##### Table of Contents

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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

(Mark One)

|x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------

For the fiscal year ended June 30, 2007



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

For the transition period from  to

Commission File No. 001-15034



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TELZUIT MEDICAL TECHNOLOGIES, INC.

(Exact Name of Small Business Issuer as Specified in Its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 01-0656115                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)

5422 Carrier Drive, Suite 306

Orlando, Florida 32819

(Address of Principal Executive Offices)

(407) 354-1222

(Issuers Telephone Number)



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Securities registered under Section 12(b) of the Act:

None

Securities registered under Section 12(g) of the Act:

Common Stock, $.001 Par Value, 125,000,000 shares authorized



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

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

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the 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.

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

Registrants revenues for the year ended June 30, 2007:
$843,296

The aggregate market value of the Registrants common stock held by non-affiliates of the Registrant as of September 27, 2007 was
approximately $2,400,000 based upon the closing sales price of the Registrants common stock of $0.05 on September 27, 2007 (see Footnote (1) below).

As of September 27, 2007, 49,271,351 shares of the Registrants common stock, par value $.001, were outstanding.

Transitional Small Business Disclosure Format (check one):    Yes ̈No  x

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|(1) | Calculation based upon 47,639,012 of Registrants Common Stock being held by
non-affiliates. The information provided shall in no way be construed as an admission that any person whose holdings are excluded from the figure is an affiliate or that any person whose holdings are included is not an affiliate and any such
admission is hereby disclaimed. The information provided is included solely for recordkeeping purposes of the Securities and Exchange Commission.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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TELZUIT MEDICAL TECHNOLOGIES, INC.

AND SUBSIDIARIES

TABLE OF CONTENTS



|          |  |                                                                                                                |  |     
|--------- |  | -------------------------------------------------------------------------------------------------------------- |  | ----
|          |  |                                                                                                                |  | Page
|PART I.   |  |                                                                                                                |  | 1   
|          |  |                                                                                                               
|Item 1.   |  | Description of Business                                                                                        |  | 2   
|Item 2.   |  | Description of Property                                                                                        |  | 19  
|Item 3.   |  | Legal Proceedings                                                                                              |  | 19  
|Item 4.   |  | Submission of Matters to a Vote of Security Holders                                                            |  | 21  
|          |  |                                                                                                               
|PART II.  |  |                                                                                                                |  | 22  
|          |  |                                                                                                               
|Item 5.   |  | Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities |  | 22  
|Item 6.   |  | Managements Discussion and Analysis or Plan of Operation                                                      |  | 23  
|Item 7.   |  | Financial Statements                                                                                           |  | F-1 
|Item 8.   |  | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure                           |  | 32  
|Item 8A.  |  | Controls and Procedures                                                                                        |  | 32  
|Item 8B.  |  | Other Information                                                                                              |  | 32  
|          |  |                                                                                                               
|PART III. |  |                                                                                                                |  |     
|          |  |                                                                                                               
|Item 9.   |  | Directors and Executive Officers of the Registrant                                                             |  | 33  
|Item 10.  |  | Executive Compensation                                                                                         |  | 36  
|Item 11.  |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                 |  | 40  
|Item 12.  |  | Certain Relationships and Related Transactions                                                                 |  | 42  
|Item 13.  |  | Exhibits                                                                                                       |  | 44  
|Item 14.  |  | Principal Accountant Fees and Services                                                                         |  | 44  



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PART I.

FORWARD LOOKING STATEMENTS:

Except for the historical information contained herein, the matters discussed in this Report on Form 10-KSB are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties. Telzuit Medical Technologies, Inc. makes such forward-looking
statements under the provision of the Safe Harbor section of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements should be considered in light of the factors described below in the Section titled
Risk Factors beginning at page 11. Actual results may vary materially from those projected, anticipated or indicated in any forward-looking statements. In this Report on Form 10-KSB, the words anticipates,
believes, expects, intends, future, could, and similar words or expressions (as well as other words or expressions referencing future events, conditions or circumstances) identify
forward-looking statements. When reading any forward-looking statement, you should remain mindful that actual results or developments may vary substantially from those expected as expressed in or implied by that statement for a number of reasons or
factors, such as those relating to:

our ability to continue as a going concern in light of our recurring losses and net capital deficiency;



| |  |  | the success of our research and development activities, the development of a viable commercial production model, and the speed with which regulatory
authorizations and product launches may be achieved;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | whether or not a market for our products develops and, if a market develops, the pace at which it develops;
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | our ability to successfully sell our products if a market develops;
| | - |  | -------------------------------------------------------------------



| |  |  | our ability to attract the qualified personnel to implement our development strategy;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | our ability to develop sales, marketing and distribution capabilities;
| | - |  | ----------------------------------------------------------------------



| |  |  | our ability to obtain reimbursement from third party payers for the products that we sell;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | the accuracy of our estimates and projections;
| | - |  | ----------------------------------------------



| |  |  | our ability to fund our short-term and long-term capital needs;
| | - |  | ---------------------------------------------------------------



| |  |  | changes in our business plan and corporate strategies; and
| | - |  | ----------------------------------------------------------



| |  |  | other risks and uncertainties discussed in greater detail in the section of this Report captioned Risk Factors.
| | - |  | -----------------------------------------------------------------------------------------------------------------

Each forward-looking statement should be read in context with, and with an understanding of, the various other disclosures concerning our Company and our business
made elsewhere in this Report, as well as other public reports filed with the SEC. You should not place undue reliance on any forward-looking statement as a prediction of actual results or developments. We are not obligated to update or revise any
forward-looking statement contained in this Report to reflect new events or circumstances unless and to the extent required by applicable law.



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|Item 1. | Description of Business
|------- | -----------------------

Business Development

Telzuit Medical Technologies, Inc. (the Company or Telzuit Medical or
we) is a Florida corporation incorporated on September 26, 2001. Prior to 2005, the Company, previously known as Taylor Madison Corp., focused its operations on the development and wholesale distribution of fragrances
and skincare products. In early 2005, we discontinued all operations and became a shell company, exploring the viability of acquiring an operating company. On May 6, 2005, pursuant to our plan to acquire an operating company, we entered into a
Share Exchange Agreement, pursuant to which we acquired all of the issued and outstanding common stock of Telzuit Technologies, Inc. from Telzuit Technologies, LLC in exchange for 2,207,723 shares of our Series B Preferred Stock, which automatically
converted, upon completion of the Companys 1-for-31 reverse stock split, into 26,492,676 shares of common stock on August 22, 2005. The share exchange was accounted for as a reverse acquisition in accordance with Statement of Financial
Accounting Standards No. 141, Business Combinations Due to the reverse acquisition, the Companys date of inception is deemed to be April 1, 2000, the date Telzuit Technologies, Inc., the predecessor Company, was
incorporated. By acquiring all of the issued and outstanding capital stock of Telzuit Technologies, Inc., we acquired certain know-how, trade secrets and other proprietary intellectual property rights relating to the development of ambulatory
medical devices, including the STATPATCHTMWireless Holter Heart Monitor. On August 18, 2005, we changed our name from Taylor Madison
Corp. to Telzuit Medical Technologies, Inc., which is more synonymous with our current operations.

Business of the Issuer

Overview

We are focused on developing and marketing ambulatory medical devices that monitor, measure, and
record physiological signals generated by the body. Our initial product is our STATPATCHTMWireless Holter Monitor (the STATPATCHTM or the STATPATCHTMHolter Monitor), a full
12-lead, wireless holter heart monitor, which measures, records and transmits physiological signals associated with a patients cardiovascular system. The STATPATCHTMsystem is a fully mobile, wireless biometric cardiac data collection system, which is FDA approved through a 510-K submission. Our STATPATCHTMSystem combines state-of-the-art technology to transmit, receive and store a patients biometric cardiac data.

In addition to developing and marketing ambulatory medical devices, we provide additional services to patients through a mobile imaging business
providing services in central and southern Florida. We acquired our mobile imaging business on August 1, 2006.

Financial
Position

We have incurred losses since our inception and have experienced and continue to experience negative cash flows from
operations. In addition, we had a working capital deficiency of $577,487 as of June 30, 2007. The company does not have enough cash to continue operations beyond October 31, 2007. We will have to rely on external sources for funding to
support immediate operating requirements. Until such time as we can achieve positive cash flow on a monthly basis, the dependence on external capital will remain. Management believes that the Company will need to raise at least an additional $1.5
million to continue our business for the next twelve (12) months. We currently do not have any arrangements or commitments for, or readily available sources of, additional financing. We cannot give you any assurance that we will be able to
secure the additional cash or working capital we will require to continue our operations. These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.



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If we are successful in timely raising sufficient capital, our plan of operation for the twelve-month
period following the date of this annual report on Form 10-KSB is to continue to develop and market the STATPATCH System and to operate our Mobile Imaging business.

The Company will need to raise additional capital in order to fund operations and research and development. As discussed above, we believe that our cash on hand will not be sufficient to cover these anticipated
expenditures, and the Company will need to raise additional cash as our current cash and working capital resources are depleted. The Company received a loan from a related party of $483,000 during fiscal 2007, which was subsequently converted into
1,380,000 shares of the Companys Common Stock, and received an additional $70,000 in July 2007. We will seek to raise additional capital through the public or private sale of debt or equity securities, the procurement of advances on contracts
or licenses, funding from joint-venture or strategic partners, debt financing or short-term loans, or a combination of the foregoing. We also may seek to satisfy indebtedness without any cash outlay through the private issuance of debt or equity
securities. We currently do not have any arrangements or commitments for, or readily available sources of, additional financing. We cannot give you any assurance that we will be able to secure the additional cash or working capital we will require
to continue our operations. These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.

The Companys ability to continue as a going concern depends on its ability to timely
complete development of the STATPATCHTMWireless Holter Monitor, generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, as well as its ability to raise sufficient capital to fund operations and research and development. There can be no assurance the Companys efforts
will be sufficient to meet the Companys expected cash needs. Failure to timely complete development of the STATPATCHTMWireless Holter Monitor,
generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, or raise sufficient capital to fund the Companys operations will have a
material adverse effect on our financial condition, results or operations, liquidity and capital resources.

Cross, Fernandez & Riley, LLP, our independent registered public accounting firm, issued a Report of Independent Public Accounting Firm related to our Financial Statements in this Form 10-KSB that contains an explanatory paragraph
that makes reference to uncertainty about our ability to continue as a going concern. Future reports may continue to contain this explanatory paragraph.

Description of Heart Monitor Systems and ECGs

A heart monitor system is a system used to
monitor and record changes in physiological signals associated with a patients cardiovascular system. Heart monitor systems are used by heart specialists known as cardiologists to collect physiological data for electrocardiogram or
ECG tests for the purpose of detecting and identifying cardiovascular disease.

There are several mobile heart monitoring
devices currently being utilized today which fall into two (2) main categories. Event monitoring devices are designed to detect a specific heart symptom at or about the time it is taking place. Event monitors require patients to determine if
they are experiencing unusual heart activity and to hold a recording device to their heart. Once the heart activity is recorded, the patient must call the physician and place the recording device on the handset of a telephone. The recorded
information is then transmitted over the telephone to the physician for evaluation.

The other type of heart monitoring device currently
being prescribed by physicians is designed to continuously record heart activity over a designated period of time. These devices, which are commonly known as holter monitors, are worn by the patient, collect and store information, and
are later returned to the physician for evaluation. Continuous heart monitoring devices do not transmit event information to the physician while being worn by the patient.



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The design of the STATPATCHTMprovides for a full twelve lead (clinical quality) ECG. ECG testing incorporates electrical sensory lead connectors that are attached to vital areas of a
patients chest. These sensory leads can detect an array of heart activity and other related information. In addition, the STATPATCHTMSystem, our
wireless monitoring system, can be programmed to transmit information at different time intervals. Our device can be patient activated or automatically activated based on a physicians prescribed time limits. Because the STATPATCHTMrecords information on a continuous basis and is also capable of transmitting event information upon its occurrence, we believe that our heart-monitoring
device combines the technologies of both event and continuous-type heart monitoring devices.

Description of Current Products

STATPATCHTMWireless Holter Monitor

In December
2004, we completed the design, fabrication and testing of a pre-production model of our first product for commercialization, our battery-operated, digital, full 12-lead STATPATCHTMWireless Holter Monitor. Since then, additional significant development has continued on the STATPATCHTMSystem. The
STATPATCHTMSystem has a substantial amount of highly-technical, state-of-the-art computer hardware, as well as advanced database software. The
STATPATCHTMSystem utilizes Philips Medicals FDA-approved algorithm, and a cellular telephone-PDA with specially designed software, all of which
communicate to transmit, receive and store a patients biometric heart data. Delivery of this biometric heart data to the treating physician can be done by phone, fax, e-mail or via our internet web portal. As discussed below, the
STATPATCHTMis used as the primary component of a 12-lead ambulatory heart monitor system to acquire, process, amplify and store physiological signal data.

The STATPATCHTMSystem has begun to generate revenues in the first quarter of fiscal year 2008. These revenues remain minimal as the lack of adequate capital has limited the rollout of the product.

The STATPATCHTMis an ambulatory patient heart monitor and recording system that will allow a patients heart to be continuously monitored over a period of 24 to 48 hours while the patient carries out his or her daily
activities away from the physicians office or hospital. The STATPATCHTMis comprised of a disposable bandage-like strip imbedded with lead sensory
connectors. A battery attached to the strip activates the lead sensory connectors to transmit heart activity information. The battery life lasts between 24 and 48 hours, at which time the patient must discard the old patch and replace it with a new
one. In operation, the STATPATCHTMis used in conjunction with a PDA capable of recording the data transmitted from our STATPATCHTM. We have designed a communication system as an intranet through which data collected by the STATPATCHTMSystem is transmitted through any form of cellular technology. Information transmitted by each PDA is routed through cellular towers to a switching station maintained at our corporate offices. We
have licensed computer software to monitor the heart activity of patients wearing our STATPATCHTM. This software, which has been developed by Philips
Medical and other medical service providers, can detect irregular heart activity.

Patients using the STATPATCHTMare able to move around freely while data is collected and sent in near-real time from the patient to our monitoring center. The patients information is sent either via cell phone to the monitoring center or by
returning the PDA to the Company or the physician, and is analyzed by the Philips algorithm. After the prescribing period, a licensed medical professional is able to access the patient information via secure web portal and download raw data
and a report. The STATPATCHTMmonitoring procedure typically lasts between 24 to 48 hours. Once the monitoring session is over, the patient disposes of the
STATPATCHTMand returns the PDA to the Company or to the prescribing physician. The STATPATCHTMSystem is entirely diagnostic and is not intended to be a life-saving device.

Description of Products under Development

STATPATCHTMWireless Event Monitor

The STATPATCHTMWireless Event Monitor utilizes the same technology as the STATPATCHTMWireless Holter Monitor. Event monitoring is another method of capturing a
patients cardiac data and is primarily used when symptoms of an abnormal heart rhythm occur infrequently. The STATPATCHTMWireless Event Monitor can
be used for a longer period of time than a Holter monitor and is consequently more likely to record an abnormal heart rhythm that occurs only infrequently. An event monitoring



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procedure can last from two to four weeks, according to the instructions of the prescribing physician. The patient replaces the disposable STATPATCHTMwith a new one for each day of continuous monitoring. Once the prescribed period has expired, the patient disposes of the STATPATCHTMand returns the PDA to the prescribing physician.

The Company intends to file an application with the FDA for approval of the STATPATCHTMWireless Event Monitor, which is designed primarily for use with patients in nursing homes and other assisted-living facilities.

STATPATCHTMSleep Apnea Device

The STATPATCHTMSleep Apnea Device also utilizes the STATPATCHTMwireless
technology to measure, record and transmit cardiac data while a patient is sleeping in the comfort of his or her own home. The Company has filed an application with the U.S. Patent and Trademark Office for this new sleep apnea device, which is
designed to assist with diagnosis of this condition in a way that is much less intrusive to the patient than before. According to the National Institutes of Health, it is estimated that sleep apnea currently affects more than 12 million people
in the United States.

The Company intends to file an application with
the FDA for approval of the STATPATCHTMSleep Apnea Device.

STATPATCHTMElderly Patient Wireless Monitoring System

The Company is developing a long-term care monitoring device that utilizes the proprietary STATPATCHTMdesign (the Elderly Patient Wireless
Monitor). The Elderly Patient Wireless Monitor is designed primarily for use by patients in nursing homes and assisted living facilities. This product will be used to measure basic biometric data on patient and will be able to alert staff if a
patient has fallen. The patients data is relayed to both a PDA and a centralized computer to allow the patients caregivers to monitor the patient with greater accuracy and effectiveness.

Medical Clinics

On March 30,
2007, the Company closed two walk-in medical clinics that provided primary medical care service to patients. The clinics were opened during the fiscal year ended June 30, 2006.

Mobile Imaging

We own and operate
six mobile imaging units that provide ultrasound imaging to clinics and doctors offices who contract for our services. We acquired the mobile imaging units on August 1, 2006 by acquiring one hundred percent of the issued and outstanding
capital stock of Cedars Diagnostic Labs, Inc., a Florida corporation (Cedars) and Atlantic Ultrasound, Inc., a Delaware corporation (Atlantic), related entities under common control and operating under the fictitious name
PDS Imaging, a Florida-based mobile ultrasound and cardiac imaging business. We paid $644,255 cash and agreed to issue 365,853 shares of our common stock to acquire PDS Imaging, which provides echocardiograms, ultrasound and other
outsourced diagnostic services to physicians and health care facilities in south and central Florida.

On December 22, 2006, Todd
Lavelle and Michael Evertsen, the former shareholders of PDS Imaging filed a Complaint and Demand for Jury Trial in the United States District Court Middle District of Florida, Orlando Division, titled Todd Lavelle and Michael Evertsen
v. Telzuit Medical Technologies, Inc. The Complaint alleged that the Company had breached its agreements with Todd Lavelle and Michael Evertsen. The Complaint sought damages of $100,000 in stock, the assumption of certain equipment leases and
payment of legal fees. The Company had previously recorded the stock and lease assumptions on its financial statements. The Company filed a response and Motion to Dismiss on January 29, 2007. On March 28, 2007 the case was dismissed,
without prejudice, by the United States District Court Middle District of Florida, Orlando Division. Lavelle and Evertsen filed a new complaint on May 15, 2007 The parties are in discussions. There can be no assurance the Company will settle
this action.



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Competition

The market for ambulatory medical devices is highly competitive, and competition is expected to continue to increase. Many of our existing competitors have significantly greater financial, human, technical and marketing resources than we
do. Our competitors may develop products and services that are superior to ours or that achieve greater market acceptance than our offerings. We may not be able to compete successfully against current and future sources of competition and
competitive pressures faced by us may have a material adverse affect on our business, results of operations and financial condition. The market for medical monitoring products is characterized by rapidly changing technology, evolving industry
standards, and price competition. There are no substantial barriers to entry, and we expect that competition will be intense and may increase. We cannot assure you that we will be able to compete successfully with existing competitors or new
competitors. Our principal competitors in the ambulatory heart monitor market include CardioNet, Inc., which markets a 3-lead, ambulatory ECG monitor system claimed to record and wirelessly transmit physiological data by radiofrequency (RF) to a
handheld PDA for subsequent modem or Internet transmission; Cardiac Telecom, Inc., which markets an ambulatory heart monitor system claimed to wirelessly transmit ECG data by way of a processor/phone-connected station; Raytel Medical, which markets
an ambulatory heart monitor system claimed to transmit data by telephone; Mortara Instrument, which manufacturers and markets a 12-lead Holter ECG system; SGN-Signalife, which is developing a heart monitoring system that employs wire leads attached
to the patients body and then fed back into a PDA for cardiac monitoring; and Card Guard, which markets event recorders as well as operating monitoring centers through its two divisions in the United States, Instromedix and Lifewatch.

Market Size

Cardiovascular disease is the leading cause of death in the industrialized world. According to the American Heart Associations Heart Disease and Stroke Statistics-2007 Update (available at www.americanheart.org):



| |  |  | Approximately 79,400,000 people in the United States suffer from one or more types of cardiovascular disease;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | Heart disease and stroke, the principal components of cardiovascular disease, claim more lives in the United States each year than the next five leading causes of
death combined;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In 2003, cardiovascular disease accounted for 36.3% of all deaths, or one of every 2.8 deaths in the United States;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | Patients who have suffered heart attacks in the United States number 7.9 million, congestive heart failure 5.2 million, and angina 8.9 million; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In 2007, the estimated direct and indirect cost of cardiovascular disease in the United States was $431.8 billion.
| | - |  | ------------------------------------------------------------------------------------------------------------------

The Centers for Disease Control and Prevention (CDC) has stated that, if all forms of major cardiovascular disease were eliminated, life expectancy would
rise by almost seven years while, in comparison, if all forms of cancer were eliminated, the gain in life expectancy would be only three years.

Sales and Marketing

We market our products and services directly to physicians and other medical care providers, and also
use strategic alliances with independent medical distributors.

Our revenues are
anticipated to come primarily through reimbursements from Medicare and insurance providers for the monitoring and information collecting services that we will provide. Current Medicare and most insurance coverage provides reimbursements for heart
monitoring and analysis, heart activity recording and patient activation services. We may also sell the STATPATCHTMSystem to medical practices and payors
of medical care.



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Physicians who prescribe heart-monitoring devices also receive reimbursements from Medicare and insurance
providers for patient hook-up, patient evaluation, and data review services they provide.

Manufacturing Capacity

We have begun the production of our STATPATCHtmutilizing third party FDA-certified contract manufacturers. Most of the components of our products are standard parts available from multiple supply sources at competitive prices.

Research and Development

We currently conduct
research and early stage development activities in-house with our technical staff and engineering consultants. We retain title to all improvements or enhancements to our technology developed by or worked on by our engineering consultants under their
contracts. The research and development expenses for Telzuit Medical Technologies, Inc. during the fiscal year ending June 30, 2007 was $212,740, and for the year ending June 30, 2006 was $245,852. We have budgeted $250,000 for research
and development for the fiscal year ending June 30, 2008.

Regulatory Overview

Our products are medical devices subject to extensive regulation by the United States Food and Drug Administration (FDA) and other regulatory
agencies. FDA regulations govern, among other things, the following activities that we perform and will continue to perform in connection with our medical devices:



| |  |  | product design and development;
| | - |  | -------------------------------



| |  |  | product testing;
| | - |  | ----------------



| |  |  | product manufacturing;
| | - |  | ----------------------



| |  |  | product labeling and packaging;
| | - |  | -------------------------------



| |  |  | product handling, storage, and installation;
| | - |  | --------------------------------------------



| |  |  | pre-market clearance or approval;
| | - |  | ---------------------------------



| |  |  | advertising and promotion; and
| | - |  | ------------------------------



| |  |  | product sales, distribution, and servicing.
| | - |  | -------------------------------------------

Unless an exemption applies, each medical device we wish to commercially distribute in the U.S.
must first receive 510(k) clearance or pre-market approval from the FDA. The STATPATCHtmSystem has received 501(k) approval. The 510(k) clearance process
is the process applicable to our current products. To obtain 510(k) clearance, we must submit a pre-market notification to the FDA demonstrating that the proposed device is substantially equivalent to a previously cleared 510(k) device, a device
that was in commercial distribution before May 28, 1976, for which the FDA has not yet called for the submission of pre-market approval applications, or is a device that has been reclassified from class III to either class II or I. The
FDAs 510(k) clearance process usually takes from three to twelve months from the date the application is submitted and filed by the FDA, but it can take significantly longer.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major
change in its intended use, will require a new 510(k) clearance or could require pre-market approval. The FDA requires each manufacturer to make this determination initially, but the FDA can review any such decision and can disagree with a
manufacturers determination. If the FDA disagrees with a manufacturers determination, the FDA can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or pre-market approval is obtained.

A pre-market approval application must be submitted if the medical device is in class III (although the FDA has the discretion to continue
to allow certain pre-amendment class III devices to use the 510(k) process) or cannot be cleared through the 510(k) process. A pre-market approval application must be supported by, among other things, extensive technical, preclinical, clinical
trials, manufacturing and labeling data to demonstrate to the FDAs satisfaction the safety and effectiveness of the device.



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##### Table of Contents

After a pre-market approval application is submitted and filed, the FDA begins an in-depth review of the
submitted information, which typically takes between one and three years, but may take significantly longer. During this review period, the FDA may request additional information or clarification of information already provided. Also during the
review period, an advisory panel of experts from outside the FDA will be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device. In addition, the FDA will conduct a pre-approval
inspection of the manufacturing facility to ensure compliance with Quality System regulations. New pre-market approval applications or pre-market approval application supplements are required for significant modifications to the manufacturing
process, labeling and design of a device that is approved through the pre-market approval process. Pre-market approval supplements often require submission of the same type of information as a pre-market approval application, except that the
supplement is limited to information needed to support any changes from the device covered by the original pre-market approval application, and may not require such extensive clinical data or the convening of an advisory panel.

A clinical trial is almost always required to support a pre-market approval application and is sometimes required for a 510(k) pre-market notification.
Clinical trials generally require submission of an application for an investigational device exemption to the FDA. The investigational device exemption application must be supported by appropriate data, such as animal and laboratory testing results,
showing that it is safe to test the device in humans and that the investigational protocol is scientifically sound. The investigational device exemption application must be approved in advance by the FDA for a specified number of patients, unless
the product is deemed a non-significant risk device and eligible for more abbreviated investigational device exemption requirements. Clinical trials for a significant risk device may begin once the investigational device exemption application is
approved by the FDA as well as the appropriate institutional review boards at the clinical trial sites, and the informed consent of the patients participating in the clinical trial is obtained.

After a medical device is placed on the market, numerous FDA regulatory requirements apply, including, but not limited to the following:



| |  |  | Quality System regulation which requires manufacturers to follow design, testing, control, documentation and other quality assurance procedures during the
manufacturing process;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Establishment Registration, which requires establishments involved in the production and distribution of medical devices, intended for commercial distribution in
the U.S. to register with the FDA;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Medical Device Listing which requires manufacturers to list the devices they have in commercial distribution with the FDA;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | Labeling regulations, which prohibit misbranded devices from entering the market and prohibit the promotion of products for unapproved or
off-label uses and impose other restrictions on labeling;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Medical Device Reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury
or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include one or more of the following sanctions:



| |  |  | fines, injunctions, and civil penalties;
| | - |  | ----------------------------------------



| |  |  | mandatory recall or seizure of our products;
| | - |  | --------------------------------------------



| |  |  | administrative detention or banning of our products;
| | - |  | ----------------------------------------------------



| |  |  | operating restrictions, partial suspension or total shutdown of production;
| | - |  | ---------------------------------------------------------------------------



| |  |  | refusing our request for 510(k) clearance or pre-market approval of new product versions;
| | - |  | -----------------------------------------------------------------------------------------



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| |  |  | revocation of 510(k) clearance or pre-market approvals previously granted; and
| | - |  | ------------------------------------------------------------------------------



| |  |  | criminal penalties.
| | - |  | -------------------

Patents and Licenses

United States Patent Applications

Telzuit Medical Technologies, Inc. has filed the following patent applications with the United States Patent and Trademark Office:



| |  |  | Serial No. 10/476,437, captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM filed on October 3, 2003, which relates to the field of medical
monitoring of patients and, more particularly, to a disposable electrode patch and apparatus for wireless monitoring of medical patients;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Serial No. 60/701,016, captioned WIRELESS MONITOR FOR SLEEP APNEA, filed on July 20, 2005 which relates to a medical monitoring apparatus and, more
specifically, to a wireless patch for monitoring sleep apnea; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Serial No. 60/720,997, captioned ELDERLY PATIENT WIRELESS MONITORING SYSTEM, filed on September 27, 2005 which relates to medical monitoring and, more
specifically, to a disposable electrode patch and apparatus for wireless monitoring of elderly patients and similarly debilitated individuals.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Serial No. 60/27771, captioned WIRELESS APPARATUS FOR MONITORING RESPIRATION, filed on July 20, 2006 which relates to medical monitoring and, more
specifically, to a disposable electrode patch and apparatus for wireless monitoring of respiratory function
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Stephan
Kroecker and Rick Krampe are the inventors named in the patent applications captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM. The inventors have assigned their rights to Telzuit Technologies, LLC, and their assignments have been recorded
with the U.S. Patent and Trademark Office. These rights have subsequently been assigned to Telzuit Technologies, Inc., and the assignments have been recorded with the U.S. Patent and Trademark Office.

Michael Vosch is the sole inventor named in the patent applications for WIRELESS MONITOR FOR SLEEP APNEA and ELDERLY PATIENT WIRELESS MONITORING SYSTEM.
The inventor has assigned his rights to Telzuit Technologies, LLC, and the assignments have been recorded with the U.S Patent and Trademark Office. These rights have subsequently been assigned to Telzuit Technologies, Inc., and the assignments have
been recorded with the U.S. Patent and Trademark Office.

We currently are waiting for initial comment from the United States Patent and
Trademark Office for utility patent application serial no. 10/476,437, captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM filed on October 3, 2003, which generally occurs between two and two and one-half years after submission, based
upon current Patent and Trademark Office staffing levels. We anticipate that it will take 3 to 5 years for this patent application to issue.

Provisional patent application serial no. 60/701,016 captioned WIRELESS MONITOR FOR SLEEP APNEA filed on July 20, 2005, and Serial No. 60/720,997 captioned ELDERLY PATIENT WIRELESS MONITORING SYSTEM filed on September 27,
2005, will not be examined by the United States Patent and Trademark Office. The patent for the sleep apnea wireless monitor was converted to a utility patent application on July 19, 2006 and has been assigned Serial No. PCT/US06/27771. An
International Preliminary Report on patentability is due November 20, 2007.

Foreign Patents and Patent Applications

We hold the following patents issued in foreign countries for our technology:



| |  |  | South African Patent No. 2003/8435 issued November 24, 2004.
| | - |  | ------------------------------------------------------------



| |  |  | Singapore Patent No. 200306482-1 issued May 3, 2002.
| | - |  | ----------------------------------------------------



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| |  |  | Australia Patent No. 2002308580 issued June 21, 2007
| | - |  | ----------------------------------------------------

We also hold the following patent applications filed in foreign countries:



| |  |  | Canada  Serial No. 2445385 captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM filed on October 27, 2003, which relates to the field of
medical monitoring of patients and, more particularly, to a disposable electrode patch and apparatus for wireless monitoring of medical patients;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Europe  Serial No. 02769318.3 captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM filed on November 12, 2003, which relates to the field of
medical monitoring of patients and, more particularly, to a disposable electrode patch and apparatus for wireless monitoring of medical patients;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | India  Serial No. 0178/DELNP/2003 captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM filed on October 29, 2003, which relates to the field
of medical monitoring of patients and, more particularly, to a disposable electrode patch and apparatus for wireless monitoring of medical patients;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Japan  Serial No. 586810-2002 captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM filed on October 29, 2003, which relates to the field of
medical monitoring of patients and, more particularly, to a disposable electrode patch and apparatus for wireless monitoring of medical patients;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Mexico  Serial No. PA/a/2003/010059 captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM filed on November 3, 2003, which relates to the field of
medical monitoring of patients and, more particularly, to a disposable electrode patch and apparatus for wireless monitoring of medical patients;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | New Zealand  Serial No. 529191 captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM filed on October 29, 2003, which relates to the field of
medical monitoring of patients and, more particularly, to a disposable electrode patch and apparatus for wireless monitoring of medical patients;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | South Korea  Serial No. 10-2003-7014237 captioned WIRELESS MEDICAL MONITORING APPARATUS AND SYSTEM filed on October 24, 2003, which relates to the
field of medical monitoring of patients and, more particularly, to a disposable electrode patch and apparatus for wireless monitoring of medical patients.: and,
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Taiwan  Serial No. 95126504 captioned WIRELESS MEDICAL APPARATUS FOR MONITORING RESPIRATION filed on July 20, 2006, which relates to medical
monitoring and, more specifically, to a disposable electrode patch and apparatus for wireless monitoring of respiratory function.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Costs and Effects of Compliance with Environmental Laws

There are no special or unusual environmental laws or regulations
that will require us to make material expenditures or that can be expected to materially impact the operation of our business.

Employees

At June 30, 2007 we had eleven (11) full-time employees. None of our employees are represented by a labor union and we
consider our relationships with our employees to be good.



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RISK FACTORS

In addition to the other information presented in this Annual Report on Form 10-KSB, the following should be carefully considered in evaluating the Company and its business. This Report contains forward-looking
statements that involve risks and uncertainties. The Companys actual results may differ materially from the results discussed in the forward-looking statements.

Factors that might cause such a difference include those discussed below and elsewhere in this Report.

Risks Relating
To Our Business

There is Substantial Doubt about Our Ability to Continue as a Going Concern.

We face significant liquidity pressure and may be unable to maintain adequate liquidity in the near term. At June 30, 2007, our cash was $178,959. We
have incurred cumulative net losses after preferred dividends in the amount of $30,509,404 from our inception through June 30, 2007. These losses are not sustainable and are becoming increasingly difficult to fund. Cross,
Fernandez & Riley, LLP, our independent registered public accounting firm, issued a Report of Independent Public Accounting Firm related to our Financial Statements in this Form 10-KSB that contains an explanatory paragraph that makes
reference to uncertainty about our ability to continue as a going concern. Future reports may continue to contain this explanatory paragraph.

The company does not have enough cash to continue operations beyond October 31, 2007. We will have to rely on external sources for funding to support immediate operating requirements. Until such time as we can achieve positive cash
flow on a monthly basis, the dependence on external capital will remain. Management believes that the Company will need to raise at least an additional $1.5 million to continue our business for the next twelve (12) months. We currently do not
have any arrangements or commitments for, or readily available sources of, additional financing. We cannot give you any assurance that we will be able to secure the additional cash or working capital we will require to continue our operations. These
factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.

If we are successful in
timely raising additional capital, our plan of operation for the twelve-month period following the date of this annual report on Form 10-KSB is to continue to develop and market the STATPATCH System and to operate our Mobile Imaging business.

The Company will need to raise additional capital in order to fund operations and research and development. As discussed above, we believe
that our cash on hand will not be sufficient to cover these anticipated expenditures, and the Company will need to raise additional cash as our current cash and working capital resources are depleted. The Company received a loan from a related party
of $483,000 during fiscal 2007, which was subsequently converted into 1,380,000 shares of the Companys Common Stock, and received an additional $70,000 in July 2007. We will seek to raise additional capital through the public or private sale
of debt or equity securities, the procurement of advances on contracts or licenses, funding from joint-venture or strategic partners, debt financing or short-term loans, or a combination of the foregoing. We also may seek to satisfy indebtedness
without any cash outlay through the private issuance of debt or equity securities. We currently do not have any arrangements or commitments for, or readily available sources of, additional financing. We cannot give you any assurance that we will be
able to secure the additional cash or working capital we will require to continue our operations. These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.

We cannot give you assurance that we will be able to secure the additional cash or working capital
we may require to continue our operations. The Companys ability to continue as a going concern depends on its ability to timely complete development of the STATPATCHTMWireless Holter Monitor, generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, as well as its
ability to raise sufficient capital to fund operations and research and development. There can be no assurance the Companys efforts will be sufficient to meet the Companys expected cash needs. Failure to timely complete development of
the STATPATCHTMWireless Holter Monitor, generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, or raise sufficient capital to fund the Companys operations will have a material adverse effect on our financial condition, results or operations, liquidity and capital resources.



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We have accumulated losses since our inception. Our continued inability to generate revenues and profits could
cause us to go out of business.

We have incurred cumulative net losses after preferred dividends in the amount of $30,509,404
from our inception through June 30, 2007. We project that we will not be cash flow positive based solely on projected sales and service revenues less manufacturing, general and administrative, marketing expenses and other operating costs for an
indefinite period of time. We anticipate that we will continue to incur substantial operating losses for the foreseeable future, notwithstanding any anticipated revenues we may receive when our products are initially introduced to markets, due to
the significant costs associated with the development and marketing of our products and services.

We may not be able to implement our business strategies, including rollout of the STATPATCHTMsystem which could cause us to go out of
business.

Implementation of our business strategies will depend, in
large part, on our ability to (i) attract a significant number of customers; (ii) effectively introduce acceptable products and services to our customers; (iii) obtain adequate financing on favorable terms to fund our business
strategies; (iv) maintain appropriate procedures, policies, and systems; (v) hire, train, and retain skilled employees; (vi) continue to operate with increasing competition in the medical industry; (vii) establish, develop and
maintain name recognition; and (viii) establish and maintain beneficial relationships with third-party manufacturers and third party payors. To date we have not been successful in rolling out our STATPATCHTMproduct. The Companys ability to continue as a going concern depends on its ability to generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, as well as its ability to raise sufficient capital to fund operations and research and development. There can be no assurance the Companys efforts to
develop and introduce the STATPATCHTMproduct will be successful. Failure to timely generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, or raise sufficient capital to fund the Companys operations will have a material adverse effect on our financial condition,
results or operations, liquidity and capital resources. If we are unable to successfully develop, market and sell the STATPATCHTMproduct, there is
substantial doubt about the Companys ability to continue as a going concern.

If we are unable to raise
additional working capital, we will be unable to fully fund our operations and to otherwise execute our business plan, leading to the reduction or suspension of our operations and ultimately our going out of business.

We believe that our currently available working capital will not be sufficient to continue our business beyond October 31, 2007. We must raise
additional cash in the near term as our current cash and working capital resources are depleted. We will seek to raise it through the public or private sale of debt or equity securities, the procurement of advances on contracts or licenses, funding
from joint-venture or strategic partners, debt financing or short-term loans, or a combination of the foregoing. We may also seek to satisfy indebtedness without any cash outlay through the private issuance of debt or equity securities. We currently
do not have any binding commitments for, or readily available sources of, additional financing. We cannot give you any assurance that we will be able to secure the additional cash or working capital we may require to continue our operations. If we
are unable to raise sufficient capital, there is substantial doubt about the Companys ability to continue as a going concern.

Even if we are
able to raise additional financing, we might not be able to obtain it on terms that are not unduly expensive or burdensome to the Company or disadvantageous to our existing shareholders.

Even if we are able to raise additional cash or working capital through the public or private sale of debt or equity securities, the procurement of advances on contracts
or licenses, funding from joint-venture or strategic partners, debt financing or short-term loans, or the satisfaction of indebtedness without any cash outlay through the private issuance of debt or equity securities, the terms of such transactions
may be unduly expensive or burdensome to the Company or disadvantageous to our existing shareholders. For example, we may be forced to sell or issue our securities at significant discounts to market, or pursuant to onerous terms and conditions,
including the issuance of preferred stock with disadvantageous dividend,



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voting or veto, board membership, conversion, redemption or liquidation provisions; the issuance of convertible debt with disadvantageous interest rates and
conversion features; the issuance of warrants with cashless exercise features; the issuance of securities with anti-dilution provisions; and the grant of registration rights with significant penalties for the failure to quickly register. If we raise
debt financing, we may be required to secure the financing with all of our business assets, which could be sold or retained by the creditor should we default in our payment obligations. We also might be required to sell or license our products or
technologies under disadvantageous circumstances we would not otherwise consider, including granting licenses with low royalty rates and exclusivity provisions.

We have a limited operating history upon which you can evaluate our business.

Our limited operating history will
make it difficult, if not impossible, to predict future operating results and to assess the likelihood of our business success in considering an investment in our Company. Risks and issues inherent in the establishment of a new business enterprise
which we face include, among others, problems with developing our products, problems of entering new markets, marketing new technologies, hiring and training personnel, acquiring reliable facilities and equipment, and implementing operational
controls. Our Company also requires significant capital from sources other than operations. Since we are a start-up business, our management and employees will shoulder the burdens of the business operations and a workload associated with company
growth and capitalization that is disproportionately greater than that for an established business. We cannot give you any assurance that we will successfully address these risks. Our prospects must be considered speculative, which may limit our
ability to encourage further investment in our Company.

We may be unsuccessful in managing our growth, which could prevent us from becoming
profitable.

While it may not be realized, we are planning for significant growth for the foreseeable future. Our growth may place
a significant strain on our management, financial and operating resources. Failure to manage this growth effectively could have a material adverse affect on our financial condition or results of operations. Part of our business strategy may be to
acquire assets or other companies that will complement our existing business. We are unable to predict whether or when any material transaction will be completed should negotiations commence. If we proceed with any such transaction, we may not
effectively integrate the acquired operations with our own operations. We also may seek to finance any such acquisition by debt financings or issuances of equity securities, and such financing may not be available on acceptable terms or at all.

Our products are highly regulated. We will not be able to introduce our products to market if we cannot obtain the necessary regulatory approvals.
If we are unable to obtain regulatory approvals for our products in selected key markets at all or in a timely manner, we will not be able to develop as quickly as expected, and the loss of anticipated revenues will also reduce our ability to fully
fund our operations and to otherwise execute our business plan. Our failure to receive the regulatory approvals in the United States would likely cause us to go out of business.

Our products will be medical devices that are subject to extensive regulation in the U.S. and in foreign countries where we plan to do business. Unless
an exemption applies, each medical device that we wish to market in the U.S. must first receive either 510(k) clearance or pre-market approval from the U.S. Food and Drug Administration (FDA). Either process can be lengthy and expensive. The
FDAs 510(k) clearance process, also known as pre-market notification, is the process applicable to our current products. It usually takes from three to twelve months from the date the application is submitted and filed with the
FDA, but may take significantly longer. Although we have obtained 510(k) clearances for our current products, our clearances may be revoked by the FDA if safety or effectiveness problems develop with the devices. The pre-market approval process is a
much more costly, lengthy and uncertain process. It generally takes from one to three years from the date the application is submitted and filed with the FDA, and may take even longer. Achieving pre-market approval may take numerous clinical trials
and require the filing of numerous amendments over time. The FDA has discretion at any time to request pre-market approval applications from us and all manufacturers of similar devices. If the FDA calls for pre-market approval applications, we will
be required to submit and obtain approvals for such devices within a



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specified period of time determined by the FDA. If we fail to do so, we will not be allowed to continue marketing these products, which could cause our
revenues to decline. If we are unable to obtain additional clearances or approvals needed to market existing or new products, or obtain such clearances or approvals in a timely fashion, it could adversely affect our revenues and profitability.

Modification to our marketed devices may require new 510(k) clearances or pre-market approvals or require us to cease marketing or recall the
modified devices until such clearances or approvals are obtained.

Any modification to an FDA cleared medical device that could
significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new FDA 510(k) clearance or possibly pre-market approval. The FDA requires every manufacturer to make its own determination as
to whether a modification requires a new 510(k) clearance or pre-market approval, but the FDA may review and disagree with any such decision by the manufacturer. In the future, we may make modifications to our products after they have received FDA
clearance or approval, and in appropriate circumstances, determine that new clearance or approval is unnecessary. The FDA may disagree with our decisions not to seek new clearance or approval and may require us to obtain 510(k) or pre-market
approval. If the FDA requires us to seek clearance or approval for any modifications to a previously cleared product, we may be required to cease marketing or recall the modified device until it obtains the necessary clearance or approval. Under
these circumstances, we may also be subject to significant regulatory fines or other penalties.

If our suppliers fail to comply with the FDAs
Quality System regulations, our manufacturing operations could be delayed, and our product sales and profitability could suffer.

The manufacturing processes for our products must comply with the FDAs Quality System regulation, which covers the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage
and shipping of our products. The FDA enforces the Quality System regulation through unannounced inspections. If we fail a Quality System regulation inspection or if our corrective action plan is not sufficient, the FDA may bring an enforcement
action against us and our operations could be disrupted and our manufacturing delayed. If we fail to take adequate corrective action in response to any serious compliance issue raised by the FDA, we could face various enforcement actions, which
could include a shut-down of our manufacturing operations and/or a recall of our products, which would cause our product sales and profitability to suffer.

Even after receiving FDA clearance or approval, our products may be subject to product recalls, which may harm our reputation.

The FDA and similar governmental authorities in other countries have the authority to make a mandatory recall or order the removal from the market of our products in the event of material deficiencies or defects in
design, manufacture, or labeling of the device. A government mandated or voluntary recall by us could occur as a result of component failures, manufacturing errors or design defects, including labeling defects. Any recall of our products may divert
managerial and financial resources and harm our business.

Our business is subject to rapid scientific change, which could have a material adverse
affect on our operations.

The market for ambulatory medical products and services is characterized by rapid scientific
developments, evolving industry standards and customer demands, and frequent new product introductions and enhancements. Our future success will depend in significant part on our ability to continually improve our offerings in response to both
evolving demands of the marketplace and competitive product offerings, and we may be unsuccessful in doing so.



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We substantially depend upon third parties for payment of services, which could have a material adverse affect on
our cash flows and results of operations.

Many of our customers will rely upon third party reimbursements from third party payors to cover all or
a portion of the cost of our products. As such, we rely on the cooperation of numerous third party payors, including, but not limited to, Medicare, Medicaid and various insurance companies, in order to get paid for performing services on behalf of
our clients. Wherever possible, the amount of such third party payments is governed by contractual relationships in cases where we are a participating provider for a specified insurance company or by established government reimbursement rates in
cases where we are an approved provider for a government program such as Medicare.

We intend to rely upon the third-party FDA-approved manufacturers
or suppliers to manufacture our heart monitoring products. Should these manufacturers fail to perform as expected, we will need to develop or procure other manufacturing sources, which would cause delays or interruptions in our product supply and
result in the loss of significant sales and customers.

We currently have no internal manufacturing capability and will rely
extensively on FDA-approved licensees, strategic partners or third party contract manufacturers or suppliers. Should we be forced to manufacture our products, we cannot give you any assurance that we will be able to develop an internal manufacturing
capability or procure third party suppliers. Moreover, we cannot give you any assurance that any contract manufacturers or suppliers we procure will be able to supply our product in a timely or cost effective manner, or in accordance with applicable
regulatory requirements or our specifications.

The market for our products and services is highly competitive, which could have a material adverse
affect on our business, results of operations and financial condition.

The market for ambulatory medical devices is highly
competitive and competition is expected to continue to increase. Many of our existing competitors have significantly greater financial, human, technical and marketing resources than we do. Our competitors may develop products and services that are
superior to ours or that achieve greater market acceptance than our offerings. We may not be able to compete successfully against current and future sources of competition, and competitive pressures faced by us may have a material adverse affect on
our business, results of operations and financial condition. The market for medical monitoring products is characterized by rapidly changing technology, evolving industry standards and price competition. There are no substantial barriers to
entry, and we expect that competition will be intense and may increase. We cannot assure you that we will be able compete successfully with existing competitors or new competitors.

The steps taken by us to protect our proprietary rights may not be adequate, which could have a material adverse affect on our business, results of operations and financial condition.

We rely on a combination of patent, patent pending, copyright, trademark and trade secret laws to protect our intellectual properties. We cannot give you
any assurance that these measures will prove to be effective in protecting our intellectual properties. We also cannot give you any assurance that our existing patents will not be invalidated, that any patents we currently or prospectively apply for
will be granted, or that any of these patents will ultimately provide significant commercial benefits. Further, competing companies may circumvent any patents that we may hold by developing products which closely emulate but do not infringe our
patents. While we intend to seek patent protection for our products in selected foreign countries, those patents may not receive the same degree of protection as they would in the United States. We can give you no assurance that we will be able to
successfully defend our patents and proprietary rights in any action we may file for patent infringement. Similarly, we can not give you any assurance that we will not be required to defend against litigation involving the patents or proprietary
rights of others, or that we will be able to obtain licenses for these rights. Legal and accounting costs relating to prosecuting or defending patent infringement litigation may be substantial. We also rely on proprietary designs, technologies,
processes and know-how not eligible for patent protection. We cannot give you any assurance that our competitors will not independently develop the same or superior designs, technologies, processes and know-how. While we have and will continue to
enter into proprietary rights agreements with our employees and third parties giving us proprietary rights to certain technology developed by those employees or parties while engaged by our Company, we can give you no assurance that courts of
competent jurisdiction will enforce those agreements.



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The Company May Not Be Able To Adequately Protect Or Enforce Its Intellectual Property Rights. The Company
considers its technology and procedures proprietary. If the Company is not able to adequately protect or enforce the proprietary aspects of its technology, competitors could be able to access the Companys proprietary technology and the
Companys business, financial condition and results of operations could be harmed. The Company currently attempts to protect its technology through a combination of patent, copyright, trademark and trade secret laws, employee and third party
nondisclosure agreements and similar means. Despite the Companys efforts, other parties may attempt to disclose, obtain or use the Companys technologies. The Companys competitors may also be able to independently develop products
that are substantially equivalent or superior to the Companys products or design around its patents. In addition, the laws of some foreign countries do not protect the Companys proprietary rights as fully as do the laws of the United
States. As a result, the Company may not be able to protect its proprietary rights adequately in the United States or abroad.

The Company may receive
notices that claim it has infringed upon the intellectual property of others. Even if these claims are not valid, they could subject the Company to significant costs. Litigation may be necessary to enforce the Companys intellectual property
rights or to determine the validity and scope of the proprietary rights of others. Litigation may also be necessary to defend against claims of infringement or invalidity by others. An adverse outcome in litigation or any similar proceedings could
subject the Company to significant liabilities to third parties, require the Company to license disputed rights from others or require the Company to cease marketing or using certain products or technologies. The Company may not be able to obtain
any licenses on acceptable terms, if at all. The Company also may have to indemnify certain customers or strategic partners if it is determined that it has infringed upon or misappropriated another partys intellectual property. Any of these
results could adversely affect the Companys business, financial condition and results of operations. In addition, the cost of addressing any intellectual property litigation claim, both in legal fees and expenses, and the diversion of
management resources, regardless of whether the claim is valid, could be significant and could seriously harm the Companys business, financial condition and results of operations.

Unfavorable results of contingent claims of our former Chief Executive Officer and other affiliates may have a material adverse affect on our business, results of operations and financial condition.

In November 2003, we removed Richard Krampe as our chief executive officer due to disagreements over compensation issues. Mr. Krampe
is employed by Focused Strategies, Inc. (FSI), a Florida Corporation which is owned and controlled by his brother, Mark Krampe. FSI entered into an agreement with us on March 16, 2001 (the Engagement Agreement) through
which Richard Krampe agreed to provide consulting, marketing and other services. We have paid FSI approximately $85,000 under the agreement and additional amounts of approximately $818,678 are claimed by FSI to be owed which we have disputed. We
also cancelled 7,625,000 Class A Units that, in our opinion, had been improperly issued to FSI for no consideration. The court has set a trial date of October 2007. For a more detailed discussion, see Item 3 - Legal Proceedings
below. We cannot predict the outcome of these claims, nor can we assure you that further litigation relating to these claims will not take place. If the outcome of this litigation is adverse to us, our liquidity, financial condition and operating
results could be materially adversely impacted.

Heath care reform could have a material adverse effect on our business, results of operations and
financial condition.

As a result of the escalation of health care costs and the inability of many individuals and employers to
obtain affordable health insurance, numerous proposals have been or may be introduced in the United States Congress and state legislatures. Further, other proposals are being considered relating to health care reform. Such proposals have included,
among other things, provision of universal access to health care, reforming the payment methodology for health care goods and services by both the public (Medicare and Medicaid) and private sectors, and methods to control or reduce public and
private spending on health care.



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The ultimate timing or effect such reforms may have on us cannot be predicted and no assurance can be given that any such reforms will not have a material
adverse effect on our revenues and/or earnings. Short-term cost containment initiatives may vary substantially from long-term reforms and may impact us in different ways.

Risks Relating to an Investment in Our Securities

Our common shares are sporadically or thinly
traded, so you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.

Our common shares have historically been sporadically or thinly traded, meaning that the number of persons interested in purchasing our common shares at or near ask prices at any given time may be
relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the
investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven development stage company such as ours or purchase or
recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned
issuer which has a large and steady volume of trading activity that will generally support continuous sales without a material reduction in share price. We cannot give you any assurance that a broader or more active public trading market for our
common shares will develop or be sustained, or that current trading levels will be sustained. Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near ask prices or at all if you need money or
otherwise desire to liquidate your shares.

The sale of a large amount of common shares held by our shareholders or our executive officers or
directors, or the perception that such sales could occur, could substantially depress the prevailing market prices for our shares.

Some of our executive officers and directors hold large amounts of common shares that they may sell under Rule 144 subject to control stock volume limitations. In addition, we have registered a significant number of shares of our
common stock held by certain of our shareholders, executive officers, and directors for resale pursuant to registration statements filed with the U.S. Securities and Exchange Commission (the SEC). Registration of such shares increases
the overall number of such shares that those officers and directors may sell on the public markets subject to volume restrictions imposed under Form S-8. Some of our executive officers and directors also hold common stock purchase warrants entitling
them to acquire large amounts of common shares. We have also registered these shares under a resale prospectus contained in the Registration Statement on Form S-8, which provides those officers and directors with a mechanism to immediately sell such
shares on the public markets subject to volume restrictions imposed under Form S-8. The sale of the shares of our common stock which may be acquired upon exercise of warrants and convertible securities may cause the market price of our common stock
to decrease. Sales of large amounts of our common stock in the public market could adversely affect the prevailing market price of our common stock. These potential sales could also impair our ability to raise additional capital through the sale of
equity securities.

There are no foreseeable dividends on our common shares.

We do not anticipate paying any dividends on our common shares in the foreseeable future. Rather, we plan to retain earnings, if any, for the operation
and expansion of our business.

The elimination of monetary liability against our directors, officers and employees under our certificate of
incorporation and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers and employees.

Our certificate of incorporation contains provisions which eliminate the liability of our directors for monetary damages to our Company and
shareholders to the maximum extent permitted under Florida corporate law. Our bylaws also require us to indemnify our directors to the maximum extent permitted by



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##### Table of Contents

Florida corporate law. We may also have contractual indemnification obligations under our agreements with our directors, officers and employees. The
foregoing indemnification obligations could result in our Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers and employees, which we may be unable to recoup. These provisions and
resultant costs may also discourage our Company from bringing a lawsuit against directors, officers and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against
our directors, officers and employees even though such actions, if successful, might otherwise benefit our Company and shareholders.

As of
June 30, 2007, we had a material weakness in our internal control over financial reporting, and we might find other material weaknesses in the future which may adversely affect our ability to provide timely and reliable financial information
and satisfy our reporting obligations under federal securities laws.

As of June 30, 2007, we did not maintain effective
controls over the completeness and accuracy relating to the accounting and disclosure for acquisition accounting and accruals. In addition, our management has determined that we have material weaknesses in our internal control over
recording, processing, summarizing and reporting information required to be disclosed by the Company in the reports it files under the Exchange Act within the time periods specified by the commissions rules and forms.

We might find other material weaknesses in our internal control over financial reporting in future periods. To the extent that any significant or
material weaknesses exist in our internal control over financial reporting, such weaknesses may adversely affect our ability to provide timely and reliable financial information necessary for the conduct of our business and satisfaction of our
reporting obligations under federal securities laws.

We may not be able to implement Section 404 of the Sarbanes-Oxley Act on a timely basis.

The Securities and Exchange Commission (the SEC), as directed by Section 404 of The Sarbanes Oxley Act, adopted
rules generally requiring each public company to include a report of management on the companys internal controls over financial reporting in its annual report on Form 10-KSB that contains an assessment by management of the effectiveness of
the companys internal controls over financial reporting. In addition, the companys independent registered accounting firm must attest to and report on managements assessment of the effectiveness of the companys internal
controls over financial reporting. This requirement will first apply to our annual report on Form 10-KSB for the fiscal year ending June 30, 2008.

We have not yet developed a Section 404 implementation plan. We have in the past discovered, and may in the future discover, areas of our internal controls that need improvement. How companies should be implementing these new
requirements including internal control reforms to comply with Section 404s requirements and how independent auditors will apply these requirements and test companies internal controls, is still reasonably uncertain.

We expect that we will need to hire and/or engage additional personnel and incur incremental costs in order to complete the work required by Section 404. There
can be no assurance that we will be able to complete a Section 404 plan on a timely basis. Our liquidity position in fiscal 2008 may also impact our ability to adequately fund our Section 404 efforts.

Additionally, upon completion of a Section 404 plan, we may not be able to conclude that our internal controls over financial reporting are effective, or in the
event that we conclude that our internal controls are effective, our independent accountants may disagree with our assessment and may issue a report that is qualified. This could subject our Company to regulatory scrutiny and a loss of public
confidence in our internal controls. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could negatively affect our operating results or cause us to fail to meet our reporting
obligations.



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##### Table of Contents

|Item 2. | Description of Property
|------- | -----------------------

Our principal executive office is currently located at 5422 Carrier Drive, Suite 306, Orlando, Florida 32819. Our premises currently occupy 2,688 square feet. We expanded our offices in November 2006 through the lease
of an additional 2,316 square feet of space directly proximate to our current location. We believe the additional space will be sufficient to meet our expected expansion and future operating needs. The premises are utilized for general and
administrative purposes and include a monitoring center that is part of the service we offer to users of the STATPATCHTMSystem.

The lease for the corporate offices expires on November 30, 2009. The base annual rent under the lease during the current term of the lease is
$87,500, payable in equal monthly installments, subject to 3% per annum increases. The landlord is also entitled to an additional annual rent payable in monthly installments, representing our proportionate share of the propertys operating
expenses, such as property taxes, common area costs, parking lot maintenance, and administrative expenses.

We also lease space for one of our now closed
outpatient clinics, the Metrowest Clinic We lease 1,518 square feet at 2411 South Hiawassee Road, Suite 23, Orlando, Florida 32835 for the Metrowest Clinic. This lease commenced on February 4, 2006 and expires on
January 31, 2011. The initial base rent is $45,540 per annum. Annual increases are based on the Consumer Price Index, but will be no less than 4% per annum. We are currently attempting to sublease or assign this lease to a third party, but
do not have any arrangements or commitments to do so. The other facility that we leased for our now closed outpatient clinic was Technological Plaza West, Ltd for 2,485 square feet located at 3403 Technological Avenue; Suite 16; Orlando, FL 32817.
The lease commenced on March 1, 2006 and expires on February 28, 2011. The Company has assigned the lease to this property to an unaffiliated third party. As part of this assignment the Company transferred a $20,511 security deposit to the
assignee. The Company would have to re-assume this lease if the assignee were to default on the lease.

With the acquisition of the mobile
imaging business on August 1, 2006, we also acquired ownership or leasehold interests on six (6) vehicles and various medical ultrasound equipment. In December of 2006, we acquired new digital ultrasound equipment that is subject to an
operating lease. In November and December 2006, we acquired five (5) new vehicles for the ultrasound business that were purchased through debt financing.

In the opinion of management, all of the property described above is adequately covered by insurance.



|Item 3. | Legal Proceedings
|------- | -----------------

Focused Strategies, Inc. v. Telzuit
Technologies, LLC and Telzuit Technologies, Inc.

On June 8, 2005, Focused Strategies, Inc., a Florida corporation, filed a
Complaint for Damages and Declaratory Relief in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida, titled Focused Strategies, Inc. v. Telzuit Technologies, LLC and Telzuit Technologies, Inc., Case
No. 48-2005-CA-004920-O (the FSI Complaint). On July 15, 2005, Telzuit Technologies, LLC and Telzuit Technologies, Inc. filed an Introduction, Answer, Defenses, Counterclaims and Third Party Claims of the Defendants (the
Answer and Counter-Claim). Telzuit Technologies, Inc. is a Florida corporation and wholly-owned subsidiary of Telzuit Medical. Telzuit Technologies, LLC is a Florida limited liability company which owns shares of the capital stock of
Telzuit Medical.

Telzuit Technologies, LLC hired Focused Strategies, Inc. to provide consulting services
pursuant to an Engagement Agreement dated March 16, 2001, (the Engagement Agreement). In the FSI Complaint, Focused Strategies, Inc. alleges that it performed its duties and obligations under the Engagement
Agreement and seeks damages of $818,678 for alleged unpaid professional fees and expenses.



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##### Table of Contents

In addition, in the FSI Complaint, Focused Strategies, Inc. requests declaratory relief seeking
(a) a determination as to the current ownership of Telzuit Technologies, LLC, including the determination as to the ownership of 7,625,000 units of membership interest that had previously been issued to FSI; (b) a
determination as to the controlling ownership group of Telzuit Technologies, LLC; and (c) a determination as to the validity of the Share Exchange Agreement, dated May 6, 2005, between Telzuit Technologies, LLC, Telzuit Medical, et.
al., providing for the transfer of all of the issued and outstanding capital stock of Telzuit Technologies, Inc. to Telzuit Medical in exchange for capital stock of Telzuit Medical.

The management of Telzuit Medical believe that Focused Strategies, Inc.s claims are not substantiated by the facts,
and are without merit, and intends to defend the Companys position vigorously. In the Answer and Counter-Claim, Telzuit Technologies, Inc. and Telzuit Technologies, LLC assert a number of defenses in response to the
allegations made in the FSI Complaint, including fraud, breach of contract, and self-dealing. In addition, Telzuit Technologies, Inc. and Telzuit Technologies, LLC have filed counterclaims against the claimant, based on fraud and breach of
implied contract. In connection with each of these claims, Telzuit Technologies, Inc. and Telzuit Technologies, LLC seek damages in excess of $15,000. The parties mediated their respective claims on March 3, 2006, and April 11, 2007, but
were unsuccessful in reaching an agreement to resolve the lawsuit. The court has set a trial date of October, 2007. The Company intends to seek to postpone the trial while it engages new legal counsel in this matter. There can be no assurance the
Company will be successful in postponing the trial date or timely engaging legal counsel. If the outcome of this litigation is adverse to the Company, our liquidity, financial condition and operating results could be materially adversely impacted.

Todd Lavelle and Michael Evertsen v. Telzuit Medical Technologies, Inc.

On December 22, 2006, Todd Lavelle and Michael Evertsen, the former shareholders of PDS Imaging filed a Complaint and Demand for Jury Trial in the United States District Court Middle District of
Florida, Orlando Division, titled Todd Lavelle and Michael Evertsen v. Telzuit Medical Technologies, Inc. The Complaint alleged that the Company had breached its agreements with Todd Lavelle and Michael Evertsen. The Complaint sought damages of
$100,000 in stock, the assumption of certain equipment leases and payment of legal fees. The Company had previously recorded the stock and lease assumptions on its financial statements. The Company filed a response and Motion to Dismiss on
January 29, 2007. On March 28, 2007 the case was dismissed, without prejudice, by the United States District Court Middle District of Florida, Orlando Division. Lavelle and Evertsen filed a new complaint on May 15, 2007 The parties
are in settlement discussions. There can be no assurance the Company will settle this matter.

Other litigation related matters

During 2003 and 2004, the Board of Directors of the Company voted to rescind 26,198,010 Class A membership units and 1,738,500 Class B membership units which it
believes were issued improperly for no consideration. As of December 31, 2006, two affected parties have threatened, but have not brought any legal action related to the rescission. The two parties constituted 13,213,000 of Class A
membership units and 1,338,500 of the Class B membership units rescinded. The Company acknowledges there may be additional parties to file suit. Should any of the affected parties begin legal action, the Company intends to defend its position
vigorously.

The Company is occasionally party to other litigation or threat of litigation arising in the normal course of business. Management, after
consultation with legal counsel, does not believe that the resolution of any such matters will have a material effect on the Companys financial position or results of operations.



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##### Table of Contents

Except as set forth above, as of June 30, 2007, there are no other material pending legal or
governmental proceedings relating to our Company or properties to which we are a party, and to our knowledge there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a
material interest adverse to us.



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

No matters
were submitted to a vote of the security holders of the Company during the fourth quarter of the fiscal year covered by this report.



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##### Table of Contents

PART II.



|Item 5. | Market for Common Equity, Related Stockholders Matters and Small Business Issuer Purchases of Equity Securities
|------- | ---------------------------------------------------------------------------------------------------------------

Our common shares are currently quoted on the OTC Bulletin Board (OTCBB) under the symbol TZMT. The OTCBB is a regulated provider of pricing
and financial information for the over-the-counter (OTC) securities market. From June 2004 until commencement of quotation on OTCBB on August 15, 2005, our common shares were traded on the Pink Sheets under the symbol TMDN. Prior to
June 2004, our common shares were quoted on the American Stock Exchange (AMEX) under the symbol NMC.

The following table sets
forth the quarterly high and low bid prices for our common shares for the periods indicated. The prices set forth below represent inter-dealer quotations, without retail mark-up, mark-down or commission and may not be reflective of actual
transactions.



|                                        |  |      |      |     |   |      
|--------------------------------------- |  | ---- | ---- | --- | - | -----
|Period (Fiscal Year)                    |  | High |      | Low
|2007:                                   |  |      |      |     |   |      
|Fourth Quarter ending June 30, 2007     |  | $    | 0.17 |     | $ | 0.08 
|Third Quarter ending March 31, 2007     |  | $    | 0.16 |     | $ | 0.08 
|Second Quarter ending December 31, 2006 |  | $    | 0.23 |     | $ | 0.08 
|First Quarter ending September 30, 2006 |  | $    | 0.40 |     | $ | 0.16 
|2006:                                   |  |      |      |     |   |      
|Fourth Quarter ending June 30, 2006     |  | $    | 0.65 |     | $ | 0.020
|Third Quarter ending March 31, 2006     |  | $    | 2.75 |     | $ | 0.043
|Second Quarter ending December 31, 2005 |  | $    | 5.25 |     | $ | 2.39 
|First Quarter ending September 30, 2005 |  | $    | 5.95 |     | $ | 4.40 

Holders

On June 30, 2007, there were 515 holders of record, according to a shareholders list provided by our transfer agent, American Stock Transfer & Trust Company. The number of registered shareholders
excludes any estimate by us of the number of beneficial owners of common shares held in street name.

Dividends

We have never paid cash dividends on our capital stock and do not anticipate paying any cash dividends with respect to those securities in the foreseeable
future. Our current business plan is to retain any future earnings to finance the expansion and development of our business. Any future determination to pay cash dividends will be at the sole discretion of the Board of Directors and will be
dependent upon our financial condition, results of operations, capital requirements and other factors, as our Board may deem relevant at that time. Our Board of Directors has the right to authorize the issuance of preferred stock, without further
shareholder approval, the holders of which may have preferences over the holders of the common stock as to the payment of dividends. Pursuant to a Securities Purchase Agreement dated as of



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##### Table of Contents

May 26, 2006, the Company issued a series of 10% Senior Secured Convertible Debentures. Pursuant to the terms of such debentures, the Company has agreed
to not issue cash dividends on its equity securities without written consent of the holders of at least 66% of the principal amount of the then outstanding debentures.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides
information as of June 30, 2007 about the Companys common stock that may be issued to employees or directors under the Companys equity compensation plans.

Equity Compensation Plan Information



|                                                       |  |                                                                                              |  |                                                                             |  |                                                                                                                                         
|------------------------------------------------------ |  | -------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|Plan Category                                          |  | Number of Securities tobe issued upon exercise
ofoutstanding options,warrants and rights (a) |  | Weighted averageexercise price ofoutstandingoptions,
warrantsand rights (b) |  | Number of securitiesremaining availablefor future
issuanceunder equitycompensation plans(excluding securitiesreflectedin column (a)) (c)
|Equity compensation plans approved by stockholders     |  | -0-                                                                                          |  | -0-                                                                         |  | 15,000,000(4)                                                                                                                           
|Equity compensation plans not approved by stockholders |  | 3,300,000-(1), (2), (3)                                                                      |  | $0.50(1), (2), (3)                                                          |  | -0-                                                                                                                                     
|TOTAL                                                  |  | 3,300,000                                                                                    |  | $0.50                                                                       |  | 15,000,000(4)                                                                                                                           

---

|(1) | On June 16, 2006, the Company and Warren Stowell entered into an Employment Agreement effective as of May 8, 2006, which expires May 8, 2009. Pursuant to the terms of
the Employment Agreement, Mr. Stowell is eligible to receive a warrant or stock option for the purchase of 2,000,000 shares of common stock at an exercise price of $.50 per share (referred to in this paragraph as the Warrant
Shares). Twenty-five percent of the Warrant Shares vested on the effective date of the Employment Agreement, and on each anniversary of the effective date of the Employment Agreement an additional twenty-five percent of the Warrant Shares will
vest. Neither the Employment Agreement nor the warrant referred to in this paragraph was issued pursuant to a formal equity compensation plan for our directors, officers, and employees.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | On May 9, 2006, the Company authorized the issuance to Warren Stowell of a warrant exercisable for 300,000 shares of common stock. The warrant referred to in this paragraph is
not issuable pursuant to a formal equity compensation plan for our directors, officers, and employees. The Warrant Shares are fully vested and have an execise price of $0.50 per share.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | In August 2006, the Company and Jerry Balter entered into an Employment Agreement effective as of July 11, 2006, which expires July 11, 2009. Pursuant to the terms of the
Employment Agreement, Mr. Balter is eligible to receive stock options for the purchase of 1,000,000 shares of common stock at an exercise price of $.50 per share (the referred to in this paragraph as the Warrant Shares). Twenty-five
percent of the Warrant Shares vested on the effective date of the Employment Agreement, and on each anniversary of the effective date of the Employment Agreement an additional twenty-five percent of the Warrant Shares will vest.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | At the annual meeting of shareholders on February 27, 2007, the Companys shareholders approved the Telzuit Medical Technologies, Inc. 2007 Long Term Incentive Plan. The
Plan authorized the Compensation Committee of the Board of Directors to issue up to 15,000,000 options to purchase the Companys common stock. To date, there have been no issuances from this plan.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 6. | Managements Discussion and Analysis or Plan of Operation
|------- | ---------------------------------------------------------

The following is a discussion of the financial condition and results of operations of the Company for the fiscal year ended June 30, 2007, and the fiscal year ended June 30, 2006. This discussion should be
read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Report.



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##### Table of Contents

Overview

Telzuit Medical is a company focused on developing and marketing ambulatory medical devices which
monitor, measure, and record physiological signals generated by the body. Our initial product is our StatPatch Wireless Holter Monitor (the STATPATCHTM or the STATPATCHTMHolter Monitor), a 12-lead, wireless holter heart monitor which measures, records,
and transmits physiological signals associated with a patients cardiovascular system. The STATPATCHTMsystem is FDA approved through a 510-K
submission. In addition to the STATPATCHTMsystem, during the fiscal year ended June 30, 2007, the Company provided services to patients through the
operation of two medical clinics located in the Orlando, Florida area and the operation of a mobile imaging business that provides services in central and southern Florida. Telzuit Medical acquired this mobile imaging business on August 1,
2006. The walk-in medical clinics were closed on March 30, 2007.

The Company has primarily derived its
revenue from two primary sources: (i) its walk-in clinics; and (ii) its mobile imaging business. The walk-in clinics were closed on March 30, 2007. The Company recognizes revenues from these services when the services have been
performed, net of anticipated discounts taken by third party payors, such as insurance carriers, Medicare and Medicaid. The Company has received virtually no revenues from its STATPATCH business. If the Company is successful in introducing the
STATPATCH product, revenues are expected to be recognized in the following two ways: (i) medical providers will be provided with STATPATCH patches and receiving devices by the Company, without charge, and the Company will bill third party
payors upon issuing a holter monitor report; and (ii) the Company will provide STATPATCH patches and receiving devices to third party distributors, without charge, who will provide the product to medical providers. When the Company receives
information from the patch and sends a holter report to the medical provider, the distributor or medical provider will directly bill third party payors for this service. The Company will bill the distributor on a regular basis based on the number of
reports the Company has issued during the period. The Company will only bill and recognize revenue from its STATPATCH business when a holter monitor report is generated and sent to a medical provider. Revenues will be recognized net of contractual
adjustments as the reports are generated. The STATPATCH patches and receiving devices will remain the property of the Company. Also, as part of this sales program the medical provider may use a Telzuit Medical owned PDA to gather data.

Prior to 2005, the Company was known as Taylor Madison Corp., and focused its operations on the development and wholesale distribution of
fragrances and skincare products. In early 2005, the Company discontinued all operations and became a shell company, exploring the viability of acquiring an operating company. On May 6, 2005, the Company entered into a Share Exchange Agreement
(the Share Exchange Agreement), pursuant to which it acquired all of the issued and outstanding capital stock of Telzuit Technologies, Inc. from Telzuit Technologies, LLC in exchange for 2,207,723 shares of Series B Preferred Stock,
which automatically converted, upon completion of our 1-for-31 reverse stock split, into 26,492,676 shares of our common stock on August 22, 2005. As a result of the closing of the transactions contemplated by the Share Exchange Agreement, the
owners of Telzuit Technologies, LLC acquired approximately 70% of our voting capital stock. The share exchange was accounted for as a reverse acquisition in accordance with Statement of Financial Accounting Standards No. 141, Business
Combinations. Due to the reverse acquisition, the Companys date of inception is deemed to be April 1, 2000, the date Telzuit Technologies, Inc., the Companys predecessor, was incorporated.

By acquiring all of the issued and outstanding capital stock of Telzuit Technologies, Inc., we
acquired certain know-how, trade secrets, and other proprietary intellectual property rights relating to the development of ambulatory medical devices, including the STATPATCHTMHolter Monitor (collectively referred to herein as the STATPATCHTMTechnologies). On August 18, 2005, we
changed our name from Taylor Madison Corp. to Telzuit Medical Technologies, Inc., which is more synonymous with our current operations.



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##### Table of Contents

Financial Position

We have incurred losses since our inception and have experienced and continue to experience negative cash flows from operations. In addition, we had a
working capital deficiency of $577,487 as of June 30, 2007. The company does not have enough cash to continue operations beyond October 31, 2007. We will have to rely on external sources for funding to support immediate operating
requirements. Until such time as we can achieve positive cash flow on a monthly basis, the dependence on external capital will remain. Management believes that the Company will need to raise at least an additional $1.5 million to continue our
business for at least the next twelve (12) months. We currently do not have any arrangements or commitments for, or readily available sources of, additional financing. We cannot give you any assurance that we will be able to secure the
additional cash or working capital we will require to continue our operations. These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.

If we are successful in timely raising sufficient capital our plan of operation for the twelve-month period following the date of this annual report on
Form 10KSB is to continue to develop and market the STATPATCH System and to operate our Mobile Imaging business.

The Company will
need to raise additional capital in order to fund operations and research and development. As discussed above, we believe that our cash on hand will not be sufficient to cover these anticipated expenditures, and the Company will need to raise
additional cash as our current cash and working capital resources are depleted. The Company received a loan from a related party of $483,000 during fiscal 2007, which was subsequently converted into 1,380,000 shares of the Companys Common
Stock, and received an additional $70,000 in July 2007. We will seek to raise additional capital through the public or private sale of debt or equity securities, the procurement of advances on contracts or licenses, funding from jointventure
or strategic partners, debt financing or short-term loans, or a combination of the foregoing. We also may seek to satisfy indebtedness without any cash outlay through the private issuance of debt or equity securities. We currently do not have any
arrangements or commitments for, or readily available sources of, additional financing. We cannot give you any assurance that we will be able to secure the additional cash or working capital we will require to continue our operations. These factors,
among others, raise substantial doubt about the Companys ability to continue as a going concern.

We cannot give you assurance that we will be able to secure the additional cash or working capital we may require to continue our operations. The Companys ability to continue as a going concern depends on its
ability to timely complete development of the STATPATCHTMWireless Holter Monitor, generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, as well as its ability to raise sufficient capital to fund operations and research and development. There can be no assurance the
Companys efforts will be sufficient to meet the Companys expected cash needs. Failure to timely complete development of the STATPATCHTMWireless Holter Monitor, generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, or raise sufficient capital to fund the Companys
operations will have a material adverse effect on our financial condition, results or operations, liquidity and capital resources.

Cross, Fernandez & Riley, LLP, our independent registered public accounting firm, issued a Report of Independent Public Accounting Firm related to our Financial Statements in this Form 10-KSB that contains an
explanatory paragraph that makes reference to uncertainty about our ability to continue as a going concern. Future reports may continue to contain this explanatory paragraph.

Research and Development

In December 2004, we
completed the design, fabrication and testing of a pre-production model of our first product for commercialization, our battery-operated, digital 12-lead STATPATCHTMWireless Holter Monitor. As discussed above, the STATPATCHTMis used as the primary component of a 12-lead ambulatory heart
monitor system to acquire, process, amplify and store physiological signal data.



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##### Table of Contents

The STATPATCHTMis an ambulatory patient heart monitor and recording system that will allow a patients heart to be continuously monitored over a period of 24 to 48 hours while the patient carries out his or her
daily activities away from the physicians office or hospital. The STATPATCHTMis comprised of a disposable bandage-like strip, which is imbedded with
lead sensory connectors. A battery attached to the strip activates the lead sensory connectors to transmit heart activity information. The battery life lasts between 24 and 48 hours, at which time the patient must discard the old patch and replace
it with a new one.

In operation, the STATPATCHTMis used in conjunction with the STATPATCHTMSystem, which
includes a cellular telephone device (commonly referred to as a PDA) capable of recording the data transmitted from our STATPATCHTM. Based on
testing conducted by us and third parties we believe that a properly designed PDA device is capable of recording information transmitted from our STATPATCHTM. We acquire the STATPATCHTMSystem from manufacturers of PDAs, modify these devices physically and equip them with software to permit the
transmission of heart activity received from the STATPATCHTM.

We have designed a communication system as an intranet through which data collected by our Unit
can be transmitted through any form of cellular technology. Information transmitted by each STATPATCHTMSystem is routed through cellular towers to a
switching station maintained at our corporate offices. We have licensed computer software that will monitor the heart activity of patients wearing our STATPATCHTM. This software, which has been developed by Philips Medical (Phillips) and other medical service providers, can detect irregular heart activity.

Patients using the STATPATCHTMare able to move around freely while data is collected and sent in near real time from the patient module to the monitoring center. At the conclusion of the recording period, the patient returns the Unit to the
cardiologist. The patients information, having been sent via cell phone to the monitoring center, is then analyzed by the Philips algorithm. After the prescribing period, the physician is able to access the patient information via secure
web portal and download raw data and a report. The physician then interprets all of the information available to him or her to make a diagnosis. The STATPATCHTMSystem is entirely diagnostic and is not intended to be a life-saving device.

Medical Imaging

The Company also owns and operates six mobile imaging units that provide ultrasound imaging to
clinics and medical practices that contract for our services. We acquired the mobile imaging units on August 1, 2006 by acquiring 100% of the issued and outstanding capital stock of Cedars Diagnostic Labs, Inc., a Florida corporation
(Cedars) and Atlantic Ultrasound, Inc., a Delaware corporation (Atlantic), related entities under common control and operating under the fictitious name PDS Imaging, a Florida-based mobile ultrasound and cardiac
imaging business. We paid $644,255 cash and agreed to issue 88,853 shares of common stock to acquire PDS Imaging. In addition, the Company entered into three-month consulting agreements, effective August 1, 2006 through October 31, 2006,
with the principals of PDS Imaging. As consideration for the consulting services, the Company paid additional cash of $12,000 and agreed to issue an additional 277,000 shares of the Companys common stock to the principals. The shares of Common
Stock have not yet been issued . The Companys acquisition of PDS Imaging adds a Medicare-approved and private insurance credentialed Independent Diagnostic Testing Facility (IDTF) to our business. The IDTF will enable the Company
to receive reimbursement from third party payors for its STATPATCHTMSystem. PDS Imaging generated revenues of approximately $0.9 million in for the year
ended June 30, 2007. In connection with the acquisition of the mobile imaging business, we acquired five new vehicles for a total price of $86,058 and leased new ultrasound equipment for sixty (60) months with a monthly payment of
approximately $6,000.



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##### Table of Contents

Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements for the fiscal year ended June 30, 2007, and explanatory
notes included as part of this filing.

SUMMARY STATEMENT OF OPERATIONS DATA

(Dollar amounts and share data)



|                                       |  |                         |            |   |                         |   |             |  
|-------------------------------------- |  | ----------------------- | ---------- | - | ----------------------- | - | ----------- | -
|                                       |  | Year EndedJune 30, 2007 |            |   | Year EndedJune 30, 2006 |  
|Total Revenue                          |  | $                       | 843,296    |   |                         | $ | 3,540       |  
|Net (Loss)                             |  | $                       | (5,580,439 | ) |                         | $ | (11,136,327 | )
|Net (Loss) attributed to Common Shares |  | $                       | (5,897,177 | ) |                         | $ | (20,314,810 | )

Fiscal Year Ended June 30, 2007, and Fiscal Year Ended December 31, 2006

REVENUES.Overall net revenues for the year ended June 30, 2007 were $843,296, as compared to net revenues of $3,540 for the twelve month period ending
June 30, 2006. The increase in revenues was primarily due to revenues from the PDS Imaging business, which was acquired on August 1, 2006.

COST OF REVENUES: Cost of revenues for the fiscal year ended June 30, 2007 were $952,143 as compared
to $21,821 for the fiscal year ended June 30, 2006. The cost of revenues during the fiscal year ended June 30, 2007 included salaries of employees for the mobile imaging business, disposable medical products utilized in treating patients,
interest and leasing costs for the equipment used in this business and expenses of the medical professionals who provided interpretation of the ultrasound scans. In the future cost of revenues will encompass the direct operating expenses of the
STATPATCHTM, including the cost of materials, costs for communications equipment and other equipment, if we successfully rollout this product.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses consisted of
payroll and related expenses for executive, accounting and administrative personnel, professional fees and other general corporate expenses. General and administrative expenses for the year ended June 30, 2007 were $2,990,269, as compared to
general and administrative expenses of $9,751,682 for the year ended June 30, 2006. A significant amount of the decrease was attributable to the decrease in non-cash payments in stock to directors, officers and consultants, including non-cash
payments to the broker-dealer engaged by the Company. In addition, there were significant decreases in legal, accounting, and other professional fees during the fiscal year ending June 30, 2007. The Company has taken steps to control its
general and administrative expenses and expects these charges to trend lower in fiscal year 2008. Sales and marketing expenses are expected to be substantially higher during fiscal year 2008 because we intend to rollout the STATPATCHTMSystem and if we achieve sales we expect to pay sales commissions on such sales. Not included in current year general and administrative expenses was the
write-down of $496,779 of the value of computer hardware and software and $469,118 related to the impairment of the goodwill related to the PDS Imaging acquisition.

RESEARCH AND DEVELOPMENT EXPENSES.Research and development expenditures for the fiscal year ended
June 30, 2007 were $212,740, as compared to research and development expenditures of $245,852 for the fiscal year ended June 30, 2006. We expect to keep R&D expenses at the same level in fiscal year 2008 as they were in 2007. R&D
going forward will be focused on expanding the wireless monitoring product line as well as enhancements to the current STATPATCHTMsystem.

INTEREST EXPENSE.Interest expense decreased to $823,471 for the fiscal year ended June 30, 2007 from $1,158,674 for the fiscal year
ended June 30, 2006. For such periods the interest expenses related to non-cash payments. The terms of the 10% Senior Subordinated Debentures allow the Company to make all interest payments in Common Stock. The decrease during fiscal year 2007
can be attributed to amortization of approximately $941,000 of debt discount on the Companys May, 2005 convertible debentures when they converted to Series A Preferred Stock in July 2005, and the addition of interest on the debentures for



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approximately 35 days during 2006. Interest on the May, 2006 Debentures will continue to be payable during fiscal year 2008, unless such instruments are
converted into Common Stock. It is the Companys current intention to satisfy its interest obligations utilizing Common Stock.

LOSS FROM DISCONTINUED
OPERATIONS. On March 30, 2007, the Company closed its two walk-in clinics resulting in a loss from discontinued operations of $511,992 for the fiscal year ended June 30, 2007. There were no losses from discontinued operations in fiscal
year ended June 30, 2006.

NET LOSS.The net loss for the year ended June 30, 2007 was ($5,580,439), as compared to a net loss of
($11,136,327) for the year ended June 30, 2006. Also, the net loss attributed to common shareholders was $20,314,810 for the fiscal year ended June 30, 2006, as compared to a net loss attributed to common shareholders of $5,897,177 for the
year ended June 30, 2007. The decrease in net loss for the year ended June 30, 2007 is primarily due to non-cash expenses. These decreases include significantly lower interest expense, stock compensation to current and former employees,
investor relations and public relations expenses and other professional fees. The Company undertook efforts that resulted in substantial reductions to stock compensation to current and former employees, investor relations and public relations
expenses and other professional fees. The decrease in net loss attributable to common stockholders is due to the same reasons.

Liquidity and Capital
Resources

The Company had cash and equivalents of $178,959 on June 30,
2007, excluding restricted cash. Net Cash used in continuing operations was $2,650,026 for the fiscal year ended June 30, 2007, as compared to $2,860,449 used in continuing operations for the year ended June 30, 2006. Management believes
that approximately half of these expenditures were for activities that are no longer necessary for the Companys operations which are focused on sales and marketing of the STATPATCHTMand the further development of our mobile imaging business. These activities included extensive investor relations, marketing and other consulting expenses. The Company has taken steps to continue to reduce its cash
burn rate. In addition we closed our walk-in clinic operations which resulted in a loss from discontinued operations of $511,992.

During the fiscal year ending June 30, 2007 the company spent $748,264 on equipment purchases which included the acquisition of the mobile imaging business and the acquisition of equipment for the mobile imaging business. At this time
the Company does not have any plans to purchase significant amounts of additional equipment.

During the fiscal year ending June 30, 2007 the company
borrowed $483,000 from Michael Vosch, an officer and director of the Company. Mr. Vosch converted his loan into 1,380,000 shares of the Companys Common Stock in July 2007 and lent the Company an additional $70,000 in July 2007. The loans
are interest free loans and are to be repaid by either conversion into the Companys Common Stock or repayment of the principal at the discretion of the company.

The company does not have enough cash to continue operations beyond October 31, 2007. We will have to rely on external sources for funding to support immediate operating requirements. Until such time as we can
achieve positive cash flow on a monthly basis, the dependence on external capital will remain. Management believes that the Company will need to raise at least an additional $1.5 million to continue our business for the next twelve (12) months.
We currently do not have any arrangements or commitments for, or readily available sources of, additional financing. We cannot give you any assurance that we will be able to secure the additional cash or working capital we will require to continue
our operations. These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.

If
we are successful in timely raising additional capital, our plan of operation for the twelve-month period following the date of this annual report on Form 10-KSB is to continue to develop and market the STATPATCH System and to operate our Mobile
Imaging business.

The Company will need to raise additional capital in order to fund operations and research and development. As discussed
above, we believe that our cash on hand will not be sufficient to cover these



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anticipated expenditures, and the Company will need to raise additional cash as our current cash and working capital resources are depleted. The Company
received a loan from a related party of $483,000 during fiscal 2007, which was subsequently converted into 1,380,000 shares of the Companys Common Stock, and received an additional $70,000 in July 2007. We will seek to raise additional capital
through the public or private sale of debt or equity securities, the procurement of advances on contracts or licenses, funding from jointventure or strategic partners, debt financing or short-term loans, or a combination of the foregoing. We
also may seek to satisfy indebtedness without any cash outlay through the private issuance of debt or equity securities. We currently do not have any arrangements or commitments for, or readily available sources of, additional financing. We cannot
give you any assurance that we will be able to secure the additional cash or working capital we will require to continue our operations. These factors, among others, raise substantial doubt about the Companys ability to continue as a going
concern.

We cannot give you assurance that we will be able to secure the additional
cash or working capital we may require to continue our operations. The Companys ability to continue as a going concern depends on its ability to timely complete development of the STATPATCHTMWireless Holter Monitor, generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, as well
as its ability to raise sufficient capital to fund operations and research and development. There can be no assurance the Companys efforts will be sufficient to meet the Companys expected cash needs. Failure to timely complete
development of the STATPATCHTMWireless Holter Monitor, generate revenues from the sale of the STATPATCHTMWireless Holter Monitor, or raise sufficient capital to fund the Companys operations will have a material adverse effect on our financial condition, results or operations, liquidity and capital
resources.

Our consolidated financial statements are prepared using accounting principles generally accepted in the United
States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred losses since our inception and have experienced and continue to experience
negative cash flows from operations. In addition, we had working capital deficiency of $577,487 as of June 30, 2007. The company does not have enough cash to continue operations at historical levels beyond October 31, 2007. Short term, we will
have to rely on external sources for funding to support immediate operating requirements. Until such time as we can achieve positive cash flow on a monthly basis, the dependence on external capital will remain. Management believes that the Company
will need to raise an additional $1.5 million to continue our business for at least the next twelve (12) months.

Contractual Obligations and
Purchase Obligations

See Note 14 of our financial statements found at Item 7 below for a description of our material contractual
commitments. The company does not currently have any material purchase obligations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical
Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. For a description of those estimates, see Note 2,Significant Accounting Policies, contained in the explanatory
notes to our audited financial statements for the years ended June 30, 2006 and June 30, 2007 contained in this filing. On an on-going basis, we evaluate our estimates, including those related to deferred tax assets and valuation
allowance, and, fair value of equity instruments issued to consultants for services. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the



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circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable. Management has also discussed our
critical accounting policies and estimates with our audit committee, and the members of the audit committee have reviewed the disclosures set forth below.

Our critical accounting policies include:

Stock-based Compensation

Effective July 1, 2006, we adopted Statement of Financial Accounting Standard (SFAS) No. 123 (revised 2004). Share-Based Payment(SFAS 123R). SFAS 123R requires companies to
measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on grant-date fair value of the award and to recognize it as compensation expense over the period the employee is required
to provide services in exchange for the award, usually the vesting period.

SFAS 123R applies to new awards and to awards modified, repurchased, or
cancelled after the effective date, as well as to the unvested portion of awards outstanding as of the effective date. We use the Black-Scholes option-pricing model to value our new stock awards under SFAS 123R, applying the modified
prospective method for existing grants which requires us to value stock options prior to our adoption of SFAS 123R under the fair value method and expense the value over the requisite service period. SFAS 123R also requires us to estimate
forfeitures in calculating the expense related to stock-based compensation. In addition, SFAS 123R requires the Company to reflect cash flows resulting from excess tax benefits related to those options as a cash inflow from financing activities
rather than as a reduction of taxes paid.

Revenue Recognition

Revenue Recognition - Although at this stage in the Companys development it has had no significant revenues, management considers revenue recognition a critical accounting policy as it affects the timing of
earnings recognition. The Company derives its revenue from one primary source: services provided at its mobile imaging business. The Company recognizes revenues from these services when the services have been performed and are billable.

New Accounting Pronouncements

In February 2006, the FASB issued
SFAS No. 155, Accounting for Certain Hybrid Financial Instruments  An Amendment of FASB Statements No. 133 and 140 (SFAS No. 155), SFAS No. 155 provides entities with relief from having to
separately determine the fair value of an embedded derivative that would otherwise be required to be bifurcated from its host contract in accordance with SFAS No. 133. It also allows an entity to make an irrevocable election to measure such a
hybrid financial instrument at fair value in its entirety, with changes in fair value recognized in earnings. SFAS No. 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement (new basis) event occurring
for fiscal years beginning after September 15, 2006. The Company has not yet assessed the impact of this SFAS on its financial position, results of operations or cash flows.

In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48). FIN 48 provides guidance
on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosures and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company has not yet assessed the impact of FIN 48 on its financial position, results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, (SFAS157).SFAS 157 simplifies and codifies guidance on
fair value measurements under generally accepted accounting



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##### Table of Contents

principles. This standard defines fair value, establishes a framework for measuring fair value and prescribes expanded disclosures about fair value
measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the effect, if
any, the adoption SFAS 157 will have on our financial statements, results of operations and cash flows.

In September 2006, the SEC issued Staff Accounting
Bulletin (SAB) No. 108. Considering the Effects of Prior Year Misstatements when quantifying Misstatements in Current Year Financial Statements, (SAB 108).SAB 108 requires companies to evaluate the
materiality of identified unadjusted errors on each financial statement and related financial statement disclosure using both the rollover approach and the iron curtain approach. The rollover approach quantifies misstatements based on the amount of
the error in the current year financial statements whereas the iron curtain approach quantifies misstatements based on the effects of correcting the misstatement existing in the balance sheet at the end of the current year, irrespective of the
misstatements year(s) origin. Financial statements would require adjustment when either approach results in quantifying a misstatement that is material. Correcting prior year financial statements for immediate errors would not require
previously filed reports to be amended. SAB 108 is effective for the first fiscal year ending after November 15, 2006. The application of SAB 108 did not have any material effect on our financial statement, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, (SFAS
159).SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS 159 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted. We are
currently evaluating the effect, if any, the adoption SFAS 157 will have on our financial statements, results of operations and cash flows.



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Telzuit Medical Technologies, Inc. & Subsidiaries

Consolidated Financial Statements

As of June 30, 2007 and June 30, 2006



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Telzuit Medical Technologies, Inc. & Subsidiaries

Consolidated Financial Statements

As of June 30, 2007

Table of
Contents



|                                                                                                        |  |     
|------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                        |  | Page
|                                                                                                        | 
|Report of Independent Registered Public Accounting Firm (Cross, Fernandez & Riley, LLP)                 |  | F-1 
|                                                                                                        | 
|Consolidated Financial Statements:                                                                      |  |     
|                                                                                                        | 
|Consolidated Balance Sheets as of June 30, 2007 and 2006                                                |  | F-2 
|                                                                                                        | 
|Consolidated Statements of Operations for the year ended June 30, 2007 and the year ended June 30, 2006 |  | F-3 
|                                                                                                        | 
|Consolidated Statements of Stockholders Equity (Deficit) from June 30, 2005 to June 30, 2007.          |  | F-4 
|                                                                                                        | 
|Consolidated Statements of Cash Flows for the year ended June 30, 2007 and the year ended June 30, 2006 |  | F-5 
|                                                                                                        | 
|Notes to the Consolidated Financial Statements                                                          |  | F-6 



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Telzuit Medical Technologies, Inc.

Orlando, Fl

We have audited the accompanying consolidated balance sheets of Telzuit Medical Technologies, Inc. as of June 30, 2007 and 2006 and the related consolidated
statements of operations, stockholders deficit, and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Telzuit
Medical Technologies, Inc. at June 30, 2007 and June 30, 2006, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 21 to
the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Managements plans in regard to these matters
are also described in Note 21. The financial statements do not include any adjustments that might result form the outcome of this uncertainty.

Cross,
Fernandez & Riley, LLP

Orlando, Fl.

September 25, 2007



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##### Table of Contents

Telzuit Medical Technologies, Inc. & Subsidiaries

Consolidated Balance Sheets



|                                                                                                                                                  |  |               |             |   |               |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ------------- | - | ----------- | -
|                                                                                                                                                  |  | June 30, 2007 |             |   | June 30, 2006 |  
|ASSETS                                                                                                                                            |  |               |             |   |               |   |             |  
|Current assets:                                                                                                                                   |  |               |             |   |               |   |             |  
|Cash and cash equivalents                                                                                                                         |  | $             | 178,959     |   |               | $ | 3,643,722   |  
|Short term investments, restricted                                                                                                                |  |               | 170,000     |   |               |   |            |  
|Accounts receivable, net of allowance of $79,911 and $0                                                                                           |  |               | 102,865     |   |               |   | 1,763       |  
|Prepaid expenses                                                                                                                                  |  |               | 44,425      |   |               |   | 20,099      |  
|Inventory                                                                                                                                         |  |               | 74,890      |   |               |   |            |  
|Other current assets                                                                                                                              |  |               | 38,452      |   |               |   | 58,963      |  
|                                                                                                                                                  |  |               |             |   |               |   |             |  
|Total current assets                                                                                                                              |  |               | 609,591     |   |               |   | 3,724,547   |  
|Property and equipment (net of accumulated depreciation and amortization of $439,396 and $182,363)                                                |  |               | 293,098     |   |               |   | 823,244     |  
|Intangible assets, net of accumulated amortization of $0                                                                                          |  |               | 107,379     |   |               |   | 68,158      |  
|Other assets:                                                                                                                                     |  |               |             |   |               |   |             |  
|Licensed software                                                                                                                                 |  |               | 333,426     |   |               |   | 333,426     |  
|Goodwill                                                                                                                                          |  |               |            |   |               |   |            |  
|Acquired client list (net of accumulated amortization of $165,000 and $0)                                                                         |  |               | 15,000      |   |               |   |            |  
|Debt issuance costs (net of accumulated amortization of $80,386 and $67,066)                                                                      |  |               | 2,333,981   |   |               |   | 2,347,301   |  
|                                                                                                                                                  |  |               |             |   |               |   |             |  
|Total other assets                                                                                                                                |  |               | 2,682,407   |   |               |   | 2,680,727   |  
|                                                                                                                                                  |  |               |             |   |               |   |             |  
|TOTAL ASSETS                                                                                                                                      |  | $             | 3,692,475   |   |               | $ | 7,296,676   |  
|                                                                                                                                                  |  |               |             |   |               |   |             |  
|                                                                                                                                                  |  |              
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                                             |  |               |             |   |               |   |             |  
|Current liabilities:                                                                                                                              |  |               |             |   |               |   |             |  
|Accounts payable                                                                                                                                  |  | $             | 97,249      |   |               | $ | 79,447      |  
|Accrued expenses                                                                                                                                  |  |               | 367,682     |   |               |   | 165,243     |  
|Dividends payable                                                                                                                                 |  |               | 140,881     |   |               |   | 156,126     |  
|Note payable  shareholder                                                                                                                        |  |               | 483,000     |   |               |   |            |  
|Notes payable  current portion                                                                                                                   |  |               | 98,266      |   |               |   |            |  
|                                                                                                                                                  |  |               |             |   |               |   |             |  
|Total current liabilities                                                                                                                         |  |               | 1,187,078   |   |               |   | 400,816     |  
|                                                                                                                                                  |  |               |             |   |               |   |             |  
|Long Term Liabilities  10% convertible debentures                                                                                                |  |               | 182,098     |   |               |   | 160,544     |  
|Notes payable  net of current portion                                                                                                            |  |               | 86,709      |   |               |   |             |  
|                                                                                                                                                  |  |               |             |   |               |   |             |  
|Total liabilities                                                                                                                                 |  |               | 1,455,885   |   |               |   | 561,360     |  
|Series A convertible preferred stock, $0.001 par value; 7,700,000 shares authorized; 3,066,321 and 3,301,174 shares issued and
outstanding      |  |               | 12,366,875  |   |               |   | 12,367,108  |  
|Stockholders deficit:                                                                                                                            |  |               |             |   |               |   |             |  
|Series B convertible preferred stock, $.001 par value; 2,300,000 shares authorized, 0 and 2,258,306 shares issued and outstanding,
respectively |  |               |            |   |               |   |            |  
|Common stock, $0.001 par value; 125,000,000 shares authorized; 40,550,369 and 33,831,004 shares issued and outstanding                            |  |               | 40,552      |   |               |   | 33,832      |  
|Common Stock payable                                                                                                                              |  |               | 673,304     |   |               |   | 527,334     |  
|Additional paid in capital                                                                                                                        |  |               | 19,665,263  |   |               |   | 18,419,270  |  
|Deficit accumulated during development stage                                                                                                      |  |               | (30,509,404 | ) |               |   | (24,612,228 | )
|                                                                                                                                                  |  |               |             |   |               |   |             |  
|Total stockholders deficit                                                                                                                       |  |               | (10,130,285 | ) |               |   | (5,631,792  | )
|                                                                                                                                                  |  |               |             |   |               |   |             |  
|TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                                       |  | $             | 3,692,475   |   |               | $ | 7,296,676   |  
|                                                                                                                                                  |  |               |             |   |               |   |             |  

See notes to consolidated financial statements



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##### Table of Contents

Telzuit Medical Technologies, Inc. & Subsidiaries

Consolidated Statements of Operations



|                                                      |  |                                |            |   |                                 |   |             |  
|----------------------------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------- | - | ----------- | -
|                                                      |  | For the yearendedJune 30, 2007 |            |   | For the yearended June 30, 2006 |  
|Revenues                                              |  | $                              | 843,296    |   |                                 | $ | 3,540       |  
|Cost of revenues                                      |  |                                | 952,143    |   |                                 |   | 21,821      |  
|                                                      |  |                                |            |   |                                 |   |             |  
|Gross margin                                          |  |                                | (108,847   | ) |                                 |   | (18,281     | )
|Research and development costs                        |  |                                | 212,740    |   |                                 |   | 245,852     |  
|Impairment of fixed assets                            |  |                                | 496,779    |   |                                 |   |            |  
|Impairment of goodwill                                |  |                                | 469,118    |   |                                 |   |            |  
|General and administrative expenses                   |  |                                | 2,990,269  |   |                                 |   | 9,751,682   |  
|                                                      |  |                                |            |   |                                 |   |             |  
|Loss before other income (expense)                    |  |                                | (4,277,753 | ) |                                 |   | (10,015,815 | )
|Interest income                                       |  |                                | 32,777     |   |                                 |   | 38,162      |  
|Interest expense                                      |  |                                | (823,471   | ) |                                 |   | (1,158,674  | )
|                                                      |  |                                |            |   |                                 |   |             |  
|Loss from continuing operations                       |  |                                | (5,068,447 | ) |                                 |   | (11,136,327 | )
|Loss from discontinued operations                     |  |                                | (511,992   | ) |                                 |   |            |  
|                                                      |  |                               
|Net loss                                              |  | $                              | (5,580,439 | ) |                                 | $ | (11,136,327 | )
|Preferred stock dividends                             |  |                                | (316,738   | ) |                                 |   | (9,178,483  | )
|                                                      |  |                                |            |   |                                 |   |             |  
|Net loss attributable to common shares                |  | $                              | (5,897,177 | ) |                                 | $ | (20,314,810 | )
|Basic and diluted net loss per common share           |  | $                              | (0.16      | ) |                                 | $ | (0.76       | )
|Weighted average shares outstanding-basic and diluted |  |                                | 36,165,557 |   |                                 |   | 26,849,983  |  

See notes to consolidated financial statements



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##### Table of Contents

Telzuit Medical Technologies, Inc. & Subsidiaries

Consolidated Statements of Stockholders Equity (Deficit)

From January 1, 2005 to June 30, 2006



|                                                                                                                     |  |         |  |         |   |              |   |                      |   |        |                          |            |  |                          |        |  |           |   |  |        |           |   |   |            |   |  |   |        |   |  |   |            |   |  |   |             |   |  |   |             |  
|-------------------------------------------------------------------------------------------------------------------- |  | ------- |  | ------- | - | ------------ | - | -------------------- | - | ------ | ------------------------ | ---------- |  | ------------------------ | ------ |  | --------- | - |  | ------ | --------- | - | - | ---------- | - |  | - | ------ | - |  | - | ---------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                                                                                                     |  | Class A |  | Class B |   | Common Stock |   | Common Stock Payable |   |        | Series B Preferred Stock |            |  | AdditionalPaid inCapital |        |  | Deficit   |   |  | Total  |          
|                                                                                                                     |  | Shares  |  | $       |   | Shares       |   | $                    |   | Shares |                          | $          |  | Shares                   |        |  | $         |   |  | Shares |           |   | $ |            |   |  |  
|Total stockholders equity at June 30, 2005                                                                           |  |        |  | $       |  |              |  |                      | $ |       |                          | 947,695    |  | $                        | 948    |  | 405,000   |   |  | $      | 1,962,826 |   |   | 2,258,306  |   |  | $ | 2,259  |   |  | $ | 3,813,392  |   |  | $ | (4,297,419  | ) |  | $ | 1,482,007   |  
|                                                                                                                     |  |         |  |         |   |              |   |                      |   |        |                          |            |  |                          |        |  |           |   |  |        |           |   |   |            |   |  |   |        |   |  |   |            |   |  |   |             |   |  |   |             |  
|Conversion of Series B Preferred Stock to Common Stock, August 2005                                                  |  |        |  |         |  |              |  |                      |   |       |                          | 27,099,672 |  |                          | 27,099 |  |          |   |  |        |          |   |   | (2,258,306 | ) |  |   | (2,259 | ) |  |   | (24,840    | ) |  |   |            |   |  |   |            |  
|Shares issued to employees for services, August 2005                                                                 |  |        |  |         |  |              |  |                      |   |       |                          | 29,000     |  |                          | 29     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 166,721    |   |  |   |            |   |  |   | 166,750     |  
|Shares issued to board members for services, August 2005                                                             |  |        |  |         |  |              |  |                      |   |       |                          | 45,000     |  |                          | 45     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 258,705    |   |  |   |            |   |  |   | 258,750     |  
|Shares committed to vendors not issued, August 2005                                                                  |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  | 12,500    |   |  |        | 67,813    |   |   |           |   |  |   |       |   |  |   |            |   |  |   |            |   |  |   | 67,813      |  
|Shares committed to vendors not issued, August 2005                                                                  |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  | 60,333    |   |  |        | 241,334   |   |   |           |   |  |   |       |   |  |   |            |   |  |   |            |   |  |   | 241,334     |  
|Shares issued to employees for services, September 2005                                                              |  |        |  |         |  |              |  |                      |   |       |                          | 405,000    |  |                          | 405    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 2,278,345  |   |  |   |            |   |  |   | 2,278,750   |  
|Shares issued to board members for services, September 2005                                                          |  |        |  |         |  |              |  |                      |   |       |                          | 10,000     |  |                          | 10     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 57,490     |   |  |   |            |   |  |   | 57,500      |  
|Shares issued to service providers, September 2005                                                                   |  |        |  |         |  |              |  |                      |   |       |                          | 30,000     |  |                          | 30     |  | (30,000   | ) |  |        | (40,576   | ) |   |           |   |  |   |       |   |  |   | 40,546     |   |  |   |            |   |  |   |            |  
|Cashless exercise of warrants for shares  September 2005                                                            |  |        |  |         |  |              |  |                      |   |       |                          | 345,616    |  |                          | 346    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | (346       | ) |  |   |            |   |  |   |            |  
|Share issued to board members  October 2005                                                                         |  |        |  |         |  |              |  |                      |   |       |                          | 25,000     |  |                          | 25     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 115,600    |   |  |   |            |   |  |   | 115,625     |  
|Amendment to consulting agreement  November 2005                                                                    |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  | (50,000   | ) |  |        | (448,750  | ) |   |           |   |  |   |       |   |  |   |            |   |  |   |            |   |  |   | (448,750    | )
|Shares issued to vendors  October 2005                                                                              |  |        |  |         |  |              |  |                      |   |       |                          | 200,000    |  |                          | 200    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 734,800    |   |  |   |            |   |  |   | 735,000     |  
|Shares issued to employees  November 2005                                                                           |  |        |  |         |  |              |  |                      |   |       |                          | 4,000      |  |                          | 4      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 17,206     |   |  |   |            |   |  |   | 17,210      |  
|Shares issued to vendors  November 2005                                                                             |  |        |  |         |  |              |  |                      |   |       |                          | 1,500      |  |                          | 2      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 6,452      |   |  |   |            |   |  |   | 6,454       |  
|Shares issued to vendors  November 2005                                                                             |  |        |  |         |  |              |  |                      |   |       |                          | 9,000      |  |                          | 9      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 41,573     |   |  |   |            |   |  |   | 41,582      |  
|Cashless exercise of warrants for shares  November 2005                                                             |  |        |  |         |  |              |  |                      |   |       |                          | 1,010,515  |  |                          | 1,011  |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | (1,011     | ) |  |   |            |   |  |   |            |  
|Share issued to board members  November 2005                                                                        |  |        |  |         |  |              |  |                      |   |       |                          | 30,000     |  |                          | 30     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 113,970    |   |  |   |            |   |  |   | 114,000     |  
|Shares issued to vendors  December 2005                                                                             |  |        |  |         |  |              |  |                      |   |       |                          | 750        |  |                          | 1      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 1,654      |   |  |   |            |   |  |   | 1,655       |  
|Shares issued to vendors  December 2005                                                                             |  |        |  |         |  |              |  |                      |   |       |                          | 2,750      |  |                          | 3      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 6,066      |   |  |   |            |   |  |   | 6,069       |  
|Shares issued to board members  December 2005                                                                       |  |        |  |         |  |              |  |                      |   |       |                          | 30,000     |  |                          | 30     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 100,470    |   |  |   |            |   |  |   | 100,500     |  
|Cashless exercise of warrants for shares  January 2006                                                              |  |        |  |         |  |              |  |                      |   |       |                          | 132,422    |  |                          | 132    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | (132       | ) |  |   |            |   |  |   |            |  
|Shares issued to employees  January 2006                                                                            |  |        |  |         |  |              |  |                      |   |       |                          | 2,000      |  |                          | 2      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 4,412      |   |  |   |            |   |  |   | 4,414       |  
|Shares issued to board members  January 2006                                                                        |  |        |  |         |  |              |  |                      |   |       |                          | 5,000      |  |                          | 5      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 16,745     |   |  |   |            |   |  |   | 16,750      |  
|Shares issued to vendors  January 2006.                                                                             |  |        |  |         |  |              |  |                      |   |       |                          | 750        |  |                          | 2      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 1,480      |   |  |   |            |   |  |   | 1,482       |  
|Shares issued to board members  March 2006                                                                          |  |        |  |         |  |              |  |                      |   |       |                          | 100,000    |  |                          | 100    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 143,480    |   |  |   |            |   |  |   | 143,580     |  
|Shares issued to employees  March 2006                                                                              |  |        |  |         |  |              |  |                      |   |       |                          | 6,000      |  |                          | 6      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 7,894      |   |  |   |            |   |  |   | 7,900       |  
|Share issued to vendors  March 2006                                                                                 |  |        |  |         |  |              |  |                      |   |       |                          | 1,500      |  |                          | 2      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 1,479      |   |  |   |            |   |  |   | 1,481       |  
|Conversion of Series A Convertible Preferred stock to common stock  March 2006                                      |  |        |  |         |  |              |  |                      |   |       |                          | 233,334    |  |                          | 233    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   |           |   |  |   |            |   |  |   | 233         |  
|Cashless exercise of warrants for shares  March 2006                                                                |  |        |  |         |  |              |  |                      |   |       |                          | 512,213    |  |                          | 512    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | (512       | ) |  |   |            |   |  |   |            |  
|Warrants issued for consulting services  March 2006                                                                 |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 20,000     |   |  |   |            |   |  |   | 20,000      |  
|Conversions of Series A Convertible Preferred Stock to common stock  April 2006                                     |  |        |  |         |  |              |  |                      |   |       |                          | 1,912,398  |  |                          | 1,912  |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   |           |   |  |   |            |   |  |   | 1,912       |  
|Accrued dividends on Series A Convertible Preferred stock, May 2006                                                  |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   |           |   |  |   | (156,126    | ) |  |   | (156,126    | )
|Common stock issued for dividends on Series A Convertible Preferred stock, May 2006                                  |  |        |  |         |  |              |  |                      |   |       |                          | 45,480     |  |                          | 44     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 24,696     |   |  |   | (24,740     | ) |  |   |            |  
|Additional Common stock issued for Series A Convertible Preferred stock dividends, May 2006                          |  |        |  |         |  |              |  |                      |   |       |                          | 118,990    |  |                          | 119    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 250,590    |   |  |   | (250,709    | ) |  |   |            |  
|Series A Convertible Preferred stock dividends  paid through issuance of convertible debenture                      |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   |           |   |  |   | (32,225     | ) |  |   | (32,225     | )
|Shares issued to Vendor  April 2006                                                                                 |  |        |  |         |  |              |  |                      |   |       |                          | 187,500    |  |                          | 188    |  | (187,500  | ) |  |        | (990,063  | ) |   |           |   |  |   |       |   |  |   | 989,875    |   |  |   |            |   |  |   |            |  
|Shares issued to Vendor  April 2006                                                                                 |  |        |  |         |  |              |  |                      |   |       |                          | 150,000    |  |                          | 150    |  | (150,000  | ) |  |        | (551,250  | ) |   |           |   |  |   |       |   |  |   | 551,100    |   |  |   |            |   |  |   |            |  
|Shares issued to Board member  April 2006                                                                           |  |        |  |         |  |              |  |                      |   |       |                          | 5,000      |  |                          | 5      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 16,745     |   |  |   |            |   |  |   | 16,750      |  
|Shares issued to Employee  May 2006                                                                                 |  |        |  |         |  |              |  |                      |   |       |                          | 6,000      |  |                          | 6      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 2,770      |   |  |   |            |   |  |   | 2,776       |  
|Shares issued to Vendor  May 2006                                                                                   |  |        |  |         |  |              |  |                      |   |       |                          | 750        |  |                          | 1      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 2,796      |   |  |   |            |   |  |   | 2,797       |  
|Shares issued to Vendor  June 2006                                                                                  |  |        |  |         |  |              |  |                      |   |       |                          | 2,250      |  |                          | 2      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 1,032      |   |  |   |            |   |  |   | 1,034       |  
|Shares issued to Vendor  June 2006                                                                                  |  |        |  |         |  |              |  |                      |   |       |                          | 10,000     |  |                          | 10     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 5,390      |   |  |   |            |   |  |   | 5,400       |  
|Shares issued to board members  June 2006                                                                           |  |        |  |         |  |              |  |                      |   |       |                          | 8,219      |  |                          | 8      |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 4,893      |   |  |   |            |   |  |   | 4,901       |  
|Shares issued to Vendor  June 2006                                                                                  |  |        |  |         |  |              |  |                      |   |       |                          | 20,700     |  |                          | 21     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 9,979      |   |  |   |            |   |  |   | 10,000      |  
|Shares issued to Vendor  June 2006                                                                                  |  |        |  |         |  |              |  |                      |   |       |                          | 25,000     |  |                          | 25     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 26,879     |   |  |   |            |   |  |   | 26,904      |  
|Shares issued to Board members  June 2006                                                                           |  |        |  |         |  |              |  |                      |   |       |                          | 95,000     |  |                          | 95     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 41,205     |   |  |   |            |   |  |   | 41,300      |  
|Shares issued to Vendor  June 2006                                                                                  |  |        |  |         |  |              |  |                      |   |       |                          | 25,000     |  |                          | 25     |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 10,475     |   |  |   |            |   |  |   | 10,500      |  
|Value of Beneficial Conversion Feature on May 2006 Convertible Debentures                                            |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 2,064,152  |   |  |   |            |   |  |   | 2,064,152   |  
|Value of Warrants issued to purchasers of May 2006 Convertible Debentures                                            |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 3,715,468  |   |  |   |            |   |  |   | 3,715,468   |  
|Value of Warrants issued to broker/dealers for May 2006 Convertible Debentures                                       |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 1,951,088  |   |  |   |            |   |  |   | 1,951,088   |  
|Value of Warrants issued to employee  May 2006                                                                      |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 279,998    |   |  |   |            |   |  |   | 279,998     |  
|Sale of additional shares  May 2006                                                                                 |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 250,000    |   |  |   |            |   |  |   | 250,000     |  
|Shares committed to shareholder  April 2006                                                                         |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  | 550,000   |   |  |        | 286,000   |   |   |           |   |  |   |       |   |  |   | 298,500    |   |  |   |            |   |  |   | 584,500     |  
|Preferred stock dividend related to Series A Preferred Stock penalty warrants  May 2006                             |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   |           |   |  |   | (4,883,993  | ) |  |   | (4,883,993  | )
|Preferred stock dividend related to beneficial conversion feature on Series A convertible Preferred stock  May 2006 |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   |           |   |  |   | (3,830,690  | ) |  |   | (3,830,690  | )
|Net Loss for the year ended June 30, 2006                                                                            |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   |           |   |  |   | (11,136,327 | ) |  |   | (11,136,327 | )
|                                                                                                                     |  |         |  |         |   |              |   |                      |   |        |                          |            |  |                          |        |  |           |   |  |        |           |   |   |            |   |  |   |        |   |  |   |            |   |  |   |             |   |  |   |             |  
|Total Shareholder Equity (deficit) at June 30, 2006                                                                  |  |        |  | $       |  |              |  |                      | $ |       |                          | 33,831,004 |  | $                        | 33,832 |  | 610,333   |   |  | $      | 527,334   |   |   |           |   |  | $ |       |   |  | $ | 18,419,270 |   |  | $ | (24,612,228 | ) |  | $ | (5,631,792  | )
|Conversions of Series A Convertible Preferred Stock to common stock                                                  |  |        |  |         |  |              |  |                      |   |       |                          | 671,000    |  |                          | 671    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | (438       | ) |  |   |            |   |  |   | 233         |  
|Common stock issued for dividends on Series A Convertible Preferred stock                                            |  |        |  |         |  |              |  |                      |   |       |                          | 2,182,727  |  |                          | 2,183  |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 329,801    |   |  |   |            |   |  |   | 331,984     |  
|Common stock issued for interest on May 2006 10% convertible debentures                                              |  |        |  |         |  |              |  |                      |   |       |                          | 3,665,638  |  |                          | 3,666  |  | 262,118   |   |  |        | 28,898    |   |   |           |   |  |   |       |   |  |   | 503,830    |   |  |   |            |   |  |   | 536,394     |  
|Value of warrants issued to employee                                                                                 |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | 335,000    |   |  |   |            |   |  |   | 335,000     |  
|Acquisition of mobile imaging business                                                                               |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  | 365,853   |   |  |        | 117,072   |   |   |           |   |  |   |       |   |  |   |           |   |  |   |            |   |  |   | 117,072     |  
|Shares issued to shares holder                                                                                       |  |        |  |         |  |              |  |                      |   |       |                          | 200,000    |  |                          | 200    |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   | (200       | ) |  |   |            |   |  |   |            |  
|Preferred dividends declared during fiscal year 2007                                                                 |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   |           |   |  |   | (316,737    | ) |  |   | (316,737    | )
|Net Loss                                                                                                             |  |        |  |         |  |              |  |                      |   |       |                          |           |  |                          |       |  |          |   |  |        |          |   |   |           |   |  |   |       |   |  |   |           |   |  |   | 5,580,439   |   |  |   | 5,580,439   |  
|                                                                                                                     |  |         |  |         |   |              |   |                      |   |        |                          |            | 
|Total Shareholder Equity (deficit) at June 30, 2007                                                                  |  |        |  |         |  |              |  |                      |   |       |                          | 40,550,369 |  |                          | 40,552 |  | 1,238,304 |   |  |        | 673,304   |   |   |           |   |  |   |       |   |  |   | 19,587,263 |   |  |   | 30,509,404  |   |  |   | 10,208,285  |  
|                                                                                                                     |  |         |  |         |   |              |   |                      |   |        |                          |            |  |                          |        |  |           |   |  |        |           |   |   |            |   |  |   |        |   |  |   |            |   |  |   |             |   |  |   |             |  

See notes to consolidated financial statements



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##### Table of Contents

Telzuit Medical Technologies, Inc. & Subsidiaries

Consolidated Statements of Cash Flows



|                                                                                     |  |                                |   |  |                                |  
|------------------------------------------------------------------------------------ |  | ------------------------------ | - |  | ------------------------------ | -
|                                                                                     |  | For the yearendedJune 30, 2007 |   |  | For the yearendedJune 30, 2006 |  
|Net Loss                                                                             |  | (5,580,439                     | ) |  | (11,136,327                    | )
|Net loss from discontinued operations                                                |  | (511,992                       | ) |  |                               |  
|Net loss from continuing operations                                                  |  | (5,068,447                     | ) |  |                               |  
|                                                                                     |  |                               
|Operating Activities                                                                 |  |                                |   |  |                                |  
|Adjustments to reconcile net loss to net cash used in operating activities:          |  |                                |   |  |                                |  
|Depreciation and amortization                                                        |  | 414,112                        |   |  | 147,694                        |  
|Amortization of debt discount and financing costs                                    |  | 34,874                         |   |  | 1,507,371                      |  
|Non-cash compensation expenses                                                       |  | 335,000                        |   |  | 6,079,696                      |  
|Services paid by shareholder on behalf of the Company                                |  |                               |   |  | 584,502                        |  
|Impairment of fixed assets                                                           |  | 496,779                        |   |  |                               |  
|Impairment of goodwill                                                               |  | 469,118                        |   |  |                               |  
|(Increase) Decrease in assets:                                                       |  |                                |   |  |                                |  
|Accounts receivable                                                                  |  | 76,406                         |   |  | (1,763                         | )
|Inventory                                                                            |  | (74,891                        | ) |  |                                |  
|Prepaid expenses                                                                     |  |                               |   |  | (498,547                       | )
|Other current assets                                                                 |  | (33,213                        | ) |  | 285,312                        | )
|Other long-term assets                                                               |  |                               |   |  | 118,321                        |  
|Increase (Decrease) in liabilities:                                                  |  |                                |   |  |                                |  
|Accounts Payable                                                                     |  | (20,857                        | ) |  | 45,632                         |  
|Accrued expenses                                                                     |  | 720,993                        |   |  | 7,660                          |  
|                                                                                     |  |                                |   |  |                                |  
|Net cash used in continuing operations                                               |  | (2,650,126                     | ) |  | (2,860,449                     | )
|Net cash used in discontinued operations                                             |  | (331,398                       | ) |  |                               |  
|Net Cash Used in Operating Activities                                                |  | (2,981,524                     | ) |  | (2,860,449                     | )
|                                                                                     |  |                                |   |  |                                |  
|Investing Activities                                                                 |  |                                |   |  |                                |  
|Cash paid for acquisition, net of cash acquired                                      |  | (633,501                       | ) |  |                                |  
|Purchase of short term investments                                                   |  | (170,000                       | ) |  |                                |  
|Investment in Intangible Assets                                                      |  | (39,220                        | ) |  | (7,196                         | )
|Increase in licensed software                                                        |  |                               |   |  | (333,426                       | )
|Purchase of property and equipment                                                   |  | (114,763                       | ) |  | (419,707                       | )
|                                                                                     |  |                                |   |  |                                |  
|Net cash used in continuing operations                                               |  | (957,484                       | ) |  | (760,329                       | )
|Net cash used in discontinued operations                                             |  |                               |   |  |                               |  
|Net Cash Used in Investing Activities                                                |  | (957,484                       | ) |  | (760,329                       | )
|                                                                                     |  |                                |   |  |                                |  
|                                                                                     |  |                               
|Financing Activities                                                                 |  |                                |   |  |                                |  
|Proceeds from Issuance of Series A Convertible Preferred stock, net                  |  |                               |   |  | 184,000                        |  
|Proceeds from sale of common stock                                                   |  |                               |   |  | 250,000                        |  
|Debt issuance costs                                                                  |  |                               |   |  | (463,279                       | )
|Proceeds from issuance of convertible debentures                                     |  |                               |   |  | 4,941,985                      |  
|Proceeds from related party borrowing                                                |  | 483,000                        |   |  |                               |  
|Repayment of notes payable                                                           |  | (8,755                         | ) |  |                               |  
|                                                                                     |  |                                |   |  |                                |  
|Net Cash Provided by Financing Activities                                            |  | 474,245                        |   |  | 4,912,706                      |  
|                                                                                     |  |                                |   |  |                                |  
|Net Increase (Decrease) in Cash and Cash Equivalents                                 |  | (3,464,763                     | ) |  | 1,291,928                      |  
|Cash and Cash Equivalents at Beginning of Period                                     |  | 3,643,722                      |   |  | 2,351,794                      |  
|                                                                                     |  |                                |   |  |                                |  
|Cash and Cash Equivalents at End of Period                                           |  | 178,959                        |   |  | 3,643,722                      |  
|                                                                                     |  |                                |   |  |                                |  
|Non-cash Investing and Financing Activities:                                         |  |                                |   |  |                                |  
|Warrants and stock issued for debt issuance costs                                    |  |                               |   |  | 1,951,088                      |  
|Debt discount on May 2006 convertible debentures                                     |  |                               |   |  | 5,779,620                      |  
|May 2005 convertible debentures and interest converted into Series A Preferred Stock |  |                               |   |  | 1,076,367                      |  
|Series A Preferred Stock converted to May 2006 convertible debentures                |  |                               |   |  | 837,635                        |  
|Conversion of Series B Preferred Stock to common stock                               |  |                               |   |  | 27,099                         |  
|Series A Preferred Stock dividend related to penalty warrants                        |  |                               |   |  | 4,883,993                      |  
|Series A Preferred Stock dividend related to beneficial conversion feature           |  |                               |   |  | 3,830,690                      |  
|Accrued dividends on Series A Preferred Stock                                        |  | 316,738                        |   |  | 156,126                        |  
|Series A Preferred Stock dividends paid through issuance of common stock             |  | 331,984                        |   |  | 275,449                        |  
|Cashless exercise of warrants for common stock                                       |  |                                |   |  | 2,001                          |  
|Conversion of Series A Preferred Stock to common stock                               |  | 235                            |   |  | 2,145                          |  
|Interest expense paid in common stock                                                |  | 536,396                        |   |  |                               |  

See notes to consolidated financial statements



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##### Table of Contents

Telzuit Medical Technologies, Inc. & Subsidiaries

Notes to Consolidated Financial Statements

1. ORGANIZATIONAL MATTERS

Background
Information and Basis of Presentation

Telzuit Medical Technologies, Inc. (the Company or Telzuit Medical) was incorporated
in Florida on September 26, 2001 under the name Nimbus Group, Inc. Due to the reverse acquisition described below, the Companys date of inception is deemed to be April 1, 2000, the date Telzuit Technologies, Inc., the predecessor
Company, was incorporated. On April 1, 2004, the Company changed its name from Nimbus Group, Inc. to Taylor Madison Corp. On August 18, 2005, the Company changed its name from Taylor Madison Corp. to its
current name, Telzuit Medical Technologies, Inc.

During fiscal year 2004, the Company turned its focus to the development and wholesale
distribution of fragrances and skincare products, both proprietary and under license. In connection with such plan for the development and wholesale distribution of fragrances, skincare products and other products, the Company acquired licensing
rights to certain brands that enabled the Company to enter into sub-licensing and distribution agreements, which generated income for the Company in 2004. The Company did not directly manufacture or purchase any products or take positions in
inventory.

The Company discontinued such operations in 2005 and became a shell company, exploring the viability of acquiring an operating company. In
April of 2005, the Company formed a wholly-owned subsidiary, Taylor Madison Holdings Inc. (Taylor Holdings) and transferred all shares of stock of Nimbus Jets and Take To Auction to Taylor Holdings and Taylor Holdings ownership was
subsequently transferred to the former President of Taylor Madison Corp. The transfer constituted full satisfaction of all outstanding obligations owed by the Company to this former officer.

Telzuit Technologies, LLC (Telzuit LLC) is a Florida limited liability company established in 2003. As such, the potential liability of its members is
limited to their individual investments in the Company. Telzuit Technologies, Inc. (the Predecessor or Telzuit Inc.) was a Florida corporation established April 1, 2000. Effective July 8, 2003, all assets and
liabilities of the Predecessor were merged with Telzuit LLC.

On May 6, 2005, pursuant to its plan to acquire an operating company, Taylor Madison
Corp. (Taylor Madison) entered into a Share Exchange Agreement and acquired all of the issued and outstanding capital stock of Telzuit Inc. from Telzuit LLC, in exchange for 2,207,723 of the Companys Series B Preferred Stock. Upon
completion of the 1-for-31 reverse stock split effective August 22, 2005 (see below), such shares of Series B Preferred Stock automatically converted into 26,492,676 shares of common stock of the Company. Due to the conversion rate (12 to 1),
irrevocable proxies, and reverse stock split, upon completion of the Share Exchange Agreement, Telzuit LLC obtained majority voting control of Taylor Madison. The transaction was accounted for as a reverse acquisition in accordance with Statement of
Financial Accounting Standards No. 141 (SFAS 141), Business Combinations in which Taylor Madison was acquired by Telzuit Inc (a reverse acquisition in which Telzuit Inc. is considered the predecessor and acquirer for
accounting purposes). On August 18, 2005, Taylor Madison changed its name to Telzuit Medical Technologies, Inc, the Companys current name. By acquiring all of the issued and outstanding capital stock of Telzuit Inc., the Company acquired
certain know-how, trade secrets and other proprietary intellectual property rights relating to the development of ambulatory medical devices, including the StatPatch Wireless Holter Monitor (collectively referred to herein as the StatPatch
Technologies).

On December 8, 2005, the Company formed a wholly-owned operating subsidiary, Immediate Quality Care Clinics, Inc., to own and
operate walk-in medical clinics. The Company closed its two walk-in medical clinics on March 30, 2007. On August 1, 2006, the Company acquired PDS Imaging and the capital stock of its operating subsidiaries, Cedars Diagnostic Labs,
Inc. and Atlantic Ultrasound, Inc.



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##### Table of Contents

The financial statements included herein represent the accounts of the Company (formerly Taylor Madison and Telzuit,
Inc., the predecessor and accounting acquirer) and its wholly owned subsidiaries Immediate Quality Care Clinics, Inc., Cedars Diagnostic Labs, Inc. and Atlantic Ultrasound, Inc. All intercompany accounts and transactions have been eliminated in
consolidation.

Nature of Business

Since
inception, Telzuit Medical and Telzuit, Inc. (the predecessor company) have primarily been conducting research and development of a remote electro-heart monitoring system. The system consists of a Biometric Monitoring Patch and
Personal Digital Assistant and is being designed to allow physicians to monitor heart patients through a wireless cellular communication network. The Company has not generated any significant revenue from these operations. In December
2005, the Company formed a wholly owned subsidiary, Immediate Quality Care Clinics, Inc., to provide primary care medical services to patients on a walk in basis. The Company closed its two walk-in medical clinics on March 30, 2007. The Company
also operates a mobile imaging business.

Reverse Stock Split

On August 18, 2005, the Companys shareholders approved a 1-for-31 reverse stock split of the issued and outstanding common stock effective as of the open of market on August 22, 2005. All share
amounts, exercise prices relating to share purchase options and warrants, and earnings per share amounts referred to in these financial statements and notes are presented on a post-split basis.

2. SIGNIFICANT ACCOUNTING POLICIES

Use of
EstimatesThese financial statements have been prepared in accordance with generally accepted accounting principles of the United States and, accordingly, require management to make estimates and assumptions that affect the reported
amounts of 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.

Revenue RecognitionThe Company has historically derived its revenue from the following two primary sources: (i) its now closed walk-in clinics;
and (ii) its mobile imaging business. The Company recognizes revenue from these sources when services have been performed, net of anticipated discounts taken by third party payors, such as insurance carriers, Medicare and Medicaid. The Company
also began deriving a minimal amount of revenue from its STATPATCH business during the quarter ended December 31, 2006. The Company recognizes revenue from its STATPATCH business in the following two ways: (i) medical providers are
provided with STATPATCH patches and receiving devices by the Company, without charge, and the Company bills third party payors upon issuing a holter monitor report; and (ii) the Company provides STATPATCH patches and receiving devices to third
party distributors, without charge, who will provide the product to medical providers. When the Company receives information from the patch and sends a holter report to the medical provider, the distributor or medical provider will directly bill
third party payors for this service. The Company will bill the distributor on a regular basis based on the number of reports the Company has issued during the period. The Company will only bill and recognize revenue from its STATPATCH business when
a holter monitor report is generated and sent to a medical provider. Revenues will be recognized net of contractual adjustments as the reports are generated. The STATPATCH patches and receiving devices will remain the property of the Company.

Fair Value of Financial InstrumentsThe carrying values of cash short-term investments and receivables and payables approximate their
fair values due to their short maturities. At June 30, 2007 the fair value of the convertible debentures was carried at $182,098 and their face value was $5,779,620. At June 30, 2006, the fair value of the convertible debentures was
carried at $160,544 and their face value was $5,779,620. These differences are attributed to the debt discount associated with the Black-Scholes value of warrants and the intrinsic value of the beneficial conversion feature embedded in the
debentures.

Cash and Cash EquivalentsCash equivalents are comprised of certain highly liquid investments with maturity of three months
or less when purchased. The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts.



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##### Table of Contents

Short Term Restricted InvestmentShort term restricted investmentis comprised of a certificate of
deposit in the Companys name, which matures on January 1, 2008. This certificate of deposit is being utilized as collateral, for a period of twelve months, for an equipment lease which the Company entered into in January 2007. Upon the
maturity of the certificate of deposit, the monies from the certificate of deposit will be unrestricted.

Accounts ReceivableAccounts
receivable are comprised of amounts billed primarily to third party payors, such as insurance carriers, Medicare, and Medicaid. Additionally, the Company bills physicians practices to whom we provide mobile imaging services. The Company
maintains an allowance based upon the experience of its management in prior arrangements from these types of payors. Management anticipates adjusting this allowance as it develops more experience with these third party payors.

Property and EquipmentThe Company records property and equipment at historical cost and expenses maintenance and repairs as incurred. It is the
policy of the Company to capitalize items greater than or equal to $1,000 and to provide depreciation based on the estimated useful life of individual assets, calculated using the straight line method. For income tax purposes, the Company uses
accelerated depreciation methods.

Estimated useful lives are as follows:



|                        |  |      
|----------------------- |  | -----
|                        |  | Years
|Furniture and equipment |  | 5 - 7
|Computer hardware       |  | 5    
|Leasehold Improvements  |  | 5    

Software Development CostsThe Company records software development costs as incurred. To date
software development costs have all related to the development of the STATPATCH Holter Monitor System. Upon the introduction and roll out of the product the Company will amortize these costs over a three year period using the straight line method.

Intangible Assets and GoodwillFinancial Accounting Standards Board Statement No. 141, Business Combinations (SFAS
141), requires all business combinations to be accounted for using the purchase method and also includes guidance on the initial recognition and measurement of goodwill and other intangible assets arising from such business acquisitions.
Goodwill and certain of the Companys amortizable intangible assets relate to the acquisition discussed in note 3 and consist of the cost of purchased businesses in excess of the estimated fair value of net assets acquired (excess
purchase price). The excess purchase price was allocated to amortizable intangible assets with the remainder recorded as goodwill.

The Company
accounts for its goodwill and other intangible assets under Financial Accounting Standards Board Statement No. 142, Goodwill and Other Intangible Assets (SFAS 142), which requires, among other things, that companies test
goodwill for impairment at least annually. Amortizable intangible assets are amortized over their useful lives ( one year for client list), or, in the case of patents, over the lesser of the patents economic or legal life (17 years in the
United States). The carrying value of these intangible assets is periodically reviewed by management to determine if facts and circumstances warrant adjustments to the carrying value and estimates of useful lives.

Impairment of long-lived AssetsThe Company follows SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, which established a primary asset approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived
assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the
sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.



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##### Table of Contents

In accordance with Statement of Financial Accounting Standard (SFAS) No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets, the Company evaluates the carrying value of long-lived assets when circumstances indicate the carrying value of those assets may not be fully recoverable. The Company evaluates
recoverability of long-lived assets held for use by comparing the net carrying value of an asset group to the estimated undiscounted cash flows (excluding interest) during the remaining life of the asset group. If such an evaluation indicates that
the future undiscounted cash flows of certain long-lived asset groups are not sufficient to recover the carrying value of such asset groups, the assets are then adjusted to their fair values. The Company recorded an impairment of property and
equipment in the third quarter of fiscal 2007 and a goodwill impairment in the fourth quarter of fiscal year 2007 as discussed more fully in Notes 19 and 20. Computer equipment with a net book value of $ 544,898 was written down to fair market value
of $ 48,120 based upon an offer received from an unrelated third party. The equipment will no longer be used in the Statpatch reporting process. A loss of $ 496,779 was reported in general and administrative expenses as a result of this impairment.

Disposal CostsThe Company has recorded accruals in connection with the closing of its walk in clinics. As of June 30,
2007, these accruals included estimates pertaining to the abandonment of leased facilities. Actual costs may differ from these estimates or the Companys estimates may change. In accordance with SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, costs associated with restructuring activities are recognized when they are incurred rather than at the date of a commitment to an exit or disposal plan. Given the complexity and timing of these
activities, the accrual process involved assessments of contract cancellation charges and real estate market conditions for sub-lease rents. As of June 30, 2007, there are no further costs that require estimates and any future disposal costs
will be recorded as incurred in accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities.

Debt Issuance CostsIn connection with the May 2006 convertible debenture financing, the Company incurred debt issuance costs in the form of commissions and warrants which were paid to broker/dealers and their affiliates.
The Company captures these costs and treats them as capital costs which are amortized over the life of the debentures using the effective interest method of amortization.

Income TaxesDeferred income taxes result primarily from temporary differences between financial and tax reporting methods and operating loss carry forwards. Deferred tax assets and liabilities are
determined based on the difference between the financial statement bases and tax bases of assets and liabilities using enacted tax rates. A valuation allowance is recorded to reduce a deferred tax asset to an amount that is expected to more likely
than not be realized.

Net Loss Per Common ShareThe Company applies SFAS No. 128, Earnings Per Share for
calculating the basic and diluted loss per common share. The Company computes basic loss per share by dividing net loss attributable to common shares by the weighted average number of common shares outstanding. Diluted loss per share is computed
similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive. Potential
common shares are excluded from the computation of net loss per share if their effect is anti-dilutive.

The convertible preferred stock and warrants
outstanding during all periods were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive. The amount of Series A Convertible Preferred Stock, Series B Convertible Preferred Stock,
convertible debentures, and warrants excluded from the computation for the year ended June 30, 2007 were 8,542,577, 0, 16,513,200, and 35,055,690, respectively. The amount of Series A Convertible Preferred Stock, Series B Convertible Preferred
Stock, convertible debentures, and warrants excluded from the computation for the year ended June 30, 2006 were 9,431,926; 0; 16,513,200; and 34,055,690, respectively.

Stock-Based CompensationThe Company records compensation expense measured at fair value for all stock-based award transactions under the provisions of SFAS 123R Accounting for Stock Based
Compensation (SFAS No. 123R). In instances where shares were issued as compensation, the Company



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##### Table of Contents

uses the average of the high and low price for the day, on the measurement date, to value the shares. In cases where warrants were issued, the fair value of
the warrants is determined on the date of grant using the Black-Scholes option pricing model.

Stock payableStock payable consists of
stock committed but not yet issued to service providers, stockholders or others.

Series A Convertible Preferred StockOn June 22,
2005, the board of directors designated 7,700,000 of preferred shares as Series A Convertible Preferred stock (Series A Preferred Stock). The holders of Series A Preferred Stock have the right to vote on an as-converted
basis, with the common shareholders on all matters submitted to a vote. Each share of Series A Preferred Stock was originally convertible into common stock at a price of sixty cents ($.60) per share of common stock, subject to adjustment. In
connection with the May 2006 convertible debenture financing (Note 11), the conversion price was reduced to thirty-five cents ($0.35) per share. In addition, the holders of Series A Preferred Stock are entitled to receive a dividend equal to ten
percent (10%) of the stated value of the Series A Preferred Stock, payable semi-annually. In the event of liquidation, dissolution or winding up of the Company, either voluntarily or involuntary, Series A Preferred holders are entitled to
receive an amount equal to the Stated Value of the Preferred stock ($1.00) plus any accrued but unpaid dividends. Series A Preferred shares rank senior to the Companys common stock and any other securities the Company may issue.

New Accounting Pronouncements

In February 2006, the FASB issued SFAS
No. 155, Accounting for Certain Hybrid Financial Instruments  An Amendment of FASB Statements No. 133 and 140 (SFAS No. 155),SFAS No. 155 provides entities with relief from having to separately
determine the fair value of an embedded derivative that would otherwise be required to be bifurcated from its host contract in accordance with SFAS No. 133. It also allows an entity to make an irrevocable election to measure such a hybrid
financial instrument at fair value in its entirety, with changes in fair value recognized in earnings. SFAS No. 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement (new basis) event occurring for
fiscal years beginning after September 15, 2006. The Company has not yet assessed the impact of this SFAS on its financial position, results of operations or cash flows.

In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income TaxesAn Interpretation of FASB Statement No. 109 (FIN 48). FIN 48 provides
guidance on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosures and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company has not yet assessed the impact of FIN 48 on its financial position, results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, (SFAS157).SFAS 157 simplifies and codifies guidance on
fair value measurements under generally accepted accounting principles. This standard defines fair value, establishes a framework for measuring fair value and prescribes expanded disclosures about fair value measurements. SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the effect, if any, the adoption SFAS 157 will have on our
financial statements, results of operations and cash flows.

In September 2006, the SEC issued Staff Accounting Bulletin (SAB) No. 108.
Considering the Effects of Prior Year Misstatements when quantifying Misstatements in Current Year Financial Statements, (SAB 108).SAB 108 requires companies to evaluate the materiality of identified unadjusted errors
on each financial statement and related financial statement disclosure using both the rollover approach and the iron curtain approach. The rollover approach quantifies misstatements based on the amount of the error in the current year financial
statements whereas the iron curtain approach quantifies misstatements based on the effects of correcting the misstatement existing in the balance sheet at the end of the current year, irrespective of the misstatements year(s) origin. Financial
statements would require adjustment when either approach results in quantifying a misstatement that is material. Correcting prior year financial



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##### Table of Contents

statements for immediate errors would not require previously filed reports to be amended. SAB 108 is effective for the first fiscal year ending after
November 15, 2006. The application fo SAB 108 did not have any material effect on our financial statement, results of operations or cash flows.

In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, (SFAS 159).SFAS 159 permits entities to choose to measure many financial instruments and certain
other items at fair value. SFAS 159 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted. We are currently evaluating the effect, if any, the adoption SFAS 157 will have on our financial statements,
results of operations and cash flows.

3. ACQUISITIONS

On August 1, 2006, the Company entered into an Agreement for Purchase and Sale of Shares (the Purchase Agreement), and acquired, pursuant to the Purchase Agreement, 100% of the outstanding capital stock of Cedars Diagnostic
Labs, Inc.,a Florida Corporation, (Cedars) and Atlantic Ultrasound, Inc., a Delaware Corporation (Atlantic). Cedars and Atlantic were related entities under common control operating
under the fictitious name PDS Imaging. PDS Imaging is a Florida based mobile ultrasound and cardiac imaging business. As an independent diagnostic testing facility, PDS Imaging offers echocardiograms, ultrasounds and other out-sourced
diagnostic services to physicians and healthcare facilities in central Florida.

At the closing, the Company paid $644,255 in cash and agreed to issue
88,853 shares of its common stock, as payment in full, for Cedars and Atlantic. Additionally, the Company entered into three month consulting agreements with the principals of PDS Imaging, paying an additional $12,000 in cash and agreed to issue an
additional 277,000 shares of the Companys common stock. The total purchase price, including the value of the consulting contract, was recorded at $773,000, including the cash and stock consideration.

The acquisition was accounted for using the purchase method. Accordingly, the excess of the purchase price over the estimated fair values of the assets acquired and the
liabilities assumed has been allocated to goodwill and amortizable assets in accordance with SFAS 141.

The Company consummated this transaction, which resulted in a significant amount of goodwill for a number of reasons, including: PDS Imagings business model which complements the Companys business focus of providing mobile
medical services; PDS Imaging adds a Medicare-approved and private insurance credentialed Independent Diagnostic Testing Facility (IDTF), which will enable the Company to receive reimbursement from third party payors for its
STATPATCHTMSystem; and the growth opportunities in the markets in which PDS Imaging operates. The Company believes the asset value of the IDTF is minimal
since the Company could have applied for and been granted an IDTF for minimal cost, such excess has been attributed to Goodwill. The predominant portion of the consideration paid for PDS Imaging was based on the expected financial performance of PDS
Imaging after the transaction. The tax deductibility of the acquired goodwill is to be determined.

The preliminary purchase price allocation is as
follows:



|                                |  |   |          |  
|------------------------------- |  | - | -------- | -
|Cash                            |  | $ | 23,000   |  
|Accounts Receivable             |  |   | 179,000  |  
|Fixed Assets                    |  |   | 66,000   |  
|Intangible Assets  Client List |  |   | 180,000  |  
|Goodwill                        |  |   | 469,000  |  
|Accounts Payable                |  |   | (37,000  | )
|Other Liabilities               |  |   | (107,000 | )
|                                |  |   |          |  
|Total Purchase Price            |  | $ | 773,000  |  
|                                |  |   |          |  



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##### Table of Contents

The Companys results include operations of PDS Imaging since August 1, 2006. The following unaudited pro forma
consolidated operations of the Company for the twelve months ended June 30, 2007 assume that the acquisition had occurred as of July 1, 2006 and 2005. This financial information is provided for informational purposes only and should not be
construed to be indicative of the Companys consolidated results of operations had the acquisitions of PDS Imaging been consummated on the dates assumed and does not project the Companys results of operations for any future period:



|                                                   |  |                                |            |   |                                |   |             |  
|-------------------------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------ | - | ----------- | -
|                                                   |  | For twelve monthsended 6/30/07 |            |   | For twelve monthsended 6/30/06 |  
|Revenues                                           |  | $                              | 923,296    |   |                                | $ | 766,200     |  
|Net (loss) income                                  |  |                                | (5,585,439 | ) |                                |   | (11,226,483 | )
|Preferred Dividends                                |  |                                | (316,738   | ) |                                |   | (9,178,483  | )
|(Loss) income attributable to common shareholders  |  | $                              | (5,902,177 | ) |                                | $ | (20,404,966 | )
|                                                   |  |                               
|(Loss) income per share  basic                    |  | $                              | (0.16      | ) |                                | $ | (0.75       | )
|(Loss) income per share  diluted                  |  | $                              | (0.16      | ) |                                | $ | (0.75       | )
|                                                   |  |                               
|Weighted average number of common shares  basic   |  |                                | 36,531,410 |   |                                |   | 27,215,836  |  
|Weighted average number of common shares  diluted |  |                                | 36,531,410 |   |                                |   | 27,215,836  |  

Goodwill of $ 496,168 related to the acquisition of the mobile imaging business. Goodwill acquired in the
acquisition of the mobile imaging business was written off due to the loss of a major customer which resulted in the business generating negative cash flow. A loss of $ 496,168 has been recorded in general and administrative expense.

4. PREPAID EXPENSES

As of June 30, 2007 and 2006, prepaid expenses
consisted of the following items:



|                       |  |              |        |              |   |       
|---------------------- |  | ------------ | ------ | ------------ | - | ------
|                       |  | June 30,2007 |        | June 30,2006
|Prepaid rent           |  |              | 7,771  |              |   | 8,887 
|                       |  |             
|Deposit on furniture   |  |              | 13,721 |              |   |      
|Prepaid insurance      |  |              | 2,902  |              |   |      
|Other                  |  |              | 2,031  |              |   | 11,212
|                       |  |              |        |              |   |       
|Total prepaid expenses |  | $            | 44,425 |              | $ | 20,099
|                       |  |              |        |              |   |       

5. PROPERTY AND EQUIPMENT

The Companys property and equipment as of June 30, 2007 and 2006 is as follows:



|                                          |  |               |          |   |              |   |           |  
|----------------------------------------- |  | ------------- | -------- | - | ------------ | - | --------- | -
|                                          |  | June 30, 2007 |          |   | June 30,2006 |  
|Computer equipment                        |  | $             | 328,054  |   |              | $ | 796,578   |  
|Other Equipment                           |  |               | 214,216  |   |              |   | 119,378   |  
|Leasehold improvements                    |  |               | 49,384   |   |              |   | 30,766    |  
|Furniture and fixtures                    |  |               | 6,079    |   |              |   | 32,952    |  
|Automobiles                               |  |               | 105,322  |   |              |   |          |  
|Software                                  |  |               | 29,440   |   |              |   | 25,933    |  
|                                          |  |               |          |   |              |   |           |  
|Total property and equipment              |  |               | 732,494  |   |              |   | 1,005,607 |  
|Accumulated depreciation and amortization |  |               | (439,396 | ) |              |   | (182,363  | )
|                                          |  |               |          |   |              |   |           |  
|Property and equipment, net               |  | $             | 293,098  |   |              | $ | 823,244   |  
|                                          |  |               |          |   |              |   |           |  

6. INTANGIBLE ASSETS

The Companys intangible assets consist of the costs of acquiring patents. As of June 30, 2007 and 2006, intangible assets were $107,379 and $68,158, respectively.

The company has not been amortizing the costs of the patents, but will begin once they have been approved. All costs associated with filing a patent are capitalized unless the patent application is rejected at which
time the costs are expensed.



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##### Table of Contents

7. ACCRUED EXPENSES

As of June 30, 2007 and 2006, accrued expenses consisted of the following items:



|                        |  |              |         |              |   |        
|----------------------- |  | ------------ | ------- | ------------ | - | -------
|                        |  | June 30,2007 |         | June 30,2006
|Accrued Interest        |  | $            | 101,003 |              | $ | 55,421 
|Accrued Payroll         |  |              | 82,280  |              |   | 20,852 
|Accrued Severance Costs |  |              |        |              |   | 88,970 
|Accrued disposal costs  |  |              | 98,899  |              |   |        
|Accrued royalties       |  |              | 37,500  |              |   |        
|Accrued legal fees      |  |              | 25,000  |              |   |        
|Other                   |  |              | 23,000  |              |   |       
|                        |  |              |         |              |   |        
|Total accrued expenses  |  | $            | 367,682 |              | $ | 165,243

8. RELATED PARTY TRANSACTIONS

During the fourth quarter of fiscal year 2007, Michael Vosch, an officer and director of the Company, lent the Company $483,000. In July 2007, the loan was converted into 1,380,000 shares of the Companys Common
Stock. Mr. Vosch lent the Company an additional $70,000 in August 2007. The loans are interest free loans and are to be repaid by either conversion into the Companys Common Stock or repayment of the principal at the discretion of the
company.

In the year ended June 30, 2006 the Company entered into a separation agreement with its former CEO. The Company recorded expenses of
approximately $133,000 in connection with this agreement. At June 30, 2006, the Company had accrued expenses of $88,970 remaining to be paid under this agreement, which were paid by January 3, 2007.

Included in the accrued liabilities of the Company as of June 30, 2005 is $75,000 due to a former officer, which was paid during the fiscal year ended June 30,
2006.

On August 18, 2005, the Board of Directors elected the managing member of Midtown Partners & Co., LLC (Midtown Partners)
to serve as a Class I Director of the Companys Board of Directors. There was no arrangement or understanding between the managing member and any other person(s) pursuant to which the
managing member was selected as a director. Chris Phillips, the managing member resigned from the Board of Directors on September 11, 2007. Midtown Partners & Co., LLC is the NASD licensed broker-dealer that
assisted the Company with its recent private placements of securities (the Private Placements) as further discussed in Notes 9 and 11. Midtown Partners acted as placement agent for the Company in connection with the Private Placements.
Pursuant to the terms of the placement agent agreements, the Company agreed to pay Midtown Partners a cash commission and to issue warrants to Midtown Partners based on a percentage of the securities sold in the Private Placements. For the year
ended June 30, 2006, $435,779 was paid in commissions plus the issuance of warrants to purchase 1,505,640 shares of common stock and 183,617 registered shares of common stock were due, all as compensation for assisting in the May 2006
convertible Debenture financing (see Note 12). Additional warrants to purchase 1,407,715 shares of common stock were issued to Midtown upon approval of an increase in the Companys authorized share total. The total value of the fees for the
2006 placement was $2,387,000. In addition, for other services rendered, the Company issued 50,583 shares of its Series B Preferred stock to Midtown Partners in May 2005, which converted on August 22, 2005 into 606,996 shares of common stock.

In addition, the managing member of Midtown Partners & Co., LLC is also the managing member of Total CFO, LLC (Total CFO),
which provides consulting and CFO services. The Company has engaged Total CFO to provide accounting services for a period of one year beginning June 30, 2005. The agreement between Total CFO and the Company calls for
payments of $10,000 per month for the first three months and $8,500 per month for the remainder of the agreement. The agreement expired in July 2006. The Company paid total CFO approximately $119,000 for the year ended June 30, 2006 and $ 4,250
for the fiscal year ended June 30, 2007.

In September 2005, the Company engaged a director as a consultant to support the businesses goal of
expanding into the operation of medical clinics. During the year ended June 30, 2006, the Company paid the consultant $65,000. As additional compensation for consulting services, the Company granted the director warrants to purchase 300,000
shares of common stock. The warrants are immediately exercisable, have an exercise price of $0.50 per share, and expire five years from the date of grant. The warrants were valued at $104,998 using the Black-Scholes option pricing model. In May
2006, the Company hired the consultant as its CEO and entered into an employment agreement (see Note 14).



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##### Table of Contents

A director of the Company was reported to be an advisory director of Business Consulting Group Unlimited
(BCGU). In May 2005, the Company entered into a consulting agreement with BCGU. Under the terms of the original agreement, the Company was to issue 200,000 shares of restricted common stock to BCGU as compensation for services to be
rendered through May 2006. These shares were valued at $1,000,000. In November 2005, the agreement was amended to reduce the number of shares of restricted common stock to 150,000. This modification resulted in a $448,750 reduction to the amount of
consulting expense to be recognized under the agreement. The 150,000 shares of restricted common stock were issued during the year ended June 30, 2006. In conjunction with this agreement, the Company recognized consulting expense of $467,917
for the year ended June 30, 2006.

In addition, in October 2005, the Company entered into a 90 day consulting agreement with the two principals of
BCGU. Each of the principals was issued 100,000 shares of common stock valued at $367,500 as payment for these services. Accordingly, the Company recognized an aggregate of $735,000 in consulting expense under these agreements for the year ended
June 30, 2006.

In September 2005, the Company entered into a marketing agreement with a shareholder and relative of the Companys former CEO.
Pursuant to the agreement, which expired in December 2005, the Company issued 11,750 shares of common stock valued at $47,646 to the consultant.

In April
2006, the Company entered into a consulting agreement with a third party in exchange for 500,000 shares of common stock. These shares were issued to the consultant in May, 2006 and valued at the market price as of the date of the agreement with a
corresponding charge to expense of $298,500. In June 2006, the scope of the consulting agreement was expanded and the company agreed to issue another 700,000 shares of common stock for the expanded services. In June, 2006, a shareholder of the
Company loaned the Company 500,000 shares of Company stock which were transferred to the consultant in payment for the services. The Company valued these shares at their market value at the date of transfer and recorded consulting expense and a
stock payable of $286,000. The shareholder was promised 50,000 additional shares of common stock and the value of these shares has been recorded as interest expense and stock payable. At June 30, 2006, the Company had recorded stock payable to
the shareholder of $286,000.

In May 2006, Telzuit Technologies, LLC sold common stock held in its name for $250,000 in proceeds which it loaned to Telzuit
Medical Technologies, Inc. These proceeds have been recorded as additional paid in capital in the accompanying consolidated financial statements.

9.
INCOME TAXES

The company has net operating loss carry-forwards which are substantially limited due to the change in ownership. The Company provided no
current income tax expense due to the losses incurred through the twelve months ended June 30, 2007 and ended June 30, 2006. Net operating loss carry-forwards for tax purposes were approximately $25,700,000 at June 30, 2007 which
expire at various dates through 2027. The Company has provided a 100% valuation allowance at June 30, 2007 and June 30, 2006 for the deferred tax benefit resulting from the net operating loss carry-forwards and other deferred assets. The
valuation allowance increased $1,957,419 from June 30, 2006 to June 30, 2007. In addressing the potential impact of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. A reconciliation of the statutory Federal
income tax rate and the effective income tax rate for the years ended June 30, 2007 and June 30, 2006 is as follows:



|                                         |  |        |    |  |        |   
|---------------------------------------- |  | ------ | -- |  | ------ | --
|                                         |  | 2007   |    |  | 2006   |   
|Statutory federal income tax rate        |  | (34.00 | )% |  | (34.00 | )%
|State income taxes, net of federal taxes |  | (4.0   | )% |  | (4.00  | )%
|Non-deductible items                     |  | (0.19  | )% |  | 5.10   | % 
|Valuation allowance                      |  | 37.40  | %  |  | 32.90  | % 
|                                         |  |        |    |  |        |   
|Effective Tax Rate                       |  |       | %  |  |       | % 
|                                         |  |        |    |  |        |   



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##### Table of Contents

Significant components of deferred tax assets and liabilities are as follows:



|                                   |  |               |             |   |               |   |            |  
|---------------------------------- |  | ------------- | ----------- | - | ------------- | - | ---------- | -
|                                   |  | June 30, 2007 |             |   | June 30, 2006 |  
|Allowance for doubtful accounts    |  |               | 30,000      |   |               |   |           |  
|Stock compensation                 |  |               | 127,000     |   |               |   |           |  
|Accruals                           |  |               | 37,000      |   |               |   |           |  
|Deferred tax assets (liabilities): |  |               |             |   |               |   |            |  
|Net operating loss carry forwards  |  | $             | 9,768,000   |   |               | $ | 8,282,176  |  
|Other Deferred Tax Assets          |  |               | 243,205     |   |               |   |            |  
|Depreciation and amortization      |  |               | (154,000    | ) |               |   | (123,595   | )
|                                   |  |               |             |   |               |   |            |  
|Deferred tax assets, net           |  |               | 10,116,000  |   |               |   | 8,158,581  |  
|Valuation allowance                |  | $             | (10,116,000 | ) |               | $ | (8,158,581 | )
|Net deferred tax asset             |  |               |            |   |               |   |           |  

10. MAY 2005 CONVERTIBLE DEBENTURE FINANCING

During May 2005 the Company, pursuant to a Securities Purchase Agreement and Share Exchange Agreement, issued (a) 10% Convertible Debentures, having an aggregate original principal balance of $1,057,250, and
(b) Class A Warrants entitling the debenture holders to purchase, in the aggregate, 1,334,062 shares of the Companys common stock. The 10% Convertible Debentures were due one year from the date of issuance, or, upon the earlier
occurrence of certain events specified in each 10% Convertible Debenture. All principal and accrued interest of each debenture automatically converts into either (a) shares of the Companys common stock at a price of $.40 per share of
common stock, or (b) units at a price of $.66 per unit, each unit being comprised of (i) one share of Series A Preferred Stock which converts into common stock at a price of $.60 per share, subject to adjustment and (ii) one Class B
warrant, each Class B warrant having an exercise price of $.80 per share, subject to adjustment. The purchase price paid to the Company in connection with the Debenture financing was $1,057,250. The Company closed the financing in two tranches
raising $565,000 and $492,250 on May 6, 2005 and May 19, 2005 respectively.

The Class A Warrants are exercisable by the holder at any time
before the date five (5) years from the date of issuance at an exercise price of $.60 per share, subject to adjustment. Beginning twelve (12) months following the date of issuance of the Class A Warrants, if the closing bid price of
the Companys common stock exceeds two dollars ($2.00) for a period of twenty (20) consecutive trading days, and the Companys common stock has an average trading volume in excess of fifty thousand (50,000) shares per day for the
twenty (20) prior trading days, the Class A Warrants may be redeemed by the Company at one cent ($.01) per share.

The exercise prices of the
Companys Class A and Class B warrants were reduced to $.5174 per shares and $.6898 per share, respectively upon the closing of May 2006 Private Placement as further discussed in Note 11.

Relating to these debentures, the Company incurred a debt discount in the amount of $1,057,250 as a result of the intrinsic value of the beneficial conversion feature
and the detachable warrants previously described. During the six months ended June 30, 2005 the Company amortized $144,829 of the debt discount to interest expense. In July 2005, all of the holders of this convertible debenture offering
converted their debentures plus accrued interest into 1,614,551 shares of Series A Preferred Stock and Class B Warrants entitling the holders to purchase an aggregate of 2,690,834 shares of common stock. Concurrent with this conversion, the
remaining debt discount of $912,421 was amortized as interest expense on July 12, 2005.



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##### Table of Contents

11. SERIES A CONVERTIBLE PREFERRED STOCK OFFERING

On August 19, 2005, the Company completed its Series A Preferred private placement of approximately $3,399,619, which such amount includes (1) $1,749,990 that had closed on June 22, 2005,
(2) $1,036,629 that had closed on June 28, 2005, (3) $413,000 of which was stock subscribed as of June 30, 2005 and completed on July 14, 2005, and (4) $200,000 which was purchased on August 19, 2005. Pursuant to
the Securities Purchase Agreement, in June and July of 2005 the Company issued a total of 3,199,619 shares of Series A Convertible Preferred Stock (the Series A Preferred Stock), and (b) Class B Warrants entitling holders of the
Series A Preferred Stock to purchase, in the aggregate, 5,332,683 shares of Companys common stock. In August 2005, the Company issued 200,000 shares of Series A Preferred Stock which were purchased for $200,000 and (b) Class B Warrants
entitling holders of the Series A Preferred Stock to purchase, in the aggregate, 333,375 shares of Companys common stock. On July 12, 2005, all of the holders of the May 2005 10% convertible debenture financing converted their debentures
plus accrued interest into (a) 1,614,551 shares Series A Preferred Stock and (b) Class B Warrants entitling holders of the Series A Preferred Stock to purchase, in the aggregate, 2,690,834 shares of Companys common stock.

The Class B Warrants are exercisable by the holder at any time before the date five (5) years from the date of issuance at an exercise price of $.80 per share,
subject to adjustment as further described below. Beginning twelve (12) months following the date of issuance of the Class B Warrants, if the closing bid price of the Companys common stock exceeds two dollars ($2.00) for a period of
twenty (20) consecutive trading days and the Companys common stock has an average trading volume in excess of fifty thousand (50,000) shares per day for the twenty (20) prior trading days, the Class B Warrants may be redeemed by
the Company at one cent ($.01) per share.

The Series A Preferred Stock is convertible into shares of common stock at an initial conversion price of $0.60
per share, subject to adjustment as further described below, and can be converted either upon the effective date of the Companys registration statement of the underlying common stock or the date that the holder of the Series A Preferred Stock
has satisfied the minimum one year holding requirement set forth in SEC Rule 144(d). The Company has the right to force the holders of the Series A Preferred Stock to convert into shares of common stock if, at any time after an effective
registration statement is achieved, the closing price of the Companys common stock equals or exceeds $2.00 per share for a period of 20 consecutive trading days and the Companys common stock has an average trading volume in excess of
100,000 shares per day for the same 20 trading days. In addition, upon the occurrence of a change in control event, as defined, the holders of at least a majority of the then outstanding Series A Preferred Stock may elect to force the Company to
redeem all or a portion of the Series A Preferred Stock in cash in an amount equal to the stated value of the preferred stock ($1.00 per share) plus all accrued but unpaid dividends. Accordingly, the Series A Preferred Stock has been classified
outside of permanent equity on the accompanying consolidated balance sheets.

Pursuant to the terms
of the Series A Preferred Stock financing, the Series A Preferred Stockholders are entitled to receive additional Class B warrants in the event the Company has not filed a registration statement within 45 days after the date of the closing of the
Series A Preferred financing. If the Company does not file its registration statement by this date it is required to issue Class B warrants to purchase shares of common stock equal to 1.5% of the sum of the number of shares of common stock issuable
upon conversion of the Series A Preferred Stock into common stock and the number of shares of common stock issuable upon exercise of the Class B warrants originally issued. For each subsequent 30 day period that the Company does not file the
registration statement, it owes the holders of the Series A Preferred Stock an additional 1.5% until the registration statement is filed up to a maximum of 9%. In addition, the series A Preferred Stockholders are also entitled to receive additional
Class B warrants in the event the Companys registration statement has not been declared effective by the SEC by the 120thday after the closing of
the Series A Preferred Stock financing or the 150thday after the closing if the registration statement is subject to a full SEC review. If the Company
does not meet this requirement it is required to issue Class B of Warrants to purchase common shares in the amount equal to 1.5% of the sum of the number of shares common stock issuable upon conversion of the Series A Preferred Stock into common
stock and the number of shares of common stock issuable upon exercise of the Class B warrants originally issued. For each subsequent 30 day period that the registration statement is not declared effective, the Company owes



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the holders of the Series A Preferred Stock an additional 1.5% until the registration statement is declared effective up to a maximum of 9%. As a result of
these penalty provisions, the Company issued Class B warrants to purchase 1,484,236 additional shares of common stock to the holders of the Series A Preferred Stock as required by the terms of the agreement. These warrants were valued at $4,883,993
and have been recorded as a preferred stock dividend in the accompanying consolidated financial statements for the year ended June 30, 2006.

The
Company granted the purchasers of the Series A Preferred Stock and Class B Warrants price protection in case the Company issued other securities at lower prices. This event occurred with the May 2006 Convertible Debenture financing (see Note 11) and
the conversion price of the Series A Preferred Stock was reduced to $0.35 per share and the exercise price of the Class B Warrants was reduced to $0.6898 per share. The reduction in the conversion price of the Series A Preferred Stock resulted in a
beneficial conversion feature of $3,830,690 which the Company recorded as a deemed preferred stock dividend in the accompanying consolidated financial statements for the twelve months ended June 30, 2006. This amount represents the difference
between the discounted conversion price of $0.35 and the fair market value of the Companys stock at the time of the original issuance of the preferred stock. The amount of the dividend was limited to the amount of proceeds received from the
outstanding Series A Preferred Stock when it was originally issued.

12. MAY 2006 CONVERTIBLE DEBENTURE FINANCING

On May 26, 2006, the Company raised gross proceeds of approximately $4,942,000 from the private placement (the May 2006 Private Placement) to accredited
institutional and individual investors (the Investors) of its three-year 10% Senior Secured Convertible Debentures (the Debentures). In connection with the issuance of the Debentures, the Company issued to the investors Class
C Warrants, to purchase up to 10,590,000 shares of the Companys common stock at a per share exercise price of $0.45 and exercisable for six years from the date of offering and Class D Warrants, to purchase up to 3,530,000 shares of the
Companys common stock at a per share exercise price of $1.25 and exercisable for ten years from the date of offering. The exercise prices of the Class C and Class D warrants are subject to adjustment as further described below. In addition, if
at any time after one year from the date of the May 2006 Private Placement, the Company has not obtained an effective registration statement covering the common stock underlying the warrants, the warrants may then be exercised by means of a cashless
exercise provision. Upon expiration, the Class C and Class D warrants will be automatically exercised by means of a cashless exercise provision.

In
connection with the May 2006 Private Placement, some holders of Series A Convertible Preferred Stock exercised a Most Favored Nations contract right in the Investors Right Agreement dated June 22, 2005. As a result, 805,410 shares
of Series A Convertible Preferred Stock, plus accrued dividends of $32,225, were exchanged for (a) 10% Debentures having an aggregate original principal balance equal to $837,635 (ii) Class C Warrants exercisable, in the aggregate, for
1,794,933 common shares, and (iii) Class D Warrants exercisable, in the aggregate, for 598,310 common shares.

To secure the Companys
obligations under the Debentures, the Company has granted a security interest in substantially all of its assets and its subsidiaries assets. In addition, the debentures are guaranteed by the Companys subsidiaries. Upon the occurrence of
certain change in control transactions, as defined, the holders of the Debentures may elect to require the Company to redeem all or a portion of the then outstanding debentures for cash. If, at any time after the May 2006 Private Placement, the
trading price, as defined, of the Companys common stock for each of any 10 consecutive trading days (the threshold period) exceeds $1.50 and the aggregate dollar amount of common stock traded exceeds $200,000 on each day during
such threshold period then the Company may require the Investors to convert all or a part of the then outstanding Debentures plus any accrued but unpaid interest and liquidated damages to common stock.

The Debentures mature on May 26, 2009 and are convertible into shares of common stock at the holders option at any time at an initial conversion price of
$0.35 per share, subject to adjustment as further described below. Interest on the Debentures accrues at the rate of 10% per annum, payable upon conversion or semi-annually (November 1 and May 1 of each year, with the first scheduled
payment date being November 1, 2006) or upon maturity, whichever occurs first, and will continue to accrue until the



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Debentures are fully converted and/or paid in full. Interest is payable, at the option of the Company, either (i) in cash, or (2) in shares of
Common Stock at a 10% discount from the public trading price. The Company recorded interest expense of $55,421 in the accompanying consolidated financial statements for the year ended June 30, 2006 and $823,471 for the year ended June 30,
2007.

The conversion price of the Debentures and the exercise price of the Class C and Class D warrants are subject to adjustment for certain future
dilutive issuances of securities and for the failure of the Company to achieve certain operating milestones, as defined. The Debentures are subject to certain events of default, including obtaining an effective Registration Statement of the
underlying common stock within 240 days of the closing of the May 2006 Private Placement. Upon the occurrence of any such event, the outstanding principal, plus any accrued but unpaid interest and liquidated damages will become, at the
Investors election, immediately due and payable in cash at the Mandatory Default Amount, as defined.

As a result of the beneficial conversion
feature embedded in the convertible Debentures, the Company recognized a debt discount of $2,064,152. This amount represents the intrinsic value of the conversion feature, limited to the total cash proceeds allocated to the Debentures from the
private placement. The Company also recorded a $3,715,468 discount on the Debentures based upon the fair values of the Class C and Class D warrants. During the twelve months ended June 30, 2007, $21,555 of the discount was amortized and is
included in interest expense in the accompanying consolidated financial statements. The remaining unamortized discount of $5,597,522 will be amortized over the remaining term of the Debentures.

The amortization schedule for the debt discount and debt issuance costs (through maturity) follows below:



|                                 |  |                      |  |             
|-------------------------------- |  | -------------------- |  | ------------
|                                 |  | DebtAcquisitionCosts |  | DebtDiscount
|Incurred on May 26, 2006         |  | 2,414,367            |  | 5,779,620   
|                                 |  |                     
|Amounts to be amortized          |  |                      |  |             
|                                 |  |                     
|For the year ended June 30, 2006 |  | 67,066               |  | 160,544     
|For the year ended June 30, 2007 |  | 13,321               |  | 21,555      
|For the year ended June 30, 2008 |  | 190,764              |  | 386,811     
|For the year ended June 30, 2009 |  | 2,143,216            |  | 5,210,711   
|                                 |  |                      |  |             
|Total to be amortized            |  | 2,414,367            |  | 5,779,620   
|                                 |  |                      |  |             

In connection with the May 2006 Private Placement, the broker-dealers and others were paid aggregate cash
commissions equal to $463,279 (see Note 7 for related-party broker-dealers). The broker-dealers also received (a) warrants entitling the broker-dealers to purchase, in the aggregate, 1,407,100 shares of the Companys common stock at an
exercise price of thirty five ($.35) cents per share for six years and (b) warrants entitling the broker-dealers to purchase 98,540 shares of the Companys common stock at one cent ($0.01) per share for six years, and (c) 183,617
unrestricted freely trading shares of common stock. As



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additional compensation, the broker-dealers received (a) warrants entitling the broker-dealers to purchase, 1,055,786 shares of the Companys
common stock at an exercise price of forty five cents ($.45) per share for six years and (b) warrants entitling the broker-dealers to purchase 351,929 shares of the Companys common stock at an exercise price of one dollar and twenty five
cents ($1.25) for ten years. The value of the warrants, calculated utilizing the Black- Scholes option pricing model is $1,835,000. This amount, combined with the cash payments and the value of the shares issued to the broker dealer are treated as
debt issuance costs totaling approximately $2,414,000. This amount will be amortized over the thirty-six month term of the Debentures.

The placement of
the Debentures resulted in the reduction to $0.35 from $0.60 of the conversion rate into common stock of the outstanding shares of the Companys Series A Convertible Preferred Stock issued in June through July of 2005. In addition, pursuant to
anti dilution clauses, the exercise prices of the Companys Class A and Class B warrants were reduced to $.5174 per shares and $.6898 per share, respectively upon the closing of May 2006 Private Placement.

13. OPTIONS AND WARRANTS OUTSTANDING

Stock Option Plan

As part of the share exchange agreement dated May 6, 2005 between Taylor Madison, Telzuit Technologies, Inc. and Telzuit Technologies, LLC, all options issued and
outstanding under the Companys then existing stock option plan were cancelled. As of June 30, 2007 no options were outstanding under this plan.

On November 11, 2006, The Board of Directors approved a new Long Term Incentive Plan. At the annual meeting of shareholders on February 27, 2007, the Companys shareholders approved the Telzuit Medical Technologies, Inc. 2007
Long Term Incentive Plan. The Plan authorized the Compensation Committee of the Board of Directors to issue up to 15,000,000 options to purchase the Companys common stock. To date, there have been no issuances from this plan.

Warrants granted to Employees

The Company records compensation expense
measured at fair value for all stock-based award transactions under the provisions of SFAS 123R Accounting for Stock Based Compensation (SFAS No. 123R). Effective July 1, 2005, the Company adopted the provisions of Statement of
Financial Accounting Standards 123 (Revised 2004), Share-Based Payment (SFAS 123R). SFAS 123R establishes standards surrounding the accounting for transactions in which an entity exchanges its equity instruments for goods or services.
SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions, such as options issued under the Companys Stock Option Plans. SFAS 123R provides for, and the Company
has elected to adopt the modified prospective application under which compensation cost is recognized on or after the required effective date for the fair value of all future share based award grants and the portion of outstanding awards at the date
of adoption of this statement for which the requisite service has not been rendered, based on the grant-date fair value of those awards calculated under Statement 123R pro forma disclosures. The Companys stock option compensation expense was
$335,000 and $279,998 for the twelve month periods ended June 30, 2007 and 2006, respectively. This stock option expense is a non-cash item.

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the
underlying common stock, expected option life and expected volatility in the market value of the underlying common stock. We used the following assumptions for options issued in the following periods:

|                        |  |                             |   |  |             |  
|----------------------- |  | --------------------------- | - |  | ----------- | -
|                        |  | Twelve months EndedJune 30, |  
|                        |  | 2007                        |   |  | 2006        |  
|Expected volatility     |  | 380                         | % |  | 60-380      | %
|Expected lives          |  | 10 yrs                      |   |  | 5-10 yrs.   |  
|Risk-free interest rate |  | 4.95                        | % |  | 3.94 - 5.06 | %
|Expected dividend yield |  | none                        |   |  | none        |  

The Black-Scholes option-pricing model was developed for use in estimating the fair value of
traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Companys stock
options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate, in managements opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of such stock options. The risk free interest rate is based upon quoted market yields for United States Treasury debt securities. The expected dividend yield is based upon the
Companys history of having never issued a dividend and managements current expectation of future action surrounding dividends. During the twelve months ended June 30, 2007 and 2006, the Company recognized $335,000 and $0 for
warrants and options vesting during the period.



|                                            |  |                         |  |                              |      |        |           |                              |   |     
|------------------------------------------- |  | ----------------------- |  | ---------------------------- | ---- | ------ | --------- | ---------------------------- | - | ----
|                                            |  | Year endedJune 30, 2007 |  | Year endedMarch 31, 2006    
|                                            |  | Shares                  |  | WeightedAverageExercisePrice |      | Shares |           | WeightedAverageExercisePrice
|Outstanding at beginning of period          |  | 2,300,000               |  | $                            | 0.50 |        |          |                              | $ |    
|Granted                                     |  | 1,000,000               |  | $                            | 0.50 |        | 2,300,000 |                              | $ | 0.50
|Exercised                                   |  |                        |  |                              |     |        |          |                              |   |    
|Forfeited                                   |  |                        |  |                              |     |        |          |                              |   |    
|Expired                                     |  |                        |  |                              |     |        |          |                              |   |    
|                                            |  |                         |  |                              |      |        |           |                              |   |     
|Outstanding at end of period                |  | 3,300,000               |  | $                            | 0.50 |        | 2,300,000 |                              | $ | 0.50
|Exercisable at end of period                |  | 1,550,000               |  | $                            | 0.50 |        | 800,000   |                              | $ | 0.50
|Outstanding                                 |  |                         |  |                              |      |        |           |                              |   |     
|Weighted average remaining contractual term |  |                         |  |                              | 8.4  |        |           |                              |   | 9.2 
|                                            |  |                         |  |                              |      |        |           |                              |   |     
|Aggregate Intrinsic Value                   |  |                         |  | $                            |     |        |           |                              | $ |    
|                                            |  |                         |  |                              |      |        |           |                              |   |     
|Weight average grant date fair value        |  |                         |  | $                            | 0.34 |        |           |                              | $ | 0.35
|                                            |  |                         |  |                              |      |        |           |                              |   |     
|Exercisable                                 |  |                         |  |                              |      |        |           |                              |   |     
|Weighted average remaining contractual term |  |                         |  |                              | 7.8  |        |           |                              |   | 7.7 
|                                            |  |                         |  |                              |      |        |           |                              |   |     
|Aggregate Intrinsic Value                   |  |                         |  | $                            |     |        |           |                              | $ |    



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##### Table of Contents

A summary of the Companys unvested options is presented below:



|                                |  |                                  |   |                                  |                                     |      |        |           |   |                                     |   |     
|------------------------------- |  | -------------------------------- | - | -------------------------------- | ----------------------------------- | ---- | ------ | --------- | - | ----------------------------------- | - | ----
|                                |  | Twelve months endedJune 30, 2007 |   | Twelve months endedJune 30, 2006
|                                |  | Shares                           |   |                                  | WeightedAverageGrantDate Fair Value |      | Shares |           |   | WeightedAverageGrantDate Fair Value
|Unvested at beginning of period |  | 1,500,000                        |   |                                  | $                                   | 0.35 |        |          |   |                                     | $ |    
|                                |  |                                  |   |                                 
|Granted                         |  | 1,000,000                        |   |                                  | $                                   | 0.32 |        | 2,300,000 |   |                                     | $ | 0.35
|Vested                          |  | (750,000                         | ) |                                  | $                                   | 0.34 |        | (800,000  | ) |                                     | $ | 0.35
|Exercised                       |  |                                 |   |                                  |                                     |     |        |          |   |                                     |   |    
|Expired                         |  |                                 |   |                                  |                                     |     |        |          |   |                                     |   |    
|                                |  |                                  |   |                                  |                                     |      |        |           |   |                                     |   |     
|Outstanding at end of period    |  | 1,750,000                        |   |                                  | $                                   | 0.34 |        | 1,500,000 |   |                                     | $ | 0.35

As of June 30, 2007, there was $510,750 of total unrecognized compensation cost related to non-vested
warrants granted to the Companys employees. The cost is expected to be recognized ratably over the next 2 years.

Warrants

At June 30, 2007, the Company had outstanding warrants to purchase the Companys common stock which were issued in connection with multiple financing
arrangements, consulting agreements and employment agreements. Information relating to these warrants is summarized as follows:



|                       |  |                              |  |  |                                         |  |                                 |       
|---------------------- |  | ---------------------------- |  |  | --------------------------------------- |  | ------------------------------- | ------
|Warrants               |  | Remaining Number Outstanding |  |  | Weighted Average Remaining Life (Years) |  | Weighted Average Exercise Price
|Class A Warrants       |  | 1,547,038                    |  |  | 3.00                                    |  | $                               | 0.5174
|Class B Warrants       |  | 10,640,304                   |  |  | 3.15                                    |  | $                               | 0.6898
|Class BD Warrants      |  | 76,750                       |  |  | 2.85                                    |  | $                               | 0.60  
|Class BD-B Warrants    |  | 10,000                       |  |  | 3.08                                    |  | $                               | 0.5174
|Class BD-B Warrants    |  | 10,000                       |  |  | 4.08                                    |  | $                               | 0.6898
|Class C Warrants       |  | 12,384,933                   |  |  | 4.92                                    |  | $                               | 0.45  
|Class D Warrants       |  | 4,128,310                    |  |  | 8.92                                    |  | $                               | 1.25  
|Class BD  C Warrants  |  | 1,055,786                    |  |  | 4.92                                    |  | $                               | 0.35  
|Class BD  X Warrants  |  | 1,407,100                    |  |  | 4.92                                    |  | $                               | 0.01  
|Class BD  D Warrants  |  | 351,929                      |  |  | 4.92                                    |  | $                               | 0.35  
|Class BD  X1 Warrants |  | 118,540                      |  |  | 4.92                                    |  | $                               | 0.01  
|Other Warrants         |  | 3,300,000                    |  |  | 8.40                                    |  | $                               | 0.50  
|Other Warrants         |  | 25,000                       |  |  | 3.92                                    |  | $                               | 2.50  
|Total                  |  | 35,055,690                   |  |  |                                         |  |                                 |       



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##### Table of Contents

The fair value of each warrant granted is estimated on the grant date using the Black-Scholes option pricing model using
the assumptions listed in Note 2 under Stock Based Compensation for each period.

Reserved Shares

At June 30, 2007, 60,336,950 shares of common stock were reserved for issuance for the Companys outstanding warrants and upon conversion of the outstanding
Series A Convertible Preferred Stock and May 2006 Convertible debentures.

14. COMMITMENTS AND CONTINGENCIES

Loans

During the quarter ended December 31, 2006, the Company
purchased five vehicles for a total price of $86,098. The vehicles are used in the PDS Imaging business. The Company borrowed the entire amount of the purchase price from Bank of America. The loan is for a five-year term and is collateralized by the
related vehicles. Monthly payments are approximately $1,785, beginning January 2007 and ending December 2011.

Vosch Loans

During the fourth quarter of fiscal year 2007, Michael Vosch, an officer and director of the Company, lent the Company $483,000. In July 2007, the loan was converted into
1,380,000 shares of the Companys Common Stock. Mr. Vosch lent the Company an additional $70,000 in August 2007. The loans are interest free loans and are to be repaid by either conversion into the Companys Common Stock or repayment
of the principal at the discretion of the company.

Leases

In connection with the acquisition of PDS Imaging (see Note 3), the Company acquired various capital and operating leases on six (6) vehicles with various expiration dates through December 2010 and various medical ultrasound equipment
with various expiration dates through January 2010.

In January 2007, the Company leased approximately $260,000 of new ultrasound equipment for its PDS
imaging business. The equipment is subject to a five-year financial lease provided by US Bank, which financed the transaction in its entirety. Monthly payments, beginning in February 2007 and ending January 2012 are approximately $6,000. These
leases are secured by a one-year $170,000 certificate of deposit. The certificate of deposit may be reduced or released back to the Company after one year of payment history.

The Company leases certain office and clinic premises under non-cancelable, operating leases which expire at various dates through March 2011.



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##### Table of Contents

Aggregate approximate minimum rental commitments at June 30, 2007 under non-cancelable operating leases are
summarized as follows:



|         |  |              |        
|-------- |  | ------------ | -------
|June 30, |  | GrossRentals
|2008     |  | $            | 198,000
|2009     |  | $            | 203,000
|2010     |  | $            | 153,000
|2011     |  | $            | 84,000 
|2012     |  |              | 21,000 
|Total    |  | $            | 659,000
|         |  |              |        

Rental expense included in operations totaled approximately $71,700 for the twelve months ended June 30, 2007
and $84,000 for the 12 months ended June 30, 2006.

Aggregate minimum lease commitments at June 30, 2007 under non-cancelable capital leases are
summarized as follows:



|                                 |  |              |         |                 |   |                  |  |   |        
|-------------------------------- |  | ------------ | ------- | --------------- | - | ---------------- |  | - | -------
|                                 |  | TotalPayment |         | InterestPortion |   | PrincipalPortion
|For the 12 months ended June 30, |  |              |         |                 |   |                 
|2008                             |  | $            | 94,346  |                 | $ | 11,286           |  | $ | 83,060 
|2009                             |  | $            | 19,806  |                 | $ | 1,782            |  | $ | 18,024 
|2010                             |  | $            | 5,574   |                 | $ | 333              |  | $ | 5,241  
|2011                             |  | $            | 1,261   |                 | $ | 180              |  | $ | 1,081  
|2012 and beyond                  |  | $            |        |                 | $ |                 |  | $ |       
|                                 |  |              |         |                 |   |                  |  |   |        
|Total                            |  | $            | 120,987 |                 | $ | 13,581           |  | $ | 107,406
|                                 |  |              |         |                 |   |                  |  |   |        

Employment Agreements

The Company has entered into employment agreements with various officers and key employees. These agreements establish bonuses based upon performance and provide for severance compensation under certain circumstances, as defined. The
employment agreements for each of the companys two officers provide for an annual base salary of between $150,000 and $160,000, subject to annual increases as approved by the compensation committee. The employment agreement for the CEO
provides for warrants to purchase 2,000,000 shares of the Companys common stock. The warrants are exercisable for ten years at an exercise price of $0.50 per share, with 25% exercisable immediately, and an additional 25% exercisable on each
anniversary of his employment. The Employment Agreement for the CFO provides for warrants to purchase 1,000,000 shares of common stock at an exercise price of $.50 per share (the referred to in this paragraph as the Warrant Shares).
Twenty-five percent of the Warrant Shares vested on the effective date of the Employment Agreement, and on each anniversary of the effective date of the Employment Agreement an additional twenty-five percent of the Warrant Shares will vest. The
officers employment agreements expire in May 2009 for the CEO and July 2009 for the CFO.

Licensing Agreements

On March 31, 2006 the Company entered into a software license agreement with an unrelated company to provide certain additional software to be used in the operation
and delivery of the Companys products and services. Pursuant to the terms of the agreement on March 31, 2006 the Company made the $25,000 non-refundable payment. In consideration for the non-refundable payment, the Company received one
copy of the software. Additional terms of the agreement are as follows: (i) the agreement will remain in force until



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terminated; (ii) at the request of the Company additional copies of the software are available for $12,500 per copy; (iii) the Company agrees to
pay the software company a royalty of 0.5% of the first annual gross turnover equal to one million two hundred and twenty-five thousand dollars and, once said gross turnover has been reached, a royalty of 0.25% of the annual gross turnover
thereafter; (iv) the Company guarantees that the royalty payments to be made will not be less than $37,500 for each 12-month period during the first five years and in the event the royalty payments are calculated to be less than the $37,500
stipulated in the contract the Company will pay the difference.

The Company has commitments under various agreements with service providers and
consultants as part of its routine operations which extend beyond June 30, 2007.

15. LEGAL PROCEEDINGS

Focused Strategies, Inc. v. Telzuit Technologies, LLC and Telzuit Technologies, Inc.

On June 8, 2005, Focused Strategies, Inc., a Florida corporation, filed a Complaint for Damages and Declaratory Relief in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida, titled
Focused Strategies, Inc. v. Telzuit Technologies, LLC and Telzuit Technologies, Inc., Case No. 48-2005-CA-004920-O (the FSI Complaint). In July 2005, Telzuit Technologies, LLC and Telzuit Technologies, Inc. filed an Introduction,
Answer, Defenses, Counterclaims and Third Party Claims of the Defendants (the Answer and Counter-Claim). Telzuit Technologies, Inc is a Florida corporation and wholly-owned subsidiary of Telzuit Medical.

Telzuit Technologies, LLC hired Focused Strategies, Inc. to provide consulting services pursuant to an Engagement Agreement dated March 16, 2001, (the
Engagement Agreement). In the FSI Complaint, Focused Strategies, Inc. alleges that it performed its duties and obligations under the Engagement Agreement and seeks damages of $818,678 for alleged unpaid professional fees and expenses.

In addition, in the FSI Complaint, Focused Strategies, Inc. requests declaratory relief seeking (a) a determination as to the current ownership of
Telzuit Technologies, LLC, (b) a determination as to the controlling ownership group of Telzuit Technologies, LLC, and (c) a determination as to the validity of the Share Exchange Agreement, dated May 6, 2005, between Telzuit
Technologies, LLC, Telzuit Medical, et. al., providing for the transfer of all of the capital stock of Telzuit Technologies, Inc. to Telzuit Medical in exchange for capital stock of Telzuit Medical.

The management of Telzuit Medical believe that Focused Strategies, Inc.s claims are not substantiated by the facts,
and are without merit, and intends to defend the Companys positions vigorously. In the Answer and Counter-Claim, Telzuit Technologies, Inc. and Telzuit Technologies, LLC assert a number of defenses in response to the
allegations made in the FSI Complaint, including fraud, breach of contract, and self-dealing. In addition, Telzuit Technologies, Inc. and Telzuit Technologies, LLC have filed counterclaims against the claimant, based on fraud and breach of
implied contract. In connection with each of these claims, Telzuit Technologies, Inc. and Telzuit Technologies, LLC seek damages in excess of $15,000. The parties mediated their respective claims on March 3, 2006, and April 11, 2007, but
were unsuccessful in reaching an agreement to resolve the lawsuit. The court has set a trial date of October, 2007. The Company intends to seek to postpone the trial while it engages new legal counsel in this matter. There can be no assurance the
Company will be successful in postponing the trial date or timely engaging legal counsel. If the outcome of this litigation is adverse to the Company, our liquidity, financial condition and operating results could be materially adversely impacted.

Todd Lavelle and Michael Evertsen v. Telzuit Medical Technologies, Inc.

On December 22, 2006, Todd Lavelle and Michael Evertsen, the former shareholders of PDS Imaging filed a Complaint and Demand for Jury Trial in the United States District Court Middle District of
Florida, Orlando Division, titled Todd Lavelle and Michael Evertsen v. Telzuit Medical Technologies, Inc. The Complaint alleged that the Company had breached its agreements with Todd Lavelle and Michael Evertsen. The Complaint sought damages of
$100,000 in stock, the assumption of certain equipment leases and payment of legal fees. The Company had previously recorded the stock and lease assumptions on its



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financial statements. The Company filed a response and Motion to Dismiss on January 29, 2007. On March 28, 2007 the case was dismissed, without
prejudice, by the United States District Court Middle District of Florida, Orlando Division. Lavelle and Evertsen filed a new complaint on May 15, 2007. The parties are in discussion. There can be no assurance the Company will settle this
matter.

Other litigation related matters

During 2003 and 2004, the Board of Directors of the Company voted to rescind 26,198,010 Class A membership units and 1,738,500 Class B membership units which it believes were issued improperly for no consideration. As of
December 31, 2004, two affected parties have threatened, but have not brought any legal action related to the rescission. The two parties constituted 13,213,000 of Class A membership units and 1,338,500 of the Class B membership units
rescinded. The Company acknowledges there may be additional parties to file suit. Should any of the affected parties begin legal action, the Company intends to defend its position vigorously.

The Company is occasionally party to other litigation or threat of litigation arising in the normal course of business. Management, after consultation with legal
counsel, does not believe that the resolution of any such matters will have a material effect on the Companys financial position or results of operations.

Except as set forth above, as of the date of this filing, there are no other material pending legal or governmental proceedings relating to our company or properties to which we are a party, and to our knowledge there are no material
proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.

16. EQUITY TRANSACTIONS

At a meeting of the Board of Directors on May 9, 2006, the Board of Directors authorized the issuance of a
Common Stock Purchase Warrant to each of six members of the Board of Directors, each warrant exercisable for 1,000,000 shares of the Companys common stock at an exercise price of $.50 per share (the Director Warrants), subject to
the adoption of a comprehensive equity compensation plan, to be presented for approval by Telzuits shareholders (the Comprehensive Equity Compensation Plan). As of September 26, 2006, the shareholders and the Board of
Directors had not adopted a Comprehensive Equity Compensation Plan. As a result effective on or about September 26, 2006, the Board of Directors rescinded the grant of the Director Warrants, and the Director Warrants were cancelled.

During the year ended June 30, 2007, the Company paid out 2,182,727 shares of its common stock to satisfy dividend payments accrued related to the Series A
Convertible Preferred Stock.

During the year ended June 30, 2007, the Company paid out 3,665,638 shares of its common stock to satisfy interest
payments accrued related to the 10% Senior Secured Debentures.

During the year ended June 30, 2007, the Company issued 671,000 shares of its common
stock upon conversion of 234,853 Preferred A shares.

See Footnote 12 above for a discussion regarding the issuance of Warrants to Jerry Balter, the
Companys Chief Financial Officer.

The Company records compensation expense measured at fair value for all stock-based award transactions under the
provisions of SFAS 123R Accounting for Stock Based Compensation (SFAS No. 123R). When warrants or options are issued, the fair value of the warrants is determined on the date of grant using the Black-Scholes option pricing model,
and the fair value is recognized over the vesting period. During the years ended June 30, 2007 and 2006, the Company recognized $335,000 and $271,250 for warrants and options vesting during the period.



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##### Table of Contents

17. CLOSURE OF WALK-IN CLINICS

On March 30, 2007, the Company closed its two walk-in clinics. The closing of its two walk-in clinics resulting in a loss from discontinued operations of $511,992 for the fiscal year ended June 30, 2007. As
part of the closure the company had leases on the two properties that remain in effect.



| |  |  | One lease, Technological Plaza West, Ltd is for 2,485 square feet located at 3403 Technological Avenue; Suite 16; Orlando, FL 32817. The lease commenced on
March 1, 2006 and expires on February 28, 2011. The remaining payments on this lease after March 31, 2007 are $165,300 plus taxes and escalation payments, which add approximately $24,000 to this amount. The Company assigned this lease
to an unaffiliated third party, which requires the Company to remain liable for all payments due under the lease that are not paid by the assignee. The Company had deposited $20,511 as a security deposit when it entered into this lease, which was
assigned to the assignee of the lease in the proposed transaction.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The second lease, Metrowest Village Shopping Center is for 1,518 square feet located at 2411 S. Hiawassee Road; Suite 23; Orlando, FL 32835. The lease commenced on
December 6, 2005 and expires on December 31, 2010. The remaining payments on this lease after March 31, 2007 are $166,980 plus taxes and escalation payments, which add approximately $27,500 to this amount. The Company had deposited
$33,321 as a security deposit when it entered into this lease.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Within each facility are furniture and fixtures which had a book value on March 30, 2007 of $43,171. The Company has no use for such furniture and fixtures and
has written them off.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | There are no other obligations related to the walk-in clinics
| | - |  | -------------------------------------------------------------

In March 2007, the Company abandoned its two walk-in clinics and accrued $98,899 related to abandonment of these facilities. This amount was calculated as the present value of the remaining lease rentals, reduced by
the estimated market value of sublease rentals. If the Company does not sublease these facilities, the actual loss will exceed this estimate. There are no other exit costs. The Company is accounting for the costs associated with these transactions
in accordance with SFAS No. 146, Accounting for Costs Associated with an Exit or Disposal Activity, because the above arrangements are planned and controlled by management and materially changed the manner in which the
Companys business will be conducted. In accordance with SFAS No. 146, costs associated with disposal activities, the Company reported a total of $119,410 in disposal costs from discontinued operations. The above transactions were
communicated to the Companys employees on March 9, 2007. As of March 31, 2007, all 6 employee positions associated with the walk-in clinics had been eliminated. There were no employee termination costs.

The Company anticipates that in future periods there will not be any additional disposal costs related to the closing of the walk-in clinics.

18. IMPAIRMENT OF PROPERTY AND EQUIPMENT

In light of
the closing of the walk-in clinics discussed in Note 16, the Company determined that it is more likely than not that a majority of its fixed assets related to the walk-in clinics would be sold or disposed of prior to the end of their useful life. In
accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Term Assets, the Company wrote down the value of its assets to their



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##### Table of Contents

estimated fair values in March 2007. The Company estimates the fair value of the assets to not exceed the costs incurred to sell the assets. Therefore, the
book value of the assets related to the clinics has been fully impaired, totaling $43,171.

Computer equipment with a net book value of $
544,898 was written down to fair market value of $ 48,120 based upon an offer received from an unrelated third party. The equipment will no longer be used in the Statpatch reporting process. A loss of $ 496,779 was reported in general and
administrative expenses as a result of this impairment.

19. GOING CONCERN

Our consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and
liquidation of liabilities in the normal course of business. We have incurred losses since our inception and have experienced and continue to experience negative cash flows from operations. In addition, we had a working capital deficiency of
$577,487 as of June 30, 2007. The company does not have enough cash to continue operations at historical levels beyond October 31, 2007. Short term, we will have to rely on external sources for funding to support immediate operating
requirements. Until such time as we can achieve positive cash flow on a monthly basis, the dependence on external capital will remain. Management believes that the Company will need to raise an additional $1.5 million to continue our business for at
least the next twelve (12) months.

If we are successful in timely raising additional capital, our plan of operation for the twelve-month period
following the date of this quarterly report on Form 10-KSB is to continue to develop and market the STATPATCH System and to operate our Mobile Imaging business.

The Company will need to raise additional capital in order to fund operations and research and development. As discussed above, we believe that our cash on hand will not be sufficient to cover these anticipated expenditures, and the Company
will need to raise additional cash in the future as our current cash and working capital resources are depleted. The Company received a loan from a related party of $483,000 during fiscal 2007, which was subsequently converted into 1,380,000 shares
of the Companys Common Stock, and received an additional $70,000 in July 2007. We may seek to raise additional capital through the public or private sale of debt or equity securities, the procurement of advances on contracts or licenses,
funding from joint-venture or strategic partners, debt financing or short-term loans, or a combination of the foregoing. We also may seek to satisfy indebtedness without any cash outlay through the private issuance of debt or equity securities. We
currently do not have any arrangements or commitments for, or readily available sources of, additional financing. We cannot give you any assurance that we will be able to secure the additional cash or working capital we will require to continue our
operations. These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.



---

##### Table of Contents

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

On July 6, 2006 the Board of Directors, at the recommendation of the Audit Committee, dismissed Pender Newkirk & Company, CPAs (Pender
Newkirk), as the Companys independent registered public accounting firm. On July 28, 2006, the Company engaged Cross, Fernandez & Riley, LLP as its new independent registered public accounting firm to audit the
Companys financial statements. A more detailed discussion regarding the Companys change in auditors is contained in the Form 8-Ks filed with the U.S. Securities and Exchange Commission on July 11, 2006 and August 1, 2006.



|Item 8A. | Controls and Procedures
|-------- | -----------------------

(1) Evaluation Of Disclosure Controls
and Procedures

The Companys management, with the participation of Warren Stowell, the Companys Chief Executive and Jerry
Balter, the Companys Chief Financial Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the fiscal period
covered by this Annual Report on Form 10-KSB. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Companys disclosure controls and procedures were not
effective in recording, processing, summarizing and reporting information required to be disclosed by the Company in the reports it files or submits under the Exchange Act within the time periods specified in the Commissions rules and forms.

Historically, the Company has not had a formal system of controls and procedures due to the fact that the Company was small in size and
had no operations. Currently, management, with the oversight of the Chief Executive and Chief Financial Officer, is devoting considerable effort to develop and implement a formal system of disclosure controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.

It should be noted that the design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

(2) Changes In Internal Control Over Financial Reporting

There were no changes in the Companys internal control over financial reporting (as defined in Section 240.13a-15(f) or 240.15d-15(f) of the Exchange Act) during our fourth fiscal quarter ended June 30, 2007 that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



|Item 8B. | Other Information
|-------- | -----------------

Not applicable.

PART III.



|Item 9. | Directors and Executive Officers of the Registrant
|------- | --------------------------------------------------

As of September 27, 2007, the directors and executive officers of Telzuit Medical Technologies, Inc., their age, positions, the dates of their initial election or appointment as directors or executive officers, and the expiration of their
terms are as follows:



---

##### Table of Contents

|                                   |  |     |  |                                                                 |  |                                                                  
|---------------------------------- |  | --- |  | --------------------------------------------------------------- |  | -----------------------------------------------------------------
|Name of Director/Executive Officer |  | Age |  | Position                                                        |  | Period Served                                                    
|Warren Stowell                     |  | 55  |  | President and Chief Executive Officer; Class III Director       |  | March 2006 to Present; term as Class III Director expires in 2009
|                                   |  |     | 
|Jerry Balter                       |  | 55  |  | Chief Financial Officer                                         |  | July 2006 to Present                                             
|                                   |  |     | 
|Michael Vosch                      |  | 49  |  | Senior Vice President of Product Development; Class II Director |  | May 2005 to Present; term as Class II Director expires in 2008   
|                                   |  |     | 
|Jon C. Stemples                    |  | 66  |  | Class III Director and Chairman of the Board of Directors       |  | Term as Class III Director expires in 2009                       
|                                   |  |     | 
|Kenneth F. Adams                   |  | 61  |  | Class III Director                                              |  | Term as Class III Director expires in 2009                       
|                                   |  |     | 
|Richard J. Bischoff                |  | 62  |  | Class II Director                                               |  | Term as Class II Director expires in 2008                        

Duties, Responsibilities And Experience

Warren D. Stowell.Mr. Stowell has been President and Chief Executive Officer since March 2006. He previously served as President and
Chief Executive Officer of Care Florida, Inc., a privately-owned HMO that was purchased by Foundation Health. Prior to that, Mr. Stowell served as President and Chief Executive Officer of Health Insurance Plan (HIP) of Florida, a not-for-profit
HMO, from 1988 to 1991. From 1983 to 1988, he was responsible for the operations of five HMOs in Ohio as the President and Chief Executive Officer of Health America Corporation of Ohio. Mr. Stowell was also the Chief Financial Officer/Operating
Officer of Comprehensive Care Centers, Inc., from 1978 to 1983.

Jerry Balter.Mr. Balter has been Chief Financial
Officer since July 2006. He has worked most of the last 25 years in the investment banking and venture capital business, primarily focused on emerging health care and life sciences companies. He has worked for Robertson, Stephens & Co., as
a research analyst and investment banker, a founder and managing partner of The Ulysses Group, founder and manager of The New Zealand Seed Fund, a managing director of Aurora Capital LLC and a managing director of Punk, Ziegel & Company,
L.P. Mr. Balter has been involved with numerous companies from founding through their IPOs. He has a BS in biology/biochemistry from Columbia University and an MBA in Finance from NYUs Stern School of Business.

Michael Vosch.Mr. Vosch is Senior Vice President of Product Development. He
has served in this capacity since May 2005. Mr. Vosch has seventeen (17) years of experience in the IT industry. His areas of expertise are in wireless and satellite networks, as well as in engineering and nursing. He has seven
(7) years of experience designing network systems for physicians. Mr. Vosch designed the Companys first product, the STATPATCHTM, and is a
co-inventor of that product.

Jon C. Stemples.Mr. Stemples has thirty-five (35) years of experience in the
semiconductor industry, having served at Agere Systems, Lucent Microelectronics, Ortel Corporation, Level One Communications, Linear Technology and National Semiconductor as Director of Marketing; Area, Regional and District Sales Manager; Product
Marketing Manager and Field Applications Engineer. His technical expertise ranges from communications chips to data acquisition to microprocessors. Mr. Stemples holds a B.S.E.E. from the University of Miami.

Kenneth F. Adams.Mr. Adams has over 35 years in the financial area. He served with Saab Cars USA, Inc. from 1974  2005, most
recently as Vice President and Chief Financial Officer from 1992  2005. In 1997 he set up and incorporated Saab Financial Services Corporation. While serving as CFO of SFCC he led his team in creating a corporate structure that included
operating, trust and bankruptcy remote companies, as well as establishing a $1 Billion warehouse line of credit. Mr. Adams started his career at Price Waterhouse after obtaining a BS in Finance from Mount Saint Marys University.



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##### Table of Contents

Richard J. Bischoff, Esquire.Mr. Bischoff has 35 years of experience as a corporate
attorney practicing in Miami, Florida. He practiced with national and regional law firms before establishing a consultancy in corporate governance matters. Mr. Bischoff holds a BS degree in accounting from the University of Florida and JD and
LLM degrees from the University of Miami.

Audit Committee

The audit committee is comprised of Ken Adams (Chairman), Jon Stemples and Richard Bischoff.

Audit Committee Financial
Expert

Ken Adams is deemed to be an audit committee financial expert and is independent as that term is used in
Item 7(d)(3)(iv) of Schedule 14A.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires the Companys executive officers, directors, and persons who own more than 10% of a registered class
of the Companys equity securities to file an initial report of ownership on Form 3 and changes in ownership on Forms 4 or 5 with the SEC. Executive officers, directors, and greater-than-10% shareholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) forms that they file. Based solely on a review of the copies of such forms received by us, or written representations from certain reporting persons, the Company believes that all of these
requirements were satisfied during the fiscal year ended June 30, 2007, except as follows:



|                         |  |                         |  |                                         |  |                       
|------------------------ |  | ----------------------- |  | --------------------------------------- |  | ----------------------
|Name of Reporting Person |  | No. of Late Reports (1) |  | No. of Transactions Not Reported Timely |  | Failure to File Form 5
|Michael J. Vosch         |  | 3                       |  | 3                                       |  | ü                     

---

|(1) | All late reports (Form 3 or Form 4) have been filed with the SEC.
|--- | -----------------------------------------------------------------

To the best of our knowledge, other than as set forth above, there were no other late filings required to be
filed under Section 16(a) during the fiscal year ended June 30, 2007.

Code of Ethics

On January 10, 2006, the Company adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, and principal
accounting officer, or persons performing similar functions. The Code of Ethics is posted on our website, www.telzuit.com.



|Item 10. | Executive Compensation
|-------- | ----------------------

The following table sets
forth information regarding the compensation earned by our Chief Executive Officer and each of our most highly compensated executive officers whose aggregate annual salary and bonus exceeded $100,000 for each of the years indicated with respect to
services rendered by such persons.

SUMMARY COMPENSATION TABLE



|                            |  |      |        |                     |          |                        |                              |        |                                                             |   |                       |  |                           |           |  |   |  |   |       
|--------------------------- |  | ---- | ------ | ------------------- | -------- | ---------------------- | ---------------------------- | ------ | ----------------------------------------------------------- | - | --------------------- |  | ------------------------- | --------- |  | - |  | - | ------
|                            |  | Year |        | Annual Compensation |          | Long-Term Compensation
|Name and Principal Position |  |      | Salary |                     | Bonus($) |                        | Other Annual Compensation($) |        | RestrictedStockAwards/SecuritiesUnderlying Options SARs (1) |   | PayoutsLTIPPayouts($) |  | All Other Compensation($)
|Warren Stowell,             |  | 2007 |        | $                   | 160,000  |                        | $                            |       |                                                             | $ | 6,000                 |  | $                         |          |  |  |  | $ |      
|Chief Executive Officer(2)  |  | 2006 |        | $                   | 21,505   |                        |                              |        |                                                             | $ | 1,000                 |  | $                         | 279,998   |  |   |  | $ | 65,000
|                            |  |      |        |                     |          |                        |                             
|Jerry Balter (3)            |  | 2007 |        | $                   | 145,480  |                        |                              |        |                                                             | $ | 6,000                 |  |                           |           |  |   |  | $ | 45,000
|                            |  |      |        |                     |          |                        |                             
|James Tolan,(4)             |  | 2007 |        | $                   | 80,000   |                        | $                            |       |                                                             | $ | 3,000                 |  | $                         |          |  |  |  |   |      
|Senior Vice President       |  | 2006 |        | $                   | 165,519  |                        | $                            | 50,000 |                                                             | $ | 6,000                 |  | $                         | 1,125,000 |  |  |  |   |      
|                            |  |      |        |                     |          |                        |                             
|Michael Vosch,              |  | 2007 |        | $                   | 160,000  |                        | $                            |       |                                                             | $ | 6,000                 |  | $                         |          |  |  |  |   |      
|Senior Vice President       |  | 2006 |        | $                   | 165,519  |                        | $                            | 50,000 |                                                             | $ | 6,000                 |  | $                         | 6,883     |  |  |  |   |      



---

##### Table of Contents

---

|1) | Amounts reflect fair market value of membership interests of Telzuit Technologies, LLC issued to the executive officers for fiscal years 2004 and 2005. For fiscal years 2006, the
amounts reflect the value of stock and warrants awarded to executive officers.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2) | Prior to becoming Chief Executive Officer, Mr. Stowell received $65,000 in cash compensation during fiscal year 2006 related to the development of the out-patient clinic
business.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3) | Mr. Balter became Chief Financial Officer on July 11, 2007. Prior to that time his prior employer, The Ulysses Group Advisors, Inc. received consulting payments totaling
$45,000.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4) | Mr. Tolan resigned as Chief Executive Officer effective March 14, 2006.
|-- | -----------------------------------------------------------------------

Stock Options and Stock Appreciation Rights Grant Table

The following table provides certain information with respect to
individual grants during the 2007 fiscal year to each of our named executive officers of common share purchase options or stock appreciation rights relating to our common shares:



|               |  |                                                   |  |                                                     |   |  |                        |      |                 |               |    
|-------------- |  | ------------------------------------------------- |  | --------------------------------------------------- | - |  | ---------------------- | ---- | --------------- | ------------- | ---
|Name           |  | Common Shares Underlying Grant Of Options Or SARs |  | As Percentage Of Option/SAR Grants To All Employees |   |  | Exercise Or Base Price |      | Expiration Date |              
|Warren Stowell |  | 2,300,000                                         |  | 69.7                                                | % |  | $                      | 0.50 |                 | June 16, 2016 | (1)
|Jerry Balter   |  | 1,000,000                                         |  | 30.3                                                | % |  | $                      | 0.50 |                 | July 11, 2016 |    

---

|(1) | The expiration date for 300,000 shares underlying common stock purchase warrant approved for issuance to Warren Stowell will be five years from the date of issuance. As of the date
of this filing, such warrants have not been issued.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Stock Options and Stock Appreciation Rights Exercise And Valuation Table

The following table provides certain information with respect to each of our named executive officers concerning any common share
purchase options or stock appreciation rights they may have exercised in fiscal year 2006, and the number and value of any unexercised common share purchase options or stock appreciation rights they may hold as of June 30, 2007:



|                        |  |                           |  |                |  |                                                                                                        |  |                                                                                              
|----------------------- |  | ------------------------- |  | -------------- |  | ------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------
|Named Executive Officer |  | SharesAcquiredOn Exercise |  | Value Realized |  | Number of securities underlying unexercised options/ SARs atJune 30, 2007 (Exercisable/ Unexercisable) |  | Value of unexercised in-the- money options/SARs at June 30, 2007 (Exercisable/ Unexercisable)
|Warren Stowell          |  | 0                         |  | Not Applicable |  | 1,300,000 exercisable/1,000,000 unexercisable                                                          |  | 0 exercisable/0 unexercisable                                                                
|                        |  |                           |  |               
|Jerry Balter            |  | 0                         |  | Not Applicable |  | 500,000 exercisable/500,000 unexercisable                                                              |  | 0 exercisable/0 unexercisable                                                                



---

##### Table of Contents

A summary of the Companys unvested options is presented below:



|                                |  |                          |   |  |                                     |     
|------------------------------- |  | ------------------------ | - |  | ----------------------------------- | ----
|                                |  | Year ended June 30, 2007
|                                |  | Shares                   |   |  | WeightedAverageGrantDate Fair Value
|Unvested at beginning of period |  | 1,500,000                |   |  | $                                   | 0.35
|Granted                         |  | 1,000,000                |   |  | $                                   | 0.32
|Vested                          |  | (750,000                 | ) |  | $                                   | 0.34
|Exercised                       |  |                         |   |  |                                     |    
|Expired                         |  |                         |   |  |                                     |    
|                                |  |                          |   |  |                                     |     
|Outstanding at end of period    |  | 1,750,000                |   |  | $                                   | 0.34

As of June 30, 2007, there was $573,750 of total unrecognized compensation cost related to non-vested
warrants granted to the Companys employees. The cost is expected to be recognized ratably over the next 2.25 years.

Compensation of Directors

We did not compensate our outside directors during the year ended June 30, 2007.

Employment Contracts

Warren Stowell, President
and Chief Executive Officer

On June 16, 2006, effective as of May 8, 2006, Telzuit Medical Technologies, Inc. entered
into a three-year employment agreement with Warren Stowell (the Stowell Employment Agreement). Under the terms of the Stowell Employment Agreement, Mr. Stowell is entitled to receive a salary of $159,000 per annum, subject to annual
increases based on the increase in the consumer price index, plus three percent (3%). In addition, under the terms of the agreement, Mr. Stowell is (a) eligible for a performance based bonus (to be awarded by the Compensation Committee of
the Board of Directors) at its discretion, (b) entitled to receive health benefits and coverage, (c) entitled to receive paid life insurance for coverage up to $50,000, and (d) entitled to receive a monthly car allowance.
Mr. Stowell will also receive warrants and/or options (if a stock option is approved by the shareholders) for two million shares of Common Stock at an exercise price of $0.50. Twenty-five percent (25%) of this award vested upon entering
into the contract and Twenty-five percent (25%) will vest at the end of each year of the contract.

Jerry Balter, Chief
Financial Officer

On July 11, 2006, Telzuit Medical Technologies, Inc. entered into a three-year employment agreement with
Jerry Balter(the Balter Employment Agreement). Under the terms of the Balter Employment Agreement, Mr. Balter is entitled to receive a salary of $150,000 per annum, subject to annual increases based on the increase in the consumer
price index, plus three percent (3%). In addition, under the terms of the agreement, Mr. Balter is (a) eligible for a performance based bonus (to be awarded



---

##### Table of Contents

by the Compensation Committee of the Board of Directors) at its discretion, (b) entitled to receive health benefits and coverage, (c) entitled to
receive paid life insurance for coverage up to $50,000, and (d) entitled to receive a monthly car allowance. Mr. Balter received a payment of $45,000 for relocation expenses upon entering into his contract. Mr. Balter will also
receive warrants and/or options (if a stock option is approved by the shareholders) for one million shares at an exercise price of $0.50. Twenty-five percent (25%) of this award vested upon entering into the contract and Twenty-five percent
(25%) will vest at the end of each year of the contract.

Michael Vosch, Vice President

On January 3, 2005, Telzuit Technologies, LLC entered into a two-year employment agreement with Michael Vosch (the Vosch Employment
Agreement). Under the terms of the Vosch Employment Agreement, Mr. Vosch is entitled to receive a salary of $150,000 per annum, subject to annual increases based on the increase in the consumer price index, plus three percent (3%). In
addition, under the terms of the agreement, Mr. Vosch is (a) eligible for a performance based bonus (to be awarded by the Chief Executive Officer) an amount up to twenty percent (20%) of Mr. Voschs base salary,
(b) entitled to receive health benefits and coverage, (c) entitled to receive paid life insurance for coverage up to $50,000, and (d) entitled to receive a monthly car allowance. Mr. Voschs contract expired on
January 3, 2007. He remains an employee of the Company at terms materially similar to those cited above.

James Tolan, former
Vice President

On January 3, 2005, Telzuit Technologies, LLC entered into a two-year employment agreement with James Tolan
(the Tolan Employment Agreement). Under the terms of the Tolan Employment Agreement, Mr. Tolan is entitled to receive a salary of $150,000 per annum, subject to annual increases based on the increase in the consumer price index,
plus three percent (3%). In addition, under the terms of the agreement, Mr. Tolan is (a) eligible for a performance based bonus (to be awarded by the Chief Executive Officer) an amount up to twenty percent (20%) of
Mr. Tolans base salary, (b) entitled to receive health benefits and coverage, (c) entitled to receive paid life insurance for coverage up to $50,000, and (d) entitled to receive a monthly car allowance.
Mr. Tolans contract expired on January 3, 2007. He is no longer an employee of the Company.

Don Sproat, former Chief
Executive Officer

On January 3, 2005, Telzuit Technologies, LLC entered into a two-year employment agreement with Don Sproat
(the Sproat Employment Agreement). Under the terms of the Sproat Employment Agreement, Mr. Sproat is entitled to receive a salary of $150,000 per annum, subject to annual increases based on the increase in the consumer price index,
plus three percent (3%). In addition, under the terms of the agreement, Mr. Sproat is (a) eligible for a performance based bonus amount up to twenty percent (20%) of Mr. Sproats base salary, (b) entitled to receive
health benefits and coverage, and (c) entitled to receive a monthly car allowance. Mr. Sproat resigned from the Company on March 14, 2006. He was under the terms of his contract through December 31, 2006.



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

The table below sets forth information with respect to the beneficial ownership of our common stock as of September 27, 2007 for (i) any person
who we know is the beneficial owner of more than 5% of our outstanding common stock; (ii) each of our directors or those nominated to be directors, and executive officers; and (iii) all of our directors and executive officers as a group.



---

##### Table of Contents

|                                                |  |                                                                           |  |                                           |  |                        |  
|----------------------------------------------- |  | ------------------------------------------------------------------------- |  | ----------------------------------------- |  | ---------------------- | -
|SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS | 
|Title of Class                                  |  | Name, Title and Address of Beneficial Owner(1)                            |  | Amount and Nature of Beneficial Ownership |  | Percentage of Class(2) |  
|Common                                          |  | Warren D. Stowell, Executive Officer and Member of the Board of Directors |  | 2,355,000 (3)                             |  | 5.8                    | %
|Common                                          |  | Jerry Balter, Executive Officer                                           |  | 1,000,000 (4)                             |  | 2.4                    | %
|Common                                          |  | Michael Vosch, Member of the Board of Directors and an Executive Officer  |  | 1,402,100(5)                              |  | 3.4                    | %
|Common                                          |  | Jon C. Stemples, Member of the Board of Directors                         |  | 119,719(Direct Ownership)                 |  |                        | *
|Common                                          |  | Kenneth F. Adams, Member of the Board of Directors                        |  | 30,000(Direct Ownership)                  |  |                        | *
|Common                                          |  | Richard J. Bischoff, Member of the Board of Directors                     |  | 25,700(Direct Ownership)                  |  |                        | *
|Common                                          |  | All Officers and Directors as a Group (8 Persons)                         |  | 4,932,519(8)                              |  | 12.1                   | %

---

|* | Less than 1%.
|- | -------------

|(1) | Unless otherwise indicated, the address of each shareholder is 5422 Carrier Drive, Suite 306, Orlando, Florida 32819.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(2) | Applicable percentage of ownership is based on 40,594,879 shares of common stock being issued and outstanding as of June 30, 2007. Calculations do not include outstanding
warrants, options, convertible debentures, or other rights issued by the Company, unless the reporting person is the beneficial owner of the warrant, option, or other right. Beneficial ownership is determined in accordance with the rules of the
Commission and generally includes voting of investment power with respect to securities. Shares of common stock subject to securities exercisable or convertible into shares of common stock that are currently exercisable or exercisable within 60 days
of the filing date of this registration statement are deemed to be beneficially owned by the person holding such options for the purpose of computing the percentage of ownership of such persons, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person. Unless otherwise noted, we believe that all shares are beneficially owned and that all persons named in the table have sole voting and investment power with respect to all shares of common
stock owned by them.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes (a) 55,000 common shares directly owned by Warren Stowell; (b) common shares related to a contractual right to receive a common stock purchase warrant exercisable
for 300,000 shares; and (c) 2,000,000 common shares underlying stock warrants and/or which Mr. Stowell is eligible to receive pursuant to his Employment Agreement dated effective as of May 8, 2006. Twenty-five percent of the warrants
under the Employment Agreement vested on the effective date of the Employment Agreement, and an additional twenty-five percent vest on each anniversary thereof.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | As part of Mr. Balters Employment Agreement dated July 13, 2006, he is eligible to receive a stock option and/or warrants to purchase 1,000,000 shares of the
Companys common stock, subject to a vesting schedule of twenty-five percent as of the effective date of the Employment Agreement and twenty-five at each anniversary thereof.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes (a) 1,402,100 common shares directly owned by Michael Vosch.
|--- | ---------------------------------------------------------------------



|Item 12. | Certain Relationships and Related Transactions
|-------- | ----------------------------------------------

Except as set forth below, there were no transactions during the last two fiscal years, and there are no proposed transactions, to which the Company was or is to become a party in which any director, executive officer, director nominee,
beneficial owner of more than five percent (5%) of any class of our stock, or members of their immediate families had, or is to have, a direct or indirect material interest.

1. On May 8, 2006, the Company entered into a loan agreement with Telzuit Technologies, LLC. The terms of the agreement are as follows: $225,000 of
cash and 25,000 of prepaid services with an outside vendor, at an interest rate of 5% per annum, payable on demand. Pursuant to the agreement, the Company received $50,000 cash and the $25,000 of prepaid services on April 3, 2006; $50,000
of cash on April 13, 2006; $25,000 cash on April 18, 2006; and $100,000 cash on May 1, 2006.



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##### Table of Contents

2. On May 26, 2006, the Company competed a private offering of its 10% Senior Secured Convertible
Debentures and related warrants. Midtown Partners & Co., LLC (Midtown Partners), an SEC and NASD registered broker dealer, acted as the placement agent for the Company in connection with the Private Offering. The Company paid
Midtown Partners a total cash commission equal to approximately $436,000 and issued to Midtown Partners warrants as non-cash compensation. Chris Phillips, a director of the Company, is the President and CEO of Apogee Financial Investments, Inc.,
which is the managing member of Midtown Partners.

3. During the fourth quarter of fiscal year 2007, Michael Vosch, an officer and director
of the Company, lent the Company $483,000. In July 2007, the loan was converted into 1,380,000 shares of the Companys Common Stock. Mr. Vosch lent the Company an additional $70,000 in August 2007. The loans are interest free loans and are
to be repaid by either conversion into the Companys Common Stock or repayment of the principal at the discretion of the company.



|Item 13. | Exhibits
|-------- | --------

See below.



|Item 14. | Principal Accountant Fees and Services
|-------- | --------------------------------------

Effective
July 28, 2006, Telzuit Medical Technologies, Inc. (the Company) engaged Cross, Fernandez & Riley, LLP as its new independent registered public accountant to audit the Companys financial statements for the fiscal year
ended June 30, 2006. Our prior auditors, Pender Newkirk & Company, audited the Companys financial statements for the six month transition period ending June 30, 2005, the twelve month period ending December 31, 2004,
and reviewed the financial statements included in our 10-QSB reports filed during fiscal year 2006, the six month transition period ending June 30, 2005, and fiscal year 2004.

Audit Fees. Our principal independent accountants (including our former principal independent accountants) billed us, for the twelve month fiscal
years ending June 30, 2007 and June 30, 2006, the following aggregate fees for its professional services rendered for the audit of our annual financial statements and review of financial statements included in our Form 10-QSB reports, our
Form 10-KSB reports, or other services normally provided in connection with statutory and regulatory filings or engagements:



|                                |  |   |        
|------------------------------- |  | - | -------
|Fiscal Year ended June 30, 2007 |  | $ | 133,500
|Fiscal Year ended June 30, 2006 |  | $ | 138,258

Audit-Related Fees. Our principal independent accountants (including our former Principal
independent accountants) billed us, for the twelve month fiscal years ending June 30, 2007 and June 30, 2006, the following aggregate fees for assurance and related services reasonably related to the performance of the audit or review of
our financial statements and not reported above under Audit Fees:



|                                |  |   |       
|------------------------------- |  | - | ------
|Fiscal Year ended June 30, 2007 |  | $ | 7,900 
|Fiscal Year ended June 30, 2006 |  | $ | 20,000

Tax Fees.Our principal independent accountants (including our former Principal independent
accountants) billed us, for the twelve month fiscal year ending June 30, 2007 and June 30, 2006, the following aggregate fees for professional services rendered for tax compliance, tax advice and tax planning:



|                                |  |   |       
|------------------------------- |  | - | ------
|Fiscal Year ended June 30, 2007 |  | $ | 9,000 
|Fiscal Year ended June 30, 2006 |  | $ | 19,262



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##### Table of Contents

All Other Fees. Our principal independent accountants (including our former Principal independent
accountants) billed us, for the twelve month fiscal years ending June 30, 2006 and June 30, 2007., the following aggregate fees for products and services provided by it, other than the services reported in the above three categories:



|                                |  |   |      
|------------------------------- |  | - | -----
|Fiscal Year ended June 30, 2007 |  | $ | 0    
|Fiscal Year ended June 30, 2006 |  | $ | 5,000

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that
require the engagement of any auditor engaged to render any auditing or permitted non-auditing related service, be:



| |  |  | Approved by our Audit Committee; or
| | - |  | -----------------------------------



| |  |  | Entered into pursuant to pre-approval policies and procedures established by the Audit Committee, provided that the policies and procedures are detailed as to the
particular service, the Audit Committee is informed of each service, and such policies and procedures do not include delegation of the audit committees responsibilities to management.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|            |  |                                                                                                                                                                                                                                                                                                                                          
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION OF EXHIBIT                                                                                                                                                                                                                                                                                                                   
|2.01        |  | Share Exchange Agreement dated May 6, 2005, by and among Registrant, Telzuit Technologies, LLC, Telzuit Technologies, Inc., Michael J. Vosch, James P. Tolan, Don Sproat, and Chris Phillips, as
authorized representative for each of the persons that purchased the 10% Convertible Promissory Debentures issued by Taylor Madison. (2)
|            | 
|3.01        |  | Articles of Incorporation of Telzuit Medical Technologies, Inc., formerly known as Taylor Madison Corp. (2)                                                                                                                                                                                                                              
|            | 
|3.02        |  | Articles of Amendment to Articles of Incorporation, Certificate of Designations, Preferences, and Rights of the Series B Preferred Stock. (2)                                                                                                                                                                                            
|            | 
|3.03        |  | Articles of Amendment to Articles of Incorporation, Certificate of Designations, Preferences and Rights of the Series A Convertible Preferred Stock (3).                                                                                                                                                                                 
|            | 
|3.04        |  | Bylaws of Telzuit Medical Technologies, Inc., formerly known as Taylor Madison, Corp. (2)                                                                                                                                                                                                                                                
|            | 
|10.01       |  | Conversion of Debt to Equity Agreement. (1)                                                                                                                                                                                                                                                                                              
|            | 
|10.02       |  | Exclusive Manufacturing and Distribution Agreement. (1)                                                                                                                                                                                                                                                                                  
|            | 
|10.03       |  | Assignment of Gund, Inc. Agreement (1)                                                                                                                                                                                                                                                                                                   
|            | 
|10.04       |  | Securities Purchase Agreement dated May 6, 2005, by and among Registrant, Lucien Lallouz, Michael B. Wellikoff, Taylor Madison Holdings, Inc., and Chris Phillips, as authorized representative
for each of the persons that purchased 10% Convertible Debentures issued by Taylor Madison. (2)                                          
|            | 
|10.05       |  | Form of 10% Convertible Debenture issued on May 6, 2005. (2)                                                                                                                                                                                                                                                                             
|            | 
|10.06       |  | Form of Class A Warrant issued on May 6, 2005 to purchaser of the 10% Convertible Debentures. (2)                                                                                                                                                                                                                                        
|            | 
|10.07       |  | Consulting Agreement, effective as of May 6, 2005, by and between Apogee Business Consultants, LLC, a Nevada corporation, and Registrant. (2)                                                                                                                                                                                            
|            | 
|10.08       |  | Private Placement Agreement dated May 6, 2005 by and between Midtown Partners & Co., LLC and Registrant. (2)                                                                                                                                                                                                                             
|            | 
|10.09       |  | Form of Warrant issued to Midtown Partners & Co., LLC on May 6, 2005. (2)                                                                                                                                                                                                                                                                
|            | 
|10.10       |  | Agreement by Registrant dated May 6, 2005 regarding 1 for 31 reverse stock split. (2)                                                                                                                                                                                                                                                    
|            | 
|31.01       |  | Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 302 (4)                                                                                                                                                                                                                                         
|            | 
|31.02       |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (4)                                                                                                                                                                                                                                                              
|            | 
|32.01       |  | Section 906 Certification by Chief Executive Officer (4)                                                                                                                                                                                                                                                                                 
|            | 
|32.02       |  | Section 906 Certification by Chief Financial Officer (4)                                                                                                                                                                                                                                                                                 
|            | 
|99.01       |  | Irrevocable Proxy granted by ZTZ Trust, Lucien Lallouz, Trustee to Telzuit Technologies, LLC to vote 8,350,000 shares of Common Stock of the Registrant. (2)                                                                                                                                                                             



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##### Table of Contents

|      |  |                                                                                                                                               
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|99.02 |  | Irrevocable Proxy granted by Michael B. Wellikoff to Telzuit Technologies, LLC to vote 3,478,000 shares of Common Stock of the Registrant. (2)

---

|(1) | Previously filed as an exhibit to the Form 8-K filed with the SEC on November 8, 2004, and incorporated herein by reference.
|--- | ----------------------------------------------------------------------------------------------------------------------------

|(2) | Previously filed as an exhibit to exhibit to the Form 8-K filed with the SEC on May 12, 2005.
|--- | ---------------------------------------------------------------------------------------------

|(3) | Previously filed as an exhibit to the Form 8-K filed with the SEC on June 24, 2005.
|--- | -----------------------------------------------------------------------------------

|(4) | Filed herewith.
|--- | ---------------

[signature pages to follow]



---

##### Table of Contents

SIGNATURES

In accordance with section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized officer.



|                                                         |  |                   
|-------------------------------------------------------- |  | ------------------
|(Registrant)                                            
|TELZUIT MEDICAL TECHNOLOGIES, INC.                      
|                                                         | 
|By:                                                      |  | /s/ Warren Stowell
|Warren Stowell                                          
|President and Chief Executive Officer                   
|                                                         | 
|By:                                                      |  | /s/ Jerry Balter  
|Jerry Balter                                            
|Chief Financial Officer and Principal Accounting Officer



|      |  |                
|----- |  | ---------------
|Date: |  | October 2, 2007

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



|       |  |                                                                                  
|------ |  | ---------------------------------------------------------------------------------
|By:    |  | /s/ Warren Stowell                                                               
|Name:  |  | Warren Stowell                                                                   
|Title: |  | President, Chief Executive Officer and member of the
Board of Directors          
|       | 
|Date:  |  | October 2 , 2007                                                                 
|       | 
|By:    |  | /s/ Michael Vosch                                                                
|Name:  |  | Michael Vosch                                                                    
|Title: |  | Senior Vice President of Product Development and member Of the Board of Directors
|       | 
|Date:  |  | October 2 , 2007                                                                 
|       | 
|By:    |  | /s/ Jon Stemples                                                                 
|Name:  |  | Jon Stemples                                                                     
|Title: |  | Chairman of the Board of Directors                                               
|       | 
|Date:  |  | October 2, 2007                                                                  
|       | 
|By:    |  | /s/ Kenneth F. Adams                                                             
|Name:  |  | Kenneth F. Adams                                                                 
|Title: |  | Member of the Board of Directors                                                 
|       | 
|Date:  |  | October 2, 2007                                                                  
|       | 
|By:    |  | /s/ Richard J. Bischoff                                                          
|Name:  |  | Richard J. Bischoff                                                              
|Title: |  | Member of the Board of Directors                                                 
|       | 
|Date:  |  | October 2 , 2007