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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K/A







|x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------

For the fiscal year ended December 31, 2008



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------

For the transition period from  to

Commission file number 001-31275





VERTICAL HEALTH SOLUTIONS, INC.

(Name of small business issuer in its charter)







|                                                                  |  |                                     
|----------------------------------------------------------------- |  | ------------------------------------
|Florida                                                           |  | 59-3635262                          
|(State of or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                          |  |           
|----------------------------------------- |  | ----------
|855 Dunbar Ave., Ste. B, Oldsmar, Florida |  | 34677     
|(Address of principal executive offices)  |  | (Zip Code)

Issuers telephone number (813) 749-0848





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

Securities registered pursuant to Section 12(g) of
the Exchange Act: Common Stock





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

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

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

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



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

Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a small
reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check One):



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large Accelerated Filer |  |  ̈ |  | Accelerated Filer         |  |  ̈
|                        |  |   | 
|Non-accelerated Filer   |  |  ̈ |  | Smaller reporting company |  | x

The aggregate market value of the voting common stock held by non-affiliates of the Registrant was $48,764 based upon the last reported trade of the stock, which was on March 6, 2009 at $.0.005 per share.

There were 44,474,973 shares of the Registrants $.001 par value common stock outstanding as of December 31, 2008.

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









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Vertical Health Solutions, Inc.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED

DECEMBER 31, 2008

TABLE OF CONTENTS



|                                                                                                                       |  |   
|---------------------------------------------------------------------------------------------------------------------- |  | --
|PART I                                                                                                                 |  |   
|                                                                                                                       | 
|Item 1. Business                                                                                                       |  | 3 
|Item 1A. Risk Factors                                                                                                  |  | 6 
|Item 1B. Unresolved Staff Comments                                                                                     |  | 8 
|Item 2. Description of Property                                                                                        |  | 8 
|Item 3. Legal Proceedings.                                                                                             |  | 8 
|Item 4. Submission of Matters to a Vote of Security Holders.                                                           |  | 9 
|PART II                                                                                                                |  |   
|                                                                                                                       | 
|Item 5. 
Market For Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |  | 9 
|Item 6. Selected Financial Data.                                                                                       |  | 10
|Item 7. 
Managements Discussion and Analysis of Financial Condition and Results of Operations.                        |  | 10
|Item 7A. Quantitative and Qualitative Disclosures About Market Risk.                                                   |  | 11
|Item 8. Financial Statements and Supplementary Data.                                                                   |  | 11
|Item 9. 
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.                         |  | 11
|Item 9A. Controls and Procedures.                                                                                      |  | 11
|Item 9B. Other Information.                                                                                            |  | 12
|PART III                                                                                                               |  |   
|                                                                                                                       | 
|Item 10. Directors, Executive Officers, and Corporate Governance.                                                      |  | 12
|Item 11. Executive Compensation.                                                                                       |  | 14
|Item 
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.              |  | 14
|Item 13. Certain Relationships and Related Transactions, and Director Independence.                                    |  | 15
|Item 14. Principal Accounting Fees and Services.                                                                       |  | 16
|PART IV                                                                                                                |  |   
|                                                                                                                       | 
|Item 15. Exhibits and Financial Statement Schedules.                                                                   |  | 16
|                                                                                                                       | 
|SIGNATURES                                                                                                             |  | 18



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PART I



|Item 1. | DESCRIPTION OF BUSINESS.
|------- | ------------------------

General

In June 2007, Vertical Health Solutions, Inc. completed the sale of its only operating subsidiary, Drug Depot, Inc. The
Company is not actively engaged in any business at the present time and is seeking to develop a new business or secure future acquisitions. Prior to August 2007, the Company, through its wholly-owned subsidiary, operated a Florida retail and
veterinary compounding pharmacy providing specialized compounding pharmaceutical prescription services to veterinarians and their customers in the companion animal sector

Vertical Health Solutions, Inc. was incorporated on March 2000, as a Florida corporation under the name LabelClick.com, Inc. In January 2001, we changed our name to Vertical Health Solutions, Inc. The
Companys executive offices are located at 855 Dunbar Ave., Ste. B, Oldsmar, Florida 34677 and its telephone number is (813) 749-0848. References in this Annual Report on Form 10-KSB refer to Vertical Health Solutions, Inc. and, as
applicable, its subsidiary as the Company or Vertical, unless the context otherwise requires.

Cautionary
Statements for Purposes of The Safe Harbor Provisions of The Private Securities Litigation Reform Act of 1995

The Private Securities Litigation Reform Act of 1995 (the Act) provides a safe harbor for forward-looking statements to encourage companies to provide prospective information, so long as such information
is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the forward-looking statement(s). The Company desires
to take advantage of the safe harbor provisions of the Act.

Except for historical information, the Companys Annual
Report on Form 10-K for the year ended December 31, 2008, the Companys quarterly reports on Form 10-Q, the Companys current reports on Form 8-K, periodic press releases, as well as other public documents and statements, may contain
forward-looking statements within the meaning of the Act.

In addition, representatives of the Company may, from time to time,
participate in speeches and calls with market analysts, conferences with investors and potential investors in the Companys securities, and other meetings and conferences. Some of the information presented in such speeches, calls, meetings and
conferences may be forward-looking within the meaning of the Act.

It is not reasonably possible to itemize all of the many
factors and specific events that could affect the Company and/or the Companys industry as a whole. In some cases, information regarding certain important factors that could cause actual results to differ materially from those projected,
forecasted, estimated, budgeted or otherwise expressed in forward-looking statements made by or on behalf of the Company may appear or be otherwise conveyed together with such statements.

Business  General

The Company, based on proposed business activities, is a blank check company. The U.S. Securities and Exchange Commission (the SEC) defines those companies as any company that is issuing a penny stock, within the
meaning of Section 3(a)(51) of the Exchange Act of 1934, as amended, (the Exchange Act) and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or
companies. Under SEC Rule 12b-2 under the Securities Act of 1933, as amended (the Securities Act), the Company also qualifies as a shell company, because it has no or nominal assets (other than cash) and no or nominal
operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of blank check companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to
develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those
requirements.



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The analysis of new business opportunities has and will be undertaken by or under the
supervision of the officers and directors of the Company. The Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, the Company will
consider the following kinds of factors:

(a) Potential for growth, indicated by new technology, anticipated market expansion
or new products;

(b) Competitive position as compared to other firms of similar size and experience within the industry
segment as well as within the industry as a whole;

(c) Strength and diversity of management, either in place or scheduled for
recruitment;

(d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from
operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;

(e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials;

(f) The extent to which the business opportunity can be advanced;

(g) The accessibility of required management
expertise, personnel, raw materials, services, professional assistance and other required items; and

(h) Other relevant
factors.

In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all
factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of
which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the Companys limited capital available for investigation, the Company may not discover or adequately
evaluate adverse facts about the opportunity to be acquired.

Form of Acquisition

The manner in which the Company participates in an opportunity will depend upon the nature of the opportunity, the respective needs and
desires of the Company and the promoters of the opportunity, and the relative negotiating strength of the Company and such promoters.

It is likely that the Company will acquire its participation in a business opportunity through the issuance of common stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be
noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called tax free reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the Code),
depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other tax free provisions provided
under the Code, all prior stockholders would in such circumstances retain 20% or less of the total issued and outstanding shares. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may
retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who were stockholders of the Company prior to such reorganization.



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The present stockholders of the Company will likely not have control of a majority of the
voting shares of the Company following a reorganization transaction. As part of such a transaction, all or a majority of the Companys directors may resign and new directors may be appointed without any vote by stockholders.

In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by
stockholders. In the case of a statutory merger or consolidation directly involving the Company, it will likely be necessary to call a stockholders meeting and obtain the approval of the holders of a majority of the outstanding shares. The
necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will
seek to structure any such transaction so as not to require stockholder approval.

It is anticipated that the investigation of
specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and
others. If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation would not be recoverable. Furthermore, even if an agreement is reached for the participation in a
specific business opportunity, the failure to consummate that transaction may result in the loss to the Company of the related costs incurred.

Competition

Our primary goal is the acquisition of a target company or business seeking the perceived
advantages of being a publicly held corporation. The Company faces vast competition from other shell companies with the same objectives. The Company is in a highly competitive market for a small number of business opportunities which could reduce
the likelihood of consummating a successful business combination. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be
desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.

Patent and Trademarks

We currently do not own any patents, trademarks or licenses of any kind.

Government Regulations

There are no government approvals necessary to conduct our current business.

Employees

We presently have no employees apart from our management.
Our officers and director are engaged in outside business activities and we anticipate that they will devote to our business very limited time until the acquisition of a successful business opportunity has been identified. We expect no
significant changes in the number of our employees other than such changes, if any, incident to a business combination.



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|Item 1A. | RISK FACTORS.
|-------- | -------------

RISK
FACTORS

Our business is difficult to evaluate because we have no operating history.

As the Company has no operating history or revenue and only minimal assets, there is a risk that we will be unable to continue as a going
concern and consummate a business combination. The Company has had no recent operating history nor any revenues or earnings from operations since inception. We have no significant assets or financial resources. We will, in all likelihood, sustain
operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in our incurring a net operating loss that will increase continuously until we can consummate a business combination with a
profitable business opportunity. We cannot assure you that we can identify a suitable business opportunity and consummate a business combination.

There is competition for those private companies suitable for a merger transaction of the type contemplated by management.

The Company is in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to
be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and
venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than
we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating
a successful business combination.

Future success is highly dependent on the ability of management to locate and attract a suitable
acquisition.

The nature of our operations is highly speculative and there is a consequent risk of loss of your
investment. The success of our plan of operation will depend to a great extent on the operations, financial condition and management of the identified business opportunity. While management intends to seek business combination(s) with entities
having established operating histories, we cannot assure you that we will be successful in locating candidates meeting that criterion. In the event we complete a business combination, the success of our operations may be dependent upon management of
the successor firm or venture partner firm and numerous other factors beyond our control.

The Company has no existing agreement for a
business combination or other transaction.

We have no arrangement, agreement or understanding with respect to engaging in
a merger with, joint venture with or acquisition of, a private or public entity. No assurances can be given that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. Management
has not identified any particular industry or specific business within an industry for evaluation. We cannot guarantee that we will be able to negotiate a business combination on favorable terms, and there is consequently a risk that funds allocated
to the purchase of our shares will not be invested in a company with active business operations.

Management intends to devote only a
limited amount of time to seeking a target company which may adversely impact our ability to identify a suitable acquisition candidate.

While seeking a business combination, management anticipates devoting no more than a few hours per week to the Companys affairs in total. Our officers have not entered into a written employment
agreement with us and are not expected to do so in the foreseeable future. This limited commitment may adversely impact our ability to identify and consummate a successful business combination.



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The time and cost of preparing a private company to become a public reporting company may preclude us
from entering into a merger or acquisition with the most attractive private companies.

Target companies that fail to
comply with SEC reporting requirements may delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act require reporting companies to provide certain information about significant acquisitions, including certified financial statements
for the company acquired, covering one, two, or three years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare these statements may significantly delay or
essentially preclude consummation of an acquisition. Otherwise suitable acquisition prospects that do not have or are unable to obtain the required audited statements may be inappropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.

The Company may be subject to further government regulation which would adversely affect our operations.

Although we will be subject to the reporting requirements under the Exchange Act, management believes we will not be subject
to regulation under the Investment Company Act of 1940, as amended (the Investment Company Act), since we will not be engaged in the business of investing or trading in securities. If we engage in business combinations which result in
our holding passive investment interests in a number of entities, we could be subject to regulation under the Investment Company Act. If so, we would be required to register as an investment company and could be expected to incur significant
registration and compliance costs. We have obtained no formal determination from the SEC as to our status under the Investment Company Act and, consequently, violation of the Investment Company Act could subject us to material adverse consequences.

Any potential acquisition or merger with a foreign company may subject us to additional risks.

If we enter into a business combination with a foreign concern, we will be subject to risks inherent in business operations outside of the
United States. These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and
cultural and language differences. Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource
self-sufficiency and balance of payments positions, and in other respects.

There are issues impacting liquidity of our securities with
respect to the SECs review of a future resale registration statement.

Since our shares of common stock issued prior
to a business combination or reverse merger cannot currently, nor will they for a considerable period of time after we complete a business combination, be available to be offered, sold, pledged or otherwise transferred without being registered
pursuant to the Securities Act, we will likely file a resale registration statement on Form S-1, or some other available form, to register for resale such shares of common stock. We cannot control this future registration process in all
respects as some matters are outside our control. Even if we are successful in causing the effectiveness of the resale registration statement, there can be no assurances that the occurrence of subsequent events may not preclude our ability to
maintain the effectiveness of the registration statement. Any of the foregoing items could have adverse effects on the liquidity of our shares of common stock.

We have never paid dividends on our common stock.

We have never paid
dividends on our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further its business strategy.



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The Company may be subject to certain tax consequences in our business, which may increase our cost of
doing business.

We may not be able to structure our acquisition to result in tax-free treatment for the companies or
their stockholders, which could deter third parties from entering into certain business combinations with us or result in being taxed on consideration received in a transaction. Currently, a transaction may be structured so as to result in tax-free
treatment to both companies, as prescribed by various federal and state tax provisions. We intend to structure any business combination so as to minimize the federal and state tax consequences to both us and the target entity; however, we cannot
guarantee that the business combination will meet the statutory requirements of a tax-free reorganization or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could
result in the imposition of both federal and state taxes that may have an adverse effect on both parties to the transaction.

Our business
will have no revenues unless and until we merge with or acquire an operating business.

We are a shell company and have
had no revenues from operations. We may not realize any revenues unless and until we successfully merge with or acquire an operating business.

The Company intends to issue more shares in a merger or acquisition, which will result in substantial dilution.

Our Certificate of Incorporation authorizes the issuance of a maximum of 250,000,000 shares of common stock and a maximum of 4,000,000 shares of preferred stock. Any merger or acquisition effected by us may result in the issuance of
additional securities without stockholder approval and may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction
may be valued on an arbitrary or non-arms-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all
of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued in connection with a business combination or otherwise, dilution to the interests of our
stockholders will occur and the rights of the holders of common stock might be materially and adversely affected.

The Company has
conducted no market research or identification of business opportunities, which may affect our ability to identify a business to merge with or acquire.

The Company has neither conducted nor have others made available to us results of market research concerning prospective business opportunities. Therefore, we have no assurances that market demand exists
for a merger or acquisition as contemplated by us. Our management has not identified any specific business combination or other transactions for formal evaluation by us, such that it may be expected that any such target business or transaction will
present such a level of risk that conventional private or public offerings of securities or conventional bank financing will not be available. There is no assurance that we will be able to acquire a business opportunity on terms favorable to us.
Decisions as to which business opportunity to participate in will be unilaterally made by our management, which may act without the consent, vote or approval of our stockholders.



|Item 1B. | UNRESOLVED STAFF COMMENTS.
|-------- | --------------------------

None.



|Item 2. | DESCRIPTION OF PROPERTY.
|------- | ------------------------

As of December 31, 2008, the Company had no real property, equipment, furniture, and leasehold improvements.



|Item 3. | LEGAL PROCEEDINGS.
|------- | ------------------

The
Company is not currently a party to any other legal proceeding, which it believes will have a material adverse affect on its results of operations.



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

There were no matters submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2008.

PART II



|Item 5. | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|------- | ------------------------------------------------------------------------------------------------

Market for Securities

In
October 2003, the Company filed Form 211, under the U.S. Securities and Exchange Commission Rule 15c2-11, to apply with NASD Regulation for listing of its common stock and warrants on the OTC Bulletin Board. In January 2004, the Companys
common stock began trading on the OTC Bulletin Board under the symbol VHSL. There is a limited trading market for the Companys stock; therefore historical price information is limited. High and low sales prices since that time, by
quarter-ended date, are as follows:



|                   |  |      |      |     |   |     
|------------------ |  | ---- | ---- | --- | - | ----
|                   |  | High |      | Low
|March 31, 2007     |  | $    | 0.21 |     | $ | 0.11
|June 30, 2007      |  | $    | 0.18 |     | $ | 0.15
|September 30, 2007 |  | $    | 0.15 |     | $ | 0.07
|December 31, 2007  |  | $    | 0.10 |     | $ | 0.07
|                   |  |     
|March 31, 2008     |  | $    | 0.06 |     | $ | 0.03
|June 30, 2008      |  | $    | 0.03 |     | $ | .002
|September 30, 2008 |  | $    | 0.10 |     | $ | 0.01
|December 31, 2008  |  | $    | 0.01 |     | $ | 0.01

As of
December 31, 2008, there were approximately 232 stockholders of record of the Companys common stock.

Dividend Policy

Historically, the Company has not declared or paid any cash dividends on its common stock. Any future determination to pay
dividends on its common stock will depend upon the Companys results of operations, financial condition and capital requirements, applicable restrictions under any contractual arrangements and such other factors deemed relevant by the
Companys Board of Directors.

Recent Sales of Unregistered Securities:

On December 31, 2008, Vertical Health Solutions, Inc. (the Company), issued an aggregate of 27,752,626 shares of common
stock to eight holders in exchange for the payables totaling $138,783. Those receiving shares of common stock included the following affiliates of the Company:



|                         |  |           
|------------------------ |  | ----------
|Name                     |  | Shares    
|Vitality Systems, Inc.   |  | 12,454,540
|Jugal K. Taneja          |  | 4,000,000 
|Stephen M. Watters       |  | 7,630,984 
|Labelclick, Inc.         |  | 1,000,000 
|Brian T. Nugent          |  | 1,667,102 
|Frijouf, Rust & Pyle, PA |  | 1,000,000 

The shares were
issued in reliance on the exemption provided by section 4(2) under the Securities Act of 1933.



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|Item 6. | Selected Financial Data.
|------- | ------------------------

Not applicable.



|Item 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------

The statements contained in this Report that are not historical are forward-looking statements, including statements regarding the
Companys expectations, intentions, beliefs or strategies regarding the future. Forward-looking statements include the Companys statements regarding liquidity, anticipated cash needs and availability and anticipated expense levels. All
forward-looking statements included in this Report are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. It is important to note that the
Companys actual results could differ materially from those in such forward-looking statements. Additionally, the following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and notes thereto
appearing elsewhere in this Report. The discussion is based upon such consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles.

Overview

The Company,
primarily, derived its revenues from developing, packaging and wholesaling a wide variety of veterinary and certain pharmaceuticals. Revenues were billed and recognized, as product is shipped, net of discounts, allowances, returns and credits. The
Company is currently operating as a public shell and does not generate revenues or produce products.

Cost of goods sold was
comprised of material product costs, packaging and labeling costs, direct personnel compensation and other statutory benefits and indirect costs relating to the labor to support product purchase, receipt, packaging, and warehousing. Research and
development expenses were charged against cost of goods sold as incurred and are not material to the Companys operations.

Selling, general and administrative costs include management and general office salaries, advertising and promotional expenses, sales and marketing and other indirect operating costs.

Results of Operations

Year Ended December 31, 2008 Compared To Year Ended December 31, 2007

Operating expenses.
The Company incurred operating expenses of $116,551 for the year ended December 31, 2008, a decrease of $97,151 or 45%, compared to $213,702 for the year ended December 31, 2007. The decrease was primarily attributable to the lack of
operations in 2008 and search for a merger candidate.

Interest expense, net of interest income. Interest income, net
of interest expense was $0 for the year ended December 31, 2008, compared to $2,103 of net interest expense for the year ended December 31, 2007. The decrease in interest expense, net of interest income was primarily a result of the
elimination of outstanding debt.

Income taxes. The Company had no income tax provision for the years ended
December 31, 2008 and 2007. No tax benefit has been provided due to the uncertainty in the utilization of the loss carry forwards. These net operating losses may be carried forward for up to 20 years.

Discontinued operations. The Company had income from the operation of discontinued operations of the animal health products division
of $0 for the year ended December 31, 2008 as compared to $200,520 for the year ended December 31, 2007. The decrease in the income from this segment was due to the sale of the animal health products division in 2007.

Preferred dividends. Preferred dividends on the Companys preferred stock were $0 for the years ended December 31, 2008 and
December 31, 2007.



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Net loss per share.Net loss per share was $0.01 for the year ended December 31,
2008, compared to net loss per share of $0.00 for the year ended December 31, 2007.

Inflation; Seasonality.Management believes that there was no material effect on operations or the financial condition of the Company as a result of inflation for the years ended December 31, 2008 and 2007. Management also believes that its business is not
seasonal; however, significant promotional activities can have a direct impact on sales volume in any given quarter.

Financial Condition, Liquidity and Capital Resources

The Company had cash of $0 and a working capital
deficit of $59,202 at December 31, 2008, compared to cash of $0 and a working capital deficit of $91,893 at December 31, 2007.

Net cash used by operating activities was $59,441 for the year ended December 31, 2008, as compared to net cash used in operating activities of $266,797 for the year ended December 31, 2007. The
provision of cash was primarily attributable to the sale of Drug Depot during the year ended December 31, 2007.

Net cash
provided by investing activities was $0 for the year ended December 31, 2008, as compared to $86,498. The decrease in cash provided by investing activities is primarily due to the sale of the animal health products subsidiary on June 1,
2007.

Net cash provided by financing activities was $59,441 for the year ended December 31, 2008, as compared to $92,654
for the year ended December 31, 2007. The decrease in cash provided by financing activities is primarily due to a reduction in operating expenses, which decreases the need for additional loans from the related party.

During the year ended December 31, 2007, the Company entered into an agreement to sell Drug Depot, a wholly owned subsidiary. The
agreement and sale closed in August 2007. The Companys sole business activities now consist of finding a new business to operate.

The Companys future liquidity and cash requirements will primarily depend on the Companys ability to develop a new business or secure future acquisitions. In particular, as the Company will
not have any cash flows from operations, it will be necessary for the Company to raise capital or seek additional financing. While there can be no assurance that such raising of capital or seeking of additional financing would be available in
amounts and on terms acceptable to the Company, management believes that such financing would likely be available on acceptable terms.



|Item 7A. | Quantitative and Qualitative Disclosure About Market Risk.
|-------- | ----------------------------------------------------------

Not applicable.



|Item 8. | Financial Statements and Supplementary Data.
|------- | --------------------------------------------

See consolidated financial statements following Item of this Annual Report on Form 10-K.



|Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|------- | -------------------------------------------------------------------------------------

None.



|Item 9A. | CONTROLS AND PROCEDURES.
|-------- | ------------------------

Evaluation
of disclosure controls and procedures.

An evaluation was performed under the supervision and with the participation of our
management, including the chief executive officer and the chief financial officer, of the effectiveness of the design and operation of our disclosure procedures. Based on managements evaluation as of the end of the period covered by this
Annual Report, our principal executive officer and chief financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
Exchange Act) were effective.



11



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##### Table of Contents

Changes in internal controls.

There have been no changes in our internal controls over financial reporting during our fourth fiscal quarter that have materially affected
or are reasonably likely to materially affect our internal control over financial reporting. There have been no changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent
to the date of the evaluation referred to above, nor were there any significant deficiencies or material weaknesses in our internal controls. Accordingly, no corrective actions were required or undertaken except as disclosed.

Managements Report of Internal Control Over Financial Reporting.

The Companys management is responsible for establishing and maintaining adequate internal control over financial reporting in accordance with Exchange Act Rule 13a-15. With the participation of the
Companys chief executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting using the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSCO) in Internal Control-Integrated Framework.

The Companys internal
control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets
that could have a material effect on the financial statements.

Based on this evaluation, the Companys management
concluded that its internal control over financial reporting was effective as of December 31, 2008.

A control system, no
matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

This annual
report does not include an attestation report of the Companys registered accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public
accounting firm pursuant to temporary rules of the Securities and Exchange Commission.



|Item 9B. | OTHER INFORMATION.
|-------- | ------------------

None



|Item 10. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
|-------- | --------------------------------------------------------------------------------------------------------------------------------------

The following are the names and certain information regarding the current Directors and Executive Officers of the Company:



|                   |  |     |  |                                                       |  |               
|------------------ |  | --- |  | ----------------------------------------------------- |  | --------------
|Name               |  | Age |  | Position                                              |  | Director Since
|Stephen M. Watters |  | 42  |  | Chief Executive and Chief Financial Officer, Director |  | 2006          
|Jugal K. Taneja    |  | 65  |  | Director                                              |  | 2000          
|Alfred Lehmkuhl    |  | 77  |  | Director                                              |  | 2002          



12



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Pursuant to the Companys bylaws, each director serves for a term of one year and until
his successor is duly qualified. Officers are elected annually by the Board of Directors (subject to the terms of any employment agreement), at the Companys annual meeting, to hold such office until an officers successor has been duly
appointed and qualified, unless an officer sooner dies, resigns or is removed by the Board. Some of the directors and executive officers of the Company also serve in various capacities with subsidiary of the Company. There are no family
relationships among any of the Companys other directors and executive officers.

Background of Executive Officers and Directors

On January 4, 2006 Stephen Watters resigned as Chief Executive Officer of the Company and effective July 7, 2006,
was reappointed Chief Executive and Financial Officer of the Company. Prior to working with us, Mr. Watters was the Co-founder, Chief Executive Officer and President, of Drugmax, Inc., from September 1998 until August 2000. DrugMax was a
wholesaler and retailer of pharmaceuticals, over-the counter drugs, health and beauty care products and private label dietary supplements. From September through November 1998, Mr. Watters served as Vice President of Finance of Dynamic Health
Products, Inc., a publicly-held nutraceutical products company. Prior to that, he worked in the investment banking and brokerage businesses from April 1992 to September 1998. He received his Executive Masters of Business Administration degree from
Case Western Reserve University in 1997.

On January 4, 2006, Jugal Taneja resigned as a consultant to the Company. Jugal
K. Taneja had served as a director of the Company since its inception and as a consultant to the Company since March 2000. In addition to his service to the Company, Mr. Taneja operates several other companies. He serves as Co-Chairman of the
Board of DrugMax, Inc., and from October 2000 to November 2004 served as DrugMaxs Chief Executive Officer. He previously served as DrugMaxs Chief Executive Officer from its inception in October 1993 through April 1995, and again from
January 1996 until August 1999. Further, he served at various times over the years as DrugMaxs President and Secretary. DrugMax was a wholesaler and retailer of pharmaceuticals, over-the counter drugs, health and beauty care products and
private label dietary supplements. Mr. Taneja also serves as Chairman and a director of Geopharma, Inc., a publicly-held pharmaceutical and nutraceutical products company. Mr. Taneja holds degrees in Petroleum Engineering, Mechanical
Engineering, and a Masters in Business Administration from Rutgers University.

Alfred F. Lehmkuhl has been a Director since
May 2002. Since June 1988, he has been Chief Executive Officer of Seven Limers, Inc., an agricultural equipment and supply company, and KAS Trucking, Inc., a regulated common carrier trucking company. He served as President and Chief Executive
Officer of Horns Crop Service, Inc., an agricultural supply company from September 1984 to December 1993. Mr. Lehmkuhl holds a Bachelor of Science degree in Animal Nutrition from The Ohio State University.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4, 5, and amendments thereto, furnished to the Company during fiscal year 2008 and 2007, the Company is not aware of any director, officer or beneficial owner of
more than ten percent of the Companys Common Stock that failed to file reports required by Section 16(a) of the Securities Exchange Act of 1934 on a timely basis during fiscal year 2008.

Code of Ethics

The Company
has adopted its Code of Ethics and Business Conduct for Officers, Directors and Employees, which applies to all of the officers, directors and employees of the Company. The Code of Ethics is filed as an exhibit to this Report on Form 10-K,
incorporated by reference.

Committees of the Board

The Board does not maintain any committees and does not have an audit committee financial expert. The Company is not required by any listing standard to maintain an audit committee and given the
Companys limited operations, the Board does not believe that a financial expert is required.



13



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##### Table of Contents

|Item 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

SUMMARY COMPENSATION TABLE (1)



|                            |      |                            |   |           |   |          |   |                |   |                     |   |                          |   |         
|--------------------------- | ---- | -------------------------- | - | --------- | - | -------- | - | -------------- | - | ------------------- | - | ------------------------ | - | --------
|                            |      | Summary Compensation Table |   |           |   |          |   |               
|Name Principal Positions    |      | YearEnded                  |   | Salary($) |   | Bonus($) |   | StockAwards($) |   | OptionAwards($) (A) |   | All OtherCompensation($) |   | Total($)
|Stephen M. Watters,CEO, CFO |      | 2008                       |   | 0         |   |         |   |               |   |                    |   |                         |   | 0       
|                            | 2007 |                            | 0 |           |  |          |  |                |  |                     |  |                          | 0
|                            | 2006 |                            | 0 |           |  |          |  |                |  |                     |  |                          | 0



|(1) | The compensation described in this table does not include medical and dental insurance benefits received by the named executive officers, if applicable, which are
available generally to all employees of the Company and certain perquisites and other personal benefits received by the named executive officers, the value of which does not exceed the lesser of $50,000 or 10% of any such officers total salary
and bonus disclosed in the table.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Mr. Stephen M. Watters served as the Companys Chief Executive Officer since its inception and was reappointed as Chief Financial Officer on July 7,
2006
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

During the year ended December 31, 2008, the Company did not pay any director fees for each meeting
attended by such director. Directors who are also employees receive no compensation for serving on the Board. The Companys non-employee directors receive options to purchase shares of common stock at the market price on the date they are
granted, reimbursement of expenses incurred consequential to their service and may receive additional options at the discretion of the Board. There was no compensation paid to our non-employee directors during the year ended December 31, 2008.

Employment Agreements

The Company did not have any outstanding employment contracts with any of its officers or directors for the year ended December 31, 2008.

The Company did not grant or issue any stock options for the year ended December 31, 2008.



|                                         |  |           |  |                                                            |  |                                                                    |  |                                                 |  |                                             
|---------------------------------------- |  | --------- |  | ---------------------------------------------------------- |  | ------------------------------------------------------------------ |  | ----------------------------------------------- |  | --------------------------------------------
|Name                                     |  | GrantDate |  | All OtherStock Awards:Number ofShares of StockOr Units (#) |  | All OtherOption Awards:Number ofSecurities Under-Lying Options (#) |  | Exercise orBase PriceOf OptionAwards($ / Share) |  | Grant DateFair ValueOf Stock andOptionAwards
|Stephen M. Watters,CEO, CFO and Director |  |           |  |                                                           |  |                                                                   |  |                                                |  |                                            



|Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|-------- | -----------------------------------------------------------------------------------------------

The following table sets forth certain information, as of December 31, 2008 with respect to the beneficial ownership of the outstanding
Common Stock by (i) any holder of more than five (5%) percent; (ii) each of the Companys executive officers and directors; and (iii) the directors and executive officers of the Company as a group. An asterisk indicates
beneficial ownership of less than 1% of the outstanding Common Stock. Except as otherwise indicated, each of the shareholders listed below has sole voting and investment power over the shares beneficially owned.



14



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##### Table of Contents

|       |  |                                                   |  |                                           |  |                                    |  
|------ |  | ------------------------------------------------- |  | ----------------------------------------- |  | ---------------------------------- | -
|Class  |  | Name and Address of Beneficial Owner(1)           |  | Amount andNature ofBeneficialOwnership(2) |  | ApproximateTitle ofPercent OfClass |  
|Common |  | Stephen M. Watters(3)                             |  | 19,162,244                                |  | 43.09                              | %
|Common |  | Brian T. Nugent (4)                               |  | 5,427,085                                 |  | 12.20                              | %
|Common |  | Jugal K. Taneja(5)                                |  | 13,997,603                                |  | 31.47                              | %
|Common |  | Alfred Lehmkuhl(6)                                |  | 1,562,395                                 |  | 3.51                               | %
|Common |  | All officers and directors as a group (3 persons) |  | 34,722,242                                |  | 78.07                              | %



|(1) | Except as otherwise indicated, the address of each beneficial owner is c/o Vertical Health Solutions, Inc. at 855 Dunbar Ave., Ste. B, Oldsmar, FL 34677.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Beneficial ownership is determined in accordance with the rules of the Commission and generally includes voting or investment power with respect to the shares shown.
Except where indicated by footnote and subject to community property laws where applicable, the persons named in the table have sole voting and investment power with respect to all shares of voting securities shown as beneficially owned by them.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Of the shares beneficially owned by Mr. Watters, 1,913,868 shares are owned by SMW Capital Group Limited Partnership, a company owned and controlled by
Mr. Watters. Also includes 228,575 shares are owned by Kristen Watters, Mr. Watters wife. Mr. Watters disclaims beneficial ownership of the shares registered in the name of his wife.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Of the shares beneficially owned by Mr. Nugent, 95,240 shares are owned by Julie Nugent, Mr. Nugents wife. Mr. Nugent disclaims beneficial
ownership of the shares registered in the name of his wife.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Of the shares beneficially owned by Mr. Taneja, 450,994 shares are owned by Manju Taneja, Mr. Tanejas wife. 285,720 shares are owned by
Carnegie Capital LLC, a company owned and controlled by Mr. Taneja, 553,750 shares are owned by 21stCentury Healthcare Fund L.P., a company controlled by Mr. Taneja, and 322,232 shares are owned by Bryan Capital
Limited Partnership, a company wholly-owned by Dynamic Health Products, Inc., a public company which is controlled by Mr. Taneja. Mr. Taneja disclaims beneficial ownership of the shares registered in the name of his wife.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Of the shares beneficially owned by Mr. Lehmkuhl, 38,100 shares are held by Mr. Lehmkuhl as custodian for each of Joseph J. Zam, Jr. and Katelyn C. Zam,
Mr. Lehmkuhls grandchildren.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
|-------- | -------------------------------------------------------------------------

On January 4, 2006, Vertical Health Solutions, Inc. (the Company), entered into an agreement with Vitality Systems, Inc.
(Vitality), pursuant to which Vitality purchased all of the outstanding stock of the Companys wholly-owned subsidiary Labelclick, Inc. (Labelclick). The purchase price consisted of a 7% promissory note in the principal
amount of $300,000, together with the assumption and personal guarantee of the purchasers of debt in the aggregate amount of $1,800,000. The promissory note has a term of three years and is payable monthly in the principal amount of $9,263.13,
together with accrued and unpaid interest. The Agreement is effective as of January 4, 2006. Vitality is owned by Stephen Watters, our former Chief Executive Officer and a current director, Brian Nugent, our former President and a current
director, and Jugal K. Taneja, a former consultant and a current director. In connection with the sale, the Company received an independent valuation of Labelclick which supported the price paid by Vitality and the sale was approved by the
Companys independent directors.

On December 31, 2008, Vertical Health Solutions, Inc. (the Company),
issued an aggregate of 27,752,626 shares of common stock to seven holders in exchange for the payables totaling $138,783. Those receiving shares of common stock included the following affiliates of the Company:



|                                  |  |           
|--------------------------------- |  | ----------
|Name                              |  | Shares    
|Vitality Systems, Inc.            |  | 12,454,540
|Jugal K. Taneja                   |  | 4,000,000 
|Stephen M. Watters                |  | 7,630,984 
|Labelclick, Inc.                  |  | 1,000,000 
|Brian T. Nugent (former director) |  | 1,667,102 



15



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##### Table of Contents

Each of Vitality Systems, Inc. and Labelclick, Inc. are owned 40% be each of Messrs. Watters
and Taneja, each current officers and/or director of the Company and 20% by Mr. Nugent, a former director and officer of the Company.

Amounts due from and to affiliates represent balances owed to or from the Company for sales or purchases occurring in the normal course of business. Amounts due from and to these affiliates are in the
nature of trade payables or receivables and fluctuate based on sales and purchasing volume and payments received. The Company believes that material affiliated transactions and loans, and business relationships entered into by the Company or its
subsidiary with certain of its officers, directors and principal shareholders or their affiliates were on terms no less favorable than the Company could have obtained from independent third parties. Any future transactions between the Company and
its officers, directors or affiliates will be subject to approval by a majority of disinterested directors or shareholders in accordance with Florida law.

Amounts due from and to affiliates represent balances owed to or from the Company for sales or purchases occurring in the normal course of business. Amounts due from and to these affiliates are in the
nature of trade payables or receivables and fluctuate based on sales and purchasing volume and payments received. The Company believes that material affiliated transactions and loans, and business relationships entered into by the Company or its
subsidiary with certain of its officers, directors and principal shareholders or their affiliates were on terms no less favorable than the Company could have obtained from independent third parties. Any future transactions between the Company and
its officers, directors or affiliates will be subject to approval by a majority of disinterested directors or shareholders in accordance with Florida law.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees. The aggregate fees billed by our auditors to date, for professional services rendered for the audit of the Companys annual financial statements for the years ended December 31, 2008 and December 31, 2007, and for
review of the financial statements included in the Companys quarterly reports on Form 10-Q and Form 10-QSB during such fiscal years, were $62,568 and $62,787, respectively.

Tax Fees. The aggregate fees billed for tax preparation and related services by our auditors were $0 and $5,000 for the years ended
December 31, 2008 and 2007, respectively.

All Other Fees. For the fiscal year ended December 31, 2008 and 2007, the
Company incurred fees to auditors of $0 for services rendered to the Company, other than the services covered in Audit Fees, Audit-Related Fees or Tax Fees.

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following exhibits are filed with this report:



|    |  |                                                                                                                                                                  
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 |  | Amended and Restated Articles of Incorporation*                                                                                                                  
|    | 
|3.2 |  | Amendment Creating Class of Preferred Stock*                                                                                                                     
|    | 
|3.3 |  | By-Laws*                                                                                                                                                         
|    | 
|3.4 |  | Certificate of Incorporation of Vertical Health Ventures, Inc., a wholly-owned subsidiary of the Company, filed as Exhibit 3.4 to Form SB-2, File No.
333-116682.



16



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##### Table of Contents

|     |  |                                                                                                                                                                                                             
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.5  |  | Certificate of Designation of Vertical Health Ventures, Inc., designating the rights of Series A Cumulative Convertible Preferred Stock, as amended, filed as Exhibit 3.5 to Form
SB-2, File No. 333-116682.
|     | 
|3.6  |  | Bylaws of Vertical Health Ventures, Inc, filed as Exhibit 3.6 to Form SB-2, File No. 333-116682.                                                                                                            
|     | 
|4.1  |  | Specimen Stock Certificate*                                                                                                                                                                                 
|     | 
|4.2  |  | Amendment No. 1 to Securities Purchase Agreement, dated as of September 20, 2004, filed as exhibit 4.9 to Companys Report on Form SB2/A dated as of October 20, 2004, and
incorporated herein by reference.
|     | 
|4.3  |  | Form of Redeemable Class A Warrant Agreement between Vertical Health Solutions, Inc. and Registrar and Transfer Company*                                                                                    
|     | 
|10.1 |  | Form of 2001 Stock Option Plan*                                                                                                                                                                             
|     | 
|10.2 |  | Form of Consulting Agreement with Jugal K. Taneja**                                                                                                                                                         
|     | 
|10.3 |  | Stephen Watters warrant agreement*                                                                                                                                                                          
|     | 
|10.4 |  | Jugal K. Taneja warrant agreement*                                                                                                                                                                          
|     | 
|14.1 |  | Code of Ethics of Vertical Health Solutions, Inc.***                                                                                                                                                        
|     | 
|21.1 |  | Vertical Health Solutions, Inc.  List of Subsidiaries****                                                                                                                                                  
|     | 
|31.1 |  | Certification Of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                     
|     | 
|32.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                     



|* | Incorporated by reference to the Companys registration statement on Form SB-2, file no. 333-74766.
|- | ---------------------------------------------------------------------------------------------------

|** | Incorporated by reference to the Companys 10-KSB filed for the year ending December 31, 2004.
|-- | ----------------------------------------------------------------------------------------------

|*** | Incorporated by reference to the Companys 10-KSB filed for the year ending December 31, 2007.
|--- | ----------------------------------------------------------------------------------------------

|**** | Previously Filed.
|---- | -----------------



17



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.



|                     |  |  |  |                                 |  |                                                                                                                                                     
|-------------------- |  |  |  | ------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|                     |  |  |  | VERTICAL HEALTH SOLUTIONS, INC.
|                     |  |  | 
|Dated: March 5, 2010 |  |  |  | By:                             |  | /s/ Stephen M. Watters                                                                                                                              
|                     |  |  |  |                                 |  | Stephen M. Watters, Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer)

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



|          |  |                        |  |       |  |          |  |      |  |              
|--------- |  | ---------------------- |  | ----- |  | -------- |  | ---- |  | -------------
|Signature |  |                        |  | Title |  |          |  | Date
|          |  |                        |  |       | 
|By:       |  | /s/ Stephen M. Watters |  |       |  | Director |  |      |  | March 5, 2010
|          |  | Stephen M. Watters     |  |       |  |          |  |      |  |              
|          |  |                        |  |       | 
|By:       |  | /s/ Jugal K. Taneja    |  |       |  | Director |  |      |  | March 5, 2010
|          |  | Jugal K. Taneja        |  |       |  |          |  |      |  |              
|          |  |                        |  |       | 
|By:       |  | /s/ Alfred Lehmkuhl    |  |       |  | Director |  |      |  | March 5, 2010
|          |  | Alfred Lehmkuhl        |  |       |  |          |  |      |  |              



18



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##### Table of Contents

VERTICAL HEALTH SOLUTIONS, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES



|                                                                                                           |  |           
|---------------------------------------------------------------------------------------------------------- |  | ----------
|                                                                                                           |  | PAGE      
|                                                                                                           | 
|Independent Auditors Report                                                                               |  | F-2       
|                                                                                                           | 
|Consolidated Balance Sheets as of December 31, 2008 and 2007                                               |  | F-3       
|                                                                                                           | 
|Consolidated Statements of Operations for the years ended December 31, 2008 and
2007                       |  | F-4       
|                                                                                                           | 
|Consolidated Statements of Changes in Stockholders Equity for the years ended December 
31, 2008 and 2007 |  | F-5       
|                                                                                                           | 
|Consolidated Statements of Cash Flows for the years ended December 31, 2008 and 2007                       |  | F-6  F-7 
|                                                                                                           | 
|Notes to Consolidated Financial Statements                                                                 |  | F-8  F-13



---

##### Table of Contents

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors

Vertical
Health Solutions, Inc. and Subsidiary

We have audited the accompanying consolidated balance sheets of Vertical Health Solutions, Inc. and
subsidiary as of December 31, 2008 and 2007 and the related statements of operations, changes in stockholders equity, and cash flows for the years ended December 31, 2008 and 2007. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit 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 consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Vertical Health
Solutions, Inc. as of December 31, 2008 and 2007 and the results of operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to
the consolidated financial statements, the Company had a net loss of $106,686 for the year ended December 31, 2008 and had a working capital deficit of $59,795 as of December 31, 2008. The Company currently has no revenue producing
activities and there are no assurances that they will be able to obtain additional financing, if required. These conditions raise substantial doubt about the Companys ability to continue as a going concern. The accompanying financial
statements have been prepared on the basis that the Company will continue as a going concern, which assumes the satisfaction of liabilities in the normal course of business, and does not include any adjustments that may result from the outcome of
this uncertainty.



|                               
|-------------------------------
|BRIMMER, BUREK & KEELAN LLP    
|                               
|/s/ Brimmer, Burek & Keelan LLP
|Tampa, Florida                 
|March 31, 2009                 



F-2



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##### Table of Contents

VERTICAL HEALTH SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

December 31,



|                                                                                                                                    |  |      |            |   |      |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                                                                                    |  | 2008 |            |   | 2007 |  
|Assets                                                                                                                              |  |      |            |   |      |   |            |  
|Deposits                                                                                                                            |  |      | 1,800      |   |      |   |           |  
|                                                                                                                                    |  |      |            |   |      |   |            |  
|Total current assets                                                                                                                |  |      | 1,800      |   |      |   |           |  
|                                                                                                                                    |  |      |            |   |      |   |            |  
|Total Assets                                                                                                                        |  | $    | 1,800      |   |      | $ |           |  
|                                                                                                                                    |  |      |            |   |      |   |            |  
|                                                                                                                                    |  |     
|Liabilities and Stockholders Equity (Deficit)                                                                                      |  |      |            |   |      |   |            |  
|Current liabilities:                                                                                                                |  |      |            |   |      |   |            |  
|Accounts payable                                                                                                                    |  | $    | 54,303     |   |      | $ | 56,649     |  
|Accrued expenses                                                                                                                    |  |      | 1,200      |   |      |   | 26,320     |  
|Notes payable to related parties                                                                                                    |  |      | 6,092      |   |      |   | 8,924      |  
|                                                                                                                                    |  |      |            |   |      |   |            |  
|                                                                                                                                    |  |     
|Total current liabilities                                                                                                           |  |      | 61,595     |   |      |   | 91,893     |  
|                                                                                                                                    |  |      |            |   |      |   |            |  
|                                                                                                                                    |  |     
|Total liabilities                                                                                                                   |  |      | 61,595     |   |      |   | 91,893     |  
|                                                                                                                                    |  |      |            |   |      |   |            |  
|                                                                                                                                    |  |     
|Commitments and contingencies                                                                                                       |  |      |           |   |      |   |           |  
|                                                                                                                                    |  |     
|Stockholders equity (deficit):                                                                                                     |  |      |            |   |      |   |            |  
|                                                                                                                                    |  |     
|Preferred stock, $0.001 par value, 5,000,000 shares authorized:                                                                     |  |      |            |   |      |   |            |  
|Series A; 10% cumulative, convertible; 1,000,000 shares authorized, no shares issued and outstanding                                |  |      |           |   |      |   |           |  
|Undesignated, 4,000,000 shares authorized, no shares issued and outstanding                                                         |  |      |           |   |      |   |           |  
|Common stock, $.001 par value, 250,000,000 shares authorized; 44,474,973 and 16,722,347 shares issued and outstanding,
respectively |  |      | 44,476     |   |      |   | 16,723     |  
|Additional paid-in capital                                                                                                          |  |      | 2,771,852  |   |      |   | 2,660,821  |  
|Accumulated deficit                                                                                                                 |  |      | (2,876,123 | ) |      |   | (2,769,437 | )
|                                                                                                                                    |  |      |            |   |      |   |            |  
|                                                                                                                                    |  |     
|Total stockholders equity                                                                                                          |  |      | (59,795    | ) |      |   | (91,893    | )
|                                                                                                                                    |  |      |            |   |      |   |            |  
|                                                                                                                                    |  | $    | 1,800      |   |      | $ |           |  
|                                                                                                                                    |  |      |            |   |      |   |            |  

See accompanying notes to consolidated financial statements.



F-3



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##### Table of Contents

VERTICAL HEALTH SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31, 2008 and 2007



|                                                                                 |  |      |            |   |      |   |            |  
|-------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                                 |  | 2008 |            |   | 2007 |  
|Sales                                                                            |  | $    |           |   |      | $ |           |  
|Cost of goods sold                                                               |  |      |           |   |      |   |           |  
|                                                                                 |  |      |            |   |      |   |            |  
|Gross profit                                                                     |  |      |           |   |      |   |           |  
|                                                                                 |  |      |            |   |      |   |            |  
|Operating expenses:                                                              |  |      |            |   |      |   |            |  
|Selling, general and administrative expenses                                     |  |      | 116,551    |   |      |   | 213,702    |  
|                                                                                 |  |      |            |   |      |   |            |  
|Total operating expenses                                                         |  |      | 116,551    |   |      |   | 213,702    |  
|                                                                                 |  |      |            |   |      |   |            |  
|                                                                                 |  |     
|Operating loss before other income and expense                                   |  |      | (116,551   | ) |      |   | (213,702   | )
|                                                                                 |  |      |            |   |      |   |            |  
|Other income (expense):                                                          |  |      |            |   |      |   |            |  
|Interest income                                                                  |  |      |           |   |      |   | 3,479      |  
|Gain on settlement of liability                                                  |  |      | 9,865      |   |      |   |           |  
|Gain on sale of subsidiary                                                       |  |      |           |   |      |   | 13,145     |  
|Interest expense                                                                 |  |      |           |   |      |   | (1,376     | )
|                                                                                 |  |      |            |   |      |   |            |  
|Total other income (expense)                                                     |  |      | 9,865      |   |      |   | 15,248     |  
|                                                                                 |  |      |            |   |      |   |            |  
|Loss from continuing operations before income taxes                              |  |      | (106,686   | ) |      |   | (198,454   | )
|                                                                                 |  |      |            |   |      |   |            |  
|Income taxes                                                                     |  |      |           |   |      |   |           |  
|                                                                                 |  |      |            |   |      |   |            |  
|Loss from continuing operations                                                  |  |      | (106,686   | ) |      |   | (198,454   | )
|                                                                                 |  |      |            |   |      |   |            |  
|Discontinued operations                                                          |  |      |            |   |      |   |            |  
|Loss from operation of discontinued animal health products division (net of tax) |  |      |           |   |      |   | 200,520    |  
|Loss from disposal of animal health products division (net of tax)               |  |      |           |   |      |   | (42,177    | )
|                                                                                 |  |      |            |   |      |   |            |  
|                                                                                 |  |      |           |   |      |   | 158,343    |  
|                                                                                 |  |      |            |   |      |   |            |  
|                                                                                 |  |     
|Net loss available to common stockholders                                        |  | $    | (106,686   | ) |      | $ | (40,111    | )
|                                                                                 |  |      |            |   |      |   |            |  
|Basic and diluted loss per share from continuing operations                      |  | $    | (0.00      | ) |      | $ | (0.00      | )
|                                                                                 |  |      |            |   |      |   |            |  
|Basic and diluted loss per share from discontinued operations                    |  | $    | (0.00      | ) |      | $ | (0.00      | )
|Basic and diluted weighted average number of common shares outstanding           |  |      | 16,722,347 |   |      |   | 16,618,453 |  
|                                                                                 |  |      |            |   |      |   |            |  

See accompanying notes to consolidated financial statements.



F-4



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##### Table of Contents

VERTICAL HEALTH SOLUTIONS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY DEFICIT

Years Ended December 31, 2008 and 2007



|                                                                      |  |                 |  |              |   |                   |            |             |   |         |                    |         |           |  |         |            |   |  |   |          |  
|--------------------------------------------------------------------- |  | --------------- |  | ------------ | - | ----------------- | ---------- | ----------- | - | ------- | ------------------ | ------- | --------- |  | ------- | ---------- | - |  | - | -------- | -
|                                                                      |  | Preferred Stock |  | Common Stock |   | AdditionalPaid-in |            | Accumulated |   |         | TotalStockholders |        
|                                                                      |  | Shares          |  | Dollars      |   | Shares            |            | Dollars     |   | Capital |                    | Deficit |           |  | Deficit |           
|Balance at December 31, 2006                                          |  | 0               |  | $            | 0 |                   | 16,423,755 |             | $ | 16,424  |                    | $       | 2,628,275 |  | $       | (2,729,326 | ) |  | $ | (84,267  | )
|                                                                      |  |                 |  |              |   |                   |           
|Issuance of common stock in settlement of a payable                   |  |                 |  |              |   |                   | 298,592    |             |   | 299     |                    |         | 32,546    |  |         |            |   |  |   | 32,845   |  
|Net loss                                                              |  |                 |  |              |   |                   |            |             |   |         |                    |         |           |  |         | (40,111    | ) |  |   | (40,111  | )
|                                                                      |  |                 |  |              |   |                   |            |             |   |         |                    |         |           |  |         |            |   |  |   |          |  
|                                                                      |  |                 |  |              |   |                   |           
|Balance at December 31, 2007                                          |  | 0               |  | $            | 0 |                   | 16,722,347 |             | $ | 16,723  |                    | $       | 2,660,821 |  | $       | (2,769,437 | ) |  | $ | (91,893  | )
|Issuance of common stock in settlement of payables                    |  |                 |  |              |   |                   | 14,298,086 |             |   | 14,298  |                    |         | 57,213    |  |         |            |   |  |   | 71,511   |  
|Issuance of common stock in settlement of related party notes payable |  |                 |  |              |   |                   | 12,454,540 |             |   | 12,455  |                    |         | 49,818    |  |         |            |   |  |   | 62,273   |  
|Issuance of common stock in settlement of accrued expenses            |  |                 |  |              |   |                   | 1,000,000  |             |   | 1,000   |                    |         | 4,000     |  |         |            |   |  |   | 5,000    |  
|Net loss                                                              |  |                 |  |              |   |                   |            |             |   |         |                    |         |           |  |         | (106,686   | ) |  |   | (106,686 | )
|                                                                      |  |                 |  |              |   |                   |            |             |   |         |                    |         |           |  |         |            |   |  |   |          |  
|Balance, December 31, 2008                                            |  | 0               |  | $            | 0 |                   | 44,474,973 |             | $ | 44,476  |                    | $       | 2,771,852 |  | $       | (2,876,123 | ) |  | $ | (59,795  | )
|                                                                      |  |                 |  |              |   |                   |            |             |   |         |                    |         |           |  |         |            |   |  |   |          |  



F-5