LONG-TERM COMPENSATION
 -------------------------------  -------------------------------------------------  ----------------------------------------
 NAME AND PRINCIPAL                                                        OTHER      RESTRICTED    UNDERLYING      OTHER
 POSITION                         YEAR       SALARY          BONUS     COMPENSATION  STOCK AWARDS    OPTIONS     COMPENSATION
 -------------------------------  ----  ---------------  ------------  ------------  ------------  ------------  ------------
<S>                               <C>   <C>              <C>            <C>          <C>           <C>            <C>
 Dr. Brajnandan B. Sahay          2006  $    250,000(3)  $         --   $        --    $       --   $        --   $        --
                                  2005  $    250,000(2)            --            --            --            --            --
                                  2004  $    185,836(1)            --            --            --            --            --
 Robert Murphy                    2006  $    117,692(4)         3,048            --            --            --            --
</TABLE>



(1) $28,920 of this amount has been deferred.

(2) $66,561 of this amount has been deferred.

(3) $74,174 of this amount has been deferred.

(4) Mr. Murphy is no longer with the Company.

Option Grants

Medical Staffing has no outstanding options. However, pursuant to Medical
Staffing's employment agreement with Dr. Sahay, Medical Staffing is obligated to
grant 3,000,000 options to purchase common stock of Medical Staffing to Dr.
Sahay. Upon the adoption of a stock option plan, Medical Staffing will issue
these options to Dr. Sahay.

Compensation Of Directors

Medical Staffing did not issue any shares of common stock as compensation to any
Director in 2006.

Employment Agreements

On January 1, 2005, Medical Staffing and Dr. Sahay entered into a five (5)-year
employment agreement. Pursuant to such employment agreement, Dr. Sahay shall
serve as Medical Staffing's President and Chief Executive Officer or other
executive officer of Medical Staffing. Dr. Sahay shall receive $250,000 per
year, four (4) weeks paid vacation, a car allowance and will be reimbursed for
business expenses. Dr. Sahay will receive additional consideration of 3,000,000
options to purchase common stock of Medical Staffing for the fiscal year 2005 at
an exercise price of $0.06 per share. For each year after 2005 and during the
term of the employment agreement, Dr. Sahay shall be entitled to receive
3,000,000 options to purchase common stock of Medical Staffing at an exercise
price equal to the average of the closing price of Medical Staffing's common
stock for the ten (10) days immediately preceding June 30 of the applicable
year.

Nurses PRN Acquisition Corp. (hereinafter "Nurses Onsite Corp.") and Mr. Robert
Murphy entered into a three (3) year executive employment agreement in
connection with the completion of the acquisition by Medical Staffing of Nurses
PRN, LLC on July 1, 2005. Pursuant to the employment agreement, Mr. Murphy shall
serve as President or other executive officer. Mr. Murphy will receive: (a)
$120,000 per year; (b) a bonus equal to five percent (5%) of Nurses Onsite
Corp.'s net income after taxes for each fiscal year Mr. Murphy is employed with
Nurses Onsite Corp.; (c) reimbursement for all reasonable business expenses; (d)
health, life, dental and disability coverage; (e) entitlement to participate in
all incentive, savings and retirement plans, policies and programs; and (f)
fifteen (15) days of paid vacation annually. Mr. Murphy has resigned and is no
longer with the Company since December 28, 2006.

Securities Authorized For Issuance Under Equity Compensation Plan

Medical Staffing adopted a 2004 Stock Plan (the "Stock Plan") in January 2004,
authorizing 4,000,000 shares under the Stock Plan. On each of January 22, 2004
and February 18, 2004, Medical Staffing issued 2,000,000 shares under the Stock
Plan to certain employees and consultants of Medical Staffing. On January 15,
2004, Medical Staffing filed a Form S-8 registering all 4,000,000 shares under
the Plan.

Medical Staffing currently has no outstanding employee option plans. However,
pursuant to Medical Staffing's employment agreement with Dr. Sahay, Medical
Staffing is obligated to grant 3,000,000 options to purchase common stock of
Medical Staffing to Dr. Sahay. Upon the adoption of a stock option plan, Medical
Staffing will issue these options to Dr. Sahay.


                                       21
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The table below sets forth information with respect of the beneficial ownership
as of April 14, 2006 for any person who is known to Medical Staffing to be the
beneficial owner of more than five percent (5%) of Medical Staffing's common
stock.

<TABLE>
<CAPTION>

                                  SECURITY OWNERSHIP CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
        -------------------------------------------------------------------------------------------------------------
                                         Name and address                      Amount and Nature of       Percentage
        Title of Class                 of Beneficial Owner                     Beneficial Ownership      of Class (1)
        --------------  --------------------------------------------------   ------------------------    ------------
<S>                     <C>                                                  <C>                         <C>
        Common          Brajnandan B. Sahay
                        Chairman of the Board of Directors, President
                        Chief Executive Officer and Interim Principal
                        Financial Officer
                        8150 Leesburg Pike, Suite 1200
                        Vienna, Virginia 22182                                             47,362,722           25.99%
</TABLE>

(1)   Applicable percentage of ownership is based on 182,203,773 shares of
      common stock outstanding at April 14, 2007 for each shareholder.
      Beneficial ownership is determined in accordance within the rules of the
      SEC and generally includes voting of investment power with respect to
      securities.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the past two (2) years, Medical Staffing has not entered into a
transaction with a value in excess of $60,000 with a Director, officer, or
beneficial owner of five percent (5%) or more of Medical Staffing's common
stock, except as disclosed in the following paragraphs.

Medical Staffing has outstanding at December 31, 2006, $95,500 of non-interest
bearing note payable to related parties. These amounts have no specific
repayment terms, and were provided to Medical Staffing to cover some of the
costs of completing the merger. These amounts are reflected in the consolidated
balance sheet as current liabilities.

ITEM 13. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K

(a) Documents Filed As Part Of This Report:

See Index to Consolidated Financial Statements attached, which are filed as part
of this Annual Report.

(b) Reports On Form 8-K:

On January 18, 2006, the Company filed a report on Form 8-K describing the
following event: On December 13, 2005 the Company entered into an Investment
Agreement with Cornell Capital Partners, LP pursuant to which the Company issued
and sold to Cornell Capital $3,000,000 of Series A Preferred shares which shall
be convertible into shares of the Company's common stock.

On March 6, 2006, the Company filed a report on Form 8-K announcing that on
February 16, 2006, the Circuit Court of Fairfax County, Virginia entered a Final
Order in favor of plaintiff Azmat Ali against defendant TeleScience
International, Inc., a wholly-owned subsidiary of Medical Staffing Solutions,
Inc. in the matter Azmat Ali v. TeleScience International, Inc., et al.

On March 17, 2006, the Company filed a report on Form 8-K announcing entry into
a material definitive investment agreement with Cornell Capital.

On June 9, 2006, the Company filed a report on Form 8-K correcting certain
statements in the annual report for 2004.

On September 13, 2006, the Company filed a report on Form 8-K announcing that it
had entered into a Letter of Intent to sell substantially all of the assets of a
subsidiary for an aggregate purchase price equal to $2,850,000.

On September 18, 2006, the Company filed a report on Form 8-K announcing that on
September 8, 2006, the Supreme Court, upon review of the record and
consideration of the argument submitted in support of and in opposition to the
granting of an appeal in certain litigation, refused the Petition.

On December 1, 2006, the Company filed a report on Form 8-K announcing
termination of the letter of intent signed September 6, 2006 regarding the sale
of assets.

On January 5, 2007, the Company filed a report on Form 8-K announcing that it
had filed for protection from its creditors under Chapter 11 of the Bankruptcy
Code.

                                       22
<PAGE>

 (c) Exhibits:

<TABLE>
<CAPTION>
    EXHIBIT NO.
    ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                                <C>
    3.1                Articles of Incorporation, as amended              Incorporated  by  reference  to  Exhibit  3(a) to the
                                                                          Company's  Registration  Statement  on  Form  SB-2 as
                                                                          filed with the United States  Securities and Exchange
                                                                          Commission on October 9, 2001

    3.2                Bylaws                                             Incorporated  by  reference  to  Exhibit  3(b) to the
                                                                          Company's  Registration  Statement  on  Form  SB-2 as
                                                                          filed with the United States  Securities and Exchange
                                                                          Commission on October 9, 2001

    3.3                Certificate of Amendment to Articles of            Incorporated   by  reference  to  Exhibit  3  to  the
                       Incorporation                                      Company's  Annual Report on Form 10-KSB as filed with
                                                                          the United States Securities and Exchange  Commission
                                                                          on March 27, 2003
</TABLE>


                                       23
<PAGE>

<TABLE>
<CAPTION>
    EXHIBIT NO.
    ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                                <C>
    3.4                Certificate of Amendment to Articles of            Incorporated   by  reference  to  Exhibit  3  to  the
                       Incorporation                                      Company's  Annual Report on Form 10-KSB as filed with
                                                                          the United States Securities and Exchange  Commission
                                                                          on March 27, 2003

    5.1                Opinion of Burton, Bartlett & Glogovac             Provided herewith

    10.1               Sublease Agreement, dated December 23, 2002, by    Incorporated  by  reference  to  Exhibit  10.1 to the
                       and among InterAmerica Technologies, Inc.,         Company's  Annual Report on Form 10-KSB as filed with
                       Kemron Environmental Services and Telescience      the United States Securities and Exchange  Commission
                       International, Inc.                                on April 9, 2004

    10.2               Promissory Note in the principal amount of         Incorporated  by  reference  to  Exhibit  10.2 to the
                       $875,920 made by the Company in favor of           Company's  Annual Report on Form 10-KSB as filed with
                       Dr. B.B. Sahay                                     the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.3               Memorandum of Understanding, dated March 10,       Incorporated  by  reference  to  Exhibit  10.3 to the
                       2004, by and between Silver Star Technologies,     Company's  Annual Report on Form 10-KSB as filed with
                       Inc.                                               and TeleScience International, Inc. the United States
                                                                          Securities and Exchange Commission on April 9, 2004

    10.4               Memorandum of Understanding, by and between        Incorporated  by  reference  to  Exhibit  10.4 to the
                       Telescience International, Inc. and Chesapeake     Company's  Annual Report on Form 10-KSB as filed with
                       Government Technologies, Inc.                      the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.5               Proposal, dated January 7, 2004, from              Incorporated  by  reference  to  Exhibit  10.5 to the
                       Professional Nursing Resources, Inc. to            Company's  Annual Report on Form 10-KSB as filed with
                       Telescience International, Inc.                    the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.6               Standby Equity Distribution Agreement, dated       Incorporated  by  reference  to  Exhibit  10.6 to the
                       March 11, 2004, by and between Medical Staffing    Company's  Annual Report on Form 10-KSB as filed with
                       Solutions, Inc. and Cornell Capital Partners, LP   the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.7               Registration Rights Agreement, dated March 11,     Incorporated  by  reference  to  Exhibit  10.7 to the
                       2004 between Medical Staffing and Cornell          Company's  Annual Report on Form 10-KSB as filed with
                       Capital Partners, LP                               the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.8               Escrow Agreement, dated March 11, 2004 among       Incorporated  by  reference  to  Exhibit  10.8 to the
                       Medical Staffing, Cornell Capital Partners LP,     Company's  Annual Report on Form 10-KSB as filed with
                       and Butler Gonzalez, LP                            the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.9               Securities Purchase Agreement, dated March 11,     Incorporated  by  reference  to  Exhibit  10.9 to the
                       2004, by and among Medical Staffing Solutions,     Company's  Annual Report on Form 10-KSB as filed with
                       Inc. and the Buyers listed therein                 the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.10              Escrow Agreement, dated March 11, 2004, among      Incorporated  by  reference  to Exhibit  10.10 to the
                       Medical Staffing Solutions, Inc., Butler           Company's  Annual Report on Form 10-KSB as filed with
                       Gonzalez, LP and the Buyers listed therein         the United States Securities and Exchange  Commission
                                                                          on April 9, 2004
</TABLE>


                                       24
<PAGE>

<TABLE>
<CAPTION>
    EXHIBIT NO.
    ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                                <C>
    10.11              $250,000 Convertible Debenture, dated March 11,    Incorporated  by  reference  to Exhibit  10.11 to the
                       2004, issued by Medical Staffing Solutions, Inc.   Company's  Annual Report on Form 10-KSB as filed with
                       to Cornell Capital Partners, LP                    the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.12              Investors Registration Rights Agreement, dated     Incorporated  by  reference  to Exhibit  10.12 to the
                       March 11, 2004, by and between Medical Staffing    Company's  Annual Report on Form 10-KSB as filed with
                       Solutions, Inc. and the Investors listed therein   the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.13              Placement Agent Agreement, dated March 11, 2004,   Incorporated  by  reference  to Exhibit  10.13 to the
                       by and among Medical Staffing Solutions, Inc.,     Company's  Annual Report on Form 10-KSB as filed with
                       Newbridge Securities Corporation and Cornell       the United States Securities and Exchange  Commission
                       Capital Partners, LP                               on April 9, 2004

    10.14              Renewal Agreement, dated February 5, 2004, from    Incorporated  by  reference  to Exhibit  10.14 to the
                       Commonwealth of Pennsylvania to Telescience        Company's  Annual Report on Form 10-KSB as filed with
                       International, Inc. regarding Contract 2550-09     the United States Securities and Exchange  Commission
                       (Personal Protection Equipment PPE)                on April 9, 2004

    10.15              Memorandum of Understanding, dated February 23,    Incorporated  by  reference  to Exhibit  10.15 to the
                       2004, by and between Mobile Healthcare             Company's  Annual Report on Form 10-KSB as filed with
                       Solutions, Inc. and Telescience International,     the United States Securities and Exchange  Commission
                       Inc.                                               on April 9, 2004

    10.16              Master Contract, dated April 1, 2004, by and       Incorporated  by  reference  to Exhibit  10.17 to the
                       between Telescience International, Inc. and        Company's  Annual Report on Form 10-KSB as filed with
                       State of California Department of Corrections      the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    10.17              Memorandum, dated March 26, 2003, regarding        Incorporated by reference to Exhibit 10.20 to the
                       Branch Office Location                             Company's Annual Report on Form 10-KSB as filed with
                                                                          the United States Securities and Exchange Commission
                                                                          on April 9, 2004

    10.18              $1,000,000 Promissory Note, dated June 8, 2004,    Incorporated by reference to Exhibit 10.18 to the
                       issued by Medical Staffing Solutions, Inc. to      Company's Annual Report on Form 10-KSB as filed with
                       Cornell Capital Partners, LP                       the United States Securities and Exchange Commission
                                                                          on March 31, 2005

    10.19              $315,000 Promissory Note, dated October 6, 2004    Incorporated  by  reference  to Exhibit  10.19 to the
                       by Medical Staffing Solutions, Inc. to Cornell     Company's  Annual Report on Form 10-KSB as filed with
                       Capital Partners, LP                               the United States Securities and Exchange  Commission
                                                                          on March 31, 2005

    10.20              Amended and Restated Promissory Note, issued to    Incorporated  by  reference  to Exhibit  10.25 to the
                       Cornell Capital Partners, LP by Medical Staffing   Company's  Amended  Registration  Statement  on  Form
                       Solutions, Inc. on January 5, 2005 and amended     SB-2 as filed with the United States  Securities  and
                       on June 7, 2005                                    Exchange Commission on August 5, 2005

    10.21              Employment Agreement, dated January 1, 2005, by    Incorporated  by  reference  to Exhibit  10.21 to the
                       and between Medical Staffing Solutions, Inc. and   Company's  Annual Report on Form 10-KSB as filed with
                       Dr. Brajnandan B. Sahay                            the United States Securities and Exchange  Commission
                                                                          on March 31, 2005
</TABLE>


                                       25
<PAGE>

<TABLE>
<CAPTION>
    EXHIBIT NO.
    ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                                <C>
    10.22              Contract, dated December 6, 2004, by and between   Incorporated  by  reference  to Exhibit  10.22 to the
                       Telescience International, Inc. and State of       Company's  Annual Report on Form 10-KSB as filed with
                       California Department of Corrections               the United States Securities and Exchange  Commission
                                                                          on March 31, 2005

    10.23              Master Contract, dated December 19, 2004, by and   Incorporated  by  reference  to Exhibit  10.23 to the
                       between Telescience International, Inc. and        Company's  Annual Report on Form 10-KSB as filed with
                       State of California Department of Corrections      the United States Securities and Exchange  Commission
                                                                          on March 31, 2005

    10.24              Consulting Services Contract                       Incorporated  by  reference  to 5.1 to the  Company's
                                                                          Registration  Statement  on Form  SB-2 as filed  with
                                                                          the United States Securities and Exchange  Commission
                                                                          on April 13, 2005

    10.25              Asset   Purchase   Agreement,   effective  as  of  Incorporated  by  reference  to  Exhibit  99.1 to the
                       June 16,  2005,  by and  among  Medical  Staffing  Company's  Amended  Form 8-K as filed with the United
                       Solutions,  Inc.,  Nurses PRN Acquisition  Corp.,  States   Securities   and  Exchange   Commission   on
                       Nurses PRN, LLC and the Members listed therein     July 14, 2005

    10.26              $250,000  Promissory  Note,   effective  June 16,  Incorporated by reference to Exhibit 99.2 to the
                       2005,  by  Nurses  PRN  Acquisition  Corp.,  Inc.  Company's Amended Form 8-K as filed with the United
                       issued to Mr. Aftab Adamjee                        States Securities and Exchange Commission on July
                                                                          14, 2005

    10.27              Executive  Employment  Agreement,  dated June 16,  Incorporated by reference to Exhibit 99.3 to the
                       2005,  by  and  between  Nurses  PRN  Acquisition  Company's Amended Form 8-K as filed with the United
                       Corp. and Mr. Robert Murphy                        States Securities and Exchange Commission on July
                                                                          14, 2005

    10.28              Executive  Employment  Agreement,  dated June 16,  Incorporated by reference to Exhibit 99.4 to the
                       2005,  by  and  between  Nurses  PRN  Acquisition  Company's Amended Form 8-K as filed with the United
                       Corp. and Ms. Linda Romano                         States Securities and Exchange Commission on July
                                                                          14, 2005

    10.29              Release,   dated  June 16,  2005,  by  Mr.  Aftab  Incorporated by reference to Exhibit 99.5 to the
                       Adamjee  releasing all claims against Nurses PRN,  Company's Amended Form 8-K as filed with the United
                       LLC, Mr. Robert Murphy and Ms. Linda Romano        States Securities and Exchange Commission on July
                                                                          14, 2005

    10.30              Release,  dated May 26,  2005,  by Mr. Phil Dodge  Incorporated by reference to Exhibit 99.6 to the
                       releasing all claims against Nurses PRN, LLC       Company's Amended Form 8-K as filed with the United
                                                                          States Securities and Exchange Commission on July
                                                                          14, 2005

    10.31              Release,  dated  June 16,  2005,  by  Mr.  Robert  Incorporated by reference to Exhibit 99.7 to the
                       Murphy  releasing all claims  against Nurses PRN,  Company's Amended Form 8-K as filed with the United
                       LLC                                                States Securities and Exchange Commission on July
                                                                          14, 2005

    10.32              Release,   dated  June 16,  2005,  by  Ms.  Linda  Incorporated by reference to Exhibit 99.8 to the
                       Romano  releasing all claims  against Nurses PRN,  Company's Amended Form 8-K as filed with the United
                       LLC                                                States Securities and Exchange Commission on July
                                                                          14, 2005
</TABLE>


                                       26
<PAGE>

<TABLE>
<CAPTION>
    EXHIBIT NO.
    ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                                <C>
    10.33              Assumption  Agreement,  dated  June 16,  2005, by  Incorporated by reference to Exhibit 99.9 to the
                       and   among   Nurses   PRN,   LLC,   Nurses   PRN  Company's Amended Form 8-K as filed with the United
                       Acquisition Corp. and Mr. Jeffrey T. Dowling       States Securities and Exchange Commission on July
                                                                          14, 2005

    10.34              Pledge  Agreement,  dated  June 16,  2005, by and  Incorporated by reference to Exhibit 99.10 to the
                       between  Mr.  Robert  Murphy  and  Ms.  Linda  J.  Company's Amended Form 8-K as filed with the United
                       Romano as Pledgor and Mr.  Jeffrey T.  Dowling as  States Securities and Exchange Commission on July
                       Pledgee                                            14, 2005

    10.35              Indemnity and Guaranty Agreement,  dated June 16,  Incorporated by reference to Exhibit 99.11 to the
                       2005, by and among Mr. Aftab Adamjee,  Mr. Robert  Company's Amended Form 8-K as filed with the United
                       Murphy and Ms.  Linda Romano as  Indemnitors  and  States Securities and Exchange Commission on July
                       Nurses PRN, LLC                                    14, 2005

    10.36              Guaranty  of Payment,  dated  June 16,  2005,  by  Incorporated by reference to Exhibit 99.12 to the
                       Medical Staffing Solutions,  Inc. with respect to  Company's Amended Form 8-K as filed with the United
                       Mr. Jeffrey T. Dowling                             States Securities and Exchange Commission on July
                                                                          14, 2005

    10.37              Form of Guaranty of Payment,  by Medical Staffing  Incorporated by reference to Exhibit 99.13 to the
                       Solutions,   Inc.   with  respect  to  Mr.  Aftab  Company's Amended Form 8-K as filed with the United
                       Adamjee                                            States Securities and Exchange Commission on July
                                                                          14, 2005

    10.38              Guaranty,  dated  June 16,  2005,  by Mr.  Robert  Incorporated by reference to Exhibit 99.14 to the
                       Murphy  and Ms.  Linda  Romano  with  respect  to  Company's Amended Form 8-K as filed with the United
                       Jeffrey  T.   Dowling  and  the  payment  of  all  States Securities and Exchange Commission on July
                       indebtedness of Nurses PRN, LLC                    14, 2005

    10.39              Bill of  Sale,  undated,  by and  between  Nurses  Incorporated by reference to Exhibit 99.15 to the
                       PRN, LLC and Nurses PRN Acquisition Corp.          Company's Amended Form 8-K as filed with the United
                                                                          States Securities and Exchange Commission on July
                                                                          14, 2005

    10.40              Assignment   and  Assumption   Agreement,   dated  Incorporated by reference to Exhibit 99.16 to the
                       June 16,  2005,  by and between  Nurses PRN,  LLC  Company's Amended Form 8-K as filed with the United
                       and Nurses PRN Acquisition Corp.                   States Securities and Exchange Commission on July
                                                                          14, 2005

    10.41              Joinder,  dated June 10, 2005, by and between Mr.  Incorporated by reference to Exhibit 99.17 to the
                       Aftab Adamjee and Mr. Jeffrey T. Dowling           Company's Amended Form 8-K as filed with the United
                                                                          States Securities and Exchange Commission on July
                                                                          14, 2005

    10.42              Amended and Restated Promissory Note issued to     Incorporated  by  reference  to Exhibit  10.25 to the
                       Cornell Capital Partners, LP by Medical Staffing   Company's  Amended Form SB-2 as filed with the United
                       on April 26, 2005 and amended on June 7, 2005      States  Securities and Exchange  Commission on August
                                                                          5, 2005

    10.43              SYSTRAN Financial Services Corporation Factoring   Incorporated  by  reference  to  Exhibit  99.1 to the
                       Agreement, dated as of June 30, 2005, by and       Company's  Form 8-K as filed with the  United  States
                       between Medical Staffing Solutions, Inc.,          Securities and Exchange Commission on July 14, 2005
                       TeleScience International, Inc., Nurses PRN
                       Acquisition Corp. and SYSTRAN Financial Service
                       Corporation

</TABLE>

                                       27
<PAGE>

<TABLE>
<CAPTION>
    EXHIBIT NO.
    ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                                <C>
    10.44              Form of Addendum to the SYSTRAN Financial          Incorporated  by  reference  to  Exhibit  99.2 to the
                       Services Corporation Factoring Agreement           Company's  Form 8-K as filed with the  United  States
                                                                          Securities and Exchange Commission on July 14, 2005

    10.45              Form of Continuing Guaranty                        Incorporated  by  reference  to  Exhibit  99.3 to the
                                                                          Company's  Form 8-K as filed with the  United  States
                                                                          Securities and Exchange Commission on July 14, 2005

    10.46              Form of Letter to SYSTRAN Credit and Operations    Incorporated  by  reference  to  Exhibit  99.4 to the
                       Departments                                        Company's  Form 8-K as filed with the  United  States
                                                                          Securities and Exchange Commission on July 14, 2005

    10.47              Securities Purchase Agreement, dated September     Incorporated  by  reference  to  Exhibit  99.1 to the
                       2, 2005, by and between Medical Staffing           Company's  Form 8-K as filed with the  United  States
                       Solutions, Inc. and Cornell Capital Partners, LP   Securities and Exchange Commission on October 3, 2005

    10.48              Secured Convertible Debenture, dated September     Incorporated  by  reference  to  Exhibit  99.2 to the
                       2, 2005, issued by Medical Staffing Solutions,     Company's  Form 8-K as filed with the  United  States
                       Inc. to Cornell Capital Partners, LP               Securities and Exchange Commission on October 3, 2005

    10.49              Investor Registration Rights Agreement, dated      Incorporated  by  reference  to  Exhibit  99.3 to the
                       September 2, 2005, by and between Medical          Company's  Form 8-K as filed with the  United  States
                       Staffing Solutions, Inc. and Cornell Capital       Securities and Exchange Commission on October 3, 2005
                       Partners, LP

    10.50              Escrow Agreement, dated September 2, 2005, by      Incorporated  by  reference  to  Exhibit  99.4 to the
                       and between Medical Staffing Solutions, Inc.,      Company's  Form 8-K as filed with the  United  States
                       Cornell Capital Partners, LP and David Gonzalez,   Securities  and  Exchange  Commission  on  October 3,
                       Esq., as Escrow Agent                              2005

    10.51              Security Agreement, dated September 2, 2005, by    Incorporated  by  reference  to  Exhibit  99.5 to the
                       and between Medical Staffing Solutions, Inc. and   Company's  Form 8-K as filed with the  United  States
                       Cornell Capital Partners, LP                       Securities and Exchange Commission on October 3, 2005

    10.52              Irrevocable Transfer Agent Instructions, dated     Incorporated  by  reference  to  Exhibit  99.6 to the
                       September 2, 2005                                  Company's  Form 8-K as filed with the  United  States
                                                                          Securities and Exchange Commission on October 3, 2005

    10.53              Warrant, effective August 10, 2005, issued by      Incorporated  by  reference  to  Exhibit  99.7 to the
                       Medical Staffing Solutions, Inc. to Cornell        Company's  Form 8-K as filed with the  United  States
                       Capital Partners, LP                               Securities and Exchange Commission on October 3, 2005

    10.54              Investment Agreement, dated December 13, 2005,     Incorporated by reference to Exhibit 10.1 to the
                       by and between Medical Staffing Solutions, Inc.    Company's Current Report on Form 8-K as filed with
                       and Cornell Capital Partners, LP                   the United States Securities and Exchange Commission
                                                                          on January 18, 2006
</TABLE>


                                       28
<PAGE>
<TABLE>
<CAPTION>

    EXHIBIT NO.
    ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                                <C>
    10.55              Certificate of Designation of Series A Preferred   Incorporated by reference to Exhibit 10.2 to the
                       Shares, as filed with the Secretary of State for   Company's Current Report on Form 8-K as filed with
                       the State of Nevada on December 16, 2005           the United States Securities and Exchange Commission
                                                                          on January 18, 2006

    10.56              Investor Registration Rights Agreement, dated      Incorporated by reference to Exhibit 10.3 to the
                       December 13, 2005, by and between Medical          Company's Current Report on Form 8-K as filed with
                       Staffing Solutions, Inc. and Cornell Capital       the United States Securities and Exchange Commission
                       Partners, LP                                       on January 18, 2006

    10.57              Escrow Agreement, dated December 13, 2005, by      Incorporated by reference to Exhibit 10.4 to the
                       and among Medical Staffing Solutions, Inc.,        Company's Current Report on Form 8-K as filed with
                       Cornell Capital Partners, LP and David Gonzalez,   the United States Securities and Exchange Commission
                       Esq., as Escrow Agent                              on January 18, 2006

    10.58              Irrevocable Transfer Agent Instructions, dated     Incorporated by reference to Exhibit 10.5 to the
                       December 13, 2005, by and among Medical Staffing   Company's Current Report on Form 8-K as filed with
                       Solutions, Inc., David Gonzalez, Esq. and          the United States Securities and Exchange Commission
                       Holladay Stock Transfer, Inc.                      on January 18, 2006

    10.59              Warrant, dated December 13, 2005, issued by        Incorporated by reference to Exhibit 10.6 to the
                       Medical Staffing Solutions, Inc. to Cornell        Company's Current Report on Form 8-K as filed with
                       Capital Partners, LP                               the United States Securities and Exchange Commission
                                                                          on January 18, 2006

    14.1               Code of Ethics                                     Incorporated  by  reference  to  Exhibit  14.1 to the
                                                                          Company's  Annual Report on Form 10-KSB as filed with
                                                                          the United States Securities and Exchange  Commission
                                                                          on April 9, 2004

    23.1               Consent of Bagell, Josephs & Company, L.L.C.       Provided herewith

    31.1               Certification pursuant to 15 U.S.C. Section        Provided herewith
                       7241, as adopted pursuant to Section 302 of the
                       Sarbanes-Oxley Act of 2002

    32.1               Certification pursuant to 18 U.S.C. Section        Provided herewith
                       1350, as adopted pursuant to Section 906 of the
                       Sarbanes-Oxley Act of 2002
</TABLE>


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

(1) Audit Fees. The Company paid Bagell, Josephs, Levine & Company, L.L.C. audit
fees of $20,000 for the audit of fiscal year 2006 and audit fees of $17,000 for
the audit of fiscal year 2005.

(2) Audit - Related Fees. The Company has paid Bagell, Josephs, Levine &
Company, L.L.C. audit related fees of $5,000 in 2006 for quarterly statement
review and other accounting services.

(3) Tax Fees. The Company has paid $3,000 in 2006 for tax services to Bagell,
Josephs, Levine & Company, L.L.C.

(4) All Other Fees. The Company has not paid for any other services to Bagell,
Josephs, Levine & Company, L.L.C.

(5) Audit Committee pre-approval policies and procedures. The Company's sole
director, which acts as the Company's audit committee, approved the engagement
of Bagell, Josephs, Levine & Company, L.L.C.

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, t 6 0
Medical Staffing has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized April 17, 2007.

May 15, 2007 MEDICAL STAFFING SOLUTIONS, INC.


By:   /s/ Brajnandan B. Sahay
-----------------------------
      Brajnandan B. Sahay,
      President, Chief Executive
      Officer, Interim
      Principal Financial
      Officer and Director


                                       29
<PAGE>




                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005




<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2006 AND 2005

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm                    i

Balance Sheets as of December 31, 2006 and 2005                           F-1

Statements of Operations for the Years Ended
  December 31, 2006 and 2005                                              F-2

Statement of Changes in Stockholders' Deficit
  for the Years Ended December 31, 2006 and 2005                          F-3

Statements of Cash Flows for the Years Ended Ended
  December 31, 2006 and 2005                                           F-4 - F-5


Notes to Financial Statements                                         F-6 - F-19

<PAGE>

                    BAGELL, JOSEPHS, LEVINE & COMPANY, L.L.C.
                          Certified Public Accountants
                     200 Haddonfield Berlin Road, Suite 402
                        Gibbsboro, New Jersey 08026-1239
                        (856) 346-2828 Fax (856) 346-2882

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Medical Staffing
Solutions, Inc.

We have audited the accompanying consolidated balance sheets of Medical Staffing
Solutions, Inc. and subsidiaries (the "Company") as of December 31, 2006 and
2005, and the related consolidated statements of operations, changes in
stockholders' deficit, and cash flows for each of the years in the two-year
period ended December 31, 2006. These consolidated financial statements are the
responsibility of management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Medical Staffing
Solutions, Inc. and subsidiaries as of December 31, 2006 and 2005, and the
results of its operations, and cash flows for each of the years in the two-year
period ended December 31, 2006 in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As more fully described in Notes 1, 14 and 18,
as a result of the bankruptcy filing, realization of assets and satisfaction of
liabilities, without substantial adjustments and/or changes in ownership, are
subject to uncertainty and raise substantial doubt about the Company's ability
to continue as a going concern. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of these uncertainties.

As discussed in Note 16 to the financial statements, the accompanying financial
statements have been restated as of December 31, 2005.


/s/ BAGELL, JOSEPHS, LEVINE & COMPANY, L.L.C.
Bagell, Josephs, Levine & Company, L.L.C.
Gibbsboro, NJ 08026

April 13, 2007


           AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (AICPA)
               NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
             PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
                       FLORIDA STATE BOARD OF ACCOUNTANCY


                                       i
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                                      2006           2005
                                                                  ------------    ------------
                                                                                   (restated)
<S>                                                               <C>             <C>
                                     ASSETS

Current Assets:
  Cash and cash equivalents                                       $     19,412    $    296,498
  Accounts receivable, net                                           3,423,236       3,783,725
  Due from related parties                                              11,108          38,845
  Prepaid expenses                                                      53,884          97,927
                                                                  ------------    ------------

    Total Current Assets                                             3,507,640       4,216,995

  Fixed assets, net of depreciation                                     99,678         117,374

  Deposits                                                              48,011          50,000
  Customer lists                                                     1,024,005       1,706,675
                                                                  ------------    ------------

TOTAL ASSETS                                                      $  4,679,334    $  6,091,044
                                                                  ============    ============

                 LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES
Current Liabilities:
  Loan payable - Factoring agent                                  $  2,408,090    $  2,502,780
  Note payable, current portion                                        351,309         439,055
  Accounts payable and accrued expenses                              3,412,263       2,004,984
  Derivative liability                                               3,459,897       2,294,610
  Warrant liability                                                    363,240         293,425
                                                                  ------------    ------------

      Total Current Liabilities                                      9,994,799       7,534,854

Loan payable - officer                                                      --          87,604
Note payable, net of current portion                                        --          99,654
                                                                  ------------    ------------

      Total Liabilities                                              9,994,799       7,722,112
                                                                  ------------    ------------

STOCKHOLDERS' DEFICIT
Preferred Stock, $.001 Par; 30,000,000
  authorized, 4,400,000 designated Series A
  Convertible, 4,287,000 and 3,000,000 issued and
  outstanding at December 31, 2006 and 2005, respectively                2,887           3,000
Common Stock, $.001 Par Value; 1,500,000,000 shares
  authorized, 182,203,773 and 175,253,677 shares issued
  and outstanding at December 31, 2006 and 2005, respectively          182,204         175,254
Additional Paid-in Capital                                           6,266,481       6,423,318
Preferred stock subscription receviable                                     --        (415,799)
Deficit                                                            (11,767,037)     (7,816,841)
                                                                  ------------    ------------

      Total Stockholders' Deficit                                   (5,315,465)     (1,631,068)
                                                                  ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                       $  4,679,334    $  6,091,044
                                                                  ============    ============
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                       F-1
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

                                                     2006              2005
                                                 -------------    -------------
                                                                    (restated)
OPERATING REVENUES
  Revenue                                        $  18,849,163    $  12,345,585

COST OF SALES                                       13,870,189        8,379,213
                                                 -------------    -------------

GROSS PROFIT                                         4,978,974        3,966,372
                                                 -------------    -------------

OPERATING EXPENSES
   Administrative commissions and payroll            4,276,503        3,130,713
   General and administrative expenses               3,578,862        2,231,126
   Depreciation and amortization                       720,166          445,292
   Impairment of customer lists                             --          400,000
                                                 -------------    -------------
       Total Operating Expenses                      8,575,531        6,207,131
                                                 -------------    -------------

(LOSS) BEFORE OTHER INCOME (EXPENSES)               (3,596,557)      (2,240,759)
                                                 -------------    -------------

OTHER INCOME (EXPENSES)
Amortization of discount on conversions                     --          (65,625)
Gain on fair value of derivative and warrant           170,788          260,137
Other income                                            99,026               --
Interest income                                             --           13,254
Interest expense                                      (623,453)        (355,319)
                                                 -------------    -------------
Total Other Income (Expenses)                         (353,639)        (147,553)
                                                 -------------    -------------

(LOSS) BEFORE PROVISION FOR INCOME TAXES         $  (3,950,196)   $  (2,388,312)
                                                 -------------    -------------

NET (LOSS) APPLICABLE TO COMMON SHARES           $  (3,950,196)   $  (2,388,312)
                                                 =============    =============

NET (LOSS) PER BASIC AND DILUTED SHARES          $       (0.02)   $       (0.01)
                                                 =============    =============

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                             179,077,595      161,805,913
                                                 =============    =============

               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                       F-2
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                 FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005


<TABLE>
<CAPTION>
                                                                              Additional
                                                                 Additional    Paid-in
                      Preferred Stock         Common Stock          Paid        Capital                   Subscription
Description          Shares     Amount      Shares     Amount   -in Capital    Warrants       Deficit      Receivable     Total
----------------   ---------  ---------  -----------  --------  -----------   ----------   ------------   ------------  ----------
<S>                <C>        <C>        <C>          <C>       <C>           <C>          <C>            <C>           <C>
Balance,
 January 1, 2005          --  $      --  122,509,383  $122,509  $ 4,615,939   $       --   $ (5,428,529)  $         --  $ (690,081)

Shares issued for
 debt cancellation        --         --   44,090,634    44,091    1,383,051           --             --             --   1,427,142

Shares issued in
 acquisition of
 Nurses,  PRN             --         --    9,500,000     9,500      275,500           --             --             --     285,000

Issuance of
 preferred stock
 for cancellation
 of debt           2,184,201      2,184           --        --    2,182,017           --             --             --   2,184,201

Issuance of
 preferred stock
 for cash            400,000        400           --        --      399,600           --             --             --     400,000

Issuance of
 15,000,000
 warrants                 --         --           --        --     (280,286)     280,286             --             --          --

Issuance of
 subscription for
 preferred stock     415,799        416      415,383        --           --           --             --       (415,799)         --

Shares cancelled
 during the year          --         --     (846,340)     (846)          --           --             --             --        (846)

Net loss for
 the year                 --         --           --        --           --           --     (1,827,114)            --  (1,827,114)
                   ---------  ---------  -----------  --------  -----------   ----------   ------------   ------------  ----------
Balance,
 December 31, 2005
 as previously
 reported          3,000,000      3,000  175,253,677   175,254    8,991,204      280,286     (7,255,643)      (415,799)  1,778,302

Adjustment
 applicable to
 the year ended
 December 31, 2005
 (note 16)                --         --           --        --   (2,567,886)    (280,286)      (561,198)            --  (3,409,370)

                   ---------  ---------  -----------  --------  -----------   ----------   ------------   ------------  ----------
Balance,
 December 31, 2005
 as restated       3,000,000      3,000  175,253,677   175,254    6,423,318           --     (7,816,841)      (415,799) (1,631,068)

Issuance of
 preferred stock
 for cash          1,400,000         --           --        --           --           --             --             --          --

Issuance cost
 associated with
 preferred-stock          --         --           --  (150,000)          --           --             --       (150,000)

Cash received for
 subscriptions            --         --           --        --           --           --             --        415,799     415,799

Conversion of
 preferred series
 A to common         (50,000)       (50)   2,304,147     2,304       (2,254)          --             --             --          --

Conversion of
 prederred series
 A to common         (35,000)       (35)   1,215,278     1,215       (1,180)          --             --             --          --

Conversion of
 prederred series
 A to common         (20,000)       (20)   1,652,893     1,653       (1,633)          --             --             --          --

Conversion of
 prederred series
 A to common          (8,000)        (8)   1,777,778     1,778       (1,770)          --             --             --          --

Net (loss) for the
 year ended
 December 31, 2006        --         --           --        --           --           --     (3,950,196)            --  (3,950,196)
                   ---------  ---------  -----------  --------  -----------   ----------   ------------   ------------  ----------
Balance
 December 31, 2006 4,287,000  $   2,887  182,203,773  $182,204  $ 6,266,481   $       --   $(11,767,037)  $         --  (5,315,465)
                   =========  =========  ===========  ========  ===========   ==========   ============   ============  ==========
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                       F-3
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                                 2006             2005
                                                             -------------    -------------
                                                                                (restated)
<S>                                                          <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net (loss)                                                $  (3,950,196)   $  (2,388,312)
                                                             -------------    -------------
   Adjustments to reconcile net (loss) to net cash
     used in operating activities
     Depreciation and amortization                                 720,166          445,292
     Impairment of customer lists                                       --          400,000
     Amortization of discount on conversions                            --           65,625
     Conversion of interest on convertible debentures                   --           61,296
     Warrants issued for compensation                                5,890               --
     (Gain) on fair value of warrants and derivatives             (170,788)        (260,137)
     Allowance for doubtful accounts                               (84,233)          47,591
  Changes in assets and liabilities
     (Increase) decrease in accounts receivable                    444,722       (2,353,479)
     (Increase) decrease in prepaid expenses                        44,043          (44,817)
     (Increase) decrease in deposits                                 1,989            2,643
     Increase in accounts payable and
       and accrued expenses                                      1,407,279        1,009,072
                                                             -------------    -------------
     Total adjustments                                           2,369,068         (626,914)
                                                             -------------    -------------

     Net cash (used in) operating activities                    (1,581,128)      (3,015,226)
                                                             -------------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                                            (19,800)         (80,642)
   Acquisition of business                                              --       (1,600,000)
                                                             -------------    -------------

Net cash (used in) investing activities                            (19,800)      (1,680,642)
                                                             -------------    -------------

CASH FLOWS FROM FINANCING ACTIVITES
    Proceeds from preferred stock issuance                              --          400,000
    Increase (decrease) in proceeds from factoring agent           (94,690)       1,433,196
    Net cash received for warrants and preferred stock
     issued, net                                                 1,250,000               --
    Proceeds from common stock subscribed                          415,799               --
    Proceeds from standby equity distribution agreement                 --        3,184,201
    (Increase) decrease in amounts due related parties              27,737          (28,504)
    Payments on note payable - related party                            --         (105,333)
    (payments) Proceeds from loan payable - officer                (87,604)          22,604
    Proceeds (payments) of notes payable - net                    (187,400)          57,854
                                                             -------------    -------------
       Net cash provided by financing activities                 1,323,842        4,964,018
                                                             -------------    -------------
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                      F-4
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                             2006             2005
                                                         -------------    -------------
                                                                            (restated)
<S>                                                      <C>              <C>
NET INCREASE (DECREASE) IN
  CASH AND CASH EQUIVALENTS                                   (277,086)         268,150

CASH AND CASH EQUIVALENTS -
  BEGINNING OF YEAR                                            296,498           28,348
                                                         -------------    -------------

CASH AND CASH EQUIVALENTS - END OF YEAR                  $      19,412    $     296,498
                                                         =============    =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:

CASH PAID DURING THE YEAR FOR:
  Interest expense                                       $     623,453    $     355,319
                                                         =============    =============

SUPPLEMENTAL DISCLOSURE OF NON-CASH
  INFORMATION:

Warrent subscription                                     $          --    $     415,799
                                                         =============    =============
Debt refinancing for replacement debt                    $          --    $   3,549,201
                                                         =============    =============
Common stock issued for debt cancellation                $          --    $   1,427,142
                                                         =============    =============
Common stock issued in acquisition of subsidiary         $          --    $     285,000
                                                         =============    =============
Warrants issued for compensation                         $       5,890    $          --
                                                         =============    =============
Common stock issued for conversion of interest expense   $          --    $      61,296
                                                         =============    =============
Issuance costs associated with preferred stock and
  warrants                                               $     150,000    $          --
                                                         =============    =============



SUMMARY OF ACQUISITION OF BUSINESS

Net Assets acquired                                      $          --   $     134,633
                                                         -------------    -------------

Assumption of debt                                       $          --    $    (615,488)
Liabilities assumed                                      $          --    $    (162,155)
Cash paid                                                $          --    $  (1,600,000)
Common stock issued                                      $          --    $    (285,000)
                                                         -------------    -------------

     Subtotal                                            $          --    $  (2,662,643)

Customer lists acquired                                  $          --    $   2,528,010
                                                         =============    =============
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                       F-5
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 1 -    ORGANIZATION AND BASIS OF PRESENTATION

            Medical Staffing Solutions, Inc. (the "Company") ("MSSI"), was
            incorporated in the State of Nevada on June 21, 2001. The Company
            had no revenues or operations and was considered a development stage
            company until September 26, 2003 when they entered into a reverse
            merger with TeleScience International, Inc. Prior to the
            transaction, MSSI had 10,499,333 shares of common stock. Upon the
            merger, MSSI cancelled 9,953,333 of these shares and issued
            2,200,000 shares to acquire TeleScience for 100% of the outstanding
            stock of TeleScience.

            For accounting purposes, the transaction was accounted for as a
            reverse acquisition under the purchase method of accounting.
            Accordingly, TeleScience will be treated as the continuing entity
            for accounting purposes, and the consolidated financial statements
            presented herein are those of TeleScience.


                                      F-6
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 1 -    ORGANIZATION AND BASIS OF PRESENTATION
            (CONTINUED)

            On September 29, 2003, the Board of Directors approved a 14-for-1
            stock split, increasing the outstanding shares of the Company to
            41,200,005, including 667 fractional shares (10,005 shares after the
            14:1 split). As of December 31, 2006, the Company had 182,203,773
            shares of common stock issued and outstanding.

            The Company is a provider of medical personnel to state and federal
            government agencies and private hospitals. The Company's business
            plan anticipates diversification into building up a technology
            division, which includes developing a Homeland Security subdivision.
            The Company has expensed some start-up costs relating to this in the
            past year.

            The Company entered into an asset purchase agreement on June 16,
            2005 with Nurses PRN Acquisition Group. Nurses PRN Acquisition Group
            had purchased the assets of Nurses PRN, LLC, a Florida limited
            liability company. The Company closed on this transaction on July 1,
            2005. The purchase price was $1,600,000 in cash, 9,500,000 shares of
            the Company's common stock valued at $285,000, and the assumption of
            liabilities in the amount of $363,406.

            On December 27, 2006 the Registrant and two of its domestic
            subsidiaries filed voluntary petitions for relief under Chapter 11
            of the United States Bankruptcy Code (the "Bankruptcy Code") in the
            United States Bankruptcy Court for the Eastern District of Virginia
            (Alexandria Division)("Bankruptcy Court"). Case nos.: 06-11822,
            06-11821, and 06-11823. Each of the Registrant and each of the
            subsidiaries remains in possession of its assets and properties and
            continues to operate its business as a "debtor-in-possession" under
            the jurisdiction of the Bankruptcy Court and in accordance with the
            applicable provisions of the Bankruptcy Code and Orders of the
            Bankruptcy Court.

NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Principles of Consolidation

            The consolidated financial statements include the accounts of the
            Company and its wholly owned subsidiary. All significant
            inter-company accounts and transactions have been eliminated in
            consolidation.

            Use of Estimates

            The preparation of financial statements in conformity with
            accounting principles generally accepted in the United States of
            America requires management to make estimates and assumptions that
            affect the reported amounts of assets and liabilities and
            disclosures of contingent assets and liabilities at the date of the
            financial statements and the reported amounts of revenues and
            expenses during the reporting period. Actual results could differ
            from those estimates.


                                      F-7
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            (CONTINUED)

            Revenue and Cost Recognition

            Revenue is recognized under the accrual method of accounting when
            the services are rendered and the customer has been billed, rather
            than when cash is collected for the services provided. Specifically,
            the terms of the contracts call for a fixed set fees based on an
            hourly rate per individual.

            Cost is recorded on the accrual basis as well, when the services are
            incurred rather than paid for.

            Cash and Cash Equivalents

            The Company considers all highly liquid debt instruments and other
            short-term investments with an initial maturity of three months or
            less to be cash equivalents.

            The Company maintains cash and cash equivalent balances at several
            financial institutions that are insured by the Federal Deposit
            Insurance Corporation up to $100,000. As of December 31, 2006, and
            2005 the Company had no deposits in excess of the insured limits.

            Fixed Assets

            Fixed assets are stated at cost. Depreciation is computed using the
            straight-line method over the estimated useful life of the assets.

            Furniture and fixtures                        7    Years
            Office equipment                              5    Years

            Income Taxes

            The income tax benefit is computed on the pretax loss based on the
            current tax law. Deferred income taxes are recognized for the tax
            consequences in future years of differences between the tax basis of
            assets and liabilities and their financial reporting amounts at each
            year-end based on enacted tax laws and statutory tax rates.


                                      F-8
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            (CONTINUED)

            Advertising

            Costs of advertising and marketing are expensed as incurred.
            Advertising and marketing costs were $54,213 and $24,723 for the
            twelve months ended December 31, 2006 and 2005, respectively.

            Fair Value of Financial Instruments

            The carrying amount reported in the consolidated balance sheet for
            cash and cash equivalents, derivatives, deposits, prepaid expenses,
            accounts payable, and accrued expenses approximate fair value
            because of the immediate or short-term maturity of these financial
            instruments. The carrying amount reported for notes payable
            approximates fair value because, in general, the interest on the
            underlying instruments fluctuates with market rates.

            (Loss) Per Share of Common Stock

            Historical net income (loss) per common share is computed using the
            weighted average number of common shares outstanding. Diluted
            earnings per share (EPS) include additional dilution from common
            stock equivalents, such as stock issuable pursuant to the exercise
            of stock options and warrants. Common stock equivalents are not
            included in the computation of diluted earnings per share when the
            Company reports a loss because to do so would be antidilutive for
            the periods presented.


                                      F-9
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            (CONTINUED)

            (Loss) Per Share of Common Stock (Continued)

            The following is a reconciliation of the computation for basic and
            diluted EPS:

                                                                    Restated
                                                      2006            2005
                                                 -------------    -------------

            Net (Loss)                           $  (3,950,196)   $  (2,388,312)
                                                 =============    =============

            Weighted-average common shares
              outstanding (basic)                  179,077,595      161,805,913

            Weighted-average common stock
              equivalents:
              Stock options and warrants                    --               --
                                                 -------------    -------------

            Weighted-average common shares
              outstanding (diluted)                         --               --
                                                 =============    =============

            Net loss per basic  and diluted
              shares                                     (0.02)           (0.01)
                                                 =============    =============


            Options and warrants outstanding to purchase stock were not included
            in the computation of diluted EPS because inclusion would have been
            anti-dilutive. As of December 31, 2006 there were no options
            outstanding.

            However, there were 95,000,000 freestanding warrants, and
            approximately 114,827,700 common shares available for conversion in
            association with the convertible preferred Series A stock.


                                      F-10
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            (CONTINUED)

            Reclassifications

            Certain amounts for the year ended December 31, 2005 have been
            reclassified to conform to the presentation of the December 31, 2006
            amounts. The reclassifications have no effect on net (loss) for the
            year ended December 31, 2005.

            Recent Accounting Pronouncements

            In February 2006, the FASB issued SFAS No. 155, "Accounting for
            Certain Hybrid Financial Instruments, an amendment of FASB
            Statements No. 133 and 140." SFAS No. 155 resolves issues addressed
            in SFAS No. 133 Implementation Issue No. D1, "Application of
            Statement 133 to Beneficial Interests in Securitized Financial
            Assets," and permits fair value remeasurement for any hybrid
            financial instrument that contains an embedded derivative that
            otherwise would require bifurcation, clarifies which interest-only
            strips and principal-only strips are not subject to the requirements
            of SFAS No. 133, establishes a requirement to evaluate interests in
            securitized financial assets to identify interests that are
            freestanding derivatives or that are hybrid financial instruments
            that contain an embedded derivative requiring bifurcation, clarifies
            that concentrations of credit risk in the form of subordination are
            not embedded derivatives and amends SFAS No. 140 to eliminate the
            prohibition on a qualifying special-purpose entity from holding a
            derivative financial instrument that pertains to a beneficial
            interest other than another derivative financial instrument. SFAS
            No. 155 is effective for all financial instruments acquired or
            issued after the beginning of the first fiscal year that begins
            after September 15, 2006. The adoption of SFAS No. 155 did not have
            a material impact on the Company's financial position, results of
            operations, or cash flows.

            In March 2006, the FASB issued SFAS No. 156, "Accounting for
            Servicing of Financial Assets, an amendment of FASB Statement No.
            140." SFAS No. 156 requires an entity to recognize a servicing asset
            or liability each time it undertakes an obligation to service a
            financial asset by entering into a servicing contract under a
            transfer of the servicer's financial assets that meets the
            requirements for sale accounting, a transfer


                                      F-11
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            (CONTINUED)

            Recent Accounting Pronouncements (Continued)

            of the servicer's financial assets to a qualified special-purpose
            entity in a guaranteed mortgage securitization in which the
            transferor retains all of the resulting securities and classifies
            them as either available-for-sale or trading securities in
            accordance with SFAS No. 115, "Accounting for Certain Investments in
            Debt and Equity Securities" and an acquisition or assumption of an
            obligation to service a financial asset that does not relate to
            financial assets of the servicer or its consolidated affiliates.
            Additionally, SFAS No. 156 requires all separately recognized
            servicing assets and servicing liabilities to be initially measured
            at fair value, permits an entity to choose either the use of an
            amortization or fair value method for subsequent measurements,
            permits at initial adoption a one-time reclassification of
            available-for-sale securities to trading securities by entities with
            recognized servicing rights and requires separate presentation of
            servicing assets and liabilities subsequently measured at fair value
            and additional disclosures for all separately recognized servicing
            assets and liabilities. SFAS No. 156 is effective for transactions
            entered into after the beginning of the first fiscal year that
            begins after September 15, 2006. The adoption of SFAS No. 156 did
            not have a material impact on the Company's financial position,
            results of operations, or cash flows.

            In September 2006, the FASB issued Statement of Financial Accounting
            Standards No. 157, Fair Value Measurements,("FAS 157"). This
            Standard defines fair value, establishes a framework for measuring
            fair value in generally accepted accounting principles and expands
            disclosures about fair value measurements. FAS 157 is effective for
            financial statements issued for fiscal years beginning after
            November 15, 2007 and interim periods within those fiscal years. The
            adoption of FAS 157 is not expected to have a material impact on the
            Company's financial position, results of operations or cash flows.

            The FASB also issued in September 2006 Statement of Financial
            Accounting Standards No. 158, Employers' Accounting for Defined
            Benefit Pension and Other Postretirement Plans -- an amendment of
            FASB Statement No. 87, 88, 106 and 132(R), ("FAS 158") . This
            Standard requires recognition of the funded status of a benefit plan
            in the statement of financial position. The Standard also requires
            recognition in other comprehensive income certain gains and losses
            that arise during the period but are deferred under pension
            accounting rules, as well as modifies the timing of reporting and
            adds certain disclosures. FAS 158 provides recognition and
            disclosure elements to be effective as of the end of the fiscal year
            after December 15, 2006 and measurement elements to be effective for
            fiscal years ending after December 15, 2008. The Company has not yet
            analyzed the impact FAS 158 will have on its financial condition,
            results of operations, cash flows or disclosures.


                                      F-12
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 3 -    ACCOUNTS RECEIVABLE

            The Company's revenues are derived from private hospitals and
            government contracts with various state and federal agencies
            including hospitals, medical facilities and penitentiaries. As such,
            payments for services rendered are based on negotiated terms. The
            Company does provide for an allowance of doubtful accounts and often
            evaluates receivables for collectibility. At December 31, 2006, and
            2005 the Company has $3,423,236 and $3,783,725 due to them for their
            services.

            The accounts receivable are being used as collateral on a line of
            credit the Company has with a factor (See Note 8).

NOTE 4 -    PROPERTY AND EQUIPMENT

            Property and equipment consist of the following at December 31,
            2006, and 2005:

                                                  2006       2005
                                                --------   --------
            Furniture, fixtures and equipment   $299,265   $233,708
            Less:  accumulated depreciation      199,587    116,334
                                                --------   --------
            Net book value                      $ 99,678   $117,374
                                                ========   ========

            Depreciation expense ended December 31, 2006 and 2005 was $37,496
            and $23,957 respectively.

NOTE 5 -    DEPOSITS

            The Company has deposits with various entities for security
            purposes. The balance of these deposits at December 31, 2006 and
            2005 was $48,011 and $50,000 respectively.


                                      F-13
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 5 -    DEPOSITS
            (CONTINUED)

            The Company was required to place into escrow $1,250,000, pending
            adjudication of an appeal (see note 15). The full amount has been
            removed from escrow, and the full amount of the judgement has been
            paid.

NOTE 6 -    CUSTOMER LISTS

            In the acquisition of Nurses, PRN, the Company recorded customer
            lists in the amount of $2,528,010. The Company has performed an
            analysis of the account and has determined that the impairment for
            the amount of $400,000 is warranted due to Hurricane Katrina at
            December 31, 2005. The customer list is being amortized based on
            three years starting July 1, 2005. The amortization expense for the
            years ended  December 31, 2006 and 2005 is $682,670 and $421,335
            respectively.

NOTE 7 -    DUE FROM RELATED PARTIES

            The Company has outstanding at December 31, 2006, $11,108 from
            related parties, primarily in the form of employee advances. These
            amounts have no specific repayment terms. As such, the amounts are
            reflected in the consolidated balance sheet as current assets. See
            Note 11.

NOTE 8 -    LINE OF CREDIT

            In July 2005, the Company entered into a line of credit agreement
            with a factor. The loan, which is due on demand bears interest at
            prime plus 1.00% (9.75% at December 26, 2006). The factor lends up
            to 90% of the billed receivables to the Company to December 26, 2006
            and from December 27 the factor lends up to 85% of the billed
            receivables to the Company, and receives payment directly on the
            outstanding receivables and the remaining balance is remitted to the
            Company. The outstanding balance at December 31, 2006 and 2005 was
            $2,408,090 and $2,502,780 respectively. The balance is reflected net
            of a 10% reserve that the factor has established which is adjusted
            on each funding.

NOTE 9 -    PROVISION FOR INCOME TAXES

            Deferred income taxes will be determined using the liability method
            for the temporary differences between the financial reporting basis
            and income tax basis of the Company's assets and liabilities.
            Deferred income taxes will be measured based on the tax rates
            expected to be in effect when the temporary differences are included
            in the Company's consolidated tax return. Deferred tax assets and
            liabilities are recognized based on anticipated future tax
            consequences attributable to differences between financial statement
            carrying amounts of assets and liabilities and their respective tax
            bases.


                                      F-14
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 9 -    PROVISION FOR INCOME TAXES
            (CONTINUED)

            At December 31, 2006 and 2005, deferred tax assets approximated the
            following:

                                             2006           2005
                                         -----------    -----------
            Deferred tax assets          $ 1,179,260    $ 1,963,000
            Less: valuation allowances    (1,179,260)    (1,963,000)
                                         -----------    -----------
            Net deferred tax assets      $        --    $        --

            At December 31, 2006 and 2005, the Company had accumulated deficits
            in the amounts $11,767,037 and $7,816,841, respectively, available
            to offset future taxable income through 2026. The Company
            established valuation allowances equal to the full amount of the
            deferred tax assets due to the uncertainty of the utilization of the
            operating losses in future periods.

NOTE 10 -   LOAN PAYABLE - OFFICER

            The Company was party to a claim in which an individual was seeking
            damages under an agreement into which the Company entered in 2002.
            The Company eventually settled this claim, and consequently recorded
            a liability for the settled amount of $1,092,156, which included
            attorney's fees. The payout of this settlement was to be over
            forty-two months in semi-monthly installments of $12,500 commencing
            February 2003. The settlement accrued interest at 12% upon any
            default of the agreement. As part of this agreement the individual
            can seek no further damages against the Company.

            The Company paid $216,236 of this amount, and then in November 2003,
            the President of the Company, in a private stock transaction, signed
            over personal shares of common stock of the Company in consideration
            of the remainder of the liability. The Company recorded a loan
            payable to the President for the balance of the unpaid liability,
            $875,920. The Company has since paid down this liability and the
            total outstanding at December 31, 2006 and 2005 is $ 95,500 and
            89,500.


                                      F-15
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 11 -   COMMITMENTS AND CONTINGENCIES

            The Company had established a 401(k) Plan for its employees and
            agreed to match a portion of the contribution. Effective January 1,
            2004, the Company discontinued its matching portion of the
            contribution.

            On January 1, 2005, Medical Staffing and Dr. Brajnandan B. Sahay
            entered into a five (5) year employment agreement. Pursuant to the
            employment agreement, Dr. Sahay shall serve as Medical Staffing's
            President and Chief Executive Officer or other executive officer of
            Medical Staffing. Dr. Sahay will receive a salary of $250,000 per
            year, four (4) weeks paid vacation, a car allowance and will be
            reimbursed for business expenses. Dr. Sahay will receive additional
            consideration of 3,000,000 options to purchase common stock of
            Medical Staffing for the fiscal year 2005 at an exercise price of
            $0.06 per share. For each year after 2005 and during the term of the
            employment agreement, Dr. Sahay shall be entitled to receive
            3,000,000 options to purchase common stock of Medical Staffing at an
            exercise price equal to the average of the closing price of Medical
            Staffing's common stock for the ten (10) days immediately preceding
            September 30 of the applicable year.

            Rent expense was $319,253 and $260,717 for the twelve months ended
            December 31, 2006 and 2005, respectively.

NOTE 12 -   NOTE PAYABLE

            In connection with the acquisition of Nurses PRN on July 1, 2005,
            the Company assumed a note payable with Jeffrey Dowling in the
            amount of $365,488. In addition, the Company assumed a note payable
            with Aftab Adamjee in the amount of $250,000. The IRS has advised
            the Company not to pay Adamjee until an IRS deficiency is satisfied
            The note payable to Jeff Dowling is payable in 26 monthly
            installments with a 9% interest rate. The note payable to Aftabe
            Adamjee is payable in two installments. The balances on these notes
            at December 31, 2006 were $101,309 and $250,000, respectively.

NOTE 13 -   STOCKHOLDERS' EQUITY

            The Company has two classes of stock; a preferred class with a par
            value of $.001 and 30,000,000 shares authorized, and a common class
            with a par value of $.001 and 1,500,000,000 shares authorized.

            The Company has 182,203,773 common shares issued and outstanding
            and, 4,287,000 shares of Series A shares convertible preferred stock
            issued and outstanding as of December 31, 2006.

            On December 13, 2005, the Company issued 3,000,000 shares of Series
            A convertible preferred stock. The stock was issued in three parts;
            the first installment was consummated when the Company issued
            2,184,201 shares in payment of a promissory note held by Cornell
            Capital Partners LP ("Cornell"). The debt was in the amount of
            $2,113,332 plus accrued interest of $70,869. The second installment
            was for 400,000 shares in the amount of $400,000. The remaining
            shares were advanced two days prior


                                      F-16
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 13 -   STOCKHOLDERS' EQUITY
            (CONTINUED)

            to the Company filing a registration statement, which was filed
            January 31, 2006. In addition, the Company extended a warrant to
            Cornell to purchase 15,000,000 shares of common stock at a fixed
            exercise price of $0.03.

            On March 13, 2006, the Company amended its agreement with Cornell to
            increase the number of authorized preferred shares to 4,400,000 (an
            additional 1,400,000 preferred shares) in exchange for $1,400,000,
            from which $150,000 issuance fees were deducted, reducing the net
            cash to the Company to $1,250,000. In addition, the Company issued
            to Cornell four warrants to purchase 80,000,000 shares of the
            Company's common stock as follows: (i) 30,000,000 shares at an
            exercise price of $.005 per share, (ii) 30,000,000 shares at an
            exercise price of $.01 per share, (iii) 10,000,000 shares at an
            exercise price of $.015 per share, and (iv) 10,000,000 shares at an
            exercise price of $.02 per share. The warrants expire five years
            after the date of issuance.

            On January 30, 2006, a convertible series A preferred shareholder
            notified the Company of their intent to convert 50,000 shares of
            preferred stock into common stock, as outlined in the agreement. The
            preferred shares were converted at a price of $.0217, which
            translated into 2,304,147 shares of common stock.

            On May 4, 2006, a convertible series A preferred shareholder
            notified the company of their intent to convert 35,000 shares of
            preferred stock into common stock, as outlined in the agreement. The
            preferred shares were converted at a price of $.0288, which
            translated into 1,215,278 shares of common stock.

            On July 11, 2006 a convertible series A preferred shareholder
            notified the company of their intent to convert 20,000 shares of
            preferred stock into common stock, as outlined in the agreement. The
            preferred shares were converted at a price of $ .0121, which
            translated into 1,652, 893 shares of common stock.


                                      F-17
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 13 -   STOCKHOLDERS' EQUITY
            (CONTINUED)

            On December 7, 2006 a convertible series A preferred shareholder
            notified the company of their intent to convert 8,000 shares of
            preferred stock into common stock, as outlined in the agreement. The
            preferred shares were converted at price of $.0045, which translated
            into 1,777,778 shares of common stock.

NOTE 14 -   GOING CONCERN

            As shown in the accompanying consolidated financial statements, the
            Company incurred substantial net losses for the year ended December
            31, 2006 and 2005. There is no guarantee whether the Company will be
            able to generate enough revenue and/or raise capital to support
            those operations. This raises substantial doubt about the Company's
            ability to continue as a going concern.

            Management is confident that they can improve operations and raise
            the appropriate funds needed through contracts into which the
            Company recently has entered.

            The consolidated financial statements do not include any adjustments
            that might result from the outcome of these uncertainties.


                                      F-18
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 15 -   LITIGATION

            In October 2004, The Roche Group sought action against the Company
            for pecuniary loss in connection with an ex-dividend date of the
            Company's common stock. The courts have dismissed two of the three
            counts with prejudice. Plaintiffs are seeking $125,000 in damages.
            The parties have agreed to mediation in an attempt to fully resolve
            the litigation. The matter was settled for $50,000 and a settlement
            agreement was executed by the parties on or about December 6, 2006.
            This case is subject to an automatic stay of further proceedings.

            In 2003, the Company believed it had settled a claim by the
            Plaintiff who was a former officer and investor of TeleScience. In
            satisfaction of that settlement, 2,655,678 restricted shares of the
            Company's common stock were delivered to Plaintiff in November of
            2003. The Plaintiff rejected the share tender and demanded a cash
            settlement. The Company maintains the tender to have been sufficient
            and binding. The parties engaged in legal proceedings in November
            2003 and the case went forward for a jury trial. On November 16,
            2005, the jury returned a favorable verdict for TeleScience. The
            Plaintiff petitioned the Court to set aside the jury verdict. The
            motion was set for oral argument December 16, 2005. On February 16,
            2006, the Circuit Court of Fairfax County, Virginia entered a final
            order against TeleScience in the amount of $851,875 along with
            interest at 12% accruing since October 16, 2003.

            As a result of the February 16, 2006 decision, the Company placed
            $1,250,000 in escrow with the Fairfax County Circuit Court of
            Appeals. The proceeds were held in escrow until adjudication of the
            matter with the Court of Appeals. The final order in the amount
            $851,875 was recorded as a current liability along with $319,240 in
            accrued interest.

            On September 8, 2006, the Supreme Court of Virginia in the City of
            Richmond, upon review of the record and consideration of the
            argument submitted in support of and in opposition to the granting
            of an appeal, refused the Petition.

            On November 17, 2006 the Virginia Supreme Court denied Company's
            petition for rehearing of its September 8, 2006 ruling denying
            Company's appeal in this case against the plaintiff. The amount paid
            for this case was $1,171, 115.


                                      F-19
<PAGE>

                MEDICAL STAFFING SOLUTIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR YEARS ENDED DECEMBER 31, 2006 AND 2005


NOTE 16 -   RESTATEMENT

            The December 31, 2005 financial statements have been restated. An
            additional $821,335 of expenses have been recorded, including a
            $400,000 impairment on the closing of the New Orleans facility and
            $421,335 amortization of customer lists. Derivative and warrant
            liabilities were recorded and valued at December 31, 2005 in the
            amounts $2,294,610 and $293,425, respectively, and a gain on fair
            value of derivative and warrant in the amount $260,137 was also
            recorded. As a result of these charges , the accumulated deficit
            increased $561,198, from $7,255,643 to $7,816,841; the net loss
            applicable to common shares increased from $1,827,114 to $2,388,312;
            and the net loss per basic and diluted share remained $0.01.

NOTE 17 -   DERIVATIVE AND WARRANT LIABILITIES

            The Company has outstanding 4,287,000 shares of Series A preferred
            stock with conversion rights that contain free-standing warrants and
            embedded derivative features. The shares were issued pursuant to
            investment agreements with Cornell Capital. The Company accounts for
            these derivatives and warrants in accordance with SFAS No. 133,
            "Accounting for Derivative Instruments and Hedging Activities", and
            EITF Issue No. 00-19, "Accounting for Derivative Financial
            Instruments Indexed to, and Potentially Settled in, a Company's Own
            Stock". In accordance with the provisions of SFAS No. 133 and EITF
            Issue No. 00-19, the embedded derivatives and warrants are required
            to be bifurcated from the debt instrument and recorded as a
            liability at fair value on the consolidated balance sheet. At
            inception of this transaction, the fair value of the warrants and
            the embedded derivatives exceeded the proceeds received for the
            preferred stock which resulted in a loss on the transaction. As a
            result, the preferred stock is recorded as $0.

            Changes in the fair value of the derivative and warrant liabilities
            are recorded at each reporting period as a gain (loss) on fair value
            of derivative and warrant, a separate component of the other income
            (expense). At December 31, 2005, the 3,000,000 issued and
            outstanding shares of preferred stock had a derivative liability
            with a fair value of $2,294,610 and a warrant liability with a fair
            value of $293,425. In March 2006 the Company issued 1,400,000 shares
            of preferred stock with an embedded derivative that had a fair value
            of $1,233,812 and 80,000,000 warrants with a fair value of
            $2,246,259, at which time an immediate loss of $2,080,071 was
            recognized in accordance with FASB Statement No. 133 and EITF Issue
            No. 00-19. In September 2006 the Company issued 3,000,000 options as
            compensation to its President and CEO with a fair value of $5,890.
            At December 31, 2006, the 4,400,000 issued and outstanding shares of
            preferred stock with embedded derivatives and warrants, and the
            3,000,000 options had a derivative liability and warrant liability
            of $3,459,897 and $363,240, respectively, resulting in a net gain of
            $170,788 for the year ended December 31, 2006.

NOTE 18 -   BANKRUPTCY

            On December 27, 2006 the Registrant and two of its domestic
            subsidiaries filed voluntary petitions for relief under Chapter 11
            of the United States Bankruptcy Code (the "Bankruptcy Code") in the
            United States Bankruptcy Court for the Eastern District of Virginia
            (Alexandria Division)("Bankruptcy Court"). Case nos.: 06-11822,
            06-11821, and 06-11823. Each of the Registrant and the subsidiaries
            remains in possession of its assets and properties and continues to
            operate its business as a "debtor-in-possession" under the
            jurisdiction of the Bankruptcy Court and in accordance with the
            applicable provisions of the Bankruptcy Code and Orders of the
            Bankruptcy Court.


                                      F-20