UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                   FORM 10-KSB


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 For the fiscal year ended December 31, 2003

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

                         Commission File Number: 0-33513

                             tds (Telemedicine) Inc.
                             -----------------------
                 (Name of Small Business Issuer in its charter)

               NEW YORK                                         11-3579554
--------------------------------------------------------------------------------
(State or other jurisdiction of                       (I.R.S. Employer ID No.)
 incorporation or organization)

One Penn Plaza, Suite 1612, New York,NY                            10119
--------------------------------------------------------------------------------
 Address of principle executive offices)                       (Zip Code)

Issuers telephone number (212) 994-5374

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

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par
value, $.001

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

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

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

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

The issuer's  revenues for the fiscal year ended  December 31, 2005 were $0. The
aggregate  market  value  of the  issuer's  outstanding  voting  stock  held  by
non-affiliates  on July 12,  2006,  based on the last sale price of such  common
equity on the Pink Sheets on such date, was $131,414.

Transitional Small Business Disclosure Format (check one): Yes|_| No |X|


<PAGE>


<TABLE>

                     TDS (TELEMDICINE), INC. AND SUBSIDIARY
                           ANNUAL REPORT ON FORM 10KSB
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
                                TABLE OF CONTENTS
<CAPTION>
Part I                                                                                           Page No.
<S>                                                                                                <C>
Item 1.           Description of Business............................................................3
Item 2.           Description of Properties .........................................................6
Item 3.           Legal Proceedings......... ........................................................6
Item 4.           Submission of Matters to a Vote of Security Holders................................6

Part II
Item 5.           Market for Common Equity, Related Stockholder Matters and Small
                    Business Issuer Purchases of Equity Securities.................................6-7
Item 6.           Management's Discussion and Analysis or Plan of Operation........................7-8
Item 7.           Financial Statements...............................................................9
Item 8.           Changes and Disagreements with Accountants on Accounting and
                    Financial Disclosure.............................................................9
Item 8A.          Controls and Procedures............................................................9
Item 8B           Other Information..................................................................9

Part III
Item 9.           Directors and Executive Officers of the Registrant................................10
Item 10.          Executive Compensation.........................................................10-11
Item 11.          Security Ownership of Certain Beneficial Owners and
                    Related Stockholders Matters.................................................11-12
Item 12.          Certain Relationships and Related Transactions....................................13
Part IV
Item 13.          Exhibits..........................................................................13
Item 14.          Principal Accountant Fees and Services............................................13
Signatures        ...............................................................................14-15
</TABLE>


<PAGE>



PART I
Item 1.    Description of Business

Forward Looking Statements

In addition to historical information, this Form 10-KSB contains forward looking
statements  relating to such matters as  anticipated  financial and  operational
performance,  business  prospects,  and similar matters.  The Private Securities
Litigation  Reform  Act of  1995  provides  a safe  harbor  for  forward-looking
statements.  The  Company  notes  that a  variety  of  factors  could  cause the
Company's   actual  results  and  experience  to  differ   materially  from  the
anticipated  results or other  expectations  expressed in the Company's  forward
looking  statements.  When  used in this  Form  10-KSB,  the  words  or  phrases
"believes,"   "anticipates,"   "expects,"   "intends,"   "will  likely  result,"
"estimates,"  "projects"  or similar  expressions  are intended to identify such
forward looking statements,  but are not the exclusive means of identifying such
statements. Such forward-looking statements are only predictions, and the actual
events or results  may  differ  materially  from the  results  discussed  in the
forward-looking statements. Readers are cautioned not to place undue reliance on
these  forward-looking  statements,  which  speak  only  as of the  date of this
report.   The  Company   undertakes  no  obligation  to  publicly  revise  these
forward-looking  statements to reflect events or circumstances  that arise after
the date of this report.

Historical Business Development

The Company was formed as a New York  corporation  on November 30, 2000. In 2002
the Company acquired TDS-USA in a reverse merger  transaction.  TDS-USA had been
engaged in the telemedicine diagnostic services industry since January 1998, and
continued in that  business  until 2004.  As a result of a bankruptcy  filing in
June 2004 of the Company's operating subsidiary,  tds (Dermatology) Limited, the
Company ceased operations in 2004.

Early in 2005  TDS's  management  began to review  opportunities  to  acquire an
operating company through a "reverse merger" procedure.

In May 2005 TDS (Telemedicine) entered into a Management Services Agreement with
Greenshift   Corporation.   Greenshift  agreed  to  provide  interim  management
assistance  and financial  support,  while  preparing TDS  (Telemedicine)  for a
strategic  acquisition.  In that  connection,  GreenShift  is  providing  to TDS
(Telemedicine)  the  services  of Kevin  Kreisler,  who is the  Company's  Chief
Executive Officer.

In compensation for those services, tds (Telemedicine) will issue to GreenShift
common stock equal to 75% of its outstanding stock plus common stock with a
market value of $150,000 plus $50,000 per quarter during which services are
provided.

Employees

The Company currently has no employees other than its President.

BUSINESS RISK FACTORS

There are many important factors that have affected, and in the future could
affect, tds (Telemedicine)'s business, including but not limited to the factors
discussed below, which should be reviewed carefully together with other
information contained in this report. Some of the factors are beyond our control
and future trends are difficult to predict.

The Company is not a going concern.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  The Company,  however,  is a
shell company without any  operations.  As of June 30, 2006, the Company did not
have any cash and had current  liabilities in excess of $600,000.  These matters
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.

The bankruptcy proceeding of our tds (Dermatology)  Limited,  subsidiary exposes
us to risks and uncertainties.

The wholly owned subsidiary,  tds (Dermatology) Limited,  "Limited",  was placed
into  administrative  status of the UK bankruptcy code in June 2004. Limited was
restated as a discontinued  operation  through the date of the bankruptcy filing
for financial  statement  purposes and was  deconsolidated  as of the bankruptcy
date for financial statement  purposes.  Certain claims might be brought against
the Company  seeking to hold the Company  liable for certain  transfers  made by
Limited to the Company  and/or for  Limited's  obligations  to  creditors  under
various equitable theories recognized under bankruptcy law. As of June 30, 2006,
there have been no such claims  filed  against the Company or any of its current
or former officers or directors,  and we do not expect any material claims to be
filed. However, the outcome of complex litigation (including claims which may be
asserted  against us) cannot be predicted  with certainty and its dependent upon
many  factors  beyond  the  Company's  control;  however,  any such  claims,  if
successful,  could have a material  adverse  impact on the  Company's  financial
condition.  We may  incur  additional  costs in  connection  with the  Company's
involvement in the Limited bankruptcy proceedings.

The  Company is not likely to hold annual  shareholder  meetings in the next few
years.

New York  corporation law provides that members of the board of directors retain
authority  to act  until  they are  removed  or  replaced  at a  meeting  of the
shareholders.  A  shareholder  may petition the New York courts to direct that a
shareholders'  meeting be held. But absent such a legal action, the board has no
obligation to call a shareholders'  meeting.  Unless a shareholders'  meeting is
held, the existing  directors elect directors to fill any vacancy that occurs on
the board of directors.  The shareholders,  therefore,  have no control over the
constitution of the board of directors,  unless a shareholders' meeting is held.
Management  does not expect to hold annual  meetings of shareholders in the next
few years,  due to the expense  involved.  Kevin  Kreisler is currently the sole
director of the  Company  and was  appointed  to that  position by the  previous
directors. If other directors are added to the Board in the future, it is likely
that Mr.  Kreisler  will appoint  them.  As a result,  the  shareholders  of the
Company will have no effective  means of exercising  control over the operations
of the Company.

GreenShift Corporation can exert control over us and may not make decisions that
further the best interests of all stockholders.

GreenShift  Corporation is entitled to obtain over 80% of our voting stock. As a
result,  GreenShift Corporation may exert a significant degree of influence over
our  management  and affairs and over matters  requiring  stockholder  approval,
including  the  election of  directors  and  approval of  significant  corporate
transactions.  In addition, this concentration of ownership may delay or prevent
a change in control of us and might affect the market price of our common stock,
even when a change in control may be in the best  interest of all  stockholders.
Furthermore,  the  interests of this  concentration  of ownership may not always
coincide with the interests of other stockholders and,  accordingly,  they could
cause us to enter  into  transactions  or  agreements  which are not in the best
interests of the Company.

Investing in our stock is highly speculative and you could lose some or all of
your investment.

The value of our common stock may decline and may be affected by numerous market
conditions, which could result in the loss of some or the entire amount invested
in our stock. The securities  markets  frequently  experience  extreme price and
volume  fluctuations  that affect  market  prices for  securities  of  companies
generally and very small capitalization companies such as us in particular.

Our common stock qualifies as a "penny stock" under SEC rules, which may make it
more difficult for our stockholders to resell their shares of our common stock.

The  holders  of our  common  stock may find it  difficult  to  obtain  accurate
quotations  concerning  the  market  value of the stock.  Stockholders  also may
experience greater  difficulties in attempting to sell the stock than if it were
listed on a stock  exchange  or quoted on the OTC  Bulletin  Board or the NASDAQ
Small-Cap Market. Because our common stock does not trade on a stock exchange or
on NASDAQ , and the  market  price of the  common  stock is less than  $5.00 per
share,  the common stock  qualifies as a "penny stock." SEC Rule 15g-9 under the
Securities  Exchange Act of 1934 imposes additional sales practice  requirements
on broker-dealers that recommend the purchase or sale of penny stocks to persons
other than those who  qualify as an  "established  customer"  or an  "accredited
investor."  This  includes  the  requirement  that a  broker-dealer  must make a
determination  on the  appropriateness  of  investments  in penny stocks for the
customer and must make special  disclosures to the customer concerning the risks
of penny  stocks.  Application  of the penny  stock  rules to our  common  stock
affects the market liquidity of the shares, which in turn may affect the ability
of holders of our common stock to resell the stock.

Only a small portion of the investment  community  will purchase  "penny stocks"
such as our common stock.

Our common stock is defined by the SEC as a "penny stock" because it trades at a
price  less than  $5.00 per share.  Our  common  stock  also  meets most  common
definitions  of a "penny  stock," since it trades for less than $1.00 per share.
Many brokerage  firms will  discourage  their  customers from  purchasing  penny
stocks,  and even more brokerage firms will not recommend a penny stock to their
customers.  Most  institutional  investors  will not invest in penny stocks.  In
addition,  many  individual  investors  will not  consider a purchase of a penny
stock due, among other things, to the negative reputation that attends the penny
stock market.  As a result of this  widespread  disdain for penny stocks,  there
will be a limited  market  for our  common  stock as long as it remains a "penny
stock." This situation may limit the liquidity of your shares.

Item 2.  Description of Property

TDS'S  executive  office is  located in the  office of  GreenShift  Corporation.
GreenShift  Corporation provides the office space under a management  consulting
contract.  There is no specific  rental  charged for the office  space.

Item 3. Legal Proceedings

BANKRUPTCY - tds (Dermatology) Limited

In June 2004, an order of  administration  was entered against tds (Dermatology)
Limited,  an operating  subsidiary,  under United Kingdom  bankruptcy  laws. The
order  provides tds  (Dermatology)  Limited  protection  from its  creditors and
appoints an  administrator  to aid tds  (Dermatology)  Limited in its day-to-day
operations. The effects of this on the Company's operations resulted in the loss
of control of the Subsidiary and the winding down of operations.

Item 4.  Submission of Matters to a Vote of Security Holders

None.

                                    PART II

Item 5. Market for Common Equity and Related Shareholder  Matters. The Company's
Common Stock traded on the OTC Bulletin Board ("OTCBB") under the trading symbol
"SRFG" from the date the  Company's  Form 211 was  accepted by NASD on September
26,  2002 to the  Company's  change of name and trading  symbol on February  13,
2003. After that date, the Company's trading symbol has been "TDST".  Commencing
on May 24, 2004,  the  Company's  common  stock was removed from the OTCBB,  and
since that date it has been quoted only on the Pink Sheets.  The following table
sets forth the high and low  closing bid  quotations  for the  Company's  Common
Stock during the six quarters after trading commenced and ending on December 31,
2003.  These  quotations  reflect  inter-dealer  prices without retail  mark-up,
mark-down or commission and may not represent actual transactions.

Period                             High                 Low
 -------------------------------------------------------------------------------



 2003 Fourth Quarter               0.21                 0.065

 2003 Third Quarter                0.50                 0.10

 2003 Second Quarter               0.62                 0.15

 2003 First Quarter                0.60                 0.07

 2002 Fourth Quarter               2.20                 0.26

 2002 Third Quarter                6.50                 1.10

 2002 Second Quarter               6.10                 3.75

 2002 First Quarter                3.50                 1.37


Title of Class                       Approximate Number of Holders of  Record
---------------                       ----------------------------------------
 Common Stock, 0.0001 par value                        45

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

As of June 30, 2006 there were 100,000,000 shares of Company Common Stock issued
and outstanding held by  approximately  45 registered  holders of record.  This
number of record holders excludes  individual  shareholders  holding stock under
nominee security position listings.

The  trading  volume of our  securities  fluctuates  and may be  limited  during
certain periods.  As a result, the pricing and liquidity of an investment in the
Company's securities may be adversely affected.  Because of our stock price, our
Common Stock is subject to the SEC's penny stock rules,  which adversely affects
the ability of persons to purchase or sell our Common Stock.

Dividend  Policy

The Company has not paid any  dividends  on its Common Stock and does not expect
to pay any such dividends in the foreseeable  future.  There are no restrictions
that limit the Company's ability to pay dividends on its Common Stock.

Securities Authorized  for  Issuance  under  Equity  Compensation  Plans

The Company has no equity  compensation plans in place but continues to evaluate
their utility for attracting and retaining qualified employees.

Recent Sales of  Unregistered Securities

In  January  2003,  the  Company  sold  in  a  private   placement  exempt  from
registration  pursuant  to  Section  4(2)  of  the  Securities  Act of  1933  an
additional  486,000  shares of its Common  Stock to third  party  investors  for
$50,803. The investors were all non-US resident private investors and the shares
issued to them had  affixed  restrictive  legends  as to such  shares  not being
registered under the Securities Act of 1933.

In August 2003, the Company sold in a private placement exempt from registration
pursuant to Section 4(2) of the Securities  Act of 1933 an additional  2,550,000
shares of its Common Stock to third party investors for $104,509.  The investors
were all non-US  resident  private  investors  and the shares issued to them had
affixed  restrictive  legends as to such shares not being  registered  under the
Securities Act of 1933.  The investors  agreed to a lock up of such shares for a
period of 60 days and certain  subsequent  trading  restrictions and the Company
undertook to register such shares under certain demand conditions.

In  October  2003,  the  Company  sold  in  a  private   placement  exempt  from
registration  pursuant  to  Section  4(2)  of  the  Securities  Act of  1933  an
additional  150,000  shares of its Common  Stock to third  party  investors  for
$45,205.  The investor was a US resident  private investor and the shares issued
to them had affixed  restrictive  legends as to such shares not being registered
under the Securities Act of 1933.

Item 6. Management's  Discussion and Analysis or Plan of Operation.

Result of Operation:

Our revenues from  discontinued  operations for the year-end,  December 31, 2003
were $457,497. This represents a decrease from 2002 revenues of $1,114,312 a 59%
decrease. The Company had a net loss of $805,757 for the year ended December 31,
2003 versus a net loss of $487,099 for the year ended December 31, 2002. Company
management  attributes the sales reduction and resulting operational losses to a
number of factors. Senior management was obliged to commit to the procurement of
investment   monies  which   limited  their  ability  to  develop  new  business
opportunities.  Growth of the  business  in the United  Kingdom  was limited and
reduced by cutbacks in the UK health  care  system.  Funds in the UK health care
system were redirected to health care treatments deemed more urgent and critical
than dermatology. The financial cost of raising funds over a considerable period
of the year had a significant adverse affect on the Company's performance.  As a
result of these factors the TDS's UK operation filed  bankruptcy and the TDS USA
operation ceased business.

Today  TDS has no  operations.  In  order  to  commence  operations,  it will be
necessary for TDS to acquire an operating company.

Sources of Liquidity

The Company's  internal source of liquidity was from  operational cash flow. The
external  source of  liquidity  came from its private  placements.  During 2003,
TDS-USA  raised  $200,517  as a result of  TDS-USA's  private  placement  of its
securities with private investors.  Today the Company has no assets and $600,000
in  liabilities.  Its  ability to sustain  operations  depends on the  financial
commitment by GreenShift Corporation,  which funds its ongoing operations. Based
on  that  commitment,   the  Company  expects  to  sustain  operations  for  the
foreseeable future.

There are no off-Balance Sheet Arrangements.

Item 7.  Financial Statements.

The  information  in  response  to  this  item  is set  forth  in the  Financial
Statements beginning on page F-1 of this report on Form 10-KSB.

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure.

The audit  reports of Weaver and Tidwell on the Company's  financial  statements
for the  years  ended  December  31,  2002 and  2001  contained  a  modification
expressing  substantial doubt about the Company's ability to continue as a going
concern. The audit report of Weaver and Tidwell for the years ended December 31,
2002 and 2001 did not contain any other adverse opinion or disclaimer of opinion
or qualification other than the modification noted above. Weaver and Tidwell did
not, during the applicable periods,  advise the Company of any of the enumerated
items described in Item 304(a)(1)(iv) of Regulation S-B.

The Company  and Weaver and  Tidwell  have not,  during the  Company's  two most
recent fiscal years or any subsequent period through the date of dismissal,  had
any disagreement on any matter of accounting principles or practices,  financial
statement disclosure, or auditing scope or procedure, which disagreement, if not
resolved to Weaver and  Tidwell's  satisfaction,  would have  caused  Weaver and
Tidwell  to  make  reference  to  the  subject  matter  of the  disagreement  in
connection with its reports.

In September 2005, the Company  retained the firm of Rosenberg Rich Baker Berman
& Company,  P.A.  ("Rosenberg Rich") to audit the Company's financial statements
for the years ended December 31, 2003, 2004 and 2005. At no time during the past
two fiscal years or any subsequent period did the Company consult with Rosenberg
Rich regarding any matter of the sort  described  above with reference to Weaver
and Tidwell,  any issue relating to the financial  statements of the Company, or
the type of audit opinion that might be rendered for the Company.

Item 8A.  Controls and Procedures

Evaluation of Disclosure  Controls and  Procedures.  Kevin  Kreisler,  our Chief
Executive Officer and Chief Financial Officer,  carried out an evaluation of the
effectiveness of the Company's disclosure controls and procedures as of December
31, 2003.  Pursuant to Rule13a-15(e)  promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, "disclosure controls
and procedures"  means controls and other procedures that are designed to insure
that information  required to be disclosed by the Company in the reports that it
files with the  Securities  and  Exchange  Commission  is  recorded,  processed,
summarized  and reported  within the time limits  specified in the  Commission's
rules.   "Disclosure  controls  and  procedures"  include,  without  limitation,
controls  and  procedures  designed  to insure that  information  the Company is
required to disclose in the reports it files with the  Commission is accumulated
and communicated to our Chief Executive  Officer and Chief Financial  Officer as
appropriate to allow timely decisions  regarding required  disclosure.  Based on
his evaluation,  Mr. Kreisler  concluded that the Company's system of disclosure
controls and  procedures  was effective as of December 31, 2003 for the purposes
described in this paragraph.

Changes in  Internal  Controls.  There was no change in internal  controls  over
financial  reporting  (as  defined  in  Rule  13a-15(f)  promulgated  under  the
Securities  Exchange Act or 1934)  identified in connection  with the evaluation
described in the preceding  paragraph that occurred during the fiscal year ended
December  31,  2003 that has  materially  affected  or is  reasonably  likely to
materially affect the Company's internal control over financial reporting.

Item 8B    Other Information

None.

                                    PART III

Item 9. Directors and Executive Officers of the Registrant.

 Name                Age     Position                            Director Since
 ----                ---     --------                            --------------
Kevin Kreisler       33      Chairman of the Board,                  2005
                             Chief Executive Officer,
                             and Chief Financial Officer

Mr.  Kreisler  has  over  fifteen  years  of  diversified  business  experience,
specifically including the operation of publicly-traded  companies. Mr. Kreisler
is currently the Chairman of the Board and Chief Executive Officer of Greenshift
Corporation, and he serves as Chairman of the Board of GS CleanTech Corporation,
GreenWorks Corporation,  GS Energy Corporation,  and Hugo International Telecom,
Inc., and is a member of the board of directors of Ovation Products Corporation.
Mr. Kreisler served as GS CleanTech  Corporation's  vice-president  from 1998 to
2000,  president  from 2000 to 2002,  and chief  executive  officer from 2002 to
February  2005.  Mr.  Kreisler  is a graduate of Rutgers  University  College of
Engineering  (B.S.,  Civil  and  Environmental   Engineering,   1994),   Rutgers
University Graduate School of Management  (M.B.A.,  1995) and Rutgers University
School of Law (J.D.,  1997).  Mr.  Kreisler is  admitted to practice  law in New
Jersey and the United States District Court for the District of New Jersey.

Audit Committee

The Board of Directors has not appointed an Audit Committee.  The functions that
would  be  performed  by an  Audit  Committee  are  performed  by the  Board  of
Directors.  The Board of Directors does not have an "audit  committee  financial
expert," because there is only one Board member.

Code of Ethics

The Company has not adopted a formal code of ethics  applicable to its executive
officers.  The Board of Directors has  determined  that the Company's  financial
operations are not sufficiently  complex to warrant adoption of a formal code of
ethics.


Section 16(a) Beneficial Ownership Reporting Compliance

None of the  officers,  directors or  beneficial  owners of more than 10% of the
Company's  common stock failed to file on a timely basis the reports required by
Section 16(a) of the Exchange Act during the year ended December 31, 2003.

Item 10.  Executive Compensation

Set forth below is information  with respect to compensation  paid to or accrued
by the Company for the fiscal years ended  December  31, 2001,  2002 and 2003 to
the Company's  Chief  Executive  Officer.  There was no officer whose  aggregate
compensation for the year ended December 31, 2003 exceeded $100,000.

         Name                     Year              Salary
         ----                     ----              ------
        Roger Coomber             2003             $92,400
                                  2002             $91,000
                                  2001             $62,800

Item 11.  Security Ownership of Certain Beneficial Owners and Management and
          Related Stockholder Matters.

The following  table sets forth certain  information  regarding the  "beneficial
ownership"  of  TDST's  common  stock  as of July  15,  2006  by each of  TSDT's
directors and executive  officers,  all current directors and executive officers
as a group, and persons or groups owning more than 5% of the outstanding  Common
Stock. This information is based upon information  received from or on behalf of
the named individuals.  SEC Rule 13d-3 under the Securities Exchange Act of 1934
defines "beneficial  ownership" to mean the right to vote or exercise investment
power,  or to share in the  right to vote or  exercise  investment  power,  with
respect to the specified securities, whether or not the specified person has any
economic interest in the specified securities. In computing the number of shares
beneficially  owned by a person and the  percentage  ownership  of that  person,
shares of common stock  subject to options or warrants  held by that person that
are currently  exercisable or exercisable  within 60 days of the date hereof are
deemed  outstanding.  Except as  indicated  in the  footnotes  to this table and
pursuant to applicable  community  property laws, each stockholder  named in the
table has sole voting and investment  power with respect to the shares set forth
opposite  such  stockholder's  name.  The  percentage   ownership  is  based  on
100,000,000 shares of Common Stock issued and outstanding as of July 15, 2006.


--------------------------------------------------------------------------------
Name and Address of    Amount and Nature of Beneficial Percentage of Outstanding
Beneficial Owner                    Ownership                   Shares
--------------------------------------------------------------------------------
Kevin Kreisler(1)                   383,333,333(2)            79.3%
c/o GreenShift Corporation
One Penn Plaza, Suite 1612
New York, NY 10119

All Officers and Directors          383,333,333(2)            79.3%
  as a group (1 person)

Jesse Dylan Capital Inc.             15,000,000               15.0%
119 Ironwood Ct.
Middletown, NJ 07748

Keith Freeman                         7,150,000                7.2%
Kingfisher, Wickenby
Lincoln, LN35AB  U.K.
--------------------------------

(1)  All shares  attributed  to Mr.  Kreisler are owned of record by  GreenShift
     Corporation.  Mr. Kreisler is the Chief  Executive  Officer and controlling
     shareholder of GreenShift Corporation.

(2)  Includes  (a)  300,000,000  shares  that  will be  issued  pursuant  to the
     Management  Services  Agreement  between  GreenShift  Corporation  and  tds
     (Telemedicine)  as  soon  as  tds  (Telemedicine)  amends  its  charter  to
     authorized  sufficient  additional  shares,  and (b) 83,333,333 shares that
     would be issued if the obligation under the Management  Services  Agreement
     to issue  $250,000  worth of common  stock were  satisfied  at the  current
     market price of $0.003.  Does not include shares  issuable  pursuant to the
     Convertible  Demand  Note  given by tds  (Telemedicine),  because  the note
     cannot be converted if GreenShift  would hold over 4.95% of the outstanding
     shares  after  the  conversion.  But  for  that  limitation,  the  $182,147
     principal  amount of the Note could be converted into 60,715,666  shares at
     the current market price of $0.003 per share.

Item 12. Certain Relationships and Related Transactions

In May 2005,  the Company  entered into a  Management  Services  Agreement  with
Greenshift  Corporation  under  which  Greenshift  agreed to provide  management
assistance,  financial support, and business development services.

Kevin  Kreisler,  the  Chairman  of tds  (Telemedicine)  is  also  Chairman  and
controlling shareholder of GreenShift. The Agreement was for a term of one year,
although the parties continue to function under the terms of the Agreement.  The
Agreement  provides  that,  in  compensation  for  GreenShift's   services,  tds
(Telemedicine) will issue to GreenShift:

o        300,000,000 shares of common stock;
o        Common stock with a value of $150,000;
o        Common stock with a value of $50,000 for each calendar quarter during
         which GreenShift provides services to tds (Telemedicine);
o        Common stock with a value equal to the expenses incurred by GreenShift
         in providing services to tds (Telemedicine).

At the end of 2005, tds (Telemedicine) issued to GreenShift a Convertible Demand
Note in the principal amount of $182,147. The Note was issued in satisfaction of
$100,000 accrued quarterly fees plus $82,147 in out-of-pocket expenses. The Note
bears  interest at 5% per annum.  The principal and interest  under the Note are
convertible by GreenShift into tds  (Telemedicine)  common stock at a conversion
rate equal to the average of the three lowest  closing  market prices during the
thirty days preceding  conversion.  The Note may not be converted,  however,  if
after the  conversion  GreenShift  would own more than 4.95% of the  outstanding
stock of tds (Telemedicine).




                                    PART IV

Item 13.  Exhibits

The  following are exhibits  filed as part of the Company's  Form 10-KSB for the
period ended December 31, 2003:

Exhibit Number                     Description

3-a  Certificate  of  Incorporation  -  filed  as an  exhibit  to the  Company's
     Registration  Statement on Form 10-SB on January 18, 2002, and incorporated
     herein by reference.

3-a(1) Certificate of Amendment of Certificate  of  Incorporation  - filed as an
     exhibit to the  Company's  Information  Statement  on Schedule 14C filed on
     January 21, 2003, and incorporated herein by reference.

3-b  Bylaws - filed as an exhibit to the  Company's  Registration  Statement  on
     Form 10-SB on January 18, 2002, and incorporated herein by reference.

10-a Management   Services   Agreement   between  the  Company  and   GreenShift
     Corporation dated May 2005

10-a(1)  Amendment  No.  1 to  Consulting  Agreement  between  the  Company  and
     GreenShift Corporation.

16   Letter from Weaver and Tidwell.

31.  Certification  of Chief  Executive  Officer  and  Chief  Financial  Officer
     pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of
     the Sarbanes-Oxley Act of 2002.

32.  Certification  of Chief  Executive  Officer  and  Chief  Financial  Officer
     pursuant  to  18  U.S.C.   Section  1350,   as  adopted   pursuant  to  the
     Sarbanes-Oxley Act of 2002.

Item 14.  Principal Accountant Fee and Services

In  September  2005  TDST  retained  Rosenberg  Rich  Baker  Berman & Co. as its
principal  accountant.  Rosenberg  Rich  Baker  Berman & Co.  had  performed  no
services for TDST prior to that date.

Audit Fees

Rosenberg Rich Baker Berman & Co. billed the Company  $29,450 in connection with
the  audits  of  the  Company's   financial   statements  for  the  years  ended
December 31, 2005, 2004 and 2003.

Tax Fees

Rosenberg  Rich Baker  Berman & Co. did not bill the  Company in the years ended
December 31, 2003 or 2002 for professional services rendered for tax compliance,
tax advice and tax planning.

All Other Fees

Rosenberg Rich Baker Berman & Co. did not bill the Company for any other fees in
the years ended  December 31, 2003 or 2002.

It is the policy of TDST's  board of  directors  to approve all  engagements  of
their  independent  auditors to render audit or non-audit  services prior to the
initiation of such services.


<PAGE>



                             tds (Telemedicine) Inc.
                                FINANCIAL REPORT
                                DECEMBER 31, 2003

                                    CONTENTS

                                                                         Page

REPORTS OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRMS.................................................F-1, F-2

FINANCIAL STATEMENTS

Consolidated Balance Sheet...................................................F-3

Consolidated Statement of Operations.........................................F-4

Consolidated Statement of Changes in Stockholders' Impairment................F-4

Consolidated Statement of Cash Flows.........................................F-5

Notes to Consolidated Financial Statements...................................F-7




<PAGE>




tds (TELEMEDICINE) INC.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
tds (Telemedicine) Inc. and Subsidiaries


We  have   audited  the   accompanying   consolidated   balance   sheet  of  tds
(Telemedicine)   Inc.  and  Subsidiaries  as  of  December  31,  2003,  and  the
consolidated statements of operations,  changes in stockholders' equity and cash
flows  for the year  ended  December  31,  2003.  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.  The  consolidated  financial  statements as of
December  31, 2002 were audited by other  auditors  whose report dated April 24,
2003 contained a modification  expressing  substantial doubt about the company's
ability to continue as a going concern.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of tds
(Telemedicine)   Inc.  and   subsidiaries  as  of  December  31,  2003  and  the
consolidated  results of their operations and cash flows for the year then ended
in conformity with U. S. generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
financial  statements,  the Company has  incurred  substantial  losses and has a
working  capital  deficit,  all of  which  raise  substantial  doubt  about  the
company's ability to continue as a going concern.  Management's  plans in regard
to these matters are also  discussed in Note 2. The financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.

/s/ Rosenberg, Rich, Baker & Berman


Rosenberg, Rich, Baker & Berman
Bridgewater, NJ
July 12, 2006



<PAGE>

                        REPORT OF INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM

tds (TELEMEDICINE) INC.
INDEPENDENT AUDITORS' REPORT

To the Members
tds (Telemedicine) Inc.

We have audited the accompanying consolidated statements of operations,  changes
in stockholders' deficit and cash flows of tds (Telemedicine), Inc. for the year
ended  December  31,  2002.  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 audit in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall 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 consolidated  results of their operations
and their cash flows for the year then ended  December 31, 2002,  in  conformity
with U. S. generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
financial  statements,  the Company has  incurred  substantial  losses and has a
working  capital  deficit,  all of  which  raise  substantial  doubt  about  the
company's ability to continue as a going concern.  Management's  plans in regard
to these matters are also  discussed in Note 2. The financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.

/s/ Weaver and Tidwell, LLP


Weaver and Tidwell, L.L.P.
Fort Worth, Texas
April 24, 2003

<PAGE>



                            tds (TELEMEDICINE) INC.
                           CONSOLIDATED BALANCE SHEET
                               DECEMBER 31, 2003

                             ASSETS

                                                                        2003
                                                                      ---------


   Assets to be disposed of ....................................        272,853
                                                                    -----------

TOTAL CURRENT ASSETS ...........................................    $   272,853
                                                                    ===========


                LIABILITIES AND STOCKHOLDERS' DEFICIENCY


CURRENT LIABILITIES

   Checks issued in excess of bank balances ....................          2,942
   Accrued expenses ............................................        167,282
   Liabilities to be disposed of ...............................      1,121,208
                                                                    -----------

       Total current liabilities ...............................      1,291,432

LONG-TERM LIABILITIES ..........................................            -0-


                                                                    -----------

       Total liabilities .......................................      1,291,432

MINORITY INTEREST ..............................................            -0-

CONTINGENCIES ..................................................            -0-

STOCKHOLDERS' DEFICIENCY

 Common stock, $.001 par value, 100,000,000
 Shares authorized 68,707,296 shares issued
 and outstanding at December 31, 2003 ..........................         68,707
 Additional paid-in capital ....................................        430,712
 Accumulated other comprehensive (loss) ........................        (95,163)
 Accumulated deficit ...........................................     (1,422,835)
                                                                    -----------
TOTAL STOCKHOLDERS' DEFICIENCY .................................     (1,018,579)
                                                                    -----------
TOTAL LIABILITIES AND MEMBERS' EQUITY ..........................    $   272,853
                                                                    ===========


The Notes to  Consolidated  Financial  Statements  are an integral  part of this
statement.



<PAGE>

                            tds (TELEMEDICINE) INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        2003              2002
                                                   ------------    ------------

OPERATING REVENUES .............................              0               0
                                                   ------------    ------------

          Total operating revenues .............              0               0

COST OF SALES ..................................              0               0
                                                   ------------    ------------

          Gross profit .........................              0               0

GENERAL AND ADMINISTRATIVE .....................              0               0
                                                   ------------    ------------
  Loss from continuing
operations .....................................             (0)             (0)
Income tax expense/benefit .....................              0               0



DISCONTINUED OPERATIONS

  Loss from the operation of the
     Discontinued component, net of tax of $0 ..       (805,757)       (487,099)
                                                   ------------    ------------


  Net loss on discontinued operation ...........       (805,757)              0

OTHER INCOME (EXPENSE)
    Interest expense ...........................              0               0
                                                   ------------    ------------

          Loss before income tax ...............       (805,757)       (487,099)

INCOME TAX .....................................           --              --
                                                   ------------    ------------

          Net loss .............................   ($   805,757)   ($   487,099)
                                                   ============    ============

Loss per share:(Basic & Diluted)
    From Discontinued Operations ...............   ($      0.01)   ($      0.01)
    From Continuing Operations .................   ($      0.00)   ($      0.00)
                                                   ============    ============


Weighted average number
    of shares outstanding
      Basic and diluted ........................     66,794,384      47,725,051
                                                   ============    ============

The Notes to Consolidated Financial Statements are an integral part of this
statement.


<PAGE>

<TABLE>


                            tds (TELEMEDICINE) INC.
         CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' IMPAIRMENT
                     YEARS ENDED DECEMBER 31, 2003 AND 2002
<CAPTION>

                                                                   Additional       Other
                                              Common Stock          Paid-in       Accumulated
                                         ----------------------     Capital      Comprehensive  Accumulated
                                           Shares        Amount    (Discount)    Income (Loss)     Deficit         Total
                                         ----------     -------     ---------      ---------      ---------      ---------

<S>                                    <C>          <C>           <C>            <C>            <C>            <C>
Balance, January 1, 2002 ...........    46,764,000   $    46,764   ($   22,912)   $     4,099    ($  129,969)   ($  102,018)

   Sale of common stock ............     7,129,296         7,129       257,921           --             --          265,050

   Reverse acquisition of
     Surf Group, Inc. ..............    11,628,000        11,628        (1,628)          --             --      $    10,000

   Other comprehensive income (loss)          --            --            --          (21,882)          --          (21,882)
   Net loss ........................          --            --            --             --         (487,099)      (487,099)

      Total comprehensive
          income (loss) ............          --            --            --             --             --         (508,981)
                                       -----------   -----------   -----------    -----------    -----------    -----------

Balance, December 31, 2002 .........    65,521,296        65,521       233,381        (17,783)      (617,068)      (335,949)
                                       ===========   ===========   ===========    ===========    ===========    ===========
   Sale of Common Stock ............     3,186,000         3,186       197,331        200,517
   Other Comprehensive Loss ........          --            --            --          (77,380)          --          (77,380)
   Net Loss ........................          --            --            --             --         (805,767)      (805,767)
                                       -----------   -----------   -----------    -----------    -----------    -----------
Balance, December 31, 2003 .........    68,707,296   $    68,707   $   430,712    ($   95,163)   ($1,422,835)   ($1,018,579)
                                       ===========   ===========   ===========    ===========    ===========    ===========


The Notes to  Consolidated  Financial  Statements  are an integral  part of this
statement. F-4
</TABLE>


<PAGE>




                             tds (TELEMEDICINE) INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           DECEMBER 31, 2003 AND 2002



                                                       12/31/02      12/31/03
                                                      -------------------------

Cash flow from operating activities
   Income/(loss) from continuing operations .......   $       0    $       0
 Adjustments to reconcile net loss to net cash
                  used in operating activities:
Cash used in operating activities of
              discontinued operations .............    (270,190)    (246,524)
                                                      ---------    ---------
              Net cash used in operating activities    (270,190)    (246,524)
Cash flow from investing activities
 Cash used in investing activities
              of discontinued operations ..........     (15,392)    (127,931)
                                                      ---------    ---------
              Net cash used in investing activities     (15,392)    (127,931)


Cash flow from financing activities
 Proceeds from issuance of common stock ...........     200,517      357,200
  Cash from other financing activities
       of discontinued operations .................      35,480       66,550
                                                      ---------    ---------

  Net cash provided by financing activities .......     235,997      423,750

Net increase/(decrease) in cash ...................     (49,585)      49,295
Cash, beginning of year ...........................      49,585          290
                                                      ---------    ---------
Cash, end of year .................................   $       0     $ 49,585
                                                      =========    =========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid during the year for:
            Interest ..............................   $   8,422    $  39,349
            Income Taxes ..........................   $       0    $       0


The Notes to  Consolidated  Financial  Statements  are an integral  part of this
statement.

<PAGE>

                             tds (TELEMEDICINE) INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1        BASIS OF PRESENTATION

TDS  (Telemedicine),  Inc.  ("we",  the "Company" or "tds") is a holding company
that no longer has any operating  subsidiaries.  The company's  former operating
subsidiary,  entered into bankruptcy  protection under United Kingdom bankruptcy
laws and went through formal liquidation  procedures during 2004. The Company no
longer has any operations.

Nature of Operations

The  Company's  former  operations  utilized  the Internet and digital and voice
communication  technology to bridge the separation  between medical patients and
diagnosing physicians when medical conditions exist in which the patient and the
physician are separated by space,  time or both.  From 1998 to 2004, the Company
provided these services to the National Health Service in the United Kingdom.

In June 2004 the  Company's  only  operating  subsidiary  (TDS,  LTD)  filed for
protection   under  the  bankruptcy  laws  of  the  United  Kingdom  and  ceased
operations.  The final and formal termination of the subsidiary was completed in
November 2005. The company's  United States  operations  also ceased to continue
development of the business in the United States in 2004.

PRINCIPLES OF CONSOLIDATION

For the years  ended  2002 and 2003,  the  accompanying  consolidated  financial
statements include the accounts of tds (Telemedicine)  Inc. and its wholly-owned
subsidiary,  tds  (Dermatology)Ltd.  All significant  intercompany  balances and
transactions were eliminated in consolidation.

2      GOING CONCERN

The accompanying  consolidated  financial statements have been prepared assuming
the company will continue as a going concern.  The Company had a working capital
deficiency of $1,018,579 as ofDecember 31, 2003, which raises  substantial doubt
about the company's  ability to continue as a going concern.  For the year ended
December  31, 2003 the Company  sustained a loss of $805,757 and as of 6December
31, 2003 it had a stockholders'  deficiency of $1,018,579.  The company has gone
through a winding down of its operations, and the ability to continue as a going
concern is dependent upon the addition of profitable operations and support from
stockholders and investors.

The consolidated financial statements do not include any adjustments relating to
the  recoverability  and  classification of recorded asset amounts or the amount
and  classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

3        CERTAIN ACCOUNTING POLICIES

USE OF ESTIMATES

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

For accounts payable and accrued expenses, the carrying amount approximates fair
value because of the short term maturity of these instruments.

Fair value  estimates  are made at a specific  point in time,  based on relevant
information and information about the financial instrument.  These estimates are
subjective  in nature and  involve  uncertainties  and  matters  of  significant
judgment  and  therefore  cannot  be  determined  with  precision.   Changes  in
assumptions could significantly affect the estimates.

NET INCOME/(LOSS) PER SHARE

The Company  calculates  net income (loss) per share as required by Statement of
Financial  Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). SFAS
128 replaces the  calculation  of primary and fully  diluted  earnings per share
with basic and diluted  earnings per share.  Unlike primary  earnings per share,
basic earnings per share excludes any dilutive effect of stock options, warrants
and convertible securities.


INCOME TAXES

Deferred  income taxes are  recognized  for the tax  consequences  of "temporary
differences" by applying enacted  statutory tax rates applicable to future years
to  differences  between the financial  statement  carrying  amounts and the tax
bases of existing  assets and  liabilities.  The effect on  deferred  taxes of a
change in tax rates is  recognized  in income in the period  that  includes  the
enactment date.  Valuation  allowances are established  when necessary to reduce
deferred tax assets to the amount expected to be realized. Income tax expense is
the tax payable or refundable for the period plus or minus the change during the
period in deferred tax assets and liabilities.

TRANSLATION OF FOREIGN CURRENCIES

Assets  and  liabilities  of  foreign  subsidiaries  are  translated  at current
exchange rates and the effects of these translation  adjustments are reported as
a separate  component of  stockholders'  equity.  Realized gains and losses from
foreign currency  transactions  are included in the  consolidated  statements of
operations,  as are unrealized  gains and losses arising from the translation of
the foreign  subsidiaries'  intercompany  liability  accounts into U.S. dollars.
Market risk is the potential  loss arising from adverse  changes in market rates
and prices, such as foreign currency exchange rates.

ADVERTISING EXPENSES

Advertising  expenses are charged to  operations in the period in which they are
incurred.  Advertising  expenses  for the year ended  December 31, 2003 and 2002
were immaterial.

REVENUE RECOGNITION

Revenue from medical services are recognized as services are rendered.

BANKRUPTCY - tds (Dermatology) Ltd.

In June 2004 an order of  administration  was entered against tds  (Dermatology)
Ltd., an operating  subsidiary,  under United Kingdom bankruptcy laws. The order
provides tds (Dermatology)  Ltd.  protection from its creditors and in June 2004
the  court  appointed  administrators  to  aid  tds  (Dermatology)  Ltd.  in its
day-to-day operations.  The effects of this on the Company's operations resulted
in the winding down of operations.

DISCONTINUED OPERATIONS AND DECONSOLIDATION OF SUBSIDIARIES

Under  generally  accepted  accounting  principles,  consolidation  is generally
required for investments of more than 50% of the outstanding  voting stock of an
investee,  except when  control is not held by the majority  owner.  Under these
rules,  legal  reorganization  or  bankruptcy  represent  conditions  which  can
preclude  consolidation  in instances  where  control  lies with the  bankruptcy
court, rather than the majority owner. Accordingly, due to the appointment of an
administrator, the Company ceased to consolidate the financial results of its UK
subsidiary beginning June 2004. The operations of the UK subsidiary are included
in results from discontinued operations,  net, in the accompanying  consolidated
statements of operations through the date of deconsolidation.

The results of the discontinued operations are shown as "loss from operations of
discontinued  component" on the  consolidated  statement of  operations  and are
comprised of:

                                             Period ended
                                        12/31/03    12/31/02
                                        --------------------

Revenues ........................   $   457,957    $ 1,114,312

Operating loss ..................      (805,757)      (487,099)
                                    -----------    -----------

Loss from discontinued operations   $  (805,757)   $  (487,099)
                                    ===========    ===========

NEW ACCOUNTING PRONOUNCEMENTS

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment of
Long-Lived  Assets  and for  Long-Lived  Assets  to be  disposed  of."  SFAS 144
requires  that  long-lived  assets be reviewed for  impairment  whenever  events
change or changes in  circumstances  indicate that their carrying amount may not
be  recoverable  and is measured by a comparison  of the  carrying  amount of an
asset to  undiscounted  future net cash flows  expected to be  generated  by the
asset.  If  the  carrying  amount  of an  asset  exceeds  its  estimated  future
undiscounted  cash flows,  an impairment  charge is recognized for the amount by
which the carrying amount of the asset exceeds the fair value of the asset. SFAS
144 requires companies to separately report discontinued  operations and extends
that  reporting to a component of an entity that either has been disposed of (by
sales,  abandonment or in a distribution to owners) or is classified as held for
sale. The Company adopted SFAS 144 on January 1, 2002.


4        INCOME TAXES

TDS  (TELEMEDICINE)  Inc.  is a  corporation  that  reports  and  files  a  U.S.
corporation  business  tax  return.  Its  former  wholly-owned   subsidiary,   a
corporation that reported and filed their corporate  business tax returns in the
United Kingdom. The components of the provision for income taxes consist of:


                       2002             2001
                       ----             ----
   Current Foreign    $ -0-             $ -0-
                      =====             =====

The Company has a U.S. income tax operating loss  carryforward of  approximately
$260,000 that expires through the year 2021.


5        AMOUNTS DUE TO FACTOR

The Company has entered into a factoring  agreement  with Royal Bank of Scotland
Commercial Services Limited. This agreement does not meet the criteria for sales
recognition  and,  accordingly,  is accounted for as a secured  borrowing with a
pledge of collateral.

6        BUSINESS COMBINATION

tds  (Dermatology)  Ltd.  was a  privately  held  company  in the U.K.  prior to
December  2002. On December 18, 2002 the Company  consummated a merger with Surf
Group,  Inc., a publicly  traded U. S. company.  As a result of the merger,  the
principle shareholders of tds (Telemedicine) Inc. assumed control of Surf Group,
Inc. While Surf Group,  Inc. was the acquiring  entity for legal  purposes,  tds
(Telemedicine) Inc. is considered the acquiring entity for accounting  purposes.
In connection  with the merger,  Surf Group,  Inc. issued  53,893,296  shares of
common stock to the owners of tds (Telemedicine) Inc.

At the date of merger,  Surf Group, Inc. had $10,000 cash, no liabilities and no
ongoing operations.  Accordingly,  $10,000 has been assigned as the value of the
common  stock  retained by the Surf  Group,  Inc.  shareholders  pursuant to the
merger.  Pro Forma  information  has not been  provided  since there would be no
significant  difference  compared  to the amounts  included in the  accompanying
financial   statement.   The  accompanying   financial  statements  include  the
operations of tds  (Telemedicine)  Inc. for the periods shown and the operations
of Surf Group,  Inc. post merger  (December 18, 2002).  In February  2003,  Surf
Group, Inc. changed its name to tds (Telemedicine) Inc.

7        CONTINGENCIES

The  wholly  owned   subsidiary,   tds   (Dermatology)   Ltd.  was  placed  into
administrative  status of the UK bankruptcy  code in June 2004.  Certain  claims
might be brought  against  the Company  seeking to hold the  Company  liable for
certain   transfers  made  by  Limited  to  the  Company  and/or  for  Limited's
obligations  to creditors  under various  equitable  theories  recognized  under
bankruptcy law. As of June 30, 2006, there have been no claims filed against the
Company or any of its  current or former  officers or  directors,  and we do not
expect  any  material  claims to be  filed.  However,  the  outcome  of  complex
litigation  (including  claims  which  may be  asserted  against  us)  cannot be
predicted  with  certainty  and its  dependent  upon  many  factors  beyond  the
Company's  control;  however,  any such  claims,  if  successful,  could  have a
material  adverse  impact on the  Company's  financial  condition.  We may incur
additional  costs in connection  with the Company's  involvement  in the Limited
bankruptcy proceedings.

8        SUBSEQUENT EVENTS

In February of 2005, the Company issued all of its remaining  authorized  common
shares  to  create  a  total  of  100,000,000  common  shares  outstanding.  The
29,292,704 shares were issued for the assumption of the Company's existing trade
payables  of  $150,000.  In May 2005,  the  Company  entered  into a  Management
Services Agreement with GreenShift  Corporation under which GreenShift agreed to
provide  management  assistance,  financial  support,  and business  development
services.

The  agreement is for a term of one year and provides for  GreenShift to receive
$150,000 payable in the form of registered and price protected TDST common stock
and 3,000,000  share of common stock due  immediately  upon the  completion of a
reverse stock split.  The  transaction  was valued at the estimated  fair market
value of the  services  provided in the total  amount of  $300,000  and is being
expensed over the one year service  period.  In addition,  GreenShift is also to
receive  $50,000  management fee per quarter and  reimbursement  of all expenses
until such time as the strategic transaction is complete.


                                   SIGNATURES

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

                                 TDS (TELEMEDICINE), INC.
Dated:  July 19, 2006            By:/s/ Kevin Kreisler
                                        ------------------
                                        Kevin Kreisler, Chief Executive 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 and
in the capacities and on the dates indicated.


                                   /s/ Kevin Kreisler
                                       -----------------------
                                       Kevin Kreisler
                                       Chief Executive Officer,
                                       Chief Financial and Accounting
                                       Officer, Director
                                       July 19, 2006