U.S. Securities and Exchange CommissionWashington, 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, 2006                                               
|  |                                                                                           
|  | OR                                                                                        
|  |                                                                                           
|o | TRANSITION REPORT PURSUANT
  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|  |                                                                                           
|  | For the transition period
  from                                                          

Commission file number 000-33191

(VISUALMED LOGO)

VISUALMED CLINICAL SOLUTIONS CORP.(Name of small
business issuer in its charter)

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|------------------------------------------------------------------- |  | --------------------------------------
|NEVADA                                                              |  | 88-0436055                            
|(State
  or other jurisdiction of 
  incorporation or organization) |  | (I.R.S.
  Employer Identification No.)

1035 Laurier St. West
Suite 200
Montreal, Quebec
Canada H2V 2L1(Address of principal
executive offices) (Zip Code)

(514) 274-1115Issuers telephone
number

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

| |                        |                                             
| | ---------------------- | --------------------------------------------
| | Title of
  each class: | Name of
  each exchange on which registered:
| | None                   | None                                        

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

Common Stock
46,028,345 Common Shares

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

Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.


Yes x
No o


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

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12-b-2 of the
Exchange Act).


Yes o
No x


State issuers revenues for
its most recent fiscal year: $308,946

The aggregate market value
of the voting and non-voting common equity held by non-affiliates, computed by
reference to the average bid and asked price of such common equity as of June
30, 2006 was $30,984,427.

As of September 27, 2006,
the issuer had 46,038,345 outstanding shares of common stock.

Transitional Small Business
Disclosure Format (Check one):


Yes o
No x


DOCUMENTS INCORPORATED BY REFERENCE: None

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TABLE OF CONTENTS

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|-------- | ------------------------------------------------------------------------------------------------------------------- | ----
|PART I   | 2                                                                                                                  
|         |                                                                                                                    
|ITEM 1.  | DESCRIPTION
  OF BUSINESS                                                                                           | 2   
|         |                                                                                                                     |     
|ITEM 2.  | DESCRIPTION
  OF PROPERTY                                                                                           | 11  
|         |                                                                                                                     |     
|ITEM 3.  | LEGAL
  PROCEEDINGS                                                                                                 | 11  
|         |                                                                                                                     |     
|ITEM 4.  | SUBMISSION
  OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                               | 11  
|         |                                                                                                                     |     
|PART II  | 11                                                                                                                 
|         |                                                                                                                    
|ITEM 5.  | MARKET FOR
  COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                          | 11  
|         |                                                                                                                     |     
|ITEM 6.  | MANAGEMENTS
  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                             | 13  
|         |                                                                                                                     |     
|ITEM 7.  | FINANCIAL
  STATEMENTS                                                                                              | 16  
|         |                                                                                                                     |     
|ITEM 8.  | CHANGES IN
  AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                              | F-20
|         |                                                                                                                     |     
|ITEM 8A. | CONTROLS
  AND PROCEDURES                                                                                           | F-20
|         |                                                                                                                     |     
|ITEM 8B. | OTHER
  INFORMATION                                                                                                 | F-20
|         |                                                                                                                     |     
|ITEM 9.  | DIRECTORS,
  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
  16(A) OF THE EXCHANGE ACT | F-20
|         |                                                                                                                     |     
|ITEM 10. | EXECUTIVE
  COMPENSATION                                                                                            | F-22
|         |                                                                                                                     |     
|ITEM 11. | SECURITY
  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
  MATTERS                  | F-24
|         |                                                                                                                     |     
|ITEM 12. | CERTAIN
  RELATIONSHIPS AND RELATED TRANSACTIONS                                                                    | F-26
|         |                                                                                                                     |     
|ITEM 13. | EXHIBITS                                                                                                            | F-26
|         |                                                                                                                     |     
|ITEM 14. | PRINCIPAL
  ACCOUNTANT FEES AND SERVICES                                                                            | F-27

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Forward-Looking Statements and Associated Risk

Certain
statements contained in this annual report on Form 10-KSB constitute
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause deviations in actual results, performance or
achievements to be materially different from any future results, performance or
achievement expressed or implied. Such factors include but are not limited to:
market and customer acceptance of and satisfaction with our products, market
demand for our products; fluctuations in foreign currency markets; the use of
estimates in the preparation of our financial statements; the impact of
competitive products and pricing in our field; the ability to develop and
launch new products in a timely fashion; government and industry regulatory
environment; fluctuations in operating results, including, but not limited to,
spending on research and development, spending on sales and marketing
activities, spending on technical and product support; and other risks outlined
in previous filings with the Securities and Exchange Commission, and in this
annual report on Form 10-KSB.

The
words believe, expect, anticipate, intend and plan and similar expressions
identify forward-looking statements. Such statements are subject to risks and
uncertainties that cannot be quantified and, consequently, actual results may
differ materially from those expressed or implied by such forward-looking
statements. You are cautioned not to place undue reliance on these
forward-looking statements.

Unless
otherwise noted, all currency figures in this filing are in U.S. dollars.

The
terms Company, we, us, our, VisualMED and the Registrant
refer to
VisualMED Clinical Solutions Corp., a Nevada corporation, and its subsidiaries.

PART I

|        |                           
|------- | --------------------------
|ITEM 1. | DESCRIPTION
  OF BUSINESS.

Company History

We
were incorporated in the State of Nevada on September 7, 1999 under the name
Ancona Mining Corp. (Ancona) as a mining and exploration company. After initial
disappointing results from our mining exploration, we did very little business
and showed very limited activity, with no profitability. On September 23, 2004,
after receiving advice that our mining properties were not deemed to be
economically attractive, we chose to enter the emerging field of clinical
information systems and entered into an agreement, in principle, to purchase
the distribution rights to a suite of clinical software modules, as well as
some minor office equipment and all of the issued and outstanding common shares
of VisualMED Marketing Inc., an inactive company with no revenue, from Visual
Healthcare Corp. (formerly known as VisualMED Clinical Systems Corp.), a Nevada
corporation (VHCC). We refer to this asset purchase transaction as the
Acquisition. We consummated the Acquisition on October 13, 2004 and, in
consideration for the assets purchased, we issued what then amounted to 80% of
our common stock to VHCC. As a result of the Acquisition, we have the right to
exploit, commercialize, install, support and upgrade the clinical software
modules purchased. Our rights to exploit, commercialize, install, support and
upgrade the modules are worldwide, except for that part of the U.S. market, as
well as the Chinese and the Japanese language markets, into which VHCC has
entered into similar agreements with other non-related companies.

To
reflect the nature of our new business, we changed our corporate name in
November 2004 from Ancona Mining Corp. to VisualMED Clinical Solutions Corp.
Our principal executive offices are located at 1035 Laurier Street West, Suite
200, Montreal, Quebec, Canada H2V 2L1 and our telephone number is (514)
274-1115.

About Our Controlling Stockholder

As
of September 27, 2006, VHCC owns approximately 52% of our issued and
outstanding common stock. VHCC was formed in 1998 to further develop clinical
information products based on Dr. Arthur Gelstons investigations in the
field. These products include software clinical management modules, electronic
patient records, electronic charting, dynamic clinical notes and other medical
information platforms and clinical tool sets for doctors and nurses.

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Field of Operations and Corporate Mission

We
are a medical information company that uses technology to assist physicians and
nurses streamline the mass of patient information in a coherent and usable
manner. Our clinical information systems are designed for use in hospitals, healthcare
delivery organizations and regional and national healthcare authorities. Our
corporate mission is to help healthcare professionals practice the best
possible medicine at the point of care.

We
market cutting-edge technology solutions for healthcare institutions and
authorities. These solutions are designed to save cost and time, and to reduce
adverse drug events (ADE) that kill more than 200,000 patients per year in the
United States alone. Our latest generation suite of software modules comprises
a fully functional clinical information system (Clinical Information System)
that includes the complete electronic medical record (Electronic Medical
Record), with a core computerized physician order entry (CPOE) module. Our
Clinical Information System, Electronic Medical Record and CPOE work together
to reduce the cost of providing medical care, while dramatically improving the
quality and efficiency of healthcare services offered by healthcare
institutions.

Our Products

The VisualMED System

The
VisualMED system is a suite of software modules that constitute a
comprehensive, state of the art, fully functional Clinical Information System.
VisualMED is an informatics tool that enables the physician to make informed
diagnostic and therapeutic decisions at the point of care. The system
communicates with existing legacy systems including Admissions (ADT), pharmacy,
laboratory, radiology and Picture Archival and Communication Systems (PACS)
through Health Language 7 (HL-7) interfaces. Through its interfaces, VisualMED
captures all clinical information available on every hospitalized patient at
any given moment, representing the totality of data required by the hospitals
clinical staff to perform their duties. Healthcare personnel are able to access
information culled from a variety of different sources through this single
software solution. The VisualMED system has the following functionality:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Electronic Medical Record.
  Our Electronic Medical Record system replaces paper-based activities by
  doctors and nurses. All patient care is prescribed and documented in an
  electronic media that may include wireless devices with remote access via an
  Internet portal. All of a patients medical history is securely stored in a
  central database for easy access by the attending healthcare professionals.
  The information is accessed through a series of computer workstations placed
  in every ward, within easy reach of the doctors and nurses responsible for
  those patients.            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | CPOE. The CPOE module is a
  method of giving patient prescriptions and other medical orders in an
  electronic mode. This form of automation of medical acts has many advantages,
  such as, the speedy transmission of orders through the hospital and the
  elimination of errors due to ineligible handwriting. As a result, a CPOE
  module is believed to contribute to better patient safety. Furthermore, a
  CPOE module, when combined with decision support information could eliminate
  many common medical errors that occur on a daily basis, such as dosage errors
  and harmful drug interactions.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Clinical Decision Support.
  VisualMED decision support helps physicians validate their therapeutic
  decisions in real time while prescribing medication. Physician activities
  using this functionality are supported by an extensive knowledge base
  containing thousands of user cases and thousands of decisional algorithms
  with 30 levels of decision support.                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | ADE Prevention. Our
  VisualMED system helps prevent ADEs, which often cause prolonged
  hospitalization and death, by reducing the risk of  medication side-effects, avoiding duplication of prescriptions,
  lab tests and radiology exams, and bringing important clinical information to
  the attention of the physician in real time at the point of care. Through our
  system, the availability of medical charts is immediate and can be securely
  encrypted and transmitted worldwide via the Internet.                                                                                                 

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| |   |                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Medical Audits. The
  implementation of the VisualMED system in a hospital setting allows for a
  comprehensive audit of medical procedures and their outcomes. The medical
  audit mechanism also assures that appropriate regulatory standards are being
  met. In addition, the use of biometric electronic signature provides data
  security at the highest level.

VisualMED Modules

VisualMED
modules come in four broad classes  administrative/support, nursing, clinical,
and the Electronic Medical Record.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Administrative module.
  VisualADMIN is the principal administrative module. VisualADMIN allows users
  with the appropriate security rights to access screens that may be used to
  define and modify the basic architectural structure that defines the business
  rules for the CPOE for the six general order entry types  drugs, labs,
  IV solutions, image tests, nursing orders, and dressings  as well as special
  order entry types, such as sliding scales, drug tapers and transfusions.
  VisualADMIN creates and modifies decision support algorithms that are called
  upon at multiple levels in the order entry sequence. These operate as
  background processes and maintain the ward/bed configuration of the
  institution, as well as a set of diagnoses, a custom set of system
  requisitions that may be required by the healthcare institution, a set of
  system user groups and user group rights and a set of system parameters that
  are used to determine the system configuration. We supply all of the content
  required for full function of the system at the time of installation. Our
  customers may modify any of the content at any time in plain language.
  VisualADMIN is a required module in the setting of a minimal VisualMED
  installation.                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Nursing module. The
  VisualMED nursing module (VisualNURSE) integrates all physician/nursing
  clinical functions at the order entry and clinical data entry levels.
  VisualNURSE contains a medication administration record that is automatically
  generated by the VisualMED system according to a rules engine, which
  translates the physicians prescription into the date-times for prescription
  administration. System rules are supplied by VisualMED at the time of
  installation and may vary for each individual clinical module. VisualNURSE
  also contains a plan of care and screen sets that allow for the recording and
  display of clinical information, including vital signs, glucometer-insulin
  record, input and output, and pain scale. Additional screens exist for the
  recording of the nursing history. The healthcare institutions system
  administrator, through VisualADMIN, manages the basic structure of
  VisualNURSE. All of our clinical modules access VisualNURSE. VisualNURSE is a
  required module in the setting of a minimal VisualMED installation.                                                                                                                                                                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Clinical module. The
  VisualMED clinical modules broadly correspond to the individual clinical
  specialty of medicine of the healthcare institution or a particular division
  or ward of the institution, such as VisualER, VisualSurgeon, VisualPediatrics
  and VisualICU. All of the patients in a particular ward may all be linked to
  a single module or patients in a given ward may each be attached to different
  modules in accordance with the patients ailment. Each clinical module may
  have its own set of available drug listings, its own table of order sets and
  unique decision support algorithms. The look and feel of each clinical module
  is constant, though modules may contain unique screens, which may not be
  available elsewhere in the VisualMED Clinical Information System. For
  example, VisualER uses unique patient tracking screens; VisualICU, CCU, and
  ER contain unique results reporting screens. The health care institutions
  system administrator, through VisualADMIN, manages the seed content of the
  clinical modules. At least one clinical module is required in the setting of
  a minimal VisualMED installation. Our system includes, as an option, a DICOM
  viewer embedded in the clinical signs and results reporting screens so that
  PACS images may be viewed directly within the clinical context of the
  VisualMED clinical data display screens.

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Electronic Medical Record.
  All clinical modules come with a complete Electronic Medical Record which can
  be used by physicians, consultants, nursing staff and paramedical staff to
  record their admission and progress notes in a coded, menu-driven or
  free-text format, depending on the preference of the individual user.
  Clinicians can access all data related to their patient through the
  Electronic Medical Record. Clinical data entered into the Electronic Medical
  Record is available to review for the purposes of quality assurance by the
  clinical or administration staff and, where law permits, may be consulted by
  the patient.

During
fiscal 2006, we began the installation of our ScopeNotes product line at
Montreals Jewish General Hospital Colorectal Surgery Department. ScopeNotes
allows doctors to record surgical notes in electronic format for ready access.
We have equally begun to market a dedicated Oncology Module for oncology
departments, and a Drug Order and Tracking Module for pharmacies and doctors.
Finally, we have begun to look into the possibility of incorporating our unique
security features, which pass every federal guideline for securing sensitive
patient information, into other existing products in the market that operate
within similar architectural and database parameters as the VisualMED system.

Installation and Implementation

Delivery
of a VisualMED system to a customer consists of three broad phases: hardware
installation, software implementation and training.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Hardware installation.
  Hardware may be installed by us or the customers technical staff according
  to our specific configuration. The scope of the hardware is determined by the
  number of beds and wards in the particular healthcare institution, as well as
  the institutions physical layout.                                                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | Software implementation.
  Our VisualMED software is configured based on a healthcare institutions
  responses to our implementation questionnaire. The information obtained from
  the questionnaire is used to create the clinical content and populate the
  production database. Concurrent with managing and preparing this data, HL7
  interfaces to other hospital systems such as Pharmacy, Laboratory, ADT and
  PACS will be designed, developed and tested by VisualMED and the system
  suppliers.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | Costs. Cost of
  implementation of a VisualMED system can vary between $2 and $20 million
  depending on the size of the hospital and the nature, and functionality of
  the selected technology.                                                                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | Training. Training begins
  well in advance of the installation. VisualMED has specific training programs
  for physicians, nurses and other hospital staff. In large hospitals, a
  pre-determined number of wards will go-live every two weeks until the entire
  hospital is in full production. VisualMED training personnel provide on-site
  support 24 hours per day until the hospital staff can use the system independently.                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | Helpdesk. The VisualMED
  helpdesk is available to our customers 24 hours per day, seven days per week
  for technical and functional assistance. VisualMED has the ability to monitor
  and update the system from a remote location.                                                                                                                                                                                                                                                                         

Independent Evaluation

The
technology platform on which VisualMED modules and some of its applications are
based has been evaluated by independent agencies, such as the Leapfrog Group
and Five Rights Consulting. These agencies have consistently ranked our
technology as one of the more complete and efficacious set of solutions in its
field. The VisualMED technology was also positively evaluated after an in-depth
audit for the benefit of a Canadian governmental agency by Dr. Antoine
Geisbuhler, formerly of Vanderbilt University medical school and holder of the
chair of medical informatics, Faculty of Medicine, University of Geneva,
Switzerland.

Advertising and Brand Recognition

VisualMED
attends all key industry trade shows, with a dedicated booth that provides
demonstrations of the VisualMED system as it currently operates in a live
hospital environment. We do not advertise in tradition print or television
media. We rely heavily on the quality of the VisualMED system, its high rating
by industry analysts and the building of a successful implementation track
record with our existing customers, to attract potential new customers.

Marketing

A
significant part of our marketing effort is conducted in conjunction with
strategic partners who often have a geographical concentration or who offer
particular services within the healthcare industry where we are present,
including management  consultants,
systems integrators, major engineering firms and outsourcing companies. Our
strategic partnerships include alliances with Oracle, IBM, Stratus, Citrix
Systems, Hewlett Packard, Rutherford Marketing LLC, Imtech of Rotterdam NL, ITS
of the Kingdom of Saudi Arabia, Sonotec S.A.R.L. of Tunis, Post Logic Inc. of
Paris, Réseau Numérique Inc. of Montreal, First Consulting Group and Superior
Consulting. We are also working closely with elements of the Italian and French
healthcare authorities and health services industry, with regard to the
implementation of our system over a broad range of hospitals, clinics and
pharmacies in those countries.

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Intellectual Property and Research and
Development

We
continue to improve and upgrade our system for better performance and to answer
our customers specific needs. Our development activities are often
subcontracted to technical companies that specialize in these fields. All of
our research and development work is proprietary to our company. In fiscal
2005, we spent approximately $561,356 on research and development. In fiscal
2006, we spent approximately $1,093,096 on research and development. All of our
research and development activities are outsourced and absorbed entirely by us.

We
do not have any patents on our system or modules. We rely on trade secrets
laws, confidentiality agreements and other contractual commitments to protect our
proprietary research and development efforts and intellectual property. These
protections may not be adequate to protect our proprietary interests. We cannot
assure you that third party competitors will not obtain access of our technical
information and exploit it for their own benefit. In such event, we may not
have adequate funds available to prosecute actions to protect or to defend our
proprietary rights. If our proprietary interests are divulged to the public and
we do not have adequate funds to prevent third parties from using these
interests for their own use, we may lose our competitive advantage, which may
adversely affect our financial condition.

Our Industry

Industry Overview

There
are over 15,000 hospitals in western countries, including the United States and
Canada, and more than 10,000 hospitals in Europe, which make up most of the
potential market for VisualMED systems and other products derived from the
VisualMED proprietary technology platform. According to the Leapfrog Group, relatively
few American hospitals have experimented with physician-based clinical support
order entry. Fewer than 10% of hospitals have some form of CPOE with decision
support, or other similar Clinical Information System. However new federal
legislation in the United States and abroad, reflecting a shift in public
policy with regard to healthcare information technology (IT), has begun to
favor the widespread deployment of IT solutions in the healthcare field.

The Healthcare Information Technology
Industry  Recent Developments

Modern
hospitals are under increasing pressure to address mounting evidence of major
increases in hospital death due to medical errors and ADEs. According to the
benchmark March 2000 report, To Err is Human, released by the Washington-based
Institute of Medicine, up to 100,000 Americans die each year from adverse drug
reactions, half of which it considered preventable. Since 2000, evaluations of
deaths from ADEs have been as high as 200,000 in the United States, 85,000 in England
and 23,000 in Canada.

Medical
literature and recent publications from the HIMSS indicate that the
introduction of Electronic Medical Record technology that would replace
paper-based medical records could significantly reduce the incidence of ADEs
and help to contain rising medical costs by increasing the productivity of
caregivers.

A
coalition of some of Americas largest employers and healthcare purchasers
helped to create the Leapfrog Group, a non-profit organization dedicated to
promoting information solutions for hospitals. According to the Leapfrog Group,
CPOE systems with clinical decision support are deemed to be the core component
of an effective clinical information system to replace paper-based records. To
date, more than 500 hospitals in the United States have registered with the
Leapfrog Group, pledging to move towards the new standards set by the
organization for managing healthcare through information technology.

Modernization
of the healthcare system is a major part of the national agenda of most western
countries. In 2004, the U.S. Department of Health and Human Services appointed
its first National Health Information Technology Coordinator, Dr. David
Brailer. Mr. Brailers duties include the execution of actions ordered by
President Bush, who has called for widespread deployment of health information
technology within the next ten years to realize substantial improvements in
healthcare safety and efficiency.

The
current presidential administration continues to place a high priority on
making electronic health records available to most Americans, a goal set by the
President in 2004. According to the Department of Health and Human Services,
widespread use of electronic health records will help ensure Americans receive
high quality medical care by providing doctors access to patients medical
history at the time of care. The Administration supports the adoption of IT as
a normal cost of doing business to ensure patients receive high-quality care.
To encourage doctors and patients to adopt electronic health records, the
Administrations goal is to promote conditions for a thriving free market.
Identifying national standards will help focus development efforts, increase
demand for the technology, and ultimately create affordable technology. The
creation of the American Health Information Community in the Fall of 2005 was
one step toward this goal. This organization will help ensure that there are
certified technology products and nationwide interoperability standards, which
should help purchasers of IT gain confidence in the investments they make. The
2007 national budget includes $169 million to accelerate progress for this
effort, including $116 million for the Office of the National Coordinator for
Health Information Technology; $50 million for the Agency for Healthcare
Research and Quality; and $3 million for the Office of the Assistant Secretary
for Planning and Evaluation. The United States governments continuing and new
activities include efforts to:

| |   |                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Promote
  nationwide interoperability of health IT systems through an industry-wide
  process to harmonize standard development, maintenance, and refinements;                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                         
| |  | Define the
  key elements of basic electronic health records for use in clinical settings,
  develop working prototypes for the use of electronic health data in such
  priority areas as coordinated chronic disease management and improved
  ambulatory care, and capture laboratory test data in a standardized way;
| |   |                                                                                                                                                                                                                                                                                                                         
| |  | Pursue
  breakthroughs in health systems architecture, such as rapidly collecting and
  disseminating public health surveillance data electronically and encouraging
  the use by patients of their own computer-readable personal health records,
  containing their complete medical history;                         
| |   |                                                                                                                                                                                                                                                                                                                         
| |  | Work closely
  with the Centers for Medicare and Medicaid Services (CMS) to advance the use
  of electronic prescriptions nationally; and                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                         
| |  | Continue to
  address key privacy and security issues to encourage the exchange of health
  information nationwide.                                                                                                                                                                                                     

6

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Competition

There
are several large companies that develop and bring to market other forms of
Electronic Medical Record and CPOE systems in the United States, such as:
Cerner Corporation, Eclipsys Corporation, IDX System Corporation, HBOC-McKesson
Corporation, Epic Systems Corporation, Medical Information Technology
Incorporated, Misys Healthcare Systems, and more recently such global giants as
General Electric, Siemens, IBM and Bell. Management believes that our VisualMED
technology offers customers a far richer integrated medical and clinical
content delivered to the healthcare provider at point of care, than any other
system. In terms of high-priority functionality, VisualMED is consistently
rated among the leaders in all systems of its kind, offering us a significant
quality advantage when competing for customer contracts. In addition,
VisualMEDs Clinical Information System is flexible enough that it can be
installed in smaller hospitals that are far less attractive to our major competitors,
and tailored to the specific needs and policies of that institution. The
VisualMED system also provides a multi-lingual platform which gives us a
competitive advantage in the international markets.

Due
to the relatively lengthy sales cycle involved in the healthcare information
technology industry, and the fact that we are significantly smaller and have
less financial resources than our competitors, we face an initial disadvantage
in the U.S. market. We will have to continue developing new, dynamic and
flexible marketing strategies to remain competitive.

Diversification of Product Lines

The
healthcare technology industry is undergoing rapid changes, with major software
companies, information technology consulting service providers and system
integrators, Internet start-ups, and other software companies having the
potential to develop specialized healthcare systems to compete with our
product. Management feels our success will hinge upon our ability to continue
upgrading and improving our system in a timely fashion, using the success of
existing implementations to build a steady customer base and revenue stream,
while continuing to offer new product lines that meet the technology needs of
the market.

7

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Our Suppliers

We
depend on a limited number of third parties to manufacture and supply critical
components for our products and services. The infrastructure configuration
required to run the VisualMED application in a hospital setting includes
products from Microsoft, Oracle, HP, Stratus, Citrix Systems, Verinex
Technologies, Digital Persona, IBM, APC Software, NEC and Veritas Software. If
any of these third party manufacturers should cease operations or refuse to
sell components to us, we may have to suspend or cease operations. We do not
have long-term contracts with our suppliers. Supplier commitments are arranged
on a project-by-project basis. If our suppliers do not fulfill their
obligations, if they stop manufacturing and supplying components critical for
our clinical solutions or if the terms for supply, including price, become
commercially unreasonable, we may need to search for alternative sources for
components. Our search for additional or alternate suppliers could result in
significant delays to our system implementation process, added expense and
hinder our ability to maintain or expand our business. Any of these events
could require us to take unforeseen actions or devote additional resources to
provide our products and services and could harm our ability to compete
effectively and adversely affect our financial condition.

Government Regulation and Legislation

VisualMED
is not required to obtain any governmental approvals to operate in the
healthcare technology market. However, the current climate of healthcare
information technology legislation requires that companies active in the field
be constantly vigilant as new industry norms and standards are tabled and
finalized. It is important that governments and healthcare authorities continue
to recognize the importance of healthcare reform and the use of information
systems, since there rests the impetus for change, hence a healthy, growing
market. VisualMEDs products are fully compliant with industry norms
established by HIPAA and federal and industry policy makers concerning
functionality, programming language, transaction code set, privacy, security
and medical content.

Employees

As
of June 30, 2006, we had eleven full-time employees, and retained one full-time
and twenty-five part-time consultants. Our employees are not unionized. We
believe that our relationship with our employees and consultants is good.

Risk Factors Associated With Our Business

You
should carefully consider the risks and uncertainties described below and the
other information in this annual report. These are not the only risks we face.
Additional risks and uncertainties that we are not aware of or that we
currently deem immaterial may also impair our business. If any of the following
risks actually occur, our business, financial condition and operating results
could be materially adversely affected.

We have a limited operating history.

We
have a limited operating history upon which an evaluation of our future
prospects can be made. Our business history has been limited to mining
exploration and recently to the emerging field of healthcare IT. Since
inception, our operation has been generating losses and we cannot give
assurances that we will be successful in generating profits in the future. We
are regarded as a new or start-up venture with all of the unforeseen costs,
expenses, problems, and difficulties to which such ventures are subject. We
cannot give assurances that we will be able to raise the financing necessary to
maintain our current operation. Therefore, you may lose your entire investment
in us.

Our auditors have issued a going concern
opinion. Therefore, we may not be able to achieve our objectives and may have
to suspend or cease operations.

At
this time, we cannot be sure that we will be successful in our operations.
Furthermore, as at June 30, 2006, our independent public accountants issued an
opinion that there is substantial doubt about our ability to continue in
business as a going concern without additional financing and/or generating
profits. We cannot assure you that we will be able to raise the requisite
amount of additional financing or generate sufficient profit to sustain
operations.

8

---



Because we have historically incurred losses
and these losses may increase in the future, we must begin generating a profit
from our operations. If we do not begin generating a profit we may have to
suspend or cease operations.

We
have never been profitable. At June 30, 2006 we had working capital deficit of
$74,429. If we do not obtain additional financing or begin generating profit
within the next year, we may have to reduce or suspend our operations. In order
to become profitable, we will need to generate significant revenues to offset
our cost of revenues, sales and marketing, research and development and general
and administrative expenses. We may not achieve or sustain our revenue or
profit objectives and our losses may continue or increase in the future in
which case you might lose your entire investment in our company.

We have experienced a history of losses and
expect to incur future losses. Therefore, we must continue to raise money from
investors and seek advances from customers to fund our operations. If we are
unable to fund our operations, we will cease doing business.

We
have recorded $308,946 in revenue from operations to date, and we have incurred
a cumulative loss of $13,895,588 through June 30, 2006. Our losses have
resulted principally from costs incurred in marketing, sales, research and
development activities related to our efforts to develop our technologies, the
associated administrative costs related to these activities, and costs related
to discontinued operations. We expect to incur significant operating losses and
negative cash flows over the next several quarters due to the costs of expanded
research and development of our products. We will need to generate significant
revenues in order to achieve and maintain profitability. We may not be able to
generate these revenues or achieve profitability in the future. Even if we do
achieve profitability, we may not be able to sustain or increase profitability.
We are a development stage company focused on developing and implementing our
VisualMED systems. We have generated negative revenue to date. Consequently, we
must raise money from investors to maintain our operations. If we cant fund
our operations through product sales or investments by third parties, we will
have to cease operations.

Because we depend on a limited number of
third parties to manufacture and supply critical components for our products
and services, if the third party manufacturer should cease operations or refuse
to sell components to us, we may have to suspend or cease operations. As a
result, you may lose your investment. As a result, you may lose your entire
investment in our company.

If
our suppliers do not fulfill their obligations, or if they stop manufacturing
and supplying components critical for our VisualMED systems, we may not be
capable of finding other suppliers to operate our business. We rely on limited
suppliers for a number of key components and do not have long-term agreements
with any of our suppliers. If our agreements with these suppliers were
terminated or expire, if we were unable to obtain adequate quantities of
components critical for our products and services, if the quality of these
components was inadequate, or if the terms for supply of these components
became commercially unreasonable, our search for additional or alternate
suppliers could result in significant delays, added expense and our inability
to maintain or expand our business. Any of these events could require us to
take unforeseen actions or devote additional resources to provide our products
and services and could harm our ability to compete effectively. As a result,
you could lose your entire investment in our company.

Competition from companies with already
established marketing links to our potential customers may adversely affect our
ability to market our products.

Current and
potential competitors have longer operating histories, larger customer bases,
greater brand name recognition and significantly greater financial, marketing
and other resources than we have. Certain of our competitors may be able to
secure product from vendors on more favorable terms, devote greater resources
to marketing and promotional campaigns and adopt more aggressive pricing or
inventory availability policies than we will. Given our limited financial
resources, we cannot assure you that we will be able to compete successfully
against our current and future competitors.

9

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Our parent company has significant influence
over our corporate decisions.

As
of September 27, 2006, our parent company, VHCC, owns approximately 52% of our
issued and outstanding common stock. As a result, VHCC is able to significantly
influence matters requiring approval of stockholders, including the election of
directors and the determination of significant corporate actions.

Because we do not have any patents, we rely
on trade secrets, confidentiality agreements and contractual agreements, which
may not be adequate to protect our proprietary interests. If our proprietary
interests are divulged to the public, we may lose our competitive edge and have
to cease operations.

We
have not obtained patents or copyrights for our solutions. There is no
assurance that third party competitors will not obtain access to our technical
information and exploit it for their own benefit. In order to protect our
propriety rights, we will have to obtain patents or file lawsuits and obtain
injunctions. If we do that, we will have to spend large sums of money for
attorneys fees in order to obtain the injunctions. Even if we obtain the
injunctions, there is no assurance that the parties enjoined would comply with
the injunctions. Further, we may not have adequate funds available to prosecute
actions to protect or to defend our proprietary rights, in which case those
using our proprietary rights may continue to do so in the future.

We may be exposed to liability claims for
which we have limited insurance coverage.

If
we are sued for any reason, including, without limitation, intellectual
property infringement, we will have to rely on our limited capital resources
and liability insurance to pay any judgment rendered against us. If a judgment
is rendered against us for any amount of money over our coverage limit of
$1,000,000, we may have to cease operations.

Third parties may claim that our current or
future products or services infringe their proprietary rights or assert other
claims against us.

As
the number of entrants into our market increases, the possibility of an
intellectual property or other claim against us grows. Any intellectual
property or other claim, with or without merit, would be time-consuming and
expensive to litigate or settle and could divert management attention from
focusing on our core business. Any successful claim against us would result in
our having to pay costs and damages resulting from such claim, develop costly
non-infringing technology, if possible, or enter into license agreements, which
may not be available on terms acceptable to us, if at all.

Fluctuations in the value of foreign
currencies could result in increased product costs and operating expenses.

We
have suppliers that are located outside Canada and the United States Our
functional and reporting currency is the U.S. dollar. The functional currency
of our subsidiary is the Canadian dollar. Fluctuations in the value of the
Canadian and U.S. dollars are difficult to predict and can cause us to incur
currency exchange costs which will adversely affect our financial condition. We
have not engaged in any hedging activities to minimize this risk.

We must be able to respond to rapidly changing
technology, services and standards in order to remain competitive.

Management
feels our success will hinge upon our ability to continue upgrading and
improving our system in a timely fashion, using the success of existing
implementations to build a steady customer base and revenue stream, while
continuing to offer new product lines that meet the technology needs of the
market. We cannot assure you that our efforts to continually upgrade and
improve our systems will be successful. Furthermore, we cannot predict the
effect new emerging technology will have on our financial condition and results
of operations.

10

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Because the market for our common stock is
limited, you may not be able to resell your shares of common stock.

There
is currently a limited trading market for our common stock. Our common stock
trades on the OTC Bulletin Board operated by the National Association of
Securities Dealers, Inc. under the symbol VMCS. As a result, you may not be
able to resell your securities in open market transactions.

Because our common stock is subject to penny
stock rules, the liquidity of your investment may be restricted.

Our
common stock is now, and may continue to be in the future, subject to the penny
stock rules under the Exchange Act. These rules regulate broker/dealer
practices for transactions in penny stocks. Penny stocks generally are equity
securities with a price of less than $5.00. The penny stock rules require
broker/dealers to deliver a standardized risk disclosure document that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker/dealer must also provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker/dealer
and its salesperson and monthly account statements showing the market value of
each penny stock held in the customers account. The bid and offer quotations
and the broker/dealer and salesperson compensation information must be given to
the customer orally or in writing prior to completing the transaction and must
be given to the customer in writing before or with the customers confirmation.
In addition, the penny stock rules require that prior to a transaction, the
broker and/or dealer must make a special written determination that the penny
stock is a suitable investment for the purchaser and receive the purchasers
written agreement to the transaction. These additional penny stock disclosure
requirements are burdensome and may reduce the trading activity in the market
for our common stock. As long as the common stock is subject to the penny stock
rules, holders of our common stock may find it more difficult to sell their
securities.

|        |                         
|------- | ------------------------
|ITEM 2. | DESCRIPTION OF PROPERTY.

We
do not own real property. On November 1, 2004, we entered into a lease
agreement for our corporate office. We lease 1,200 square feet of office space
at 1035 Laurier St. West, Suite 200, Montreal, Quebec Canada H2V 2L1. The
office is leased from 4120345 Canada Inc., for an initial term of five years,
which automatically renews for additional five year periods. The rent is
$11,500 per month.

|        |                   
|------- | ------------------
|ITEM 3. | LEGAL PROCEEDINGS.

From
time to time we may be involved in litigation incidental to the conduct of our
business, such as contractual matters and employee-related matters. Currently,
we are not a party to any material legal proceeding or litigation, whether
current or threatened, nor are any of our officers, directors, affiliates or
security holders, a party adverse to us in any legal proceeding or litigation.

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

No
matters were submitted to a vote of shareholders in the fourth quarter of
fiscal 2006.

PART II

|        |                                                          
|------- | ---------------------------------------------------------
|ITEM 5. | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Our
common stock is traded on the OTC Bulletin Board operated by the National
Association of Securities Dealers, Inc. under the symbol VMCS. Our common
stock is also listed for trading on the Frankfurt and Munich Stock Exchanges
and the XETRA Stock Exchange, each located in Germany.

11

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On
June 30, 2006, the closing price of our common stock, as reported by the OTC
Bulletin Board, was $2.50. As of June 30, 2006, there were a total of
46,028,345 shares of common stock issued and outstanding. Of these shares,
12,393,771 shares are freely tradable and 33,634,574 shares are restricted
securities as defined in Rule 144 of the Securities Act of 1933, as
amended. As of June 30, 2006, we had 60 holders of record of our common stock.

The
following table sets forth the quarterly high and low bid prices per share for
the common stock, as reported by the OTC Bulletin Board for the fiscal years
indicated. These quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commissions and may not represent actual transactions.

|                 |  |                  |  |         |  |       | 
|---------------- |  | ---------------- |  | ------- |  | ----- | 
|Fiscal
  Quarter |  | High Bid         |  | Low Bid | 
|                 |  |                  |  |         | 
|2006             |  |                  |  |         |  |       | 
|                 |  | Fourth
  Quarter |  | $4.08   |  | $1.82 | 
|                 |  | Third
  Quarter  |  | $2.37   |  | $1.81 | 
|                 |  | Second
  Quarter |  | $2.68   |  | $1.66 | 
|                 |  | First Quarter    |  | $3.10   |  | $2.55 | 
|2005             |  |                  |  |         |  |       | 
|                 |  | Fourth
  Quarter |  | $3.09   |  | $2.10 | 
|                 |  | Third
  Quarter  |  | $3.10   |  | $1.53 | 
|                 |  | Second
  Quarter |  | $1.64   |  | $0.62 | 
|                 |  | First
  Quarter  |  | $0.62   |  | $0.62 | 

Securities authorized for issuance under
equity compensation plans

Our
Board of Directors adopted the 2006 Nonqualified Stock Option Plan (Plan) in
March, 2006. The Plan was adopted to attract and maintain employees, officers,
directors and advisors whose services are important to the success of our
company. The Board of Directors is responsible for the administration of the
Plan, the granting of options under the Plan and the establishment of the terms
and conditions the options, including the exercise price and vesting schedule
of options. Under the Plan, options may be granted by the Board of
Directors for ten years following the adoption of the Plan. All unexercised
options will terminate ten years following the date such options were granted.
As of June 30, 2006, options to purchase 884,500 shares of our common stock
were outstanding.

|                                                             |  |                                                                                                         |  |                                                                                     |  |                                                                      | 
|------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------- |  | -------------------------------------------------------------------- | 
|Plan category                                                |  | Number of
  securities to be
  issued upon
  exercise of
  outstanding
  options, warrants
  and rights |  | Weighted average
  exercise price of
  outstanding
  options, warrants
  and rights |  | Number of
  securities
  remaining
  available for
  future issuance | 
|                                                             |  |                                                                                                         |  |                                                                                     |  |                                                                      | 
|                                                             |  | (a)                                                                                                     |  | (b)                                                                                 |  | (c)                                                                  | 
|                                                             |  |                                                                                                         |  |                                                                                     |  |                                                                      | 
|Equity compensation plans
  approved by security holders     |  |                                                                                                        |  |                                                                                    |  |                                                                     | 
|                                                            
|Equity compensation plans not
  approved by security holders |  | 884,500                                                                                                 |  | $1.08                                                                               |  | 0                                                                    | 
|                                                            
|Total                                                        |  | 884,500                                                                                                 |  | $1.08                                                                               |  | 0                                                                    | 

Dividends

We
have not declared any cash dividends in the last two fiscal years. We intend to
retain future earnings for use in our business and do not anticipate declaring
or paying any cash or stock dividends on shares of our common stock in the near
future. In addition, any determination to declare and pay dividends will be
made by our Board of Directors in light of our earnings, financial position,
capital requirements, limitations under the corporate law of the State of
Nevada and other factors that our Board of Directors deems relevant.

Transfer Agent

Our
transfer agent is Olde Monmouth Stock Transfer Co., Inc., 200 Memorial Parkway,
Atlantic Highlands, New Jersey 07716, Tel: (732) 872-2727

Recent Sales of Unregistered Securities

Pursuant
to an acquisition agreement (Acquisition Agreement) relating to the Acquisition
which closed on October 13, 2004, we issued 31,866,000 (on a post-stock
dividend basis) restricted shares of common stock to VHCC.

In
connection with the Acquisition Agreement, we commenced a private placement on
March 15, 2005 offering a minimum of 2,000,000 units and a maximum of 5,333,333
units at a price of $0.75 per unit. A unit consisted of one share of common
stock and a warrant to purchase one share of common stock at a price of $1.25
per share for a period up to two years. In March 2005, we completed the private
placement and issued 2,275,567 units at $0.75 per unit. We used the proceeds of
this offering to repay outstanding notes payable of $1,674,612 and accrued
interest of $32,063. In connection with the private placement, we issued:

| |   |                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------
| |  | 1,321,759
  common shares and 1,321,759 warrants to Capex Investments Ltd. in
  consideration of $991,319.25;

12

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| |   |                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------
| |  | 553,370
  common shares and 553,370 warrants to Aton Select Fund Ltd. in consideration
  of $415,027.50;     
| |   |                                                                                                              
| |  | 400,438
  common shares and 400,438 warrants to Asset Protection Fund Ltd. in
  consideration of $300,328.50;

In
consideration for professional services rendered to us in connection with the
private placement, we issued:

| |   |                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------
| |  | 233,333
  warrants to purchase common stock at an exercise price of $0.001 per share to
  Stephane Solis as a finders fee;
| |   |                                                                                                                            
| |  | 25,000
  common shares to Claude Pellerin for professional services rendered to us;
  and                                  
| |   |                                                                                                                            
| |  | 15,000 common
  shares to the legal firm of HPS Inc., in consideration of legal services
  rendered to us.                 

On
March 23, 2005, we issued Mr. Solis 160,000 shares of common stock upon
his exercise of a portion of the warrant issued to him in connection with the
private placement discussed above.

On
April 15, 2005, we issued Mr. Solis 73,333 shares of common stock upon his
exercise of a portion of the warrant issued to him in connection with the
private placement discussed above.

On
July 19, 2005, we issued 752,230 shares of common stock upon the exercise of
752,230 warrants at $1.25 per share for proceeds of $940,288 (296,138 shares of
common stock to Capex Investments Ltd., 214,742 shares of common stock to Aton
Select Fund Ltd. and 241,350 shares of common stock to Asset Protection Fund
Ltd).

On
August 26, 2005, we issued to Capex Investments Ltd. 180,537 shares of common
stock upon the exercise of 180,537 warrants at $1.25 per share for proceeds of
$225,671.

On
September 6, 2005, we issued to Capex Investments Ltd. 200,020 shares of common
stock upon the exercise of 200,020 warrants at $1.25 per share for proceeds of
$250,025.

On
October 7, 2005, we issued to Capex Investments Ltd. 137,800 shares of common
stock upon the exercise of 137,800 warrants at $1.25 per share for proceeds of
$172,250.

On
November 4, 2005, we issued to Capex Investments Ltd. 67,984 shares of common
stock upon the exercise of 67,984 warrants at $1.25 per share for proceeds of
$84,980.

On
November 14, 2005, we issued to Capex Investments Ltd. 100,332 shares of common
stock upon the exercise of 100,332 warrants at $1.25 per share for proceeds of
$125,415.

On
December 14, 2005, we issued to Capex Investments Ltd. 138,240 shares of common
stock upon the exercise of 138,240 warrants at $1.25 per share for proceeds of
$172,800.

On
January 18, 2006, we issued to Aton Select Fund Ltd. 136,448 shares of common
stock upon the exercise of 136,448 warrants at $1.25 per share for proceeds of
$170,560.

On
March 6, 2006, we issued to Asset Protection Fund Ltd. 52,482 shares of common
stock upon the exercise of 52,482 warrants at $1.25 per share for proceeds of
$65,603.

On
March 6, 2006, we issued to Asset Protection Fund Ltd. 70,229 shares of common
stock upon the exercise of 70,229 warrants at $1.25 per share for proceeds of
$87,786.

On
March 6, 2006, we issued to Aton Select Fund Ltd. 55,320 shares of common stock
upon the exercise of 55,320 warrants at $1.25 per share for proceeds of
$69,150.

On
March 9, 2006, we issued to Aton Select Fund Ltd. 53,207 shares of common stock
upon the exercise of 53,207 warrants at $1.25 per share for proceeds of
$66,509.

On
March 23, 2006, we issued to Aton Select Fund Ltd. 68,616 shares of common
stock upon the exercise of 68,616 warrants at $1.25 per share for proceeds of
$85,770.

We currently
have 262,122 warrants outstanding, with an aggregate exercise price of
$327,653.

|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|ITEM 6. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
  RESULTS OF OPERATIONS.

Overview

It
is important to note that our business changed dramatically on October 13,
2004, when we ceased our mining and exploration activities and entered the
field of developing and marketing healthcare information technology. We refer
to the twelve month period ended June 30, 2006, as fiscal 2006, and the twelve
month period ended June 30, 2005, as fiscal 2005.

We
had $10,976 of cash at June 30, 2006 and $308,946 in revenue for fiscal 2006.
These factors raise substantial doubt about our ability to continue as a going
concern without raising significant additional capital or generating
significant revenue in the upcoming fiscal year.

We
incurred losses of $7,079,106 for fiscal 2006 as compared to losses of
$6,301,451 in fiscal 2005. The principal component of these losses was costs
associated with sales and marketing, research and development, and general
administration. We also incurred professional expenses, depreciation and filing
fees.

Operating
expenses for fiscal 2006 were $7,352,359 consisting of sales and marketing
expenses of $3,559,861, general and administrative expense of $2,058,500,
development costs of $1,093,096, customer service expense of $618,144 and
depreciation expense of $22,758.

There
are current trends developing within the United States government which could
have a significant and positive effect on our ability to secure clients in the
coming years. The United States Office of the National Coordinator for Health
Information Technology (ONC) provides leadership for the development and
implementation of a nationwide health IT infrastructure allowing secure and
seamless exchange of data and records. Headed by Dr. David J. Brailer, the ONC
advises the Secretary of the Department of Health and Human Services on health
IT policies and initiatives, and coordinates the Departments efforts to meet
the Presidents goal of making an electronic medical record available for most
Americans by 2014. The VisualMED technology is compliant with almost all of the
requirements set forth by HHS for a national medical record program, and could
see a significant, federally approved and partially funded market open to it in
the United States, where hospitals receive a federal mandate to implement IT
solutions of the type VisualMED currently offers.

The
American Health Information Community (AHIC) is a federal advisory body,
chartered to make recommendations to the Secretary of HHS on how to accelerate
the development and adoption of Health IT. The AHIC pursues breakthroughs that
will produce tangible value to the health care consumer in the near-term, while
building toward long-term goals for a broad and robust system. Its current set
of recommendations contain, among others, the availability of a
consumer-directed and secure electronic record of health care registration
information and a medication history for patients; and the creation of an
electronic health record that includes laboratory results and interpretations,
that is standardized, widely available and secure.

VisualMED
is well positioned to benefit from a policy move in this direction, as the
above guidelines, and promotion of these directives, describe with a consistent
measure of accuracy the current functionalities of the array of VisualMED
products, including our Electronic Medical Record including CPOE with
decision-support. The success of our current implementations, of which most are
in the United States, and the statistical validation they offer, could make our
products an ideal and proven candidate for implementation on a wide scale
throughout the United States, in keeping with the stated goals of HHS and of
the current presidential administration to give most Americans access to this
type of technology in the next decade.

13

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Marketing Strategy and Recent Developments

Fiscal
2006 was a milestone year for us, as it marked the first year that we recorded
revenue. The revenue was a result of hospital clients that signed off on our
product after a successful implementation. As we move forward with some of the
clients with whom we have signed agreements, we expect that more successful
implementations and delivery of specialized modules will translate into
revenues in the coming year. We also anticipate that we will be delivering
specialized modules in ASP mode which could result in monthly rental payments
and constitute recognizable recurring revenues.

In
March 2006, we created a nonqualified stock option plan through which we issued
2,518,000 options geared to attract, engage and retain individuals of
exceptional talent upon whom, in large measure, the sustained progress growth
and profitability of the Company for the shareholders depends. As a result, we
feel we are well positioned to step up our marketing efforts, especially that
which relates to our new modules, tailored to the individual needs of specific
hospital departments, during Fiscal 2007.

The
main challenges that we will have to meet over the next 12 months will continue
to be the funding of our operations, the sales and marketing of our modules,
and the conclusion of agreements with local and internationally-based
technology, distribution and integration companies that will allow us to
compete favorably for contracts in promising foreign locations. Our major
priorities remain the expansion of our client base through diversification of
our product lines and the achievement of a critical mass of client institutions
to generate sustainable revenues and to validate the quality of our products.

During
Fiscal 2006, we successfully implemented our full, latest-generation Clinical
Information System at Southwest Regional Rehabilitation Center of Battle Creek,
Michigan, and at Kansas Surgery and Recovery Center of Wichita, Kansas.
Department-specific modules are currently being installed at Montreals Jewish
General Hospitals Colorectal Surgery Department, including our trademark
ScopeNotes product line.

Our
marketing department has developed new marketing tools to maintain and support
a sales funnel which currently includes more than 100 potential client
hospitals in North America alone. We have hired new professionals and
consultants to support our growing operations, including the maintenance and
upgrading of our current implementations and software to remain at the cutting
edge. We also continue to hire sales and marketing executives and consultants
as our customer base continues to grow.

During
Fiscal 2006, we signed an exclusive agreement with the developers of Canadas
first private hospital in 40 years, the Metropolitan Medical Cooperative, in
which we will install our full array of Clinical Information Systems, including
Electronic Medical Record with decision support. We also entered into an
agreement with Reseau Numerique Inc., a Canadian group of laboratory companies
and medical education companies that will deploy a complete interactive
platform to link physicians and laboratories.

Our
board of advisors has been instrumental in developing and maintaining
relationship with potential clients both in North America and abroad, and has
brought together a broad cross-section of experts from the medical and
international business community. Dr. Alan Brox was hired as Senior Physician
hemo/oncol, to assist in the marketing and demonstrations of our products to
leading physicians and administrators at candidate hospitals in North America
and France.

We
have engaged the services of Mr. Larry Kurlender, who replaces Philippe
Rainville, as our Chief Financial Officer. Mr. Kurlender has extensive
experience in managing companies that have emerged from their development phase
and we expect Mr. Kurlender to help guide the company successfully through its
current period of growth. We also had Mr. Chris Marcolefas to join our Board of
Directors. He will serve as Chair of our Audit and Compensation Committees.

We
have been targeting markets where current legal regulations encourage the
adoption of our clinical management modules. We will aggressively pursue these
markets through the creation of sales consortiums that bring together local
healthcare consultants, hardware vendors and local systems integrators. We are
organizing one such entity in France that will pursue opportunities offered by
new French legislation that has mandated the implementation throughout the
French healthcare system of a universal Electronic Medical Record. We have been
hired by Post Logic Inc., a French software company, which should help them
secure significant budgets set aside by the French Minister of Health, and
could see VisualMED technology installed in France by 2008.

In
Italy, we continue to pursue an exclusive agreement with health authorities in
select provinces, and are continuing to build alliances in other European
markets.

We
have made continuing efforts in the Canadian market, where the federal
government is near legalizing e-Prescriptions in an effort to contain the
rising cost of prescription drugs. In Quebec, we have signed an agreement for
the deployment of our system throughout a network of clinics through Reseau
Numerique Inc.

In
North Africa, a pilot project is underway at a major tertiary care facility in
Tunis, which could lead to a long-term contract with the Tunisian Health
Ministry. In addition, we have expanded our representation in the Persian Gulf
area, a region that spends billions on state-of-the-art healthcare facilities.

We
are in advanced talks with healthcare authorities in the Kingdom of Saudi
Arabia regarding the potential implementation of a series of key hospitals in
that country, part of the Saudi effort to maintain its leadership in
leading-edge medical care.

In
order to continue financing our operations, we will rely primarily on revenue
from payments and advances from agreements we have signed in the past year, as
well as receiving funds from the exercise of warrants that were issued in March
2005.

14

---



Financial Condition, Liquidity and Capital
Resources

At
June 30, 2006, all of our principal capital resources have been acquired
through the issuance of our common stock, advances from our investors, and
revenue from sales. Cash used in operations was $2,075,639 for fiscal 2006.

At
June 30, 2006, we had a negative working capital of $74,429, as compared to a
deficiency of $49,345 at June 30, 2005. We had cash on hand of $10,976 at June
30, 2006. We had a net loss of $7,079,106 for fiscal 2006 and $6,301,451 for
fiscal 2005. At June 30, 2006, our total assets were $392,878, as compared to
$908,354 at June 30, 2005. At June 30, 2006, our total liabilities decreased to
$400,785 from $930,824 at June 30, 2005.

We
will need to raise additional equity/debt financing to sustain operations over
the next 12 months. Our auditors have expressed substantial doubt about our
ability to continue as a going concern in their audit report.

Critical Accounting Policies

Our
discussion and analysis of financial condition and results of operations are
based upon the financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States of America.
The preparation of financial statements require management to make estimates
and judgments that affect the reported amounts of assets and liabilities,
revenues and expenses and disclosures on the date of the financial statements.
On an on-going basis, we evaluate our estimates, including, but not limited to,
those related to revenue recognition.

We
use authoritative pronouncements, historical experience and other assumptions
as the basis for making judgments. Actual results could differ from those
estimates. Critical accounting policies identified are as follows:

Long-Lived Assets

In
accordance with SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, we test long-lived assets or asset groups for
recoverability when events or changes in circumstances indicate that their
carrying amount may not be recoverable. Circumstances which could trigger a
review include, but are not limited to: significant decreases in the market
price of the asset; significant adverse changes in the business climate or legal
factors; accumulation of costs significantly in excess of the amount originally
expected for the acquisition or construction of the asset; current period cash
flow or operating losses combined with a history of losses or a forecast of
continuing losses associated with the use of the asset; and current expectation
that the asset will more likely than not be sold or disposed significantly
before the end of its estimated useful life.

Recoverability
is assessed based on the carrying amount of the asset and its fair value which
is generally determined based on the sum of the undiscounted cash flows
expected to result from the use and the eventual disposal of the asset, as well
as specific appraisal in certain instances. An impairment loss is recognized
when the carrying amount is not recoverable and exceeds fair value.

Foreign Currency Transactions/Balances

Our
functional and reporting currency is the United States dollar. The functional
currency of our subsidiary is the Canadian dollar. The financial statements of
the subsidiary are translated to United States dollars in accordance with SFAS
No. 52 Foreign Currency Translation using period-end rates of exchange for
assets and liabilities, and average rates of exchange for the period for revenues
and expenses. Translation gains (losses) are recorded in accumulated other
comprehensive income (loss) as a component of stockholders equity. Foreign
currency transaction gains and losses are included in current operations.

15

---



Revenue Recognition

The Company
recognizes revenue related to sales and licensing of medical software in
accordance with Statement of Position No. 97-2, Software Revenue Recognition (SOP 97-2), as amended by
Statement of Position No. 98-9, Software
Revenue Recognition with Respect to Certain Arrangements. Pursuant
to SOP 97-2 and Staff Accounting Bulletin No. 104 Revenue Recognition,
revenue will only be recognized when the price is fixed or determinable,
persuasive evidence of an arrangement exists, the service is performed, and
collectibility is reasonably assured. The Companys revenue contracts are
accounted for in conformity with Accounting Research Bulletin No. 45 Long-Term
Construction-Type Contracts, using the relevant guidance in SOP
81-1 Accounting
for Performance of Construction-Type and Certain Production-Type Contracts,
unless specified criteria for separate accounting for any service element are
met. The Company also follows the guidance in Emerging Issues Task Force
(EITF) Issue No. 00-21 Revenue Arrangements with Multiple Deliverables
relating to the separability of deliverables included in an arrangement into
different units of accounting and the allocation of an arrangements
consideration to those units of accounting. It does not address when revenue
should be recognized for the units of accounting. The Company received $35,000
during the year ended June 30, 2006 for annual license renewal fees, which are
recognized in revenue over the term of the license. At June 30, 2006, the
balance of deferred revenue, which relates to the unearned portion received of
annual license fees, is $17,292. Incremental direct costs related to contract
acquisition and origination, which result in deferred revenue, are expensed as
incurred. Any allowance for doubtful accounts is based on the Companys
detailed assessment of the collectibility of specific customer accounts. Any
significant customer accounts that are not expected to be collected are
excluded from revenues. To date, the Company has not experienced any losses
from uncollectible accounts.

Development Costs

Costs
related to the enhancement of existing medical software modules are expensed as
incurred until technological feasibility in the form of a working model has
been established. The time period between the establishment of technological
feasibility and completion of product development is expected to be short,
therefore the Company has not capitalized any product development costs during
the period.

|        |                     
|------- | --------------------
|ITEM 7. | Financial Statements

PART I.

Financial Statements

VisualMED
Clinical Solutions Corp.
(A Development Stage Company)

16

---



|                                                        |  |      
|------------------------------------------------------- |  | -----
|                                                        |  | Index
|                                                        |  |      
|Report of Independent Registered Public Accounting Firm |  | F1  
|                                                        |  |      
|Consolidated Balance Sheets                             |  | F2  
|                                                        |  |      
|Consolidated Statements of Operations                   |  | F3  
|                                                        |  |      
|Consolidated Statements of Cash Flows                   |  | F4  
|                                                        |  |      
|Consolidated Statement of Stockholders Deficit         |  | F5  
|                                                        |  |      
|Consolidated Notes to the Financial Statements          |  | F7  

17

---



(LOGO)

|                                         |                                                                   
|---------------------------------------- | ------------------------------------------------------------------
|M A N N I N G  E L L I O T T             | 11th floor, 1050 West Pender Street, Vancouver, BC, Canada V6E 3S7
|                                         |                                                                   
|C H A R T E R E D  A C C O U N T A N T S | Phone: 604. 714. 3600 Fax: 604. 714. 3669 Web: manningelliott.com 

Report of Independent Registered Public Accounting Firm

To the Stockholders and Directors
of VisualMED Clinical Solutions Corp. 
(A Development Stage Company)

We have audited the accompanying balance
sheets of VisualMED Clinical Solutions Corp. (A Development Stage Company) as
of June 30, 2006 and 2005 and the related statements of operations, cash flows
and stockholders deficit for the period from September 7, 1999 (Date of
Inception) to June 30, 2006 and for each of the years in the two year period
ended June 30, 2006. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the aforementioned financial
statements present fairly, in all material respects, the financial position of
VisualMED Clinical Solutions Corp. (A Development Stage Company) as of June 30,
2006 and 2005, and the results of its operations and its cash flows for the
period from September 1, 1999 (Date of Inception) to June 30, 2006 and for each
of the years in the two year period ended June 30, 2006, in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have
been prepared assuming the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company has a working
capital deficiency and accumulated operating losses. These factors raise
substantial doubt about the Companys ability to continue as a going concern.
Managements plans in regard to these matters are also discussed in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

MANNING ELLIOTT LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

August 25, 2006

F-1

---



VisualMED Clinical Solutions
Corp.
(A Development Stage Company)Consolidated Balance Sheets
(expressed in U.S. dollars)

|                                                                                                                             |  |  |               |   |               |            |  
|---------------------------------------------------------------------------------------------------------------------------- |  |  | ------------- | - | ------------- | ---------- | -
|                                                                                                                             |  |  | June 30,2006$ |   | June 30,2005$
|                                                                                                                             |  |  |               |   |               |            |  
|Assets                                                                                                                       |  |  |               |   |               |            |  
|                                                                                                                             |  |  |               |   |               |            |  
|Current Assets                                                                                                               |  |  |               |   |               |            |  
|                                                                                                                             |  |  |               |   |               |            |  
|Cash                                                                                                                         |  |  | 10,976        |   |               | 348,410    |  
|Accounts receivable                                                                                                          |  |  | 2,550         |   |               |           |  
|Advances to related parties (Note 4)                                                                                         |  |  | 30,175        |   |               | 57,265     |  
|Prepaid expenses (Note 3)                                                                                                    |  |  | 249,517       |   |               | 454,777    |  
|Inventory                                                                                                                    |  |  | 13,587        |   |               |           |  
|Other assets                                                                                                                 |  |  | 16,319        |   |               | 14,512     |  
|                                                                                                                             |  |  |               |   |               |            |  
|Total Current Assets                                                                                                         |  |  | 323,124       |   |               | 874,964    |  
|                                                                                                                             |  |  |               |   |               |            |  
|Property and Equipment
  (Note 5)                                                                                            |  |  | 69,754        |   |               | 33,390     |  
|                                                                                                                             |  |  |               |   |               |            |  
|Total Assets                                                                                                                 |  |  | 392,878       |   |               | 908,354    |  
|                                                                                                                             |  |  |               |   |               |            |  
|                                                                                                                             |  |  |               |   |               |            |  
|Liabilities
  and Stockholders Deficit                                                                                      |  |  |               |   |               |            |  
|                                                                                                                             |  |  |               |   |               |            |  
|Current Liabilities                                                                                                          |  |  |               |   |               |            |  
|                                                                                                                             |  |  |               |   |               |            |  
|Accounts payable                                                                                                             |  |  | 220,785       |   |               | 96,850     |  
|Accrued liabilities (Note 6)                                                                                                 |  |  | 155,526       |   |               | 105,350    |  
|Notes payable (Note 8)                                                                                                       |  |  |              |   |               | 651,865    |  
|Current portion of capital lease obligation (Note 10)                                                                        |  |  | 3,951         |   |               | 3,244      |  
|Deferred revenue                                                                                                             |  |  | 17,291        |   |               | 67,000     |  
|                                                                                                                             |  |  |               |   |               |            |  
|Total Current Liabilities                                                                                                    |  |  | 397,553       |   |               | 924,309    |  
|                                                                                                                             |  |  |               |   |               |            |  
|Capital Lease Obligation
  (Note 10)                                                                                         |  |  | 3,232         |   |               | 6,515      |  
|                                                                                                                             |  |  |               |   |               |            |  
|Total Liabilities                                                                                                            |  |  | 400,785       |   |               | 930,824    |  
|                                                                                                                             |  |  |               |   |               |            |  
|                                                                                                                             |  |  |               |   |               |            |  
|Commitments (Notes 1 and
  15)                                                                                               |  |  |               |   |               |            |  
|                                                                                                                             |  |  |               |   |               |            |  
|Stockholders Deficit                                                                                                        |  |  |               |   |               |            |  
|Preferred Stock,                                                                                                             |  |  |               |   |               |            |  
|Authorized:
  15,000,000 shares, Series A 10% Cumulative; par value $0.00001;
  Issued and outstanding: nil shares           |  |  |              |   |               |           |  
|Authorized:10,000,000
  shares, Undesignated; par value $0.00001;
  Issued and outstanding: nil shares                       |  |  |              |   |               |           |  
|Common Stock,                                                                                                                |  |  |               |   |               |            |  
|Authorized:
  100,000,000 shares, par value $0.00001;
  Issued and outstanding: 46,028,345 shares (2005 - 42,381,400 shares) |  |  | 460           |   |               | 424        |  
|Additional Paid-in Capital                                                                                                   |  |  | 13,887,221    |   |               | 6,687,006  |  
|Accumulated Other
  Comprehensive Loss                                                                                       |  |  | (113,753      | ) |               | (7,171     | )
|Deficit Accumulated During
  the Development Stage                                                                           |  |  | (13,781,835   | ) |               | (6,702,729 | )
|                                                                                                                             |  |  |               |   |               |            |  
|Total Stockholders
  Deficit                                                                                                |  |  | (7,907        | ) |               | (22,470    | )
|                                                                                                                             |  |  |               |   |               |            |  
|Total Liabilities and
  Stockholders Deficit                                                                                |  |  | 392,878       |   |               | 908,354    |  
|                                                                                                                             |  |  |               |   |               |            |  

(The accompanying notes are an integral part of these consolidated
financial statements)

F-2

---



VisualMED Clinical Solutions
Corp.
(A Development Stage Company)Consolidated Statements of Operations
(expressed in U.S. dollars)

|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|----------------------------------------- |  |  | -------------------------------------------------------------------------------- | - | --------------------------------------- | ---------- | --------------------------------------- |  | ---------- | -
|                                          |  |  | Accumulated from
  September 7, 1999
  (Date of Inception)
  to June 30,
  2006$ |   | For the
  Year Ended
  June 30,
  2006$ |            | For the
  Year Ended
  June 30,
  2005$
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Revenue                                   |  |  | 308,946                                                                          |   |                                         | 308,946    |                                         |  |           |  
|Cost of sales                             |  |  | 175,229                                                                          |   |                                         | 175,229    |                                         |  |           |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Gross Profit                              |  |  | 133,717                                                                          |   |                                         | 133,717    |                                         |  |           |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Expenses                                  |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Customer service                          |  |  | 1,047,154                                                                        |   |                                         | 618,144    |                                         |  | 429,010    |  
|Amortization                              |  |  | 27,514                                                                           |   |                                         | 22,758     |                                         |  | 4,756      |  
|Development costs                         |  |  | 1,654,452                                                                        |   |                                         | 1,093,096  |                                         |  | 561,356    |  
|General and administration                |  |  | 2,745,793                                                                        |   |                                         | 2,058,500  |                                         |  | 687,293    |  
|Sales and marketing                       |  |  | 3,643,472                                                                        |   |                                         | 3,559,861  |                                         |  | 83,611     |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Total Expenses                            |  |  | 9,118,385                                                                        |   |                                         | 7,352,359  |                                         |  | 1,766,026  |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Net Loss From Operations                  |  |  | (8,984,668                                                                       | ) |                                         | (7,218,642 | )                                       |  | (1,766,026 | )
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Other Income (Expenses)                   |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Interest                                  |  |  | (38,081                                                                          | ) |                                         | 1,637      |                                         |  | (39,718    | )
|Financing costs                           |  |  | (4,514,285                                                                       | ) |                                         |           |                                         |  | (4,514,285 | )
|Foreign exchange gain                     |  |  | 137,276                                                                          |   |                                         | 130,244    |                                         |  | 7,032      |  
|Gain on forgiveness of interest           |  |  | 7,655                                                                            |   |                                         | 7,655      |                                         |  |            |  
|Gain on forgiveness of debt               |  |  | 12,689                                                                           |   |                                         |           |                                         |  | 12,689     |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Net Loss Before
  Discontinued Operations |  |  | (13,379,414                                                                      | ) |                                         | (7,079,106 | )                                       |  | (6,300,308 | )
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Discontinued Operations                   |  |  | (402,421                                                                         | ) |                                         |           |                                         |  | (1,143     | )
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Net Loss                                  |  |  | (13,781,835                                                                      | ) |                                         | (7,079,106 | )                                       |  | (6,301,451 | )
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Other Comprehensive Loss                  |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Foreign currency translation adjustments  |  |  | (113,753                                                                         | ) |                                         | (106,582   | )                                       |  | (7,171     | )
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Comprehensive Loss                        |  |  | (13,895,588                                                                      | ) |                                         | (7,185,688 | )                                       |  | (6,308,622 | )
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Net Loss Per Share  Basic
  and Diluted  |  |  |                                                                                  |   |                                         | (0.16      | )                                       |  | (0.15      | )
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  
|Weighted Average Shares
  Outstanding     |  |  |                                                                                  |   |                                         | 44,163,000 |                                         |  | 42,140,000 |  
|                                          |  |  |                                                                                  |   |                                         |            |                                         |  |            |  

(The accompanying notes are an integral part of these consolidated
financial statements)

F-3

---



VisualMED Clinical Solutions
Corp.
(A Development Stage Company)Consolidated Statements of Cash Flows
(expressed in U.S. dollars)

|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|------------------------------------------------------------------------------- |  |  | --------------------------------------------------------------------------------- | - | --------------------------------- | ---------- | --------------------------------- |  | ---------- | -
|                                                                                |  |  | Accumulated from
  September 7, 1999
  (Date of Inception) to
  June 30, 
  2006$ |   | For theYear EndedJune 30,
  2006$ |            | For theYear EndedJune 30,
  2005$
|Operating Activities                                                            |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Net loss                                                                        |  |  | (13,781,835                                                                       | ) |                                   | (7,079,106 | )                                 |  | (6,301,451 | )
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Adjustments to reconcile
  net loss to net cash used in operating activities:   |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Amortization                                                                    |  |  | 29,056                                                                            |   |                                   | 22,758     |                                   |  | 4,756      |  
|Stock-based compensation                                                        |  |  | 9,441,708                                                                         |   |                                   | 4,655,200  |                                   |  | 4,514,285  |  
|Common stock issued for interest                                                |  |  | 32,063                                                                            |   |                                   |           |                                   |  | 32,063     |  
|Common stock issued for services                                                |  |  | 81,250                                                                            |   |                                   |           |                                   |  | 81,250     |  
|Write off of assets                                                             |  |  | 3,568                                                                             |   |                                   |           |                                   |  | 924        |  
|Gain on forgiveness of interest                                                 |  |  | (7,655                                                                            | ) |                                   | (7,655     | )                                 |  |           |  
|Gain on settlement of debt                                                      |  |  | (12,689                                                                           | ) |                                   |           |                                   |  | (12,689    | )
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Changes in operating assets
  and liabilities                                   |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Prepaid expenses                                                                |  |  | (248,918                                                                          | ) |                                   | 205,859    |                                   |  | (454,777   | )
|Inventory                                                                       |  |  | (13,587                                                                           | ) |                                   | (13,587    | )                                 |  |           |  
|Other assets                                                                    |  |  | (15,127                                                                           | ) |                                   | (615       | )                                 |  | (14,512    | )
|Deferred revenue                                                                |  |  | 447,292                                                                           |   |                                   | (49,708    | )                                 |  | 67,000     |  
|Due to related party                                                            |  |  | 12,822                                                                            |   |                                   |           |                                   |  | 470        |  
|Advances and receivables                                                        |  |  | (459,781                                                                          | ) |                                   | 27,484     |                                   |  | (57,265    | )
|Accounts payable and accrued liabilities                                        |  |  | 365,932                                                                           |   |                                   | 163,731    |                                   |  | 192,746    |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Net Cash Used In Operating
  Activities                                         |  |  | (4,125,901                                                                        | ) |                                   | (2,075,639 | )                                 |  | (1,947,200 | )
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Investing Activities                                                            |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Purchase of property and equipment                                              |  |  | (82,252                                                                           | ) |                                   | (54,265    | )                                 |  | (25,521    | )
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Net Cash Used In Investing
  Activities                                         |  |  | (82,252                                                                           | ) |                                   | (54,265    | )                                 |  | (25,521    | )
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Financing Activities                                                            |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Proceeds from short term loans                                                  |  |  | 521,749                                                                           |   |                                   | 521,749    |                                   |  |           |  
|Proceeds from the sale of common stock                                          |  |  | 1,485,313                                                                         |   |                                   | 1,379,093  |                                   |  |           |  
|Repayment of capital lease obligation                                           |  |  | (3,425                                                                            | ) |                                   | (3,425     | )                                 |  |           |  
|Proceeds from notes payable                                                     |  |  | 2,326,476                                                                         |   |                                   |           |                                   |  | 2,326,476  |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Net Cash Provided By
  Financing Activities                                     |  |  | 4,330,113                                                                         |   |                                   | 1,897,417  |                                   |  | 2,326,476  |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Effect of Exchange Rate
  Changes on Cash                                       |  |  | (110,984                                                                          | ) |                                   | (104,947   | )                                 |  | (6,037     | )
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Increase (Decrease) in Cash                                                     |  |  | 10,976                                                                            |   |                                   | (337,434   | )                                 |  | 347,718    |  
|Cash  Beginning of Period                                                      |  |  |                                                                                  |   |                                   | 348,410    |                                   |  | 692        |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Cash  End of Period                                                            |  |  | 10,976                                                                            |   |                                   | 10,976     |                                   |  | 348,410    |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Non-Cash Financing
  Activities                                                 |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Common stock issued in settlement of advances                                   |  |  | 133                                                                               |   |                                   |           |                                   |  |           |  
|Common stock issued for mining claims                                           |  |  | 2,644                                                                             |   |                                   |           |                                   |  |           |  
|Common stock issued for services                                                |  |  | 372,223                                                                           |   |                                   |           |                                   |  | 100,000    |  
|Common
  stock issued for settlement of notes payable and accrued interest, net |  |  | 2,853,884                                                                         |   |                                   | 1,165,959  |                                   |  | 1,687,925  |  
|Common stock issued for property & equipment                                    |  |  | 4,000                                                                             |   |                                   |           |                                   |  | 4,000      |  
|Warrants issued for financing services                                          |  |  | 662,440                                                                           |   |                                   |           |                                   |  | 662,440    |  
|Capital lease obligation recognized for assets under capital
lease              |  |  | 10,520                                                                            |   |                                   |           |                                   |  | 10,520     |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Supplemental Disclosures                                                        |  |  |                                                                                   |   |                                   |            |                                   |  |            |  
|Interest paid                                                                   |  |  |                                                                                   |   |                                   |           |                                   |  |           |  
|Income taxes paid                                                               |  |  |                                                                                   |   |                                   |           |                                   |  |           |  
|                                                                                |  |  |                                                                                   |   |                                   |            |                                   |  |            |  

(The accompanying notes are an integral part of these consolidated
financial statements)

F-4

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)Consolidated Statements of Stockholders Deficit
For the Period from September 7, 1999 (Date of Inception) to June 30, 2006
(expressed in U.S. dollars)

|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | ------------------------------ |  | ------------------------------------------ | - | -------------------------------------------------------- | --------- | ----- |  | ------ | - |  | ---------- | - |  | ---------- | -
|                                                                                                  |  |                |             | Additional
  Paid-In
  Capital |  | Accumulated
  Other
  Comprehensive
  Loss |   | Deficit
  Accumulated
  During the
  Development
  Stage |           | Total | 
|                                                                                                  |  |                |             |                                |  |                                            |  
|                                                                                                  |  | Common
  Stock |             |                                |  |                                            |  
|                                                                                                  |  |                |             |                                |  |                                            |  
|                                                                                                  |  | Number         |             | Amount                         |  |                                            |   |                                                          |          
|                                                                                                  |  | #              |             | $                              |  | $                                          |   | $                                                        |           | $     |  | $      |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Balance  September 7, 1999
  (Date of Inception)                                                 |  |                |            |                                |  |                                           |   |                                                          |          |       |  |       |   |  |           |   |  |           |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Issuance of common stock
  for services, mining claims and payment of advances at $.011 per share |  |                | 37,500,000  |                                |  | 375                                        |   |                                                          | 274,625   |       |  |       |   |  |           |   |  | 275,000    |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Net loss                                                                                          |  |                |            |                                |  |                                           |   |                                                          |          |       |  |       |   |  | (294,522   | ) |  | (294,522   | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Balance  June 30, 2000                                                                           |  |                | 37,500,000  |                                |  | 375                                        |   |                                                          | 274,625   |       |  |        |   |  | (294,522   | ) |  | (19,522    | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Issuance of common stock
  for cash at $0.02 per share                                            |  |                | 7,966,500   |                                |  | 80                                         |   |                                                          | 106,140   |       |  |       |   |  |           |   |  | 106,220    |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Net loss                                                                                          |  |                |            |                                |  |                                           |   |                                                          |          |       |  |       |   |  | (38,069    | ) |  | (38,069    | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Balance  June 30, 2001                                                                           |  |                | 45,466,500  |                                |  | 455                                        |   |                                                          | 380,765   |       |  |        |   |  | (332,591   | ) |  | 48,629     |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Net loss                                                                                          |  |                |            |                                |  |                                           |   |                                                          |          |       |  |       |   |  | (41,281    | ) |  | (41,281    | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Balance  June 30, 2002                                                                           |  |                | 45,466,500  |                                |  | 455                                        |   |                                                          | 380,765   |       |  |        |   |  | (373,872   | ) |  | 7,348      |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Net loss                                                                                          |  |                |            |                                |  |                                           |   |                                                          |          |       |  |       |   |  | (18,202    | ) |  | (18,202    | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Balance  June 30, 2003                                                                           |  |                | 45,466,500  |                                |  | 455                                        |   |                                                          | 380,765   |       |  |        |   |  | (392,074   | ) |  | (10,854    | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Net loss                                                                                          |  |                |            |                                |  |                                           |   |                                                          |          |       |  |       |   |  | (9,204     | ) |  | (9,204     | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Balance  June 30, 2004                                                                           |  |                | 45,466,500  |                                |  | 455                                        |   |                                                          | 380,765   |       |  |       |   |  | (401,278   | ) |  | (20,058    | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Return and cancellation of
  common stock                                                         |  |                | (37,500,000 | )                              |  | (375                                       | ) |                                                          | 375       |       |  |       |   |  |           |   |  |           |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Issue of common stock for
  acquisition of assets from VisualMED Clinical Solutions Corporation   |  |                | 31,866,000  |                                |  | 319                                        |   |                                                          | 3,681     |       |  |       |   |  |           |   |  | 4,000      |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Issue of common stock for
  cash at $0.75 per share, net of financing costs of $18,750            |  |                | 2,275,567   |                                |  | 23                                         |   |                                                          | 1,687,902 |       |  |       |   |  |           |   |  | 1,687,925  |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Issue of common stock for
  services at $2.50 per share                                           |  |                | 40,000      |                                |  |                                           |   |                                                          | 100,000   |       |  |       |   |  |           |   |  | 100,000    |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Issue of common stock by
  exercise of cashless warrants at $0.001 per share                      |  |                | 233,333     |                                |  | 2                                          |   |                                                          | (2        | )     |  |       |   |  |           |   |  |           |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Stock-based compensation                                                                          |  |                |            |                                |  |                                           |   |                                                          | 4,514,285 |       |  |       |   |  |           |   |  | 4,514,285  |  
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Foreign currency
  translation adjustment                                                         |  |                |            |                                |  |                                           |   |                                                          |          |       |  | (7,171 | ) |  |           |   |  | (7,171     | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Net loss                                                                                          |  |                |            |                                |  |                                           |   |                                                          |          |       |  |       |   |  | (6,301,451 | ) |  | (6,301,451 | )
|                                                                                                  |  |                |             |                                |  |                                            |   |                                                          |           |       |  |        |   |  |            |   |  |            |  
|Balance  June 30, 2005                                                                           |  |                | 42,381,400  |                                |  | 424                                        |   |                                                          | 6,687,006 |       |  | (7,171 | ) |  | (6,702,729 | ) |  | (22,470    | )

(The accompanying notes are an integral part
of these consolidated financial statements)

F-5

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Consolidated Statements of Stockholders Deficit (continued)
For the Period from September 7, 1999 (Date of Inception) to June 30, 2006
(expressed in U.S. dollars)

|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|---------------------------------------------------------------------------------- |  | -------------- | ---------- | ------------------------------ |  | ------------------------------------------ |  | -------------------------------------------------------- | ---------- | ----- |  | -------- | - |  | ----------- | - |  | ---------- | -
|                                                                                   |  |                |            | Additional
  Paid-In
  Capital |  | Accumulated
  Other
  Comprehensive
  Loss |  | Deficit
  Accumulated
  During the
  Development
  Stage |            | Total | 
|                                                                                   |  |                |            |                                |  |                                            | 
|                                                                                   |  | Common
  Stock |            |                                |  |                                            | 
|                                                                                   |  |                |            |                                |  |                                            | 
|                                                                                   |  | Number         |            | Amount                         |  |                                            |  |                                                          |           
|                                                                                   |  | #              |            | $                              |  | $                                          |  | $                                                        |            | $     |  | $        |  
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Balance  June 30, 2005                                                            |  |                | 42,381,400 |                                |  | 424                                        |  |                                                          | 6,687,006  |       |  | (7,171   | ) |  | (6,702,729  | ) |  | (22,470    | )
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Issue of common stock for
  cash at $0.49 per share upon exercise of stock options |  |                | 30,500     |                                |  |                                           |  |                                                          | 14,945     |       |  |         |   |  |            |   |  | 14,945     |  
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Issue of common stock for
  cash at $1.25 per share upon exercise of warrants      |  |                | 1,080,678  |                                |  | 11                                         |  |                                                          | 1,350,836  |       |  |         |   |  |            |   |  | 1,350,847  |  
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Issue of common stock to
  settle notes payable upon exercise of warrants          |  |                | 932,767    |                                |  | 9                                          |  |                                                          | 1,165,950  |       |  |         |   |  |            |   |  | 1,165,959  |  
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Issue of common stock for
  cash at $1.90 per share upon exercise of stock options |  |                | 7,000      |                                |  |                                           |  |                                                          | 13,300     |       |  |         |   |  |            |   |  | 13,300     |  
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Issue of common stock at
  $0.00001 per share upon exercise of stock options       |  |                | 1,596,000  |                                |  | 16                                         |  |                                                          | (16        | )     |  |         |   |  |            |   |  |           |  
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Stock-based compensation                                                           |  |                |           |                                |  |                                           |  |                                                          | 4,655,200  |       |  |         |   |  |            |   |  | 4,655,200  |  
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Foreign currency
  translation adjustment                                          |  |                |           |                                |  |                                           |  |                                                          |           |       |  | (106,582 | ) |  |            |   |  | (106,582   | )
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Net loss                                                                           |  |                |           |                                |  |                                           |  |                                                          |           |       |  |         |   |  | (7,079,106  | ) |  | (7,079,106 | )
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  
|Balance  June 30, 2006                                                            |  |                | 46,028,345 |                                |  | 460                                        |  |                                                          | 13,887,221 |       |  | (113,753 | ) |  | (13,781,835 | ) |  | (7,907     | )
|                                                                                   |  |                |            |                                |  |                                            |  |                                                          |            |       |  |          |   |  |             |   |  |            |  

(The accompanying notes are an integral part
of these consolidated financial statements)

F-6

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Development
  Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company
  was incorporated in the State of Nevada on September 7, 1999. The Company
  changed its name to VisualMed Clinical Solutions Corporation on November 30,
  2004. In September 1999 the Company purchased three mineral claims
  representing forty-four units, situated in the Greenwood Mining Division in
  the Province of British Columbia, Canada. The Companys original business
  plan was to acquire, explore and develop mineral properties and to ultimately
  seek earnings by exploiting the mineral claims. Pursuant to an Agreement
  dated September 23, 2004 (the Agreement), which closed on October 13, 2004,
  the Company agreed to issue 31,866,000 split-adjusted restricted shares of
  common stock to Visual Healthcare Corporation (VHCC) in exchange for
  certain assets of VHCC consisting of property and equipment and a suite of
  clinical software modules (the modules) that are the key components of a
  Clinical Information System for healthcare facilities. VHCC is a Nevada
  corporation, based in Montreal, Canada, involved in developing software
  solutions targeting clinical medicine and related areas of the healthcare
  market. The Company has the right to exploit, commercialize, install, support
  and upgrade the modules purchased. The rights to exploit, commercialize,
  install, support and upgrade are worldwide, except for that part of the U.S.
  market, as well as the Chinese and the Japanese language markets, into which
  VHCC has entered into exclusivity agreements with other non-related
  companies. As the result of the transaction, VHCC controlled 80% of the
  Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The
  Companys new business plan involves the distribution of medical software,
  and the Company, in connection with the closing of the Agreement discussed
  above, decided to discontinue its mineral exploration efforts. These mineral
  interests will be allowed to lapse. The Company is primarily involved in
  activities related to the distribution of medical software and is considered
  to be a development stage company. At June 30, 2006, the Company had a
  working capital deficiency of $74,429 and has incurred losses of $13,781,835
  since inception. The ability of the Company to emerge from the development
  stage with respect to any planned principal business activity is dependent
  upon its successful efforts to raise additional equity financing and then
  attain profitable operations. Management has plans to seek additional capital
  through equity and/or debt offerings. There is no guarantee that the Company
  will be able to complete any of the above objectives. These financial
  statements do not include any adjustments to the recoverability and
  classification of recorded asset amounts and classification of liabilities
  that may be necessary should the Company be unable to continue as a going
  concern. These factors raise substantial doubt regarding the Companys
  ability to continue as a going concern.                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2. | Summary of
  Significant Accounting Principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|a) | Basis of
  Presentation and Fiscal Year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | These
  consolidated financials statements and related notes are presented in
  accordance with accounting principles generally accepted in the United
  States, and are expressed in US dollars. The Company has not produced
  significant revenues from its principal business and is a development stage
  company as defined by Statement of Financial Accounting Standard (SFAS) No.
  7 Accounting
  and Reporting by Development Stage Enterprises. These financial
  statements include the accounts of the Company and its wholly-owned
  subsidiary, VisualMed Clinical Systems Marketing Inc., a company incorporated
  and based in Quebec, Canada. All intercompany transactions and balances have
  been eliminated. The Companys fiscal year-end is June 30.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|b) | Use of
  Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The
  preparation of financial statements in conformity with U.S. generally
  accepted accounting principles requires management to make estimates and
  assumptions that affect the reported amounts of assets and liabilities and
  disclosure of contingent assets and liabilities at the date of the financial
  statements and the reported amounts of revenues and expenses during the
  reporting period. Actual results could differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-7

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Summary of
  Significant Accounting Principles (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|c) | Cash and
  Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company
  considers all highly liquid instruments with a maturity of three months or
  less at the time of issuance to be cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|d) | Property and
  Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Property and
  equipment is stated at cost, less accumulated amortization, and consists of
  office furniture, computer hardware and software, leasehold improvements and
  assets under capital lease. Amortization of office furniture is computed
  using the straight-line method over five years. Amortization of computer
  hardware and software is computed using the straight-line method over three
  years. Amortization of leasehold improvements is computed using the
  straight-line method over five years. Amortization of assets under capital
  lease is computed using the straight-line method over the term of the lease.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|e) | Long-Lived
  Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In
  accordance with SFAS No. 144, Accounting
  for the Impairment or Disposal of Long-Lived Assets, the carrying
  value of intangible assets and other long-lived assets is reviewed on a
  regular basis for the existence of facts or circumstances that may suggest
  impairment. The Company recognizes impairment when the sum of the expected
  undiscounted future cash flows is less than the carrying amount of the asset.
  Impairment losses, if any, are measured as the excess of the carrying amount
  of the asset over its estimated fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|f) | Foreign
  Currency Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The
  Companys functional and reporting currency is the United States dollar. The
  functional currency of the Companys subsidiary is the Canadian dollar. The
  financial statements of the subsidiary are translated to United States
  dollars in accordance with SFAS No. 52 Foreign
  Currency Translation using period-end rates of exchange for
  assets and liabilities, and average rates of exchange for the period for
  revenues and expenses. Translation gains (losses) are recorded in accumulated
  other comprehensive income (loss) as a component of stockholders equity.
  Foreign currency transaction gains and losses are included in current
  operations.                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|g) | Development
  Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Costs
  related to the enhancement of existing medical software modules are expensed
  as incurred until technological feasibility in the form of a working model
  has been established. The time period between the establishment of
  technological feasibility and completion of product development is expected
  to be short, therefore the Company has not capitalized any product
  development costs during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|h) | Basic and
  Diluted Net Income (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company
  computes net income (loss) per share in accordance with SFAS No. 128, Earnings
  per Share which requires presentation of both basic and diluted
  earnings per share (EPS) on the face of the income statement. Basic EPS is
  computed by dividing net income (loss) available to common shareholders (numerator)
  by the weighted average number of shares outstanding (denominator) during the
  period. Diluted EPS gives effect to all dilutive potential common shares
  outstanding during the period including stock options, using the treasury
  stock method, and convertible preferred stock, using the if-converted method.
  In computing diluted EPS, the average stock price for the period is used in
  determining the number of shares assumed to be purchased from the exercise of
  stock options or warrants. Diluted EPS and the weighted average number of
  common shares excludes all dilutive potential shares since their effect is
  anti dilutive. Shares underlying these securities totalled approximately
  1,132,000 as of June 30, 2006.

F-8

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Summary of
  Significant Accounting Principles (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|i) | Financial
  Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The carrying
  value of cash, accounts receivable, advances to related parties, accounts
  payable, accrued liabilities, notes payable and capital lease obligation
  approximate fair value due to the relatively short maturity of these
  instruments. Financial instruments which potentially subject the Company to a
  concentration of credit risk consist primarily of cash. The Company deposits
  cash with a high quality financial institution. For the year ended June 30,
  2006, revenue from one customer represented 52% of total revenue and from a
  second customer represented 46% of total revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|j) | Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Inventory
  consists of computer hardware and software acquired for specific revenue
  contracts and also includes related support and implementation costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|k) | Revenue
  Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company
  recognizes revenue related to sales and licensing of medical software in
  accordance with Statement of Position No. 97-2, Software Revenue Recognition (SOP
97-2), as amended by
  Statement of Position No. 98-9, Software
  Revenue Recognition with Respect to Certain Arrangements.
  Pursuant to SOP 97-2 and Staff Accounting Bulletin No. 104 Revenue
  Recognition, revenue will only be recognized when the price is
  fixed or determinable, persuasive evidence of an arrangement exists, the
  service is performed, and collectibility is reasonably assured. The Companys
  revenue contracts are accounted for in conformity with Accounting Research
  Bulletin No. 45 Long-Term Construction-Type Contracts,
  using the relevant guidance in SOP 81-1 Accounting for Performance of Construction-Type and
  Certain Production-Type Contracts, unless specified criteria for
  separate accounting for any service element are met. The Company also follows
  the guidance in Emerging Issues Task Force (EITF) Issue No. 00-21 Revenue
  Arrangements with Multiple Deliverables relating to the
  separability of deliverables included in an arrangement into different units
  of accounting and the allocation of an arrangements consideration to those
  units of accounting. It does not address when revenue should be recognized
  for the units of accounting. The Company received $35,000 during the year
  ended June 30, 2006 for annual license renewal fees, which are recognized in
  revenue over the term of the license. At June 30, 2006, the balance of
  deferred revenue, which relates to the unearned portion received of annual
  license fees, is $17,292. Incremental direct costs related to contract
  acquisition and origination, which result in deferred revenue, are expensed
  as incurred. Any allowance for doubtful accounts is based on the Companys
  detailed assessment of the collectibility of specific customer accounts. Any
  significant customer accounts that are not expected to be collected are
  excluded from revenues. To date, the Company has not experienced any losses
  from uncollectible accounts.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|l) | Comprehensive
  Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | SFAS No.
  130, Reporting Comprehensive Income,
  establishes standards for the reporting and display of comprehensive loss and
  its components in the financial statements. For the years ended June 30, 2006
  and 2005, the Companys only component of comprehensive loss was foreign
  currency translation adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|m) | Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Certain
  reclassifications have been made to the prior periods financial statements
  to conform to the current periods presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-9

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Summary of
  Significant Accounting Principles (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|n) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Potential
  benefits of income tax losses are not recognized in the accounts until
  realization is more likely than not. The Company has adopted SFAS No. 109 Accounting
  for Income Taxes as of its inception. Pursuant to SFAS No. 109
  the Company is required to compute tax asset benefits for net operating
  losses carried forward. The potential benefit of net operating losses have
  not been recognized in these financial statements because the Company cannot
  be assured it is more likely than not it will utilize the net operating
  losses carried forward in future years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|o) | Stock-based
  Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Prior to
  January 1, 2006, the Company accounted for stock-based awards under the
  recognition and measurement provisions of Accounting Principles Board Opinion
  No. 25, Accounting
  for Stock Issued to Employees using the intrinsic value method of
  accounting. Effective January 1, 2006, the Company adopted the fair value
  recognition provisions of SFAS No. 123R Share Based Payments, using the
  modified retrospective transition method. The Company had not issued any
  stock options and had no unvested share based payments prior to January 1,
  2006. Accordingly, there was no effect on the Companys reported loss from
  operations, cash flows or loss per share as a result of adopting SFAS No
  123R.                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|p) | Recent
  Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | In May 2005,
  the Financial Accounting Standards Board (FASB) issued SFAS No. 154, Accounting
  Changes and Error Corrections  A Replacement of APB Opinion No. 20 and SFAS
  No. 3. SFAS 154 changes the requirements for the accounting for
  and reporting of a change in accounting principle and applies to all
  voluntary changes in accounting principle. It also applies to changes
  required by an accounting pronouncement in the unusual instance that the
  pronouncement does not include specific transition provisions. SFAS 154
  requires retrospective application to prior periods financial statements of
  changes in accounting principle, unless it is impracticable to determine
  either the period-specific effects or the cumulative effect of the change.
  The provisions of SFAS No. 154 are effective for accounting changes and
  correction of errors made in fiscal years beginning after December 15, 2005.
  The adoption of this standard is not expected to have a material effect on
  the Companys results of operations or financial position.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The FASB has
  also issued SFAS No. 155 Accounting for Certain Hybrid Financial
  Instruments and SFAS No. 156 Accounting for Servicing of Financial Assets,
  but they will not have any relationship to the operations of the Company.
  Therefore a description and its impact for each on the Companys operations
  and financial position have not been disclosed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | Prepaid
  expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | As at June
  30, 2006 and 2005, the following comprises prepaid expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|                                                |  |  |                     |  |                     |         | 
|----------------------------------------------- |  |  | ------------------- |  | ------------------- | ------- | 
|                                                |  |  | June 30,
  2006
  $ |  | June 30,
  2005
  $
|                                                |  |  |                     |  |                     |         | 
|Directors
  and officers insurance              |  |  | 33,640              |  |                     |        | 
|Prepaid
  expenses related to Medicool contract |  |  | 204,587             |  |                     | 427,935 | 
|Other                                           |  |  | 11,290              |  |                     | 26,842  | 
|                                                |  |  |                     |  |                     |         | 
|                                                |  |  | 249,517             |  |                     | 454,777 | 
|                                                |  |  |                     |  |                     |         | 

F-10

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|   |                              
|-- | -----------------------------
|4. | Advances to
  Related Parties

|                                                                  |  |  |     |  |                     |        |                     |  |        | 
|----------------------------------------------------------------- |  |  | --- |  | ------------------- | ------ | ------------------- |  | ------ | 
|                                                                  |  |  |     |  | June 30,
  2006
  $ |        | June 30,
  2005
  $
|                                                                  |  |  |     |  |                     |        |                     |  |        | 
|Advances to
  employees                                           |  |  | (a) |  |                     | 30,175 |                     |  |       | 
|Due from
  Visual Healthcare Corporation, an affiliated company   |  |  | (b) |  |                     |       |                     |  | 664    | 
|Due from
  VisualMED Clinical Systems Inc., an affiliated company |  |  | (c) |  |                     |       |                     |  | 56,601 | 
|                                                                  |  |  |     |  |                     |        |                     |  |        | 
|                                                                  |  |  |     |  |                     | 30,175 |                     |  | 57,265 | 
|                                                                  |  |  |     |  |                     |        |                     |  |        | 

|a)  | Advances to
  employees of $30,175 represent amounts advanced towards travel expenses to be
  incurred. These amounts are non-interest bearing.                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                       
|b)  | At June 30,
  2005, the Company was owed $664 from its parent company, Visual Healthcare
  Corporation (VHCC). The amount represented cash advances, was unsecured,
  non-interest bearing and had no specific terms of repayment. During the year
  ended June 30, 2006, this amount was repaid in full.           
|    |                                                                                                                                                                                                                                                                                                                       
|c)  | At June 30,
  2005, the Company was owed $56,601 from VisualMED Clinical Systems Inc., a
  wholly-owned subsidiary of VHCC. The amount represented cash advances, was
  unsecured, non-interest bearing and had no specific terms of repayment.
  During the year ended June 30, 2006, this amount was repaid in full.
|    |                                                                                                                                                                                                                                                                                                                       
|5.. | Property and
  Equipment                                                                                                                                                                                                                                                                                              

|                         |  |  |          |  |                                |        |                                         |  |                                          |  |  |        | 
|------------------------ |  |  | -------- |  | ------------------------------ | ------ | --------------------------------------- |  | ---------------------------------------- |  |  | ------ | 
|                         |  |  | Cost
  $ |  | Accumulated
  Amortization
  $ |        | June
  30,2006
  Net carrying value
  $ |  | June 30,
  2005
  Net carrying value
  $
|                         |  |  |          |  |                                |        |                                         |  |                                          |  |  |        | 
|                         |  |  |          |  |                                |        |                                         |  |                                          |  |  |        | 
|Computer
  hardware      |  |  | 52,386   |  |                                | 14,363 |                                         |  | 38,023                                   |  |  | 8,414  | 
|Computer
  software      |  |  | 23,998   |  |                                | 8,125  |                                         |  | 15,873                                   |  |  | 6,523  | 
|Office
  furniture       |  |  | 12,558   |  |                                | 3,430  |                                         |  | 9,128                                    |  |  | 10,654 | 
|Leasehold
  improvements |  |  | 9,670    |  |                                | 2,940  |                                         |  | 6,730                                    |  |  | 7,799  | 
|                         |  |  |          |  |                                |        |                                         |  |                                          |  |  |        | 
|                         |  |  | 98,612   |  |                                | 28,858 |                                         |  | 69,754                                   |  |  | 33,390 | 
|                         |  |  |          |  |                                |        |                                         |  |                                          |  |  |        | 

|   |                                                                                                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Assets under
  capital lease are included in office furniture with a cost of $11,599. During
  the year ended June 30, 2006, the Company recognized accumulated amortization
  of assets under capital lease of $3,133 (June 30, 2005  $649).
|   |                                                                                                                                                                                                                                               
|6. | Accrued
  Liabilities                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                               
|   | As at June 30,
  2006 and 2005, the following comprises accrued liabilities:                                                                                                                                                                  

|                                   |  |  |                     |  |                     |         | 
|---------------------------------- |  |  | ------------------- |  | ------------------- | ------- | 
|                                   |  |  | June 30,
  2006
  $ |  | June 30,
  2005
  $
|                                   |  |  |                     |  |                     |         | 
|Salaries,
  wages and vacation pay |  |  | 112,276             |  |                     | 46,330  | 
|Professional
  fees                |  |  | 35,000              |  |                     | 50,000  | 
|Other                              |  |  | 8,250               |  |                     | 9,020   | 
|                                   |  |  |                     |  |                     |         | 
|                                   |  |  | 155,526             |  |                     | 105,350 | 
|                                   |  |  |                     |  |                     |         | 

F-11

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | Asset
  Acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Pursuant to
  an Agreement dated September 23, 2004, which closed on October 13, 2004, the
  Company issued 31,866,000 split-adjusted restricted shares of common stock to
  Visual Healthcare Corporation (VHCC) in exchange for certain assets of VHCC
  consisting of property and equipment, a suite of clinical software modules
  that are the key components of a Clinical Information System for healthcare
  facilities, all the issued and outstanding common shares of VisualMed
  Marketing Inc., and other assets.                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company
  completed the Agreement by completing a private placement of 2,275,567 units
  at $0.75 per unit to settle outstanding notes payable of $1,674,612 and
  accrued interest of $32,063. Each unit consists of one share of common stock
  and one warrant. Each warrant entitles the holder to acquire an additional
  share at a price of $1.25 per share for a period up to two years from the
  closing date of the private placement. The Company also paid ongoing
  operating costs of VCSC from July 1, 2004 to closing of the Agreement, to
  maintain the ongoing operating costs of VCSC. The Company also requested back
  to treasury and cancelled 37,500,000 split-adjusted common shares, previously
  issued to two former directors of the Company, for no consideration. The
  31,866,000 split-adjusted restricted shares of common stock were issued to
  VHCC.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | As a result
  of the above transactions VHCC controlled 80% of the outstanding common
  shares of the Company. The acquisition has been accounted for as an asset
  purchase in accordance with EITF 98-3 Determining Whether a Nonmonetary
  Transaction Involves Receipt of Productive Assets or of a Business, as all
  but a de minimis amount of the fair value of the transferred assets is
  represented by the software modules. These modules must be modified before
  implementation by any potential customers. There were no prior sales by VHCC
  related to these modules. The transferred assets have been recorded at the
  book value of the transferor, VHCC, as this is a related party transaction.
  Acquisition costs of $13,000 associated with this acquisition were charged to
  operations.                                                                       

|                                                                   |  |  |       | 
|------------------------------------------------------------------ |  |  | ----- | 
|                                                                   |  |  | $     | 
|                                                                   |  |  |       | 
|Property and
  equipment                                           |  |  | 4,000 | 
|Software
  modules                                                 |  |  |      | 
|Common
  shares of VisualMed Marketing, Inc. (an inactive company) |  |  |      | 
|                                                                   |  |  |       | 
|Paid by the
  issue of 31,866,000 split-adjusted common shares     |  |  | 4,000 | 
|                                                                   |  |  |       | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8. | Notes
  Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In addition
  to the notes payable issued as described in Note 7, the Company issued notes
  payable for cash proceeds of $1,165,959 which bore interest at 10% per annum.
  On August 26, 2005, the Company issued 180,537 shares of common stock upon
  the exercise of 180,537 warrants at $1.25 per share to settle notes payable
  of $225,671. On July 19, 2005, the Company issued 752,230 shares of common
  stock upon the exercise of 752,230 warrants at $1.25 per share to settle
  notes payable of $940,288. A gain on forgiveness of interest expense was
  recorded during the year ended June 30, 2006 in the amount of $7,655.

F-12

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|   |                                       |                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9. | Related
  Party Transactions/Balances
|   |                                       |                                                                                                                                                                                                                                                                                                                                                                            
|   | a)                                    | The Company
  is indebted to a director and an officer for $NIL (2005 - $9,230),
  representing expenses incurred on behalf of the Company. These amounts are
  included in accounts payable and are unsecured, non-interest bearing and have
  no specific terms of repayment.                                                                                            
|   |                                       |                                                                                                                                                                                                                                                                                                                                                                            
|   | b)                                    | The Company
  is owed $NIL (2005 - $664) from its parent company, Visual Healthcare
  Corporation (VHCC). The Company is owed $NIL (2005 - $56,601) from
  VisualMED Clinical Systems Inc., a wholly-owned subsidiary of VHCC. These
  amounts represent cash advances, are unsecured, non-interest bearing and have
  no specific terms of repayment.                   
|   |                                       |                                                                                                                                                                                                                                                                                                                                                                            
|   | c)                                    | During the
  year ended June 30, 2006, the Company incurred $NIL (2005 - $45,000) in
  management fees paid to its parent company, Visual Healthcare Corporation.                                                                                                                                                                                                          
|   |                                       |                                                                                                                                                                                                                                                                                                                                                                            
|   | d)                                    | During the
  year ended June 30, 2006, the Company incurred $51,405 (2005 - $13,565) in
  consulting fees paid to a family member of the Companys Chief Executive
  Officer.                                                                                                                                                                                              
|   |                                       |                                                                                                                                                                                                                                                                                                                                                                            
|   | e)                                    | At June 30,
  2004, the former President of the Company was owed $12,219 for expenses
  incurred on behalf of the Company. During the year ended June 30, 2005, the
  former President incurred an additional $470 on behalf of the Company. The
  balance owing of $12,689 was forgiven and is included in the statement of
  operations for the year ended June 30, 2005.

|    |                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | Capital
  Lease Obligation                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                   
|    | During the
  year ended June 30, 2005, the Company entered into a leasing arrangement
  involving office furniture and equipment. The lease is for a three year term
  and requires monthly payments of $340 (CDN $417) per month.
|    |                                                                                                                                                                                                                                   
|    | The
  following represents future minimum lease payments under capital leases and
  the present value of the minimum lease payments as of June 30, 2006.                                                                          

|                                                      |  |  |        |  
|----------------------------------------------------- |  |  | ------ | -
|                                                      |  |  | $      |  
|                                                      |  |  |        |  
|2007                                                  |  |  | 4,491  |  
|2008                                                  |  |  | 3,368  |  
|                                                      |  |  |        |  
|Total
  minimum lease payments                        |  |  | 7,859  |  
|Less:
  Amounts representing interest                 |  |  | (676   | )
|                                                      |  |  |        |  
|Present
  value of net minimum lease payments         |  |  | 7,183  |  
|Current
  portion of obligations under capital leases |  |  | (3,951 | )
|                                                      |  |  |        |  
|Long-term
  obligations under capital leases          |  |  | 3,232  |  
|                                                      |  |  |        |  

F-13

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11. | Preferred
  Stock                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On January
  12, 2006, the Company restated its Articles of Incorporation to increase the
  authorized share capital to 125,000,000 shares consisting of 100,000,000
  shares of common stock, and 25,000,000 shares of preferred stock, of which
  15,000,000 have been designated as Series A 10% Cumulative Preferred Stock.                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Series A
  10% Cumulative Preferred Stock has a par value of $0.00001 per share, a
  stated value of $1.00 per share and are non-voting. The holders of the Series
  A Preferred Stock will be entitled to receive an annual dividend equal to 10%
  per annum of the stated value of $1.00 per share payable, at the option of
  the Board of Directors, in either cash or in shares of Series A Preferred
  Stock.

|    |                          |                                                                                                                                                                              
|--- | ------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|12. | Common Stock            
|    |                          |                                                                                                                                                                              
|    | Year ended June 30, 2006
|    |                          |                                                                                                                                                                              
|    | a)                       | On June 21,
  2006, the Company issued 5,000 shares of common stock upon the exercise of
  5,000 options at an exercise price of $0.00001 per share.                         
|    |                          |                                                                                                                                                                              
|    | b)                       | On June 15,
  2006, the Company issued 80,000 shares of common stock upon the exercise of
  80,000 options at an exercise price of $0.00001 per share.                       
|    |                          |                                                                                                                                                                              
|    | c)                       | On June 15,
  2006, the Company issued 154,000 shares of common stock upon the exercise of
  154,000 options at an exercise price of $0.00001 per share.                     
|    |                          |                                                                                                                                                                              
|    | d)                       | On June 5,
  2006, the Company issued 200,000 shares of common stock upon the exercise of
  200,000 options at an exercise price of $0.00001 per share.                      
|    |                          |                                                                                                                                                                              
|    | e)                       | On June 5,
  2006, the Company issued 5,500 shares of common stock upon the exercise of
  5,500 options at an exercise price of $0.49 per share for proceeds of $2,695.      
|    |                          |                                                                                                                                                                              
|    | f)                       | On May 24,
  2006, the Company issued 125,000 shares of common stock upon the exercise of
  125,000 options at an exercise price of $0.00001 per share.                      
|    |                          |                                                                                                                                                                              
|    | g)                       | On May 8,
  2006, the Company issued 3,500 shares of common stock upon the exercise of
  3,500 options at an exercise price of $1.90 per share for proceeds of $6,650.       
|    |                          |                                                                                                                                                                              
|    | h)                       | On May 8,
  2006, the Company issued 23,500 shares of common stock upon the exercise of
  23,500 options at an exercise price of $0.00001 per share.                         
|    |                          |                                                                                                                                                                              
|    | i)                       | On April 21,
  2006, the Company issued 3,500 shares of common stock upon the exercise of
  3,500 options at an exercise price of $1.90 per share for proceeds of $6,650.    
|    |                          |                                                                                                                                                                              
|    | j)                       | On April 21,
  2006, the Company issued 20,000 shares of common stock upon the exercise of
  20,000 options at an exercise price of $0.49 per share for proceeds of
  $9,800.
|    |                          |                                                                                                                                                                              
|    | k)                       | On April 21,
  2006, the Company issued 262,000 shares of common stock upon the exercise of
  262,000 options at an exercise price of $0.00001 per share.                    
|    |                          |                                                                                                                                                                              

F-14

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|    |                            |                                                                                                                                                                                               
|--- | -------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|12. | Common Stock
  (continued)
|    |                            |                                                                                                                                                                                               
|    | l)                         | On April 3,
  2006, the Company issued 5,000 shares of common stock upon the exercise of
  5,000 options at an exercise price of $0.49 per share for proceeds of $2,450.                      
|    |                            |                                                                                                                                                                                               
|    | m)                         | On April 3,
  2006, the Company issued 241,500 shares of common stock upon the exercise of
  241,500 options at an exercise price of $0.00001 per share.                                      
|    |                            |                                                                                                                                                                                               
|    | n)                         | On March 24,
  2006, the Company issued 68,616 shares of common stock upon the exercise of
  68,616 warrants at an exercise price of $1.25 per share for proceeds of
  $85,770.               
|    |                            |                                                                                                                                                                                               
|    | o)                         | On March 13,
  2006, the Company issued 53,207 shares of common stock upon the exercise of
  53,207 warrants at an exercise price of $1.25 per share for proceeds of
  $66,509.               
|    |                            |                                                                                                                                                                                               
|    | p)                         | On March 6,
  2006, the Company issued 178,031 shares of common stock upon the exercise of
  178,031 warrants at an exercise price of $1.25 per share for proceeds of
  $222,539.             
|    |                            |                                                                                                                                                                                               
|    | q)                         | On March 3,
  2006, the Company issued 505,000 shares of common stock upon the exercise of
  505,000 options at an exercise price of $0.00001 per share.                                      
|    |                            |                                                                                                                                                                                               
|    | r)                         | On January
  20, 2006, the Company issued 136,448 shares of common stock upon the exercise
  of 136,448 warrants at an exercise price of $1.25 per share for proceeds of
  $170,560.          
|    |                            |                                                                                                                                                                                               
|    | s)                         | On December
  14, 2005, the Company issued 138,240 shares of common stock upon the exercise
  of 138,240 warrants at an exercise price of $1.25 per share for proceeds of
  $172,800.         
|    |                            |                                                                                                                                                                                               
|    | t)                         | On December
  2, 2005, the Company issued 100,332 shares of common stock upon the exercise
  of 100,332 warrants at an exercise price of $1.25 per share for proceeds of
  $125,415.          
|    |                            |                                                                                                                                                                                               
|    | u)                         | On November
  4, 2005, the Company issued 67,984 shares of common stock upon the exercise
  of 67,984 warrants at an exercise price of $1.25 per share for proceeds of
  $84,980.             
|    |                            |                                                                                                                                                                                               
|    | v)                         | On October
  7, 2005, the Company issued 137,800 shares of common stock upon the exercise
  of 137,800 warrants at an exercise price of $1.25 per share for proceeds of
  $172,250.           
|    |                            |                                                                                                                                                                                               
|    | w)                         | On September
  6, 2005, the Company issued 200,020 shares of common stock upon the exercise
  of 200,020 warrants at an exercise price of $1.25 per share for proceeds of
  $250,025.         
|    |                            |                                                                                                                                                                                               
|    | x)                         | On August
  26, 2005, the Company issued 180,537 shares of common stock upon the exercise
  of 180,537 warrants at an exercise price of $1.25 per share to settle notes
  payable of $225,671.
|    |                            |                                                                                                                                                                                               
|    | y)                         | On July 19,
  2005, the Company issued 752,230 shares of common stock upon the exercise of
  752,230 warrants at an exercise price of $1.25 per share to settle notes
  payable of $940,288.  
|    |                            |                                                                                                                                                                                               
|    | Year Ended June 30, 2005: 
|    |                            |                                                                                                                                                                                               
|    | aa)                        | On April 15,
  2005, the Company issued 73,333 split-adjusted shares of common stock upon
  the exercise of 73,333 warrants at an exercise price of $0.001 per share.                         
|    |                            |                                                                                                                                                                                               
|    | bb)                        | On March 24,
  2005, the Company issued 15,000 split-adjusted shares of common stock at a
  fair value of $37,500 for professional services rendered.                                         

F-15

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|    |                           
|--- | --------------------------
|12. | Common Stock
  (continued)

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | cc) | On March 23,
  2005, the Company issued 25,000 split-adjusted shares of common stock at a
  fair value of $62,500 for consulting services rendered.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | dd) | On March 23,
  2005, the Company issued 2,275,567 units at $0.75 per unit for proceeds of
  $1,706,675, pursuant to a private placement offering. Each unit consisted of
  one split-adjusted share of common stock and one share purchase warrant. Each
  warrant entitles the holder to acquire one split-adjusted share of common
  stock at $1.25 per share for a period of two years. The fair value of the
  warrants was estimated at $3,851,845 using the Black-Scholes pricing model
  and is included as financing costs on the statement of operations. The
  following assumptions were used: average risk-free interest rate of 3.34%;
  expected life of one year; dividend yield of 0%; and expected volatility of 68%.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ee) | On March 23,
  2005, the Company issued 233,333 warrants as a finders fee pursuant to a
  Finders Fee Agreement dated March 21, 2005. Each warrant entitles the holder
  to acquire one split-adjusted share of common stock at $0.001 per share for a
  period of two years. The fair value of the warrants was estimated at $662,440
  using the Black-Scholes pricing model and is included as financing costs on
  the statement of operations. The following assumptions were used: average
  risk-free interest rate of 3.34%; expected life of one year; dividend yield
  of 0%; and expected volatility of 68%.                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ff) | The Company
  issued 233,333 split-adjusted shares of common stock by the exercise of
  233,333 warrants at an exercise price of $0.001 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | gg) | On October
  25, 2004, the Company declared a stock dividend of one additional share of
  common stock for each two shares of common stock outstanding. All per share
  amounts have been retroactively adjusted to reflect the stock dividend.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | hh) | On October 13,
  2004, the Company issued 31,866,000 split-adjusted shares of common stock at
  a fair value of $4,000 for the acquisition of certain assets acquired from
  VCSC as described in Note 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ii) | On October
  13, 2004, 37,500,000 split-adjusted shares previously issued to two directors
  of the Company were returned to treasury and cancelled for no consideration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|    |                                          
|--- | -----------------------------------------
|13. | Stock
Options and Share Purchase Warrants

| |     |                
| | --- | ---------------
| | (i) | Stock
  Options

| |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Effective
  March 2, 2006, the Company filed a Form S-8 Registration Statement in
  connection with its 2006 Non-Qualified Stock Option Plan (the 2006 Plan)
  allowing for the direct award to directors, officers, employees and
  consultants of shares or stock options to acquire up to a total of 2,500,000
  common shares in the aggregate. During the year ended June 30, 2006, the
  following stock options were granted:

| |                |  |              |  |                |  |             |               
| | -------------- |  | ------------ |  | -------------- |  | ----------- | --------------
| | Grant date     |  | # of Options |  | Exercise Price |  | Expiry Date
| |                |  |              |  |                |  |             |               
| | March 1, 2006  |  | 595,500      |  | 0.49           |  |             | March 1, 2011 
| | March 3, 2006  |  | 1,200,000    |  | 0.00001        |  |             | March 2, 2011 
| | March 10, 2006 |  | 416,000      |  | 1.90           |  |             | March 11, 2011
| | March 10, 2006 |  | 159,500      |  | 0.00001        |  |             | March 9, 2011 
| | April 1, 2006  |  | 18,000       |  | 0.00001        |  |             | April 1, 2011 
| | April 2, 2006  |  | 45,000       |  | 0.00001        |  |             | April 2, 2011 
| | May 23, 2006   |  | 125,000      |  | 0.00001        |  |             | May 22, 2011  
| | June 1, 2006   |  | 44,000       |  | 0.00001        |  |             | May 31, 2011  
| | June 5, 2006   |  | 55,000       |  | 0.00001        |  |             | June 5, 2011  
| | June 15, 2006  |  | 60,000       |  | 0.00001        |  |             | June 14, 2011 
| |                |  |              |  |                |  |             |               
| |                |  | 2,718,000    |  |                |  |             |               
| |                |  |              |  |                |  |             |               

F-16

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|    |                                                      
|--- | -----------------------------------------------------
|13. | Stock
Options and Share Purchase Warrants (continued)

| |                                                                                                                                                                                                                                                                                                                                           |                            
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------
| | (i)                                                                                                                                                                                                                                                                                                                                       | Stock
  Options (continued)
| |                                                                                                                                                                                                                                                                                                                                           |                            
| | The fair
  value for options granted was estimated at the date of grant using the Black-Scholes
  option-pricing model and the weighted average fair value of stock options
  granted during the year ended June 30, 2006, was $1.76. During the year ended
  June 30, 2006, the Company recorded stock-based compensation of $4,655,200.
| |                                                                                                                                                                                                                                                                                                                                           |                            
| | The
  following table summarizes the continuity of the Companys stock options:                                                                                                                                                                                                                                                          

| |                              |  |                     |            |                                           |      |  | 
| | ---------------------------- |  | ------------------- | ---------- | ----------------------------------------- | ---- |  | 
| |                              |  | Number of 
  Shares |            | Weighted 
  average exercise 
  price
  $ |     
| | Outstanding,
  June 30, 2005 |  |                     |           |                                           |     |  | 
| | Granted                      |  |                     | 2,718,000  |                                           | 0.40 |  | 
| | Exercised                    |  |                     | (1,633,500 | )                                         | 0.02 |  | 
| | Cancelled                    |  |                     | (200,000   | )                                         | 0.49 |  | 
| |                              |  |                     |            |                                           |      |  | 
| | Outstanding,
  June 30, 2006 |  |                     | 884,500    |                                           | 1.08 |  | 
| |                              |  |                     |            |                                           |      |  | 

| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Additional
  information regarding options outstanding as at June 30, 2006 is as follows:

| |                 |  |                    |         |                                                             |  |                                      |  |                    |         |                                      |  |         |  |   |         | 
| | --------------- |  | ------------------ | ------- | ----------------------------------------------------------- |  | ------------------------------------ |  | ------------------ | ------- | ------------------------------------ |  | ------- |  | - | ------- | 
| |                 |  | Outstanding        |         | Exercisable                                                 | 
| |                 |  |                    |         |                                                             | 
| | Exercise prices |  | Number of
  shares |         | Weighted
  average
  remaining
  contractual
  life (years) |  | Weighted
  average 
  exercise price |  | Number of
  shares |         | Weighted
  average 
  exercise price | 
| |                 |  |                    |         |                                                             |  |                                      |  |                    |         |                                      |  |         |  |   |         | 
| | $0.00001        |  |                    | 110,500 |                                                             |  | 4.69                                 |  | $                  | 0.00001 |                                      |  | 110,500 |  | $ | 0.00001 | 
| | $0.49           |  |                    | 365,000 |                                                             |  | 4.67                                 |  | $                  | 0.49    |                                      |  | 365,000 |  | $ | 0.49    | 
| | $1.90           |  |                    | 409,000 |                                                             |  | 4.70                                 |  | $                  | 1.90    |                                      |  | 409,000 |  | $ | 1.90    | 
| |                 |  |                    |         |                                                             |  |                                      |  |                    |         |                                      |  |         |  |   |         | 
| |                 |  |                    | 884,500 |                                                             |  | 4.69                                 |  | $                  | 1.08    |                                      |  | 884,500 |  | $ | 1.08    | 
| |                 |  |                    |         |                                                             |  |                                      |  |                    |         |                                      |  |         |  |   |         | 

| |                                                        
| | -------------------------------------------------------
| | The weighted
  average assumptions used are as follows:

| |                                 |  |                     |      |                     |  |   | 
| | ------------------------------- |  | ------------------- | ---- | ------------------- |  | - | 
| |                                 |  | Years Ended         |     
| |                                 |  | June 30,
  2006
  $ |      | June 30,
  2005
  $ | 
| | Expected dividend yield         |  |                     | 0    | %                   |  |  | 
| | Risk-free interest rate         |  |                     | 4.67 | %                   |  |  | 
| | Expected volatility             |  |                     | 68   | %                   |  |  | 
| | Expected option life (in years) |  |                     | 2.19 |                     |  |  | 

F-17

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|    |                                                      
|--- | -----------------------------------------------------
|13. | Stock
Options and Share Purchase Warrants (continued)

| |     |                                                                           
| | --- | --------------------------------------------------------------------------
| | ii) | Share
  Purchase Warrants:                                                
| |     |                                                                           
| |     | The following
  table summarizes the continuity of the Companys warrants:

| |                            |  |                      |            |                                           |  |      | 
| | -------------------------- |  | -------------------- | ---------- | ----------------------------------------- |  | ---- | 
| |                            |  | Number of
  Warrants |            | Weighted 
  average exercise 
  price
  $ | 
| |                            |  |                      |            |                                           |  |      | 
| | Balance, June 30, 2005     |  |                      | 2,275,567  |                                           |  | 1.25 | 
| | Issued                     |  |                      |           |                                           |  |     | 
| | Exercised                  |  |                      | (2,013,445 | )                                         |  | 1.25 | 
| |                            |  |                      |            |                                           |  |      | 
| | Outstanding, June 30, 2006 |  |                      | 262,122    |                                           |  | 1.25 | 
| |                            |  |                      |            |                                           |  |      | 

At
June 30, 2006, the following share purchase warrants were outstanding:

| |                       |  |                   |      |  |               |                  | 
| | --------------------- |  | ----------------- | ---- |  | ------------- | ---------------- | 
| | Number of 
  Warrants |  | Exercise 
  Price |      |  | Expiry
  Date |                 
| |                       |  |                   |      |  |               |                 
| | 262,122               |  | $                 | 1.25 |  |               | March 23,
  2007 | 

|    |                      
|--- | ---------------------
|14. | Segment
  Disclosures

| |                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company
  operates as one operating segment which is the sale of its suite of clinical
  software modules. The Chief Executive Officer is the Companys Chief
  Operating Decision Maker (CODM) as defined by SFAS 131, Disclosure about Segments of an
  Enterprise and Related Information. The CODM allocates resources
  and assesses the performance of the Company based on the results of
  operations.

|    |            
|--- | -----------
|15. | Commitments

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | In November
  2004, the Company entered into a lease agreement for office premises at a
  rate of $70,649 (CDN$78,700) per annum including property taxes, insurance
  and other operating expenses, for a five year term expiring on September 30,
  2009, with an option to renew for an additional five years. During the year
  ended June 30, 2006, the Company incurred rent expense of $50,858 (2005 -
  $39,055). Future payments for the next five fiscal years are as follows:

|     |  |   |         | 
|---- |  | - | ------- | 
|2007 |  | $ | 70,649  | 
|2008 |  | $ | 70,649  | 
|2009 |  | $ | 70,649  | 
|2010 |  | $ | 19,288  | 
|     |  |   |         | 
|     |  | $ | 231,235 | 
|     |  |   |         | 

|   |                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------
|b) | On June 5,
  2006, the Company entered into an automobile lease for a term of 48 months. The
  monthly payments are CAD$642 ending May 5, 2010.

F-18

---



VisualMED
Clinical Solutions Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements 
(expressed in U.S. dollars)

|    |             
|--- | ------------
|16. | Income Taxes

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At June 30,
  2006, the Company had net operating losses for U.S. federal income tax
  purposes of $2,567,000, which begin expiring in fiscal 2019, and non-capital
  losses for Canadian income tax purposes of $1,610,000, which begin expiring
  in fiscal 2012. When the future utilization of some portion of the losses
  carried forward is determined not to be more likely than not, a valuation
  allowance is provided to reduce the recorded tax benefits from such assets.
  For the periods ended June 30, 2006 and 2005, the valuation allowance
  established against the deferred tax assets increased by $867,000 and
  $594,000, respectively.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | A
  reconciliation of the statutory federal income tax rate to the Companys
  effective tax rate follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |                                     |  |        |       |               |  |       |   
| | ----------------------------------- |  | ------ | ----- | ------------- |  | ----- | --
| |                                     |  | Canada |       | United States | 
| |                                     |  |        |       |               |  |       |   
| | Statutory
  federal income tax rate |  |        | 37.6  | %             |  | 35.0  | % 
| | Change in
  valuation allowance     |  |        | (37.6 | %)            |  | (35.0 | %)
| |                                     |  |        |       |               |  |       |   
| | Total income
  tax expense          |  |        |      |               |  |      |   
| |                                     |  |        |       |               |  |       |   

The
deferred tax liabilities and assets as at June 30, 2006 were as follows:

| |                                        |  |            |          |                    |  |          |  
| | -------------------------------------- |  | ---------- | -------- | ------------------ |  | -------- | -
| |                                        |  | Canada
  $ |          | United States 
  $ | 
| |                                        |  |            |          |                    |  |          |  
| | Deferred tax
  assets                  |  |            |          |                    |  |          |  
| | - Net operating losses carried forward |  |            | 621,000  |                    |  | 898,000  |  
| | - Less valuation allowance             |  |            | (621,000 | )                  |  | (898,000 | )
| |                                        |  |            |          |                    |  |          |  
| | Net deferred
  tax asset and liability |  |            |         |                    |  |         |  
| |                                        |  |            |          |                    |  |          |  

The
deferred tax liabilities and assets as at June 30, 2005 were as follows:

| |                                        |  |  |            |   |  |                   |  
| | -------------------------------------- |  |  | ---------- | - |  | ----------------- | -
| |                                        |  |  | Canada
  $ |   |  | United States
  $ |  
| |                                        |  |  |            |   |  |                   |  
| | Deferred tax
  assets                  |  |  |            |   |  |                   |  
| | - Net operating losses carried forward |  |  | 217,000    |   |  | 466,000           |  
| | - Less valuation allowance             |  |  | (217,000   | ) |  | (466,000          | )
| |                                        |  |  |            |   |  |                   |  
| | Net deferred
  tax asset and liability |  |  |           |   |  |                  |  
| |                                        |  |  |            |   |  |                   |  

F-19

---



|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE.

None.

|         |                         
|-------- | ------------------------
|ITEM 8A. | CONTROLS AND PROCEDURES.

As
of the end of the period covered by this report, under the supervision and with
the participation of our management, including Gerard Dab, our Chief Executive
Officer, and Larry Kurlender, our Chief Financial Officer, we have evaluated
the effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) of the Securities and Exchange Act of 1934 (Exchange Act). Based on
that evaluation, our Chief Executive Officer and our Chief Financial Officer
have concluded that these disclosure controls and procedures are effective to
ensure that information required to be disclosed in our annual reports filed
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in Securities Exchange Commission rules and forms.
There were no changes in our internal control over financial reporting during
the fiscal quarter ended June 30, 2006
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

Our
officers believe that our disclosure controls and procedures are effective to
ensure that information required to be disclosed in the reports that VisualMED
files or submits under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and our Chief Financial
Officer in order to allow timely decisions regarding required disclosure. There
are frequent daily communications among all of our executives, including Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer, President
and our Vice President for Finance. All of our budgetary decisions and all of
our billing and other expenditures require the written, signed approval of at
least three of our executives. All issues regarding disclosures and procedures
are discussed in a timely fashion, including all financial and other key
operational information. Current disclosure controls and procedures are
governed by the Board of Directors, and any changes to such controls and
procedures must be made with the Boards approval.

|         |                     
|-------- | --------------------
|ITEM 8B. | OTHER
  INFORMATION.

None.

|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|ITEM 9. | DIRECTORS,
  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
  16(A) OF THE EXCHANGE ACT.

The
following table sets forth the names, ages and titles of our executive officers
and members of our board of directors as of June 30, 2006:

| |                   |  |     |  |                                                                      
| | ----------------- |  | --- |  | ---------------------------------------------------------------------
| | Name              |  | Age |  | Position
  Held                                                      
| |                   |  |     |  |                                                                      
| |                   |  |     |  |                                                                      
| | Gerard Dab        |  | 58  |  | Chief Executive Officer,
  Secretary and Director                    
| | Arthur Gelston MD |  | 57  |  | President, Chief Science
  Officer and Director                      
| | Barry Scharf      |  | 61  |  | Chief Operating Officer
  and Vice President of Client Services      
| | Larry Kurlender   |  | 60  |  | Chief Financial Officer,
  Treasurer and Principal Accounting Officer
| | Jayne H. Kirby    |  | 48  |  | Vice President of Finance                                            
| | Michel Maksud     |  | 48  |  | Vice President of
  Technology                                       
| | Philippe Panzini  |  | 41  |  | Director                                                             
| | Louis J. Lombardo |  | 62  |  | Director                                                             
| | Chris Marcolefas  |  | 39  |  | Director                                                             

Gerard
Dabhas been our
Chairman and Chief Executive Officer and a director of our company since
October 2004. Mr. Dab holds an Honors BA and an MA from McGill University.
After an academic career and serving as an executive with advertising company
Foote, Cone & Belding of Chicago, he served as president of Productions
Publi-Cité Inc. of Montreal, a film and television finance company, from

November 1982 to June 1992.
From June 1992 to April 1998, Mr. Dab was executive producer of Finance,
a weekly television program on Canadas TVA network of VHCC. From July 1998 to
September 2004, Mr. Dab was President and Secretary, and since November
1999, he has been Chairman of the Board, Chief Executive Officer and a director
of VHCC.

Arthur
Gelston, M.D.has
been our President, Chief Science Officer and a director of our company since
October 2004. Dr. Gelston holds an M.D. degree from Cornell University,
Ithaca, New York and is a Fellow of Johns Hopkins University, Baltimore and a
Fellow of the Royal College of Physicians (Canada). Dr. Gelston is also an
adjunct Professor of Medicine in the Department of Internal Medicine and was
formerly Senior Physician of internal medicine, at the McGill University Health
Center in Montreal, Canada. From July 1988 to January 1999, Dr. Gelston served as
the Director of Medical Clinics of the Department of Medicine and was until
that date a senior physician at Montreals Royal Victoria Hospital. From July
1998 to December 2003, Dr. Gelston served as VHCCs chief architect and,
since 2000, Dr. Gelston has been President, Chief Science Officer and a
director of VHCC.

18

---



Barry
Scharf has been our
Chief Operating Officer and Vice President of Client Services since October
2004. From January 2002 to October 2004, Mr. Scharf was VHCCs Vice
President of Clinical Services. From January 2001 to December 2001,
Mr. Scharf was Vice President of Client Services at Medicool Health Systems
Inc. located in Montreal, Quebec. Since January 1993, Mr. Scharf has been
President of the Board of Directors of Terre des Hommes Canada, a registered
Canadian charity.

Larry
Kurlenderhas been
our Chief Financial Officer, Treasurer and Principal Accounting Officer since
April 2006. He is a Chartered Accountant (CA), and also holds Bachelor of
Commerce and MBA degrees from McGill University. Mr. Kurlender
has been a practicing CA in his own firm since 1996. Between 1970 and 1996, he
has held executive level positions in finance and in management in 3 different
companies.

Jayne
H. Kirby has been our
Vice President of Finance and Controller since October 2004. From January 1999
to September 2004, Ms. Kirby was the Controller of VHCC. Prior to 1999,
Ms. Kirby was a cash flow analyst at the head office of Royal Trust in
Toronto, and then an international portfolio auditor for State Street Quebec,
in Montreal.

Michel
Maksud has served as
our Vice President of Technology since October 2004. Since July 2000,
Mr. Maksud has been Chief Software Architect of Medicool Health Systems
Inc. conducting research and development in the field of healthcare information
technology. From December 1990 to July 2000, Mr. Maksud was the Vice President
of Research and Development and Chief Software Architect of Purkinje, a
healthcare information technology company located in Montreal, Quebec.

Philippe
Panzini has been a
director of our company since October 2004. From March 1989 through September
1991, Mr. Panzini was a marketing executive with Softimage Inc. of
Montreal, Canada, a company in 3-D computer graphic technology. From September
1991 to February 1999 he worked at Discreet Logic, a computer imaging
technology company based in Montreal, Canada, and served as its Chief
Technology Officer. In 1998, Mr. Panzini received an Academy Award from
the Academy of Motion Picture Arts and Sciences for his contribution to the
film industry in the field of digital imaging. From February 1999 to January
2000, Mr. Panzini worked as a software architect for Behaviour Inc. an
entertainment company based in Montreal, Canada. From February 2000 to December
2002, Mr. Panzini was a marketing executive with VHCC. Since December
2002, Mr. Panzini has been an imaging software manager with Apple
Computers of Cupertino, California. Mr. Panzini was a director of VHCC
from 1999 to 2003.

Louis
J. Lombardo has been
a director of our company since October 2004. Mr. Lombardo served as
Executive Vice President, Client Service Delivery, for American Express Travel
Related Services Company of New York, New York, a financial and travel service
company, from 1985 to 1998. Since 1998, he has served as President of Lombardo
Consulting, L.P., a privately held management and operational consulting firm.
Mr. Lombardo holds a B.S. from City College, New York, New York, and a
M.B.A. from New York University. Mr. Lombardo was a director of VHCC from
2000 to 2003.

Chris
Marcolefashas been
Vice President of Operations at TouchTunes Music Corporation (TouchTunes), a
private company involved with various interactive, music-on-demand applications
since June 2004.  Mr. Marcolefas has been with TouchTunes since January
1998, holding various positions, such as, Director Finance, Chief Financial
Officer, Vice President Business Development and Consultant.Prior to joining TouchTunes, he held
management positions at the NBG Bank and was a senior auditor at Ernst &
Young. He received his Bachelor of Commerce degree in 1989 and Diploma in
Accountancy in 1990 from Concordia University in Montreal.  Mr. Marcolefas
is a member of the Canadian Institute of Chartered Accountants.

All
directors of the company serve one year terms and hold office until the next
annual meeting of stockholders and until their respective successors are duly
elected and qualified.

19

---



Committees and Meetings

During
fiscal 2006, our Board of Directors held four meetings. We presently do not
have a nominating committee. However, our Board of Directors is considering
establishing this committee during the current fiscal year. Currently, our
Board of Directors makes the decisions regarding director nominations. We have
an audit committee and disclosure committee.

Audit Committee; Audit Committee Financial Expert

Our
audit committee consists of Chris Marcolefas and Louis J. Lombardo. Mr.
Marcolefas is our audit committee financial expert as defined under rule 401(e)
of Regulation S-B. We have adopted an Audit Committee Charter, which is an
exhibit to this annual report on Form 10-KSB.

Disclosure Committee

Our
disclosure committee consists of Gerard Dab and Barry Scharf. The disclosure
committee was established to ensure that all material information about our
company and our business is properly disclosed in a timely manner. We have
adopted a Disclosure Committee Charter, which is an exhibit to this annual
report on Form 10-KSB. The committee has hired Michel Dab as an independent
consultant.

Code of Ethics

We
have adopted a Code of Ethics for our executive officers, which is filed as an
exhibit to this Annual Report. Any person may obtain a copy of our Code of
Ethics, without charge, by writing to our corporate offices at 1035 Laurier St.
West, Suite 200, Montreal, Quebec Canada H2V 2L1; Attn: Secretary.

Compliance with Section 16(a) of the Exchange Act

Section 16(a)
of the Exchange Act requires our directors and executive officers and persons
who own more than 10% of a registered class of our equity securities (collectively,
Reporting Persons) to file reports of ownership and changes in ownership of our
securities with the SEC. Reporting Persons are required by the SEC to furnish
us with copies of all Section 16(a) forms they file.

Based
solely on our review of the copies of such forms received or written
representations from the Reporting Persons, we believe that, with respect to
the fiscal year ended June 30, 2006, all the Reporting Persons complied with
all applicable filing requirements.

|         |                          
|-------- | -------------------------
|ITEM 10. | EXECUTIVE
  COMPENSATION.

The
following table sets forth information with respect to compensation paid by us
to our officers and directors during the three most recent fiscal years.

20

---



Summary Compensation Table

|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|------------------------------------------------------------------ |  | ------------------- | ----------- | ------------ |  | -------------- |  | --------------------------------------- | ------------ | ----------------------------------- |  | ---------------------------------------------- |  | -------------------- | -- | ------------------------------- |  | -------------------- |  |  | -- |  |  | -- | 
|                                                                   |  | Annual Compensation |             | Awards       |  | Payouts        | 
|                                                                   |  |                     |             |              |  |                | 
|(a)                                                                |  | (b)                 |             | (c)          |  | (d)            |  | (e)                                     |              | (f)                                 |  | (g)                                            |  | (h)                  |    | (i)                             | 
|Name and
  Principal
  Position                                    |  | Year                |             | Salary
  ($) |  | Bonus
  ($)    |  | Other
  Annual
  Compen-
  sation
  ($) |              | Restricted
  Stock
  Award(s)
  ($) |  | Securities
  Underlying
  Options /
  SARs (#) |  | LTIP
  Payouts
  ($) |    | AllOther
  Compen-
  sation ($) | 
|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|Gerard Dab
  CEO, Secretary &
  Director                           |  |                     | 2005
  2006 |              |  | 150,638168,170 |  |                                         |            |                                     |  |                                              |  |                      |  |                                 |  |                    |  |  |  |  |  |  | 
|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|Arthur Gelston
  President, Chief Science
  Officer and Director   |  |                     | 2005
  2006 |              |  |              |  |                                         |            |                                     |  |                                              |  |                      |  |                                 |  |                    |  |  |  |  |  |  | 
|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|Barry Scharf
  COO and Vice-President
  Client Services            |  |                     | 2005
  2006 |              |  | 130,552168,170 |  |                                         | 
  
  4,485 |                                     |  |                                              |  |                      |  |                                 |  | 130,000
  
  100,000 |  |  |  |  |  |  | 
|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|Larry Kurlender
  CFO, Treasurer,
  Principal Accounting
  Officer |  |                     | 2006        |              |  | 1              |  |                                         |             |                                     |  |                                               |  |                      |   |                                 |  |                     |  |  |   |  |  |   | 
|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|Jayne H. Kirby
  Vice-President Finance                            |  |                     | 2005
  2006 |              |  | 86,36596,410   |  |                                         |            |                                     |  |                                              |  |                      |  |                                 |  | 100,000
  
  100,000 |  |  |  |  |  |  | 
|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|Michel Maksud
  Vice-President
  Technology                        |  |                     | 2005
  2006 |              |  |              |  |                                         |            |                                     |  |                                              |  |                      |  |                                 |  | 
  200,000          |  |  |   |  |  |  | 
|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|Philippe Panzini
  Director                                        |  |                     | 2005
  2006 |              |  | 
  19,000     |  |                                         |            |                                     |  |                                              |  |                      |  |                                 |  |                    |  |  |  |  |  |  | 
|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|Louis J. Lombardo
  Director                                       |  |                     | 2005
  2006 |              |  |              |  |                                         |            |                                     |  |                                              |  |                      |  |                                 |  |                    |  |  |  |  |  |  | 
|                                                                   |  |                     |             |              |  |                |  |                                         |              |                                     |  |                                                |  |                      |    |                                 |  |                      |  |  |    |  |  |    | 
|Chris Marcolefas
  Director                                        |  |                     | 2005
  2006 |              |  |              |  |                                         |            |                                     |  |                                              |  |                      |  |                                 |  |                    |  |  |  |  |  |  | 

21

---





---

Employment Agreements


Gerard Dab

We
have an employment agreement with Gerard Dab dated as of October 25, 2004,
pursuant to which Mr. Dab serves as our Chief Executive Officer. The
agreement terminates on October 25, 2009, unless earlier terminated pursuant to
the terms of the agreement. The agreement provides for a base salary of not
less than CDN$187,500 for each year of the employment term. In addition, under
the agreement, Mr. Dab is entitled to (1) receive an annual cash
bonus, as determined by our board of directors, of up to 25% of his base salary
per year, based on our company attaining certain performance goals, (2) receive
a bonus of CDN$50,000 upon our company reaching an aggregate of $10 million in
sales and (3) participate in any employee benefit plans, such as health
insurance, life insurance and reimbursement for business related expenses, we
offer to other employees of our company. The agreement provides that
Mr. Dabs employment may be terminated at the election of the board of
directors upon his disability or for serious reason (as defined in the
agreement).

Larry Kurlender

We
have an employment agreement with Larry Kurlender dated as of April 1, 2006,
pursuant to which Mr. Kurlender serves as our Chief Financial Officer. The
agreement terminates on March 31, 2011, unless earlier terminated pursuant to
the terms of the agreement. The agreement provides for a base salary of CDN$1
for each year of the employment term. In addition, under the agreement,
Mr. Kurlender is eligible for an annual bonus which may include options
issued under our Nonqualified Stock Option Plan, as determined by the Board of
Directors. The agreement provides that Mr. Kurlenders employment may be
terminated at the election of the Board of Directors upon his disability or for
serious reason (as defined in the agreement).

Barry Scharf

We
have an employment agreement with Barry Scharf dated as of October 25,
2004, pursuant to which Mr. Scharf serves as our Chief Operating Officer
and Vice President Client Services. The agreement terminates on October 25,
2009, unless earlier terminated pursuant to the terms of the agreement. Mr. Scharf
is responsible for supervising day-to-day activities relating to sales,
marketing, product development, customer service procurement and all matters of
commercial contracts. The agreement provides for a base salary of not less than
CDN$162,000 for each year of the employment term. In addition, under the
agreement, Mr. Scharf is entitled to (1) receive an annual cash
bonus, as determined by our board of directors, of up to 25% of his base salary
per year, based on the Company attaining certain performance goals, (2) receive
a bonus of CDN$50,000 upon our company reaching an aggregate of $10 million in
sales, (3) receive a bonus of $5,000 for each successful implementation of the
VisualMED system and (4) participate in our employee benefit plans, such
as health insurance, life insurance and reimbursement for business related
expenses, we offer to other employees of our company. The agreement provides
that Mr. Scharfs employment may be terminated at the election of the
board of directors upon his disability or for serious reason (as defined in the
agreement).

Jayne H. Kirby

We
have an employment agreement with Jayne H. Kirby dated as of October 25,
2004, pursuant to which Ms. Kirby serves as our Vice President Finance.
The agreement terminates on October 25, 2009, unless earlier terminated
pursuant to the terms of the agreement. Ms. Kirby is responsible for
supervising all of our companys financial transactions, budgets, financial
statements and audits. The agreement provides for a base salary of not less
than CDN$107,500 for each year of the employment term. In addition, under the
agreement, Ms. Kirby is entitled to (1) receive an annual cash bonus,
as determined by our board of directors, of up to 25% of her base salary per
year, (2) receive a bonus of CDN$50,000 upon our company reaching an aggregate
of $10 million in sales, and (3) participate in our employee benefit
plans, such as health insurance, life insurance and reimbursement for business
related expenses, we offer to other employees of our company. The agreement
provides that Ms. Kirbys employment may be terminated at the election of
the board of directors upon her disability or for serious reason (as defined in
the agreement).

Option/SAR Grants

The
company has a nonqualified stock option plan under which each of Jayne H. Kirby
and Michel Maksud have been granted options to purchase 200,000 shares of our
common stock, and Barry Scharf has been granted options to purchase 230,000
shares of our common stock. Please refer to Item 5 of this Form 10-KSB for a
description of the nonqualified stock option plan. We have no retirement,
pension, or profit sharing plans for the benefit of our officers and directors.

|                                        |  |                                                                  |  |                                                                     |    |                                     |       |                                     |  |                   |       |             |  |  |                     | 
|--------------------------------------- |  | ---------------------------------------------------------------- |  | ------------------------------------------------------------------- | -- | ----------------------------------- | ----- | ----------------------------------- |  | ----------------- | ----- | ----------- |  |  | ------------------- | 
|Option/SAR
  Grants in Last Fiscal Year
|Individual Grants                      
|(a)                                     |  | (b)                                                              |  | (c)                                                                 |    | (d)                                 |       | (e)                                 |  | (f)               |      
|Name                                    |  | Number of
  Securities
  Underlying
  Options/SARs
  Granted (#) |  | % of Total
  Options/SARs
  Granted to
  Employees in Fiscal
  Year |    | Exercise
  or
  Base Price
  ($/Sh) |       | Market
  Price on
  Date of
  Grant |  | Expiration
  Date |      
|                                        |  |                                                                  |  |                                                                     |    |                                     |       |                                     |  |                   |      
|Barry
  Scharf                          |  | 130,000
  100,000                                                |  | 5.2
  4                                                             | %% |                                     | $
  $ | 0.49
  1.90                         |  |                   | $
  $ | 2.06
  2.02 |  |  | 03/01/11
  03/11/11 | 
|Jayne
  H. Kirby                        |  | 100,000
  100,000                                                |  | 4
  4                                                               | %% |                                     | $
  $ | 0.49
  1.90                         |  |                   | $
  $ | 2.06
  2.02 |  |  | 03/01/11
  03/11/11 | 
|Michel
  Maksud                         |  | 100,000
  100,000                                                |  | 4
  4                                                               | %% |                                     | $
  $ | 0.49
  1.90                         |  |                   | $
  $ | 2.06
  2.02 |  |  | 03/01/11
  03/11/11 | 

Long-Term Incentive Plan Awards

We
do not have any long-term incentive plans that provide compensation intended to
serve as incentive for performance to occur over a period longer than one
fiscal year, whether such performance is measured by reference to our financial
performance, our stock price, or any other measure.

Compensation of Directors

We
do intend to pay our directors for their work as board members with a yearly
honorarium not to exceed $25,000. We do intend to grant our directors options
for serving on our board of directors. For fiscal 2006, we have not determined
the compensation that we may grant our directors.

Indemnification

Under
our articles of incorporation and bylaws, we may indemnify an officer or
director who is made a party to any proceeding, including a law suit, because
of his position, if he acted in good faith and in a manner he reasonably
believed to be in our best interest. We may advance expenses incurred in
defending a proceeding. To the extent that the officer or director is
successful on the merits in a proceeding as to which he is to be indemnified,
we must indemnify him against all expenses incurred, including attorneys fees.
With respect to a derivative action, indemnity may be made only for expenses
actually and reasonably incurred in defending the proceeding, and if the
officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws
of the State of Nevada.

Regarding
indemnification for liabilities arising under the Securities Act of 1933, which
may be permitted to directors or officers under Nevada law, we are informed
that, in the opinion of the SEC, indemnification is against public policy, as
expressed in the Act and is, therefore, unenforceable.

Officers
and directors are covered under the companys officers and directors insurance
policies.

|         |                                                                                                    
|-------- | ---------------------------------------------------------------------------------------------------
|ITEM 11. | SECURITY
  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
  MATTERS.

The
following table sets forth information concerning the beneficial ownership of
our common stock as of September 27, 2006, by:

|  |                                                                                         
|- | ----------------------------------------------------------------------------------------
| | each person known by us to
  beneficially own more than 5% of any class of common stock;
|  |                                                                                         
| | each director and each
  executive officer named in the Summary Compensation Table; and 
|  |                                                                                         
| | all named executive
  officers and directors as a group.                                

Unless
indicated below, each stockholder listed had sole voting and sole investment
power with respect to all shares beneficially owned, subject to community
property laws, if applicable.

22

---



|                                                                     |  |                      |  |                             | 
|-------------------------------------------------------------------- |  | -------------------- |  | --------------------------- | 
|Name and Address(1)(2)                                               |  | Number
  of
  Shares |  | Percent
  of
  Shares(%)(3) | 
|                                                                     |  |                      |  |                             | 
|Gerard Dab(4)                                                        |  |                     |  |                            | 
|Arthur Gelston(4)                                                    |  |                     |  |                            | 
|Barry Scharf(5,7)                                                    |  | 360,000              |  | *                           | 
|Michel Maksud(7)                                                     |  | 200,000              |  |                            | 
|Jayne H. Kirby(5,7)                                                  |  | 300,000              |  | *                           | 
|Larry Kurlender                                                      |  |                     |  |                            | 
|Louis J. Lombardo                                                    |  |                     |  |                            | 
|Philippe Panzini                                                     |  |                     |  |                            | 
|All named executive officers and directors as a
group                |  |                     |  |                            | 
|Visual Healthcare Corp. (f.k.a. VisualMED
Clinical Systems Corp.)(6) |  | 24,054,291           |  | 52%                         | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|*   | less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(1) | The address of all
  directors and executive officers in this table, unless otherwise specified,
  is c/o VisualMED Clinical Solutions Corp., 1035 Laurier St. West, Suite
  200, Montreal, Quebec Canada H2V 2L1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(2) | As used in this table,
  beneficial ownership means the sole or shared power to vote or direct the
  voting of a security, or the sole or shared power to dispose, or direct the
  disposition, of a security. A person is deemed as of any date to have
  beneficial ownership of any security that the person has the right to acquire
  within 60 days after that date. For purposes of computing the percentage
  of outstanding shares held by each person named above, any security that the
  person has the right to acquire within 60 days of the date of
  calculation is deemed to be outstanding, but is not deemed to be outstanding
  for purposes of computing the percentage ownership of any other person.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(3) | The percent of class is
  based on 46,038,345 shares of common stock issued and outstanding as of
  September 27, 2006 and warrants to purchase 1,146,622 shares of our common
  stock that are exercisable within 60 days of such date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(4) | Mr. Dab and
  Dr. Gelston may be deemed to beneficially own the 24,054,291 shares
  owned by VHCC as a result of their position as director of, and their
  respective equity interest in, that company (See Note 5 below). Each of these
  individuals disclaim beneficial ownership of these shares.                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(5) | Barry Scharf and Jayne H.
  Kirby have the right to purchase 130,000 and 100,000 shares, respectively, of
  our common stock held by VHCC, pursuant to a call right agreement between
  each of these individuals and VHCC at a price of $0.49 per share. These
  rights are immediately exercisable and terminate on October 27, 2009.                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(6) | The address of VHCC is 790
  Rockland, Outremont, Quebec Canada H2V 2Z6. Gerard Dab owns 6,545,877 common
  shares of VHCC or 13.2% of its total outstanding shares. Art Gelston, MD owns
  6,054,140 shares of VHCC or 12.2% of its total outstanding shares. Philippe
  Panzini owns 430, 215 common shares of VHCC or 0.9% of its total outstanding
  shares. Lombardo Consulting LP, which is controlled by Louis J. Lombardo,
  owns 1,948,579 common shares of VHCC or approximately 4% of its total
  outstanding shares. Jayne H. Kirby owns 2,018,054 common shares of VHCC or
  4.1% of its total outstanding shares. Barry Scharf owns 2,035,357 common
  shares of VHCC or 4.1% of its total outstanding shares. 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(7) | Barry Scharf, Jayne H.
  Kirby and Michel Maksud have options to purchase 130,000, 100,000, and
  100,000 shares, respectively, of our common stock at a price of $0.49 per
  share. These rights are immediately exercisable and terminate on March 1,
  2011. Each of Barry Scharf, Jayne H. Kirby and Michel Maksud also have the
  right to purchase 100,000 shares of our common stock at a price of $1.90 per
  share. These rights are immediately exercisable and terminate on March 11,
  2011                                                                                                                                                                                                                      

23

---



|         |                                                  
|-------- | -------------------------------------------------
|ITEM 12. | CERTAIN
  RELATIONSHIPS AND RELATED TRANSACTIONS.

One
of our directors, Louis J. Lombardo, is a member of Rutherford Marketing LLC.
Under a marketing agreement between the Company and Rutherford, Rutherford
earns commissions on the sale of the VisualMED products. Rutherford did not
earn any commissions from the Company during fiscal 2006.

VHCC
owns approximately 52% of our issued and outstanding common stock. As a result,
VHCC is able to significantly influence matters requiring approval of our
stockholders, including the election of directors and the determination of
significant corporate actions.

|         |          
|-------- | ---------
|ITEM 13. | EXHIBITS.

|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Description                                                                                                                                                                                                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|3.1     |  | Articles of Incorporation (incorporated by
        reference to Exhibit 3.1 to the Companys Registration Statement
        on Form SB-2 (Registration No. 333-94835) filed with the SEC on January
        18, 2001).                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|3.2     |  | Amendment to the Articles of Incorporation
        (incorporated by reference to Exhibit 3.2 to the Companys Quarterly
        Report on Form 10-QSB filed with the SEC on February 22, 2005).                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|3.3     |  | By-Laws (incorporated by reference to Exhibit
        3.2 to the Companys Registration Statement on Form SB-2 (Registration
        No. 333-94835) filed with the SEC on January 18, 2001).                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|4.1     |  | VisualMED Clinical Solutions Corp. 2006 Nonqualified
        Stock Option Plan (incorporated by reference to the Companys Registration
        Statement on Form S-8 (Registration No. 333-132179), filed with the SEC
        on March 2, 2006).                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|4.2     |  | Form of Stock Option Agreement (incorporated
        by reference to the Companys Registration Statement on Form S-8
        (Registration No. 333-132179), filed with the SEC on March 2, 2006).                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.1    |  | Finders Agreement dated March 21, 2005, by
        and between Stephane Solis and the Company (incorporated by reference
        to Exhibit 10.8 to the Companys Registration Statement on Form SB-2
        (Registration No. 333-125348) filed with the SEC on August 8, 2005).                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.2    |  | Memorandum of a Consultant Agreement dated
        March 7, 2005, by and between Claude Pellerin and the Company (incorporated
        by reference to Exhibit 10.1 to the Companys Registration Statement
        on Form SB-2 (Registration No. 333-125348) filed with the SEC on August
        8, 2005).                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.3    |  | Common Stock Purchase Agreement, dated as
        of March 24, 2005, by and among the Company and Capex Investments Ltd.,
        Asset Protection Fund Ltd. and Aton Select Fund Ltd. (incorporated by
        reference to Exhibit 10.6 to the Companys Registration Statement
        on Form SB-2 (Registration No. 333-125348) filed with the SEC on August
        8, 2005).
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.4    |  | Registration Rights Agreement dated as of
        March 24, 2005, by and among the Company and HPS Inc., Claude Pellerin,
        Stephane Solis and VHCC (incorporated by reference to Exhibit 10.7 to
        the Companys Registration Statement on Form SB-2 (Registration No.
        333-125348) filed with the SEC on August 8, 2005).                                     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.5    |  | Warrant dated March 23, 2005 by the Company
        in favor of Capex Investments Ltd. (incorporated by reference to Exhibit
        10.3 to the Companys Registration Statement on Form SB-2 (Registration
        No. 333-125348) filed with the SEC on August 8, 2005).                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.6    |  | Warrant dated March 24, 2005 by the Company
        in favor of Asset Protection Fund Ltd. (incorporated by reference to Exhibit
        10.4 to the Companys Registration Statement on Form SB-2 (Registration
        No. 333-125348) filed with the SEC on August 8, 2005).                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.7    |  | Warrant dated March 24, 2005 by the Company
        in favor of Aton Select Fund Ltd. (incorporated by reference to Exhibit
        10.5 to the Companys Registration Statement on Form SB-2 (Registration
        No. 333-125348) filed with the SEC on August 8, 2005).                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.8    |  | Acquisition Agreement dated September 23,
        2004, between the Company and VHCC (incorporated by reference to Exhibit
        10.1 to the Companys Current Report on Form 8-K filed with the SEC
        on October 19, 2004).                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.9    |  | Employment Agreement, dated as of October
        25, 2004, by and between Gerard Dab and the Company (incorporated by reference
        to the Companys Annual Report on Form 10-KSB for the fiscal year
        ended June 30, 2005, filed with the SEC on September 29, 2005).*                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.10   |  | Employment Agreement, dated as of October
        25, 2004, by and between Barry Scharf and the Company (incorporated by
        reference to the Companys Annual Report on Form 10-KSB for the fiscal
        year ended June 30, 2005, filed with the SEC on September 29, 2005).*                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.11   |  | Employment Agreement, dated as of October
        25, 2004, by and between Jayne Kirby and the Company (incorporated by
        reference to the Companys Annual Report on Form 10-KSB for the fiscal
        year ended June 30, 2005, filed with the SEC on September 29, 2005).*                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.12   |  | Employment Agreement, dated as of April 1,
        2006, by and between Larry Kurlender and the Company.*                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|14.1    |  | Code of Ethics (incorporated by reference
        to Exhibit 14.1 to the Companys Annual Report of Form 10-KSB filed
        with the SEC on September 5, 2003).                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|31.1    |  | Certification of Principal Financial Officer
        pursuant to Rule 13a-15(e) and Rule 15d-15(e), promulgated under the Securities
        and Exchange Act of 1934, as amended.                                                                                                                                                                                                 

24

---



|     |  |                                                                                                                                                                       
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.2 |  | Certification of Principal
  Executive Officer pursuant to Rule 13a-15(e) and Rule 15d-15(e), promulgated
  under the Securities and Exchange Act of 1934, as amended.
|     |  |                                                                                                                                                                       
|32.1 |  | Certification pursuant to
  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002 (Chief Financial Officer).                 
|     |  |                                                                                                                                                                       
|32.2 |  | Certification pursuant to
  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002 (Chief Executive Officer).                 
|     |  |                                                                                                                                                                       
|99.1 |  | Audit Committee Charter
  (incorporated by reference to Exhibit 99.1 to the Companys Annual Report of
  Form 10-KSB filed with the SEC on September 5, 2003).        
|     |  |                                                                                                                                                                       
|99.2 |  | Disclosure Committee
  Charter (incorporated by reference to Exhibit 99.2 to the Companys Annual
  Report of Form 10-KSB filed with the SEC on September 5, 2003).   
|     |  |                                                                                                                                                                       

|  |                                                                                                                 | 
|- | --------------------------------------------------------------------------------------------------------------- | 
|* | Indicates a management
  contract or compensatory plan or arrangement, as required by Item 13 of Form
  10-KSB. | 

|         |                                          
|-------- | -----------------------------------------
|ITEM 14. | PRINCIPAL
  ACCOUNTANT FEES AND SERVICES.

The
following table sets forth the aggregate fees billed to us for professional
audit services rendered by Manning Elliot for the audit of our annual
consolidated financial statements for the fiscal years ended December 31, 2006
and December 31, 2005, the review of the consolidated financial statements
included in our quarterly reports on Form 10-Q for such periods and fees billed
for other services rendered by Manning Elliot for such periods. Fees include
amounts related to the year indicated, which may differ from amounts billed.

|                        |  |                                     |        |                                     |   |        | 
|----------------------- |  | ----------------------------------- | ------ | ----------------------------------- | - | ------ | 
|                        |  | Fiscal Year
  Ended
  June 30, 2006 |        | Fiscal Year
  Ended
  June 30, 2005 |  
|                        |  |                                     |        |                                     |  
|                        |  |                                     |        |                                     |   |        | 
|Annual audit fees(1)    |  | $ $                                 | 47,525 |                                     | $ | 19,000 | 
|Audit related fees(2)   |  | $                                   | 10,500 |                                     |   | 13,775 | 
|Tax fees(3)             |  |                                     |       |                                     |   |       | 
|All other fees(4)       |  |                                     |        |                                     |   |        | 
|                        |  |                                     |        |                                     |  
|Total fees for
services |  | $ $                                 | 58,025 |                                     | $ | 32,775 | 
|                        |  |                                     |        |                                     |  

|    |                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Annual audit fees for the
  audit of the consolidated financial statements included in our annual report
  on Form 10-KSB and the review of the interim condensed consolidated financial
  statements included in our quarterly reports on Form 10-QSB or services that
  are normally provided by the accountant in connection with statutory and
  regulatory filings or engagements.
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|(2) | Audit related fees are the
  fees for assurance related services by the principal accountants that are
  reasonably related to the performance of the audit or review of our financial
  statements and that are not reported in the annual audit fees.                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|(3) | Tax fees are the fees for
  professional services rendered by the principal accountant for tax compliance,
  tax advice and tax planning.                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|(4) | All other fees are the
  fees for products and services other than those in the above three
  categories. This category includes fees for documentation assistance services
  related to internal controls over financial reporting.                                                                                                                                                   

25

---



SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on this 26th day of
September 2006.

| |                                      |                                             
| | ------------------------------------ | --------------------------------------------
| | VISUALMED
  CLINICAL SOLUTIONS CORP.
| | (Registrant)                        
|
| | By:                                  | /s/ Gerard Dab                              
| |                                      |                                             
| |                                      | Gerard Dab                                  
| |                                      | Principal Executive
  Officer, Secretary and
| |                                      | a member of the Board of
  Directors        

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

| |                       |  |                                    |  |                    
| | --------------------- |  | ---------------------------------- |  | -------------------
| | Signature             |  | Title                              |  | Date               
| |                       |  |                                    |  |                    
| | /s/ Gerard Dab        |  | Principal Executive
  Officer,     |  | September 27 , 2006
| |                       |  | Secretary and a member of
  the    |  |                    
| | Gerard Dab            |  | Board of Directors                 |  |                    
| |                       |  |                                    |  |                    
| | /s/ Arthur Gelston MD |  | President, Chief Science
  Officer |  | September 27, 2006 
| |                       |  | and a member of the Board
  of     |  |                    
| | Arthur Gelston MD     |  | Directors                          |  |                    
| |                       |  |                                    |  |                    
| | /s/ Larry Kurlender   |  | Principal Financial
  Officer,     |  | September 27, 2006 
| |                       |  | Principal Accounting
  Officer and |  |                    
| | Larry Kurlender       |  | Treasurer                          |  |                    
| |                       |  |                                    |  |                    
| | /s/ Jayne H. Kirby    |  | Vice President of Finance          |  | September 27, 2006 
| |                       |  |                                    |  |                    
| | Jayne H. Kirby        |  |                                    |  |                    
| |                       |  |                                    |  |                    
| | /s/ Louis J. Lombardo |  | A member of the Board of           |  | September 27, 2006 
| |                       |  | Directors                          |  |                    
| | Louis J. Lombardo     |  |                                    |  |                    
| |                       |  |                                    |  |                    
| | /s/ Philippe Panzini  |  | A member of the Board of           |  | September 27, 2006 
| |                       |  | Directors                          |  |                    
| | Philippe Panzini      |  |                                    |  |                    
| |                       |  |                                    |  |                    
| | /s/ Chris Marcolefas  |  | A member of the Board of           |  | September 27, 2006 
| |                       |  | Directors                          |  |                    
| | Chris Marcolefas      |  |                                    |  |                    

26

---



|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Description                                                                                                                                                                                                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|3.1     |  | Articles of Incorporation (incorporated by
        reference to Exhibit 3.1 to the Companys Registration Statement
        on Form SB-2 (Registration No. 333-94835) filed with the SEC on January
        18, 2001).                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|3.2     |  | Amendment to the Articles of Incorporation
        (incorporated by reference to Exhibit 3.2 to the Companys Quarterly
        Report on Form 10-QSB filed with the SEC on February 22, 2005).                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|3.3     |  | By-Laws (incorporated by reference to Exhibit
        3.2 to the Companys Registration Statement on Form SB-2 (Registration
        No. 333-94835) filed with the SEC on January 18, 2001).                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|4.1     |  | VisualMED Clinical Solutions Corp. 2006 Nonqualified
        Stock Option Plan (incorporated by reference to the Companys Registration
        Statement on Form S-8 (Registration No. 333-132179), filed with the SEC
        on March 2, 2006).                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|4.2     |  | Form of Stock Option Agreement (incorporated
        by reference to the Companys Registration Statement on Form S-8
        (Registration No. 333-132179), filed with the SEC on March 2, 2006).                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.1    |  | Finders Agreement dated March 21, 2005, by
        and between Stephane Solis and the Company (incorporated by reference
        to Exhibit 10.8 to the Companys Registration Statement on Form SB-2
        (Registration No. 333-125348) filed with the SEC on August 8, 2005).                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.2    |  | Memorandum of a Consultant Agreement dated
        March 7, 2005, by and between Claude Pellerin and the Company (incorporated
        by reference to Exhibit 10.1 to the Companys Registration Statement
        on Form SB-2 (Registration No. 333-125348) filed with the SEC on August
        8, 2005).                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.3    |  | Common Stock Purchase Agreement, dated as
        of March 24, 2005, by and among the Company and Capex Investments Ltd.,
        Asset Protection Fund Ltd. and Aton Select Fund Ltd. (incorporated by
        reference to Exhibit 10.6 to the Companys Registration Statement
        on Form SB-2 (Registration No. 333-125348) filed with the SEC on August
        8, 2005).
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.4    |  | Registration Rights Agreement dated as of
        March 24, 2005, by and among the Company and HPS Inc., Claude Pellerin,
        Stephane Solis and VHCC (incorporated by reference to Exhibit 10.7 to
        the Companys Registration Statement on Form SB-2 (Registration No.
        333-125348) filed with the SEC on August 8, 2005).                                     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.5    |  | Warrant dated March 23, 2005 by the Company
        in favor of Capex Investments Ltd. (incorporated by reference to Exhibit
        10.3 to the Companys Registration Statement on Form SB-2 (Registration
        No. 333-125348) filed with the SEC on August 8, 2005).                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.6    |  | Warrant dated March 24, 2005 by the Company
        in favor of Asset Protection Fund Ltd. (incorporated by reference to Exhibit
        10.4 to the Companys Registration Statement on Form SB-2 (Registration
        No. 333-125348) filed with the SEC on August 8, 2005).                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.7    |  | Warrant dated March 24, 2005 by the Company
        in favor of Aton Select Fund Ltd. (incorporated by reference to Exhibit
        10.5 to the Companys Registration Statement on Form SB-2 (Registration
        No. 333-125348) filed with the SEC on August 8, 2005).                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.8    |  | Acquisition Agreement dated September 23,
        2004, between the Company and VHCC (incorporated by reference to Exhibit
        10.1 to the Companys Current Report on Form 8-K filed with the SEC
        on October 19, 2004).                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.9    |  | Employment Agreement, dated as of October
        25, 2004, by and between Gerard Dab and the Company (incorporated by reference
        to the Companys Annual Report on Form 10-KSB for the fiscal year
        ended June 30, 2005, filed with the SEC on September 29, 2005).*                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.10   |  | Employment Agreement, dated as of October
        25, 2004, by and between Barry Scharf and the Company (incorporated by
        reference to the Companys Annual Report on Form 10-KSB for the fiscal
        year ended June 30, 2005, filed with the SEC on September 29, 2005).*                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.11   |  | Employment Agreement, dated as of October
        25, 2004, by and between Jayne Kirby and the Company (incorporated by
        reference to the Companys Annual Report on Form 10-KSB for the fiscal
        year ended June 30, 2005, filed with the SEC on September 29, 2005).*                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|10.12   |  | Employment Agreement, dated as of April 1,
        2006, by and between Larry Kurlender and the Company.*                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|14.1    |  | Code of Ethics (incorporated by reference
        to Exhibit 14.1 to the Companys Annual Report of Form 10-KSB filed
        with the SEC on September 5, 2003).                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|31.1    |  | Certification of Principal Financial Officer
        pursuant to Rule 13a-15(e) and Rule 15d-15(e), promulgated under the Securities
        and Exchange Act of 1934, as amended.                                                                                                                                                                                                 

27

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|     |  |                                                                                                                                                                       
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.2 |  | Certification of Principal
  Executive Officer pursuant to Rule 13a-15(e) and Rule 15d-15(e), promulgated
  under the Securities and Exchange Act of 1934, as amended.
|     |  |                                                                                                                                                                       
|32.1 |  | Certification pursuant to
  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002 (Chief Financial Officer).                 
|     |  |                                                                                                                                                                       
|32.2 |  | Certification pursuant to
  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002 (Chief Executive Officer).                 
|     |  |                                                                                                                                                                       
|99.1 |  | Audit Committee Charter
  (incorporated by reference to Exhibit 99.1 to the Companys Annual Report of
  Form 10-KSB filed with the SEC on September 5, 2003).        
|     |  |                                                                                                                                                                       
|99.2 |  | Disclosure Committee
  Charter (incorporated by reference to Exhibit 99.2 to the Companys Annual
  Report of Form 10-KSB filed with the SEC on September 5, 2003).   

|  |                                                                                                                
|- | ---------------------------------------------------------------------------------------------------------------
|* | Indicates a management
  contract or compensatory plan or arrangement, as required by Item 13 of Form
  10-KSB.

28

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