UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                FORM 10-QSB
(Mark One)

  [x]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

             For the quarterly period ended December 31, 2005
                                      or
 [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
      for the transition period from ________________  to ______________

                       Commission file number  000-29171

                                 MED GEN, INC.
        -----------------------------------------------------------------
           [Exact name of registrant as specified in its charter]

        Nevada                                      65-0703559
------------------------                  -------------------------
(State of incorporation)                         (IRS Employer
                                              Identification No.)


      7284 W. Palmetto Park Road, Suite 207, Boca Raton, FL   33433
      -------------------------------------------------------------
             (Address of principal executive offices)

                              (561) 750-1100
                        -------------------------
                       (Issuer's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 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 [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12B-2).  Yes [ ]  No [x ]

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


As of December 31, 2005, 8,706,727 shares of common stock, .001
par value per share, were outstanding.



<PAGE>

                                   INDEX
                                   -----

PART I.   FINANCIAL INFORMATION


Item 1.   Financial Statements
          Balance Sheet - December 31, 2005 (Unaudited)
          Statements of Operations - Three months ended December 31, 2005
          and 2004 (Unaudited).

          Statements of Cash Flows - Three months ended December 31, 2005
          and 2004 (Unaudited).

          Notes to Financial Statements (Unaudited).

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations.

Item 3.   Controls and Procedures

PART II.  OTHER INFORMATION

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

Item 5.   Other Information

Item 6.   Exhibits and Reports on Form 8-K




SIGNATURES



                                  2
<PAGE>



                            MED GEN, INC.

                  PART I - FINANCIAL INFORMATION Item  1.

Financial Statements













                                3
<PAGE>


                            Med Gen, Inc.
                           Balance Sheet
                         December 31, 2005
                            (Unaudited)


   ASSETS

Current Assets
Cash and cash equivalents                               $       581,632
    Accounts receivable, net                                     92,722
    Inventory                                                   135,943
    Other current assets                                          5,700
                                                        ---------------
      Total Current Assets                                      815,997
                                                        ---------------

Property and Equipment, net                                      41,687
Other Assets                                            ---------------

    Deferred financing fees                                     186,420
    Deposits and other                                           50,356
                                                        ---------------

                                                        $     1,094,460
                                                        ===============

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current Liabilities
   Accounts payable                                     $         5,479
   Accrued expenses                                             455,055
   Accrued litigation judgment                                2,426,191
                                                        ---------------
      Total Current Liabilities                               2,886,725
                                                        ---------------

Derivative financial instruments                                766,044
                                                        ---------------
Convertible debentures                                          182,705
                                                        ---------------

Stockholders' (Deficit)
   Preferred stock, $.001 par value, 5,000,000 shares
      authorized:
   Series A 8% cumulative, convertible, 1,500,000 shares
      authorized, no shares issued and outstanding                    -
   Undesignated, 3,500,000 shares authorized                          -
   Common stock, $.001 par value, 495,000,000 shares
      authorized, 8,706,727 shares issued and outstanding         8,707
   Paid in capital                                           24,484,941
   Accumulated (deficit)                                    (27,199,662)
                                                        ---------------
                                                             (2,706,014)
   Receivable for common stock                                  (35,000)
                                                        ---------------
                                                             (2,741,014)
                                                        ---------------

                                                        $     1,094,460
                                                        ===============


          See accompanying notes to the financial statements.


                                4

<PAGE>



                              Med Gen, Inc.
                       Statements of Operations
          For the Three Months Ended December 31, 2005 and 2004
                              (Unaudited)


<TABLE>
<CAPTION>
                                                          2005        2004
                                                      -----------  ----------
<S>                                                   <C>          <C>


Net sales                                             $   100,148  $  282,173

Cost of sales                                              28,150      99,640
                                                      -----------  ----------

Gross profit                                               71,998     182,533
                                                      -----------  ----------
Operating expenses:
  Selling, general and administrative
    expenses - non cash stock compensation
    - not included in selling, general and
    administrative expenses below                          55,700     120,000
  Selling, general and administrative expenses            705,222     317,677
                                                      -----------  ----------
                                                          760,922     437,677
                                                      -----------  ----------

(Loss) from operations                                   (688,924)   (255,144)

Other (income) expense:
  Derivative instrument income                            (49,717)          -
  Interest income                                          (3,888)          -
  Interest expense                                        144,580       4,254
                                                      -----------  ----------
                                                           90,975       4,254
                                                      -----------  ----------

Net (loss)                                            $  (779,899) $ (259,398)
                                                      ===========  ==========

Per share information - basic and fully diluted:

   Weighted average shares outstanding                  6,739,173   1,346,822

   Net (loss) per share                               $     (0.12) $    (0.19)
                                                      ===========  ==========
</TABLE>


          See accompanying notes to the financial statements.


                                  5

<PAGE>


                               Med Gen, Inc.
                        Statements of Cash Flows
         For the Three Months Ended December 31, 2005 and 2004
                             (Unaudited)

<TABLE>
<CAPTION>
                                                               2005          2004
                                                           -----------   -----------
<S>                                                        <C>           <C>

Cash flows from operating activities:
Net cash (used in) operating activities                    $  (745,128)  $  (400,741)
                                                           -----------   -----------
Cash flows from investing activities:
  Acquisition of property and equipment                         (9,174)            -
                                                           -----------   -----------
Net cash (used in) investing activities                         (9,174)            -
                                                           -----------   -----------
Cash flows from financing activities:
  Proceeds from advances and notes payable
    - related parties                                                -       156,000
  Proceeds from convertible debentures                         575,000             -
  Proceeds from option exercises - related parties                   -        51,227
                                                           -----------   -----------
Net cash provided by financing activities                      575,000       207,227
                                                           -----------   -----------

Net (decrease) in cash                                        (179,302)     (193,514)

Beginning - cash balance                                       760,934       213,708
                                                           -----------   -----------

Ending - cash balance                                      $   581,632   $    20,194
                                                           ===========   ===========
</TABLE>

          See accompanying notes to the financial statements.



                                  6

<PAGE>

                          MED GEN, INC.
                   NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2005
                           (UNAUDITED)

(1)  Basis Of Presentation

The accompanying unaudited financial statements have been
prepared in   accordance  with  generally  accepted  accounting
principles (GAAP) for interim  financial information  and  Item
310(b)  of Regulation  S-B.  They do not include all of the
information  and footnotes  required by GAAP for complete
financial statements.  In the  opinion  of management, all
adjustments (consisting  only of normal recurring adjustments)
considered necessary  for  a  fair presentation have been
included.

The  results  of  operations  for the periods  presented  are not
necessarily indicative of the results to be expected for the full
year. For further information, refer to the financial statements
of the Company as of September 30, 2005, and for the  two years
then ended, including notes thereto included in the Company's
Form 10-KSB.

(2)  Earnings Per Share

The Company calculates net income (loss) per share as required
by Statement  of Financial Accounting Standards (SFAS) 128,
"Earnings per  Share."  Basic  earnings (loss) per share  is
calculated  by dividing  net  income  (loss) by the weighted
average  number  of common  shares outstanding for the period.
Diluted earnings (loss) per  share  is  calculated by dividing
net income  (loss)  by  the weighted average number of common
shares and dilutive common stock equivalents outstanding. During
periods when anti-dilutive commons stock equivalents are not
considered in the computation.

(3)  Inventory

Inventory  is stated at the lower of cost, determined on  a
first in,   first  out  basis,  or  market  value.  Inventory
consists principally of finished goods and packaging materials.

(4)  Income Taxes

The  Company accounts for income taxes under SFAS 109,
"Accounting for  Income  Taxes", which requires use of the
liability  method. SFAS  109  provides that deferred tax assets
and  liabilities  are recorded based on the differences between
the tax bases of  assets and liabilities and their carrying
amounts for financial reporting purposes,  referred  to  as
temporary differences.  Deferred  tax assets  and  liabilities at
the end of each period are  determined using the currently
enacted tax rates applied to taxable income in the  periods in
which the deferred tax assets and liabilities  are expected to be
settled, or realized.

The  Company's  deferred  tax  asset of  approximately
$3,000,000 resulting   from  net  operating  loss  carryforwards
aggregating approximately $8,700,000 is fully offset by a
valuation allowance. The  Company  has  recorded a valuation
allowance  to  state  its deferred tax assets at estimated net
realizable value due  to  the uncertainty related to realization
of these assets through  future taxable income.

The provision for income taxes differs from the amount computed
by applying  the statutory rate of 34% to income before income
taxes due  to  the  effect  of  the net operating  loss.  The
principal difference between the accumulated deficit for income
tax purposes and  for financial reporting purposes results from
non-cash  stock compensation  being charged to operations for
financial  reporting purposes.


                                  7

<PAGE>


(5)  Stockholders' (Deficit)

During  the period from October through December 2005 the
Company issued  an  aggregate  of 1,290,000 shares  of  common
stock  for services  rendered. The shares were valued at  their
fair  market value  of  $55,700  which  was charged to
operations  during  the period.

During  the period from October through December 2005 the
Company issued  an aggregate of 4,537,950 shares of common stock
for  the conversion $68,372 of the notes described on Note 7.

During December 2005 the Company cancelled an aggregate of 400,000
shares  of  common stock which it held for issuance to settle the
litigation described in Note 6.

Stock-based Compensation

The Company did not issue options during the period ended
December 31, 2005.

A summary of stock option activity is as follows:

                                          Weighted  Weighted
                                Number    average   average
                                 of       exercise   fair
                               shares      price     value
                               ------      -----     -----
  Balance at
    September  30,  2005        9,197     $24.50     $24.50
       Granted                      -
       Exercised/Forfeited          -
                             --------

  Balance at
    December 31, 2005           9,197     $24.50     $24.50
                             ========

The following table summarizes information about fixed-price
stock options at December 31, 2005:

                              Outstanding                   Exercisable
                              -----------                   -----------
                   Weighted    Weighted     Weighted-
                    Average     Average     Average
     Exercise       Number     Contractual  Exercise     Number     Exercise
      Prices      Outstanding    Life        Price    Exercisable    Price
      ------      -----------    ----        ------   ------------  --------
      $1.01             1,597     1.0 years  $20.20        1,597     $20.20
      $1.25             5,000     3.0 years  $25.00      100,000     $25.00
      $1.31             2,600     3.0 years  $26.20        2,600     $26.20
                  -----------                         -----------
                        9,197                              9,197
                  ===========                         ===========


(6)  Commitments, Concentrations and Contingencies

During  the  period ended December 31, 2005, the  Company derived
22%,  22%  and  15%  of its total sales from three  customers.
At December 31, 2005, $29,658 is due from these customers.


                                  8

<PAGE>



Litigation

During May 2003 Global Healthcare Laboratories, Inc. (Global)
made a  claim against the Company for breach of contract under a
master license  agreement.  Management contended  that  Global
committed fraud and  multiple breaches of the master license
agreement and that the claim was without merit. The matter was
re-filed for the third  time  by the plaintiffs after two prior
dismissals  by the Federal  courts for failure to state a cause
of action. On August 31,  2004  a  verdict was rendered in favor
of the plaintiffs  and they were awarded a judgment in the sum
of $2,501,191. The Company initially  intended to appeal the
verdict, however on December 3, 2004, the Company and Global
settled the matter as follows:

The  Company  would  make  cash  payments  to  Global
aggregating $200,000  through  March 1, 2005, and would  issue
to  Global an aggregate  of  400,000 shares of common stock. The
shares  to be issued  were valued at their fair market value of
$1,120,000. The Company  has recorded an accrual of $200,000 for
the cash payments due  and a stock subscription of $1,120,000 for
the common  shares issuable  at  September  30,  2004, and charged
$1,320,000 to operations for the settlement during the year ended
September 30, 2004.  The  Company  has  agreed to file a registration
statement covering  an  aggregate of 510,000 shares of common
stock  on or before  January 15, 2005, and should it not due so an
additional 25,000 shares of common stock would be due to Global.
Global  will be  required  to execute proxies giving the voting
rights  of  the shares issuable to an officer of the Company.

A dispute  between the parties arose and the settlement
agreement was set aside by the Court and no new settlement
agreement has yet been  reached.  Through  September  30,2005,
the Company  made payments  to Global aggregating $75,000. At
September 30, 2005, the  Company  has  recorded an accrual
amounting  $2,426,191  (the original judgment of $2,501,191 less
the payments made of $75,000) plus  post  judgment interest at 7%
of $169,800. During  the  year ended  September 30, 2005, the
Company  charged  $1,181,191 to operations  for  the  difference
between the  settlement recorded during  2004  and  the  total
judgment  awarded.  The Company is currently attempting to negotiate
a new settlement agreement with Global.  In  addition, the Company
issued 400,000  shares of  its common  stock which were held by
the Company pending issuance to Global.  These shares were
cancelled when the settlement  was set aside.

During the period ended December 31, 2005, the Company recorded
an additional $43,770 of post judgment interest.

In  December 2005, the Company filed litigation against CVS,
Inc. The  Company sold CVS in excess of $140,000 dollars of
goods  and received  payment  of approximately $26,000  during
an  18  month period. CVS terminated the product in late May 2005
and claims the Company owes them $77,000. Management cannot
determine the outcome of this litigation at this time.

During  the  periods  covered by these  financial  statements
the Company  issued shares of common stock and subordinated
debentures without  registration under the Securities Act of
1933.  Although the  Company  believes  that the sales did not
involve  a  public offering  of  its securities and that the
Company did comply  with the "safe harbor" exemptions from
registration, if such exemptions were found not to apply, this
could have a material impact on  the Company's  financial
position  and  results  of  operations. In addition,  the Company
issued shares of common stock  pursuant to Form S-8 registration
statements and pursuant to Regulation S. The Company believes that
it complied with the requirements of Form S8  and  Regulation S in
regard to these issuances, however if  it were  determined  that
the  Company did  not  comply  with these provisions  this  could
have a material impact  on  the Company's financial position and
results of operations.

                                  9
<PAGE>


(7) CALLABLE SECURED CONVERTIBLE NOTES AND DERIVATIVE INSTRUMENT LIABILITIES

Derivative financial instruments

The Company does not use derivative instruments to hedge
exposures to cash flow, market, or foreign currency risks.

The  Company  reviews  the terms of convertible  debt  and
equity instruments  issued  to  determine  whether  there  are
embedded derivative instruments, including the embedded
conversion  option, that are required to be bifurcated and
accounted for separately as a  derivative  financial  instrument.
In circumstances  where  the convertible instrument contains more
than one embedded  derivative instrument,  including the
conversion option, that is required  to be bifurcated, the
bifurcated derivative instruments are accounted for  as  a
single,  compound  derivative  instrument.  Also, in connection
with  the sale of convertible debt and equity instruments, the
Company may  issue  freestanding options or warrants that may,
depending on their terms, be accounted  for as derivative
instrument liabilities, rather  than  as  equity. The Company
may  also  issue options or warrants to non-employees  in
connection with consulting or other services they provide.

When  the  risks and rewards of any embedded derivative
instrument are not "clearly and closely" related to the risks and
rewards of the  host  instrument, the embedded derivative
instrument is generally required to be bifurcated and accounted
for separately. If the convertible  instrument is debt, or has
debt-like characteristics, the risks and rewards  associated with
the embedded  conversion option are not "clearly and closely"
related to  that debt host instrument. The conversion option has
the risks and  rewards  associated  with an equity instrument,
not  a  debt instrument,  because  its value is related to  the
value  of  our common stock. Nonetheless, if the host instrument
is considered to be  "conventional convertible debt" (or
"conventional  convertible preferred  stock"), bifurcation of the
embedded conversion  option is  generally  not  required.
However, if the  instrument  is  not considered  to  be
conventional convertible debt (or  conventional convertible
preferred  stock),  bifurcation  of   the   embedded
conversion option may be required in certain circumstances.

Certain   instruments,  including  convertible  debt  and
equity instruments  and the freestanding options and warrants
issued  in connection  with those convertible instruments, may be
subject  to registration rights agreements, which impose
penalties for failure to  register the underlying common stock by
a defined date. If the convertible  debt or equity instruments
are not considered  to  be "conventional", then the existence of
the potential cash penalties under the related registration
rights agreement requires that  the embedded  conversion  option
be accounted  for  as  a  derivative instrument  liability.
Similarly, the  potential  cash  penalties under the related
registration rights agreement may require us  to account  for
the freestanding options and warrants as  derivative financial
instrument  liabilities,  rather  than  as  equity.  In addition,
when  the ability to physical or net-share  settle  the
conversion  option or the exercise of the freestanding options
or warrants  is  deemed to be not within the control of the
company, the embedded conversion option or freestanding options
or warrants may  be  required  to  be accounted for as a
derivative  financial instrument liability.

Derivative financial instruments are initially measured  at
their fair  value.  For  derivative  financial  instruments that
are accounted  for  as  liabilities,  the  derivative  instrument
is initially recorded at its fair value and is then re-valued at
each reporting date, with changes in the fair value reported as
charges or  credits  to  income.  For  option-based  derivative
financial instruments, the  Company uses the Black-Scholes option
pricing model to value the derivative instruments.

If freestanding options or warrants were issued in connection
with the issuance of convertible debt or equity instruments and
will be accounted for as derivative instrument liabilities
(rather than as equity),  the total proceeds received are first
allocated  to  the fair  value of those freestanding instruments.
If the freestanding options or warrants are to be accounted for

                                  10

<PAGE>


as equity instruments, the  proceeds are allocated between the
convertible instrument and those derivative equity instruments,
based on their relative  fair values.  When  the convertible debt
or equity instruments  contain embedded  derivative  instruments
that are to  be  bifurcated  and accounted for as liabilities,
the total proceeds allocated to  the convertible host instruments
are first allocated to the fair value of  all  the  bifurcated
derivative  instruments.  The  remaining proceeds,   if   any,
are  then  allocated  to  the   convertible instruments
themselves, usually resulting  in  those  instruments being
recorded at a discount from their face amount.

To  the  extent  that  the fair values of the freestanding
and/or bifurcated  derivative  instrument liabilities  exceed
the  total proceeds received, an immediate charge to income is
recognized, in order to initially record the derivative
instrument liabilities at their fair value.

The discount from the face value of the convertible debt,
together with the stated interest on the instrument, is amortized
over  the life of the instrument through periodic charges to
income, usually using  the  effective  interest method.  When
the  instrument  is convertible preferred stock, the dividends
payable are  recognized as they accrue and, together with the
periodic amortization of the discount, are charged directly to
retained earnings.

The  classification of derivative instruments,  including
whether such  instruments should be recorded as liabilities or as
equity, is   re-assessed  periodically,  including  at  the  end
of  each reporting period. If re-classification is required, the
fair value of the derivative instrument, as of the determination
date, is reclassified. Any previous charges or credits to income
for  changes in  the  fair value of the derivative instrument are
not reversed. Derivative  instrument liabilities are classified
in  the  balance sheet  as  current or non-current based on
whether or not net-cash settlement  of the derivative instrument
could be required  within twelve months of the balance sheet
date.

On  March 30, 2005, the Company entered into a Securities
Purchase Agreement with four accredited investors ("Note
Holders") for  the sale of up to (i) $1,540,000 in Callable
Secured Convertible Notes (the  "Convertible  Notes") and (ii)
warrants to  purchase  up  to 1,540,000  shares  of  its  common
stock  (the  "Warrants").  The Convertible Notes bear interest at
8% and have a maturity date  of three years from the date of
issuance. The Company is not required to  make any principal
payments during the term of the Convertible Notes.  The
Convertible Notes are convertible into shares  of  the Company's
common stock at the Note Holders' option, at the  lower of  (i)
$0.09 per share or (ii) 60% of the average of  the  three lowest
intra-day trading prices for the common stock as quoted  on the
Over-the-Counter  Bulletin Board  for  the  20  trading  days
preceding the conversion date. The warrants are exercisable for
a period  of  five  years  from the date of  issuance  and  have
an exercise  price of $0.085 per share. The full principal amount
of the Notes is due upon the occurrence of an event of default.

The  Convertible  Notes  and the Warrants  were  issued  in
three tranches,  on  March 30, 2005 ($740,000 of Convertible
Notes  and
740,000 Warrants), on May 25, 2005 ($700,000 of Convertible
Notes and  700,000  Warrants),  and  on August  23,  2005
($100,000  of Convertible Notes and 100,000 Warrants).

On  August  31, 2005, the Company sold an additional  $500,000
of Convertible Notes and 500,000 Warrants to the same four
investors. The terms of these Convertible Notes and Warrants are
the same  as those  previously issued, except that the exercise
price  of  the Warrants is $0.09 per share.

On  October  31, 2005, the Company sold an additional $600,000
of Convertible Notes and 600,000 Warrants to the same four
investors. The terms of these Convertible Notes and Warrants are
the same  as those  previously issued, except that the exercise
price  of  the Warrants is $0.09 per share.


                                  11

<PAGE>

The  conversion  price of the Convertible Notes and  the
exercise price  of  the  warrants will be adjusted in the  event
that  the Company  issues  common stock at a price below the
initial  fixed conversion or exercise price, with the exception
of any shares  of common stock issued in connection with the
Convertible Notes.  The conversion  price of the Convertible
Notes and the exercise  price of the warrants may also be
adjusted in certain circumstances such as  if  the Company pays a
stock dividend, subdivides or  combines outstanding shares of
common stock into a greater or lesser number of  shares, or takes
such other actions as would otherwise  result in  dilution of the
Note Holders' position. The Note Holders  have contractually
agreed to restrict their ability to  convert  their Convertible
Notes or exercise their warrants and receive shares of the
Company's  common stock such that the  number  of  shares  of
common  stock held by the Note Holders and their affiliates
after such  conversion  or exercise does not exceed 4.99%  of
the  then issued  and  outstanding shares of common stock. In
addition,  the Company  has  granted the Note Holders
registration rights  and  a security  interest  in substantially
all of the Company's  assets. The  Company  has the right to
prepay the Convertible Notes  under certain circumstances at a
premium ranging from 25% to 50% of  the principal amount,
depending on the timing of such prepayment.

Pursuant  to the terms of a Registration Rights Agreement
entered into  with the Note Holders, the Company is obligated to
register for  resale,  within a defined time period, the shares
underlying the  Warrants  and  the  shares  issuable  on
conversion  of  the Convertible Notes. The terms of the
Registration Rights  Agreement provide  that,  in the event that
the registration statement  does not  become  effective  within
105 days of  the  issuance  of  the Warrants or Convertible
Notes, the Company is required to  pay  to the  Note Holders as
liquidated damages, an amount equal to 2% per month  of  the
principal  amount of the Convertible  Notes.  This amount  may be
paid in cash or, at the Holder's option, in  shares of  common
stock priced at the conversion price then in effect  on the date
of the payment.

Because  the  Warrants  are  subject  to  a  Registration
Rights Agreement with the Note Holders, they have been accounted
for  as derivative  instrument liabilities (see below) in
accordance  with EITF  00-19,  "Accounting  for  Derivative
Financial  Instruments Indexed  To,  and Potentially Settled In,
a Company's  Own  Common Stock"  (EITF 00-19).  Accordingly the
fair value of the warrants, amounting  to  an  aggregate  of
$1,548,400,  was  recorded  as  a derivative  instrument
liability. The fair value of  the  warrants was  determined using
the Black-Scholes valuation model, based  on the market price of
the common stock on the date the Warrants were issued,  an
expected dividend yield of 0%, a  risk-free  interest rate  based
on  constant maturity rates  published  by  the  U.S. Federal
Reserve, applicable to the life of the Warrants, expected
volatility of 50% and the five year life of the Warrants.

The  Company  is  required to re-measure the  fair  value  of
the warrants at each reporting period until the registration
statement is  declared  effective. Accordingly, the Company re-
measured  the fair  value of the Warrants at December 31, 2005
using the  BlackScholes  valuation model based on the market
price of  the  common stock  on that date, an expected dividend
yield of 0%, a risk-free interest  rate based on constant
maturity rates published  by  the U.S.  Federal  Reserve,
applicable to the remaining  term  of  the Warrants, expected
volatility of 50% and an expected life equal to the remaining
term of the Warrants. This resulted in a fair market value for
the warrants of $2,479 at December 31, 2005.   Upon  the Company
meeting  its obligation to register the  securities,  the fair
value  of the Warrants on that date will be reclassified  to
equity.

Because  the  conversion  price of the Convertible  Notes  is
not fixed,  the  Convertible  Notes are not "conventional
convertible debt"  as  that term is used in EITF 00-19.
Accordingly,  because the  shares underlying the conversion of
the Convertible Notes are subject to the Registration Rights
Agreement with the Holders, the Company  is required to bifurcate
and account separately  for  the embedded  conversion options,
together with any  other  derivative instruments embedded in the
Convertible Notes.

                                  12

<PAGE>


The  conversion option related to each Convertible Note,
together with  the  embedded call options represented by the Note
Holders' right  to  receive  interest payments and any
registration  rights penalties  in  common  stock, were treated,
for  each  Convertible Note,  as  a  single  compound  derivative
instrument,  and  were bifurcated  from the Convertible Note and
accounted for separately as  a derivative instrument liability
(see below).  The bifurcated embedded derivative instruments,
including the embedded conversion options which were valued using
the Black-Scholes valuation model, were  recorded  at  their
initial fair value of  an  aggregate  of $21,341,778.  Because
the initial fair values  of  these  embedded derivative
instruments, together with  the  fair  values  of  the Warrants
that  were  also accounted for as derivative  instrument
liabilities  and  recorded  at their  fair  values,  exceeded
the proceeds received (the face amount of the Convertible Notes),
the difference was recorded as an immediate charge to income.

The  discount  from  the  face amount  of  the  Convertible
Notes represented  by the value assigned to the Warrants and
bifurcated derivative instruments is being amortized over the
period  to  the due  date  of each Convertible Note, using the
effective  interest method.

A summary of the Callable Secured Convertible Notes and
derivative instrument liabilities at December 31, 2005, is as
follows:

Callable Secured Convertible Notes; 8% per             $740,000
annum; due March 30, 2008
Less: face amount of Notes converted                   (190,696)
                                                       --------
                                                        549,304
Less: unamortized discount related to warrants         (366,599)
and bifurcated embedded derivative instruments         --------
                                                       $182,705
                                                       --------


Callable Secured Convertible Notes; 8% per             $700,000
annum; due May 25, 2008                                --------
Less: unamortized discount related to warrants         (700,000)
and bifurcated embedded derivative instruments         --------
                                                       $      -
                                                       --------

Callable Secured Convertible Notes; 8% per             $100,000
annum; due August 23, 2008
Less: unamortized discount related to warrants         (100,000)
and bifurcated embedded derivative instruments         --------
                                                       $      -
                                                       --------

Callable Secured Convertible Notes; 8% per             $500,000
annum; due August 31, 2008                             --------
Less: unamortized discount related to warrants         (500,000)
and bifurcated embedded derivative instruments         --------
                                                       $      -
                                                       --------

Callable Secured Convertible Notes; 8% per             $600,000
annum; due October 31, 2008                            --------
Less: unamortized discount related to warrants         (600,000)
and bifurcated embedded derivative instruments         --------
                                                       $      -
                                                       ========
Total carrying value at December 31, 2005              $182,705
                                                       ========

                                  13

<PAGE>


Derivative financial instrument liabilities

We use the Black-Scholes valuation model to value the Warrants
and the  embedded  conversion  option  components  of  any
bifurcated embedded derivative instruments that are recorded as
derivative liabilities.

In  valuing  the  Warrants  and  the  embedded  conversion
option components  of the bifurcated embedded derivative
instruments,  at the  time  they were issued and at December 31,
2005, we used  the market  price  of  our common stock on the
date of  valuation,  an expected  dividend  yield of 0% and the
remaining  period  to  the expiration  date  of  the  warrants
or  repayment  date  of   the Convertible  Notes.  All warrants
and conversion  options  can  be exercised by the holder at any
time.

Because  of  the limited historical trading period of  our
common stock,  the  expected  volatility of our  common  stock
over  the remaining  life  of the conversion options and Warrants
has  been estimated at 50%. The risk-free rates of return used
were based on constant  maturity  rates published by the U.S.
Federal  Reserve, applicable  to  the  remaining life of the
conversion  options  or Warrants.

At December 31, 2005, the following derivative liabilities
related to  common stock Warrants and embedded derivative
instruments were outstanding:


                                         Exercise                  Value
                                         Price Per Value - Issue December 31,
Issue Date  Expiry Date                   Share         Date        2005
-----------------------------------------------------------------------------
03-30-2005  03-30-2010  740,000 warrants  $0.085     $673,400  $     651

05-25-2005  05-25-2010  700,000 warrants   0.085      693,000        672

08-23-2005  08-23-2010  100,000 warrants   0.085       31,000         99

08-26-2005  08-26-2010  500,000 warrants   0.090      145,000        505

10-31-2005  10-31-2010  600,000 warrants   0.090        6,000        552
                                                               ---------
Fair value of freestanding derivative instrument
  liabilities for warrants                                     $   2,479
                                                               ---------


                                                                     Value
                                                    Value - Issue December 31,
Issue Date  Expiry Date                                 Date        2005
-----------------------------------------------------------------------------

03-30-2005  03-30-2008 $617,676 convertible notes    $9,176,010   $178,006

05-25-2005  05-25-2008 $700,000 convertible notes     9,451,556    210,000

08-23-2005  08-23-2008 $100,000 convertible notes       413,333     30,000

08-26-2005  08-26-2008 $500,000 convertible notes     1,928,889    150,000

10-31-2005  10-31-2008 $500,000 convertible notes       372,000    195,559
                                                                 ---------
Fair value of bifurcated embedded derivative
  instrument liabilities associated with the
  above convertible notes                                        $ 763,565
                                                                 ---------

Total derivative financial instruments                           $ 766,044
                                                                 =========

                                  14

<PAGE>



(8)  Basis of Reporting

The  Company's  financial  statements are  presented  on  a
going concern  basis, which contemplates the realization of
assets  and satisfaction of liabilities in the normal course
of business.  The Company   has  experienced  a  significant
loss from  operations including  the  settlement of certain
litigation. For  the  period ended  December 31, 2005, the
Company incurred  a  net  loss  of  $779,899  and  has  a
working capital  deficit,  an  accumulated deficit  and a
stockholders deficit of $2,070,728, $27,199,662 and $2,741,014
at December 31, 2005.

The Company's ability to continue as a going concern is
contingent upon   its   ability  to  secure  additional
financing,  increase ownership  equity and attain profitable
operations.  In  addition, the  Company's  ability  to continue
as a going  concern  must  be considered  in  light of the
problems, expenses and  complications frequently  encountered in
established markets and the competitive environment in which the
Company operates.

The  Company is pursuing financing for its operations and
seeking additional  investments. In addition, the Company  is
seeking  to expand its revenue base by adding new customers and
increasing its advertising.  Failure  to  secure  such  financing
or  to   raise additional  equity  capital and to expand  its
revenue  base  may result in the Company depleting its available
funds and not  being able pay its obligations.

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 possible inability  of
the Company to continue as a going concern.

(9)  Subsequent Events

During  January 2006 the Company repriced certain options granted
to an officer which resulted in a charge to operations of $34,650.
During  January 2006 the Company issued 1,800,000 shares of common
stock related to the conversion of an aggregate of $9,342 of the
convertible debt described in Note 7.


                                  15

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS
        -----------------------------------------------------------

Three months ended December 31, 2005
Compared with three months ended December 31, 2004
--------------------------------------------------

GENERAL
-------

The Company is headquartered at 7284 W. Palmetto Park Rd., Suite
207,Boca Raton, Florida 33433.The Company has elected to
outsource all the manufacturing of  its products under protective
agreements at this time.


Results of Operations
---------------------

For the 2005 first fiscal quarter ended December 31, 2005, Sales
decreased 64.51% to $100,148 from $282,173.This decrease was due
to the company's inability to substantially increase "pull-
thru's" of its products as a result of its inadequate advertising
budget. This has caused the loss of most of the Company's major
retail accounts.  Snorenz[R] and Good Nights Sleep[R]  are being
sold  at three major chains, Rite Aid, Brooks - Eckerd and
Albertson's as well as smaller chains such as Happy Harry's and
Meijers, The three largest chains  account for almost 59% of the
quarter's sales figures. The company also distributes to smaller
stores through its contracts with AmerisourceBergen, Cardinal
Distributing and others.

In November the Company began its direct marketing program with
full page advertisements in the New York Times, Daily News,
Newsday, the New York Post and Newsweek.  By driving the customer
to its website the company hopes to increase cash flow and build
back its sales revenue. During the quarter the sales on its
website have been minimal although they reflect a 33% growth from
month to month. Management is exploring other various methods to
increase traffic flow as a result of its Direct Marketing
Programs and will launch  several joint venture programs  as well
as its own TV programs in the next quarter.

Gross profit for the first quarter was $71,998 versus $182,533
for the year ago quarter, an decrease of 60.56%. The decrease was
due to the large decline in overall sales for the quarter.

Gross profit margins for the quarter increased to 71.89% of sales up
from 64.68% in the previous year ago quarter. The increase was due
to lowered manufacturing costs associated with the Company's products
and the Company using up its inventory on hand during the quarter.

Operating expenses (selling, general and administrative expenses)
increased $387,545 to $705,222 from $317,677, an increase of 122%.
The increase is due to several factors including, increased legal
fees of $62,000, consultants fees of $123,110 and outside reps
commissions of $72,295. Management believes that most of these
fees will not recur in the second quarter of fiscal 2006.

Operating loss was $688,924 as opposed to $255,144 in the prior
year's quarter.

Interest expense increased from $4,254 in the year ago quarter to
$144,580 for this quarter. This was due to the Company's increased
borrowings which are approximately $2,435,000 at an 8% coupon
rate and the interest accrual related to the judgment in favor of
Global Healthcare Laboratories, Inc. against us..

For the first fiscal quarter the company reported a net loss of
$779,899 ($0.12) per share versus a loss of $259,398 ($0.19) per
share in the year ago quarter.

Liquidity and Capital Resources
-------------------------------

Cash on hand at December 31, 2005 was $581,632 and the Company
had a working capital deficit of $2,070,728  at December 31, 2005.

Net cash used in operating activities was $745,128 during the six
months ended December 31, 2005.

Net cash used in investing activities was $9,174 during the six
months ended December 31, 2005.



                                  16
<PAGE>


Net cash provided by financing activities was $575,000 during the
quarter ended December 31, 2005, which consisted of $575,000 from
the proceeds from the sale of 8% convertible debentures.

The Company expects to introduce its new product the Un-Diet Program
in the March quarter. Further, the Company has signed three joint
venture contracts with various internet marketing Companies to
increase traffic to its websites Two programs will target opt-in
[only] customer bases, the other will be via an infomercial launch.

The Company does not believe it has sufficient cash resources,
receivables and cash flow to provide for all general corporate
operations in the foreseeable future. In order to avoid any
disruption in business, the Company plans on filing a proxy to
increase the authorized shares from 500,000,000 to 2,500,000,000
and raise additional capital from its present lender.

The Company believes it will settle with its judgment holder
during the March Quarter and at the appropriate time, will make
all appropriate disclosures. Thereafter the Company intends to
borrow $ $1,000,000 from its lender to continue to operate and
execute its business plan.

We cannot continue to satisfy our current cash requirements for a
period of twelve (12) months through our existing capital. We
anticipate total estimated operating expenditures of approximately
$1,000,000 over the next 12 months, in the following areas:

Legal Fees ; $65,000.00
Proxy Registration and Printing Costs: $25,000.00
SB-2 Registration Costs: $50,000.00
Additional Derivative Accounting Costs: $36,000.00
Inventory Advances: $87,000.00
Advertising: $232,000.00
Operating Deficit : $205,000.00
Repatriation of Settlement Advance : $300,000.00

Our current cash of $581,632 as of December 30th, 2005 as well as
our cash of $359,239 as of February 6th, 2006 will satisfy our
cash requirements thru the middle of March 2006. If we are able
to settle the litigation we will be required to participate with
a minimum of $300,000 dollars of our present cash position.

Accordingly, we will be unable to fund our expenses through our
existing assets or cash. In order to acquire funding, we may be
required to issue shares of our common stock, which will dilute
the interest of current shareholders. Moreover, we may still need
additional financing through traditional bank financing or a debt


                                  17
<PAGE>


or equity offering; however, because we have limited revenues,
and a poor financial condition, we may be unsuccessful in obtaining
such financing or the amount of the financing may be minimal and
therefore inadequate to implement our business plans. In the
event that we do not receive financing or our financing is
inadequate, we may have to liquidate our business and undertake
any or all of the following actions:

  *  Significantly reduce, eliminate or curtail our business,
     operating and research and development activities so as to
     reduce operating costs;
  *  Sell, assign or otherwise dispose of our assets, if any, to
     raise cash or to settle claims by creditors;
  *  Pay our liabilities in order of priority, if we have
     available cash to pay such liabilities;
  *  If any cash remains after we satisfy amounts due to our
     creditors, distribute any remaining cash to our shareholders
     in an amount equal to the net market value of our net
     assets;
  *  File a Certificate of Dissolution with the State of Nevada to
     dissolve our corporation and close our business;
  *  Make the appropriate filings with the Securities and Exchange
     Commission so that we will no longer be required to file
     periodic and other required reports with the Securities and
     Exchange Commission, if, in fact, we are a reporting company
     at that time; and
  *  Make the appropriate filings with the National Association of
     Security Dealers to affect a delisting of our stock.

Based upon our current assets, however, we would not have the
ability to distribute any cash to our shareholders.

If we have any liabilities that we are unable to satisfy and we
qualify for protection under the U.S. Bankruptcy Code, we may
voluntarily file for reorganization under Chapter 11 or liquidation
under Chapter 7. Our creditors may also file a Chapter 7 or
Chapter 11 bankruptcy action against us. If our creditors or
we file for Chapter 7 or Chapter 11 bankruptcy, our creditors
will take priority over our shareholders. If we fail to file for
bankruptcy under Chapter 7 or Chapter 11 and we have creditors;
such creditors may institute proceedings against us seeking
forfeiture of our assets, if any.  We do not know and cannot
determine which, if any, of these actions we will be forced to
take. If any of these foregoing events occur, you could lose your
entire investment in our shares.

To date, we have funded our activities principally from loans
from related parties and loans from third party lenders.

Contractual Obligations and Commercial Commitments We have no
contractual obligations, including lease obligations, apart from
agreements in the normal course of our business.


                                  18

<PAGE>


Basis of Reporting

The  Company's  financial  statements are  presented  on  a
going concern  basis, which contemplates the realization of
assets  and satisfaction of liabilities in the normal course of
business.  The Company   has experienced  a  significant  loss
from operations including  the settlement of certain litigation.
For the period ended  December 31,  2005, the Company incurred
a net loss  of $779,899 and has a working capital deficit, an
accumulated deficit and a  stockholders' deficit of $2,070,728,
$27,199,662 and $2,741,014 at December 31, 2005.

The Company's ability to continue as a going concern is
contingent upon its ability to secure  additional financing,
increase ownership  equity and attain profitable operations.
In  addition, the Company's ability to continue as a going concern
must  be considered in light of the problems, expenses and
complications frequently encountered in established markets and
the competitive environment in which the Company operates.

The  Company is pursuing financing for its operations and
seeking additional investments. In addition, the Company is
seeking to expand its revenue base by adding new customers and
increasing its advertising.  Failure to secure such financing
or to raise additional equity capital and to expand its
revenue base may result in the Company depleting its available
funds and not  being able pay its obligations.

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 possible inability of
the Company to continue as a going concern.

Derivative instruments

In connection with the sale of debt or equity instruments, we
may sell options or warrants to purchase our common stock. In
certain circumstances, these options or warrants may be classified
as derivative liabilities, rather than as equity. Additionally,
the debt or equity instruments may contain embedded derivative
instruments, such as conversion options, which in certain
circumstances may be required to be bifurcated from the
associated host instrument and accounted for separately as a
derivative instrument liability.

The identification of, and accounting for, derivative instruments
is complex. Our derivative instrument liabilities are re-valued
at the end of each reporting period, with changes in the fair
value of the derivative liability recorded as charges or credits
to income, in the period in which the changes occur. For options,
warrants and bifurcated conversion options that are accounted for
as derivative instruments liabilities, we determine the fair


                                  19

<PAGE>


value of these instruments using the Black-Scholes option pricing
model. That model requires assumptions related to the remaining
term of the instruments and risk-free rates of return, our
current common stock price and expected dividend yield, and the
expected volatility of our common stock price over the life of
the option. We have estimated the future volatility of our common
stock price based the history of our stock price. The
identification of, and accounting for, derivative instruments and
the assumptions used to value them can significantly affect our
financial statements.

CRITICAL ACCOUNTING POLICIES
----------------------------

Our discussion of results of operations and financial condition relies
on our consolidated financial statements that are prepared based on
certain critical accounting policies that require management to make
judgments and estimates that are subject to varying degrees of
uncertainty. We believe that investors need to be aware of these policies
and how they impact our financial reporting to gain a more complete
understanding of our financial statements as a whole, as well as our
related discussion and analysis presented herein.  While we believe that
these accounting policies are grounded on sound measurement criteria,
actual future events can and often do result in outcomes that can be
materially different from these estimates or forecasts. The accounting
policies and related risks described in the notes to our financial
statements for the year ended September 30, 2005 are those that depend
most heavily on these judgments and estimates.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
-----------------------------------------

In  November 2004, the Financial Accounting Standards Board
(FASB) issued  SFAS  151  "Inventory Costs". This  Statement
amends  the guidance in ARB No. 43, Chapter 4, "Inventory
Pricing, to  clarify the  accounting  for  abnormal amounts of
idle  facility  expense, freight,  handling  costs,  and  wasted
material  (spoilage).  In addition,  this  Statement  requires
that  allocation  of   fixed production  overhead to the costs of
conversion be  based  on  the normal  capacity of the production
facilities. The  provisions  of this  Statement  will be
effective for the Company beginning  with its  fiscal  year
ending 2005. The Company does not  believe  that this  standard
will  have  a material  impact  on  the  Company's financial
position, results of operations or cash flows.

In  December  2004,  the FASB issued SFAS 153  "Exchanges  of
Non monetary  Assets  -  an  amendment of APB Opinion  No.  29".
This Statement  amended APB Opinion 29 to eliminate the
exception  for non  monetary exchanges of similar productive
assets and  replaces it  with a general exception for exchanges
of non monetary  assets that do not have commercial substance. A
non monetary exchange has commercial  substance if the future
cash flows of the  entity  are expected to change significantly
as a result of the exchange.  The adoption  of  this  Standard is
not expected to  have  a  material impact  on the Company's
financial position, results of operations or cash flows.

In  December 2004, the FASB issued SFAS 123 (revised 2004) "Share
Based  Payment". This Statement requires that the  cost
resulting from  all  share-based transactions be recorded in  the
financial statements.  The Statement establishes fair  value as


                                  20

<PAGE>


the measurement  objective  in  accounting  for  share-based
payment arrangements and requires all entities to apply a fair-
value-based measurement  in  accounting for share-based  payment
transactions with  employees. The Statement also establishes fair
value as  the measurement objective for transactions in which an
entity acquires goods  or  services  from  non-employees  in
share-based  payment transactions.  The  Statement replaces SFAS
123  "Accounting  for Stock-Based  Compensation"  and  supersedes
APB  Opinion  No.  25 "Accounting for Stock Issued to Employees".
The provisions of this Statement  will  be effective for the
Company beginning  with  its fiscal  year  ending in 2006. The
Company is currently  evaluating the  impact this new Standard
will have on its financial position, results of operations or
cash flows.

In March 2005, the Securities and Exchange Commission (SEC)
issued Staff   Accounting   Bulletin  No.107  (SAB  107)  which
provides guidance   regarding the  interaction  of SFAS 123(R)
and  certain SEC  rules  and  regulations. The new guidance
includes the  SEC's view  on  the  valuation of share-based
payment arrangements  for public companies and  may simplify
some  of   SFAS   123(R)'s implementation   challenges  for
registrants and enhance the information investors receive.

In March 2005, the FASB issued FIN 47,  Accounting for
Conditional Asset  Retirement  Obligations,  which  clarifies
that  the  term 'conditional asset retirement  obligation'  as
used in  SFAS 143, Accounting  for Asset Retirement Obligations,
refers  to a legal obligation to perform an asset retirement
activity in which  the timing  and/or method of settlement are
conditional on  a  future event that  may or may not be within
the control of  the  entity. FIN  47 requires an entity to
recognize a liability  for the fair value  of  a conditional
asset retirement  obligation if the  fair value  can be
reasonably estimated. FIN 47 is effective  no  later than the
end of the fiscal year ending after  December 15,  2005. The
Company does not  believe  that FIN 47 will have  a  material
impact on its  financial position, results from operations or
cash flows.

In August 2005, the FASB issued SFAS 154, Accounting Changes
and Error  Corrections.   This  statement  applies  to  all
voluntary changes  in  accounting principle and to changes
required  by  an accounting pronouncement if the pronouncement
does  not  include specific transition  provisions,  and it
changes the requirements for  accounting for and reporting them.
Unless it is impractical, the  statement requires retrospective
application  of the changes to  prior   periods' financial
statements.  This  statement  is effective for accounting
changes and correction of errors made in fiscal years  beginning
after December 15, 2005. The adoption  of this  Standard  is not
expected to have a material impact  on  the Company's financial
position, results of operations or cash flows.

FORWARD LOOKING STATEMENTS
--------------------------

When used throughout in this form 10QSB filing, the words "believe",
"should", "would", and similar expressions that are not historical are
intended to identify forward-looking statements that involve risks and
uncertainties. Such statements include, without limitation, expectations
with respect to the results for the next fiscal year, the Company's
beliefs and its views about the long term future of the industry and the
Company, its suppliers or its strategic business partners. In addition to



                                  21

<PAGE>


factors that may be described in the Company's other Securities and
Exchange Commission ("SEC") filings, unforeseen circumstances or events
could cause the Company's financial performance to differ materially from
that expressed in any forward-looking statements made by, or on behalf
of, the Company. The Company does not undertake any responsibility to
update the forward-looking statements contained in this Form 10QSB filing.


Item 3.  Controls & Procedures

As required by Rule 13a-15 under the Exchange Act, as of the date of the
filing of this report , the Company carried out an evaluation of the
effectiveness of the design and operation of the Company's disclosure
controls and procedures.  This evaluation was carried out under the
supervision and with the participation of the Company's management,
including the Company's President, Chief Executive Officer and Chief
Financial Officer. Based upon that evaluation, the Company's President,
Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective. There have
been no significant changes in the Company's internal controls or in
other factors, which could significantly affect internal controls
subsequent to the date the Company carried out its evaluation.

Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed
in Company reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in
the Securities and Exchange Commission's rules and forms. Disclosure
controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed
in Company reports filed under the Exchange Act is accumulated and
communicated to management, including the Company's Chief Executive
Officer and Chief Financial Officer as appropriate, to allow timely
decisions regarding required disclosure.

The Company maintains disclosure controls and procedures that are
designed  to ensure that information required to be disclosed in
the  Company's  Exchange Acts reports is recorded, processed  and
summarized  and is reported within the time periods specified  in
the  SEC's  rules  and  forms,  and  that  such  information is
accumulated and communicated  to  the  Company's   management,
including its  Chief  Executive  Officer  and  Chief  Financial
Officer,  as  appropriate,  to allow timely  decisions regarding
required  disclosure. In designing and evaluating the disclosure
control procedures, no matter how well designed and operated, can
provide  only  reasonable  assurance  of  achieving the  desired
control  objectives, and management necessarily was required  to
apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.


                                  22

<PAGE>



                             PART II
                             -------

Item 1.  LEGAL PROCEEDINGS

During May 2003 Global Healthcare Laboratories, Inc. ("Global")
made a claim against the Company for breach of contract under a master
license agreement. A trial was held in August 2004 and a jury verdict in
the sum of $2,501,191 was awarded in favor of the plaintiff's. The Company
subsequently settled the judgment on December 3rd, 2004. The basic terms
of the settlement are the payment of the sum of $200,000 to  plaintiffs,
spread over a 4-5 month period and the registration of 8,000,000 common
shares by January 15th, 2005. The Company made the first three installments
totaling $75,000 on a timely basis. The Company tendered the fourth payment
13 days late and the plaintiff's unilaterally declared the settlement
null and void. The Company filed a motion to enforce the provisions of
the agreement in March 2005.

The uncontroverted facts are as follows:

The Company made the first payment on time, the second payment
was two days late and the third payment was 7 days late (of which
four days were due to a UPS delivery problem). The fourth payment
was made 13 days late as the Company was undergoing severe cash
flow problems at the time and the check was delivered only after
Mr. Mitchell, the President borrowed the necessary funds on a
homeequity loan to cover the amount. The Company also tendered
the final future payment at that time in advance of the payment
schedule. The stock was registered on August 12th, 2005 and the
plaintiff's orally rejected delivery.

The Court ruled that because the settlement contract had a "time
is of the essence clause" the untimely payments made by the
Company allow Global Healthcare to disaffirm the agreement. The
Court ruled that Enriquillo Export & Import Inc v. M.B.R.
Industries Inc. applies and the Company's 13 day late tender was
not adequate performance {Enriquillo had a 58 day delay}.
Furthermore, the Court ruled that the $75,000 dollars of payments
cashed by Global and tendered by the Company under the original
settlement agreement shall not be returned but rather applied to
the judgment.

At present the Company has retained the firm of Furr & Cohen
Esq.'s. and notified its lender, whose outside counsel is working
closely with the Company's counsel to reach a new settlement with
the judgment creditor. The parties have orally agreed to a
standstill agreement while they exhaust all possible remedies in
the instant matter. In the event a new accord is not reached, the
Company will be required to file a bankruptcy petition to protect
the Company and its assets. Recently, the parties have agreed in
principal to new settlement terms and a definitive agreement
should be executed no later than February 28th, 2006.

In December 2005, the Company filed a litigation against CVS,
Inc. The Company sold CVS in excess of $140,000 dollars of goods
and received payment of approximately $26,000 during an 18 month
period. CVS terminated the product in late May 2005 and claims
the Company owes them $77,000 Management expects to recover fully
in this litigation but cannot determine the possible outcome at
this time.


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Item 2.  CHANGE IN SECURITIES

         Not Applicable.

Item 3.  DEFAULTS UPON SENIOR SECURITIES

         Not Applicable


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

On October 31st, 2005 the Company received the certified tally of the
proxy solicitation which authorized the increase of the issued and
outstanding shares from 250,000,000 to 500,000,000 million. The
authorized is comprised of 495,000,000 common shares and 5,000,000
preferred shares. The vote was as follows:

     For:       2,948,347
     Against:     479,930
     Abstain:         500

The Company amended its certificate of incorporation in Nevada to
reflect the Proxy results.

Item 5.  OTHER INFORMATION

In the event that the Company settles with the judgment creditor
a proxy will be filed requesting shareholder approval increasing
the authorized shares from 500,000,000 to 2,500,000,000. The
Company will borrow an additional  $1,000,000 from its lenders so
that it can continue to operate and execute its business plan.
Presently the Company filed an SB-2 Registration Statement which
went effective and covered $1,540,000 of the convertible
debentures. The Company is required to file a registration to
cover the $1,100,000 already loaned to it by its lenders and
received by the Company and the additional $1,000,000 future
funding scheduled to be received over the next few weeks. At the
present market price of the stock the registration requires a
minimum of 1,000,000,000 shares to be registered to cover the
hypothetical conversion of all of the lender's outstanding debt.
Although this registration may have a diluting effect to present
shareholders Management believes the funding will allow the
Company to avoid a bankruptcy filing, which otherwise would wipe
out all of the shareholder value.

At December 31, 2005, $2,640,000 was borrowed by the Company and
$190,696 was repaid through convertible debenture conversions
into approximately 12,057,950 common shares leaving a balance
owed to the lender of $2,449,304.

The Company intends to amend its March and June Form 10-QSB
filings for 2005 in order to comply with the new derivative
accounting regulations.



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Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) 31.1   Certification of Chief Executive Officer Pursuant to
           Section 302 of the Sarbanes-Oxley Act of 2002,
           promulgated under the Securities Exchange Act of 1934,
           as amended

    31.2   Certification of Chief Financial Officer Pursuant to
           Section 302 of the Sarbanes-Oxley Act of 2002, promulgated
           under the Securities Exchange Act of 1934, as amended

    32.1   Certification of Chief Executive Officer Pursuant to 18
           U.S.C. Section 1350, as adopted Pursuant to Section 906
           of the Sarbanes-Oxley Act of 2002

    32.2   Certification of Chief Financial Officer Pursuant to 18
           U.S.C. Section 1350, as adopted Pursuant to Section 906
           of the Sarbanes-Oxley Act of 2002

(b)        On 10-7-2005, 10-31-2005, and 11-25-2004 a Form 8-K
           was filed.



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


                           SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant
caused this report to be signed on its behalf by the undersigned,
thereunto
duly authorized.


                                        Med Gen, Inc.
                                        (Registrant)


Date: February 15th, 2006
                                        By:  /s/Paul B. Kravitz
                                           -----------------------
                                           Paul B. Kravitz
                                           Chief Executive Officer



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