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

                                   FORM 10-KSB

              |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                    For the Fiscal Year Ended: June 30, 2005

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

             For the Transition Period From __________ to __________

                          Commission File No. 000-29531

                         ADVANCED MEDICAL INSTITUTE INC.
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)


            NEVADA                                       88-0409144
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

               Level 1, 204-218 Botany Road
                      Alexandria, NSW
                         Australia                                    2015
         (Address of principal executive offices)                  (Zip code)
         ----------------------------------------                  ----------

                   Issuer's telephone number: (61) 2 9640 5253
--------------------------------------------------------------------------------

           Securities registered pursuant to Section 12(b) of the act:

                                      none

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

                               $0.001 Common Stock
--------------------------------------------------------------------------------
                                (Title of Class)

      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//

      Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of 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. / /

      State the issuer's revenues for the June 30, 2005 fiscal year:
$15,560,078.

      The average bid and asked price of shares of common stock held by
non-affiliates of the issuer, as of the last business day of the most recent
quarter and the date hereof is $1.35 and $2.10 respectively.

      As of June 30, 2005, there were 31,122,450 shares of the issuer's common
stock, $.001 par value, outstanding.

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I........................................................................3

Item  1. Description of Business..............................................3

Item  2. Description of Property..............................................7

Item  3. Legal Proceedings....................................................8

Item  4. Submission of Matters to Vote of Security Holders....................9

PART  II......................................................................9

Item  5. Market for Common Equity and Related Stockholder Matters and Small
      Business Issuer Purchases of Equity
      Securities..............................................................9

Item  6. Management's Discussion and Analysis or Plan of Operation............10

Item  7. Financial Statements.................................................21

Item  8. Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure....................................................21

Item  8A. Controls and Procedures.............................................21

Item  8B. Other Information...................................................21

PART  III.....................................................................21

Item  9. Directors, Executive Officers, Promoters and Control Persons;
      Compliance With Section 16(a) of the Exchange
      Act.....................................................................21

Item  10. Executive Compensation..............................................24

Item  11. Security Ownership of Certain Beneficial Owners and Management and
      Related Stockholder Matters.............................................25

Item  12. Certain Relationships and Related Transactions......................26

Item  13. Exhibits............................................................26

Item  14. Principal Accountant Fees and Services..............................27

Signatures....................................................................29

Financial Statements.........................................................F-1

                                       2
<PAGE>

                                     PART I

Item  1. Description of Business.

The statements contained in this Form 10-KSB that are not purely historical are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These include statements about the Company's expectations, beliefs,
intentions or strategies for the future, which are indicated by words or phrases
such as "anticipate," "expect," "intend," "plan," "will," "the Company
believes," "management believes" and similar words or phrases. The
forward-looking statements are based on the Company's current expectations and
are subject to certain risks, uncertainties and assumptions. The Company's
actual results could differ materially from results anticipated in these
forward-looking statements. All forward-looking statements included in this
document are based on information available to the Company on the date hereof,
and the Company assumes no obligation to update any such forward-looking
statements.

Introduction

      We were incorporated under the name of Hawksdale Financial
Visions, Inc. (sometimes the "Company") on December 6, 1996 under the laws of
the State of Nevada. We originally had intended to time share a single family
dwelling house in the Rum Cay area of the Bahamas, offering a one-twelfth
fractional interest. As at March 31, 1997, all funds raised by the sale of
shares of $.001 par value common stock ("Common Stock") in order to fulfill our
initial objective had been expended and we, thereafter, become dormant. From
March 31, 1997 until January 28, 2005, we were in the developmental stage and
had no operations and we could be defined as a "shell" company, an entity which
is generally described as having no or nominal operations and with no or nominal
assets or assets consisting solely of cash and cash equivalents.

      On October 1, 2004, we formed a corporation under the laws of the State of
Nevada called "Advanced Medical Institute Inc." and on October 5, 2004, we
acquired one hundred shares of its common stock for cash. On October 15, 2004,
the subsidiary was merged with and into the Company and as a result of the
merger, the Company's corporate name was changed to "Advanced Medical Institute
Inc."

      On January 28, 2005, we entered into a Share Exchange Agreement (the
"Exchange Agreement") with Advanced Medical Institute Pty Limited, a privately
owned Australian company ("AMI Australia"), and AMI Australia's shareholders,
(the "Shareholders"), pursuant to which the parties agreed that we would acquire
all of the issued and outstanding shares of stock of AMI Australia in exchange
for the issuance in the aggregate of 14,600,000, or 58.4%, of our shares of
Common Stock (the "Shares") to the Shareholders. On March 21, 2005, we closed
the transaction and issued our Shares, resulting in us acquiring the business of
AMI Australia (the "Share Exchange"), which is discussed below. As used herein,
the "Company" shall also mean AMI Australia after the close of the Share
Exchange when used for events after March 21, 2005, described herein.

General Business Plan.

      AMI Australia was established in February 2001 when it entered into an
agreement with Health Services For Men and Australian Momentum Health to acquire
two chains of medical clinics which provide services relating to the treatment
of sexual dysfunction. AMI Australia currently operates 17 clinics Australia
wide and on July 15, 2005 AMI Australia commenced operations in New Zealand. For
the year ended June 30, 2005, AMI Australia's revenues were approximately AU$20
million (US$15 million).



                                       3
<PAGE>

      AMI Australia is a service provider company which arranges for patients to
be provided with medical services, pharmaceuticals and associated clinical
support services to men and women with sexual dysfunction. Its treatment options
include:

      (a)   injections, lozenges, tablets and nasal delivery systems for the
            treatment of erectile dysfunction; and

      (b)   injections, lozenges and nasal spray delivery systems for the
            treatment of premature ejaculation.

      Each of AMI Australia's treatment options are prescribed by licensed
Australian and New Zealand doctors and prepared and delivered by an Australian
compounding pharmacy in full compliance with Australian regulatory requirements.
AMI Australia's products and services are only available by prescription and are
sold on an "off-label" basis. AMI Australia's treatment options are generally
only available through its medical clinics.

      AMI Australia licenses certain of the intellectual property used in its
business from Jacov (Jack) Vaisman, its founder, President and Director. This
intellectual property includes an Australian innovation patent for its premature
ejaculation products (which patent is due to expire on July 9, 2012) and a
worldwide PCT patent application (WO 2005/004855, Australian standard patent
application No. 2004222783). AMI Australia's injection, lozenge and tablet
impotence and erectile dysfunction treatment options are not patent protected.

      AMI Australia obtains customers through direct advertising and marketing
and through its existing customer database which exceeds 250,000 people.

      On July 15, 2005 AMI Australia commenced operations in New Zealand. AMI
Australia's services are being provided from its head office in Sydney, where 2
of it doctors are licensed in both Australia and New Zealand. AMI Australia
intends to move towards full operations as a result of its initial positive
outcomes.

      AMI Australia is also in the process of developing new treatment options
to expand the range of treatment methods and delivery systems available to its
customers. During July 2005, AMI Australia filed four patent applications that
the Company believes will be granted within the next two calendar years.

      AMI Australia's 93% owned subsidiary, Intelligent Medical Technologies Pty
Limited ("IMT") was granted the exclusive worldwide right and license from
Sheiman Ultasonic Research Foundation Pty Limited ("SURF") to exploit and
sub-license certain inventions, patents and other intellectual property in
relation to certain ultrasonic nebulizer technology (including Australian Patent
No's 693064 and 753817, European Patent No's 0 705 145 and 1 071 479 and US
Patent No's 5,908,158 and 6,379,616) within the field of the treatment of sexual
dysfunction in men and women (including impotence, premature ejaculation and the
treatment of female sexual arousal disorders). Some of these patents expire in
October 2013, with the remaining patents expiring around 2023.

      IMT's license is a broad based license which includes the right to
manufacture, market, sell and distribute products based on the technology and
patents within the field of use. IMT also has the option to extend its field of
use to the treatment of prostate diseases on payment of AU$1.

      IMT acquired its license in order to develop an ultrasonic nebulizer to
deliver medications to patients' lungs for the treatment of sexual dysfunction
as it believes that this delivery system will be more efficient and clinically
effective than any other alternative treatment option and will reduce dosage
levels and the likelihood of side effects.

                                       4
<PAGE>

      IMT has completed development of an initial working prototype of the
nebulizer device. Two further prototypes of this device were completed in August
2005 with a further 2 prototypes scheduled for completion in September 2005.
Those prototypes are in production at this time.

      Additional prototypes, which incorporate various improvements to the
functionality and efficiency of the device (the "Beta Devices"), plan to be
completed during late October/early November 2005.

      On completion of the Beta Devices, IMT intends to list its device with the
Therapeutic Goods Administration ("TGA") (the Australian equivalent of the FDA)
and the European Medicines Evaluation Authority (the European equivalent of the
FDA) before exploring registration of the device with the FDA. IMT's listing
application with TGA is expected to be completed by the end of 2005.

      IMT has received advice from Brandwood Biomed Pty Limited (an Australian
regulatory expert on TGA requirements) that it does not need to conduct clinical
trials to list its device with the TGA.

      Simultaneously with development of the new product, IMT intends to
commence phase I clinical trials of a medication for treatment of erectile
dysfunction and IMT has begun its preparation to commence these trials at the
direction of and under analysis by the commercial arm of a leading Australian
university.

      IMT has been spending a large portion of its capital on research and
development activities with financial support from AMI Australia (AU$379,000
during FY05 being approximately US$284,250). IMT has compiled a team of experts
to assist it with these research and development activities.

Competition

      AMI Australia competes with rival treatments such as Viagra, Cialis and
Levitra in the erectile dysfunction field. AMI Australia does not currently know
of any competitors in the premature ejaculation market.

      Companies of all sizes are engaged in the development and
commercialization of technologies similar to ours. Competition in the sexual
dysfunction market is intense in all of our businesses and includes many large
and small competitors. The principal means of competition vary among product
categories and business groups. However, the efficacy, safety, patients' and
customers' ease of use and cost effectiveness of our products are important
factors for success in all of our principal businesses. Many of our competitors
have greater financial and other resources, larger research and development
staffs and more experience in the regulatory approval process. Moreover,
potential competitors have or may have patents or other rights that conflict
with patents covering our technologies.

      Information published by the research firm IMS in 2004 estimated the
Australian erectile dysfunction market to have AU$59 million (approximately
US$44.25 million) in annual sales with Viagra having a 54.7% market share
(AU$32.3 million, approximately US$24.23 million), Cialis holding 36.6% of the
market (AU$21.6 million, approximately US$16.2 million)) and Bayer holding the
remaining 8.7% (AU$5.1 million, approximately US$3.83 million). This firm also
estimated that the market had grown 55 percent over the previous 4 years
(Australian Financial Review, November 15, 2004, page 51).

                                       5
<PAGE>

      The research by IMS did not include AMI Australia's sales, which would
have made it the third largest treatment provider in Australia (and which
indicate that the size of the market has been significantly understated). The
size of the market, including AMI Australia's sales figures, is approximately
AU$80 million (approximately US$60 million), this would translate into an
approximate 25% market share.

      In relation to the premature ejaculation treatments, AMI Australia's
efforts to reach the market is still in a development phase and AMI Australia
has achieved significant growth on a month by month basis since October 2004,
shortly after AMI Australia commenced concentrating on this market segment.

      Based on its review of available market information, AMI Australia
believes that the impotence market in Australia will continue to grow at a
steady rate, with significantly higher market growth available in the premature
ejaculation market.

Significant Subsidiaries of AMI Australia.

      AMI Australia's significant subsidiaries are IMT and Whygo Video
Conferencing Pty Ltd ("Whygo").

      Details of IMT are set forth in the General Business Description above.

      AMI Australia holds 70% of the outstanding shares of Whygo. Whygo provides
video conferencing services, which facilitates its client by providing video
conferencing rooms across Australia and around the world. Whygo uses some of AMI
Australia clinic facilities and pays room hire fees for the usage. In those
locations where AMI Australia does not have clinics, Whygo uses other
facilities.

      Whygo owns proprietary scheduling software, which allows its corporate
partners to login and book rooms anywhere around the world. The source of
Whygo's income is derived from video conferencing rooms to its corporate
partners through AMI Australia and its other channeling partners.

Employees

      As of June 30, 2005, AMI Australia had a total of approximately 140
full-time staff, working in the areas of sales and marketing, customer support,
product development and back office functions. None of the Company's employees
are members of a union or labor organization.

      AMI Australia's core staff include:

      DR. JACOV (JACK) VAISMAN, CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR -
Dr. Vaisman is a pioneer in the sexual dysfunction business in Australia. Since
2001, he has served as the managing director and chief executive officer of AMI
Australia. He is responsible for the overall management and strategic direction
of AMI Australia's impotency operations with the support of AMI Australia's
chief operations officer, Tony Khan, and AMI's chief financial officer, Dilip
Shrestha. Dr. Vaisman is also currently a consultant to and shareholder in
Yayasan On Clinic, which operates a similar business in Indonesia.

      From 1993 through 2001, Dr. Vaisman was the founder and director of On
Clinic International in Australia, a predecessor of AMI Australia. The holder of
a Bachelor of Medicine, a Master of Gynecology and a PhD in Medical Science, Dr.
Vaisman has more than 35 years of experience and expertise in the field of
sexual health care provision and was recently granted an innovation patent in
the field of premature ejaculation treatment by the Australian patent office.

                                       6
<PAGE>

      DILIP SHRESTHA, CHIEF FINANCIAL OFFICER - Mr. Shrestha also serves as the
chief financial officer of AMI Australia. From 2001 to July 1, 2005, Mr.
Shrestha was the Financial Controller of AMI Australia. Prior to that he was an
Assistant Accountant with Australian Momentum Health Pty Ltd, a position he held
from 1999. Mr. Shrestha holds a Bachelor of Business Accounting, Master of
E-Commerce and a Graduate Diploma of Information Services and E-Commerce, all
from Central Queensland University Sydney & Rockhampton Campus in Australia.

      FORHAD (TONY) KHAN, EXECUTIVE VICE PRESIDENT, SECRETARY AND DIRECTOR- -
Mr. Khan also serves as chief operating officer of AMI Australia. From 2001 to
July 1, 2005, Mr. Khan was the General Manager of AMI Australia. Prior to
joining AMI Australia, Mr. Khan was the Director and sole operator of Australian
Momentum Health ("AMH"), one of two medical establishments leading in providing
impotency treatment in Australia. Mr. Khan was Sales Manager and then Operations
Manager for On Clinic International prior to establishing AMH. Mr. Khan holds a
Masters degree in Commerce and Accounting and has been involved in the industry
for over 10 years.

      AMI Australia's staff also include 25 licensed medical doctors.

      AMI Australia's subsidiary, IMT, does not have any employees. Whygo has 1
employee.

Item 2. Description of Property.

      As of June 30, 2005, AMI Australia had a leasehold interest in 24
Australian properties, being the 17 clinics used to operate the business, AMI
Australia's Australian executive office in Sydney Australia and a leasehold
interest in part of AMI Australia's former executive office in Sydney which is
in the process of being sublet to another business, following closure of the
business previously occupying that space. There are no encumbrances over AMI
Australia's interest in these properties. All of these properties are rented and
none of these properties are owned. AMI Australia's head office is located at
Suite 1, Level 1, 204-218 Botany Road, Alexandria New South Wales, Australia.
AMI Australia's head office houses AMI Australia's corporate head office, its
centralized call centre and some of AMI Australia's licensed doctors, nursing
staff and sales and administration staff.

      AMI Australia's medical clinics are located around Australia with clinics
in the following cities and regional centers: Sydney City, Parramatta (Sydney,
New South Wales), Hurstville (Sydney), Newcastle (major city, New South Wales),
Wollongong (major city, New South Wales), Albury (regional New South Wales),
Tamworth (regional New South Wales), Dubbo (regional New South Wales), Chermside
(Queensland), Mt Gravatt (Brisbane, Queensland), Bundall (Gold Coast,
Queensland), Cairns (North Queensland), Townsville (North Queensland),
Rockhampton (Queensland), Toowomba (Queensland), Melbourne City (Victoria), St.
Kilda (Victoria), Box Hill (Melbourne, Victoria), Dandenong (regional Victoria),
Perth (Western Australia) and Adelaide (South Australia). AMI Australia is in
the process of closing five (5) clinics as it considers it will be more cost
effective to service the relevant customers from its executive office.

      In addition, the Company presently occupies office space supplied by our
registered agent representative in the State of Nevada at 6767 Tropicana Avenue,
Suite 207, Las Vegas, Nevada 89103. This space is provided to us on a rent free
basis.

                                       7
<PAGE>

      IMT rents space in Roseberry (Sydney, New South Wales) in connection with
its research and development activities.

Item 3. Legal Proceedings.

      As of June 30, 2005, there was no litigation pending or threatened by or
against the Company, IMT or Whygo. AMI Australia currently is involved in the
following litigation and administrative matters.

      On July 19, 2004, the Australian Competition and Consumer Commission
(collectively, the "ACCC") filed a suit against AMI Australia in the Federal
Court of Australia Sydney Registry. The ACCC claims that a series of
advertisements made by AMI Australia involving a celebrity that confessed
impotence were misleading and deceptive. AMI Australia has denied the allegation
and is vigorously defending this suit. ACCC is seeking corrective advertising
for the alleged misleading and deceptive advertisements. The ACCC has not made
any claim for damages. The hearing of the proceedings concluded on September 2,
2005 with a final judgment expected later this calendar year.

      On August 10, 2004, Bradley Joyce, AMI Australia's former Chief Executive
Officer filed a suit against AMI Australia in the Industrial Commission of NSW.
Mr. Joyce alleges that his contract is unfair and seeks to have the Industrial
Commission of NSW amend the contract to include a six month severance payment
(which would be approximately AU$100,000). These proceedings are at an early
stage and a compulsory conciliation conference did not resolve the claim. AMI
Australia has denied the allegations and is vigorously defending this suit.

      On December 17, 2002, Alan Hibberd, a former patient, notified a claim
against AMI Australia in accordance with the Personal Injuries Proceeding Act of
2002 (Qld). AMI Australia received the notification on April 5, 2004. Mr.
Hibberd claims that we did not properly notify him of possible adverse effects
of the medical procedure he underwent. Mr. Hibberd is seeking reimbursement of
wages in the amount of AU$1,731 and presently unspecified damages for physical
injuries. These proceedings are in pre-court procedure. AMI Australia has denied
the allegations and is vigorously defending this suit.

      On September 27, 2004, Rocco Licastro, a former patient, filed a suit
against AMI Australia in the District Court of NSW, Sydney Registry. Mr.
Licastro's claims result from an injection therapy that Mr. Licastro claims
caused physical injuries. Mr. Licastro is seeking damages including medical
expenses, but no amount has been specified to date. These proceeding are in an
early stage. AMI Australia has denied the allegations and is vigorously
defending this suit.

      On August 24, 2004, AMI Australia initiated a suit against Mr. Mark Ryan,
a former consultant, two companies controlled by Mr. Ryan which now compete with
us in the erectile dysfunction market, Dr. Ian Davies, Mr. Ryan's partner, and a
third company controlled by Dr. Davies (the "Defendants") in the Federal Court
of Australia. AMI Australia alleges that Mr. Ryan breached his confidentiality
agreement with it and misused its intellectual property. AMI Australia obtained
interim orders in late 2004. AMI Australia is seeking a permanent injunction
restraining the Defendants from using its confidential information and
intellectual property. AMI Australia is also seeking an as of yet unspecified
amount of damages. This proceeding is still in the discovery stage. The
Defendants have denied the allegations.

                                      8
<PAGE>

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

                  An amendment (the "Amendment") to the Company's Articles of
Incorporation, (i) to increase the number of authorized shares of the capital
stock of the Company to 100,000,000; (ii) to designate 90,000,000 shares of the
capital stock as Common Stock; and (iii) to designate 10,000,000 shares of the
capital stock as Preferred Stock which may be issued in one or more series or
classes as designated by the Board of Directors, from time to time, without the
approval of the stockholders, was authorized at a telephonic meeting of the
Board of Directors of the Company on May 25, 2005 and was subsequently adopted
by the written consent of the Company's stockholders entitled to vote a majority
of the shares of Common Stock then outstanding on May 25, 2005 (the "Stockholder
Consent").

Item 5. Market for Common Equity and Related Stockholder Matters and Small
        Business Issuer Purchases of Equity Securities.

      Our Common Stock is listed on the Pink Sheets(R), which is a centralized
quotation service that collects and publishes market maker quotes for
over-the-counter securities that is published by the Pink Sheets LLC, under the
symbol "AVMD.PK". The following sets forth, for the periods indicated, the high
and low bid price for our Common Stock as reported in the Pink Sheets(R). The
Pink Sheets is a limited, voluntary reporting service and may not include all
transactions regarding our Common Stock. The quotations set forth below reflect
inter-dealer prices, without retail mark-up, mark-down or commissions and may
not represent actual transactions.

Quarter Ending:                            High                         Low
---------------                            ----                         ---

2004
----
December 31, 2004                         $1.25                        $1.25

2005
----
March 31, 2005                            $1.35                        $1.00
June 30, 2005                             $1.35                        $1.25
September 30, 2005 (through
September 14, 2005)                       $2.10                        $1.35


      As of September 14, 2005 there were 174 shareholders of record.

      We have not paid any stock dividends and cash dividends to date and have
no plans to pay any stock or cash dividends in the immediate future.

Recent Sales of Unregistered Securities

      On June 29, 2005, the Company entered into a subscription agreement with
certain non-U.S. persons pursuant to which the Company agreed to issue an
aggregate of 6,122,450 shares of common stock for aggregate gross proceeds of
AU$1 million (US$762,000) (the "Transaction"). The Shares have not been and will
not be registered under the Securities Act, and, if in the future the Subscriber
decides to offer, resell, pledge or otherwise transfer the Shares, such Shares
may be offered, resold, pledged or otherwise transferred only (A) pursuant to an
effective registration statement filed under the Act, (B) to non-U.S. persons in
an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S
of the Act, (C) pursuant to the resale limitations set forth in Rule 905 of
Regulation S, or (D) pursuant to an exemption from registration under the Act
provided by Rule 144. The net proceeds from the Transaction will be used for
working capital and general corporate purposes.

                                       9
<PAGE>

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

Plan of Operation.

      From March 31, 1997 until January 28, 2005, we had been in the
developmental stage and have had no operations and we could be defined as a
"shell" company, an entity which is generally described as having no or nominal
operations and with no or nominal assets or assets consisting solely of cash and
cash equivalents. We were seeking to merge with an operating company.

      On October 1, 2004, a holding corporation was formed under the laws of the
State of Nevada called "Advanced Medical Institute Inc." and on October 5, 2004,
we acquired one hundred shares of its common stock for cash. On October 15,
2004, the new corporation was merged with and into us and as a result of the
merger, the surviving corporation's corporate name was changed to "Advanced
Medical Institute Inc." We were the surviving corporation in the merger and,
except for the name change, there was no change at that time in our directors,
officers, capital structure or business.

      On January 28, 2005, we entered into the Exchange Agreement with AMI
Australia and all of the shareholders of AMI Australia, pursuant to which the
parties agreed that we would acquire 100% of the issued and outstanding shares
of stock of AMI Australia in exchange for the issuance of 14,600,000, or 58.4%,
of our outstanding restricted shares of Common Stock to the shareholders of AMI
Australia. On March 21, 2005, we closed the transaction and issued our shares of
Common Stock, resulting in AMI Australia becoming our wholly-owned subsidiary.

      AMI Australia was established in February 2001 when it entered into an
agreement with On Clinic, Health Services For Men Pty Limited and Australian
Momentum Health Pty Limited to acquire two chains of medical clinics which
provide services relating to the treatment of sexual dysfunction. AMI Australia
operates 18 clinics Australia wide. For the year ended June 30, 2005, AMI
Australia's revenues were approximately AU$17.9 million (US$13,497,559). As a
result of the stock exchange transaction, AMI Australia became the primary
revenue generator for the Company (see "Accounting Treatment of the Acquisition
Transaction" below).

      Our core intellectual property includes: the patent license held by IMT;
customer database of more than 250,000 patients; our Clinic Management System
(software and hardware) used for customer profile, financial history; logistics
management; customer relationship management, clinic booking system and
micro-management and internal control; the right to use medication formulations
in the Australian market under a license from Dr. Jack Vaisman; dosing
protocols, treatment manuals and methodologies; scripts: call center booking
script, outbound call booking script, outbound sales script, direct sales (over
the phone) script, face to face sales script and customer service
script/proactive call script; marketing and sales collateral including copyright
in advertisements and general know how, trade secrets, concepts and technical
information.

Liquidity and Capital Resources.

      As of June 30, 2005, we had total liabilities of $4,149,690 including
unearned revenue of $1,803,044 and we had a positive net worth of $799,801. As
of June 30, 2004, we had total liabilities of $3,655,742 including unearned
revenue of $1,591,464 and a negative net worth of $875,852.

                                       10
<PAGE>

      Our bank balances as at June 30, 2005 was AU$388,400 (US$295,961). We
forecast that we will be able to generate sufficient funds from our business in
order to fund its operations in the ordinary course during the next 12 months.
As set out previously, we are considering further expansion of our business
offshore. If we expand our business in this manner we may need to raise
additional debt or equity funding in order to undertake any such expansion.
However, there can be no assurance that we can or will obtain sufficient funds
from operations or from additional financings on terms acceptable to us. If we
are unable to obtain sufficient additional financing, we may not be able to
expand our operations as proposed or we could be required to reduce spending and
operations.

Accounting Treatment of the Acquisition Transaction.

      The Share Exchange with AMI Australia has been accounted for as a reverse
acquisition with the Company being the surviving company. Pursuant to the
Exchange Agreement, the Shareholders will exercise control over the Company. The
Share Exchange has been deemed to be a capital transaction where we are treated
as a non-business entity. Therefore, the accounting for the business combination
is identical to that resulting from a reverse merger, except no goodwill or
other intangible assets will be recorded. For accounting purposes, AMI Australia
will be treated as the accounting acquirer and, accordingly, will be presented
as the continuing entity.

Result of Operations:
---------------------
<TABLE>
<CAPTION>
                                             June 30, 2005     June 30, 2004            Increase/(decrease)

<S>                                             <C>             <C>                                <C>
                         TOTAL REVENUES         $15,560,078     $13,425,587                        16%

                       COST OF REVENUES         (4,443,899)     (5,300,794)                      (16%)

                           GROSS PROFIT          11,116,179       8,124,793                        37%


                   SELLING, GENERAL AND
                ADMINISTRATIVE EXPENSES
                      Employee benefits           (993,673)       (545,875)                        82%
                           Depreciation            (96,029)        (97,584)                       (2%)
                            Advertising         (4,317,646)     (3,637,664)                        19%
                       Consultancy Fees           (489,590)       (420,288)                        16%
                          Contract Work           (199,626)       (138,929)                        44%
                                   Rent         (1,051,007)       (608,730)                        73%
                    Call Centre Charges           (432,057)       (435,807)                       (1%)
                         Legal expenses           (806,536)       (262,684)                       207%
               Market research expenses           (226,743)               -                       100%
               Research and development
                               expenses            (35,237)               -                       100%
                     Telephone expenses           (375,687)       (328,823)                        14%
                            Commissions           (238,454)       (173,743)                        37%
                     Traveling expenses           (121,854)       (161,666)                      (25%)
           Other expenses from ordinary
                             activities           (972,627)       (822,233)                        18%

             TOTAL SELLING, GENERAL AND
                ADMINISTRATIVE EXPENSES        (10,356,766)     (7,634,026)                        36%

               OTHER INCOME AND EXPENSE
                          Rental income              59,734          50,270                        19%
                          Bank interest               7,970          21,702                      (63%)
                  Other interest income               1,468               -                       100%
                          Sundry income               8,439               -                       100%
            Provision for doubtful debt
                           written back              15,116               -                       100%
                        Borrowing costs            (20,826)               -                       100%

         TOTAL OTHER INCOME AND EXPENSE              71,901          71,972

          NET INCOME (before income tax
                               expense)             831,314         562,739                        48%

                     INCOME TAX EXPENSE             204,727       (296,196)                     (169%)

                             NET INCOME           1,036,041         266,543                       289%

         NET INCOME ATTRIBUTABLE TO
         OUTSIDE EQUITY INTERESTS                  (36,886)              ~~                       100%

         NET INCOME ATTRIBUTABLE TO
         THE PARENT ENTITY                          999,155         266,543                       275%

         Net income per share, basic                  $0.04           $0.02

         Weighted average number of
         shares                                  25,034,014      25,000,000

</TABLE>

                                       11
<PAGE>

      Our overall performance at June 30, 2005 showed an increase in earnings
before income tax (EBIT) of 48% from US$562,739 to US$831,314. The reason for
this increase is explained below.

Revenue:

      Our gross revenue increased $2,134,491, or 16%, from the fiscal year ended
June 30, 2004 to the fiscal year ended June 30, 2005. This increase can be
attributable to two factors.

                                       12
<PAGE>

      The first is an increase in our revenue generated from the Premature
Ejaculation (PE) treatment segment of our business. The revenue in this segment
increased 121% in the fiscal year ended 2005. Starting in the second quarter of
the fiscal year we commenced marketing campaigns to specifically target this
market. Previously our marketing efforts had been combined with our Erectile
Dysfunction (ED) treatment segment. At June 30, 2005 the PE segment of our
business had increased from 17% of overall revenue to 38%.

      Our revenue generated from the ED segment of our business has remained
consistent with 2004.

      The second is an increase in revenue generated by our majority owned
subsidiary, Whygo Video Conferencing Pty., Ltd. (Whygo), of approximately
$740,000 over the prior year. This increase is attributable to expansion of
video conferencing room rental services.

Cost of Revenues

      The cost of revenues decreased from 2004 to 2005 by $856,895, or 16%.

      During 2005 we experienced a decrease in the cost of wages as a component
of our cost of revenues of $580,340, or 14% over the previous year. We were able
to reduce these costs because of reduction in the number, and increase in
productivity of, our medical personnel and also restructure in sales-consultants
wages.

      In addition we were also able to reduce our medication costs by $306,674,
or 43% over the fiscal year ended June 2004. The reduction in medication costs
was attributable to less reliance on costly chemicals and increases in usage of
cost effective and more efficient treatment options.

Gross Profit

      Our gross profit for the year ended June 2005 increased $2,991,386, or 37%
over the year ended June 2005. We were able to accomplish this by an increase in
our overall revenues of 16% and a decrease in our cost of revenues of 16%, as
described above.

Total selling, general and administrative expenses:

      Our total expenses have increased by $2,722,740, or 36% in 2005 from the
total expense level in fiscal 2004. The following have contributed to the
increases:

      Employee benefits:

      Due to the growth in our business we have had to employ additional staff.
Concurrently with this we made a decision to eliminate a majority of our
contract labor and hire full time staff. Due to these items our employee benefit
costs ratably increased. Our costs in this area increased by $447,798 or 82%
over 2004.

      Advertising expense:

      We have increased our expenditure on advertising by $679,982, or 19%, as
we were exploring different media groups to identify the suitable media group
for each particular market. Similarly, additional marketing costs were invested
to promote the PE segment of our business (as discussed above).

                                       13
<PAGE>

      Rent:

      Towards the end of FY 2004, our executive office was moved from its
previous location to the current location. The new executive office is larger
and the move has increased our rental expenses. This change was necessary as a
result of expansion of our business operations and focus. Whygo Video
Conferencing has also contributed to increase, because as part of its service,
Whygo hires conferencing room from other channeling partners, where it does not
own conferencing rooms. Our rent increased by $442,277, or 73% over the fiscal
year ended June 2004.

      Legal expense:

      Our legal expenses have increased $543,852 or 207%, over FY 2004. There
are several reasons for these changes.

      We have been involved in several litigation matters. One of those matters
has settled and the hearing of a second matter has completed with a judgment
expected shortly. While some further expense is expected in relation to the Mark
Ryan matter, we believe that the remaining matters are non-recurring.

      We incurred expenses in relation to the Share Exchange and are continuing
to incur expenses in connection with our ongoing corporate governance and
compliance issues. This expenditure is anticipated to continue, though at a
reduced level.

      We have incurred expenses in connection with the expansion and development
of our majority owned subsidiary, IMT. We believe that this expense will
continue.

Risks Factors Related to Our Business.

In addition to the other information in this annual report, the following
factors should be considered carefully in evaluating the Company's business and
prospects. THE FOLLOWING MATTERS, AMONG OTHERS, MAY HAVE A MATERIAL ADVERSE
EFFECT ON THE BUSINESS, FINANCIAL CONDITION, LIQUIDITY, RESULTS OF OPERATIONS OR
PROSPECTS, FINANCIAL OR OTHERWISE, OF THE COMPANY. REFERENCE TO THIS CAUTIONARY
STATEMENT IN THE CONTEXT OF A FORWARD-LOOKING STATEMENT OR STATEMENTS SHALL BE
DEEMED TO BE A STATEMENT THAT ANY ONE OR MORE OF THE FOLLOWING FACTORS MAY CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN SUCH FORWARD-LOOKING STATEMENT
OR STATEMENTS. We are subject to, among others, the following risks:

RISKS ASSOCIATED WITH OUR BUSINESS.

Our business may result in adverse effects from competition in the market for
the treatment of sexual dysfunction.

      The business is operating in a competitive market in the sexual
dysfunction segment and our competitors have significantly greater resources.
There has also been significant innovation in this market segment in recent
years resulting, for example, with the introduction of Cialis and Levitra as
alternative treatment options. It is likely that new competitors will emerge in
the short to medium term which may have an adverse impact on our business.

                                       14
<PAGE>

An inability to respond quickly and effectively to new trends would adversely
impact our competitive position.

      Our failure to maintain the level of our technological capabilities or to
respond effectively to technological changes could adversely affect our ability
to retain existing business and secure new business. We will need to constantly
seek out new products and develop new solutions to maintain in our portfolio. If
we are unable to keep current with new trends, our competitors' technologies or
products may render us noncompetitive and our products obsolete.

Increases in staffing costs could adversely affect our business.

      Our business is labor intensive and we are highly dependent on the
provision of services by highly qualified personnel. These resources are scarce
and we may be subject to competition for these services resulting in increased
expenses for the business. These expenses constitute a significant component of
our overall cost of doing business and increases in these costs may adversely
impact the our business.

Increases in advertising expenses and effectiveness of our advertising.

      Our current business model is reliant upon advertising and changes to the
costs associated with that advertising or a decrease in the effectiveness of
that advertising could have a significant impact on the revenue and/or
profitability of our business.

Increases in prices of pharmaceutical compounds and other materials could
adversely affect our business.

      We arrange for patients to be provided with medications. Significant
increases in the price of medications or other materials could increase the
overall expense of the Company doing business and reduce its profitability.

We may be subject to product liability claims and product recalls, which could
negatively impact our profitability.

      We treat our patients with pharmaceutical products, which involves risks
such as product contamination or spoilage, product tampering and other
adulteration of pharmaceutical products. We may be subject to liability if the
consumption of any of our products causes injury, illness or death. In addition,
we will voluntarily recall products in the event of contamination or damage. A
significant product liability judgment or a widespread product recall may
negatively impact our profitability for a period of time depending on product
availability, competitive reaction and consumer attitudes. Even if a product
liability claim is unsuccessful or is not fully pursued, the negative publicity
surrounding any assertion that company products caused illness or injury could
adversely affect our reputation with existing and potential customers and our
corporate and brand image.

We have limited business insurance coverage.

      We have limited business liability insurance coverage for our operations.
Moreover, while business disruption insurance is available, we have determined
that the risks of disruption and cost of the insurance are such that we do not
require it at this time. Any business disruption, litigation or natural disaster
might result in substantial costs and diversion of resources.

We have a limited concentration of credit risk.

                                       15
<PAGE>

      Concentration of credit risk with respect to customer receivables are
limited due to the large number of customers comprising our customer base, and
their dispersion across Australia. In addition, we maintain reserves for
potential credit losses. Such losses in the aggregate have not exceeded
management's expectations.

We may experience risks resulting from our plans for expansion.

      We may acquire new Australian clinic facilities in the future and/or
expand internationally. Entering into any transaction entails many risks, any of
which could harm our business, including: (a) diversion of management's
attention from other business concerns; (b) failure to integrate the acquired
company with our existing business; (c) additional operating expenses not offset
by additional revenue; and (d) dilution of our stock as a result of issuing
equity securities.

      If we are unable to implement our acquisition strategy, we may be less
successful in the future. We may not be able to identify and acquire companies
meeting our acquisition criteria on terms acceptable to us. Additionally,
financing to complete significant acquisitions may not always be available on
satisfactory terms. Further, our acquisition strategy presents a number of
special risks to us that it would not otherwise contend with absent such
strategy, including possible adverse effects on our earnings after each
acquisition, diversion of management's attention from our core business due to
the special attention that a particular acquisition may require, failure to
retain key acquired personnel and risks associated with unanticipated events or
liabilities arising after each acquisition, some or all of which could have a
material adverse effect on our business, financial condition and results of
operations.

We may be adversely affected should certain patents expire and the products
become widely available.

      We are exploiting or planning to exploit patented technology in relation
to its existing or proposed businesses. Our businesses may be adversely affected
by the expiration of those patents if our competitors utilize that technology
from expiration of those patents to compete with our businesses.

The inability to obtain patent and copyright protection for our technology or
misappropriation of our intellectual property could adversely affect our
competitive position.

      Our success depends on our medication formulations and internally
developed know-how, and related intellectual properties. Management regards this
intellectual property as proprietary and has and will continue to attempt to
protect it by seeking patents, copyrights or trademarks (as appropriate), and by
invoking trade secret laws and confidentiality and nondisclosure agreements.
Despite these precautions, it may be possible for a third party to obtain and
use our services or intellectual property without authorization.

      We may need to resort to litigation in the future to enforce or to protect
our intellectual property rights. In addition, our intellectual property and
patents may be claimed to conflict with or infringe upon the patent, trademark
or other proprietary rights of third parties. If this occurred, we would have to
defend ourselves against such challenges, which could result in substantial
costs and the diversion of resources. Any of these events could materially harm
our business.

Our products may infringe on the intellectual property rights of others, which
could increase our costs and negatively affect our profitability.

      Third parties may in the future assert against us infringement claims or
claims that we have infringed a patent, copyright, trademark or other
proprietary right belonging to them. Any infringement claim, even if not
meritorious, could result in the expenditure of significant financial and
managerial resources and could negatively affect our profitability.

                                       16
<PAGE>

      Our ongoing research and development activities are, and the production
and marketing of our pharmaceutical product candidates and medical devices
derived there from will be subject to regulation by numerous governmental
authorities in Australia, principally the Therapeutics Goods Administration, or
TGA, and the Food and Drug Administration, or FDA, in the United States, the
Medicines Control Agency in the United Kingdom and the European Medicines
Evaluation Authority. We may be subject to other governmental authorities as
expand our business to countries other than Australia, the United States and
Europe.

      Prior to marketing, any therapeutic product developed must undergo
rigorous pre-clinical testing and clinical trials, as well as an extensive
regulatory approval process mandated by the TGA and, to the extent that any of
our pharmaceutical products under development are marketed abroad, by foreign
regulatory agencies, including the FDA in the United States and the Medicines
Control Agency in the United Kingdom. These processes can take many years and
require the expenditure of substantial resources. Delays in obtaining regulatory
approvals would adversely affect the development and commercialization of our
pharmaceutical product candidates. We cannot be certain that we will be able to
obtain the clearances and approvals necessary for clinical testing or for
manufacturing and marketing our pharmaceutical products candidates.

We may have future capital needs for which we will need to access additional
financing.

      We currently anticipate that our available funds and resources, including
sales, will be sufficient to meet our needs for working capital and capital
expenditures for the next twelve months. We will need to raise additional funds
in the future in order to fund more research and development and more rapid
expansion and to develop new or enhanced products. If additional funds are
raised through the issuance of equity or convertible debt securities, our
current stockholders may experience dilution and any such securities may have
rights, preferences or privileges senior to those of the rights of our common
stock. There can be no assurance that additional financing will be available on
terms favorable to us, or at all. If adequate funds are not available or not
available on acceptable terms, we may not be able to fund our expansion, promote
our brand name as we desire, take advantage of unanticipated acquisition
opportunities, develop or enhance products or respond to competitive pressures.
Any such inability could have a material adverse effect on our business, results
of operations and financial condition.

We may not be able to retain our key management.

      As a small company with a limited number of personnel, we are highly
dependent on the services of Dr. Jacov (Jack) Vaisman, Mr. Dilip Shrestha and
Mr. Forhad (Tony) Khan, as well as the other principal members of our management
and scientific staff. The loss of one or more of such individuals could
substantially impair ongoing research and development programs. Our success
depends in large part upon our ability to attract and retain highly qualified
personnel. We compete in our hiring efforts with other pharmaceutical and
medical treatment companies and we may have to pay higher salaries to attract
and retain personnel.

We may not be able to exploit the patent licenses held by Dr. Jacov (Jack)
Vaisman.

      We exploit the patent held by Dr. Vaisman as part of our technology and
treatment processes. Even though AMI Australia and Dr. Vaisman have entered into
an agreement regarding our exploitation of this patent, if this agreement
expires and we are unable to renew it, or if Dr. Vaisman restricts or otherwise
prohibits the use of the patent held by him, our business could be materially
adversely affected.

Our stock price is highly volatile.

                                       17
<PAGE>

      Our stock price has fluctuated dramatically. There is a significant risk
that the market price of our common stock will decrease in the future in
response to any of the following factors, some of which are beyond our control:

      o     variations in our quarterly operating results;
      o     general economic slowdowns;
      o     changes in market valuations of similar companies;
      o     sales of large blocks of our common stock;
      o     announcements by us or our competitors of significant contracts,
            acquisitions, strategic partnerships, joint ventures or capital
            commitments; and
      o     fluctuations in stock market prices and volumes, which are
            particularly common among highly volatile securities of
            internationally-based companies.

We may be adversely affected as a result of current matters in litigation.

      We may be subject to adverse publicity, costs orders and damages and if we
lose the current litigation we are involved in we may be subject to costs orders
and may have a limited damages exposure if there is a decision adverse to our
interest as a result of current litigation matters.

If our common stock becomes subject to the SEC's penny stock rules,
broker-dealers may experience difficulty in completing customer transactions and
trading activity in our securities may be adversely affected.

      If at any time we have net tangible assets of $5,000,000 or less and our
common stock has a market price per share of less than $5.00, transactions in
our common stock may be subject to the "penny stock" rules promulgated under the
Securities Exchange Act of 1934. Under these rules, broker-dealers who recommend
such securities to persons other than institutional accredited investors:

      1.    must make a special written suitability determination for the
            purchaser;

      2.    receive the purchaser's written agreement to a transaction prior to
            sale;

      3.    provide the purchaser with risk disclosure documents which identify
            certain risks associated with investing in "penny stocks" and which
            describe the market for these "penny stocks" as well as a
            purchaser's legal remedies; and

      4.    obtain a signed and dated acknowledgment from the purchaser
            demonstrating that the purchaser has actually received the required
            risk disclosure document before a transaction in a "penny stock" can
            be completed.

      If our common stock becomes subject to these rules, broker-dealers may
find it difficult to effectuate customer transactions and trading activity in
our securities may be adversely affected. As a result, the market price of our
securities may be depressed, and you may find it more difficult to sell our
securities.

                                       18
<PAGE>

Efforts to comply with recently enacted changes in securities laws and
regulations have required substantial financial and personnel resources and we
still may fail to comply.

      As directed by Section 404 of the Sarbanes-Oxley Act of 2002, the SEC
adopted rules requiring public companies to include a report of management on
the company's internal controls over financial reporting in their annual reports
on Form 10-KSB. In addition, the public accounting firm auditing the company's
financial statements must attest to and report on management's assessment of the
effectiveness of the company's internal controls over financial reporting. This
requirement will first apply to our annual report on Form 10-KSB for our fiscal
year ending June 30, 2006. If we are unable to conclude that we have effective
internal controls over financial reporting or, if our independent auditors are
unable to provide us with an unqualified report as to the effectiveness of our
internal controls over financial reporting as of June 30, 2006 and future year
ends as required by Section 404 of the Sarbanes-Oxley Act of 2002, investors
could lose confidence in the reliability of our financial statements, which
could result in a decrease in the value of our securities. The formal process of
evaluating our internal controls over financial reporting, which has required
the devotion of substantial financial and personnel resources, is not complete.
Given the status of our efforts, coupled with the fact that guidance from
regulatory authorities in the area of internal controls continues to evolve,
uncertainty exists regarding our ability to comply by applicable deadlines.

RISKS ASSOCIATED WITH DOING BUSINESS IN AUSTRALIA.

We are subject to the risks associated with doing business in Australia.

      As most of our operations are conducted in Australia, the Company is
subject to special considerations and significant risks not typically associated
with companies operating in North America and Western Europe. These include
risks associated with, among others, the political, economic and legal
environments and foreign currency exchange. Our results may be adversely
affected by changes in the political and social conditions in Australia, and by
changes in governmental policies with respect to laws and regulations,
anti-inflationary measures, currency conversion and remittance abroad, and rates
and methods of taxation, among other things.

      AMI Australia is incorporated in Australia. All of our executive officers
and directors are non-residents of the United States. Therefore, it may be
difficult for an investor, or any other person or entity, to enforce a U.S.
court judgment based upon the civil liability provisions of the U.S. federal
securities laws in an Australian court against us or any of those persons or to
effect service of process upon these persons in the United States. Additionally,
it may be difficult for an investor, or any other person or entity, to enforce
civil liabilities under U.S. federal securities laws in original actions
instituted in Australia. It may be difficult to enforce a judgment in the United
States against us and most of our officers and directors or to assert U.S.
securities laws claims in Australia or serve process on most of our officers and
directors.

We may experience an impact of the United States Foreign Corrupt Practices Act
on our business.

      Compliance with the Foreign Corrupt Practices Act could adversely impact
our competitive position; failure to comply could subject us to penalties and
other adverse consequences. We are subject to the United States Foreign Corrupt
Practices Act, which generally prohibits United States companies from engaging
in bribery or other prohibited payments to foreign officials for the purpose of
obtaining or retaining business. Foreign companies, including some that may
compete with us, are not subject to these prohibitions. We have attempted to
implement safeguards to prevent and discourage such practices by our employees
and agents. We can make no assurance, however, that our employees or other
agents will not engage in such conduct for which we might be held responsible.
If our employees or other agents are found to have engaged in such practices, we
could suffer severe penalties and other consequences that may have a material
adverse effect on our business, financial condition and results of operations.

                                       19
<PAGE>

We may experience an impact due to Australian or New Zealand Regulation of the
pharmaceutical and/or medical services industry.

      We may suffer an adverse impact to our business if the manner in which our
services are provided is required to change due to changes in the relevant
regulatory regimes applicable to those services. This could render our current
business model unlawful or render it uneconomic, adversely impacting our
profitability and prospects.

We may experience a risk of revenue reduction due to a saturation of the
Australian Market.

      Australia is a country with a population of approximately 20 million
people. There are a limited number of people who are candidates for our
treatments. We are subject to increased risks or over saturation of market share
as we continue to treat more patients in the Australian market.

Effects of International Sales.

      We intend to market the our current and future services in most major
world markets. A number of risks are inherent in international transactions. In
order for us to market our services in the U.S., Europe, Australia, Canada, Asia
and certain other foreign jurisdictions, we may have to obtain required
regulatory approvals or clearances and otherwise comply with extensive
regulations regarding safety, manufacturing processes and quality. There can be
no assurance that we will be able to obtain or maintain regulatory approvals or
clearances in such countries or that we will not be required to incur
significant costs in obtaining or maintaining our foreign regulatory approvals
or clearances.

      Fluctuations in currency exchange rates may adversely affect the demand
for our services by increasing the price of our services in the currency of the
countries in which the services are marketed.

      Our consolidated financial statements are presented in Australian and U.S.
dollars. Fluctuations in the rates of exchange between U.S. dollar and other
foreign currencies may negatively impact our financial condition and results of
operations. As we expands our presence into the U.S. and other international
markets, we expect the percentage of both our revenues and expenditures
denominated in non-Australian dollars to increase, with particular emphasis on
U.S. dollars. For the foreseeable future, we expect our expenditures to be
predominantly denominated in Australian dollars, resulting primarily from our
activities in Australia, and expect our capital expenditures to be denominated
in Australian dollars.

We may experience a risk of revenue reduction due to currency conversions.

      At this time all of our revenue, expenses and capital purchasing
activities are transacted in Australian Dollars. Capital transactions will
always be reported based on the current exchange rates, resulting gains and
losses from historical rates are charged or credited directly to Stockholders'
Equity section. Revenues and expenses will be converted using the
weighted-average exchange rates for the periods being reported. Any major
fluctuation in the average exchange rate between the Australian Dollar and the
U.S. Dollar during a period will effect our results of operations reported as
reported in U.S. Dollars.

      To the extent future revenue is denominated in foreign currencies, we
would be subject to increased risks relating to foreign currency exchange rate
fluctuations that could have a material adverse affect on our financial
condition and operating results. To date, we have not engaged in any hedging
transactions in connection with our operations.

                                       20
<PAGE>

Item  7. Financial Statements.

      Our consolidated financial statements and the notes thereto begin on page
F-1 of this Annual Report on Form 10-KSB.

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

            None.

Item 8A. Controls and Procedures.

Evaluation of Disclosure on Controls and Procedures.

      We carried out an evaluation as of June 30, 2005, under the supervision
and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based upon and as of the
date of that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting.

      There were no changes in our internal controls or in other factors that
could have significantly affected those controls subsequent to the date of our
most recent evaluation.

Item  8B. Other Information.

            None.

                                    PART III

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

      Since June 30, 2005, and as of the date hereof our directors and executive
officers are as follows:
<TABLE>
<CAPTION>

 Name                       Age                     Position
 ----                       ---                     --------

<S>                         <C>       <C>
Jacov (Jack) Vaisman        59        Chief Executive Officer, President and Director

Dilip Shrestha              28        Chief Financial Officer

Forhad (Tony) Khan          43        Executive Vice President, Secretary and Director

Anatoly Fanshil             54        Director

Mark Shabshay               56        Director

Spiro Baramilis             47        Director
</TABLE>

                                       21
<PAGE>

      DR. JACOV (JACK) VAISMAN, CHIEF EXECUTIVE OFFICER, PRESIDENT AND DIRECTOR
- Dr Vaisman is a pioneer in the sexual dysfunction business in Australia. Since
2001, he has served as the managing director and chief executive officer of AMI
Australia. He is also the current chief executive officer, president and
director of the Company. He is responsible for the overall management and
strategic direction of AMI Australia's impotency operations with the support of
AMI Australia's chief operations officer, Tony Khan, and AMI's chief financial
officer, Dilip Shrestha.

      Dr. Vaisman is also currently a consultant to and shareholder in Yayasan
On Clinic, which operates a similar business in Indonesia.

      From 1993 through 2001, Dr Vaisman was the founder and director of On
Clinic International in Australia, a predecessor of AMI Australia. The holder of
a Bachelor of Medicine, a Master of Gynecology and a PhD in Medical Science, Dr
Vaisman has more than 35 years of experience and expertise in the field of
sexual health care provision and was recently granted an innovation patent in
the field of premature ejaculation treatment by the Australian patent office.

      DILIP SHRESTHA, CHIEF FINANCIAL OFFICER - Mr. Shrestha also serves as the
chief financial officer of AMI Australia. From 2001 to July 1, 2005, Mr.
Shrestha was the Financial Controller of AMI Australia. Prior to that he was an
Assistant Accountant with Australian Momentum Health Pty Ltd, a position he held
from 1999. Mr. Shrestha holds a Bachelor of Business Accounting, Master of
E-Commerce and a Graduate Diploma of Information Services and E-Commerce, all
from Central Queensland University Sydney & Rockhampton Campus in Australia.

      FORHAD (TONY) KHAN, EXECUTIVE VICE PRESIDENT, SECRETARY AND DIRECTOR- -
Mr. Khan also serves as chief operating officer of AMI Australia. From 2001 to
July 1, 2005, Mr. Khan was the General Manager of AMI Australia. Prior to
joining AMI Australia, Mr. Khan was the Director and sole operator of Australian
Momentum Health ("AMH"), one of two medical establishments leading in providing
impotency treatment in Australia. Mr. Khan was Sales Manager and then Operations
Manager for On Clinic International prior to establishing AMH. Mr. Khan holds a
Masters degree in Commerce and Accounting and has been involved in the industry
for over 10 years.

      ANATOLY FANSHIL, DIRECTOR - From 1994 through the present, Mr. Fanshil has
held the position of director of Australian Overseas Shipping Services Pty
Limited. From 1991 to 1994, Mr. Fanshil was an engineering service manager for
Australian Ocean Lines. From 1972 through 1991, Mr. Fanshil was employed by the
Black Sea Shipping Company as an electrical engineer and also had oversight over
the entire company for the repairs of various ships anchored in the seaports of
Finland, Greece, Italy and Germany. Mr. Fanshil holds a degree in electrical
engineering.

      MARK SHABSHAY, DIRECTOR - From 2000 through the present, Mr. Shabshay was
the owner of a taxi business. From 1990 to 2000, Mr. Shabshay was the owner and
director of a meat processing factory. Prior to 1999 Mr. Shabshay also owned and
operated a retail store and taxi business. Mr. Shabshay has been the founder,
owner and director of several closely held companies in Australia during the
past 28 years.

                                       22
<PAGE>

      SPIRO BARAMILIS, DIRECTOR - From 1992 through the present, Mr. Baramilis
has been the owner and Managing Director of Australian International Marine
Services Pty Limited, a company which provides supplies to marine vessels. From
1981 through 1992, Mr. Baramilis was employed by Nautilus Trading PTY LTD (and
its predecessor company, Baramilis Marine PTY LTD), a company that supplies
vessels with provisions and technical supplies. Mr. Baramilis attended Sydney
Technical College and was educated in the field of mechanical engineering.

      All directors hold office until the next annual stockholders' meeting or
until their death, resignation, retirement, removal, disqualification, or until
their successors have been elected and are qualified. Our officers serve at the
will of the Board of Directors.

      There are no agreements or understandings for any officer or director of
the Company to resign at the request of another person and none of the officers
or directors is acting on behalf of or will act at the direction of any other
person.

Compliance With Section 16(a) of Exchange Act

      Based on our review of copies of Forms 3, 4 and 5 filed with the SEC or
written representations from certain reporting persons, we believe that during
fiscal year 2004, all officers, directors, and greater than ten-percent
beneficial owners timely complied with the applicable filing requirements of
Section 16(a) of the Securities Exchange Act of 1934.

Code of Ethics

            On April 30, 2005, we adopted a code of ethics that applies to our
officers, employees and directors, including our Chief Executive Officer
(principal executive officer) and Chief Financial Officer (principal financial
and accounting officer), and other persons who perform similar functions. A copy
of our Code of Ethics is filed as an exhibit to our Annual Report for the fiscal
year ended December 31, 2004 on Form 10-KSB. Our Code of Ethics is intended to
be a codification of the business and ethical principles which guide us, and to
deter wrongdoing, to promote honest and ethical conduct, to avoid conflicts of
interest, and to foster full, fair, accurate, timely and understandable
disclosures, compliance with applicable governmental laws, rules and
regulations, the prompt internal reporting of violations and accountability for
adherence to this Code.

Audit Committee

            The Board of Directors has adopted an Audit Committee Charter. The
Board of Directors had appointed each of Anatoly Fanshil, Mark Shabshay and
Spiro Baramilis to the Audit Committee. Each of Mark Shabshay and Spiro
Baramilis meets the independence requirements and standards currently
established by the SEC. An internal review by the Board of Directors has
determined that Anatoly Fanshil does not meet the independence requirements
established by the SEC. In addition, the Board of Directors has not yet
designated a member to serve on the Audit Committee member as an "audit
committee financial expert" within the meaning of the rules and regulations of
the SEC because they have not found a qualified independent individual who meets
the requirements for the position. The Company is currently in the process of
meeting with independent persons who have the qualifications to serve as a
director and on the Audit Committee as the "audit committee financial expert"
for the Audit Committee.

      The Audit Committee assists the Board by overseeing the performance of the
independent auditors and the quality and integrity of our internal accounting,
auditing and financial reporting practices. The Audit Committee is responsible
for retaining (subject to stockholder ratification) and, as necessary,
terminating, the independent auditors, annually reviews the qualifications,
performance and independence of the independent auditors and the audit plan,
fees and audit results, and pre-approves audit and non-audit services to be
performed by the auditors and related fees.

                                       23
<PAGE>

Item  10. Executive Compensation.

      As at June 30, 2005, none of our officers and/or directors received any
compensation for their respective services rendered to the Company, nor have
they received such compensation in the past.

      We have not adopted any retirement, pension, profit sharing, stock option
or insurance programs or other similar programs for the benefit of our
directors, officers and/or employees.

      None of our executive officers or directors owned any securities
exercisable for or convertible into our Common Stock as of June 30, 2005.

      On June 21, 2005, AMI Australia executed employment agreements with Forhad
(Tony) Khan, the Company's Executive Vice President and Secretary and AMI
Australia's Chief Operating Officer, and Dilip Shrestha, the Company's and AMI
Australia's Chief Financial Officer. Each of these employment agreements is
effective as of July 1, 2005 and continues in perpetuity unless earlier
terminated in accordance with the terms of the respective employment agreements.
The Board of Directors of the Company approved the employment agreements by
unanimous written consent on July 30, 2005.

      Pursuant to his employment agreement, Mr. Khan is entitled to receive an
annual base salary of AU$180,000, subject to increases as shall be determined by
the Company's board of directors and management of AMI Australia. In addition,
the annual salary of Mr. Khan shall be supplemented by a bonus based on the
Company achieving certain profit targets during prescribed periods. In addition
to these base and bonus salary components, AMI Australia will also contribute
retirement benefits (superannuation) for Mr. Khan in accordance with Australian
legal requirements.

      Pursuant to his employment agreement, Mr. Shrestha is entitled to receive
an annual base salary of AU$110,000, subject to increases as shall be determined
by the Company's board of directors and management of AMI Australia. In
addition, the annual salary of Mr. Shrestha shall be supplemented by a bonus
based on the Company achieving certain profit targets during prescribed periods.
In addition to these base and bonus salary components, AMI Australia will also
contribute retirement benefits (superannuation) for Mr. Shrestha in accordance
with Australian legal requirements.

      On August 29, 2005, AMI Australia executed an employment agreement with
Dr. Jacov (Jack) Vaisman, the Company's Chief Executive Officer and President
and AMI Australia's Chief Executive Officer. The employment agreement is
effective as of July 1, 2005 and continues in perpetuity unless earlier
terminated in accordance with the terms of the employment agreement. The Board
of Directors of the Company approved the employment agreement by unanimous
written consent on August 29, 2005. Pursuant to his employment agreement, Dr.
Vaisman is entitled to receive an annual base salary of AU$350,000, subject to
increases as shall be determined by the Company's board of directors and
management of AMI Australia. In addition, the annual salary of Dr. Vaisman shall
be supplemented by a bonus based on the Company achieving certain profit targets
during prescribed periods. In addition to these base and bonus salary
components, AMI Australia will also contribute retirement benefits
(superannuation) for Dr. Vaisman in accordance with Australian legal
requirements.

                                       24
<PAGE>

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

      The following table sets forth, as of June 30, 2005, certain information
concerning the beneficial ownership of our Common Stock by (i) each stockholder
known by us to own beneficially five percent or more of our outstanding common
stock; (ii) each director; (iii) each executive officer; and (iv) all of our
executive officers and directors as a group, and their percentage ownership and
voting power.
<TABLE>
<CAPTION>
                                                   Shares
                                                Beneficially
  Name and Address of Beneficial Owner             Owned (1)       Percent of Class
  ------------------------------------           ---------         ----------------

<S>                                              <C>                   <C>
Jacov (Jack) Vaisman                             10,250,000            32.93%
Unit 131
18-34 Waverley Street
Bondi Junction NSW 2022 Australia

Huntleigh Investment Fund Limited                 1,932,500              6.2%
49 Micoud Street
Castries, St. Lucia

Forhad (Tony) Khan                                  250,000                 *
Suite 4, Level 1
26/3 Wolesly Grove
Zetland NSW 2017 Australia

Dilip Shrestha                                            0                 *
18/30 Mary Street
Lidcambe NSW 2141 Australia

Anatoly Fanshil                                           0                 *
22/2 Ocean Street
Bondi Junction NSW 2026 Australia

Mark Shabshay                                             0                 *
137 Oberon Street
Coogee NSW 2015 Australia

Spiro Baramilis                                           0                 *
12 Merton Street
Kogarah Bay NSW 2217 Australia

All Directors and Officers (5 people)            10,500,000            33.73%
</TABLE>

------------------------
* Less than one percent.

                                       25
<PAGE>

      (1)   Except as indicated in the footnotes to this table and pursuant to
            applicable community property laws, the persons named in the table
            have sole voting and investment power with respect to all shares of
            common stock.

Equity Compensation Plan Information

            We do not have any equity compensation plans.

Item  12. Certain Relationships and Related Transactions.

      Throughout our history, certain members of the Board of Directors,
shareholders and general management have made loans to AMI Australia to cover
certain ordinary business expenses.

      IMT receives financial support from AMI Australia in the form of
non-interest bearing loans (AU$379,000 during FY05 being approximately
US$284,250). IMT spends the proceeds of the loans on research and development.
IMT has compiled a team of experts to assist it with these research and
development activities.

Item 13. Exhibits.

Exhibit
Number       Description
------       -----------

2.1         Share Exchange Agreement, dated January 28, 2005 (incorporated
            herewith by reference to Exhibit 2.1 to Advanced Medical Institute
            Inc.'s Current Report on Form 8-K dated March 21, 2005 and filed
            with the Securities and Exchange Commission on March 28, 2005).

3.1         Certificate of Incorporation of Advanced Medical Institute Inc.
            (incorporated herewith by reference to Exhibit 3.1 to Advanced
            Medical Institute Inc.'s Registration Statement on Form 10-SB filed
            with the Securities and Exchange Commission on February 16, 2000).

3.2         By-laws of Advanced Medical Institute Inc. (incorporated herewith by
            reference to Exhibit 3.2 to Advanced Medical Institute Inc.'s
            Registration Statement on Form 10-SB filed with the Securities and
            Exchange Commission on February 16, 2000).

10.1        Subscription Agreement, dated June 29, 2005 (incorporated herewith
            by reference to Exhibit 10.1 to Advanced Medical Institute Inc.'s
            Current Report on Form 8-K dated June 29, 2005 and filed with the
            Securities and Exchange Commission on June 30, 2005).

10.2        Employment Agreement between AMI Australia and Forhad (Tony) Khan
            (incorporated herewith by reference to Exhibit 10.2 to Advanced
            Medical Institute Inc.'s Current Report on Form 8-K dated July 30,
            2005 and filed with the Securities and Exchange Commission on August
            1, 2005).

10.3        Employment Agreement between AMI Australia and Dilip Shrestha
            (incorporated herewith by reference to Exhibit 10.3 to Advanced
            Medical Institute Inc.'s Current Report on Form 8-K dated July 30,
            2005 and filed with the Securities and Exchange Commission on August
            1, 2005).

10.4        Employment Agreement between AMI Australia and Jacov (Jack) Vaisman
            (incorporated herewith by reference to Exhibit 10.4 to Advanced
            Medical Institute Inc.'s Current Report on Form 8-K dated August 29,
            2005 and filed with the Securities and Exchange Commission on August
            30, 2005).

14.1        Code of Ethics (incorporated herewith by reference to Exhibit 14.1
            to Advanced Medical Institute Inc.'s Annual Report on Form 10-KSB
            for the period ended December 31, 2004 filed with the Securities and
            Exchange Commission on May 31, 2005).

23.1        Consent of Lichter, Yu & Associates LLP, Independent Registered
            Public Accounting Firm, filed herewith.

31.1        Certification of Chief Executive Officer pursuant to Rule
            13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as
            adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2        Certification of the Principal Financial Officer pursuant to Rule
            13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as
            adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1        Certification of Chief Executive Officer and the Principal Financial
            Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the
            Sarbanes-Oxley Act of 2002).

                                       26
<PAGE>

Item  14. Principal Accountant Fees and Services.

Audit Fees.

      The fiscal year of the Company was changed from December 31 to June 30 on
June 21, 2005. All Audit fees for the period through the fiscal year ended
December 31, 2004 are reflected in the Company's Form 10-KSB filed with the SEC
on May 31, 2005.

      Audit fees consist of fees billed for professional services rendered for
the audit of our financial statements and the review or audit of the interim
statements. The total fees billed for Lichter, Yu & Associates for the fiscal
year ended June 30, 2005 was $83,390 and applicable for the fiscal year ended
December 31, 2004 was $60,390.

Audit Related Fees.

      There were no audit related services and no fees billed for audit related
services for the fiscal year ended June 30, 2005.

Tax Fees.

      There were no tax fees billed for the fiscal year ended June 30, 2005.

All Other Fees.

      There were no other accounting fees billed for the fiscal year ended June
30, 2005.

                                       27
<PAGE>

Pre-Approval of Services.

      The Audit Committee pre-approves all services, including audit services,
provided by our independent accountants. For audit services, the independent
auditor provides the board with an engagement letter outlining the scope of the
audit services proposed to be performed during the year, which must be formally
accepted by the board before the audit commences. Until the Company finds an
independent director to serve as financial expert of the Audit Committee (as
described in Item 9 herein), the entire Board of Directors will perform the
duties of the Audit Committee.

                                       28
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Company has duly caused this Form 10-KSB to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                     ADVANCED MEDICAL INSTITUTE INC.

Date:  September 15, 2005           By:   /s/ Jacov (Jack) Vaisman
                                           ------------------------
                                          Jacov (Jack) Vaisman
                                          Chief Executive Officer and President

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

Date:  September 15, 2005           By:   /s/ Jacov (Jack) Vaisman
                                          ------------------------
                                          Jacov (Jack) Vaisman
                                          Chief Executive Officer and President

Date:  September 15, 2005           By:   /s/ Dilip Shrestha
                                          ------------------
                                          Dilip Shrestha
                                          Chief Financial Officer

Date:  September 15, 2005           By:   /s/ Forhad (Tony) Kahn
                                          ----------------------
                                          Forhad (Tony) Kahn
                                          Executive Vice President and Secretary

Date:  September 15, 2005           By:   /s/ Anatoly Fanshil
                                          -------------------
                                          Anatoly Fanshil
                                            Director

Date:  September 15, 2005           By:   /s/ Mark Shabshay
                                          -----------------
                                          Mark Shabshay
                                            Director

Date:  September 15, 2005           By:   /s/ Spiro Baramilis
                                          -------------------
                                          Spiro Baramilis
                                            Director

                                       29
<PAGE>

                                  Exhibit Index

Exhibit
 Number                                 Description
 ------                                 -----------

 2.1        Share Exchange Agreement, dated January 28, 2005 (incorporated
            herewith by reference to Exhibit 2.1 to Advanced Medical Institute
            Inc.'s Current Report on Form 8-K dated March 21, 2005 and filed
            with the Securities and Exchange Commission on March 28, 2005).

 3.1        Certificate of Incorporation of Advanced Medical Institute Inc.
            (incorporated herewith by reference to Exhibit 3.1 to Advanced
            Medical Institute Inc.'s Registration Statement on Form 10-SB filed
            with the Securities and Exchange Commission on February 16, 2000).

 3.2        By-laws of Advanced Medical Institute Inc. (incorporated herewith by
            reference to Exhibit 3.2 to Advanced Medical Institute Inc.'s
            Registration Statement on Form 10-SB filed with the Securities and
            Exchange Commission on February 16, 2000).

 10.1       Subscription Agreement, dated June 29, 2005 (incorporated herewith
            by reference to Exhibit 10.1 to Advanced Medical Institute Inc.'s
            Current Report on Form 8-K dated June 29, 2005 and filed with the
            Securities and Exchange Commission on June 30, 2005).

 10.2       Employment Agreement between AMI Australia and Forhad (Tony) Khan
            (incorporated herewith by reference to Exhibit 10.2 to Advanced
            Medical Institute Inc.'s Current Report on Form 8-K dated July 30,
            2005 and filed with the Securities and Exchange Commission on August
            1, 2005).

 10.3       Employment Agreement between AMI Australia and Dilip Shrestha
            (incorporated herewith by reference to Exhibit 10.3 to Advanced
            Medical Institute Inc.'s Current Report on Form 8-K dated July 30,
            2005 and filed with the Securities and Exchange Commission on August
            1, 2005).

 10.4       Employment Agreement between AMI Australia and Jacov (Jack) Vaisman
            (incorporated herewith by reference to Exhibit 10.4 to Advanced
            Medical Institute Inc.'s Current Report on Form 8-K dated August 29,
            2005 and filed with the Securities and Exchange Commission on August
            30, 2005).

 14.1       Code of Ethics (incorporated herewith by reference to Exhibit 14.1
            to Advanced Medical Institute Inc.'s Annual Report on Form 10-KSB
            for the period ended December 31, 2004 filed with the Securities and
            Exchange Commission on May 31, 2005).

 23.1       Consent of Lichter, Yu & Associates LLP, Independent Registered
            Public Accounting Firm, filed herewith.

 31.1       Certification of Chief Executive Officer pursuant to Rule
            13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as
            adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2       Certification of the Principal Financial Officer pursuant to Rule
            13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as
            adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1       Certification of Chief Executive Officer and the Principal Financial
            Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the
            Sarbanes-Oxley Act of 2002).

                                       30

<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES


                                FINANCIAL REPORT
                   FOR THE YEARS ENDED JUNE 30, 2005 AND 2004

<PAGE>


                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                              FINANCIAL STATEMENTS
                                TABLE OF CONTENTS


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------

FINANCIAL STATEMENTS

   Statements of Income                                                     F-1

   Statements of Financial Position                                         F-2

   Statements of Changes in Stockholders' Equity                            F-3

   Statements of Cash Flows                                                F4-F5

   Notes to Financial Statements                                          F6-F14
--------------------------------------------------------------------------------
<PAGE>

                            Lichter, Yu & Associates
                          Certified Public Accountants

                       9191 Towne Centre Drive, Suite 406
                           San Diego, California 92122
                                 (858) 320-2808

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Advanced Medical Institute, Inc.

We have audited the accompanying statements of financial position of Advanced
Medical Institute, Inc. and its subsidiaries (the "Company") as of June 30, 2005
and 2004, and the related statements of income, changes in stockholders' equity,
and cash flows for each of the years in the two-year period ended June 30, 2005.
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 (United States). 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.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Advanced Medical Institute,
Inc. as of June 30, 2005 and 2004, and the results of its operations and its
cash flows for each of the years in the two-year period ended June 30, 2005 in
conformity with accounting principles generally accepted in the United States of
America.

Lichter, Yu & Associates

August 30, 2005



<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                              STATEMENTS OF INCOME
                    FOR THE YEAR ENDED 30 JUNE 2005 AND 2004

<TABLE>
<CAPTION>
                                                  June 30, 2005    June 30, 2004
                                                   ------------    ------------
<S>                                                <C>             <C>
TOTAL REVENUES                                     $ 15,560,078    $ 13,425,587

COST OF REVENUES                                     (4,443,899)     (5,300,794)
                                                   ------------    ------------
GROSS PROFIT                                         11,116,179       8,124,793
                                                   ------------    ------------

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Employee benefits                                      (993,673)       (545,875)
Depreciation                                            (96,029)        (97,584)
Advertising                                          (4,317,646)     (3,637,664)
Consultancy Fees                                       (489,590)       (420,288)
Contract Work                                          (199,626)       (138,929)
Rent                                                 (1,051,007)       (608,730)
Call Centre Charges                                    (432,057)       (435,807)
Legal expenses                                         (806,536)       (262,684)
Market research expenses                               (226,743)             --
Research and development expenses                       (35,237)             --
Telephone expenses                                     (375,687)       (328,823)
Commissions                                            (238,454)       (173,743)
Traveling expenses                                     (121,854)       (161,666)
Other expenses from ordinary activities                (972,627)       (822,233)
                                                   ------------    ------------

TOTAL SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES                                            (10,356,766)     (7,634,026)
                                                   ------------    ------------

OTHER INCOME AND EXPENSE
Rental income                                            59,734          50,270
Bank interest                                             7,970          21,702
Other interest income                                     1,468              --
Sundry income                                             8,439              --
Provision for doubtful debt written back                 15,116              --
Borrowing costs                                         (20,826)             --
                                                   ------------    ------------

TOTAL OTHER INCOME AND EXPENSE                           71,901          71,972
                                                   ------------    ------------

NET INCOME (before income tax expense)                  831,314         562,739

INCOME TAX EXPENSE                                      204,727        (296,196)
                                                   ------------    ------------

NET INCOME                                            1,036,041         266,543

NET INCOME ATTRIBUTABLE TO OUTSIDE EQUITY
INTERESTS                                               (36,886)             --
                                                   ------------    ------------

NET INCOME ATTRIBUTABLE TO THE PARENT ENTITY            999,155         266,543
                                                   ============    ============

Net income per share, basic                        $       0.04    $       0.02
                                                   ============    ============

Weighted average number of shares                    25,034,014      25,000,000
                                                   ============    ============
</TABLE>

               See accompanying notes to the financial statements.


                                      F-1
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                        STATEMENTS OF FINANCIAL POSITION
                           AS AT 30 JUNE 2005 AND 2004

                                            Notes      June 30,       June 30,
                                                        2005           2004
CURRENT ASSETS
Cash                                                $   295,961     $   172,984
Receivables                                           2,812,704       1,627,301
Inventory                                               228,163          69,030
                                                    -----------     -----------

TOTAL CURRENT ASSETS                                  3,336,828       1,869,315
                                                    -----------     -----------

NON-CURRENT ASSETS
Receivables due from related parties          9         220,995         532,131
Less allowance for doubtful accounts          9              --         (46,499)
Security deposits                                        87,494          79,989
Property and equipment                        3         330,872         344,953
Intangible assets                                       973,302              --
                                                    -----------     -----------

TOTAL NON-CURRENT ASSETS                              1,612,663         910,574
                                                    -----------     -----------

TOTAL ASSETS                                        $ 4,949,491     $ 2,779,889
                                                    ===========     ===========

CURRENT LIABILITIES
Unearned revenue                                    $ 1,803,044     $ 1,591,464
Payables                                              1,802,246       1,433,117
Payables due to related parties               9           1,835              --
Interest bearing liabilities                  4         144,685          25,881
Provisions for compensated absences                     190,685          71,051
Income taxes payable                                    108,097          96,670
                                                    -----------     -----------

TOTAL CURRENT LIABILITIES                             4,050,592       3,218,183
                                                    -----------     -----------

NON-CURRENT LIABILITIES
Payables due to related parties               9          18,427          29,128
Rental deposit received                                   3,981              --
Interest bearing liabilities                  4          76,275          83,633
Deferred tax liabilities                                    415         324,798
                                                    -----------     -----------

TOTAL NON-CURRENT LIABILITIES                            99,098         437,559
                                                    -----------     -----------

TOTAL LIABILITIES                                     4,149,690       3,655,742
                                                    -----------     -----------

STOCKHOLDERS' EQUITY
Common stock, par value $0.001 per share,
  90,000,000 shares authorized,
  25,000,000 and 31,122,450 issued and
   outstanding, respectively                             31,122          25,000
Additional paid in capital                              782,805          (6,074)
Other comprehensive income                             (173,407)        (54,904)
Retained earnings                                       159,281        (839,874)
                                                    -----------     -----------

TOTAL STOCKHOLDERS' EQUITY                              799,801        (875,852)
                                                    -----------     -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $ 4,949,491     $ 2,779,889
                                                    ===========     ===========

               See accompanying notes to the financial statements.


                                      F-2
<PAGE>


                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                           AS AT 30 JUNE 2005 AND 2004

<TABLE>
<CAPTION>
                                      Common Stock        Additional        Other
                              ------------------------     Paid-In     Comprehensive    Retained
                                Shares        Amount       Capital         Income       Earnings        Total
                              ----------   -----------   -----------    -----------    -----------    -----------
<S>                           <C>          <C>          <C>              <C>            <C>            <C>
Balance June 30, 2003         25,000,000   $    25,000   $    18,708             --    ($1,106,417)   ($1,062,709)
Recapitalization as result
of merger                             --            --       (24,782)            --             --        (24,782)
Net income, June 30, 2004             --            --            --        (54,904)       266,543        211,639
                              ----------   -----------   -----------    -----------    -----------    -----------

Balance June 30, 2004         25,000,000        25,000        (6,074)       (54,904)      (839,874)      (875,852)
Issuance of stock              6,122,450         6,122       755,878             --             --        762,000
Recapitalization as result
of merger                             --            --        33,001             --             --         33,001
Other comprehensive income            --            --            --       (118,503)            --       (118,503)
Net income, June 30, 2005             --            --            --             --        999,155        999,155
                              ----------   -----------   -----------    -----------    -----------    -----------

Balance June 30, 2005         31,122,450   $    31,122   $   782,805    ($  173,407)   $   159,281    $   799,801
                              ==========   ===========   ===========    ===========    ===========    ===========
</TABLE>


                                      F-3
<PAGE>

               See accompanying notes to the financial statements.

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                            STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED 30 JUNE 2005 AND 2004

                                                     June 30,         June 30,
                                                       2005            2004
                                                   ------------    ------------
Cash Flows from Operating Activities

Receipts from Customers                            $ 14,501,070    $ 13,288,476
Interest Received                                         7,571          21,702
Payment to Suppliers & Employees                    (15,473,456)    (12,554,960)
Interest & Other Finance costs paid                     (20,826)        (11,566)
                                                   ------------    ------------

Net cash (used in) provided by operating
activities                                             (985,641)        743,652
                                                   ------------    ------------

Cash Flows from Investing Activities

Proceeds from Sale of Plant & Equipment                   2,687          (3,860)
Payment for Property, Plant & Equipment                 (91,400)       (154,483)
Repayment from (Loans to) related entities              320,233              --
Payment for security deposit                                797              --
Additional loans made                                        --        (641,400)
                                                   ------------    ------------

Net cash  provided  by (used  in)  investing
activities                                              232,317        (799,743)
                                                   ------------    ------------

Cash Flows From Financing Activities
Issue of shares                                         762,922              --
Proceeds from Borrowings                                101,121              --
Repayment of Borrowings                                  (6,554)        (24,766)
                                                   ------------    ------------

Net cash  provided  by (used  in)  financing
activities                                              857,489         (24,766)
                                                   ------------    ------------

Net increase (decrease) in cash held                    104,165         (80,857)
Foreign currency conversion                              18,812          11,168
Cash at Beginning of Financial Year                     172,984         242,673
                                                   ------------    ------------

Cash at end of year                                $    295,961    $    172,984
                                                   ============    ============


               See accompanying notes to the financial statements.


                                      F-4
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                            STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED 30 JUNE 2005 AND 2004

                                                 June 30, 2005   June 30, 2004

Reconciliation of Cash

Cash at the end of financial year as shown
in the Statement of Cash Flows is reconciled to
the related items in the Statement of Financial
Position as follows:

Cash                                              $   295,961    $   172,984
                                                  ===========    ===========
Reconciliation of Cash Flow from Operations
with Profit from Ordinary Activities after
Income Tax
Net Income                                            999,155        266,543

Non-Cash Flows in (Loss) Profit from
Ordinary Activities
Loss on sale of non-current assets                      6,764          4,122
Depreciation                                           96,029         97,584
Provision for doubtful debt                           462,274        (20,625)

Changes in Assets and Liabilities
(Increase) decrease in current inventories           (150,729)        28,579
(Increase) Decrease in receivables                 (1,479,608)       238,882
Increase in intangible assets                        (965,395)            --
Increase in unearned revenue                           45,903       (244,009)
Increase in payables                                  206,692         64,255
Increase in rental deposit received                     3,949             --
Increase in provisions for compensated
absences                                              111,341         12,125
(Decrease) increase in income tax payable            (353,834)       296,196
Increase in outside equity interest                    31,818             --
                                                  -----------    -----------
Cash Flows (Used in) Provided by Operating
Activities                                        $  (985,641)   $   743,652
                                                  ===========    ===========


                                      F-5
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004

1.    NATURE OF BUSINESS

      Nature of Business

      Advanced Medical Institute, Inc. (fka Hawksdale Financial Visions, Inc.)
      ("Company") was organized December 6, 1996 under the laws of the State of
      Nevada and was previously in the development stage through March 21, 2005.

      On March 21, 2005 the Company completed a Stock Exchange Agreement with
      Advanced Medical Institute Pty, Ltd. (an Australian Company) ("AMIP"). As
      a result of the exchange agreement, the reorganization was treated as an
      acquisition by the accounting acquiree that is being accounted for as a
      recapitalization and as a reverse merger by the legal acquirer for
      accounting purposes. Pursuant to the recapitalization, all capital stock
      shares and amounts and per share data have been retroactively restated.
      Accordingly, the financial statements include the following:

            (1) The balance sheet consists of the net assets of the accounting
      acquirer at historical cost and the net assets of the legal acquirer at
      historical cost.

            (2) The statements of operations include the operations of the
      accounting acquirer for the period presented and the operations of the
      legal acquirer from the date of the merger.

      Advanced Medical Institute Pty., Ltd. is a company limited by shares,
      incorporated and domiciled in Australia. The principal activity of AMIP is
      the medical treatment of male sexual dysfunction. AMIP is a service
      provider company which arranges for patients with sexual dysfunction to be
      provided with medical services, pharmaceuticals and associated support
      services. AMIP operates a centralized call center and approximately twenty
      clinics Australia wide. The pharmaceuticals are obtained from a limited
      number of vendors.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The accounting and reporting policies of the Company conform to accounting
      principles generally accepted in the United States of America. The
      following are descriptions of the more significant policies:

      Basis of Accounting

      The accompanying financial statements are accrual basis.

      Cash Equivalents

      For purposes of the statement of cash flows the Company considers all
      highly liquid investments with maturities of three months or less to be
      cash equivalents.

      Use of Estimates

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect certain reported amounts and disclosures.
      Accordingly, actual results could differ from those estimates.


                                      F-6
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                        NOTES TO THE FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Revenue Recognition

      Sales are reported as deferred income when the sales contracts are
      executed and the term of the contract exceeds three months. Up to three
      months medication is delivered to the patient upon the signing of a
      contract. Generally the term of the sales contracts are up to one year,
      but they can be for longer periods of time. The deferred income arising
      from the contracts that exceed three months is then amortized, on a
      straight line basis, into income during the approximated composite
      remaining medication delivery period. This approximated composite is an
      estimate that may vary from period to period.

      Advertising Expense

      Advertising costs are charged to expense as incurred.

      Income Tax

      The Company adopts the liability method of tax-effect accounting whereby
      the income tax expense is based on the operating profit adjusted for
      permanent differences.

      Timing differences which arise due to the different accounting periods in
      which items of revenue and expense are included in the determination of
      accounting and taxable income are brought to account as either a provision
      for deferred income tax or as a future income tax benefit at the rate of
      income tax applicable to the period in which the benefit will be received
      or the liability will become payable.

      Future income tax benefits are not brought to account unless realization
      of the asset is assured beyond any reasonable doubt. Future income tax
      benefits in relation to tax losses are not brought to account unless there
      is virtual certainty of realization of the benefit.

      The amount of benefits brought to account or which may be realized in the
      future is based on the assumption that no adverse change will occur in
      income taxation legislation and the anticipation that the Company will
      derive sufficient future assessable income to enable the benefit to be
      realized and comply with the conditions of deductibility imposed by the
      law.

      Inventories

      Inventories are measured at the lower of cost or net realizable value.
      Costs are assigned on a first-in first-out basis.

      Property and Equipment

      Property and equipment are carried at cost. Expenditures for maintenance
      and repairs are expenses as incurred and expenditures for major renewals
      and betterments are capitalized. Assets retired or sold are removed from
      the property accounts, with gains or losses on disposal included in
      income.


                                      F-7
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                        NOTES TO THE FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      Depreciation

      Equipment placed in service is depreciated over the estimated useful lives
      of the assets using the straight line depreciation method.

      Employee Entitlements

      Contributions are made to an employee superannuation fund and are charged
      as expenses when incurred.

      Foreign Currency

      In the statement of cash flows, the line item "US decrease (US increase)
      in foreign currency exchange rate" arises from the overall change arising
      from the movement of the foreign exchange rate between Australia and the
      United States.

      Research and Development Costs

      Research and development costs are charged against income from ordinary
      activities before income tax as incurred.

      Principles of Consolidation

      The consolidated financial statements include the accounts of the Company
      and its wholly owned subsidiary, Advanced Medical Institute Pty., Ltd. and
      its majority owned subsidiaries, Intelligent Medical Technologies Pty.,
      Ltd. (IMT) and Whygo Video Conferencing Pty., Ltd. (WHYGO). All
      significant intercompany accounts and transactions have been eliminated
      upon consolidation.

      Intangible Assets

      Trademarks and other intangible assets determined to have indefinite
      useful lives are not amortized. We test such trademarks and other
      intangible assets with indefinite useful lives for impairment annually, or
      more frequently if events or circumstances indicate that an asset might be
      impaired. Trademarks and other intangible assets determined to have
      definite lives are amortized over their useful lives or the life of the
      trademark and other intangible asset, whichever is less.

      Earnings Per Share

      The Company uses SFAS No. 128, "Earnings Per Share", for calculating the
      basic and diluted earnings (loss) per share. Basic earnings (loss) per
      share are computed by dividing net income (loss) attributable to common
      stockholders by the weighted average number of common shares outstanding.
      Diluted earnings per share are computed similar to basic earnings per
      share except that the denominator is increased to include common stock
      equivalents, if any, as if the potential common shares had been issued.


                                      F-8
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                        NOTES TO THE FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004

<TABLE>
<CAPTION>
                                                            June 30, 2005     June 30, 2004
<S>                                                             <C>               <C>
3.    PROPERTY, PLANT AND EQUIPMENT

      Land and Buildings

      Leasehold improvements at cost                            123,402           128,676
      Less: Accumulated depreciation                             28,879            19,429
                                                                -------           -------
                                                                 94,523           109,247
                                                                -------           -------
      Motor Vehicles                                             37,770            37,770
      Less: Accumulated Depreciation                             12,292             4,938
                                                                -------           -------
                                                                 25,478            32,832
                                                                -------           -------
      Office Furniture & Equipment                              140,029            96,480
      Less: Accumulated Depreciation                             32,883            22,007
                                                                -------           -------
                                                                107,146            74,473
                                                                -------           -------
      Computer Hardware - at Cost                               125,981           112,644
      Less: Accumulated Depreciation                             90,400            64,898
                                                                -------           -------
                                                                 35,581            47,746
                                                                -------           -------
      Low Value Pooled Fixed Assets                              65,745            59,797
      Less: Accumulated Depreciation                             47,425            36,938
                                                                -------           -------
                                                                 18,320            22,859
                                                                -------           -------
      Computer Software at cost                                 129,529           107,681
      Less: Accumulated Depreciation                             79,705            49,885
                                                                -------           -------
                                                                 49,824            57,796
                                                                -------           -------
      Total Property, Plant and Equipment                       330,872           344,953
                                                                =======           =======

<CAPTION>

                                                          June 30, 2005     June 30, 2004
<S>                                                             <C>               <C>
4.    INTEREST BEARING LIABILITIES

      Current, as of the period ended June
      30
      Capitalized lease liability                                38,005            25,881
      Unsecured loan                                            106,680                 -
                                                                -------           -------
                                                                144,685            25,881
                                                                =======           =======
      Non-current, due during the year
      ended 30 June:
      Capitalized lease liability
      2005                                                            -            28,386
      2006                                                       42,182            30,987
      2007                                                       34,093            24,260
                                                                -------           -------
      Total non-current                                          76,275            83,633
                                                                =======           =======
</TABLE>

      The interest bearing liabilities require monthly payments of principal and
      interest at a per annum interest rate ranging from 7.40% to 11.4%.
      Obligations under the notes are secured by the financed assets included in
      property and equipment.


                                      F-9
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                        NOTES TO THE FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004

5.    LAWSUITS

      Litigation is pending or threatened by or against the Company as follows:

      The Company is a defendant in various lawsuits. The legal responsibility
      and financial impact with respect to such litigation cannot presently be
      determined. Management, after review, including consultation with counsel,
      considers that any ultimate liability which would be likely to arise from
      these lawsuits would not materially affect the financial position or
      results of operations of the Company. However, there can be no assurance
      that these matters can be disposed of without such an affect.

      On July 19, 2004, the Australian Competition and Consumer Commission
      (collectively, the "ACCC") filed a suit against the Company in the Federal
      Court of Australia Sydney Registry. The ACCC claims that a series of
      advertisements made by the Company involving a celebrity that confessed
      impotence were misleading and deceptive. The Company has denied the
      allegation and is vigorously defending this suit. ACCC is seeking
      corrective advertising for the alleged misleading and deceptive
      advertisements. The ACCC has not made any claim for damages. The hearing
      of the proceedings commenced on May 16, 2005 and continued through May 19,
      2005. The hearing has been adjourned until August 30, 2005 and will
      continue until September 2005, if necessary.

      On August 10, 2004, Bradley Joyce, the Company's former Chief Executive
      Officer filed a suit against the Company in the Industrial Commission of
      NSW. Mr. Joyce alleges that his contract is unfair and seeks to have the
      Industrial Commission of NSW amend the contract to include a six month
      severance payment (which would be approximately $77,000). These
      proceedings are at an early stage and a compulsory conciliation conference
      did not resolve the claim. The Company has denied the allegations and is
      vigorously defending this suit.

      On December 17, 2002, Alan Hibberd, a former patient, notified a claim
      against the Company in accordance with the Personal Injuries Proceeding
      Act of 2002. The Company received the notification on April 5, 2004. Mr.
      Hibberd claims that we did not properly notify him of possible adverse
      effects of the medical procedure he underwent. Mr. Hibberd is seeking
      reimbursement of wages in the amount of $1,332 and presently unspecified
      damages for physical injuries. These proceedings are in pre-court
      procedure. The Company has denied the allegations and is vigorously
      defending this suit.

      On September 27, 2004, Rocco Licastro, a former patient, filed a suit
      against the Company in the District Court of NSW, Sydney Registry. Mr.
      Licastro's claims result from an injection therapy that Mr. Licastro
      claims caused physical injuries. Mr. Licastro is seeking damages including
      medical expenses, but no amount has been specified to date. These
      proceedings are in an early stage. The Company has denied the allegations
      and is vigorously defending this suit.

      On August 24, 2004, the Company initiated a suit against Mr. Mark Ryan, a
      former consultant, two companies controlled by Mr. Ryan which now compete
      with us, Dr. Ian Davies, Mr. Ryan's partner, and a third company
      controlled by Dr. Davies (the "Defendants") in the Federal Court of
      Australia. The Company alleges that Mr. Ryan breached his confidentiality
      agreement with it and misused its intellectual property. The Company is
      seeking an injunction restraining the Defendants from using its
      confidential information and intellectual property. The Company is also
      seeking an as of yet unspecified amount of damages. This proceeding is
      still in the discovery stage. The Defendants have denied the allegations.


                                      F-10
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                        NOTES TO THE FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004

6.    LEASE COMMITMENTS

      The Company is party to long-term, non-cancelable operating lease
      agreements for administrative offices and clinic locations. The future
      aggregate minimum annual lease payments arising from these lease
      agreements are as follows:

<TABLE>
<CAPTION>
                                                          June 30, 2005     June 30, 2004
<S>                                                           <C>                 <C>
      Due during the period ended June 30:
      2004                                                            -           445,082
      2005                                                      441,690           271,750
      2006                                                      311,605           140,036
      2007                                                      199,010            35,019
      2008                                                      130,970                 -
                                                              ---------           -------
                                                              1,083,275           891,887
                                                              =========           =======
</TABLE>

7.    CONCENTRATIONS

      Sales Markets - The Company's revenues arise from Australian customers.

      Suppliers - Although the Company has access to a variety of suppliers, the
      majority of the Company's products that are obtained for resale are
      purchased from a limited number of suppliers.

      Concentration of Credit Risk - Financial instruments that potentially
      subject the Company to credit risk consist of uninsured cash deposited in
      the bank and large receivables that are sometimes due from a limited
      number of debtors. The Company extends credit to a variety of related
      parties.

8.    STOCK EXCHANGE AGREEMENT

      On March 21, 2005 (the "Closing Date"), Advanced Medical Institute, Inc.
      (a Nevada, USA company) ("AMI USA") consummated the transactions
      contemplated by that certain Share Exchange Agreement dated as of January
      28, 2005 (the "Exchange Agreement") by and among AMI USA, Advanced Medical
      Pty Limited, a privately owned Australian company ("AMI Australia"), and
      AMI Australia's shareholders, (the "Shareholders"), pursuant to which AMI
      USA acquired all of the issued and outstanding shares of stock of AMI
      Australia in exchange for the issuance in the aggregate of 14,600,000 of
      AMI USA's shares of common stock (the "Shares") to the Shareholders. The
      issuance of AMI USA's shares of common stock to the Shareholders was
      exempt from registration under the Securities Act of 1933, as amended
      ("Securities Act") pursuant to Section 4(2) and Regulation S promulgated
      under the Act.

      Following the Closing Date, AMI Australia became a wholly-owned subsidiary
      of AMI USA, and upon the issuance of the Shares, the Shareholders became
      the owners of approximately 58.4% of all of AMI USA's issued and
      outstanding stock.


                                      F-11
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                        NOTES TO THE FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004

<TABLE>
<CAPTION>
                                                          June 30, 2005     June 30, 2004
<S>                                                           <C>               <C>

9.    RELATED PARTY TRANSACTIONS

      Advanced Hearing Institute Pty.
      Ltd. (an AU co.) Relationship:
      Under common management control
      Payable to this related party                       A         -             3,101

      Advanced Medical Institute
      International Pty. Ltd. (an AU co.)
      Relationship: Under common
      management control
      Receivable from this related party                 AR         -           252,540

      Advance Medical Solutions Pty. Ltd.
      (an AU co.)
      Relationship: Under common
      management control
      Call center fees charged to the
      Company                                                 242,044           435,807
      Customer service fees charged to
      the Company                                              87,212           221,962

      Australian Momentum Health Pty.
      Ltd. (an AU co.) Relationship:
      Under common management control
      Payable to this related party                       A         -               326

      Intelligent Medical Technologies
      Pty. Ltd. (an AU co.) Relationship:
      Subsidiary in year 2005 (2004:
      under common management control
      Receivable from this related party                 AR         -           213,165

      Jack Vaisman  (an AU citizen)
      Relationship: Director of the
      parent entity
      Director salary                                         115,555            71,447
      Payable to this related party                       A    18,427            14,755

      James Matthew  (an AU citizen)
      Relationship: Director of the
      subsidiary
      Director salary                                          86,470                 -
      Receivable from this related party                 AR    36,591                 -

      Total Health Screening Pty. Ltd.
      (an AU co.)
      Relationship: Affiliated with a
      director of the parent entity
      Rental revenue received from this
      entity                                                   23,982            22,421
      Receivable from this related party                 AR         -            66,426
      Less allowance for doubtful accounts                          -            46,499
      Net receivable from this related
      party                                                         -            19,927
      Payable to this related party                      A      1,835                 -
</TABLE>


                                      F-12
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                        NOTES TO THE FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004

<TABLE>
<CAPTION>
                                                             2005                2004
                                                              USD                USD
<S>                                                           <C>               <C>
9.    RELATED PARTY TRANSACTIONS (CONTINUED)

      Whygo Video Conferencing Pty. Ltd.
      (an AU co.)
      Relationship: Parent entity owns
      70%
      Rental revenue received from this
      entity                                                        -            16,719
      Payable to this related party                    A            -            10,946

      Zinalda Vaisman  (an AU citizen)
      Relationship: Director's wife
      Salary                                                   20,124                 -

      Dragon Enterprises Ltd.
      Relationship: This entity owns part
      of "AMI USA"
      Payable to this related party                   AR      184,404                 -

      TOTAL Receivables due from related
      parties                                         AR      220,995           532,131
                                                      --      =======           =======


      TOTAL Payables due to related
      parties                                          A       20,262            29,128
                                                      --      =======           =======

      Receivables from, and payables to,
      related parties are unsecured,
      interest-free and have no fixed
      repayment term.

      During the year ended, the Company
      paid expenses for the following
      entities in the amounts listed:
      o Intelligent Medical Technologies
            Pty. Ltd.                                          81,371           147,047
      o Total Health Screening Pty. Ltd.                      474,025           358,507
      o Whygo Video Conferencing Pty. Ltd.                          -            10,701
</TABLE>

10.   CONTINGENT LIABILITY

      A dispute with a previous telecommunication carrier over billing in the
      amount of $122,924 arose in 2002. Since the Company lodged a counter claim
      of $550,904 against the carrier in 2003, no correspondence has been
      received, from the carrier. No settlement has been reached, but in the
      opinion of the Company's directors, the $122,924 will not be paid. The
      financial statements do not include any adjustments that might result from
      the outcome of this uncertainty.


                                      F-13
<PAGE>

                         ADVANCED MEDICAL INSTITUTE INC.
                                AND SUBSIDIARIES

                        NOTES TO THE FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004

11.   INVESTING TRANSACTIONS

      A non-cash investing transaction consisting of the Company investing in
      Intelligent Medical Technologies Pty. Ltd. was consummated by
      extinguishing $666,214 of receivables on October 28, 2004. On May 4, 2005
      AMIP also purchased an addition 42% of Intelligent Medical Technologies
      Pty. Ltd. for $190,500, thereafter owning 93% of IMT.

12.   INCOME TAXES

      Total Federal and State income tax expense for the years ended June 30,
      2005 and 2004 amounted to $204,727 and $(296,196), respectively. For the
      years ended June 30, 2005 and 2004 there is no difference between the
      federal statutory tax rate and the effective tax rate.

      The following is a reconciliation of income tax expense:

<TABLE>
<CAPTION>
      2005                                     U.S.           State       International         Total
                                           -------------   -------------------------------------------------
<S>                                                  <C>             <C>         <C>               <C>
      Current                                        $0              $0          $204,727          $204,727
      Deferred                                        0               0            53,614            53,614
                                           -------------   -------------------------------------------------
           Total                                     $0              $0          $258,341          $258,341
                                           =============   =================================================

      2004                                     U.S.           State       International         Total
                                           -------------   -------------------------------------------------
      Current                                        $0              $0         ($296,196)        ($296,196)
      Deferred                                        0               0           200,577           200,577
                                           -------------   -------------------------------------------------
           Total                                     $0              $0          ($95,619)         ($95,619)
                                           =============   =================================================
</TABLE>

      Reconciliation of the differences between the statutory U.S. Federal
      income tax rate and the effective rate is as follows:

                                               2004            2003
                                           -------------   -------------

      Federal statutory tax rate                    33%             33%
      State, net of federal benefit                  0%              0%
                                           -------------   -------------

      Effective tax rate                            33%             33%
                                           =============   =============


                                      F-14