**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB/A**





(Mark
      One)





**x
      ANNUAL REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**


For
      the
      fiscal year ended December 31, 2006.





**o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**


For
      the
      transition period from _____to _____





Commission
      File Number 2-71164





MEDLINK
      INTERNATIONAL, INC.


(Name
      of
      small business issuer in its charter)


DELAWARE
              41-1311718(State
                  or other jurisdiction of
              (I.R.S.
                  Employer I.D. No.)incorporation
                  or organization)




11
      Oval Drive, Suite 200B, Islandia, New York 11749


(Address
      of Principal Executive Offices) (Zip Code)





631-342-8800


(Issuer’s
      Telephone Number, Including Area Code)





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





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




Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or 15(d) of the Act.


Yes
      **x** No
      **o**


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 **x** No
      **o**




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
      **o**No **x**




MedLink
      International, Inc. revenues from continuing operations for the fiscal year
      ended December 31, 2006 were $11,364.





Aggregate
      market value of the voting and non voting equity held by non-affiliates was
      approximately, $6,915,486 as of March 31, 2007. There were a total of
      approximately 8,443,520 shares held by non-affiliates as of such
      date.





The
      Company’s stock transfer agent is Computershare, 350 Indiana St, Suite 800,
      Golden, Colorado 80401.





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: 16,616,784 class A shares and 2,250,000
      class
      B shares outstanding as of March 31, 2007.




Documents
      incorporated by reference: None.





Transitional
      Small Business Disclosure Format (Check one): Yes **o** No
**x**





-1-




STATEMENT
      OF FORWARD LOOKING STATEMENTS





This
      Annual Report on Form 10-KSB contains certain “forward-looking” statements (as
      such term is defined in the Private Securities Litigation Reform Act of 1995)
      and information relating to MedLink International, Inc. and its subsidiaries
      (collectively the “Company”) that are based on the beliefs of the Company’s
      management, as well as, assumptions made by and information currently available
      to management. When used in this report, the words “estimate,” “project,”
“believe,” “anticipate,” “intend,” “expect” and similar expressions are intended
      to identify forward-looking statements. The Company’s actual results may vary
      materially from the forward-looking statements made in this report due to
      important factors, including, but not limited to: the Company's need to obtain
      additional financing or equity; uncertainties associated with changes in state
      and federal regulations, including the Health Insurance Portability and
      Accountability Act of 1996 (“HIPAA”), and certain other factors detailed below
      under Risk Factors.





As
      for
      the forward-looking statements that relate to future financial results and
      other
      projections, actual results will be different due to the inherent uncertainty
      of
      estimates, forecasts and projections and may be better or worse than projected.
      Given these uncertainties, you should not place any reliance on these
      forward-looking statements. These forward-looking statements also represent
      our
      estimates and assumptions only as of the date that they were made. The Company
      expressly disclaims a duty to provide updates to these forward-looking
      statements, and the estimates and assumptions associated with them, after the
      date of this filing to reflect events or changes in circumstances or changes
      in
      expectations or the occurrence of anticipated events.





The
      Company undertakes no obligation to publicly update any forward-looking
      statement, whether as a result of new information, future events or otherwise.
      You are advised, however, to consult any additional disclosures the Company
      makes in its Form 10-KSB, Form 10-QSB and Form 8-K reports to the SEC. This
      discussion is provided as permitted by the Private Securities Litigation Reform
      Act of 1995.





Information
      regarding market and industry statistics contained in this Report is included
      based on information available to the Company which it believes is accurate.
      The
      Company has not reviewed or included data from all sources, and cannot assure
      stockholders of the accuracy or completeness of the data included in this
      Report. Forecasts and other forward-looking information obtained from these
      sources are subject to the same qualifications and the additional uncertainties
      accompanying any estimates of future market size, revenue and market acceptance
      of products and services.




-2-





**PART
      I**





**Item
      1.**  **Description
      of Business**





The
      Company’s Background





MedLink
      International Inc. is a Delaware corporation that was incorporated in Minnesota
      in 1977 as Ionics Controls, Inc. and changed its domicile to Delaware in October
      of 2005. Our Class A common stock trades on the Over-the Counter Bulletin Board
      under the symbol “MLKNA” and our Class B common stock trades on the Frankfurt
      Stock Exchange under the symbol WM6B





We
      changed our name to Western Media Group Corporation in November 1988, and to
      MedLink International, Inc. in October 2005. The change was made in connection
      with the merger into MedLink International, Inc. Delaware Corporation in October
      2005. We formed MedLink International, Inc. in connection with the Annual
      Shareholder meeting held October 24th, 2005 to properly identify the Company’s
      main product offerings with that of the parent company.




Our
      principal executive offices are located at 11 Oval Drive, Suite 200B, Islandia,
      NY 11749 and our telephone number is (631) 342-8800. The Company’s web site
      address is www.medlinkus.com.





Our
      Business




The
      Company is in the business of selling, implementing and supporting software
      solutions and hardware that give healthcare providers secure access to clinical,
      administrative and financial data in real time, allowing them to improve the
      quality, safety and efficiency in the delivery of healthcare. MedLink offer
      its
      services as stand-alone, combined or enterprise-wide systems. The Company’s
      flagship product the *MedLink
      EHR* *®* ** software
      enables physicians to utilize one solution to handle all of their practice
      management needs from scheduling, to practice management, to medical billing
      in
      an all in one user friendly application.





The
      majority of MedLink’s business operations are carried out by MedLink
      International, Inc. and its flagship products the MedLink VPN and MedLink EHR.
      The MedLink VPN incorporates several third party applications from its partners,
      including Kodak, Emdeon, Thomson, Quest Diagnostics, I-Plexus, LibertyNet,
      and
      SnapGear. The Company also provides MedLink TV, medical billing, messaging,
      video teleconferencing, document management and advertising services to the
      health care community.





**MedLink
      Solutions & Services**




**MedLink
      EHR**




The
      MedLink EHR (Electronic Health Record) provides patient-centric
      data, meaning that information on the system is tied to each specific
      patient and the patient's primary care physician. MedLink EHR contains the
      patient's demographic information, including notes, appointments, lab results,
      prescriptions, documents, history of visits, as well as all insurance and
      financial information. MedLink EHR is designed to centralize the patient's
      medical records and streamline the diagnostic and treatment process while
      connecting the physician seamlessly with outside resources such as radiology
      centers, labs, pharmacies and insurance companies.




The
      MedLink EHR is used as a practice management system, which provides for the
      consolidation by physicians of data among disparate networks, whereby it goes
      out like a powerful search engine within a physician's own private network
      and
      collects and organizes the data into an application that provides for all of
      a
      physician's records to be stored on their local database while keeping connected
      to all the networks a physician's practice is affiliated with.




-3-




This
      process is unique to the MedLink EHR and is made possible by the MedLink VPN.
      Once a physician's affiliates are connected to the MedLink VPN, an affiliate
      network group is created and interfaced with the MedLink EHR. This allows data
      from those networks to be pulled into one application.




The
      MedLink EHR automates the collection and management of clinical data, allowing
      physician practice groups to enter, organize, and effectively utilize secure
      patient chart information at the point of care. The MedLink EHR solutions also
      streamline practice-wide clinical workflow and communication and help physicians
      manage lab orders, prescriptions, radiology images and reports and other data.
      The MedLink EHR can improve healthcare quality and reduce costs by preventing
      medical errors, reducing paperwork and reducing administrative inefficiencies;
      and automates administrative workflow, including scheduling, patient billing
      and
      collection and claims management. The MedLink EHR improves the efficiency of
      operations within a physician practice, particularly the financial aspects
      of
      the practice related to billing and reimbursement.




The
      primary care doctor utilizes MedLink EHR to gather and update the data on his
      or
      her patients. Each time that MedLink EHR is accessed through the secure MedLink
      VPN it synchronizes with a master database that is tied into all affiliates
      of
      the primary care doctor and then updates the data on the primary care doctor’s
      local database. According to physicians, this process will save a tremendous
      amount of time and enable access to data that previously could have taken up
      to
      several weeks to collect. The MedLink EHR does this all in a matter of minutes.




The
      MedLink EHR gives the primary care physician control over patient records.
      MedLink EHR enables the primary provider to easily manage the process of
      creating, maintaining and adding to patient Electronic Health
      Records.





**MedLink
      Virtual Private Network (VPN)**





The
      MedLink Virtual Private Network (“MedLink VPN”) allows subscribing doctors to
      securely communicate with other physicians and remotely access and retrieve
      patient records, lab results, X-Rays, CAT Scans and other Personal Health
      Information (PHI). The MedLink VPN provides data security compliant with Title
      II, Part C of the Health Insurance Portability and Accountability Act of 1996
      (“HIPAA”), and a system for secure delivery of radiological images, allowing for
      the delivery of radiological images without film. MedLink proprietary PACS
      viewer also allows for manipulation of radiological images. The MedLink VPN
      offers the highest level of security available in the Health Information
      Technology (“HIT”) industry. Utilizing the MedLink VPN, different networks in
      different locations can be tied into a single private network. Software
      applications can be centralized and made available to certain users and not
      others depending on your security protocols. Essentially, the MedLink VPN allows
      you to customize public and private areas within your organization. The MedLink
      VPN also incorporates streaming video technology, allowing for remote viewing
      of
      procedures or delivery of continuing education or training materials by a
      hospital to its doctors and staff, and communications software allowing for
      secure messaging among hospital personnel.





**MedLink
      EHR Lite**




The
      MedLink EHR Lite works in conjunction with the MedLink EHR for referring
      physicians to view radiology reports and images from a connected Radiology
      center. The referring physicians will utilize the MedLink EHR Lite to view
      current and past reports on their patients enabling them to generate a more
      accurate electronic health record of their patients. The seamless integration
      into a patient's electronic health record is unique to MedLink and MedLink
      hopes to make the process the standard moving forward for the delivery of
      reports and images from radiology centers.  The MedLink EHR Lite will
      help to speed the diagnostic process and significantly reduce patient wait
      times.




MedLink
      utilizes a Lite version of the MedLink EHR, which includes the following
      features to referring physicians of radiology centers affiliated with MedLink.
      The free features include: scheduler, patient demographics, messaging center
      and
      radiology reports and associated images. With less than 15% of american
      physicians utilizing EHR technology, the MedLink EHR Lite version alleviates
      a
      lot of the data entry associated with implementing an EHR system whereby patient
      demographics are automatically derived from the radiology centers information
      system.




-4-





The
      MedLink EHR Lite version, which is provided free to eligible physicians,
      currently over 42,000, will display pharmaceutical and other relevant
      advertising on the log-in and home page of the application. This offers
      advertisers a unique opportunity to reach a specific demographic for their
      advertising content directly on the physician’s desktop, as well as an
      additional revenue stream for the Company.





MedLink
      will offer its full suite of MedLink EHR products, such as the MedLink
      DocManager, MedLink Billing, E-Labs, E-Prescription and other related services
      that start at $299/month per practice to the MedLink EHR Lite
      users.


.


**MedLink
      DocManager**




MedLink
      DocManager is completely integrated with the MedLink EHR which allows physicians
      to capture, manage and share documents with the touch of a button. MedLink
      DocManager is scalable to all levels of use from a single physician's office
      to
      a large hospital. It helps eliminate hours spent filing and retrieving, as
      well
      as the cost of copying, storing and shipping records. MedLink DocManager
      utilizes bar code technology to seamlessly attach the scanned documents to
      a
      patient's medical record.




**MedLink
      Billing**




MedLink
      Billing is a proprietary medical billing software solution for the medical
      community that works seamlessly with the practice management tools of the
      MedLink EHR with seamless transmission of data from one solution to the
      other.  MedLink Billing in conjunction with its partners Emdeon and
      I-Plexus allows for the physicians to electronically submit claims to
      payors and receive associated reports.




MedLink
      Billing is a complete claims management solution, which assists a physician
      in
      managing its patients' insurance and co-pay information while establishing
      a
      simple work flow for generating and submitting more accurate bills. This
      software enables the physician to reduce insurance company rejections and speed
      up the collection of the accounts receivable of the physician's practice.




In
      addition, MedLink Billing allows MedLink to offer to medical practices one
      solution to help manage their business. The application which runs locally,
      utilizes the HIPAA security measures afforded by the MedLink VPN, and is fully
      integrated with all other functions to prevent having to enter the same data
      multiple times.




**MedLink
      TV**





In
      March
      of 2007, the Company announced the launch of MedLink TV with its strategic
      partner Dynatek Media. Whereby MedLink TV will deploy 40” LCD screens in the
      waiting rooms of medical offices and clinics. MedLink TV will comprise one
      of
      the foremost out-of-home broadcast networks reaching a captive audience of
      consumers.





MedLink
      TV offers advertisers a unique channel and innovative approach to reaching
      consumers, in the waiting rooms of physician’s offices and outpatient clinics,
      while they wait for medical visits and procedures. The network balances
      informational and advertising content with dynamically delivered, informative,
      educational and entertaining programming with a focus on health issues and
      well-being.





MedLink
      TV provides advertisers and specifically pharmaceutical companies with a captive
      audience of consumers, who are focused on health issues during the time they
      spend waiting for medical appointments. According to studies by Arbitron,
      Nielsen, and other market research companies, digitally delivered alternative
      media has been shown to have substantially higher recall rate than that of
      traditional media, such as print, radio, television and static
      billboards.




-5-




**Pharmaceutical
      Advertising**




MedLink
      will be offering a Lite version of the MedLink EHR to participating Radiology
      centers.  The goal is for the physicians to utilize the MedLink EHR to
      receive radiology studies and become familiar and comfortable with the MedLink
      EHR and to eventually purchase a full version and other related services
      such as e-prescription and the MedLink DocManager.




The
      Lite
      version of the MedLink EHR will mirror the functionality of the full version
      but
      the physician will be locked out of key features until they become a paying
      subscriber.  While MedLink plans to convert many of the 40,000 physician
      offices into paying subscribers, full penetration is unrealistic.  For
      those Lite version users only, MedLink has partnered with DynaTek who
      specializes in supplying advertisement space to advertisement vendors such
      as
      pharmaceutical companies that aim to specifically target physician
      offices.





Recent
      Business Developments





The
      MedLink Remote PACS has been installed in just over 50 radiology centers in
      California, New York, New Jersey and Florida. MedLink is actively approaching
      other Radiology Centers in the U.S. and expects to have more than 200 radiology
      centers across the U.S. utilizing the MedLink EHR Lite version to deliver their
      radiology reports and images to their referring physician base. Currently the
      referring physician base that can utilize the MedLink EHR Lite version to access
      their reports and images is a little more than 42,000, representing nearly
      10%
      of all U.S. based physicians. The Company is expanding its installation team
      to
      accommodate the requests for installations.





Due
      to
      the development in late December of 2006 of acquiring 53 radiology centers
      to
      utilize the MedLink Remote PACS to deliver their images to more than 42,000
      physician clinics. MedLink had to delay the release of MedLink EHR 2.0 to
      develop enhancements to meet the new demands in addition to the Lite version.
      MedLink EHR Lite is currently being installed in clinics in New York and the
      MedLink EHR 3.0 is scheduled for full release by the end of May.





During
      the fiscal year ended December 31, 2006, MedLink focused its efforts and
      resources on additional development of the MedLink EHR, the hiring, training
      and
      deployment of a sales team, and development of the Remote PACS and acquiring
      additional partnerships to allow for the Company’s goal of the MedLink EHR Lite
      becoming the primary delivery method of radiology reports and images to
      physicians in the U.S.





The
      Company recently announced a co-marketing agreement with Eastman Kodak Company,
      one of the largest company’s in the Healthcare IT arena that has installations
      in almost 95% of all healthcare facilities in the U.S. Under the terms of the
      agreement MedLink and Kodak will jointly market each others products and
      services to their current and future customer base. MedLink and Kodak are
      jointly working on their first project together at Mt. Sinai, whereby MedLink
      and Kodak will backup Mt. Sinai’s radiology information and utilize the MedLink
      EHR Lite version to deploy their images and reports to their referring physician
      base.





MedLink
      will actively market the users of the MedLink EHR Lite version to upgrade to
      the
      full version or parts thereof. Such as billing, practice management, e-labs,
      and
      e-prescription. MedLink’s sales force will also actively market to these
      physicians the MedLink TV and plans to have 2,000 installations by the end
      of
      2007. The Company projects that advertising revenue from the 2,000 screens
      will
      net the Company over $1 million a month and is shifting a lot of its attention
      to a more of an ad revenue approach in addition to sales of the MedLink EHR
      and
      related services. However, their can be no assurances that a significant number
      of advertisers will advertise on MedLink TV or a significant number of
      physicians will order the MedLink EHR and its related services.




-6-




The
      Market for MedLink Products and Services





MedLink
      believes that the market for its products and services consist of small and
      medium size medical practices that are looking to reduce their communication
      costs and increase employee efficiency, however the MedLink EHR is scalable
      for
      larger clinics but the company intends to focus on the aforementioned practices.
      MedLink believes that the best way to market to these doctors is by establishing
      a relationship with hospitals and radiology centers they are affiliated with,
      as
      it has done with Doshi Diagnostic, Signet Diagnostic, New Island Hospital,
      UCLA,
      Miracle Mile Medical Center, and other radiology centers.





Currently,
      to the extent that MedLink has engaged in any marketing activities, it has
      focused solely on small to medium sized practices on Long Island, NY who are
      affiliated with Doshi Diagnostic and New Island Hospital, Access Imaging, and
      UCLA. If sufficient revenue is available in the future, MedLink may seek to
      market its services to other hospitals and the doctors affiliated with them
      and
      expand its sales offices to New Jersey and Florida in late 2007.





***The
      Healthcare and Healthcare IT Industry***




The
      Bush
      administration has mandated that all physicians utilize electronic health
      records by 2014. There are currently over 600,000 physicians in the U.S. and
      only fifteen percent (15%) of them have employed electronic health records
      for
      their practice. This creates a tremendous opportunity and Medlink is
      addressing this $28 billion dollar market with its innovative,
      cost-effective technology that will be in major demand by medical professionals,
      a market which is expected to grow aggressively in years to come.




The Health
      Information Technology (HIT) marketplace remains strong. Domestically, the
      overall financial condition of hospitals remains solid, and there continues
      to
      be incentive for them to purchase health information technology to address
      safety, quality, and efficiency needs. With annual HIT spending in the United
      States of $1.9 trillion, or 16 percent of the gross domestic product, there
      is
      still broad bipartisan support of HIT, with several pieces of pending
      legislation containing provisions that encourage both hospitals and physician
      practices to adopt HIT. Globally, there continues to be a high level of interest
      in HIT at the country-wide and regional levels that is driven by similar
      safety, quality, and efficiency needs as those driving demand in the United
      States





In
      a
      report published by IDC’s Health Industry Insights, the research and advisory
      firm forecasts total information technology (IT) spending for the electronic
      health record (EHR) market in the United States to increase to $4.8 billion
      in
      2015. The study reveals a compounded annual growth rate (CAGR) of 15.8% in
      the
      EHR market over the next ten years, with current spending in that market
      estimated at $1.1 billion in 2005.





Around
      the world, healthcare costs continue to rise as healthcare professionals work
      to
      uphold quality standards. The Centers for Medicare and Medicaid Services
      (CMS) has reported that, in the United States, healthcare represents
      16 percent of the gross national product, which they project will reach
      20 percent by 2015. In this climate, HIT is broadly seen as a way to curb
      these growing costs while improving the quality of care.





*Policy
      Reforms*




The
      federal government is currently using its position as the nation’s leading
      purchaser of healthcare products and services to promote HIT use. For example,
      CMS and the Office of the Inspector General (OIG) are allowing acute care
      organizations to help provide referring physicians with hardware, software,
      training and support necessary to implement e-prescribing or interoperable
      electronic medical record systems.





To
      increase the availability of healthcare pricing information, CMS posts
      information on what Medicare will pay for 30 common elective procedures and
      other hospital admissions. We believe this focus on transparency could incent
      healthcare organizations to use technology to improve safety and efficiency.





*Private
      Sector Approaches*




Healthcare
      costs are a significant issue for employers as well. According to the Journal
      of
      Occupational and Environmental Medicine, productivity losses related to personal
      and family health problems cost U.S. employers $1,685 per employee per year
      or
      about $226 billion annually. The cost of health insurance rose
      7.7 percent in 2006, much higher than the overall rate of inflation (3.5
      percent) or the increase in workers’ earnings (3.8 percent).


Faced
      with these costs, some large employers have become advocates of HIT. For
      example, Applied Materials, Inc., BP America, Inc., Cardinal Health, Inc.,
      Intel
      Corporation, Pitney Bowes, Inc. and Wal-Mart Stores, Inc. founded an initiative
      in 2006 focused on creating personal health records for their employees. We
      believe this type of employer activism is a positive for the HIT industry as
      it
      supports wider-spread adoption of electronic medical records.




-7-





HIT
      Earns Broad Government Recognition





In
      2006,
      HIT continued to receive recognition as a part of the solution to the problems
      facing the U.S. healthcare system. Its advocates include U.S. President George
      Bush, who cited its potential in yet another State of the Union address (Feb.
      1,
      2006). In the address, the President highlighted the fact that the first of
      78 million baby boomers turn 60 in 2006, putting unprecedented strains on
      the federal government. Within the context of a national conversation on
      Medicare and Medicaid, meaningful action on HIT has become an important goal
      at
      the federal level. HIT is receiving bipartisan support, with numerous
      policymakers embracing it as a primary opportunity for improving the cost and
      quality of the nation’s healthcare delivery.





RAND
      Study Identifies Dramatic HIT-Enabled Cost Savings





One
      milestone event that supported the belief that HIT can improve the cost and
      quality of healthcare delivery came in the form of the results of a two-year
      study by RAND Corporation, a non-profit think tank. The study sought to examine
      HIT’s potential to save lives and dollars if widely embraced in the United
      States. The results, published in the leading academic journal *Health
      Affairs* (Sept.
      2006), identified a possible $162 billion in annual savings related to
      increased efficiencies, reduced adverse drug events and improved health quality
      via prevention and disease management. The study, which additionally revealed
      the potential prevention of 2.2 million avoidable medical errors, also
      pointed to the elevated role the federal government must play in helping realize
      the potential savings identified.





Influencers
      Come Together in Pursuit of Interoperability Standards





Providing
      further validation on the concept of better connecting communities and
      geographies, 2005 saw increased visibility for the National Alliance for
      Healthcare Information Technology. Among other objectives, the Alliance took
      on
      the cause to promote the identification and adoption of national
      interoperability standards. The organization made great strides in securing
      widespread industry agreement on the definition for interoperability in
      healthcare, a crucial step to ensuring that hundreds of thousands of HIT systems
      will one day seamlessly exchange critical patient data. More than 37
      organizations representing every sector of healthcare, including the Joint
      Commission on Accreditation of Healthcare Organizations, BlueCross Blue Shield
      Association, General Motors, Oracle, and the American Hospital Association,
      to
      name just a few, agreed that “In healthcare, interoperability is the ability of
      different information technology systems and software applications to
      communicate; to exchange data accurately, effectively and consistently; and
      to
      use the information that has been exchanged.”




Competition





The
      market for HIT solutions and services is intensely competitive, rapidly evolving
      and subject to rapid technological change. The Company’s principal existing
      competitors include: Cerner Corporation, Eclipsys Corporation, Epic Systems
      Corporation, GE Healthcare Technologies, iSoft Corporation, McKesson
      Corporation, Medical Information Technology, Inc. (“Meditech”), Misys Healthcare
      Systems and Siemens Medical Solutions Health Services Corporation, each of
      which
      offers a suite of software solutions and services that compete with many of
      the
      Company’s software solutions and services. Other competitors focus on only a
      portion of the market that MedLink addresses. For example, competitors such
      as
      Allscripts Healthcare Solutions, Inc., Quality Systems, Inc. and Emdeon
      Corporation offer solutions to the physician practice market but do not
      currently have a significant presence in the health systems and independent
      hospital market. In addition, the Company expects that major software
      information systems companies, large information technology consulting service
      providers, system integrators, managed care companies and others specializing
      in
      the healthcare industry may offer competitive software solutions or services.
      The pace of change in the HIT market is rapid and there are frequent new
      software solution introductions, software solution enhancements and evolving
      industry standards and requirements. The Company believes that the principal
      competitive factors in this market include the breadth and quality of system
      and
      software solution offerings, the stability of the information systems provider,
      the features and capabilities of the information systems, the ongoing support
      for the system and the potential for enhancements and future compatible software
      solutions. Substantially all of the Company’s competitors have greater financial
      and personnel resources than the Company, which could adversely affect the
      Company’s ability to compete with these entities.




-8-





Customer
      Dependence





MedLink
      is in the early stages of its business development and is solely dependent
      on a
      few major customers, Doshi Diagnostic, Signet Diagnostic New Island Hospital,
      UCLA, and select radiology groups. MedLink believes that its future success
      will
      be dependent on it developing relationships with radiology centers for access
      to
      their doctors. Without these relationships, MedLink’s business is unlikely to
      succeed.





Intellectual
      Property





MedLink
      International, Inc. has trademarked the name MedLink VPN, MedLink EHR, and
      MedLink TV. Other than these trademarks, MedLink does not have any intellectual
      property.




Research
      & Development





MedLink
      in 2006 committed $109,353 towards research and development, the majority of
      which was spent on development of the MedLink EHR. The Company intends to
      increase its research and development activities in 2007 to continue
      enhancements on the MedLink EHR to keep up with the ever changing HIT market
      by
      opening an R&D and customer support center in Hyderabad, India which is
      expected to be fully operational by May.





Government
      Regulation





The
      only
      significant government regulation affecting MedLink’s business is HIPAA. HIPAA
      required the U.S. Department of Health and Human Services to establish national
      standards for electronic health care transactions and national identifiers
      for
      providers, health plans, and employers. It also addresses the security and
      privacy of health data. The goal of the standards adopted is to improve the
      efficiency and effectiveness of the nation's healthcare system by encouraging
      the widespread use of electronic data interchange in healthcare, while
      protecting that information with a secure environment. These standards have
      been
      promulgated and must be followed by persons and companies which transmit health
      data.





MedLink
      believes that its current products and services are HIPAA compliant and that
      its
      future products and services will be HIPAA compliant because it utilizes
      third-party solutions from SnapGear, which it believes to be fully secure and
      HIPAA compliant. However, MedLink has not received any independent conformation
      of such compliance. In the event that it is found not to be HIPAA complaint,
      we
      may be subject to lawsuits and regulatory liabilities and we would be unable
      to
      provide services in the medical community.





Employees





As
      of the
      date of this report, MedLink has 11 full time employees. Medlink believes that
      its relationship with its employees is good and none of its employees are
      represented by a union or party to a collective bargaining
      agreement.





K-Rad
      Konsulting, LLC





Krad
      Konsulting, LLC. (“Krad”) a wholly-owned subsidiary of the Company is a solution
      provider for Internet infrastructure. Krad offers Internet infrastructure
      consulting for businesses and the medical community using what it deems reliable
      sources of technical help for their networks and related systems. Krad offers
      three main services which are: (1) hourly technical aid; (2) retainer contracts
      for specific skills or systems; and (3) project consulting. To date, Krad has
      not realized any significant revenues as a majority of Krad efforts are ‘focused
      on the development and maintenance of the MedLink VPN, MedLink EHR and its
      suite
      of services. Although there can be no assurance, the Company’s management
      believes that while the majority of Krad’s focus has been on development, that
      upon the realization of an established client base for the MedLink EHR Krad’s
      revenues will increase significantly as Krad will be the technical support
      arm
      of MedLink. Krad expects to bill its clients on an hourly-basis for technical
      support at a rate of approximately $125/hour. Due to the extreme technical
      aspects of Health Information Technology, many of MedLink’s competitors realize
      more than 25% of their total revenue from technical support.




-9-





Potential
      Future Acquisitions by the Company





The
      Company may seek, investigate, and if warranted, acquire interests in companies
      in exchange for debt, equity, cash or a combination thereof. While the Company
      currently intends to search for businesses that have synergies with MedLink,
      the
      Company may not restrict its search for a business opportunity to any particular
      industry or geographical area and may, therefore, engage in essentially any
      business in any industry. The Company has unrestricted discretion in seeking
      and
      participating in a business opportunity, subject to the availability of such
      opportunities, economic conditions and other factors.





The
      selection of a business opportunity in which to participate is complex and
      extremely risky and will be made by management in the exercise of its business
      judgment. There is no assurance that the Company will be able to identify and
      acquire any business opportunity which will ultimately prove to be beneficial
      to
      the Company and its shareholders.





The
      activities of the Company are subject to several significant risks which arise
      primarily as a result of the fact that the Company may acquire or participate
      in
      a business opportunity based on the decision of management which will, in all
      probability, act without the consent, vote, or approval of the Company’s
      shareholders.





Business
      opportunities may be available to the Company from various sources, including
      its officers and directors, consultants, professional advisers, securities
      broker-dealers, venture capitalists, members of the financial community, and
      others who may present unsolicited proposals. The Company will seek a potential
      business opportunity from all known sources, but will rely principally on
      personal contacts of its officers, directors and consultants as well as indirect
      associations between them and other business and professional
      people.





Although
      the Company does not anticipate engaging professional firms specializing in
      business acquisitions or reorganizations, if management deems it in the best
      interests of the Company, such firms may be retained. The Company may also
      publish notices or advertisements seeking a potential business opportunity
      in
      financial or trade publications.





The
      Company may acquire a business opportunity or enter into a business in any
      industry and in any stage of development. The Company may enter into a business
      or opportunity involving a start-up or new company. The Company may acquire
      a
      business opportunity in various stages of its operation.





In
      analyzing prospective business opportunities, management will consider such
      matters as synergies with the Company’s existing businesses, available Company
      technical, financial and managerial resources, working capital and other
      financial requirements, history of operations, if any, prospects for the future,
      the nature of present and expected competition, the quality and experience
      of
      management services which may be available and the depth of the management,
      the
      need for further research, development or exploration, the potential for growth
      and expansion, the potential for profit, the perceived public recognition or
      acceptance of products, services, trade or service marks, name identification
      and other relevant factors.





Generally,
      the Company will analyze all available facts and circumstances and make a
      determination based upon a composite of available facts, without reliance upon
      any single factor as controlling.




-10-




Methods
      of Participation of Acquisition





Specific
      business opportunities will be reviewed and, on the basis of that review, the
      legal structure or method of participation deemed by management to be suitable
      will be selected. Such structures and methods may include, but are not limited
      to, leases, purchase and sale agreements, licenses, joint ventures, other
      contractual arrangements, and may involve a reorganization, merger or
      consolidation transaction. The Company may act directly or indirectly through
      an
      interest in a partnership, corporation, or other form of
      organization.





Procedures





As
      part
      of the Company's investigation of business opportunities, officers and directors
      may meet personally with management and key personnel of the firm sponsoring
      the
      business opportunity, visit and inspect material facilities, obtain independent
      analysis or verification of certain information provided, check references
      of
      management and key personnel, and undertake other reasonable
      procedures.





The
      Company will generally request that it be provided with written materials
      regarding the business opportunity containing such items as a description of
      product, service and company history, management resumes, financial information,
      available projections with related assumptions upon which they are based, an
      explanation of proprietary products and services, evidence of existing patents,
      trademarks or service marks or rights thereto, present and proposed forms of
      compensation to management, a description of transactions between the
      prospective entity and its affiliates, relevant analysis of risks and
      competitive conditions, a financial plan of operation and estimated capital
      requirements, and other information deemed relevant. The Company may not be
      able
      to obtain audited financial statements prior to the closing of a transaction
      and
      therefore, the actual financial state of a business opportunity may be different
      than represented. However, the Company will endeavor to obtain audited financial
      statements prior to the closing of any transaction as well as contractual
      protection against any material changes not reflected in unaudited financial
      statements. The Company also will insure that if an acquired company would
      be
      considered to be a significant subsidiary of the Company, the audited financial
      statements of the acquired company that are required to be filed by the Company
      with the Securities and Exchange Commission in connection with such acquisition
      will be available for timely filing.




**Risk
      Factors**




You
      should carefully consider the risks and uncertainties described below and other
      information in this report. These are not the only risks and uncertainties
      that
      we face. Additional risks and uncertainties that we do not currently know about
      or that we currently believe are immaterial may also harm our business
      operations. If any of these risks or uncertainties occurs, it could have a
      material adverse effect on our business.





Investment
      Considerations and Risk Factors





THE
      COMPANY HAS A LIMITED OPERATING HISTORY ON WHICH TO EVALUATE OUR CURRENT
      PROSPECTS





The
      Company was incorporated in July, 1977. The businesses the Company previously
      operated were liquidated in the late 1980s and early 1990s. The Company became
      a
      corporate shell in 1991 and remained a corporate shell through October 31,
      2000.
      On October 31, 2000 the Company acquired KRAD. KRAD began doing business in
      February, 2000 and, to date, has had limited revenues. On January 1, 2002,
      the
      Company acquired MedLink, which also had had limited revenues to date. Other
      than the acquisitions of K-Rad and MedLink our activities have been very
      limited.




-11-




THE
      COMPANY MAY HAVE OUTSTANDING LIABILITIES ABOUT WHICH OUR PRESENT MANAGEMENT
      IS
      UNAWARE





Until
      1991, the Company operated in several business lines through at least five
      different subsidiaries. The Company’s records are not complete with respect to
      all transactions between 1977 and 1991, and very few corporate records exist
      for
      the period 1992 through 1999. The Company understands that during the period
      1992 - October, 2000, the Company was dormant and did not engage in any business
      activity. While the Company does not believe any material liabilities exist,
      it
      is possible such liabilities do exist. For example, there may be presently
      unknown obligations by the Company to pay monies, issue stock or perform
      specific actions under a contract. While the Company does not believe any such
      liabilities exist, the incomplete record of transactions makes assurance that
      none exist impossible.





THE
      HEALTHCARE IS HIGHLY REGULATED AND IS SUBJECT TO CHANGE AND THE COMPANY’S
      FAILURE TO COMPLY WITH NEW OR EXISTING REGULATIONS COULD ADVERSELY AFFECT ITS
      ABILITY TO OPERATE IN THEIR TARGETED INDUSTRY





The
      healthcare industry is highly regulated and is subject to changing political,
      economic and regulatory influences. For example, the Balanced Budget Act of
      1997
      (Public Law 105-32) contained significant changes to Medicare and Medicaid
      and
      had an impact for several years on healthcare providers’ ability to invest in
      capital intensive systems. In addition, the Health Insurance Portability and
      Accountability Act of 1996 (HIPAA) is having a direct impact on the
      healthcare industry by requiring identifiers and standardized transactions/code
      sets and necessary security and privacy measures in order to ensure the
      protection of patient health information. These factors affect the purchasing
      practices and operation of healthcare organizations. Federal and state
      legislatures have periodically considered programs to reform or amend the U.S.
      healthcare system at both the federal and state level and to change healthcare
      financing and reimbursement systems. These programs may contain proposals to
      increase governmental involvement in healthcare, lower reimbursement rates
      or
      otherwise change the environment in which healthcare industry participants
      operate. Healthcare industry participants may respond by reducing their
      investments or postponing investment decisions, including investments in the
      Company’s software solutions and services.





Many
      healthcare providers are consolidating to create integrated healthcare delivery
      systems with greater market power. These providers may try to use their market
      power to negotiate price reductions for the Company’s software solutions and
      services. As the healthcare industry consolidates, the Company’s client base
      could be eroded, competition for clients could become more intense and the
      importance of acquiring each client becomes greater.





THE
      HEALTHCARE INDUSTRY IS HIGHLY REGULATED AND ANY FAILURE BY THE COMPANY TO COMPLY
      WITH SUCH GOVERNMENTAL REGULATIONS COULD ADVERSELY AFFECT ITS ABILITY TO
      CONTINUE TO OPERATE IN THE HEALTHCARE INDUSTRY.





The
      healthcare industry is highly regulated at the local, state and federal level.
      Consequently, the Company may be subject to such regulations, which include
      regulation in the areas of healthcare fraud, medical devices and the security
      and privacy of patient data, and the risk of changes in the various local,
      state
      and federal laws.





*Healthcare
      Fraud.* The
      federal government continues to strengthen its position and scrutiny over
      practices involving healthcare fraud affecting healthcare providers whose
      services are reimbursed by Medicare, Medicaid and other government healthcare
      programs. Healthcare providers who are clients of the Company are subject to
      laws and regulations on fraud and abuse which, among other things, prohibit
      the
      direct or indirect payment or receipt of any remuneration for patient referrals,
      or arranging for or recommending referrals or other business paid for in whole
      or in part by these federal or state healthcare programs. Legislative provisions
      relating to healthcare fraud and abuse give federal enforcement personnel
      substantial funding, powers and remedies to pursue suspected fraud and abuse.
      The effect of this government regulation of the Company’s clients is difficult
      to predict. While the Company believes that it is in substantial compliance
      with
      any applicable laws, many of the regulations applicable to the Company’s clients
      and that may be applicable to the Company, are vague or indefinite and have
      not
      been interpreted by the courts. They may be interpreted or applied by a
      prosecutorial, regulatory or judicial authority in a manner that could require
      the Company’s clients to make changes in their operations or the way that they
      deal with the Company. If such laws and regulations are determined to be
      applicable to the Company and if the Company fails to comply with any applicable
      laws and regulations, it could be subject to sanctions or liability, including
      exclusion from government health programs and could have a material adverse
      effect on the Company’s business, results of operations or financial condition.




-12-





*Security
      and Privacy of Patient Information.* State
      and
      federal laws regulate the confidentiality of patient records and the
      circumstances under which those records may be released. These regulations
      govern both the disclosure and use of confidential patient medical record
      information and require the users of such information to implement specified
      security measures. Regulations currently in place governing electronic health
      data transmissions continue to evolve and are often unclear and difficult to
      apply.





The
      Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) requires
      national standards for some types of electronic health information transactions
      and the data elements used in those transactions, security standards to ensure
      the integrity and confidentiality of health information and standards to protect
      the privacy of individually identifiable health information. Covered entities
      under HIPAA, which include healthcare organizations such as the Company’s
      clients, were required to comply with the privacy standards by April 2003,
      the transaction regulations by October 2003 and security regulations by
      April 2005.





The
      effect of HIPAA on the Company’s business is difficult to predict, and there can
      be no assurances that the Company will adequately address the business risks
      created by HIPAA and its implementation, or that the Company will be able to
      take advantage of any resulting business opportunities. Furthermore, the Company
      is unable to predict what changes to HIPAA, or the regulations issued pursuant
      to HIPAA, might be made in the future or how those changes could affect the
      Company’s business or the costs of compliance with HIPAA. Evolving HIPAA-related
      laws or regulations could restrict the ability of the Company’s clients to
      obtain, use or disseminate patient information. This could adversely affect
      demand for the Company’s solutions if they are not re-designed in a timely
      manner in order to meet the requirements of any new regulations that seek to
      protect the privacy and security of patient data or enable the Company’s clients
      to execute new or modified healthcare transactions. The Company may need to
      expend additional capital, research and development and other resources to
      modify its solutions to address these evolving data security and privacy issues.





MedLink
      is required to comply with HIPAA. While it has taken steps to do so, it has
      not
      sought independent verification of such compliance. If MedLink is found not
      to
      be in compliance with HIPAA, it may be subject to lawsuits from its clients,
      as
      well as regulatory liability which would materially adversely affect its
      operations and business.




**If
      physicians and hospitals do not accept our products and services, or delay
      in
      deciding whether to purchase our products and services, our business, financial
      condition and results of operations will be adversely affected.**




Our
      business model depends on our ability to sell our products and services.
      Acceptance of our products and services requires physicians and hospitals to
      adopt different behavior patterns and new methods of conducting business and
      exchanging information. We cannot assure you that physicians and hospitals
      will
      integrate our products and services into their workflow or that participants
      in
      the healthcare market will accept our products and services as a replacement
      for
      traditional methods of conducting healthcare transactions. Achieving market
      acceptance for our products and services will require substantial sales and
      marketing efforts and the expenditure of significant financial and other
      resources to create awareness and demand by participants in the healthcare
      industry. If we fail to achieve broad acceptance of our products and services
      by
      physicians, hospitals and other healthcare industry participants or if we fail
      to position our services as a preferred method for information management and
      pharmaceutical healthcare delivery, our business, financial condition and
      results of operations will be adversely affected.




**If
      we are unable to successfully integrate businesses we acquire, our ability
      to
      expand our product and service offerings and our customer base may be limited.**




In
      order
      to expand our product and service offerings and grow our business by reaching
      new customers, we may continue to acquire businesses that we believe are
      complementary. The successful integration of acquired businesses is critical
      to
      our success. Such acquisitions, involve numerous risks, including difficulties
      in the assimilation of the operations, services, products and personnel of
      the
      acquired company, the diversion of management’s attention from other business
      concerns, entry into markets in which we have little or no direct prior
      experience, the potential loss of the acquired company’s key employees and our
      inability to maintain the goodwill of the acquired businesses. If we fail to
      successfully integrate acquired businesses or fail to implement our business
      strategies with respect to these acquisitions, we may not be able to achieve
      projected results or support the amount of consideration paid for such acquired
      businesses.




-13-




The
      successful implementation of our acquisition strategy depends on our ability
      to
      identify suitable acquisition candidates, acquire companies on acceptable terms,
      integrate their operations and technology successfully with our own and maintain
      the goodwill of the acquired business. We are unable to predict whether or
      when
      any prospective acquisition candidate will become available or the likelihood
      that any acquisition will be completed. Moreover, in pursuing acquisition
      opportunities, we may compete for acquisition targets with other companies
      with
      similar growth strategies. Some of these competitors may be larger and have
      greater financial and other resources than we have. Competition for these
      acquisition targets could also result in increased prices of acquisition
      targets.




**Competition
      for our employees is intense, and we may not be able to attract and retain
      the
      highly skilled employees we need to support our business.**




*Our
      ability to provide high-quality services to our clients depends in large part
      upon our employees’ experience and expertise. We must attract and retain highly
      qualified personnel with a deep understanding of the healthcare and healthcare
      information technology industries. We compete with a number of companies for
      experienced personnel and many of these companies, including clients and
      competitors, have greater resources than we have and may be able to offer more
      attractive terms of employment. In addition, we invest significant time and
      expense in training our employees, which increases their value to clients and
      competitors who may seek to recruit them and increases the costs of replacing
      them. If we fail to retain our employees, the quality of our services could
      diminish and this could have a material adverse effect on our business,
      financial condition and results of operations.*




**If
      we lose the services of our key personnel, we may be unable to replace them,
      and
      our business, financial condition and results of operations could be adversely
      affected.**




Our
      success largely depends on the continued skills, experience, efforts and
      policies of our management and other key personnel and our ability to continue
      to attract, motivate and retain highly qualified employees. In particular,
      the
      services of Ray Vuono, our Chairman and Chief Executive Officer, are integral
      to
      the execution of our business strategy. If one or more of our key employees
      leaves our employment, we will have to find a replacement with the combination
      of skills and attributes necessary to execute our strategy. Because competition
      for skilled employees is intense, and the process of finding qualified
      individuals can be lengthy and expensive, we believe that the loss of the
      services of key personnel could adversely affect our business, financial
      condition and results of operations. We cannot assure you that we will continue
      to retain such personnel. We do not maintain keyman insurance for any of our
      key
      employees.




**If
      we are unable to successfully introduce new products or services or fail to
      keep
      pace with advances in technology, our business, financial condition and results
      of operations will be adversely affected.**




The
      successful implementation of our business model depends on our ability to adapt
      to evolving technologies and industry standards and introduce new products
      and
      services. We cannot assure you that we will be able to introduce new products
      on
      schedule, or at all, or that such products will achieve market acceptance.
      Moreover, competitors may develop competitive products that could adversely
      affect our results of operations. A failure by us to introduce planned products
      or other new products or to introduce these products on schedule could have
      an
      adverse effect on our business, financial condition and results of operations.




If
      we
      cannot adapt to changing technologies, our products and services may become
      obsolete, and our business could suffer. Because the Internet and healthcare
      information markets are characterized by rapid technological change, we may
      be
      unable to anticipate changes in our current and potential customers’
requirements that could make our existing technology obsolete. Our success
      will
      depend, in part, on our ability to continue to enhance our existing products
      and
      services, develop new technology that addresses the increasingly sophisticated
      and varied needs of our prospective customers, license leading technologies
      and
      respond to technological advances and emerging industry standards and practices
      on a timely and cost-effective basis. The development of our proprietary
      technology entails significant technical and business risks. We may not be
      successful in using new technologies effectively or adapting our proprietary
      technology to evolving customer requirements or emerging industry standards,
      and, as a result, our business could suffer.




-14-




**Our
      business depends in part on and will continue to depend in part on our ability
      to establish and maintain additional strategic relationships.**




To
      be
      successful, we must continue to maintain our existing strategic relationships
      and establish additional strategic relationships with leaders in a number of
      healthcare and healthcare information technology industry segments. This is
      critical to our success because we believe that these relationships contribute
      towards our ability to:




·
            
            extend
                the reach of our products and services to a larger number of physicians
                and hospitals and to other participants in the healthcare industry;




·
            
            develop
                and deploy new products and services;




·
            
            further
                enhance the MedLink brand; and




·
            
            generate
                additional revenue and cash flows.




Entering
      into strategic relationships is complicated because strategic partners may
      decide to compete with us in some or all of our markets. In addition, we may
      not
      be able to maintain or establish relationships with key participants in the
      healthcare industry if we conduct business with their competitors. We depend,
      in
      part, on our strategic partners’ ability to generate increased acceptance and
      use of our products and services. If we lose any of these strategic
      relationships or fail to establish additional relationships, or if our strategic
      relationships fail to benefit us as expected, we may not be able to execute
      our
      business plan, and our business, financial condition and results of operations
      may suffer.




**If
      our products fail to perform properly due to undetected errors or similar
      problems, our business could suffer.**




Complex
      software such as ours often contains undetected defects or errors. It is
      possible that such errors may be found after introduction of new software or
      enhancements to existing software. We continually introduce new solutions and
      enhancements to our solutions, and, despite testing by us, it is possible that
      errors might occur in our software. If we detect any errors before we introduce
      a solution, we might have to delay deployment for an extended period of time
      while we address the problem. If we do not discover software errors that affect
      our new or current solutions or enhancements until after they are deployed,
      we
      would need to provide enhancements to correct such errors. Errors in our
      software could result in:




·
            
            harm
                to our reputation;




·
            
            lost
                sales;




·
            
            delays
                in commercial release;




·
            
            product
                liability claims;




·
            
            delays
                in or loss of market acceptance of our solutions;




·
            
            license
                terminations or renegotiations; and




-15-




·
            
            unexpected
                expenses and diversion of resources to remedy errors.




Furthermore,
      our customers might use our software together with products from other
      companies. As a result, when problems occur, it might be difficult to identify
      the source of the problem. Even when our software does not cause these problems,
      the existence of these errors might cause us to incur significant costs, divert
      the attention of our technical personnel from our solution development efforts;
      impact our reputation and cause significant customer relations problems.




**Our
      future success depends upon our ability to grow, and if we are unable to manage
      our growth effectively, we may incur unexpected expenses and be unable to meet
      our customers’ requirements.**




We
      will
      need to expand our operations if we successfully achieve market acceptance
      for
      our products and services. We cannot be certain that our systems, procedures,
      controls and existing space will be adequate to support expansion of our
      operations. Our future operating results will depend on the ability of our
      officers and key employees to manage changing business conditions and to
      implement and improve our technical, administrative, financial control and
      reporting systems. We may not be able to expand and upgrade our systems and
      infrastructure to accommodate these increases. Difficulties in managing any
      future growth could have a significant negative impact on our business,
      financial condition and results of operations because we may incur unexpected
      expenses and be unable to meet our customers’ requirements.




The
      market for our products and services is fragmented, intensely competitive and
      is
      characterized by rapidly evolving industry standards, technology and user needs
      and the frequent introduction of new products and services. Some of our
      competitors may be more established, benefit from greater name recognition
      and
      have substantially greater financial, technical and marketing resources than
      us.
      Moreover, we expect that competition will continue to increase as a result
      of
      consolidation in both the information technology and healthcare industries.
      If
      one or more of our competitors or potential competitors were to merge or partner
      with one of our competitors, the change in the competitive landscape could
      adversely affect our ability to compete effectively. We compete on the basis
      of
      several factors, including:




·
            
            breadth
                and depth of services;




·
            
            reputation;




·
            
            reliability,
                accuracy and security;




·
            
            client
                service;




·
            
            price;
                and




·
            
            industry
                expertise and experience.




There
      can
      be no assurance that we will be able to compete successfully against current
      and
      future competitors or that the competitive pressures that we face will not
      materially adversely affect our business, financial condition and results of
      operations.




-16-




**If
      we are deemed to infringe on the proprietary rights of third parties, we could
      incur unanticipated expense and be prevented from providing our products and
      services.**




We
      could
      be subject to intellectual property infringement claims as the number of our
      competitors grows and our applications’ functionality overlaps with competitive
      products. While we do not believe that we have infringed or are infringing
      on
      any proprietary rights of third parties, we cannot assure you that infringement
      claims will not be asserted against us or that those claims will be
      unsuccessful. We could incur substantial costs and diversion of management
      resources defending any infringement claims. Furthermore, a party making a
      claim
      against us could secure a judgment awarding substantial damages, as well as
      injunctive or other equitable relief that could effectively block our ability
      to
      provide products or services. In addition, we cannot assure you that licenses
      for any intellectual property of third parties that might be required for our
      products or services will be available on commercially reasonable terms, or
      at
      all.




**Factors
      beyond our control could cause interruptions in our operations, which would
      adversely affect our reputation in the marketplace and our business, financial
      condition and results of operations.**




To
      succeed, we must be able to operate our systems without interruption. Certain
      of
      our communications and information services are provided through our third-party
      service providers. Our operations are vulnerable to interruption by damage
      from
      a variety of sources, many of which are not within our control, including
      without limitation: (1) power loss and telecommunications failures;
      (2) software and hardware errors, failures or crashes; (3) computer
      viruses and similar disruptive problems; and (4) fire, flood and other
      natural disasters.




Any
      significant interruptions in our services would damage our reputation in the
      marketplace and have a negative impact on our business, financial condition
      and
      results of operations.




**We
      may be liable for use of data we provide.**




We
      provide data for use by healthcare providers in treating patients. Third-party
      contractors provide us with most of this data. If this data is incorrect or
      incomplete, adverse consequences, including death, may occur and give rise
      to
      product liability and other claims against us. In addition, certain of our
      solutions provide applications that relate to patient clinical information,
      and
      a court or government agency may take the position that our delivery of health
      information directly, including through licensed practitioners, or delivery
      of
      information by a third party site that a consumer accesses through our websites,
      exposes us to personal injury liability, or other liability for wrongful
      delivery or handling of healthcare services or erroneous health information.
      While we maintain product liability insurance coverage in an amount that we
      believe is sufficient for our business, we cannot assure you that this coverage
      will prove to be adequate or will continue to be available on acceptable terms,
      if at all. A claim brought against us that is uninsured or under-insured could
      harm our business, financial condition and results of operations. Even
      unsuccessful claims could result in substantial costs and diversion of
      management resources.




**If
      our security is breached, we could be subject to liability, and customers could
      be deterred from using our services.**




The
      difficulty of securely transmitting confidential information over the Internet
      has been a significant barrier to engaging in sensitive communications over
      the
      Internet. Our business relies on using the Internet to transmit confidential
      information. We believe that any well-publicized compromise of Internet security
      may deter people from using the Internet for these purposes and from using
      our
      system to conduct transactions that involve transmitting confidential healthcare
      information.




It
      is
      also possible that third parties could penetrate our network security or
      otherwise misappropriate patient information and other data. If this happens,
      our operations could be interrupted, and we could be subject to liability and
      regulatory action. We may need to devote significant financial and other
      resources to protect against security breaches or to alleviate problems caused
      by breaches. We could face financial loss, litigation and other liabilities
      to
      the extent that our activities or the activities of third-party contractors
      involve the storage and transmission of confidential information like patient
      records or credit information.




-17-




**Our
      failure to license and integrate third-party technologies could harm our
      business.**




We
      depend
      upon licenses for some of the technology used in our solutions from third-party
      vendors, and intend to continue licensing technologies from third parties.
      These
      technologies might not continue to be available to us on commercially reasonable
      terms or at all. Most of these licenses can be renewed only by mutual consent
      and may be terminated if we breach the terms of the license and fail to cure
      the
      breach within a specified period of time. Our inability to obtain any of these
      licenses could delay development until equivalent technology can be identified,
      licensed and integrated, which would harm our business, financial condition
      and
      results of operations.




Most
      of
      our third-party licenses are non-exclusive and our competitors may obtain the
      right to use any of the technology covered by these licenses and use the
      technology to compete directly with us. Our use of third-party technologies
      exposes us to increased risks, including, but not limited to, risks associated
      with the integration of new technology into our solutions, the diversion of
      our
      resources from development of our own proprietary technology and our inability
      to generate revenue from licensed technology sufficient to offset associated
      acquisition and maintenance costs. In addition, if our vendors choose to
      discontinue support of the licensed technology in the future or are unsuccessful
      in their continued research and development efforts, we might not be able to
      modify or adapt our own solutions.




**If
      we do not maintain and expand our business with our existing customers, our
      business, financial condition and results of operations could be adversely
      affected.**




Our
      business model depends on the success of our efforts to sell additional products
      and services to our existing customers. In addition, as we deploy new
      applications and features for our existing solutions or introduce new solutions
      and services, our current customers could choose not to purchase these new
      offerings. If we fail to generate additional business from our current
      customers, our revenue could grow at a slower rate or even decrease.




**Risks
      Related to Our Industry**




**We
      are subject to a number of existing laws, regulations and industry initiatives,
      non-compliance with certain of which could shut down our operations or otherwise
      adversely affect our business, financial condition and results of operations,
      and we are susceptible to a changing regulatory environment.**




As
      a
      participant in the healthcare industry, our operations and relationships, and
      those of our customers, are regulated by a number of federal, state and local
      governmental entities. The impact of this on us is direct, to the extent we
      are
      ourselves subject to these laws and regulations, and is also indirect in that,
      in a number of situations, even though we may not be directly regulated by
      specific healthcare laws and regulations, our products must be capable of being
      used by our customers in a manner that complies with those laws and regulations.
      Inability of our customers to do so could affect the marketability of our
      products or our compliance with our customer contracts, or even expose us to
      direct liability on a theory that we had assisted our customers in a violation
      of healthcare laws or regulations. Because our business relationships with
      physicians are unique, and the healthcare technology industry as a whole is
      relatively young, the application of many state and federal regulations to
      our
      business operations and to our customers is uncertain. Indeed, there are federal
      and state fraud and abuse laws, including anti-kickback laws and limitations
      on
      physician referrals. It is possible that a review of our business practices
      or
      those of our customers by courts or regulatory authorities could result in
      a
      determination that could adversely affect us. In addition, the healthcare
      regulatory environment may change in a way that restricts our existing
      operations or our growth. The healthcare industry is expected to continue to
      undergo significant changes for the foreseeable future, which could have an
      adverse effect on our business, financial condition and results of operations.
      We cannot predict the effect of possible future legislation and regulation.




Specific
      risks include, but are not limited to, risks relating to:




·
            
            ***Patient
                Information.***As
                part of the operation of our business, our customers provide to us
                patient-identifiable medical information related to the prescription
                drugs
                that they prescribe and other aspects of patient treatment. Government
                and
                industry legislation and rulemaking, especially the Health Insurance
                Portability and Accountability Act of 1996 (HIPAA), and standards
                and
                requirements published by industry groups such as the Joint Commission
                on
                Accreditation of Healthcare Organizations, require the use of




-18-




standard
                transactions, standard identifiers, security and other standards
                and
                requirements for the transmission of certain electronic health
                information. National standards and procedures under HIPAA include
                the
                “*Standards
                for Electronic Transactions and Code Sets*”
                (the Transaction Standards); the “*Security
                Standards*”
                (the Security Standards); and the “*Standards
                for Privacy of Individually Identifiable Health
                Information*”
                (the Privacy Standards). The Transaction Standards require the use
                of
                specified data coding, formatting and content in all specified “Health
                Care Transactions” conducted electronically. The Security Standards
                require the adoption of specified types of security for healthcare
                information. The Privacy Standards grant a number of rights to individuals
                as to their identifiable confidential medical information (called
                Protected Health Information) and restrict the use and disclosure
                of
                Protected Health Information by Covered Entities, defined as “health care
                providers, health care payers, and health care clearinghouses.” Generally,
                the HIPAA standards directly affect Covered Entities. We have reviewed
                our
                activities and believe that we are a Covered Entity to the extent
                that we
                maintain a “group health plan” for the benefit of our employees. Such a
                plan, even if not a separate legal entity from us as its sponsor,
                is
                included in the HIPAA definition of Covered Entities. We have taken
                steps
                we believe to be appropriate and required to bring our group health
                plan
                into compliance with HIPAA. We do not believe that we are a Covered
                Entity
                as a health care provider or as a health care clearinghouse; however,
                the
                definition of a health care clearinghouse is broad and we cannot
                offer any
                assurance that we could not be considered a health care clearinghouse
                under HIPAA or that, if




we
                are determined to be a healthcare clearinghouse; the consequences
                would
                not be adverse to our business, financial condition and results of
                operations. In addition, the Privacy and Security Standards affect
                third
                parties that create, access, or receive Protected Health Information
                in
                order to perform a function or activity on behalf of a Covered Entity.
                Such third parties are called “Business Associates.” Covered Entities must
                have a written “Business Associate Agreement” with such third parties,
                containing specified written satisfactory assurances, consistent
                with the
                Privacy and Security standards, that the third party will safeguard
                Protected Health Information that it creates or accesses and will
                fulfill
                other material obligations to support the Covered Entity’s own HIPAA
                compliance. Most of our customers are Covered Entities, and we function
                in
                many of our relationships as a Business Associate of those customers.
                We
                would face liability under our Business Associate Agreements if we
                do not
                comply with our Business Associate obligations. In addition, the
                federal
                agencies with enforcement authority have taken the position that
                a Covered
                Entity can be subject to HIPAA civil penalties and sanctions for
                a breach
                of a Business Associate Agreement. The penalties for a violation
                of HIPAA
                by a Covered Entity are significant and could have an adverse impact
                upon
                our business, financial condition and results of operations, if such
                penalties ever were imposed. Additionally, Covered Entities will
                be
                required to adopt a unique standard National Provider Identifier
                (NPI) for
                use in filing and processing health care claims and other transactions.
                Subject to the discussion set forth above, we believe that the principal
                effects of HIPAA are, first, to require that our systems be capable
                of
                   being operated by our customers in a manner that is compliant
                with the
                various HIPAA standards and, second, to require us to enter into
                and
                comply with Business Associate Agreements with our Covered Entity
                customers. For most Covered Entities, the deadlines for compliance
                with
                the Privacy Standards and the Transaction Standards occurred in 2003.
                Covered Entities, with the exception of small health plans (as that
                term
                is defined by the Privacy Standards), were required to be in compliance
                with the Security Standards by April 20, 2005 and to use NPIs in
                standard transactions no later than the compliance dates, which are
                May 23, 2007 for all but small health plans and one year later for
                small health plans. We have policies and procedures that we believe
                assure
                compliance with all federal and state confidentiality requirements
                for the
                handling of Protected Health Information that we receive and with
                our
                obligations under Business Associate Agreements. In particular, we
                believe
                that our systems and products are capable of being used by our customers
                in compliance with the Transaction Standards and Security Standards
                and
                are, or will be, capable of being used by our customers in compliance
                with
                the NPI requirements. If, however, we do not follow those procedures
                and
                policies, or they are not sufficient to prevent the unauthorized
                disclosure of Protected Health Information, we could be subject to
                liability, fines and lawsuits, termination of our customer contracts
                or
                our operations could be shut down. Moreover, because all HIPAA Standards
                are subject to change or interpretation and because certain other
                HIPAA
                Standards, not discussed above, are not yet published, we cannot
                predict
                the full future impact of HIPAA on our business and operations. In
                the
                event that the HIPAA standards and compliance requirements change
                or are
                interpreted in a way that requires any material change to the way
                in which
                we do business, our business, financial condition and results of
                operations could be adversely affected. Additionally, certain state
                laws
                are not preempted by HIPAA and may impose independent obligations
                upon our
                customers or us. Additional legislation governing the acquisition,
                storage
                and transmission or other dissemination of health record information
                and
                other personal information, including social security numbers, has
                been
                proposed at both the state and federal level. Such legislation may
                require
                holders of such information to implement additional security, reporting
                or
                other measures that may require substantial expenditures and may
                impose
                liability for a failure to comply with such requirements. In many
                cases,
                such proposed state legislation includes provisions that are not
                preempted
                by HIPAA. There can be no assurance that changes to state or federal
                laws
                will not materially restrict the ability of providers to submit
                information from patient records using our products and services.




-19-




·
            
            ***Electronic
                Prescribing.***The use of our software by physicians to perform a variety of functions,
                including electronic prescribing, electronic routing of prescriptions
                to
                pharmacies and dispensing, is governed by state and federal law,
                including
                fraud and abuse laws. States have differing prescription format
                requirements, which we have programmed into our software. Many existing
                laws and regulations, when enacted, did not anticipate methods of
                e-commerce now being developed. While federal law and the laws of
                many
                states permit the electronic transmission of prescription orders,
                the laws
                of several states neither specifically permit nor specifically prohibit
                the practice. Given the rapid growth of electronic transactions in
                healthcare, and particularly the growth of the Internet, we expect
                the
                remaining states to directly address these areas with regulation
                in the
                near future. In addition, on November 7, 2005, the Department of
                Health and Human Services published its final “E-Prescribing and the
                Prescription Drug Program” regulations (E-Prescribing Regulations). These
                regulations are required by the Medicare Prescription




Drug,
                Improvement, and Modernization Act of 2003 (MMA) and became effective
                beginning on January 1, 2006. The E-Prescribing Regulations consist
                of detailed standards and requirements, in addition to the HIPAA
                standards
                discussed above, for prescription and other information transmitted
                electronically in connection with a drug benefit covered by the MMA’s
                Prescription Drug Benefit. These standards cover not only transactions
                between prescribers and dispensers for prescriptions but also electronic
                eligibility and benefits inquiries and drug formulary and benefit
                coverage
                information. The standards apply to prescription drug plans participating
                in the MMA’s Prescription Drug Benefit. Aspects of our clinical products
                are affected by such regulation because of the need of our customers
                to
                comply, as discussed above. Compliance with these regulations could
                be
                burdensome, time-consuming and expensive. We also could become subject
                to
                future legislation and regulations concerning the development and
                marketing of healthcare software systems. For example, regulatory
                authorities such as the U.S. Department of Health and Human Services’
                Center for Medicare and Medicaid Services may impose functionality
                standards with regard to electronic prescribing and EHR technologies.
                These could increase the cost and time necessary to market new services
                and could affect us in other respects not presently foreseeable.




·
            
            ***Electronic
                Health Records*****.**A
                number of important federal and state laws govern the use and content
                of
                electronic health record systems, including fraud and abuse laws
                that may
                affect the donation of such technology. As a company that provides
                EHR
                systems to a variety of providers of healthcare, our systems and
                services
                must be designed in a manner that facilitates our customers’ compliance
                with these laws. Because this is a topic of increasing state and
                federal
                regulation, we must continue to monitor legislative and regulatory
                developments that might affect our business practices as they relate
                to
                EHR systems. We cannot predict the content or effect of possible
                future
                regulation on our business practices.




**Increased
      government involvement in healthcare could adversely affect our business.**




U.S.
      healthcare system reform under the Medicare Prescription Drug, Improvement
      and
      Modernization Act of 2003, and other initiatives at both the federal and state
      level, could increase government involvement in healthcare, lower reimbursement
      rates and otherwise change the business environment of our customers and the
      other entities with which we have a business relationship. We cannot predict
      whether or when future healthcare reform initiatives at the federal or state
      level or other initiatives affecting our business will be proposed, enacted
      or
      implemented or what impact those initiatives may have on our business, financial
      condition or results of operations. Our customers and the other entities with
      which we have a business relationship could react to these initiatives and
      the
      uncertainty surrounding these proposals by curtailing or deferring investments,
      including those for our products and services. Additionally, government
      regulation could alter the clinical workflow of physicians, hospitals and other
      healthcare participants, thereby limiting the utility of our products and
      services to existing and potential customers and curtailing broad acceptance
      of
      our products and services. Further examples of government involvement could
      include requiring the standardization of technology relating to EHR’s, providing
      customers with incentives to adopt EHR solutions or developing a low-cost
      government sponsored EHR solution, such as VistA-Office EHR. Additionally,
      new
      safe harbors to the federal Anti-Kickback Statute and corresponding exceptions
      to the federal Stark law may alter the competitive landscape, as such new safe
      harbors and exceptions allow hospitals and certain other
      donors to donate certain items and services used in electronic
      prescription systems and electronic health records systems. These new safe
      harbors and exceptions are intended to accelerate the adoption
      of electronic prescription systems and electronic health records systems,
      and therefore provide new and attractive opportunities for us to work with
      hospitals and other donors who wish to provide our clinical solutions to
      physicians. At the same time, such safe harbors and exceptions may
      result in increased competition from providers of acute EHR solutions, whose
      hospital customers may seek to donate their existing acute EHR solutions to
      physicians for use in ambulatory settings.




-20-




**If
      the electronic healthcare information market fails to develop as quickly as
      expected, our business, financial condition and results of operations will
      be
      adversely affected.**




The
      electronic healthcare information market is in the early stages of development
      and is rapidly evolving. A number of market entrants have introduced or
      developed products and services that are competitive with one or more components
      of the solutions we offer. We expect that additional companies will continue
      to
      enter this market. In new and rapidly evolving industries, there is significant
      uncertainty and risk as to the demand for, and market acceptance of, recently
      introduced products and services. Because the markets for our products and
      services are new and evolving, we are not able to predict the size and growth
      rate of the markets with any certainty. We cannot assure you that markets for
      our products and services will develop or that, if they do, they will be strong
      and continue to grow at a sufficient pace. If markets fail to develop, develop
      more slowly than expected or become saturated with competitors, our business,
      financial condition and results of operations will be adversely affected.




**Consolidation
      in the healthcare industry could adversely affect our business, financial
      condition and results of operations.**




Many
      healthcare industry participants are consolidating to create integrated
      healthcare delivery systems with greater market power. As provider networks
      and
      managed care organizations consolidate, thus decreasing the number of market
      participants, competition to provide products and services like ours will become
      more intense, and the importance of establishing relationships with key industry
      participants will become greater. These industry participants may try to use
      their market power to negotiate price reductions for our products and services.
      Further, consolidation of management and billing services through integrated
      delivery systems may decrease demand for our products. If we were forced to
      reduce our prices, our business would become less profitable unless we were
      able
      to achieve corresponding reductions in our expenses




WE
      HAVE
      LIMITED RESOURCES AND LIMITED REVENUES





We
      have
      limited resources. At the present time, our only source of revenue is MedLink,
      which has not generated any significant revenues. In addition, there can be
      no
      assurance that we will obtain significant revenues through the acquisition
      of
      other companies or that the Company will be able to operate on a profitable
      basis.





THE
      COMPANY HAS INCURRED LOSSES SINCE IT BEGAN ITS OPERATIONS IN 2001 AND EXPECTS
      TO
      CONTINUE TO INCUR LOSSES FOR THE FORESEEABLE FUTURE WHICH RAISES DOUBTS ABOUT
      OUR ABILITY TO CONTINUE AS A GOING CONCERN.





The
      Company has incurred losses during each fiscal year of its operations since
      it  began
      its
      operations of MedLink in 2001, and expects to continue to incur losses for
      the
      foreseeable future. We currently intend to continue to invest in infrastructure
      development, applications development, marketing and acquisitions. Whether
      we
      continue to incur losses in a particular period will depend on, among other
      things, the amount of such investments and whether those investments lead to
      increased revenues.




-21-




Our
      independent auditor prepared a report for the Company’s financial statements for
      the year ended December 31, 2006. The report states we might not be able to
      continue as a going concern. A “going-concern” opinion indicates that the
      financial statements are prepared assuming the business will continue as a
      going-concern, but there can be no guarantee that it will continue as a going
      concern.





If
      we are
      unable to curb our losses and achieve profitability we have substantial doubts
      about our ability to continue as a going concern unless we can raise additional
      capital, all of which there can be no assurance.





THE
      COMPANY MAY NEED ADDITIONAL FINANCING IN ORDER TO EXECUTE ITS BUSINESS
      PLAN





The
      Company has had limited revenues to date. The Company will be entirely dependent
      on its limited financial resources to seek additional acquisitions and run
      and
      grow the businesses of MedLink. For this reason, the acquisitions of KRAD and
      MedLink were paid in common stock. There can be no assurance that other
      potential acquisition candidates will not require payment in cash. The Company
      cannot, therefore, ascertain, with any certainty, what will be the precise
      capital requirements for successful execution of its business plan. If the
      Company’s limited resources prove insufficient to implement our plan, due, for
      example, to the size of the acquisition, the Company may have to seek additional
      financing. Even if the Company is successful in completing an acquisition,
      it
      may require additional financing for operations or our business
      growth.





ADDITIONAL
      FINANCING MAY NOT BE AVAILABLE TO THE COMPANY





There
      can
      be no assurance additional financing will be available on acceptable terms.
      It
      may not be available at all. Additional financing is likely to be necessary
      and
      if unavailable when needed, the Company may have to abandon certain of its
      plans. Any failure to secure necessary, additional financing would have a
      material adverse effect on continued development and/or growth of the Company’s
      businesses.





There
      are
      no current limitations on the Company’s ability to borrow funds to increase the
      Company’s capital to assist MedLink or to effect acquisition(s). However, the
      Company’s limited resources and lack of operating history will make it difficult
      to borrow funds. The amount and nature of the Company’s borrowings will depend
      on, among other things, the Company’s capital requirements, and perceived
      ability to meet debt service on borrowings and prevailing financial market
      and
      economic conditions. There can be no assurance that debt financing, if sought,
      would be available on commercially acceptable terms, given the best interests
      of
      the Company’s business. An inability to borrow funds to acquire companies or to
      generate funds for the Company’s businesses could have a material, adverse
      effect on the Company’s financial condition and future prospects. Even if debt
      financing is ultimately available, borrowings may subject the Company to risks
      associated with indebtedness. These risks would include, among other things,
      interest rate fluctuations and insufficiency of cash flow to pay principal
      and
      interest. If these risks were realized, they could lead to a default. Moreover,
      if a company the Company acquires already has borrowings, we might become liable
      for them.





THE
      COMPANY EXPECTS THAT ITS ACCOUNTING FOR STOCK OPTIONS AND SHARE-BASED PAYMENTS
      TO EMPLOYEES WILL HAVE A MATERIAL ADVERSE AFFECT UPON ITS OPERATING
      RESULTS





The
      Company expects that accounting for employee stock options using the fair value
      method will have a material impact on its consolidated results of operations
      and
      earnings per share.  The
      FASB
      has issued SFAS 123R, which will require the Company to recognize, in its
      financial statements, all share-based payments to its employees, including
      grants of employee stock options, based on their fair values beginning with
      the
      first quarter of 2007. The Company expects that the adoption of SFAS 123R
      will have a material impact on the Company’s consolidated results of operations
      and earnings per share. The Company cannot predict what effect the increase
      in
      its net loss or reduction in its net income, if any, may have on the market
      prices of the Company’s securities.




-22-





THE
      COMPANY CURRENTLY DEPENDS UPON A LIMITED NUMBER OF EMPLOYEES





The
      Company’s ability to successfully complete an acquisition depends on the efforts
      of the Company’s three Directors and three Officers. Three of the Company’s
      Directors also serves as, Officers. The Company has not obtained “key man” life
      insurance on any Officers or Directors. If the Company were to lose the services
      of any Officer or Director, this could have a material, adverse effect on our
      ability to achieve the Company’s business objectives.





One
      of
      the Company’s Officers, who also serves as a Director, Konrad Kim, is also
      President of KRAD. Therefore, he has conflicts of interest in allocating
      management time between the Company and KRAD. We will rely on Mr. Kim's and
      our
      other Officers’ expertise.





SINCE
      THE COMPANY PROVIDES SOFTWARE SOLUTIONS TO HEALTHCARE PROVIDERS, THE COMPANY
      MAY
      BE SUBJECT TO LIABILITIES FOR ITS PRODUCT MALFUNCTIONS OR SYSTEM
      ERRORS





Many
      of
      the Company’s software solutions provide data for use by healthcare providers in
      providing care to patients. Although no such claims have been brought against
      the Company to date regarding injuries related to the use of its software
      solutions, such claims may be made in the future. Although the Company maintains
      product liability insurance coverage in an amount that it believes is sufficient
      for its business, there can be no assurance that such coverage will cover a
      particular claim that may be brought in the future, prove to be adequate or
      that
      such coverage will continue to remain available on acceptable terms, if at
      all.





The
      Company’s systems are very complex. As with complex systems offered by others,
      the Company’s systems may contain errors, especially when first introduced.
      Although the Company conducts extensive testing, it has discovered software
      errors in its software solutions after their introduction. The Company’s systems
      are intended for use in collecting and displaying clinical information used
      in
      the diagnosis and treatment of patients. Therefore, users of the Company
      software solutions have a greater sensitivity to system errors than the market
      for software products generally. Failure of a client’s system to meet these
      criteria could constitute a material breach under such contracts allowing the
      client to cancel the contract and obtain a refund and/or damages, or could
      require the Company to incur additional expense in order to make the system
      meet
      these criteria. The Company’s contracts with its clients generally limit the
      Company’s liability arising from such claims but such limits may not be
      enforceable in certain jurisdictions or circumstances.





A
      successful claim brought against the Company, which claim is uninsured or
      under-insured, could materially harm the Company’s business, results of
      operations or financial condition.





THE
      COMPANY IS DEPENDENT ON THIRD-PARTY SUPPLIERS AND ANY INTERUPTION IN SUCH
      SERVICES COULD HARM THE COMPANY’S ABILITY TO CONDUCT ITS BUSINESS




The
      Company licenses or purchases intellectual property and technology (such as
      software, hardware and content) from third parties, and incorporates it into
      or
      sells it in conjunction with the Company’s software solutions and services, some
      of which intellectual property or technology is critical to the operation of
      the
      Company’s solutions. If any of the third party suppliers were to change product
      offerings, increase prices or terminate the Company’s licenses or supply
      contracts, the Company might need to seek alternative suppliers and incur
      additional internal or external development costs to ensure continued
      performance of the Company’s solutions. Such alternatives may not be available
      on attractive terms, or may not be as widely accepted or as effective as the
      intellectual property or technology provided by the Company’s existing
      suppliers. If the cost of licensing, purchasing or maintaining these third
      party
      intellectual property or technology solutions significantly increases, the
      Company’s gross margin levels could significantly decrease. In addition,
      interruption in functionality of the Company’s solutions could adversely affect
      future sales of licenses and services.




-23-




THE
      COMPANY FACES SIGNIFICANT COMPETITION





The
      market for healthcare information systems is intensely competitive, rapidly
      evolving and subject to rapid technological change. The Company believes that
      the principal competitive factors in this market include the breadth and quality
      of system and software solution offerings, the stability of the information
      systems provider, the features and capabilities of the information systems,
      the
      ongoing support for the system and the potential for enhancements and future
      compatible software solutions.





Certain
      of the Company’s competitors have greater financial, technical, product
      development, marketing and other resources than the Company and some of its
      competitors offer software solutions that it does not offer. The Company’s
      principal existing competitors include: Cerner Corporation, Allscripts
      Healthcare Solutions, Inc., Eclipsys Corporation, Epic Systems Corporation,
      GE
      Medical Systems, IDX Systems Corporation, iSoft Corporation, McKesson
      Corporation, Medical Information Technology, Inc. (“Meditech”), Misys Healthcare
      Systems, Siemens Medical Solutions Health Services Corporation and WebMD, each
      of which offers a suite of software solutions that compete with many of the
      Company’s software solutions and services. There are other competitors that
      offer a more limited number of competing software solutions.





In
      addition, the Company expects that major software information systems companies,
      large information technology consulting service providers and system
      integrators, Internet-based start-up companies and others specializing in the
      healthcare industry may offer competitive software/solutions or services. The
      pace of change in the healthcare information systems market is rapid and there
      are frequent new software solution introductions, software solution enhancements
      and evolving industry standards and requirements. As a result, the Company’s
      success will depend upon its ability to keep pace with technological change
      and
      to introduce, on a timely and cost-effective basis, new and enhanced software
      solutions and services that satisfy changing client requirements and achieve
      market acceptance.





In
      addition, the Company could be subject to intellectual property infringement
      claims as the number of competitors grows and the functionality of its software
      solutions and services expands. These claims, even if not meritorious, could
      be
      expensive to defend. If the Company becomes liable to third parties for
      infringing their intellectual property rights, it could be required to pay
      a
      substantial damage award and to develop non-infringing technology, obtain a
      license or cease selling the software solutions that contain the infringing
      intellectual property, which could have a material adverse effect on the
      Company’s financial condition and operations.





ANY
      ACQUISITIONS THE COMPANY MAKES COULD RESULT IN DILUTION TO EXISTING STOCKHOLDERS
      AND COULD BE DIFFICULT TO INTEGRATE WHICH COULD CAUSE DIFFICULTIES IN MANAGING
      THE COMPANY’S BUSINESS, RESULTING IN A DECREASE TO THE VALUE OF THE COMPANY’S
      STOCKHOLDERS INVESTMENT





The
      Company believes that it will need to make strategic acquisitions of other
      businesses in order to achieve growth and profitability. Evaluating acquisition
      targets is difficult and acquiring other businesses involves risk. The
      consummation of the acquisition of other businesses would subject the Company
      to
      a number of risks, including the following:





·
            difficulty
                in integrating the acquired operations and retaining acquired
                personnel;




·
            limitations
                on the Company’s ability to retain acquired sales and distribution
                channels and customers;





·
            diversion
                of management's attention and disruption of the Company’s ongoing
                business; and





·
            limitations
                on the Company’s ability to incorporate acquired technology and rights
                into its product offerings and maintain uniform standards, controls,
                procedures and policies.





Furthermore,
      the Company may incur indebtedness or issue equity securities to pay for future
      acquisitions. The issuance of equity or convertible debt securities would be
      dilutive to the Company’s then existing stockholders.




-24-




ONE
      STOCKHOLDER AND OUR AFFILIATES CURRENTLY OWN A MAJORITY OF THE COMPANY’S COMMON
      STOCK





Mr.
      Ray
      Vuono, the Company’s CEO owns approximately 29.42% of the Company’s outstanding
      common stock, and, our affiliates, including Mr. Vuono, beneficially own,
      including shares issuable upon exercise of outstanding options, a total of
      approximately 76% of our outstanding common stock. They therefore, together,
      have the ability to control the outcome of all matters submitted to the
      stockholders for approval. This includes not only election of Directors, but
      also the decision whether to attempt to effect a merger or
      acquisition.





THE
      COMPANY DOES NOT EXPECT TO PAY CASH DIVIDENDS





The
      Company does not expect to pay dividends on the common stock. Payment of
      dividends, if any, will depend on the Company’s revenues and earnings. It will
      also depend on capital requirements and the Company’s general financial
      condition. Payment of dividends, if any, will be within the Board of Directors'
      discretion. The Company presently intends to retain all earnings, if any, for
      use in its business operations. Accordingly, the Company’s Board does not
      anticipate declaring dividends in the foreseeable future.





THE
      COMPANY’S STOCK PRICE MAY BE VOLATILE





The
      trading price of the Company’s common stock may be volatile. The market for the
      Company’s common stock may experience significant price and volume fluctuations
      in response to a number of factors including actual or anticipated quarterly
      variations in operating results, rumors about the Company’s performance or
      software solutions, changes in expectations of future financial performance,
      governmental regulatory action, healthcare reform measures, client relationship
      developments, changes occurring in the securities markets in general and other
      factors, many of which are beyond the Company’s control.





Furthermore,
      the stock market in general, and the market for software and healthcare and
      information technology companies in particular, has experienced extreme
      volatility that often has been unrelated to the operating performance of
      particular companies. These broad market and industry fluctuations may adversely
      affect the trading price of the Company’s common stock, regardless of actual
      operating performance.





THERE
      EXIST RISKS TO STOCKHOLDERS RELATING TO DILUTION: AUTHORIZATION OF ADDITIONAL
      SECURITIES AND REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING AN ACQUISITION
      OR OTHER TRANSACTION IN WHICH THE COMPANY ISSUES STOCK





The
      Company’s certificate of incorporation authorizes the issuance of 200,000,000
      shares of Common Stock. The Company may issue a substantial number of shares
      in
      connection with or following acquisition transactions.





If
      the
      Company issues a substantial number of shares of common stock in connection
      with, or following, an acquisition, a change in control may occur. This could
      affect, among other things, the Company’s ability to utilize net operating loss
      carry forwards, if any. The issuance of a substantial number of shares of common
      stock may adversely affect the prevailing market price, if any, for the common
      stock. It could also impair the Company’s ability to raise additional capital
      through the sale of equity securities.





The
      Company uses and intends to continue using stock and options, in lieu of cash,
      which presently is not available, to compensate its employees, consultants
      and
      third parties who provide services. Some employees, consultants or third parties
      have been and will be paid in cash, stock, options or other of our securities.
      This could result in a substantial, additional dilution to
      investors.




-25-




THE
      COMPANY IS AUTHORIZED TO ISSUE FIVE MILLION SHARES OF AN "UNDESIGNATED" CLASS
      OF
      PREFERRED STOCK





The
      Company’s certificate of incorporation authorizes it to issue of 5,000,000
      shares of an undesignated class of stock. With respect to these shares, the
      Company’s Board of Directors may make designations and define various powers,
      preferences, rights, qualifications, limitations and restrictions, consistent
      with Minnesota law. The Board of Directors is empowered, without stockholder
      approval, to issue this stock with rights that could adversely affect the voting
      power or other rights of the holders of common stock. In addition, the
      undesignated stock could be utilized, under certain circumstances, as a method
      of discouraging, delaying or preventing a change in control.





The
      Company does not presently intend to issue any additional shares of undesignated
      stock. Nevertheless, there can be no assurance the Company will not do so in
      the
      future.





WE
      MAY
      NOT BE ABLE TO COMPLY WITH THE SARBANES-OXLEY ACT





The
      enactment of the Sarbanes-Oxley Act in July 2002 created a significant number
      of
      new corporate governance requirements and additional requirements may be enacted
      in the future. Although we expect to implement the requisite changes to become
      compliant with existing and new requirements when they do apply to us, we may
      not be able to do so, or to do so in a timely manner.





IN
      THE
      EVENT THE SEC REVIEWS OUR FORM 10-KSB AND CONSOLIDATED FINANCIAL STATEMENTS
      INCLUDED THEREIN, IT MAY BE DETERMINED THAT INFORMATION DISCLOSED THEREIN MUST
      BE AMENDED





The SEC has not in the past reviewed our annual or quarterly financial
      statements. In the event that the SEC determines to review our financial
      statements the SEC Staff may determine that information contained therein must
      be modified, removed or amended, in whole or in part, including but not limited
      to, certain accounting issues and treatments, which could result in the
      restatement and/or adjustment of our financial statements for the years ended
      December 31, 2006 and December 31, 2005.  In the event we are required to
      make any such modifications, removals or amendments, including but not limited
      to, accounting adjustments, reclassifications and/or write-downs of a material
      amount of our assets, our results of operations for the restated periods could
      be materially adversely affected and our financial condition could be adversely
      affected.





THERE
      ARE
      LIMITATIONS IN CONNECTION WITH THE AVAILABILITY OF QUOTES AND ORDER INFORMATION
      ON THE OTCBB





Trades
      and quotations on the OTCBB involve a manual process and the market information
      for such securities cannot be guaranteed. In addition, quote information, or
      even firm quotes, may not be available. The manual execution process may delay
      order processing and intervening price fluctuations may result in the failure
      of
      a limit order to execute or the execution of a market order at a significantly
      different price. Execution of trades, execution reporting and the delivery
      of
      legal trade confirmation may be delayed significantly. Consequently, one may
      not
      able to sell shares of our common stock at the optimum trading
      prices.





THERE
      ARE
      DELAYS IN ORDER COMMUNICATION ON THE OTCBB





Electronic
      processing of orders is not available for securities traded on the OTCBB and
      high order volume and communication risks may prevent or delay the execution
      of
      one's OTCBB trading orders. This lack of automated order processing may affect
      the timeliness of order execution reporting and the availability of firm quotes
      for shares of our common stock. Heavy market volume may lead to a delay in
      the
      processing of OTCBB security orders for shares of our common stock, due to
      the
      manual nature of the market. Consequently, one may not able to sell shares
      of
      our common stock at the optimum trading prices.




-26-




PENNY
      STOCK REGULATIONS MAY IMPOSE CERTAIN RESTRICTIONS ON MARKETABILITY OF OUR
      SECURITIES





The
      SEC
      has adopted regulations which generally define a “penny stock” to be any equity
      security that has a market price (as defined) of less than $5.00 per share
      or an
      exercise price of less than $5.00 per share, subject to certain exceptions.
      As a
      result, our shares of common stock are subject to rules that impose additional
      sales practice requirements on broker-dealers who sell such securities to
      persons other than established clients and “accredited investors”. For
      transactions covered by these rules, the broker-dealer must make a special
      suitability determination for the purchase of such securities and have received
      the purchaser's written consent to the transaction prior to the purchase.
      Additionally, for any transaction involving a penny stock, unless exempt, the
      rules require the delivery, prior to the transaction, of a risk disclosure
      document mandated by the SEC relating to the penny stock market. The
      broker-dealer must also disclose the commission payable to both the
      broker-dealer and the registered representative, current quotations for the
      securities and, if the broker-dealer is the sole market maker, the broker-dealer
      must disclose this fact and the broker-dealer's presumed control over the
      market. Finally, monthly statements must be sent disclosing recent price
      information for the penny stock held in the account and information on the
      limited market in penny stocks. Consequently, the “penny stock” rules may
      restrict the ability of broker-dealers to sell our shares of common stock and
      may affect the ability of investors to sell such shares of common stock in
      the
      secondary market and the price at which such investors can sell any of such
      shares.





Investors
      should be aware that, according to the SEC, the market for penny stocks has
      suffered in recent years from patterns of fraud and abuse. Such patterns
      include *:*





·
            control
                of the market for the security by one or a few broker-dealers that
                are
                often related to the promoter or
                issuer;


·
            manipulation
                of prices through prearranged matching of purchases and sales and
                false
                and misleading press releases;


·
            “boiler
                room” practices involving high pressure sales tactics and unrealistic
                price projections by inexperienced sales persons;


·
            excessive
                and undisclosed bid-ask differentials and markups by selling
                broker-dealers; and


·
            the
                wholesale dumping of the same securities by promoters and broker-dealers
                after prices have been manipulated to a desired level, along with
                the
                inevitable collapse of those prices with consequent investor
                losses.





Our
      management is aware of the abuses that have occurred historically in the penny
      stock market.





THERE
      IS
      A RISK OF MARKET FRAUD





OTCBB
      securities are frequent targets of fraud or market manipulation. Not only
      because of their generally low price, but also because the OTCBB reporting
      requirements for these securities are less stringent than for listed or NASDAQ
      traded securities, and no exchange requirements are imposed. Dealers may
      dominate the market and set prices that are not based on competitive forces.
      Individuals or groups may create fraudulent markets and control the sudden,
      sharp increase of price and trading volume and the equally sudden collapse
      of
      the market price for shares of our common stock.





THERE
      IS
      LIMITED LIQUIDITY ON THE OTCBB





When
      fewer shares of a security are being traded on the OTCBB, volatility of prices
      may increase and price movement may outpace the ability to deliver accurate
      quote information. Due to lower trading volumes in shares of our common stock,
      there may be a lower likelihood of one's orders for shares of our common stock
      being executed, and current prices may differ significantly from the price
      one
      was quoted by the OTCBB at the time of one's order entry.




-27-




THERE
      IS
      A LIMITATION IN CONNECTION WITH THE EDITING AND CANCELING OF ORDERS ON THE
      OTCBB





Orders
      for OTCBB securities may be canceled or edited like orders for other securities.
      All requests to change or cancel an order must be submitted to, received and
      processed by the OTCBB. Due to the manual order processing involved in handling
      OTCBB trades, order processing and reporting may be delayed, and one may not
      be
      able to cancel or edit one's order. Consequently, one may not able to sell
      shares of our common stock at the optimum trading prices.





INCREASED
      DEALER COMPENSATION COULD ADVERSELY AFFECT THE STOCK PRICE





The
      dealer's spread (the difference between the bid and ask prices) may be large
      and
      may result in substantial losses to the seller of shares of our common stock
      on
      the OTCBB if the stock must be sold immediately. Further, purchasers of shares
      of our common stock may incur an immediate "paper" loss due to the price spread.
      Moreover, dealers trading on the OTCBB may not have a bid price for shares
      of
      our common stock on the OTCBB. Due to the foregoing, demand for shares of our
      common stock on the OTCBB may be decreased or eliminated.





SHARES
      ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET





From
      time
      to time, certain of our stockholders may be eligible to sell all or some of
      their shares of common stock by means of ordinary brokerage transactions in
      the
      open market pursuant to Rule 144, promulgated under the Securities Act of 1933
      (Securities Act), subject to certain limitations. In general, pursuant to Rule
      144, a stockholder (or stockholders whose shares are aggregated) who has
      satisfied a one-year holding period may, under certain circumstances, sell
      within any three-month period a number of securities which does not exceed
      the
      greater of 1% of the then outstanding shares of common stock or the average
      weekly trading volume of the class during the four calendar weeks prior to
      such
      sale. Rule 144 also permits, under certain circumstances, the sale of
      securities, without any limitation, by our stockholders that are non-affiliates
      that have satisfied a two-year holding period. Any substantial sale of our
      common stock pursuant to Rule 144 or pursuant to any resale prospectus may
      have
      material adverse effect on the market price of our securities.





DIRECTOR
      AND OFFICER LIABILITY IS LIMITED





As
      permitted by Delaware law, our certificate of incorporation limits the liability
      of our directors for monetary damages for breach of a director's fiduciary
      duty
      except for liability in certain instances. As a result of our charter provision
      and Delaware law, stockholders may have limited rights to recover against
      directors for breach of fiduciary duty. In addition, our certificate of
      incorporation provides that we shall indemnify our directors and officers to
      the
      fullest extent permitted by law.




**Item
      2.**  **Description
      of Property**





We
      believe that our offices and other facilities are in good operating condition
      and adequate for our current operations and that additional leased space can
      be
      obtained on acceptable terms if needed.




**Headquarters**




We
      lease
      our corporate headquarters offices in Islandia, New York, which consists of
      approximately 3,700 square feet of space, under a lease that expires in
      July 2011.





MedLink
      leases additional office space in Beverly Hills, California at:


345
      North
      Maple Drive


Suite
      278


Beverly
      Hills, CA 90210




-28-





This
      office is leased on a 2 year contract with monthly lease payments of $2,253
      with
      the lease expiring in December of 2007.





**Item
      3.**  **Legal
      Proceedings**





Other
      than the legal proceedings described below, the Company is not a party to any
      other material legal proceedings.





On
      January 11, 2006, a lawsuit was filed against the Company by its former counsel,
      Guzov & Ofsink, LLC, for the alleged failure to pay legal fees. This
      proceeding was commenced in the Supreme Court of the State of New York, County
      of New York. The plaintiff is seeking $157,718.80 in past legal fees plus
      interest. The Company intends to vigorously defend this suit and believes that
      it has meritorious defenses and counterclaims.





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





During
      the Calendar year of 2006 there was no submission of matter to a vote by the
      Company’s shareholders





**Part
      II**





**Item
      5.**  **Market
      for Common Equity and Related Stockholder Matters** .





The
      Company's common equity is quoted in the National Association of Securities
      Dealers over-the-counter Bulletin Board under the symbol MLKNA.OB. The high
      and
      low sales prices of the Company's common stock for each quarter within the
      last
      two fiscal years are set forth below. On August 15, 2001, the Company’s common
      stock was authorized for quotation on the over-the-counter Bulletin Board after
      being delisted in 2000. At most times during the last two fiscal years, trades
      in the Company’s common stock were sporadic and therefore, published prices may
      not represent a liquid and active trading market which would be indicative
      of
      any meaningful market value. All prices have been adjusted to reflect the
      Company’s one-for-five reverse split of its common stock affected in October
      2005.


High
              
              Low1stQuarter 2005
              
              $
              1.70
              
              $
              0.702ndQuarter 2005
              
              $
              1.68
              
              $
              0.503rdQuarter 2005
              
              $
              1.64
              
              $
              0.754thQuarter 2005
              
              $
              1.40
              
              $
              0.521stQuarter 2006
              
              $
              0.98
              
              $
              0.172ndQuarter 2006
              
              $
              1.01
              
              $
              0.213rdQuarter 2006
              
              $
              0.80
              
              $
              0.214thQuarter 2006
              
              $
              0.95
              
              $
              0.211stQuarter 2007
              
              $
              0.97
              
              $
              0.27


-29-





The
      above
      quotations reflect inter-dealer prices, without retail mark-up, mark-down or
      commission and may not represent actual transactions. The source of the above
      quotations is Yahoo Finance.





The
      Company also has a secondary listing for its class A common shares on the
      Berlin-Bremen stock exchange and trades under the symbol WM6A, and has a trading
      platform for its Class B common shares that trades under the symbol WM6B on
      the
      Frankfurt Stock Exchange, Xetra and Berlin Bremen Stock Exchanges.




As
      of
      April 14, 2006 there were 1013 holders of record of our Class A commons stock
      in
      addition to those who hold shares in street name.





As
      of
      April 14, 2006 there were 1 holders of record of our Class B common stock.





No
      dividends have been declared by the Company during the last two fiscal years.
      There are no restrictions which affect or are likely to affect the Company's
      ability to pay dividends in the future. The Company intends to retain its future
      earnings, if any, for reinvestment into the Company.




Equity
      Compensation Plan Information




The
      following table contains information concerning the Company's only existing
      equity compensation plans which cover certain officers, employees and
      consultants. Each of the officers and consultants entered into an agreement
      with
      the Company for the provision of services which obligates the Company to pay
      option compensation.




Plan
                category
            
            Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights
            
            Weighted
                average exercise price of outstanding options, warrants and rights
            
            Number
                of securities remaining available for future issuance(a)
            
            (b)
            
            (c)Equity
                compensation plans approved by security holders
            
            
            
            
            $
            0.136
            
            
            5,000,000
            (4)Equity
                compensation plans not approved by
              security
                holders (1)
            
            
            720,000
            (2)
            $
            0.17
            
            
            720,000
              11,599,774
            (2)
              (3)Total
            
            
            720,000
            
            
            
            
            
            17,319,774




The
      share
      numbers below have been adjusted to reflect the Company’s 1 for 5 reverse split
      in October 2005.




(1)  On
      January 1, 2004, the Company entered into an employment agreement with Mr.
      Vuono
      for him to serve as the Company’s Chief Executive Officer. The term of the
      agreement is for three years and it provides for no cash compensation. Pursuant
      to the agreement, Mr. Vuono is to receive 200,000 shares of Company common
      stock
      on the first business day of each year of the term of the agreement and an
      option to purchase 200,000 shares of the Company’s common stock at an exercise
      price equal to the fair market value of the Company’s common stock on that date.
      The options are to have a three-year term. The common stock and options each
      have a two year vesting period during which they will be forfeited if Mr. Vuono
      is terminated for cause or leaves the Company prior to the end of the term.
      The
      vesting period is accelerated in the event of a change in control of the
      Company.





-30-


On
      January 1, 2004, the Company entered into an employment agreement with Mr.
      Rose
      for him to serve as the Company’s Vice President and Controller. The term of the
      agreement is for three years and it provides for no cash compensation. Pursuant
      to the agreement, Mr. Rose is to receive 100,000 shares of Company common stock
      on the first business day of each year of the term of the agreement and an
      option to purchase 100,000 shares of the Company’s common stock at an exercise
      price equal to the fair market value of the Company’s common stock on that date.
      The options are to have a three-year term. The common stock and options each
      have a two year vesting period during which they will be forfeited if Mr. Rose
      is terminated for cause or leaves the Company prior to the end of the term.
      The
      vesting period is accelerated in the event of a change in control of the
      Company.




On
      January 1, 2004, the Company entered into an employment agreement with Mr.
      Kim
      for him to serve as the Company’s Chief Technical Officer. The term of the
      agreement is for three years and it provides for no cash compensation. Pursuant
      to the agreement, Mr. Kim is to receive 20,000 shares of Company common stock
      on
      the first business day of each year of the term of the agreement and an option
      to purchase 20,000 shares of the Company’s common stock at an exercise price
      equal to the fair market value of the Company’s common stock on that date. The
      options are to have a three-year term. The common stock and options each have
      a
      two year vesting period during which they will be forfeited if Mr. Kim is
      terminated for cause or leaves the Company prior to the end of the term. The
      vesting period is accelerated in the event of a change in control of the
      Company. On January 1, 2005, the Company contingent to Mr. Patel’s resignation
      increased Mr. Kim’s contract by 80,000 shares in compensation and 80,000 options
      on the same terms as above in consideration for his acceptance of Mr. Patel’s
      responsibilities with the Company.




On
      January 1, 2006, the Company entered into an employment agreement with Mr.
      Vuono
      for him to serve as the Company’s Chief Executive Officer. The term of the
      agreement is for five years and it provides for a salary of $130,000 in cash
      compensation. Mr Vuono has agreed to accept shares in lieu of his salary which
      amounted to 955,833 shares in 2006. In January of 2007, the board of Directors
      approved a 20% raise in Mr. Vuono’s salary to $156,000 which Mr. Vuono has the
      option to take in stock compensation lieu of cash. Pursuant to the employment
      agreement Mr. Vuono is to receive 480,000 options of the Company’s common stock
      on the first business day of the year at an exercise price equal to the fair
      market value of the Company’s common stock on that date. The options are to have
      a ten-year term. The common stock and options each have a two year vesting
      period during which they will be forfeited if Mr. Vuono is terminated for cause
      or leaves the Company prior to the end of the term. The vesting period is
      accelerated in the event of a change in control of the Company.




On
      January 1, 2006, the Company entered into an employment agreement with Mr.
      Rose
      for him to serve as the Company’s Chief Financial Officer. The term of the
      agreement is for five years and it provides for a salary of $110,000 in cash
      compensation. Mr. Rose has agreed to accept shares in lieu of his salary which
      amounted to 808,824 shares in 2006. In January of 2007, the board of Directors
      approved a 20% raise in Mr. Rose’s salary to $132,000 which Mr. Rose has the
      option to take in stock compensation lieu of cash. Pursuant to the employment
      agreement Mr. Rose is to receive 400,000 options of the Company’s common stock
      on the first business day of the year at an exercise price equal to the fair
      market value of the Company’s common stock on that date. The options are to have
      a ten-year term. The common stock and options each have a two year vesting
      period during which they will be forfeited if Mr. Rose is terminated for cause
      or leaves the Company prior to the end of the term. The vesting period is
      accelerated in the event of a change in control of the Company.




On
      January 1, 2006, the Company entered into an employment agreement with Mr.
      Kim
      for him to serve as the Company’s Chief Technology Officer. The term of the
      agreement is for five years and it provides for a salary of $32,000 in cash
      compensation. Mr. Kim has agreed to accept shares in lieu of his salary which
      amounted to 235,294 shares in 2006. In January of 2007, the board of Directors
      approved a 20% raise in Mr. Kim’s salary to $38,400 which Mr. Kim has the option
      to take in stock compensation lieu of cash. Pursuant to the employment agreement
      Mr. Kim is to receive 120,000 options of the Company’s common stock on the first
      business day of the year at an exercise price equal to the fair market value
      of
      the Company’s common stock on that date. The options are to have a ten-year
      term. The common stock and options each have a two year vesting period during
      which they will be forfeited if Mr. Kim is terminated for cause or leaves the
      Company prior to the end of the term. The vesting period is accelerated in
      the
      event of a change in control of the Company.




-31-




(2)
      Consists of the following number of options held by the following persons which
      were received pursuant to the agreements set forth above:





Jameson
                Rose
            
            
            1,000,000Ray
                Vuono
            
            
            1,360,000Dr.
                Michael Carvo
            
            
            0Konrad
                Kim
            
            
            360,0002,720,000





(3)  Consists
      of the following number of shares of common stock which can be issued to the
      following persons in 2006, 2007, 2008, 2009 and 2010 pursuant to their
      employment agreements dated January 1, 2006:




Salary
            
            Salary
            
            Salary
            
            Salary
            
            Salary2006
            
            2007
            
            2008
            
            2009
            
            2010Ray
                Vuono
            
            
            955,883
            
            
            1,147,000
            
            
            1,147,000
            
            
            1,147,000
            
            
            1,147,000James
                Rose
            
            
            808,824
            
            
            970,589
            
            
            970,589
            
            
            970,589
            
            
            970,589Konrad
                Kim
            
            
            235,295
            
            
            282,354,
            
            
            282,354
            
            
            282,354
            
            
            282,354Totals
            
            
            2,000,002
            
            
            2,399,943
            
            
            2,399,943
            
            
            2,399,943
            
            
            2,399,943





(4)
      Consists of the following number of shares of common stock options which can
      be
      exercised by the following persons in 2006, 2007, 2008, 2009 and 2010 pursuant
      to their employment agreements dated January 1, 2006 and 2005 Stock Option
      Plan:





Options
            
            Options
            
            Options
            
            Options
            
            Options2006
            
            2007
            
            2008
            
            2009
            
            2010Ray
                Vuono
            
            
            480,000
            
            
            480,000
            
            
            480,000
            
            
            480,000
            
            
            480,000James
                Rose
            
            
            400,000
            
            
            400,000
            
            
            400,000
            
            
            400,000
            
            
            400,000Konrad
                Kim
            
            
            120,000
            
            
            120,000
            
            
            120,000
            
            
            120,000
            
            
            120,000Totals
            
            
            1,000,000
            
            
            1,000,000
            
            
            1,000,000
            
            
            1,000,000
            
            
            1,000,000






-32-




Recent
        sales of unregistered securities




In
      January 1, 2006, the Company entered into new employment agreements with Ray
      Vuono, James Rose, and Konrad Kim. The individuals will serve as the Company’s
      Chief Executive Officer, Vice President and Chief Technical Officer. The term
      of
      the agreements are for five years and provides for cash compensation for a
      total
      of $272,000 per year, however, the three employees have agreed to accept
      approximately 2,000,000 shares of the company’s restricted common stock in lieu
      of cash compensation. In addition the employees will receive an option to
      purchase each year 1,000,000 shares of the Company’s common stock. The exercise
      price of the options shall be the fair value market value of the common stock
      on
      the date granted to the employee ($.17). The options expire in ten years. The
      common stock and options each have a two year vesting period during which they
      will be forfeited if the employee if terminated for cause or leaves the Company
      prior to the end of the term. The vesting period is accelerated in the vent
      of a
      charge in control of the Company.





In
      2006,
      the Company entered into various subscription agreements with Jerry Bermensolo
      for private placements in the amount of $570,000 to purchase 2,904,323 shares
      of
      the Company’s stock for an average purchase price per share of $.196 a
      share.





In
      2006,
      the Company issued 580,000 shares of the Company’s stock in exchange for
      consulting services and marketing services to various consultants. The shares
      were valued at the closing stock price of the Company’s common shares on the
      dates of the agreements.





In
      October 2006, the Company issued 1,640,000 shares of the Company’s class B Stock
      in exchange for consulting services, relating to assisting the Company in
      investment banking, investor relations, business development and aligning
      strategic alliances for the purposes of introducing the MedLink EHR to the
      European market. These shares were valued at $.177. In addition, in 2006 this
      consultant exercised 610,000 shares of the Company’s class B options at a price
      of $.177.





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





**BUSINESS
      OVERVIEW**





Introduction:





MedLink
      International, Inc. (“MedLink” or the “Company”) is headquartered in Islandia,
      New York. The Company is in the business of selling, implementing and supporting
      software solutions and hardware that give healthcare providers secure access
      to
      clinical, administrative and financial data in real time, allowing them to
      improve the quality, safety and efficiency in the delivery of healthcare.
      MedLink offer its services as stand-alone, combined or enterprise-wide systems.
      The Company’s flagship product the *MedLink
      EHR* *®* ** software
      enables physicians to utilize one solution to handle all of their practice
      management needs from scheduling, to practice management, to medical billing
      in
      an all in one user friendly application.





The
      majority of MedLink’s business operations are carried out by its wholly-owned
      subsidiaries, MedLink VPN, Inc. and its flagship products The MedLink VPN and
      MedLink. The MedLink VPN incorporates several third party applications,
      including Kodak, Emdeon I-Plexus, Thomson, LibertyNet and Snap Gear The Company
      also provides MedLink TV, medical billing, messaging, video teleconferencing,
      advertising services, and document management services to the health care
      community.




**The
      MedLink Vision:**




The
      goal
      of MedLink International is to create the largest hub for Personal Health
      Records in the United States. MedLink plans to achieve this by meeting its
      stated mission statement below.




-33-




MedLink
      will offer the medical community applications and services that it believes
      will
      ease accessibility to information related to patient care through the creation
      of a secure digital environment, while making it accessible to institutions
      both
      large and small at an affordable price in order to achieve the highest level
      of
      participation.




MedLink
      is dedicated to creating and providing the digital backbone for the delivery
      of
      enhanced medical services to healthcare professionals worldwide through a suite
      of network, communication, management, financial and value-added solutions
      through the utilization of its Virtual Private Network (MedLink VPN). The VPN
      connects the healthcare professionals with vital information and key resources
      creating efficiencies and thereby achieving optimal, real-time delivery of
      patient information.




MedLink
      is driven by its vision of creating a national, paperless, healthcare hub,
      combining the wisdom of healthcare professionals and the latest in integrated
      technology to provide solutions for the current and future challenges facing
      the
      healthcare industry. MedLink is determined to become the global leader that
      physicians and healthcare professionals will turn to for real-time,
      cost-effective access to a myriad of patient information at the touch of a
      button.




**MedLink
      VPN:**





The
      MedLink Virtual Private Network allows subscribing doctors to securely
      communicate with other physicians and remotely access and retrieve patient
      records, lab results, X-Rays, CAT Scans and other Personal Health Information
      (PHI). The MedLink VPN provides data security compliant with Title II, Part
      C of
      the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and a
      system for secure delivery of radiological images, allowing for the delivery
      of
      radiological images without film. MedLink proprietary PACS viewer also allows
      for manipulation of radiological images. The MedLink VPN offers the highest
      level of security available in the Health Information Technology (“HIT”)
      industry. Utilizing the MedLink VPN, different networks in different locations
      can be tied into a single private network. Software applications can be
      centralized and made available to certain users and not others depending on
      your
      security protocols. Essentially, the MedLink VPN allows the user to customize
      public and private areas within your organization. The MedLink VPN also
      incorporates streaming video technology, allowing for remote viewing of
      procedures or delivery of continuing education or training materials by a
      hospital to its doctors and staff, and communications software allowing for
      secure messaging among hospital personnel.




**MedLink
      EHR**




Utilized
      in conjunction with the security platforms of the MedLink VPN, the MedLink
      EHR
      (Electronic Health Record) provides patient-centric data, which means that
      information on the system is tied to each specific patient and the patient’s
      primary care physician.




The
      primary care doctor utilizes MedLink EHR to gather and update the data on his
      or
      her patients. Each time that MedLink EHR is accessed through the secure MedLink
      VPN it synchronizes with a master database that is tied into all affiliates
      of
      the primary care doctor and then updates the data on the primary care's doctor’s
      local database. According to physicians, this process will save a tremendous
      amount of time and enable access to data that previously could have taken up
      to
      several weeks to collect. The MedLink EHR does this all in a matter of minutes.




The
      MedLink EHR is used as a practice management system, it provides for the
      consolidation by physicians of data among the disparate networks, whereby it
      goes out like a powerful search engine within a physician’s own private network
      and collects and organizes the data into an application that provides for all
      physician’s records to be stored on their local database while keeping connected
      to all the networks a physician’s practice is affiliated with.




The
      MedLink EHR gives the primary care physician control over patient records.
      MedLink EHR enables the primary provider to easily manage the process of
      creating, maintaining and adding to patient Electronic Health
      Records.




-34-




This
      process is unique to the MedLink EHR and is made possible by the MedLink VPN.
      Once a physician's affiliates are connected to the MedLink VPN, an affiliate
      network group is created and interfaced with the MedLink EHR. This allows data
      from those networks to be pulled into one application. For example, a physician
      may utilize a specific practice management application and the physician's
      affiliates may utilize different practice management applications, the MedLink
      EHR consolidates all of that data onto one format that is accessed via MedLink’s
      VPN which currently exceeds HIPAA standards.




**MedLink
      EHR Lite**




The
      MedLink EHR Lite works in conjunction with the MedLink EHR for referring
      physicians to view radiology reports and images from a connected Radiology
      center. The referring physicians will utilize the MedLink EHR Lite to view
      current and past reports on their patients enabling them to generate a more
      accurate electronic health record of their patients. The seamless integration
      into a patient's electronic health record is unique to MedLink and MedLink
      hopes to make the process the standard moving forward for the delivery of
      reports and images from radiology centers.  The MedLink EHR Lite will
      help to speed the diagnostic process and significantly reduce patient wait
      times.




MedLink
      utilizes a Lite version of the MedLink EHR, which includes the following
      features to referring physicians of radiology centers affiliated with MedLink.
      The free features include: scheduler, patient demographics, messaging center
      and
      radiology reports and associated images. With less than 15% of american
      physicians utilizing EHR technology, the MedLink EHR Lite version alleviates
      a
      lot of the data entry associated with implementing an EHR system whereby patient
      demographics are automatically derived from the radiology centers information
      system.





The
      MedLink EHR Lite version, which is provided free to eligible physicians,
      currently over 42,000, will display pharmaceutical and other relevant
      advertising on the log-in and home page of the application. This offers
      advertisers a unique opportunity to reach a specific demographic for their
      advertising content directly on the physician’s desktop, as well as an
      additional revenue stream for the Company.





MedLink
      will offer its full suite of MedLink EHR products, such as the MedLink
      DocManager, MedLink Billing, E-Labs, E-Prescription and other related services
      that start at $299/month per practice to the MedLink EHR Lite
      users.




**MedLink
      TV**





In
      March
      of 2007, the Company announced the launch of MedLink TV with its strategic
      partner Dynatek Media. Whereby MedLink TV will deploy 40” LCD screens in the
      waiting rooms of medical offices and clinics. MedLink TV will comprise one
      of
      the foremost out-of-home broadcast networks reaching a captive audience of
      consumers.





MedLink
      TV offers advertisers a unique channel and innovative approach to reaching
      consumers, in the waiting rooms of physician’s offices and outpatient clinics,
      while they wait for medical visits and procedures. The network balances
      informational and advertising content with dynamically delivered, informative,
      educational and entertaining programming with a focus on health issues and
      well-being.





MedLink
      TV provides advertisers and specifically pharmaceutical companies with a captive
      audience of consumers, who are focused on health issues during the time they
      spend waiting for medical appointments. According to studies by Arbitron,
      Nielsen, and other market research companies, digitally delivered alternative
      media has been shown to have substantially higher recall rate than that of
      traditional media, such as print, radio, television and static
      billboards.




-35-




**Pharmaceutical
      Advertising**




MedLink
      will be offering a Lite version of the MedLink EHR to participating Radiology
      centers.  The goal is for the physicians to utilize the MedLink EHR to
      receive radiology studies and become familiar and comfortable with the MedLink
      EHR and to eventually purchase a full version and other related services
      such as e-prescription and the MedLink DocManager.




The
      Lite
      version of the MedLink EHR will mirror the functionality of the full version
      but
      the physician will be locked out of key features until they become a paying
      subscriber.  While MedLink plans to convert many of the 40,000 physician
      offices into paying subscribers, full penetration is unrealistic.  For
      those Lite version users only, MedLink has partnered with DynaTek who
      specializes in supplying advertisement space to advertisement vendors such
      as
      pharmaceutical companies that aim to specifically target physician
      offices.




**Status
      of Operations**





The
      MedLink Remote PACS has been installed in just over 50 radiology centers in
      California, New York, New Jersey and Florida. MedLink is actively approaching
      other Radiology Centers in the U.S. and expects to have more than 200 radiology
      centers across the U.S. utilizing the MedLink EHR Lite version to deliver their
      radiology reports and images to their referring physician base. Currently the
      referring physician base that can utilize the MedLink EHR Lite version to access
      their reports and images is a little more than 42,000, representing nearly
      10%
      of all U.S. based physicians. The Company is expanding its installation team
      to
      accommodate the requests for installations.





Due
      to
      the development in late December of 2006 of acquiring 53 radiology centers
      to
      utilize the MedLink Remote PACS to deliver their images to more than 42,000
      physician clinics. MedLink had to delay the release of MedLink EHR 2.0 to
      develop enhancements to meet the new demands in addition to the Lite version.
      MedLink EHR Lite is currently being installed in clinics in New York and the
      MedLink EHR 3.0 is scheduled for full release by the end of May.





During
      the fiscal year ended December 31, 2006, MedLink focused its efforts and
      resources on additional development of the MedLink EHR, the hiring, training
      and
      deployment of a sales team, and development of the Remote PACS and acquiring
      additional partnerships to allow for the Company’s goal of the MedLink EHR Lite
      becoming the primary delivery method of radiology reports and images to
      physicians in the U.S.





The
      Company recently announced a co-marketing agreement with Eastman Kodak Company,
      one of the largest company’s in the Healthcare IT arena that has installations
      in almost 95% of all healthcare facilities in the U.S. Under the terms of the
      agreement MedLink and Kodak will jointly market each others products and
      services to their current and future customer base. MedLink and Kodak are
      jointly working on their first project together at Mt. Sinai, whereby MedLink
      and Kodak will backup Mt. Sinai’s radiology information and utilize the MedLink
      EHR Lite version to deploy their images and reports to their referring physician
      base.





MedLink
      will actively market the users of the MedLink EHR Lite version to upgrade to
      the
      full version or parts thereof. Such as billing, practice management, e-labs,
      and
      e-prescription. MedLink’s sales force will also actively market to these
      physicians the MedLink TV and plans to have 2,000 installation by the end of
      2007. The Company projects that advertising revenue from the 2,000 screens
      will
      net the Company over $1 million a month and is shifting a lot of its attention
      to a more of an ad revenue approach in addition to sales of the MedLink EHR
      and
      related services. However, their can be no assurances that a significant number
      of advertisers will advertise on MedLink TV or a significant number of
      physicians will order the MedLink EHR and its related services.





-36-




**PLAN
      OF OPERATION**




The
      ambulatory EHR market has evolved into three tiers based on number of providers
      -- small (under 5), medium (5 to 20) and large (over 20). MedLink's strategy
      is
      to concentrate on the small to medium size practices, and provide them with,
      as
      our marketing material says, a Simple, Secure, Affordable solution. We
      anticipate the majority of those sales to be generated by our sales force
      meeting directly with physicians and office managers and presenting our
      solutions.




Direct
      sales of the MedLink EHR will come from salespeople going directly into the
      physician's offices and presenting our products and services. Salespeople will
      be trained in "solution selling", which will focus on:




·
            Fully
                understand each physician's critical business issues




·
            Identify
                the real influencers in the decision process




·
            Identify
                physician's "drivers" and "hot buttons"




·
            Effectively
                demonstrate our software




·
            Finalize
                sale




Salespeople
      will be given territories of between 300 and 500 practices, with the expectation
      that they will penetrate 10-15% annually in the first 3 years. The expected
      sales process consists of the following stages:




·
            Initial
                contact / Needs Assessment




·
            Proposal
                / Demo




·
            Contract




The
      average sales cycle for physicians making this type of purchase is between
      30
      and 90 days, depending on number of appointments necessary and physician
      availability.




In
      addition to the frontline sales people, the direct sales channel will be
      supported with implementation specialists and trainers.




Leads
      will be generated from a variety of sources, including:




Physician
      databases




Strategic
      partnerships: MedLink's plan of integration with Hospitals, Imaging Centers,
      laboratories, etc......offers many exciting opportunities for cross marketing.
      The best example of this is our relationship with Doshi Diagnostic. Doshi has
      a
      sales force of over 100 people, whose main responsibility is managing existing
      relationships with physicians. One of the main reasons for the integration
      is
      Doshi's belief that by using MedLink's tools, their physicians become better
      and
      more loyal customers for their service. MedLink will be training this motivated
      sales force, to uncover opportunities within their account base.




Direct
      Mail: Many of our partnerships also provide opportunities for direct mail
      campaigns. One illustration would be our partnership with Emdeon, one of the
      most respected names in healthcare today. They have offered to send a direct
      mail piece, highlighting MedLink's ePrescription solution, listing MedLink
      as an
      Emdeon partner, and providing our phone number and website for physicians
      interested in further information




-37-




Website:
      As physicians become more and more comfortable with searching the internet,
      our
      website will likely generate significant leads as well. We are currently working
      with the large search engines to insure our positioning for relevant
      searches




CCHIT
      Certification: MedLink has requested, and been granted, to be certified by
      CCHIT. We have completed the first stage, and should have final certification
      by the summer of 2007. Government leaders believe certification will help
      accelerate EHR adoption and lead to interoperability - the ability of EHRs
      and
      other health information systems to communicate with one another. The
      Administration plans to put its muscle behind certification. Michael Leavitt,
      Secretary of the Department of Health and Human Services, said that when
      amendments to the Stark regulations are announced in the near future, they'll
      specify that, in order for hospitals to help doctors acquire EHRs, they'll
      have
      to be interoperable, certified products. And he stated at the July press
      conference, "If people want to do business with [the federal government] in
      the
      long term, they need to achieve a level of interoperability, and it needs to
      be
      certified as such." To qualify for EHR certification this year, vendors had
      to
      meet more than 300 criteria devised by the Commission's diverse stakeholders,
      including physicians, medical societies, vendors, and payers. Most of the
      requirements concerned EHR functionality, security, and
      reliability.




CCHIT
      maintains lists of certified EHR's on their website, with links to those
      companies, so this will generate many leads as well




DOQ-IT:
      Much as it is doing with CCHIT, the government continues to provide tools and
      incentives to encourage EHR adoption. One of these tools is a program called
      DOQ-IT, which provides free consultation services to physicians seeking to
      adopt
      EHR technology. The DOQ-IT program, while still in its infancy, has already
      assisted close to 1,000 physicians in implementing EHR's. As a CCHIT certified
      EHR, MedLink will be included in their list of preferred vendors which they
      have
      posted on their website, and who they suggest to physicians.




Trade
      Shows




Referrals:
      The physician community is generally a tight knit group that generally shares
      information about products and services. Referrals from existing clients will
      likely make up a large percentage of new sales




In
      accordance with the review and audit by the Company’s independent registered
      public accounting firm Jewett, Schwartz & Associates. Jewett Schwartz &
Associates have expressed concerns about the Company’s continued existence as a
      going concern. Currently the Company has no revenues and, as such, may have
      to
      rely on funding from its management and outside sources until such time as
      it
      begins to generate revenue sufficient to cover its operating costs and expenses.
      Over the past three years, the Company has shifted its focus away from its
      answering service business in favor of concentrating on the development of
      its
      MedLink VPN and MedLink EHR products. Management believes that when brought
      to
      market the Company’s products will be able to compete in the multi-billion
      dollar HIT industry. The products are currently being beta-tested in several
      physician’s practices, radiology centers, and hospitals nationwide. Management
      has determined to delay full release of these products pending completion of
      all
      beta-testing due to its belief that a fully tested, fully functional product
      released in the future will enhance the Company’s reputation and ability to
      generate revenues; however, until the Company begins to realize significant
      revenues to sustain its operations, it may have to rely on contributions or
      loans by management, sales of its debt or equity securities or bank loans to
      finance its operations and research and development.




As
      discussed in this report, the Company has signed several contracts with
      hospitals and radiology centers in various parts of the US. To date, management
      believes that the results of beta-testing of installations at these facilities
      and the feedback received from these centers are positive. Additionally,
      management believes the Company will be able to generate future revenue from
      the
      MedLink VPN and MedLink EHR sufficient to cover its operational cost and
      expenses.





**Healthcare
      Information Technology Market**





2005
      continued a trend of positive developments in the healthcare information
      technology (HIT) marketplace and for the Company. For the third consecutive
      year, President Bush used the State of the Union address in January 2006 to
      express his support for electronic health records. The President also
      highlighted the fact that the first of 78 million Baby Boomers turn 60 in
      2006, putting strains on the healthcare system and the federal government as
      the
      need for care of the Baby Boomers increases.




-38-




National
      policymakers continue looking to HIT. 2005 saw meaningful progress towards
      a
      bipartisan consensus on Capital Hill around the view that HIT can deliver
      significant returns. The RAND Corporation study published in *Health
      Affairs* helped
      shape that perspective by detailing potential savings of $162 billion per
      year through error reduction, elevated efficiency and improved condition
      management.





There
      have now been more than 20 healthcare information technology bills introduced
      with broad bipartisan representation. The results of the RAND study should
      help
      support these bills as it provides evidence of a return on investment in
      healthcare information technology. These bills propose facilitating healthcare
      information technology investments by offering incentives such as direct grants,
      favorable tax treatment, amended Stark and anti-kickback rules, healthcare
      information technology loans, and differential reimbursement. With respect
      to
      the Stark rules, Health and Human Services (HHS) Secretary Mike Leavitt
      announced two proposed rules in October 2005 that could create exemptions from
      the Stark laws that would allow hospitals to furnish or donate hardware,
      software, and related training services to physicians for e-prescribing and
      electronic health records.





A
      significant development was the publication of RAND’s peer-reviewed study that
      indicates healthcare information technology could save the country’s healthcare
      system $162 billion annually through improved efficiency, disease
      management and reduced adverse drug events. This study provides large-scale,
      independent, quantified proof of the impact healthcare information technology
      can have. The potential savings indicated by this study represent nearly
      10 percent of the $1.7 trillion the United States spends annually on
      healthcare. These findings should be of particular interest to the federal
      government, which incurs significant healthcare costs through Medicare and
      Medicaid funding. Overall, the acute care hospital marketplace is in good
      financial condition. As Moody’s reported in January 2006, hospital bond
      rating upgrades beat downgrades for the first time since 1997. And while some
      providers are dealing with issues such as an unfavorable payor mix and the
      responsibility to serve a growing uninsured population, *USA
      Today* indicated
      in January 2006 that hospital profit margins reached a six-year high of
      5.2 percent in 2004.





Another
      positive development is that Moody’s Investors Services recently reported that
      year-to-date rating upgrades for not-for-profit hospitals are equal to
      downgrades, which is a better ratio of upgrades to downgrades than all but
      three
      of the past 17 years. This positive view was echoed by Standard &
Poor’s in October 2005 when they reported more upgrades than downgrades this
      year and a strong financial outlook due to favorable volume trends, rate
      increases, and cost containment.





***Background
      Information on Certain Trends and Strategies***




Several
      key trends in the healthcare marketplace are influencing the use of healthcare
      information services and technology solutions of the types we provide or are
      developing. Those trends, and the strategies we have developed in response,
      are
      described briefly below:





·
            ***High
                Rates of Increase in Healthcare Costs.***According
                to the Centers for Medicare & Medicaid Services, or CMS,
                healthcare spending in the United States rose to $1.9 trillion in
                2004 (or
                approximately six thousand three hundred dollars per person), up
                from $1.7
                trillion in 2003, $1.6 trillion in 2002, $1.4 trillion in 2001 and
                $1.3 trillion in 2000. The CMS report indicated a growth rate in
                healthcare spending of 7.9% in 2004, compared to 8.2% for 2003, and
                9.1%
                for 2002. In addition, CMS indicated that healthcare’s share of gross
                domestic product was 16.0% for 2004. Another study recently released
                by
                CMS predicted that U.S. healthcare spending will increase by an
                average of 7.2% annually until 2015, at which time such spending
                will
                reach $4 trillion (or approximately twelve thousand three hundred
                dollars
                per person) and account for 20% of the gross domestic product.





·
            ***Increased
                Use of Information Technology for Clinical
                Purposes.***Healthcare
                providers are under pressure to increase quality and reduce medical
                errors. While information technology systems and electronic transaction
                services are used by many physician offices for administrative and
                financial applications, their use in clinical workflow is much more
                limited, especially in smaller practices. However, we believe this
                is
                changing. While it will be a long time before most physicians go
                to a
                “paperless office,” more physicians are beginning to incorporate
                information technology into their clinical workflow. Healthcare payers
                and
                governmental authorities are increasingly taking steps to encourage
                physicians to use information technology in their treatment of patients
                and clinical processes.




-39-




·
            ***Increased
                Online Marketing and Education Spending for Healthcare
                Products.***Pharmaceutical,
                biotechnology and medical device companies spend large amounts each
                year
                marketing their products and educating consumers and physicians about
                them, however, only a small portion of this amount is currently spent
                on
                online services. We believe that these companies, are becoming
                increasingly aware of the effectiveness of the Internet relative
                to
                traditional media in providing health, clinical and product-related
                information to consumers and physicians, and this increasing awareness
                will result in increasing demand these services on the MedLink
                VPN.





·
            ***Governmental
                Initiatives Relating to Healthcare Information
                Technology.***There
                are currently numerous federal, state and private initiatives seeking
                ways
                to increase the use of information technology in healthcare, including
                in
                the physician’s office. Most significantly, in April 2004, Executive Order
                13335 directed the appointment of a National Coordinator for Health
                Information Technology to coordinate programs and policies regarding
                health information technology across the Federal government. In May
                2004,
                David J. Brailer M.D., Ph.D., was appointed to serve in this
                position. The National Coordinator is charged with directing the
                health
                information technology programs within the Department of Health and
                Human
                Services, or HHS, and coordinating them with those of other relevant
                Executive Branch agencies. In addition, the mission of the National
                Coordinator includes supporting and encouraging the use of health
                information technology in the public and private health care delivery
                systems and coordinating partnerships between government agencies
                and
                private sector stakeholders to speed the adoption of health information
                technology. We share, and have been working towards, many of the
                same
                goals as the governmental initiatives relating to health information
                technology. We believe that our businesses may be good candidates
                to work
                with HHS and other governmental authorities on their initiatives
                and
                projects and may also benefit for the focus those initiatives create
                on
                the benefits of products and services of the types we
                provide.





The
      market for healthcare in the United States is highly complicated and there
      can
      be no assurance that the trends identified above will continue or that the
      expected benefits to MedLink’s businesses from our responses to those trends
      will be achieved. In addition, the markets for healthcare information services
      and technology solutions are highly competitive and not only are our existing
      competitors seeking to benefit from these same trends, but the trends may also
      attract additional competitors.





**RESULTS
      OF OPERATIONS**





The
      Company's revenues from continuing operations for the year ended December 31,
      2006 and 2005 were $11,364 and $0, respectively. The lack of revenue is
      primarily attributable to the Company's decision to concentrate its efforts
      on
      implementing and developing the Med-Link VPN and its related suite of services
      and concentrating on Research and Development to allow the Company’s products to
      compete in the Healthcare Information Technology sector.




Expenses
      for the fiscal year ended December 31, 2006 and 2005 were $1,550,458 and
      $1,089,223, respectively. The increase in 2006 is primarily attributable to
      the
      addition of a sales team and increase IT staff and development.





The
      Company had net losses of $(1,588,908) and $(956,953) in the fiscal years ended
      December 31, 2006 and December 31, 2005, respectively. The increase in net
      losses resulted primarily from an increase in operating expenses, although
      the
      Company continued to realize losses due to its continued commitment to install
      its Med-Link VPN at Medical Centers across the country at no cost to the
      facility and increased research and development, without having yet received
      any
      significant revenues relating to the MedLink VPN installed as well as for
      compensation expenses pursuant to the employment agreements entered into as
      of
      January 1, 2006 between the Company and each of its chief executive office,
      chief financial officer and chief technology officer.




-40-




Liquidity
      and Capital Resources





At
      December 31, 2006, the Company had a working capital deficiency of $449,837.
      While the Company believes revenue that will be earned from the MedLink VPN
      will
      be sufficient to sustain the Company's operations for the next twelve months,
      there can be no guarantee that this will be the case and that the Company will
      not have to raise additional capital from investors. In the event the Company
      has to raise additional capital, there can be no assurance that such capital
      will be available when needed, or that it will be available on satisfactory
      terms.





Critical
      Accounting Policies





The
      preparation of financial statements and related disclosures requires management
      to make judgments, assumptions and estimates that affect the amounts in the
      consolidated financial statements and accompanying notes. Note 1 to the
      consolidated Annual Report on Form 10-KSB for the year ended December 31, 2006
      describes the significant accounting policies and methods used in the
      preparation of the consolidated financial statements. Estimates are used for,
      but not limited to, goodwill impairment and long-lived asset impairments. The
      following critical accounting policies are impacted significantly by judgments,
      assumptions and estimates used in the preparation of the consolidated financial
      statements.





**Item
      7.**  **Financial
      Statements**





The
      financial statements of the Company appear at the end of this report beginning
      with the Index to Financial Statements on page F-1.





**Item
      8.**  **Changes
      In and Disagreements With Accountants on Accounting and** **** **Financial
      Disclosure.**





None





**Item
      8A.**  **Controls
      and Procedures**




As
      of
      December 31, 2006, an evaluation was performed under the supervision and with
      the participation of the Company's management, including the CEO and Vice
      President, of the effectiveness of the design and operation of the Company's
      disclosure controls and procedures. Based on that evaluation, the Company's
      management, including the CEO and Vice President concluded that the Company's
      disclosure controls and procedures were effective in ensuring that material
      information relating to the Company with respect to the period covered by this
      report was made known to them.





Based
      upon their evaluation of the Company's internal controls within 90 days of
      the
      date of this report, the CEO and Vice President of the Company have identified
      the following internal control deficiencies:





1.
      lack
      of segregation of duties relating to cash, receivables and safeguarding of
      assets; and





2.
      failure to file sales and payroll tax returns.





The
      Company plans to take steps to address these deficiencies. There have been
      no
      significant changes in the Company's internal controls or in other factors
      that
      could significantly affect internal controls subsequent to January 1,
      2007.




-41-




**Part
      III**




**Item
        9. **Directors,
        Executive Officers, Promoters and Control Persons; Compliance with
        Section********16(a)
        of the Exchange Act****





**Directors,
      Executive Officers, Promoters and Control Persons**





The
      following table sets forth the name, age, and position of each executive officer
      and director and the term of office of each director of the
      Company.


Name
              
              Age
              
              Position
              
              Director
                  or Officer SinceRay
                  Vuono
              
              41
              
              Chief
                  Executive Officer,
              
              January
                  1, 2004President
                  and Chairmanof
                  the BoardKonrad
                  Kim
              
              35
              
              Director
                  and
              
              October
                  1, 2000Chief
                  Technology OfficerDr.
                  Michael Carvo
              
              54
              
              Director
              
              January
                  1, 2002James
                  Rose
              
              28
              
              Chief
                  Financial Officer and
              
              January
                  1, 2004Executive
                  Vice PresidentJames
                  Decker
              
              42
              
              Executive
                  Vice President of Sales
              
              July
                  1, 2006





All
      Directors hold their positions for one year and until their successors are
      duly
      elected and qualified. All officers hold their positions at the discretion
      of
      the Board of Directors.





Set
      forth
      below is certain biographical information regarding each of the Company's
      executive officers and directors:





**Ray
      Vuono, Chief Executive Officer and Chairman**




Mr. Vuono has
      more than 20 years of leadership experience building global brands and guiding
      top-tier companies. An accomplished corporate strategist and marketer, his
      vision and expertise in business performance have driven notable enterprise
      growth in the insurance, pharmaceutical, and finance sectors.  Mr. Vuono
      has served as the Company's President and Chief Executive Officer since 2004
      and
      as a consultant to the company since 2001.




Offering
      a rare blend of creative and operational strengths, Ray has achieved
      exciting company and product turnarounds and is recognized for his success
      in
      growing sales and profits. His strategic approach to building a business is
      reflected in his work as CEO of RayvonVC, a private venture capital
      firm where his concept creations and focus on diverse investment mix
      quickly delivered impressive bottom-line results. His turnaround capability
      is
      highlighted by his accomplishments as President & CEO of the National
      Support Systems, where he led a distressed insurance company to record
      profitability through brand revitalization that included major shifts in brand
      strategy, operations, product design, marketing communications, and sales
      techniques.




Mr.
      Vuono's exceptional track record of business improvement is based on his
      philosophy of total enterprise engagement in change. He is known for his ability
      to quickly identify and diagnose sales and growth impediments that go far beyond
      marketing, working with companies to refine their organizational structure,
      product lines, sourcing, sales channels, market position, as well as
      point-of-sale and general advertising.




-42-




Mr.
      Vuono
      holds a Bachelor of Science in Economics from the University of Calgary
      where he also played football for the national champion University of Calgary
      Dinos in 1985.  Mr. Vuono resides in Long Island, NY.




**Jameson
      Rose, Vice President & Chief Financial Officer**




As
      chief
      financial officer and executive vice president of MedLink International,
      Inc., Rose holds management responsibilities for the company's finance,
      business development, investor relations, and business
      service functions.  Jameson has served MedLink in various
      capacities since 2001 until being appointed as the company's CFO in January
      of 2004.  Mr. Rose's expertise in operations, finance, and business
      development will help ensure continued growth and success for MedLink
      International.




Before
      his Career at MedLink, Mr. Rose served as VP of Finance at Ambassador
      Capital Group and has served as an independent consultant in various
      investment banking transactions and advising on inorganic growth
      efforts, focusing on mergers and acquisitions, and strategic
      alliances.




Mr.
      Rose
      has a bachelor of science with honors in Financial Economics from Staffordshire
      University in the U.K.  Jameson lives in Long Island, NY.




**Konrad
      Kim, Chief Technology Officer and Director**




Appointed
      Chief Technology Officer of MedLink International, Inc.
      in 2004, Konrad Kim is responsible for all aspects of MedLink's
      national IT infrastructure and line-of-business application development,
      support and maintenance, including information service delivery and security.
      Under Mr. Kim's direction, the IT department is dedicated to working with
      business partners to accelerate MedLink's business by aligning MedLink's
      technology deployment strategy with its business strategy. The IT department
      takes a leadership role in the design of world-class, integrated strategies,
      processes and architecture that ensure the integrity of MedLink's security
      platforms and a more productive, efficient and valuable use of information
      within the in hand information technology arena.




Konrad
      is
      passionate about technology and its possibilities on improving the in hand
      industry as a whole.  Prior to his appointment as MedLink's CTO, Konrad
      served various roles at iClips.com, Gateway.com, Moody's Investor Services,
      Columbia House and Sony.




Mr.
      Kim
      holds a Bachelor of Science in Natural Sciences from the University of
      Wisconsin.  Mr. Kim is currently engaged to be married and lives in Long
      Island, NY.




**James
      Decker, Executive Vice President of Sales**




In
      his
      expanded role as Executive Vice President (EVP) of Sales and
      Operations, Mr. Decker is responsible for the overall leadership of
      the Sales and Services organization at MedLink International. Under Jim's
      leadership, his team will deliver a consistent, integrated and responsive
      customer experience through a unified sales and services organization. Decker's
      focus is to grow revenue, deliver profitability for the company and provide
      best
      in class service to MedLink's customers. Decker's discipline, leadership, and
      ability to align and accelerate organizations will yield new opportunities
      for MedLink. Jim's extensive experience, operational leadership qualities,
      and
      execution focused, results oriented approach have delivered an impressive
      history of leadership achievements




Mr.
      Decker joined the company in May of 2006, prior to joining MedLink, Mr Decker
      most recently served as Exec VP of Sales at Hudson Street Networks where he
      developed sales organizations and grew sales both domestically and
      internationally while nurturing excellent relationships with exiting customer
      and vendors.  Mr Decker brings over 15 years marketing &
sales leadership and general management experience to MedLink International.
      Prior to joining Hudson Street Networks, Mr. Decker led several successful
      sales
      teams, building strong customer and partner relationships within the
      telecommunications and software development marketplace, for companies such
      as
      MCI and Telstar.




-43-




Mr.
      Decker received a Bachelor of Arts in Marketing from Hofstra University. 
Mr. Decker lives on long Island, NY with his wife and three children.




**Dr.
      Michael Carvo, Director**





Dr.
      Michael Carvo has been a member of the Company’s board of directors since
      January 1, 2002.Dr. Michael Carvo is a family physician, who has been practicing
      out of Farmingdale, Long Island for over twenty years. Dr. Carvo became involved
      with MedLink in 1995, when it was a medical answering service called
      Communications 2001. Dr. Carvo brings the experience and expertise of a
      functioning, private practitioner to MedLink USA, which allows the company
      to
      meet the needs of a modern medical office.





**Family
      Relationships**





There
      are
      no family relationships among the Directors or Officers.





**Compliance
      with Section 16(a) of the Exchange Act**





Not
      applicable.


-44-
 **Item
          10.**  **Executive
          Compensation**
 
 The
          following compensation was paid to the Company’s Chief Executive Officer and
          other officers during the periods indicated:
 **SUMMARY
        COMPENSATION TABLE**


Long
                Term CompensationAnnual
                Compensation
            
            Awards
            
            PayoutsName
                and Principal Position
            
            Year
            
            Salary
                ($)
            
            Bonus
                ($)
            
            Other
                Annual Compensation ($)
            
            Restricted
                Stock Award(s) (#)
            
            Securities
                Underlying Options/SARs (#)
            
            LTIP
                Payouts ($)
            
            All
                Other Compensation ($)Ray
                Vuono, CEO (1)
            
            
            2006
            
            $
            0
            
            
            
            
            
            
            
            
            955,483
            
            
            480,0002005
            
            $
            0
            
            
            
            
            $
            0
            
            
            200,000
            
            
            200,0002004
            
            $
            0
            
            
            
            
            $
            0
            
            
            200,000
            
            
            200,000Jameson
                Rose, CFO (2)
            
            
            2006
            
            $
            0
            
            
            
            
            $
            0
            
            
            808,824
            
            
            400,0002005
            
            $
            0
            
            
            
            
            $
            0
            
            
            100,000
            
            
            100,0002004
            
            $
            0
            
            
            
            
            $
            0
            
            
            100,000
            
            
            100,000Konrad
                Kim, CTO (3)
            
            
            2006
            
            $
            0
            
            
            
            
            $
            0
            
            
            235,295
            
            
            120,002005
            
            $
            0
            
            
            
            
            $
            0
            
            
            100,000
            
            
            100,0002004
            
            $
            0
            
            
            
            
            $
            0
            
            
            20,000
            
            
            20,000




(1)
            Mr.
                Vuono did not receive any cash during the years ended December 31,
                2006,
                but did receive 955,883 shares of common stock as payment in that
                year, in
                lieu of cash.




(2)
            Mr.
                  Rose did not receive any cash during the year ended December 31,
                  2006, but
                  did receive 808,824 shares of common stock in that year, in lieu
                  of cash.




(3)
            Mr. Kim did not receive any cash during the year
              ended
              December 31, 2006, but did receive 235,295 shares of common stock in
              that
              year, in lieu of cash.




-45-




**Item
      11.**  **Security
      Ownership of Certain Beneficial Owners and Management**





**Security
      Ownership of Certain Beneficial Owners**





The
      following table sets forth information furnished to the Company with respect
      to
      the beneficial ownership of our common stock by each executive officer and
      director named below, by all directors and executive officers as a group and
      by
      anyone know to the Company to beneficially own more than 5% of the Company’s
      securities, each as of March 31, 2007. Unless otherwise indicated, each of
      the
      persons listed has sole voting and dispositive power with respect to the shares
      shown as beneficially owned.


Title
                  of Class
              
              Name
                  and Address of Beneficial Owner
              
              Amount
                  and Nature of Beneficial Ownership
              
              Percent
                  of Class$.001
                  par (1)
              
              Ray
                  Vuono
              
              4,889,620
              
              29.42%value
                  per
              
              11
                  Oval Drive, Suite 200Bshare
              
              Islandia,
                  New York 11749common$.001
                  par
              
              Jerry
                  Bermensolo
              
              3,583,850
              
              21.76%value
                  per
              
              1087
                  W. River St, Suite 280share
              
              Boise,
                  ID 83702common$.001
                  par (2)
              
              Jameson
                  Rose
              
              2,779,413
              
              16.72%value
                  per
              
              11
                  Oval Drive, Suite 200Bshare
              
              Islandia,
                  New York 11749common$.001
                  par (3)
              
              Konrad
                  Kim
              
              857,648
              
              5.16%value
                  per
              
              11
                  Oval Drive, Suite 200Bshare
              
              Islandia,
                  New York 11749common$.001
                  par (4)
              
              Dr.
                  Michael Carvo, Director
              
              472,676
              
              2.84%value
                  per
              
              560
                  Broadhollow Roadshare
              
              Suite
                  201common
              
              Melville,
                  New York 11747




(1)  Includes
      1,360,000 shares issuable upon the exercise of options granted to Mr. Vuono
      pursuant to Mr. Vuono’s employment agreement. Includes 1,338,301 shares of
      common stock held by DDR, Ltd., of which Mr. Vuono is the controlling
      shareholder.





(2)
      Includes 1,000,000 shares issuable upon the exercise of options granted to
      Mr.
      Rose pursuant to his employment agreement.





(3)
      Includes 360,000 shares issuable upon the exercise of options granted to Mr.
      Kim
      pursuant to his employment agreement.





-46-




**Item
      12.**  **Certain
      Relationships and Related Transactions**





Effective
      January 1, 2002, the Company acquired all of the issued and outstanding stock
      of
      MedLink USA, Inc., a privately held New York corporation ("MedLink") pursuant
      to
      a Share Exchange Agreement dated December 28, 2001 (the "Agreement"). As a
      result of the share exchange, MedLink is now a wholly owned subsidiary of the
      Company and Dr. Michael Carvo, the President and a shareholder of MedLink,
      is
      now a Company director. There was no affiliation or association between MedLink
      and the Company prior to the Agreement. The transactions contemplated by the
      Agreement were intended to be a tax-free exchange pursuant to Section 368 of
      the
      Internal Revenue Code of 1986.





As
      a
      result of the share exchange pursuant to the Agreement, the Company issued
      2,000,000 shares of its $.001 par value per share common stock and 400 shares
      of
      preferred stock to MedLink's shareholders. In exchange, MedLink's four
      shareholders, including Dr. Carvo, delivered all of the issued and outstanding
      stock of MedLink to the Company. The 400 shares of preferred stock were
      cancelled by agreement with the holders of the preferred stock on December
      31,
      2003.





The
      purchase price paid for MedLink's shares was determined by analysis and
      valuation of MedLink's financial condition and projected future cash flows
      and
      comparing it to (i) the market price and projected market price of the Company's
      common stock and (ii) the value of the preferred stock based on MedLink's
      projected cash flows.





In
      October through December, 2002, the Company issued a total of 1,294,272 shares
      of common stock to Munish Rametra, Ray Vuono and Jameson Rose as compensation
      for services under their consulting agreements.





During
      the fiscal year ended December 31, 2003, the Company issued a total of 1,092,911
      shares of common stock to Munish Rametra, Ray Vuono and Jameson Rose and 821,608
      options to purchase common stock to Ray Vuono and Jameson Rose as compensation
      for services under their consulting agreements.





On
      March
      29, 2001, the Company sold certain assets to Konrad Kim, the President of KRAD
      and, at the time, President of the Company and a Company Director, for $25,000,
      evidenced by a note bearing interest at a rate of 10% per annum. The note
      matured on March 1, 2002 and was extended until March 1, 2003. This note was
      collateralized by 100,000 restricted shares of the Company's common stock owned
      by Mr. Kim. During the year ended December 31, 2001, the Company loaned an
      additional $37,528 to Mr. Kim. This loan is payable on demand and is
      non-interest bearing. Imputed interest has been computed on this loan at the
      rate of 7% per annum.





On
      December 19, 2003, Mr. Kim exercised 100,000 options and conveyed the stock
      received upon exercise to the Company in satisfaction of $56,965 remaining
      on
      the above notes.





In
      November, 2003, the Company issued 493,378 shares of common stock to Dr. Michael
      Carvo in satisfaction of a loan from him to MedLink in the amount of
      $222,021.





In
      December, 2003, the Company issued 20,000 shares of common stock to Konrad
      Kim
      upon the exercise of options by him. The issuance was accomplished in reliance
      upon Section 4(2) of the Act in a private transaction on the grounds that he
      made his own investigation of the Company and had such knowledge and experience
      in financial and business matters that he was capable of understanding the
      risks
      involved in an investment in the Company's securities.




In
      January, 2004, the Company issued 200,000 shares of common stock to Ray Vuono
      100,000 shares of common stock to Jameson Rose, 80,000 shares of common stock
      to
      Nilang Patel, and 20,000 shares to Konrad Kim as compensation pursuant to their
      employment agreements. The issuances were accomplished in reliance upon Section
      4(2) of the Act in private transactions on the grounds that they made on their
      own investigation of the Company and had such knowledge and experience in
      financial and business matters that they were capable of understanding the
      risks
      involved in an investment in the Company's securities.





-47-




In
      October, 2004, James Rose, an employee of the Company, exercised a total of
      246,509 stock options at $.10 per share. The issuance to Mr. Rose was
      accomplished in reliance upon Section 4(2) of the Act in a private transaction
      on the grounds that Mr. Rose made his own investigation of the Company and
      had
      such knowledge and experience in financial and business matters that he was
      capable of understanding the risks involved in an investment in the Company's
      securities.





In
      October, 2004, Konrad Kim, an employee of the Company, exercised a total of
      80,000 stock options at $.10 per share. The issuance to Mr. Kim was accomplished
      in reliance upon Section 4(2) of the Act in a private transaction on the grounds
      that Mr. Kim made his own investigation of the Company and had such knowledge
      and experience in financial and business matters that he was capable of
      understanding the risks involved in an investment in the Company's
      securities.





In
      January, 2005, the Company issued 200,000 shares of common stock to Ray Vuono
      100,000 shares of common stock to Jameson Rose, and 100,000 shares of common
      stock to Konrad Kim as compensation pursuant to their employment agreements.
      The
      issuances were accomplished in reliance upon Section 4(2) of the Act in private
      transactions on the grounds that they made on their own investigation of the
      Company and had such knowledge and experience in financial and business matters
      that they were capable of understanding the risks involved in an investment
      in
      the Company's securities.





In
      October, 2005, James Rose, an employee of the Company, exercised a total of
      100,000 stock options at $.24 per share. The issuance to Mr. Rose was
      accomplished in reliance upon Section 4(2) of the Act in a private transaction
      on the grounds that Mr. Rose made his own investigation of the Company and
      had
      such knowledge and experience in financial and business matters that he was
      capable of understanding the risks involved in an investment in the Company's
      securities.





In
      October, 2005, Ray Vuono, an employee of the Company, exercised a total of
      200,000 stock options at $.24 per share. The issuance to Mr. Vuono was
      accomplished in reliance upon Section 4(2) of the Act in a private transaction
      on the grounds that Mr. Vuono made his own investigation of the Company and
      had
      such knowledge and experience in financial and business matters that he was
      capable of understanding the risks involved in an investment in the Company's
      securities.





In
      January 1, 2006, the Company entered into new employment agreements with Ray
      Vuono, James Rose, and Konrad Kim. The individuals will serve as the Company’s
      Chief Executive Officer, Vice President and Chief Technical Officer. The term
      of
      the agreements are for five years and provides for cash compensation for a
      total
      of $272,000 per year, however, the three employees have agreed to accept
      approximately 2,000,000 shares of the company’s restricted common stock in lieu
      of cash compensation. In addition the employees will receive an option to
      purchase each year 1,000,000 shares of the Company’s common stock. The exercise
      price of the options shall be the fair value market value of the common stock
      on
      the date granted to the employee ($.17). The options expire in ten years. The
      common stock and options each have a two year vesting period during which they
      will be forfeited if the employee if terminated for cause or leaves the Company
      prior to the end of the term. The vesting period is accelerated in the vent
      of a
      charge in control of the Company.





**Item
      13.**  **Exhibits
      and Reports on Form 8-K**





On
      October 6, 2005, MedLink International, Inc. (the "Company") and High River
      Corporation ("High River" or "Consultant") entered into a consulting agreement
      ("Agreement") pursuant to which MedLink agreed to compensate High River, as
      a
      consultant to the Company, with 1,640,000 shares of its Class B common stock
      ("Common Stock Compensation") and an option ("Option") to purchase up to 610,000
      shares of its Class B common stock at an exercise price of $0.177 per share
      ("Exercise Price"). The Common Stock Compensation and the Option is referred
      to
      herein as the "Consultant's Compensation". The Agreement provided that upon
      the
      earlier to occur of: (i) one year from the date of the Agreement; or (ii)
      MedLink's shares of Class B common stock becoming listed for trading on either
      the Frankfurt or Berlin stock exchange and the completion of the Consultant's
      tasks as defined in the Agreement, that MedLink would deliver the Consultant's
      Compensation to High River and the Option would be immediately exercisable
      for a
      period of 90 days.


SEC
      Ref.




-48-






SEC Ref.
              No.
            Title
                of Document





3.1
            Amended
                of Articles of Incorporation (1)





3.2
            Bylaws
                (1)





10.1
            Consulting
                Agreement with DDR, Ltd. dated October 11, 2000
                (3)





10.2
            Acquisition
                Agreement pertaining to K-Rad Konsulting, LLC, dated October 27,
                2000
                (3)





10.6
            Share
                Exchange Agreement between the Company and MedLink USA, Inc.dated
                December 28, 2001 (4)





10.7
            Asset
                Purchase Agreement between the Company and 4J’s Enterprises datedJanuary
                23, 2002 (5)





10.8
            Telecommunications
                Services Agreement dated November 27, 2002between
                New Island Hospital and MedLink USA, Inc.
                (6)





10.9
              Messaging
                  Service Agreement made as of November 22, 2002 betweenTotal
                  Infosystems, Inc. and MedLink USA, Inc.
                  (6)




10.10
                Employment
                    Agreement between the Company and Ray Vuono dated January 1,
                    2004;
                    (7)





10.11
            Employment
                Agreement between the Company and Jameson Rose dated
                January1,
                2004; (7)





10.12
            Employment
                Agreement between the Company and Nilang Patel dated January
                1,2004;
                (7)





10.13
            Employment
                Agreement between the Company and Konrad Kim dated January
                1,2004;
                (7)





10.14
            CNI
                Medical Coding & Recovery, Inc. Definitive Agreement
                (8)





10.15
            Employment
                Agreement between the Company and Ray Vuono dated
                January1,
                2006;





10.16
            Employment
                Agreement between the Company and Jameson Rose dated
                January1,
                2006;





10.17
            Employment
                Agreement between the Company and Konrad Kim dated
                January1,
                2006;





21.1
            Subsidiaries
                of the Registrant





23.1
            Consent
                of Independent Auditor





31.1
            Certification
                of Ray Vuono pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a),
                as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002;





31.2
            Certification
                of Jameson Rose pursuant to Exchange Act Rules 13a-14(a)
                and15d-14(a),
                as adopted pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002;




-49-




32
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                Section906
                of the Sarbanes-Oxley Act of 2002.





(1)
      Incorporated by this reference from the Annual Report on Form 10-KSB for the
      year ended December 31, 1999, filed with the Securities and Exchange Commission
      on June 28, 2000.





(2)
      Incorporated by this reference from the Company’s registration statement on Form
      S-8 filed with the Securities and Exchange Commission on November 14,
      2001.





(3)
      Incorporated by this reference from the Current Report on Form 8-K dated October
      31, 2000, filed with the Securities and Exchange Commission on November 13,
      2000.





(4)
      Incorporated by reference from the Current Report on Form 8-K dated January
      10,
      2002 filed with the Securities and Exchange Commission on January 15,
      2002.





(5)
      Incorporated by reference from the Current Report on Form 8-K dated and filed
      with the Securities and Exchange Commission on February 7, 2002.





(6)
      Incorporated by reference from the quarterly report on Form 10-Q for the fiscal
      quarter ended September 30, 2002 and filed with the Securities and Exchange
      Commission on December 18, 2002.





(7)
      Incorporated by reference from the Annual Report on Form 10-KSB for the year
      ended December 31, 2003 filed with the Securities and Exchange Commission on
      April 15, 2004.





(8)
      Incorporated by reference from the Annual Report on Form 10-KSB for the year
      ended December 31, 2005 filed with the Securities and Exchange Commission on
      April 15, 2006.





**Item
      14.**  **Principal
      Accountant Fees and Services.**





Farber,
      Blicht, Eyerman & Herzog, LLP (“FBEH”) was the Company's principal
      accountant during the fiscal years ended December 31, 2006 and December 31,
      2005. During those fiscal years, the Company incurred the following fees with
      FBEH for the following services:


2006
              
              2005Audit
                  Related Fees
              
              $
              16,892.86
              
              $
              14,758Tax
                  Fees
              
              $
              2,965
              
              $
              2,965All
                  Other FeesOut-of-Pocket
                  ExpensesTotal
              
              $
              19,857.86
              
              $
              17,723





All
      services provided by FBEH during the fiscal years ended December 31, 2006 and
      December 31, 2005 were approved by management only. The Company does not have
      an
      audit committee of its Board of Directors or any pre-approval policies or
      procedures for non-audit or other services.





-50-





SIGNATURES





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





MEDLINK
      INTERNATIONAL, INC.





By:
              /s/ Ray
              Vuono
            
            
            Dated:April
              14, 2007Ray
                Vuono, Chief Executive Officer and President


By:
                /s/ Konrad Kim
              
              
              Dated:April
                14, 2007Konrad
                  Kim, President and Director
 By:
                  /s/ Dr.
                  Michael Carvo
                
                
                Dated:April
                  14, 2007Director
 By:
                    /s/ Jameson Rose
                  
                  
                  Dated:April
                    14, 2007Chief
                      Financial Officer







-51-


REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
        the
        shareholders and board of directors
 Medlink
        International, Inc.:
 
 We
        have
        audited the accompanying balance sheet of Medlink International, Inc.
        (hereinafter referred to as “the Company”) as of December 31, 2006, and the
        related statements of operations, shareholders’ deficit and cash flows for years
        ended December 31, 2006 and the period from February 10, 2000 (inception)
        through December 31, 2006. These financial statements are the responsibility
        of
        the Company's management. Our responsibility is to express an opinion on
        these
        financial statements based on our audits.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (PCAOB). Those standards require that we plan
        and
        perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audit provide a reasonable
        basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Medlink International, Inc.
        as of
        December 31, 2006, and the results of their operations and their cash flows
        for
        the years ended December 31, 2006 and the period from February 10, 2000
        (inception) through December 31, 2006 in conformity with accounting principles
        generally accepted in the United States.
 
 These
        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 operating and liquidity concerns, has incurred an accumulated
        deficit of approximately $10,824,641 through the period ended December 31,
        2006.
        These conditions raise substantial doubt about the Company's ability to continue
        as a going concern. Management's plans as to these matters are also described
        in
        Note B. The financial statements do not include any adjustments to reflect
        the
        possible future effects on the recoverability and classification of assets
        or
        the amounts and classification of liabilities that may result from the outcome
        of these uncertainties.
  */s/
        JEWETT, SCHWARTZ, WOLFE & ASSOCIATES*
 
 April
        15,
        2007
 Hollywood,
        Florida
  F-1
  MEDLINK
                    INTERNATIONAL, INC.FORMERLY
                    WESTERN MEDIA GROUP CORPORATION(A
                    Development Stage Company)CONSOLIDATED
                    BALANCE SHEETDecember
                    31, 2006
  2006ASSETSCurrent
                    assets
                
                $
                -Property
                    and equipment, net
                
                
                56,734Intangible
                    asset, net
                
                
                -Security
                    deposit
                
                
                5,400Total
                    Assets
                
                $
                62,134LIABILITIES
                    AND SHAREHOLDERS' DEFICIENCYCurrent
                    Liabilities:Cash
                    overdraft
                
                $
                11,047Accounts
                    payable and accrued expenses
                
                
                382,509Loans
                    payable - related parties
                
                
                56,281Total
                    Current Liabilities
                
                
                449,837Commitments
                    and ContingenciesShareholders'
                    Deficiency:Preferred
                    stock; $0.001 par value5,000,000
                    shares authorizaed; none issuedCommon
                    stock:Class
                    A; $0.001 par value, 150,000,000 sharesauthorized;
                    14,396,822 shares issued and outstanding
                
                
                14,397Class
                    B; $0.001 par value, 50,000,000 sharesauthorized;
                    2,250,000 shares issued and outstanding
                
                
                2,250Deferred
                    charges
                
                
                (159,538
                )Subscriptions
                    receivable
                
                
                (19,783
                )Treasury
                    stock (183,446 shares), at cost
                
                
                (130,551
                )Additional
                    paid-in capital
                
                
                10,730,163Accumulated
                    deficit during development stage
                
                
                (10,824,641
                )Total
                    Shareholders' Deficiency
                
                
                (387,703
                )Total
                    Liabilities and Shareholders' Deficiency
                
                $
                62,134
  The
        accompanying notes are an integral part of these financial
        statements.
 F-2
 MEDLINK
                    INTERNATIONAL, INC.FORMERLY
                    WESTERN MEDIA GROUP CORPORATION(A
                    Development Stage Company)CONSOLIDATED
                    STATEMENTS OF OPERATIONSSTATEMENTS
                    OF OPERATIONS
  For
                    the Periodfrom
                    February 10,For
                    the Years Ended December
                
                2000
                    (inception)2006
                
                2005
                
                to
                    December 31, 2006Revenues
                
                $
                11,364
                
                $
                -
                
                $
                335,571Operating
                    ExpensesGeneral
                    and administrative expenses
                
                
                1,540,949
                
                
                1,069,162
                
                
                5,523,590Depreciation
                    and amortization
                
                
                9,509
                
                
                20,061
                
                
                839,964Total
                    operating expenses
                
                
                1,550,458
                
                
                1,089,223
                
                
                6,363,554Operating
                    loss
                
                
                (1,539,094
                )
                
                (1,089,223
                )
                
                (6,027,983
                )Other
                    income (expense):Interest
                    expense
                
                
                -
                
                
                -
                
                
                (11,311
                )Cost
                    of aborted acquisition
                
                
                -
                
                
                -
                
                
                (1,375,000
                )Interest
                    income
                
                
                -
                
                
                -
                
                
                4,078Gain
                    on settlement agreement
                
                
                
                
                
                132,270
                
                
                132,270Loss
                    on impairment of assets
                
                
                (49,814
                )
                
                -
                
                
                (3,546,695
                )(49,814
                )
                
                132,270
                
                
                (4,796,658
                )Net
                    loss
                
                
                (1,588,908
                )
                
                (956,953
                )
                
                (10,824,641
                )Weighted
                    average common shares outstanding -basic
                    and diluted class A only
                
                
                13,119,076
                
                
                8,328,712Net
                    loss per share – basic and diluted
                
                $
                (0.12
                )
                $
                (0.11
                )
 The
          accompanying notes are an integral part of these financial
          statements.
 F-3
  MEDLINK
                    INTERNATIONAL, INC.FORMERLY
                    WESTERN MEDIA GROUP CORPORATION(A
                    Development Stage Company)CONSOLIDATED
                    STATEMENTS OF CASH FLOWSYears
                    Ended December 31, 2006 and 2005
  For
                    the Periodfrom
                    February 10,2000
                    (inception)2006
                
                2005
                
                to
                    December 31, 2006Cash
                    Flows From Operating ActivitiesNet
                    loss
                
                $
                (1,588,908
                )
                $
                (956,953
                )
                $
                (10,824,641
                )Adjustments
                    to reconcile net loss to netcash
                    flow used in operating activities:Depreciation
                    and amortization
                
                
                9,509
                
                
                20,061
                
                
                839,964Stock-basedpcompensation
                    to directors
                
                
                154,200
                
                
                
                
                
                154,200Amortization
                    of deferred charges
                
                
                -
                
                
                -
                
                
                279,200Deferred
                    compensation
                
                
                (159,538
                )
                
                -
                
                
                (159,538
                )Issuance
                    of common shares for consulting andother
                    services rendered
                
                
                
                
                
                580,000
                
                
                3,750,865Loss
                    on impairment of assets
                
                
                49,814
                
                
                -
                
                
                3,546,695Imputed
                    interest on officer's loan
                
                
                -
                
                
                -
                
                
                947Changes
                    in assets and liabilities:Accounts
                    receivable
                
                
                -
                
                
                227
                
                
                19,840Accrued
                    expenses and other current liabilities
                
                
                103,391
                
                
                8,155
                
                
                311,882Other
                    assets
                
                
                58,719
                
                
                (58,719
                )
                
                (622
                )Net
                    Cash Used in Operating Activities
                
                
                (1,372,813
                )
                
                (407,229
                )
                
                (2,081,208
                )Cash
                    Flows From Investing ActivitiesPurchase
                    of equipment
                
                
                (42,860
                )
                
                -
                
                
                (120,661
                )Purchase
                    of intangible asset
                
                
                -
                
                
                -
                
                
                (20,000
                )Cash
                    acquired in Med-Link acquisition
                
                
                -
                
                
                -
                
                
                274Investments
                    in partnerships
                
                
                -
                
                
                -
                
                
                (7,546
                )Net
                    Cash Used in Investing Activities
                
                
                (42,860
                )
                
                -
                
                
                (147,933
                )Cash
                    Flows From Financing ActivitiesIssuance
                    of common stock
                
                
                1,449,565
                
                
                466,995
                
                
                2,255,707Repayment
                    of bank loans
                
                
                -
                
                
                -
                
                
                (47,333
                )Purchase
                    of company common shares
                
                
                -
                
                
                (73,551
                )
                
                (73,551
                )Proceeds
                    from loan payable
                
                
                -
                
                
                -
                
                
                45,908Advances
                    from officer/shareholders
                
                
                (33,892
                )
                
                11,885
                
                
                46,932Net
                    Cash Provided by Financing Activities
                
                
                1,415,673
                
                
                405,329
                
                
                2,227,663Net
                    decrease in cash
                
                
                -
                
                
                (1,900
                )
                
                (1,478
                )Cash
                    at beginning of year
                
                
                -
                
                
                1,900
                
                
                1,478Cash
                    at end of year
                
                $
                -
                
                $
                -
                
                $
                -Supplemental
                    disclosure of cash flow information:Cash
                    paid for interest
                
                $
                -
                
                $
                -
                
                $
                11,300Cash
                    paid for taxes
                
                $
                1,700
                
                $
                300
                
                $
                11,500
  Non-cash
                    financing activities:Reference
                    is made to financial statements notes for certain non-cash financing
                    activities
  The
          accompanying notes are an integral part of these financial
          statements.
 F-4
  MEDLINK
                    INTERNATIONAL, INC.FORMERLY
                    WESTERN MEDIA GROUP CORPORATIONCONSOLIDATED
                    STATEMENTS OF CHANGES IN SHAREHOLDERS'
                    DEFICIENCY
  Surplus(Deficit)Additional
                
                DuringCommon
                    Stock
                
                Paid-in
                
                Development
                
                Subscriptions
                
                Deferred
                
                TreasuryShares
                
                Amount
                
                Capital
                
                Stage
                
                Receivable
                
                Compensation
                
                Stock
                
                TotalFormation
                    of KKL at inception (February 10, 2001)
                
                $
                -
                
                $
                -
                
                $
                900
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                900Adjustment
                        to reflect effective capitalization of KKL
                        immediately preceding reverse acquisition
                
                
                9,000,000
                
                
                9,000
                
                
                (900
                )
                
                -
                
                
                (8,100
                )
                
                -
                
                
                -
                
                
                -Shares
                    deemed issued to reflect reverse acquisition of KKL
                
                
                2,499,310
                
                
                2,499
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                2,499Net
                    income - 2000
                
                
                -
                
                
                -
                
                
                -
                
                
                17,775
                
                
                -
                
                
                -
                
                
                -
                
                
                17,775**Balance
                    at December 31, 2000**
                
                
                11,499,310
                
                $
                11,499
                
                $
                -
                
                $
                17,775
                
                $
                (8,100
                )
                $
                -
                
                $
                -
                
                $
                21,174Cash
                    contributed by DDR
                
                
                -
                
                
                -
                
                
                13,000
                
                
                -
                
                
                8,100
                
                
                -
                
                
                -
                
                
                21,100Shares
                    issued in connection with assignment ofindebtedness
                
                
                120,000
                
                
                120
                
                
                29,880
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                30,000Shares
                    issued in connection with confidential and non-disparagement
                    agreement
                    related to the aborted acquisition
                
                
                1,100,000
                
                
                1,100
                
                
                1,373,900
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                1,375,000Shares
                    issued for cash consideration
                
                
                75,000
                
                
                75
                
                
                13,925
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                14,000Shares
                    issued for consulting services
                
                
                4,095,000
                
                
                4,095
                
                
                158,755
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                162,850Imputed
                    interest on officer / stockholder loan
                
                
                -
                
                
                -
                
                
                947
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                947Other
                
                
                13
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,465,035
                )
                
                -
                
                
                -
                
                
                -
                
                
                (1,465,035
                )Less
                    deferred charges
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (134,075
                )
                
                -
                
                
                (134,075
                )**Balance
                    at December 31, 2001**
                
                
                16,889,323
                
                $
                16,889
                
                $
                1,590,407
                
                $
                (1,447,260
                )
                $
                -
                
                $
                (134,075
                )
                $
                -
                
                $
                25,961Shares
                    issued in connection with the Med-Link USA, Inc.
                    acquistion
                
                
                2,000,000
                
                
                2,000
                
                
                2,098,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                2,100,000Share
                    issues in connection with Four J's fixed assets acquisiton
                
                
                2,000,000
                
                
                2,000
                
                
                1,915,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                1,917,000Shares
                    issued in connection with the exercise of consultant's options
                
                
                1,147,389
                
                
                1,147
                
                
                21,801
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                22,948Shares
                    issued for consulting services
                
                
                1,294,272
                
                
                1,294
                
                
                51,956
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                53,250Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (733,404
                )
                
                -
                
                
                -
                
                
                -
                
                
                (733,404
                )Amortization
                    of deferred charges
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                134,075.00
                
                
                -
                
                
                134,075**Balance
                    - December 31, 2002**
                
                
                23,330,984
                
                $
                23,330
                
                $
                5,677,164
                
                $
                (2,180,664
                )
                $
                -
                
                $
                -
                
                $
                -
                
                $
                3,519,830Shares
                    issued for consulting and developmental services
                
                
                1,342,911
                
                
                1,343
                
                
                524,657
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                526,000Shares
                    issued in connection with the exercise of consultant's
                    options
                
                
                1,120,066
                
                
                1,120
                
                
                21,281
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                22,401Shares
                    issued in settlement of indebtedness to office
                
                
                493,378
                
                
                494
                
                
                221,527
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                222,021Shares
                    sold at $.04 per share
                
                
                500,000
                
                
                500
                
                
                19,500
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                20,000Shares
                    sold at $.065 per share
                
                
                3,000,000
                
                
                3,000
                
                
                192,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                195,000Shares
                    acquired from an officer of the Company
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (57,000
                )
                
                (57,000
                )Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (4,470,905
                )
                
                -
                
                
                -
                
                
                -
                
                
                (4,470,905
                )Less
                    deferred charges
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (145,125.00
                )
                
                -
                
                
                (145,125
                )**Balance
                    - December 31, 2003**
                
                
                29,787,339
                
                $
                29,787
                
                $
                6,656,129
                
                $
                (6,651,569
                )
                $
                -
                
                $
                (145,125
                )
                $
                (57,000
                )
                $
                (167,778
                )Shares
                    issued for employment services rendered and to be rendered
                
                
                2,000,000
                
                
                2,000
                
                
                1,178,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                1,180,000Warrants
                    issued and exercised related to finders fee agreement
                
                
                100,000
                
                
                100
                
                
                53,600
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                53,700Adjustment
                    relating to the exercise price of shareholders
                    / consultants options
                
                
                -
                
                
                -
                
                
                28,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                28,000Amortization
                    of deferred charges
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                145,125
                
                
                -
                
                
                145,125Shares
                    issued in connection with the exercise ofshareholders/
                    consultants options
                
                
                4,032,545
                
                
                4,032
                
                
                124,619
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                128,651Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,627,211
                )
                
                -
                
                
                -
                
                
                -
                
                
                (1,627,211
                )**Balance
                    - December 31, 2004**
                
                
                35,919,884
                
                $
                35,919
                
                $
                8,040,348
                
                $
                (8,278,780
                )
                $
                -
                
                $
                -
                
                $
                (57,000
                )
                $
                (259,513
                )Shares
                    issued for employment services rendered
                
                
                2,000,000
                
                
                2,000
                
                
                578,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                580,000Shares
                    sold at $.077 per share
                
                
                5,142,858
                
                
                5,143
                
                
                389,857
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                395,000Options
                    exercised by officers at $.048 per share
                
                
                1,500,000
                
                
                1,500
                
                
                70,495
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                71,995Shares
                    acquired from Four J's
                
                
                0
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (73,551
                )
                
                (73,551
                )Adjustment
                    to reflect 1 for 5 reverse stock split
                
                
                (35,650,194
                )
                
                (35,650
                )
                
                35,650
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (956,953
                )
                
                -
                
                
                -
                
                
                -
                
                
                (956,953
                )**Balance
                    at December 31, 2005**
                
                
                8,912,548
                
                $
                8,912
                
                $
                9,114,350
                
                $
                (9,235,733
                )
                $
                -
                
                $
                -
                
                $
                (130,551
                )
                $
                (243,022
                )Shares
                    issued for employment services rendered
                
                
                1,999,951
                
                
                2,000
                
                
                270,000
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                272,000Shares
                    sold in 2006
                
                
                2,904,323
                
                
                2,905
                
                
                567,093
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                570,000Class
                    B shares issued for consulting services
                
                
                1,640,000
                
                
                1,640
                
                
                288,640
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                290,280Shares
                    issued in connection with the exercise of class B shares
                
                
                610,000
                
                
                610
                
                
                107,360
                
                
                -
                
                
                (19,783
                )
                
                -
                
                
                -
                
                
                88,187Shares
                    issued for consulting services rendered
                
                
                580,000
                
                
                580
                
                
                228,520
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                229,1001,000,000
                    options-stock based compensation to directors
                
                
                -
                
                
                -
                
                
                154,200
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                154,200Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,588,908
                )
                
                -
                
                
                -
                
                
                -
                
                
                (1,588,908
                )Less
                    deferred charges
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (159,538
                )
                
                -
                
                
                (159,538
                )**Balance
                    at December 31, 2006**
                
                
                16,646,822
                
                $
                16,647
                
                $
                10,730,165
                
                $
                (10,824,641
                )
                $
                (19,783
                )
                $
                (159,538
                )
                $
                (130,551
                )
                $
                (387,701
                )
  The
          accompanying notes are an integral part of these financial
          statements.
 F-5
 MEDLINK
          INTERNATIONAL, INC.
 (A
          Development Stage Company)
 
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 NOTE
          1 -
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Nature
          of Business
 
 Ionic
          Controls, Inc. was incorporated on July 26, 1977, under the laws of the
          State of
          Minnesota and on November 17, 1988, changed its name to Western Media Group
          Corporation.
 
 Western
          Media Group Corporation merged with K-Rad Konsulting LLC (“KKL”) in a reverse
          acquisition transaction. The Management of KKL assumed control of the Company
          and the name Western Media Group Corporation (the legal acquirer) was retained.
          The financial statements presented are those of KKL from its inception
          (February
          10, 2000) and Western Media Group Corporation from the date of acquisition
          (October 31, 2000).
 
 On
          January 1, 2002, the Company acquired Med-Link, a privately held New York
          corporation, pursuant to a share exchange agreement dated December 28,
          2001.
 
 During
          2005 Western Media Group Corporation’s Board of Directors approved a merger
          agreement whereby Western Media Group Corporation changed the state of
          its
          incorporation from Minnesota to Delaware by merging with and into a newly
          formed
          Delaware corporation named Medlink International, Inc. In addition, the
          name of
          the company was changed from Western Media Group Corporation to Medlink
          International, Inc. (the “Company”) upon the completion of the
          merger.
 
 The
          business of the Company is carried out by two of its wholly owned subsidiaries,
          Med-Link, Med-Link VPN Company, through which it plans to market its Med-Link
          VPN products and by KKL. The Company also has two inactive subsidiaries,
          Western
          Media Acquisition Corp. (formerly Western Media Sports Holdings, Inc.),
          and
          Western Media Publishing Corp. The Company also entered into two joint-venture
          agreements in 2004 to market their products.
   MedLink
          was incorporated in 1998. While it shares an office with the Company,
          substantially all of its operations have been outsourced. Medlink provides
          a
          full service communication network to physicians and hospitals and can
          provide
          its services to labs and other businesses that require a service for
          communication of emergencies. Some of the services and products which Medlink
          provides are answering services, voice mail, a virtual private network
          (VPN) and
          an internet message center. The Company is concentrating its efforts on
          the VPN,
          which it expects will be its principal business. The VPN is still in the
          pre-revenue stage. The VPN is designed to allow physicians and other members
          of
          the medical community to contact other physicians, retrieve information
          from
          hospitals, and obtain insurance related information, such as claim status.
          The
          VPN is also designed to provide information, such as overnight admissions,
          room
          assignment, operating room schedules and lab results. In November, 2003,
          the
          Company began testing the VPN at New Island Hospital.
 
 F-6
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 NOTE
          1 -
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Nature
          of Business (continued)
  Pursuant
          to the Agreement, the Company issued 2,000,000 shares of its $.001 par
          value per
          share common stock and 400 shares of preferred stock to Medlink’s shareholders
          for all the issued and outstanding shares of Medlink. The preferred shares
          had
          no measurable economic value and were canceled in 2004. The acquisition
          of
          MedLink was accounted for under the purchase method of accounting, with
          resulting goodwill in the amount of $2,292,779.
 
 KKL
          provides computer network and software systems, consulting, installation
          and
          maintenance services.
 
 In
          2006,
          the Company received final approval from Deutsche Borse AG and its shares
          started trading through the Frankfurt Stock Exchange.
 
 Principles
          of Consolidation
 
 The
          accompanying consolidated financial statements include the accounts of
          the
          Company and all of its wholly-owned subsidiaries. All intercompany transactions
          and balances have been eliminated in consolidation.
 
 Revenue
          Recognition
 
 Revenues
          are recognized when services are provided and collectibility of payment
          is
          reasonably assured in accordance with the U.S. Securities and Exchange
          Commission’s (SEC) Staff Accounting Bulletin (SAB) No. 104, which provides
          guidance on the recognition, presentation and disclosure of revenue in
          financial
          statements.
 In
          2006,
          the Company generated approximately $5,000 from licensing, $2,000 from
          training
          and $4,364 from hardware sales. All revenues are recognized upon
          receipt.
 
 Estimates
 
 The
          preparation of consolidated 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 amount
          of
          assets and liabilities and disclosure of contingent assets and liabilities
          at
          the date of the consolidated financial statements and the reported amounts
          of
          revenues and expenses during the reporting period. Actual results could
          differ
          from those estimates.
 
 F-7
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
  NOTE
          1 -
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Goodwill
          and Indefinite-Lived Purchased Intangible Assets
 
 In
          accordance with Statement of Financial Accounting Standards (SFAS) No.
          142,
“Goodwill and Other Intangible Assets,” goodwill acquired in business
          combination is assigned to reporting units that are expected to benefit
          from the
          synergies of the combination as of the acquisition date. The Company assesses
          goodwill and indefinite-lived intangible assets for impairment annually
          at the
          end of the fourth quarter, or more frequently if events and circumstances
          indicate impairment may have occurred in accordance with SFAS No. 142.
          If the
          carrying value of a reporting unit’s goodwill exceeds its implied fair value,
          the Company records an impairment loss equal to the difference. SFAS No.
          142
          also requires that the fair value of indefinite-lived purchased intangible
          assets be estimated and compared to the carrying value. The Company recognizes
          an impairment loss when the estimated fair value of the indefinite-lived
          purchased intangible assets is less than the carrying value.
 
 Long-Lived
          Assets
 
 The
          Company’s accounting policy regarding the assessment of the recoverability of
          the carrying value of long-lived assets, including property and equipment
          and
          purchased intangible assets with finite lives, is to review the carrying
          value
          of the assets if the facts and circumstances suggest that they may be impaired.
          If this review indicates that the carrying value will not be recoverable,
          as
          determined based on the projected undiscounted future cash flows, the carrying
          value is reduced to its estimated fair value.
 
 Intangible
          assets that have finite useful lives are amortized by the straight-line
          method
          over the remaining useful lives.
  Accounting
          for Stock-Based Compensation
 
 The
          Financial Accounting Standards Board (FASB) issued a revision of SFAS 123
          (“SFAS
          123(R)”)”Share-Based compensation” that requires compensation costs related to
          share-based payment transactions to be recognized in the statement of
          operations. With limited expectations, the amount of compensation cost
          is
          measured based on the grant-date fair value of the equity or liability
          instruments issued. In addition, liability awards will be remeasured each
          reporting period. Compensation cost will be recognized over the period
          that an
          employee provides service in exchange for the award. SFAS 123(R) replaces
          SFAS
          123 and is effective January 1, 2006. In 2006, the Company used the
          Black-Scholes option pricing model for estimating the fair value of the
          options
          granted under the company’s incentive plan and were based on the following
          estimates at the date of grant: expected life - 6 years, risk free interest
          rate
          - 4%, expected volatility 100%.
 
 Cash
          and Cash Equivalents
 
 The
          Company considers all highly liquid investments with original maturity
          of three
          months or less when purchased to be cash equivalents.
 
 F-8
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 
  NOTE
          1 -
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Fixed  Assets
 The
          Company depreciates its equipment on the straight-line method for financial
          reporting purposes over a five year period. For tax reporting purposes,
          the
          Company uses accelerated methods of depreciation. Expenditures for maintenance,
          repairs, renewals and betterments are reviewed by management and only those
          expenditures representing improvements to equipment are capitalized. At
          the time
          equipment is retired or otherwise disposed of, the cost and accumulated
          depreciation accounts are removed from the books and the gain or loss on
          such
          disposition is reflected in operations.
  Concentration
          of Credit Risk
 
 Financial
          instruments that potentially subject the Company to concentrations of credit
          risk consist principally of sales, trade accounts receivable and cash.
          The
          Company grants credit to domestic companies located throughout the New
          York
          tri-state area. The Company performs ongoing credit evaluations of its
          customers' financial condition and generally requires no collateral from
          its
          customers.
 
 Deferred
          Income Taxes
 
 Deferred
          income taxes are provided based on the provisions of SFAS No. 109, "Accounting
          for Income Taxes", to reflect the tax effect of differences in the recognition
          of revenues and expenses between financial reporting and income tax purposes
          based on the enacted tax laws in effect at December 31, 2006.
 
 Earnings
          Per Common Share of Common Stock
 
 The
          Company applies SFAS No. 128, "Earnings Per Share", which requires two
          presentations of earnings per share - "basic" and "diluted". Basic earnings
          per
          share is computed by dividing income available to common stockholders by
          the
          weighted-average number of common shares for the period. The computation
          of
          diluted earnings per share is similar to basic earnings per share, except
          that
          the weighted average number of common shares is increased to include the
          number
          of additional common shares that would have been outstanding if the potentially
          dilutive common shares had been issued.
 
 In
          October 2005, the Board of Directors of the Company approved a reverse
          stock
          spilt of the Company’s common stock on a one-for-five basis. In October, 2000
          the Board of Directors of the Company approved a reverse stock split of
          the
          Company's common stock on a one-for-ten basis. All per share amounts in
          the
          accompanying financial statements have been restated to reflect the reverse
          stock splits. Only basic earnings per share is presented as all common
          stock
          equivalents are either anti-dilutive or not material for the period presented.
          For the years ended December 31, 2006 and 2005, the weighted average number
          of
          shares outstanding used in the per share computation was 13,119,076 and
          8,328,712 respectively.
 
 F-9
  NOTE
          1 -
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Fair
          Value of Financial Instruments
 
 At
          December 31, 2006, the carrying amounts of the Company's assets and liabilities
          approximate fair value.
 
 Recently
          Issued Accounting Pronouncements
  Recent
          accounting pronouncements that the Company has adopted or will be required
          to
          adopt in the future are summarized below.
  In
          May
          2005, the Financial Accounting Standards Board (FASB) issued SFAS No. 154,
          "Accounting Changes and Error Corrections" (SFAS 154), which replaces Accounting
          Principles Board (APB) Opinion No. 20, "Accounting Changes," and SFAS No.
          3,
          "Reporting Accounting Changes in Interim Financial Statements - An Amendment
          of
          APB Opinion No. 28." SFAS 154 provides guidance on the accounting for and
          reporting of accounting changes and error corrections, and it establishes
          retrospective application, or the latest practicable date, as the required
          method for reporting a change in accounting principle and the reporting
          of a
          correction of an error. SFAS 154 is effective for accounting changes and
          corrections of errors made in fiscal years beginning after December 15,
          2005.
          The Company adopted SFAS 154 in the first quarter of fiscal year 2007 and
          does
          not expect it to have a material impact on its consolidated results of
          operations and financial condition.
 
 In
          September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
          (SFAS
          157). SFAS 157 provides guidance for using fair value to measure assets
          and
          liabilities. SFAS 157 addresses the requests from investors for expanded
          disclosure about the extent to which companies measure assets and liabilities
          at
          fair value, the information used to measure fair value and the effect of
          fair
          value measurements on earnings. SFAS 157 applies whenever other standards
          require (or permit) assets or liabilities to be measured at fair value,
          and does
          not expand the use of fair value in any new circumstances. SFAS 157 is
          effective
          for financial statements issued for fiscal years beginning after November
          15,
          2007 and will be adopted by the Company in the first quarter of fiscal
          year
          2009. The Company is unable at this time to determine the effect that its
          adoption of SFAS 157 will have on its consolidated results of operations
          and
          financial condition.
 
 In
          July
          2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty
          in
          Income Taxes, an interpretation of FASB Statement No. 109" (FIN 48). FIN
          48
          clarifies the accounting for uncertainty in income taxes by prescribing
          the
          recognition threshold a tax position is required to meet before being recognized
          in the financial statements. It also provides guidance on derecognition,
          classification, interest and penalties, accounting in interim periods,
          disclosure and transition. The cumulative effects, if any, of applying
          FIN 48
          will be recorded as an adjustment to retained earnings as of the beginning
          of
          the period of adoption. FIN 48 is effective for fiscal years beginning
          after
          December 15, 2006, and the Company is required to adopt it in the first
          quarter
          of fiscal year 2008. The Company is currently evaluating the effect that
          the
          adoption of FIN 48 will have on its consolidated results of operations
          and
          financial condition and is not currently in a position to determine such
          effects, if any.
 
 F-10
 
 MEDLINK
          INTERNATIONAL, INC.
 (A
          Development Stage Company)
 
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
  NOTE
          1 -
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 In
          June
          2006, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 06−3 (EITF
          06-3), “How Taxes Collected from Customers and Remitted to Governmental
          Authorities Should Be Presented in the Income Statement (That Is, Gross
          versus
          Net Presentation).” EITF 06−3 applies to any tax assessed by a governmental
          authority that is directly imposed on a revenue producing transaction between
          a
          seller and a customer. EITF 06−3 allows companies to present taxes either gross
          within revenue and expense or net. If taxes subject to this issue are
          significant, a company is required to disclose its accounting policy for
          presenting taxes and the amount of such taxes that are recognized on a
          gross
          basis. The Company currently presents such taxes net. EITF 06−3 is required to
          be adopted during the first quarter of fiscal year 2008. These taxes are
          currently not material to the Company’s consolidated financial
          statements.
 
 In
          September 2006, the FASB issued FASB Staff Position No. FAS 13-1 (As Amended),
          “Accounting for Rental Costs Incurred during a Construction Period” (FAS 13-1).
          This position requires a company to recognize as rental expense the rental
          costs
          associated with a ground or building operating lease during a construction
          period, except for costs associated with projects accounted for under SFAS
          No.
          67, “Accounting for Costs and Initial Rental Operations of Real Estate
          Projects.” FAS 13-1 is effective for reporting periods beginning after December
          15, 2005 and was adopted by the Company in the first quarter of fiscal
          year
          2007. The Company’s adoption of FAS 13-1 will not materially affect its
          consolidated results of operations and financial position.
 
 In
          September 2006, the SEC issued Staff Accounting Bulletin No. 108, "Considering
          the Effects of Prior Year Misstatements when Quantifying Misstatements
          in
          Current Year Financial Statements" (SAB 108). SAB 108 provides guidance
          on the
          consideration of the effects of prior year misstatements in quantifying
          current
          year misstatements for the purpose of a materiality assessment. SAB 108
          establishes an approach that requires quantification of financial statement
          errors based on the effects of each on a company's balance sheet and statement
          of operations and the related financial statement disclosures. Early application
          of the guidance in SAB 108 is encouraged in any report for an interim period
          of
          the first fiscal year ending after November 15, 2006, and will be adopted
          by the
          Company in the first quarter of fiscal year 2007. The Company does not
          expect
          the adoption of SAB 108 to have a material impact on its consolidated results
          of
          operations and financial condition
 
 FSP
          FAS
          123(R)-5 was issued on October 10, 2006. The FSP provides that instruments
          that
          were originally issued as employee compensation and then modified, and
          that
          modification is made to the terms of the instrument solely to reflect an
          equity
          restructuring that occurs when the holders are no longer employees, then
          no
          change in the recognition or the measurement (due to a change in classification)
          of those instruments will result if both of the following conditions are
          met:
          (a). There is no increase in fair value of the award (or the ratio of intrinsic
          value to the exercise price of the award is preserved, that is, the holder
          is
          made whole), or the antidilution provision is not added to the terms of
          the
          award in contemplation of an equity restructuring; and (b). All holders
          of the
          same class of equity instruments (for example, stock options) are treated
          in the
          same manner. The provisions in this FSP shall be applied in the first reporting
          period beginning after the date the FSP is posted to the FASB website.
          The
          Company does not expect the adoption of FSP FAS 123(R)-5 to have a material
          impact on its consolidated results of operations and financial
          condition.
 
 F-11
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
          2 -
          GOING CONCERN
 
 The
          accompanying financial statements have been prepared in conformity with
          accounting principles generally accepted in the United States of America
          which
          contemplate continuation of the Company as a going concern. However, the
          Company
          has suffered recurring losses from operations in 2006 and 2005. During
          the years
          ended December 31, 2006 and 2005, the Company incurred net losses of $1,588,908
          and $956,953, respectively. Further, the Company has inadequate working
          capital
          to maintain or develop its operations, and is dependent upon funds from
          private
          investors and the support of certain stockholders. These factors raise
          substantial doubt about the ability of the Company to continue as a going
          concern. The consolidated financial statements do not include any adjustments
          that might result from the outcome of these uncertainties. In this regard,
          Management is proposing to raise any necessary additional funds through
          loans,
          additional sales of its common stock, or through the possible acquisition
          of
          other companies. There is no assurance that the Company will be successful
          in
          raising additional capital.
  NOTE
          3 -
          INTANGIBLE ASSETS
 
 In
          2003,
          the Company entered into a license agreement with a company for the exclusive
          right to use their Linux-based real-time streaming video system. The system
          is
          designed to transmit video and other large media files without the delays
          associated with video buffering. The cost of the license of $63,700, which
          includes a finder’s fee paid in the amount of $43,700, is being amortized over
          the life of the license agreement (10 years).
 
 The
          streaming video system is utilized on the Medlink VPN for teleconferencing,
          tutorials, lectures and announcements. Management has determined there
          is
          impairment as of December 31, 2006 for the above mentioned intangible assets.
          The total impairment loss is $49,814.
  F-12
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 NOTE
          4 -
          PROPERTY AND EQUIPMENT
 
 As
          of
          December 31, 2006, a summary of property and equipment and the estimated
          useful
          lives used in the computation of depreciation is as follows:
  EstimatedUsefulLife
                      (years)
                  
                  AmountFurniture
                      and fixtures
                  
                  
                  5
                  
                  $
                  12,383Leasehold
                      improvements
                  
                  
                  3
                  
                  
                  10,423Equipment
                  
                  
                  5
                  
                  
                  74,99597,801Less
                      accumulated depreciation
                  
                  
                  
                  
                  
                  (41,067
                  )$
                  56,734
 
 Depreciation
          expense for the years ended December 31, 2006 and 2005 was $ 9,509 and
          $
          13,689.
 
 NOTE
          6 -
          LOAN PAYABLE - RELATED PARTIES
 
 The
          Company, as of December 31, 2006, has loans due to three of its
          employees/shareholders in the amount of $56,281. These loans are payable
          on
          demand and are non-interest bearing.
 
 NOTE
          7 -
          STOCKHOLDERS' EQUITY
 
 a)  In
          2006,
          the Company entered into various subscription agreements with an individual
          for
          private placements in the amount of $570,000 to purchase 2,904,323 shares
          of the
          Company’s stock.
 
 b)  In
          2006,
          the Company issued 580,000 shares of the Company’s stock in exchange for
          consulting services and marketing services. The shares were valued at the
          closing stock price of the Company’s common shares on the dates of the
          agreements.
 
 c)  In
          2006,
          the Company issued 1,640,000 shares of the Company’s class B Stock in exchange
          for consulting services, relating to assisting the Company in investment
          banking, investor relations, business development and aligning strategic
          alliances for the purposes of introducing the MedLink EHR to the European
          market. These shares were valued at $.177. In
          addition, in 2006 this consultant exercised 610,000 shares of the Company’s
          class B options at a price of $.177.
 
 F-13
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
          7 -
          STOCKHOLDERS' EQUITY (continued)
 
 d)  On
          January 1, 2006, the Company entered into new employment agreements with
          three
          individuals. The individuals will serve as the Company’s Chief Executive
          Officer, Vice President and Chief Technical Officer. The term of the agreements
          are for five years and provides for cash compensation totaling $272,000
          per
          year, however, the three employees have agreed to accept 1,999,951 shares
          of the
          company’s restricted common stock in lieu of cash compensation. In addition the
          employees will receive an option to purchase each year 1,000,000 shares
          of the
          Company’s common stock. The exercise price of the options shall be the fair
          value market value of the common stock on the date granted to the employee
          ($.17). The options expire in ten years. The common stock and options each
          have
          a two year vesting period during which they will be forfeited if the employee
          is
          terminated for cause or leaves the Company prior to the end of the term.
          The
          vesting period is accelerated in the event of a change in control of the
          Company.
 
 For
          the
          year ended December 31, 2006, $426,200 was charged to operations for the
          above
          mentioned employment agreements.
  e)
          In
          October 2005, the Company held their annual meeting of the stockholders,
          whereby
          the Company’s stockholders approved, among other things, the following
          proposals:
 
 1)
          The
          Agreement and Plan of Merger and all transactions and developments contemplated
          by such agreement whereby Western Media Group Corporation will change the
          state
          of is incorporation from Minnesota to Delaware by merging with and into
          a newly
          formed Delaware corporation named Medlink International, Inc.
 
 2)
          The
          Company’s authorized capital stock from 100,000,000 to 205,000,000. The
          Company’s authorized stock will consist of 150,000,000 shares of class A common
          stock, $.001 par value per share 50,000,000 shares of class B common stock,
          $.001 par value per share, and 5,000,000 shares of preferred stock, $.001
          par
          value per share.
  3)
          The
          name of the Company changed from Western Media Group Corporation to Medlink
          International, Inc.
 
 4)
          The
          one-for-five reverse stock split whereby stockholders will be entitled
          to
          receive one share of common stock of Medlink International, Inc. for every
          five
          shares of common stock of Western Media Group Corporation held by
          them.
 
 5)
          The
          2005 Stock Option Plan of Medlink International, Inc. under which one million
          (1,000,000) shares of common stock of Medlink International, Inc. will
          be
          available for grants.
 
 f)
          In
          2005 two officers exercised their options to purchase 1,500,000 shares
          of the
          Company’s common stock for $71,995 (.048 per share).
 
 F-14
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
          7 -
          STOCKHOLDERS' EQUITY (continued)
 
 g)
          During
          the year ended December 31, 2005, the company sold 5,142,858 shares of
          its
          common stock for $395,000 pursuant to various subscription
          agreements.
 
 h)  On
          January 1, 2004, the Company entered into Employment Agreements with four
          individuals. The individuals will serve as the Company's Chief Executive
          Officer, Vice President, Chief Technical Officer and Chief Operations Officer.
          One of the individual left the company in December of 2004 and his shares
          were
          reallocated. The term of the Agreements are from three to five years and
          provides for no cash compensation, however, the four employees are to receive
          each year a total of 2,000,000 shares of Company common stock on the first
          business day of each year of the term of the Agreements and an option to
          purchase each year 2,000,000 shares of the Company's common stock at an
          exercise
          price equal to the fair market value of the Company's common stock on that
          date.
          The options expire in ten years. The common stock and options each have
          a two
          year vesting period during which they will be forfeited if the employee
          is
          terminated for cause or leaves the Company prior to the end of the term.
          The
          vesting period is accelerated in the event of a change in control of the
          Company.
 
 For
          the
          years ended December 31, 2005 and 2004, $580,000 and $1,180,000, respectively,
          was charged as compensation to operations for the above-mentioned Employment
          Agreements.
 
 i)  On
          October 27, 2003, the Company entered into a Finders Fee Agreement with
          an
          outside independent consultant. Under the terms of the Agreement, the Company
          paid the consultant in 2004 100,000 warrants to purchase 100,000 shares
          of the
          Company’s common stock (the warrants are exercisable at $.10 per share up to one
          year) a contract for the exclusive licensing rights of the technology product
          known as FELIX. The warrants were valued using the black-scholes option
          model at
          the date of the licensing agreement using the following assumptions: (life
          - 1
          year, risk free interest rate - 3%, volatility - 100% and dividend yield
          - 0%).
          The consultant exercised his options in 2004.
 
 The
          total
          values of the warrants were $43,700, and are being amortized over the life
          of
          the license agreement (10 years).
 
 j)
          On
          January 16, 2004, the Company entered into two Consulting Agreements with
          two
          companies. Under the terms of the Agreements, the Company will compensate
          the
          consultants with options to purchase 250,000 and 500,000 shares of the
          Company’s
          common stock for introducing the Company to hospitals and health care
          organizations who ultimately sign agreements for the Company’s services with the
          Company or Med-Link. The options are exercisable at $.05 per share. No
          introductions were made as of December 31, 2005.
 
 k)  In
          November 2003, the Company issued 493,378 shares of its common stock to
          an
          officer of Med-Link in payment of the loan outstanding to him, aggregating
          $222,021. These shares were valued at the closing stock price of the Company's
          common shares on the date of the Agreement ($.45 per share).
 
 F-15
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 
  NOTE
          7 -
          STOCKHOLDERS' EQUITY (continued)
 
 l)  In
          July,
          2003, the Company sold 3,000,000 shares of its common stock to Cooper Station
          Funding Corp. for a total of $195,000. The stock was sold pursuant to a
          consulting agreement dated May 16, 2003, in which Cooper Station Funding
          Corp.
          agreed to assist the Company in marketing and promoting the Med-Link VPN
          by
          introducing prospective clients. In exchange, the Company agreed to issue
          common
          stock at a price of not more than $.07 per share. At the time of the agreement,
          the trading price of the shares was approximately $.16 per share. The value
          of
          the difference between the option price and trading price of approximately
          $.09
          per share aggregated $243,000, (net of a 10% discount for restrictions
          placed on
          such shares) has been allocated to the cost of the consulting services,
          which
          were rendered through May, 2004 (the expiration date of the agreement).
 
 In
          June,
          2003 the Company sold 500,000 shares of its common stock to Cooper Station
          Funding Corp. for $20,000, pursuant to the aforementioned consulting agreement
          dated May 16, 2003. The value of the difference between the fair market
          value of
          the stock ($.36) on the date of the subscription agreement and the purchase
          price of the stock ($.04), less a 10% discount for restrictions placed
          on the
          shares issued, aggregated $144,000, has been allocated to the cost of consulting
          services.
 
 For
          the
          year ended December 31, 2004, $145,125 has been charged to operations for
          the
          above-mentioned transactions.
  m)  On
          April
          24, 2003, the Company issued 250,000 shares of its common stock for services
          relating to the development, programming and maintenance of the Med-Link
          Virtual
          Private Network. These shares were valued at the closing stock price of
          the
          Company's common shares on the date of the agreement ($.04).
 
 n)  On
          January 23, 2002, the Company acquired software, computers, servers, monitors,
          hubs, and other related equipment from Four J's Enterprises. The purchase
          price
          for the assets was 2,000,000 shares of the Company's common stock. The
          value of
          the aforementioned assets received was $1,917,000, which was determined
          by the
          average closing stock price of the Company for three days before and three
          days
          after the date of the agreement ($1.065), less a ten percent discount for
          restrictions placed on the shares issued. On January 23, 2002, the Company
          acquired software, computers, servers, monitors, hubs, and other related
          equipment from Four J's Enterprises. The purchase price for the assets
          was
          2,000,000 shares of the Company's common stock. The value of the aforementioned
          assets received was $1,917,000, which was determined by the average closing
          stock price of the Company for three days before and three days after the
          date
          of the agreement ($1.065), less a ten percent discount for restrictions
          placed
          on the shares issued. See note 4 in connection with settlement of litigation
          with Four J’s Enterprises.
 
 F-16
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
   NOTE
          7 -
          STOCKHOLDERS' EQUITY (continued)
 
 o)  On
          January 1, 2002, the Company issued 2,000,000 shares of its $.001 par value
          per
          share common stock and 400 shares of preferred stock for all of the issued
          and
          outstanding shares of Med-Link. The shares were valued at the closing stock
          price of the Company's common shares on the date of acquisition ($1.05).
          No
          value was attributable to the 400 shares of preferred stock issued and
          the
          shares were subsequently canceled in 2004 effective December 29,
          2003.
 
 p)  In
          December 2001, the Company issued 50,000 shares for consulting services
          to be
          rendered in 2002 and 25,000 shares to an individual for services relating
          to the
          development of the Company's business plan. These shares were valued at
          the
          closing stock price of the Company's common shares on the dates the agreements
          were signed ($.10) and ($1.25), respectively. The aggregate value of the
          shares
          issued ($36,250) was charged to operations in 2002.
 
 q)  In
          October 2001, the Company entered into consulting agreements with three
          individuals. The agreements provide for the issuance of 4,020,000 shares
          in
          exchange for consulting fees to be rendered during a twelve month period.
          The
          shares issued for the agreed upon value of the services to be rendered,
          were
          based upon the available market price of the Company's common shares ranging
          from $.02 to $.05.
 
 In
          addition, the aforementioned individuals received options to purchase 3,400,000
          common shares at an exercise price of $.02, which shares vested eight months
          after the commencement date of the agreement. In December 2002, one of
          the
          individuals exercised his option to purchase 1,147,389 common shares at
          $0.02
          per share. In 2003, two consultants exercised 267,455 and 752,611 shares
          of
          their common share options, respectively, at $0.02 per share. During the
          third
          quarter of 2004, the Company discovered that 700,000 shares of options
          should
          have been exercised at a price of $0.06 instead of $0.02. This was immediately
          rectified, resulting in an increase in additional paid-in capital and a
          reduction in the amount due the consultant, in the amount of $28,000. In
          October
          2004, two shareholders exercised 1,932,545 of their common shares options
          at
          $.02 per share. All the above-mentioned options expired in October
          2004.
 
 All
          of
          the aforementioned consulting agreements provided for a one year extension
          at
          the Company's option. Compensation during the extension period ranges from
          $2,000 per month to $10,000 per month, payable in cash or in the Company's
          common shares at a 20% discount to the prevailing market value on the last
          business day of each month, and options to purchase an additional 3,400,000
          shares at the fair market value on October 1, 2002 ($.06). In connection
          therewith, 1,294,272 shares were issued for consulting services, which
          were
          valued at $53,250 during the fourth quarter of 2002. In 2003, the Company
          issued
          1,092,911 shares of its common stock for consulting services, which were
          valued
          at $129,000. In October 2004, 1,200,000 common shares options were exercised
          by
          two shareholders at an exercise price of $.06 per share.
 
 In
          October 2001, the Company granted stock options to two stockholders to
          purchase
          1,000,000 shares (500,000 shares each) of the Company's common stock, at an
          exercise price of $0.02. These stock options expired in October 2004. One
          of the
          stockholders exercised 100,000 of their options in December 2003. The other
          stockholder exercised 215,705 of their options in October 2004.
  F-17
 
 MEDLINK
              INTERNATIONAL, INC.
 (A
              Development Stage Company)
 
 NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS
 NOTE
          7 -
          STOCKHOLDERS' EQUITY (continued)
 
 r)
          The
          following is a summary of the stock options outstanding during the year
          ended
          December 31, 2006 and 2005.
 
 2006
                  
                  2005Stock
                      options outstanding, beginningof
                      year
                  
                  
                  720,000
                  
                  
                  3,499,705Stock
                      options granted during the year
                  
                  
                  1,640,000
                  
                  
                  2,000,000Stock
                      options exercised during the year
                  
                  
                  (610,000
                  )
                  
                  (1,500,000
                  )Stock
                      options canceled
                  
                  
                  -
                  
                  
                  -Stock
                      options outstanding, end of year
                  
                  
                  1,750,000
                  
                  
                  3,999,705
  s)
          Deferred charges represent commission and consulting services to be rendered,
          which was paid for by the issuances of the Company’s common shares. Such charges
          were being shown as a reduction of the Company’s shareholders’ equity in the
          accompanying Consolidated Statement of Changes in Shareholders’ Equity (Deficit)
          and were amortized over the period of the services rendered.
 
 NOTE
          8 -
          TREASURY STOCK
 
 In
          December 2005, the Company acquired 817,227 shares of its stock at .09
          per share
          in conjunction with a settlement with Four J’s. Subsequently, the Company had a
          one-for-five reverse stock split whereby stockholders will be entitled
          to
          receive on share of common stock of Medlink International. Inc for every
          five
          shares of common stock of Western media Group Corporation held by them.
          The
          treasury stock held by the Company after the reverse split is 183,446
          shares.
 
 In
          December 2003, the Company acquired 100,000 shares of its stock at $.57
          per
          share (valued at the fair market value at date of acquisition) from an
          officer
          of the Company, the proceeds of which were used to offset the officer's
          loan
          receivable to the Company in the amount of $56,437.
 
 NOTE
          9-
          COMMITMENTS AND CONTINGENCIES
 
 In
          October 2005 the Company announced the official launch of its newly created
          customized, secure database solution the CRN designed in conjunction with
          the
          UCLA Center for Healthier Children Families and Communities.
 
 F-18
 MEDLINK
            INTERNATIONAL, INC.
 (A
            Development Stage Company)
 
 NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
          9-
          COMMITMENTS AND CONTINGENCIES (continued)
 
 In
          November 2005 the company entered into a rental lease agreement in California.
          The lease term runs from December 15, 2005 to December 14, 2008.
 
 Minimum
          annual lease commitments are as follows:
  2007
                  $28,0002008
                  29,000
 On
          July
          23, 2004, the Company entered into a joint venture agreement with JMS Capital
          Partners, LLC (JMSCP) to acquire 50% interest in Medlink West Inc. Medlink
          West
          will maintain offices in Los Angeles and provide, among other things, sufficient
          personnel for customer support and service for the Med-Link VPN. In
          consideration of entering into this agreement and the services to be performed,
          as defined in the agreement, the Company will issue to JMSCP 2,000,000
          shares of
          its $.001 par value common stock and options to purchase 1,000,000 shares
          of its
          common stock priced at a 15% discount to the 100-day moving average of
          the stock
          or the price as of a mutually agreed upon date within 90 days prior to
          the
          exercise of the option. The options expire July 12, 2009. Under the terms
          of the
          agreement, JMSCP will purchase 400 shares of MedLink West Inc. common stock
          for
          an initial capital contribution of $90,341, representing expenses incurred
          as of
          the date of this agreement and will contribute an additional amount of
          $400,000
          to maintain current operations. The Company will purchase 400 shares of
          MedLink
          West Inc. common stock for its initial capital contribution of the rights
          to
          provide service and support to the products. The joint venture agreement
          commenced on July 12, 2004 and expires on December 31, 2007 unless terminated
          by
          either party in accordance with the Agreement.
 
 In
          August
          2003, the Company entered into a rental lease agreement in Islandia, New
          York.
          The lease expired on July 31, 2006 and was extended until August 31,
          2011.
 
 Minimum
          annual lease commitments are as follows:
  Year
                      ended December 31,2007
                  
                  $
                  51,0002008
                  
                  
                  53,0002009
                  
                  
                  55,0002010
                  
                  
                  58,0002011
                  
                  
                  39,000
  Western
          Media Group Corp. and Med-Link are delinquent in filing their sales tax
          and
          payroll tax returns and New York State has filed a judgment against
          Med-Link.
  F-19
 MEDLINK
              INTERNATIONAL, INC.
 (A
              Development Stage Company)
 
 NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS
   Note
          10-INCOME TAXES
 
 The
          provision (benefit) for income taxes from continued operations for the
          years
          ended December 31, 2006 and 2005 consist of the following:
 
 December
                    31,2006
                
                2005Current:Federal
                    and state
                
                $
                -
                
                $
                --
                
                
                -Deferred:Federal
                    and state
                
                
                (635,563
                )
                
                (382,781
                )Benefit
                    from the operating loss carryforward
                
                
                635,563
                
                
                382,781Benefit
                    for income taxes, net
                
                $
                -
                
                $
                -
  The
          difference between income tax expense computed by applying the federal
          statutory
          corporate tax rate and actual income tax expense is as follows:
  December
                    31,2006
                
                2005Statutory
                    federal income tax rate
                
                34.0%
                
                34.0%Decrease
                    in valuation allowance
                
                (40.0)%
                
                (40.0)%State
                    income taxes
                
                6.0%
                
                6.0%Effective
                    tax rate
                
                (0)%
                
                (0)%
  Deferred
          income taxes result from temporary differences in the recognition of income
          and
          expenses for the financial reporting purposes and for tax purposes. The
          net
          deferred tax assets and liabilities are comprised of the following:
 
 2006Deferred
                    income tax asset:Net
                    operating loss carryforwardand
                    AMT tax credit
                
                $
                4,330,000Valuation
                    allowance
                
                
                (4,330,000
                )Deferred
                    income tax asset
                
                $
                -
  F-20
 MEDLINK
              INTERNATIONAL, INC.
 (A
              Development Stage Company)
 
 NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS
 The
          tax
          effect of these temporary differences representing deferred tax asset and
          liabilities result principally from the following:
 2006Deferred
                    tax assetsCurrent
                
                $
                -Non-current
                
                
                -Net
                    deferred income tax asset
                
                $
                -Deferred
                    tax liabilityCurrent
                
                $
                -Non-current
                
                
                -Net
                    deferred income
                
                $
                -
 
 The
          Company has a net operating loss carryforward of approximately $4,330,000
          available to offset future taxable income through 2019.
 
 The
          Company made a 100% valuation allowance at December 31, 2006. The net increase
          in valuation allowance during the year ended December 31, 2006 was approximately
          $590,000.
  NOTE
          11 -
          SUBSEQUENT EVENTS
 
 In
          2007,
          the Company entered into an agreement with Dynatek Media Corporation to
          form
          Medlink TV, which will deliver content and advertising to a digital network
          in
          the waiting room of physician offices and outpatient clinics.
 
 In
          2007,
          the Company entered into a co-marketing agreement with Eastman Kodak
          Company.
 
 In
          2007
          the Company modified their employment contract with three individuals.
          Under the
          modified employment agreement the three individuals will receive a 20%
          raise
          effective January 1, 2007 (see Note 7d).
  F-21